Legislative Joint Auditing-Educational Institutions

Minutes have emotion. Motion 2nd, all in favor say aye. All oppose. All right. adopted We will move to a review of the reports and we're going to get started with reports that were deferred from the committee at our last meeting, and I'll turn over to Mr. Fink to start those. Thank you, Mr. Chair, and good afternoon. Today we have 28 educational reports for the fiscal year 2023 to review 21 of the audit reports contained reportable findings, and we will begin with the 3 reports that were deferred from the July meeting. The first is Jacksonville, North Pulaski School District. Finding one, our examination of non-payroll expenditures, which included a sample of 31 dispersements and various tests revealed the following. 7 dis disbursements did not have any form of approval authorization. For disbursements did not have adequate supporting documentation and 5 disbursements were not properly classified. Finding two, the district made payments totaling $61,000 for related party transactions without proper approvals in conflict with Arkansas code specifically, $51,000 was paid to a company in which a board member held a financial interest without approval by the board or the Arkansas Division of Elementary and Secondary Education. Additionally, $7800 1000 dollars and $9996 paid to three companies respectively in which 3 separate board members held a financial interest without approval by the board. Finding 3. The district did not obtain bids for two indoor playgrounds and the amount of $58,000 as required by Arkansas Code. Finding 4, a review of credit card charges and other non-payroll expenditures revealed disbursements totaling $13,000. That are constantly constitutionally suspect, uh, as interpreted in the AG's opinion, uh, $99,900 for staff gifts, including $1500 for two-day shipping, $3000 for meals without a documented business purpose. In addition, the district incurred $527 in charges for convenience, late and service fees. Finding 5, the district's internal control system did not prevent or detect material errors and the district misclassified $1.1 million of bond principal payments as interest payments and other aggregate funds. The financial statements were subsequently corrected by an adjusting entry during audit field work. Um, I would note that, uh, subsequent to our meeting in July, the superintendent for the school district, uh, called me and then he also committed a revised corrective action plan. We've included that revised plan, which is very detailed. It also includes timelines for when they, uh, are going to implement their new procedures and processes, and that is in your synopsis. That concludes the findings for Jacksonville North Pulaski School District. OK, with the folks from Jacksonville, please come to the table. If you would please make sure your microphones on, introduce yourself, your name and your position, please, for the committee. Good afternoon. I'm Jeremy Oa, superintendent of schools. Daniel Gray, president of the school board. Scott Richardson, attorney for the school district. OK, thank you y'all. If you would just kind of give us uh initial summary what what you'd like to share with the committee. Yes, thank you, Chairman. Yes, we are definitely acknowledge mistakes were made. We, as soon as we received the report, we immediately started to research and and investigate uh these findings um we put measures in place with our new director of finance. We immediately ensured that there were standard operating procedures put in place as such with the POs making sure that there's a process internally that all POs purchase orders were signed and documented even. regular utility purchase orders. We have also made sure through several conversations with Mr. Fink to make sure that that ongoing communication takes place as it pertains to information that may not have been provided to the auditor when they're on site that make sure that we follow up to make sure that they have the correct information such as the indoor playground. We actually had one indoor playground that was purchased. Our director of uh the pre-K uh center. Actually did get quotes and we realized that it was a sole source, um, provider and that information was not shared with the auditor, but moving forward, we're gonna make sure that that information does uh is presented to the auditor. Uh, we also wanted to make sure that all um. Bidding processes were followed as we did with the uh approval with the board process, but we did not uh uh do the resolution that should have gone to the Secretary of Education. Since then, we have corrected that and have received an approved resolution, uh, our board, local board has also approved the local resolutions for the other uh transactions moving forward um as it pertains to the bond payments we also made sure that there's an internal control, a standard operating procedure where our director of finance and myself as superintendent will work together hand in hand to ensure that all coding is correct and. Documented as appropriate, uh, moving forward. We also I would like to share with the committee that um we understand that additional training needed to take place, so our school board and I and other district officials did go through an additional