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Stark County audit flags levy and reserve irregularities; county cites revenue volatility and gradual reductions
Summary
A Legislative Audit and Fiscal Review Committee presentation showed Stark County levied 25.88 mills for tax year 2022 (about $5.4 million) despite statutory limits tied to high reserves; county leaders said they are gradually reducing levies and keep larger reserves because oil and gas revenues are volatile.
Senator Jeffery J. Magrum convened the Legislative Audit and Fiscal Review Committee on Dec. 9, 2025, where State Auditor Joshua C. Gallion presented findings from the Stark County audit showing the county levied 25.88 mills for tax year 2022, generating approximately $5.4 million.
Gallion told the committee that North Dakota Century Code Sections 57‑15‑31 and 11‑23‑02 require counties to levy zero mills when General Fund reserves exceed 75% of annual appropriations; the audit also reported the county used a $9.2 million General Fund cash reserve balance in the budgeting process while the actual General Fund cash reserve balance totaled $21.6 million.
Neal Messer, chairman of the Stark County Commission, told the committee the commission reduced the General Fund mill levy from 35.00 to 25.88 mills during the audit period and has continued to reduce levies in subsequent years. Messer said the county maintains larger unrestricted reserves rather than transferring funds to restricted capital improvement accounts so cash remains available for unforeseen needs and emergencies.
Messer described oil and gas gross production tax revenue as volatile, noting recent receipts decreased by about 30% compared with the previous year and that property taxes provide a steadier revenue stream for the county. Committee members asked questions about reserve accounting and the statutory treatment of committed or restricted funds; Gallion noted that once funds are formally obligated to specific projects and restricted they are excluded from the General Fund reserve calculation.
The committee later reordered agenda items to allow fuller discussion of the Stark County audit and ultimately accepted the audit reports presented on Dec. 9 as part of the committee's routine acceptance of reviewed reports.
The committee took no separate enforcement action at the meeting; the audit record and the county's stated course of reducing levies were presented for legislative oversight and possible follow‑up.
