GARDINER, Mont. -

A small Montana school district is left scrambling for money after the U.S. Department of the Interior discovered an error that went unnoticed for nearly four decades.

For years, the Gardiner and West Yellowstone school districts received money from the Department of the Interior. The money was aimed at helping schools serve children of Yellowstone National Park employees who live on untaxed federal land.

But the law changed in the 1970s and those payments were supposed to stop. That never happened. Now the school districts are losing the regular payments.

Superintendent JT Stroder explained they just received the news last week.

"Not only was that payment going to be late, but it wasn't coming at all," said Stroder.

Stroder explained that payment from the federal government came in two parts, the most recent payment was expected in November.

"There is a signed agreement in place. It provides for our extracurricular activities, our professional development, travel," said Stroder.

Stroder explained on top of that, the district was informed the Department of the Interior now wants the money back.

"Probably looking at over $10 million, I am not worried about the debt, I don't think there is any way they can go after that and expect to get paid," said Stroder.

He is worried about right now, saying they have already had to cut back on extracurricular activities.

"All field trips are canceled," said Stroder.

When it comes to cutting extracurricular activities, he said everything is on the table. That could mean the possibility of no track and field this season. For sports teams like basketball, they are already feeling the financial pinch.

As they head to districts at the end of the week in Butte, the district was only able to provide limited necessities like the bus and fuel to get them there. In years past, they were able to stay in Butte during the district tournament.

We are told by the superintendent that parents were able to rally enough money so it could happen this year. But, he said, all of these cuts come down to that payment from the Department of the Interior. Now that it is gone, that means the extra expenses must go too. 

At a special meeting held by the school board on Wednesday evening, board members told NBC Montana they are in the very beginning stages of trying to figure out where to go from here. The meeting was to gain a better understanding from Yellowstone Park officials about why this situation happened, and what can be done to fix it.

Yellowstone Park officials explained the school can possibly get the payments forgiven, but Congress will have to pass legislation in order for that to happen.

Park officials also explained that through this process, they discovered Wyoming is responsible for the education of 37 students living within park boundaries.

That means Wyoming needs to take steps to create a new school district within Yellowstone, so that Mammoth students attending Gardiner are not violating the law.

"We're trying to set up a school district for Yellowstone National Park," explained Gardiner School District Board Chair Bob Fuhrmann. "That's one of the first steps. So the Wyoming folks up in Mammoth are trying to petition for a school district established so they can accept money from the state of Wyoming to help fund those students coming to Gardiner school."

Yellowstone National Park officials said they are currently working with the Wyoming governor's office to get the process moving, and they hope to have the situation resolved by the beginning of next school year.