financial training with the Arkansas School Boards Association and we've also increased the level of training with all district level administrators, uh, building level uh principles as well as directors instead of going through tier 2 training, uh, we're actually going through tier one. Training, which is the more detailed financial training so that we're all moving in the right direction and and ensuring that we're following the correct process as outlined and annotated code. OK, thank you for that. Would either of the other two gentlemen, anything else you want to add to begin with? I'll just say on behalf of the school board, um, we, this, we took this very seriously. We did have a um a special board meeting to go over the revised response to the findings in detail. Uh, and at that time we discussed having the additional training we did order that and, and, uh, Arkansas School Board Association came out and we had a, I think a 2-hour, uh, session just on audit findings and uh refreshed our memory, so, uh, uh, there were, there were definitely some Things that we could do better and, uh, we've made some changes to implement that and there's some things in here that, you know, um, We appreciate the audit process, just, uh, um, As far as the school board members, uh, owning businesses in town and doing normal business at a hardware store or a florist, uh, I'm a, I'm a shop local guy and I know all of you guys are as well. Uh, we like to support our communities and I think it's important for the school district. To be able to do such things and uh we just, we corrected that and made sure that there would not be an audit finding in the future for small minor transactions with some of the school board members. Businesses Just one last thing I would like to introduce. We have a new district treasurer for this school year, uh, who's different from the treasurer who assisted with this audit, uh, Kyle Hunt, he's right behind us, available to answer questions if anyone has questions on it. But as Doctor Owan said, I think a fair amount of this looks worse than it is because. There was a fair amount of information was not supplied to the auditors, so like the. Uh, 3rd finding on the indoor playground is Dr. Owa explained. The pre-K minister solicited information from a number of playground vendors and found out there was only one who provided an indoor playground equipment. So the law allows you to sole source in that situation, so that's what happened. Uh, those were DHS funds because it was pre-K. And DHS also conducted a desk audit last year where this was not flagged. Uh, and I think that's probably because they got the, the information that this was a, uh, a sole source situation. The uh. The first finding on the related party transaction for 51,000. I didn't know this before this process started, but apparently in central Arkansas, if you want to get fresh bread for students in schools, there's pretty much one vendor you can do that through. And um. Coincidentally, a few years ago we had a board member marry that the man who runs that business. Uh, but he's been providing fresh bread to school districts for over 2 decades. Uh, there's a bakery up in Northwest Arkansas that, that bakes all the fresh bread. And just before this audit year, they decided they weren't going to deliver the fresh bread anymore. So our child nutrition office, uh, sent out a public bid process, a request for proposals and only got the one back because there's only one. For Central Arkansas and he provides fresh bread from our district all the way up north to a number of districts. Um, So We missed the resolution going and the approval from the, uh, Department of Education, but it was a situation that the department would normally approve because it is an unusual situation with only one vendor. Um, the other larger one, the $7000.01. That's Whit Davis lumber. It's a retail store. And there's basically two retail hardware stores in the district, so you have maintenance people going and just buying tools. And it's just one of the two hardware stores in the district, and I don't think the law of means or this committee intends for. If, uh, If a board member is a part owner of a local business that district can no longer do business with that local business, so, uh, you know, some of these things are, uh, That additional information I think helps explain some of it, so we appreciate the committee's time. We appreciate Mr. Fink and his hard work on the audit and uh. Look forward to working with him in the future. Thank you all. Thank you for sharing the information. Um, my first question is to the superintendent. How long have you been in the position that you have now? This is my 4th year as superintendent. OK, so you were in your role when these findings were, were made. Yes. OK. Um, I want to ask about finding number 4. Um, sometimes the. The small things, um, tend to jump out, but sometimes they feel the most egregious. I just want to ask about the, the 9971 for staff gifts and the 1513 for two day shipping. You just tell me what that is? Yes, sir. Typically we will purchase things with the district logo for staff to use uh during their course of work um and in this case they were uh backpacks that are licensed staff utilize to carry their laptops in and then I