Oregon Audit Shows Unconstitutional Spending on Schools

Feb 7, 2012

Oregon's Secretary of State released an audit Tuesday showing the Department of State Lands violated the constitution by spending money it shouldn't have from the Common School Fund. But as Rob Manning reports, paying back the money isn't expected to harm schools.

The Common School Fund is built with earnings from state forests and other state resources and investments. The Oregon constitution directs the state to spend interest from the fund on public education. But according to a new audit, the state spent more than 75 million dollars of principal between 2001 and 2007. State officials say they will pay that back. And Secretary of State Kate Brown says public schools won't lose any money, because it can come out of the Department of State Lands' 'distributable income account'.

Kate Brown: "That account has a balance of 151 million dollars as of December 31st, 2011."

Brown says the audit made three further recommendations: to improve accounting at the Department of State Lands, to provide more detailed information to the Land Board, and to find ways to limit losses to the principal.