GRAFTON, N.D. -- A county reorganization committee has placed a $100,000 cap on spending by the Adams School District -- even though that limit already may have been surpassed -- on improvements to a auditorium owned by the city of Adams, N.D., prior to a July 1 reorganization of the Adams and Park River school districts into a new district.
The Walsh County School Annexation and Reorganization Committee on Friday also unanimously ordered both districts to get prior approval before any entering into any contracts that require additional spending, other than normal business transactions, before the new Park River Area School District is created.
The action comes as the state investigates allegations that Adams School District has or is illegally spending district funds.
"They're cash-spending themselves broke. They're trying to delete their cash accounts," said Joe Bata, reorganization committee chairman, adding that the district already has spent more than $100,000.
Alleged spending spree
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Walsh County Assistant State's Attorney Kelley Cole outlined the allegations in a letter last month to the attorney general's office:
• The Adams School Board authorized spending as much as $275,000 in school district funds for improvements to the City of Adams Auditorium. The Adams School Board initially estimated the expense would be $30,000 to $40,000.
• The Adams School District spent and the School Board approved the purchase of 55 iPads for approximately $42,000.
• The district spent and the board approved $8,000 on rifles and handgun cases.
The Adams school, which has 27 students in K-6 and no high school, will close later this month, as part of the reorganization plan.
The Adams School District in the past has leased the Adams city auditorium for some of its programs. However, Park River School District officials decided earlier that the new district will not use the auditorium once the new district is established.
While the North Dakota Bureau of Criminal Investigation has not acknowledged an investigation, a BCI official attended Friday's meeting at the Walsh County Courthouse.
Adams School District officials declined comment on the issue.
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The Adams School District's general fund carry-over to the new school district is projected to be about $133,000, according to Bata.
The district's projected cash reserve balance, as of June 30, 2013, is about $356,000, which would be turned over to the new district, according to Bata.
The Adams district had a cash reserve balance of about $534,000 at the end of June 2012, and has maintained similar balances for the past several years, he said.
According to state law, a school district is allowed to have a maximum cash reserve balance of 45 percent of the district's operating budget, plus $20,000.
The district's general fund operating budget has been about $1 million.
"They're in compliance, but just barely. They're right on the edge," Bata said.
Call Bonham at (701) 780-1110; (800) 477-6572, ext. 1110; or send email to kbonham@gfherald.com .