classified utilized them for tools or whatever their technology supplies are. And we actually did not pay the shipping. Um, that was an error and the company, the vendor corrected that and credited two payments toward there. So we actually didn't have to pay shipping at at all, um, as indicated on the invoice, the corrected invoice that they sent to us, but those that charge was for those backpacks that our staff utilize for their work day to day. OK, thank you. Yeah, the, the gifts and then the cost of the shipping really jumped out to me, so I had to ask about that. OK, Senator Chair Sullivan, I believe you had some questions. You're good. OK. Questions from any other committee members? Representative Duke. Thank you Mr. Chair. I just had a quick question as far as what are the years of experience of your school board members? Uh, so I can speak for myself. I don't know about many of the other members, but I've, I've served on the school board since before we began, uh, I think 2014 we were appointed for the Jacksonville North Pulaski School District. Prior to that, I did serve on the Pulaski County Special School Board as an appointed. I don't remember what they called that position when the district was taken over by the state. I did serve on that. So I've been serving in some capacity with the school board for probably 12 to 13 years. Ron McDaniel, uh, another member on the board has been with me. The whole time he served previously on the school board as well. And then our various members, I would say 3 to 3 to 6 years, probably between the other members. Follow up May go ahead. Um, so, um, along those lines, do you feel I I appreciate the detailed responses, the revised responses that came back because it clarified a lot of things. I had questions on so I don't have to ask those questions. Um, but, but you mentioned about the training that you had after. Do you think, since you've been on there for several years, do you feel like you had sufficient training as a school board member ahead of that to be aware of. All of the little Is that you have to dot and the T's that you have to cross to just have that transparency, or do you think that's an area where we need to have more improvement so school board members feel more empowered to have that information and knowledge and not just have to rely on staff to do that. Well, what are your thoughts on that? Uh I mean we do get a lot of training in, and sometimes, you know, as you've been around a little longer, you sometimes things get, uh, it's like the audit report we received the audit report every year. I read through the audit report. It's very thick and it's very. Uh, you know, legalese as far as the, the, the, the reading is not the easiest thing to read through and. I can't remember the terminology between, um, The findings of help me out. What the findings of fact are, what you know, some things are minor, uh, problems and some things are major problems, and when I, when I received the audit report this, this year, I, I saw, OK, we've Tony Wood was here and Doctor Duffy and Doctor Oa, we've, we've always asked about what these things were. They're, you know, minor issues, we've corrected them and we move forward. There's nothing, nothing in here is reoccurring or a major problem or something that I as a board member would have a concern with this. Or nefarious or um illegal or, you know, laundering of money, uh, some, you know, just something bad. uh, they, they seem to be honest mistakes to me, and upon the committee's, uh, comments and as it came out in the papers then it was like, well, let's, let's dig into this a little deeper and we, that's when we requested a little bit further, um, refreshing on just the audit finding, not, not school finance in general. So I thought it was. helpful for us to have a little additional training through this is it's like my grandfather always says, you pay for your education one way or the other, and we as Jacksonville or Pulaski, I think we've learned a lot through this process in the last few months, um, and we'll, we'll, we're better for it for sure. I can't speak for the rest of the school boards in the state, but, uh, we've learned a lot through this process. If I may just point out. The district has several audits prior to this one. They do not have findings like this. Uh, you know, there's. It's not unusual to have one or two things come up in an audit where there's a mistake made, then that's been more typical for the district. This audit is fairly unusual for the district. Well, the, the reason for my question is I, I sat on the school board as well, and went through those audit packets as well, and I've had a very different perspective now sitting here in this chair about the audit findings and, you know, reading through that and so I is also caused me to have some questions for my school board members in my area as well, as far as do you all understand, um, and do you feel like you're supported enough to be able to know? And so that's where the question is coming from. I thought you all did a great job of responding to this is one of the most detailed responses I've I've only a freshman, so I don't have a lot of perspective, but I do appreciate that and if there's anything that we can do, I think as a legislature to help better