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State Treasurer calls for efficiency in state finances

BISMARCK -- North Dakota government agencies have $3 million worth of outstanding state checks, and the state treasurer wants to see this number decline.

State Treasurer Kelly Schmidt recently gave state lawmakers an update on the matter.

Overall, 52 state agencies have more than 10,600 outstanding checks between 90 days and 3 years old that total nearly $3.1 million.

Outstanding checks mean the money has not been received by the proper recipient, the recipient did not cash the check or state money has not been properly returned to the appropriate funds, Schmidt said. There is not a breakdown of how many checks fall into the various categories.

The state tax department has the largest amount of outstanding checks -- 5,416 worth $2.1 million -- followed by the Department of Human Services with 2,168 checks worth about $351,000. The North Dakota Legislature is at the bottom of the list with two $25 checks outstanding.

Many of the outstanding checks in the tax department are due to people not cashing them, said Nathan Bergman, supervisor of the individual income tax section.

"It's surprising how many people will get checks and just not cash them," he said.

He estimated a few hundred checks come back as undeliverable. The department has a system to try to get money to the rightful owners in these cases, Bergman said.

Department staff search for new addresses and phone numbers and put a note on the resident's account so -- if that person calls the department -- there's a record that a check is due. If the resident files another tax return, the department checks for additional contact information.

"We try to do what we can do," he said.

There is not a way for the public to search online to see if they have an outstanding state check that they lost, never got or haven't cashed in the past three years. However, Schmidt said the state's new tax distribution outstanding check system can help state agencies work on their outstanding check lists.

This includes researching the validity of the payment, contacting the recipient to find out why the check remains outstanding, and determining whether a check should be voided and reissued.

The closer to the date of issue the checks are worked, the more likely a resolution is found, Schmidt said. This means more efficient government since less tracking time is necessary, and money belonging to the state can be put back to proper use, she said.

A review of the 2011 outstanding check transfer report found the opportunity for increased efficiencies in state check practices is "striking," Schmidt said. Issuing multiple checks to the same person, letting checks sit and not aggregating amounts for reissue has a dramatic effect on the efficiency of the state, she said.

Remaining outstanding checks are turned over to the state's Unclaimed Property Division-- which does have a searchable database -- after three years. Next month, the state will turn over nearly 2,300 outstanding checks worth $435,000.

Schmidt, who pushed for the law requiring her office to report the status of outstanding state checks to legislators, said her office is continuing to work to improve the state's check processes.

"Efficiency. That's what we're looking for," she said. "It saves the taxpayers' dollars."

Finneman is a multimedia reporter for Forum Communications Co.