Audit reveals critical flaws in trust land management

In a recent government meeting, officials discussed the findings of a performance audit concerning the School and Institutional Trust Lands Administration (SITLA) and related entities. Brian Dean, who led the audit, highlighted significant areas of concern regarding the management of trust lands, which are constitutionally mandated to benefit specific beneficiaries, primarily public education.

The audit revealed that since SITLA's establishment in 1994, the management of trust lands has improved significantly, with the permanent fund growing from approximately $50 million to $3.2 billion. However, the audit identified several areas for improvement, particularly in risk management and transparency. For instance, the acceptance of the North Temple landfill by SITLA raised concerns as it was taken on without a thorough assessment of potential liabilities, and it was not included in risk assessments for several years.

The audit also pointed out that while SITLA has considerable discretion in managing trust lands, oversight mechanisms are lacking. Approximately 80% of land sales and transactions are conducted by staff without board review, raising questions about adherence to administrative rules designed to ensure fair market value and proper procedures. Recommendations included enhancing risk management processes and ensuring compliance with administrative rules to protect beneficiaries' interests.

Additionally, the audit examined the roles of other entities within the trust system, such as the School and Institutional Trust Funds Office (CITFO) and the Land Trust Protection and Advocacy Office (LITPAL). It was noted that LITPAL's responsibilities overlap significantly with those of SITLA and CITFO, leading to confusion about its role and effectiveness. The audit suggested that the legislature consider clarifying LITPAL's functions or potentially eliminating the office altogether, as it has not demonstrated a clear impact on the trust system.

The meeting concluded with a commitment from SITLA to implement the audit's recommendations, emphasizing the importance of transparency and accountability in managing trust lands for the benefit of public education and other beneficiaries. The discussions underscored the ongoing need for oversight and strategic planning to maximize the value of trust lands and ensure compliance with fiduciary duties.