empower our school boards, you know, then I think that's something that I at least would be interested in looking at and I would love to have you all's feedback on. Yes, ma'am, and I think I would concur as far as the comments that we heard from this committee that the response wasn't detailed enough when we had a meeting. The board agreed and we, you know, the serious nature of, of, of the audit findings, we needed to be a little more detailed and we, we tasked Doctor Oh and the staff to do that and once they had this revised that we as a board met and went over everything in detail and it satisfied our concerns and this is the way it needs to be done moving forward and I would agree. Thank you, Senator Clark. Thank you Mr. Chair. I was Not suggesting anything nefarious, uh, I've come from a family business that is very similar to Whit Davis, uh, building materials and hardware. In fact, we've been affiliated with Whit Davis, uh, in the past. The but in local schools come and buy maintenance. Uh Things from us that are a no bid. Type of thing. So I understand that. But are you suggesting that if I was elected to the school board, Uh, knowing that the local school was buying for me and knowing the law that I shouldn't, uh, come to the superintendent and the school board and suggest that we either have to stop that process or have to have a vote that it's OK. No, sir. I don't know if that was directed at me, but I would say, no, sir, not at all. That was not my intent in that that answer. Our understanding is board members, we We all fill out financial disclosures. It's a known fact that that those parties have interests in those businesses. They have recused themselves in meetings when we have votes on on things of that nature, so it was not a, it, we thought we had done everything that we needed to do. We just didn't have a resolution, standing resolution for like When somebody needed to go get a 2x4 at with Davis, we wouldn't expect to have a vote, and that's, that's, and that was our intent. We didn't know that we had to have a standing resolution in order to be able to do that. So maybe there needs to be a clarification in law because I brought this up, not because I don't, there's obviously nothing nefarious from my viewpoint, knowing how that happens. On the other hand, knowing that there's a an account because there would be, there would be an account and knowing that those purchases are happening and knowing the law unless the law is not. Doesn't say that, but I think it does, uh, or the law needs to be changed or clarified because I'm, because it would be crazy for a 24, but to know that there's Possibly hundreds of dollars a month being purchased, uh, and it was happening before you were on the school board, it still seems like the law would require a vote and that that would be obvious even. Maybe especially to the attorney, uh, rather than it's no big deal. I didn't mean to suggest it was no big deal and I didn't, so I apologize if that came across. I also apologize if it came across that. Uh, board approval wasn't required for that related party transaction. That's, that's what the law is, and we respect that. Um, I was more trying to give some background information, so. It's a little bit different situation than if a board member was steering business to the company or this is just one of the local businesses which is nefarious. That would be a problem. That's something we would have to stop and the board would have to institute some processes to make sure that didn't happen again. Uh, but that's not the situation here and I think. I think partly it rose just because it's a local store and people just went this board member is not involved in the day to day operations of that store. And so I think people were going and purchasing, not realizing the problem that they were creating. I'm sure that's the case. They were already purchasing before it was there and they just kept on and just again, for every other school. So that and for every other school board member, once you're elected to that board, uh, you should be aware that purchases are happening and it should bring it. the tension should you not so that there can be a vote, not for every transaction, to say, generally, we're going to pick up maintenance stuff and we may go with Davis, we may go to ride out, but, but wherever we go, if it's, if we go here, it's, uh, the school board's OK, I agree, and it's on both sides too. It's the board member and the district and the district is highly attuned to it now and we'll have that resolution passed each year. Assuming everything is above board, which it should be, and should continue to be, um. We'll approve those transactions and standard business will continue to be run and if there is a problem, the the district and the board will take action. And this was not to get on the ad. This needs to be clarified for, for all schools. Mr. Chair. All right. Any other questions from the committee? OK. All right, Singa, we'll go ahead and dismiss you all. Thank you for coming and I will echo Representative Duke. I've been on the committee a couple of times now and it was one of the most detailed responses we've seen so I appreciate you all putting the time in to give us a more in-depth response and your corrective action plan and, uh, just great work on that. Thank you. Thank you all. All right. Got it. OK, so without objection we'll consider that report filed. Alright, seeing them, we'll go to our next report and just so the committee knows we've got 4 other districts that have Personnel present today to answer questions. So we'll head to the 2nd of our 5. Uh, the next that was deferred from the July meeting is, uh, Hope Academy of Northwest Arkansas. Um, I will not read the finding in its entirety, but I'll try to provide a brief summary, um, We found material errors in the general and special revenue funds, uh, related to misstatements and, um, The financial statements were corrected during our audit field work. Um, we found issues related to bank account reconciliations. Um, we had issues where it was not properly reconciled at June 30, 2023. And then we also noted that the June 2023 bank account was not approved. Um, we, we noted issues related to, uh, receipts, um, on the credit card transactions, um, adequate supporting documentation was not maintained for transactions totaling $6000 on $1600 we, we noted no review or approval, um, and some various other, um, issues, uh, on employee leave records, we noted that those were not maintained in accordance with Arkansas code. Um, during our examination of, uh, non-payroll expenditures. Uh, we noted issues on non-disbursements that did not indicate, uh, approval and then also, uh, non-disbursements were made with only one authorizing signature in noncompliance with Arkansas code. Um, during our examination of payroll expenditures for 5 employees, we noted that signed contracts were not available. And uh finally, the charter board is required to review, adopt and publish the charter school's budget and a budget was not available for audit review. Um, that concludes the findings for Hope Academy and officials in attendance to answer any questions the committee may have. Yep, if you would please join us at the end of the table. If you would start, just make sure your microphones on and tell us your name and your position. Yes, my name is Doug Hess. I'm the director of education for the Northwest Arkansas Children's Shelter. And additionally, the superintendent for Hope Academy of Northwest Arkansas. Thank you. First, uh, just how long have you been in that position? As superintendent last month of fiscal year 23, and that would be December of 23. OK, so a little less than a year then, OK. If you would just kind of start any kind of opening statement or any other information you want to share with the committee. Yes, sir. Thank you for allowing me the opportunity to be here today. When we got our findings, we take them very seriously as well. We recognized probably before the audit that we had some, uh, issues we needed to clear up. We had significant turnover in our finance department as a nonprofit and for the existence of our charter, I Hope Academy has existed underneath the umbrella of Northwest, uh. Northwest Arkansas Children's Shelter. And so we did not do a very good job of recognizing education funding versus regular finance and uh we went through a series of, um, people that worked in our finance department without any stability. Um, we finally rectified that in August of 23 by partnering with the APSRC to do that for us. So we recognize that they were more experts than we were, um, and we're, we're working diligently with them every month to make sure that we're doing the right thing. Um, we've tried to make corrective actions as far as we are getting a dispersing officer. We are working on getting two signatures on our checks. Um, we have cleaned up quite a bit of our financial recordkeeping with a director of finance, uh, now that's been in a position for a long period of time. He has worked very hard to right the ship, um, so, and we've done a good job now of trying to separate uh the Hope Academy. From our other, um. Um The rest of the organization as far as treating them a little bit differently instead of just treating that as the same thing, so to speak. OK, thank you. Senator Irvin. What's, what is the organization that you just referred to? I'm sorry, Northwest Arkansas Children's Shelter where nonprofit. I'm sorry, but you said that you, you said you were treating them differently than the rest of the organization. I apologize. We, we have one finance director, uh, and we were having them do all the finance for both Hope Academy and our shelter, and we recognize that we needed to have an expert in education finance financing, so we partner contracted with APSRC to, to do that for us and to help us along those lines, OK, but the name of your organization is not just Hope Academy, you have a the Hope shelter is correct. Hope Academy exists underneath the umbrella of Northwest Arkansas Children's Shelter. Yes, ma'am. OK, so Northwest Arkansas Children's Shelter is the umbrella organization. Yes, ma'am. That was my question. Yes, ma'am. And is that organization a nonprofit? 501c3 yes ma'am. OK. How many students do you have enrolled in the academy 24. And what grades are you serving? 4. K3 4 and you have 24. We have the capacity of 50. OK, thank you. Thank you all. Yeah, it actually is in my district, um, near Centerton, if I remember, I remember touring the children's shelter and remembered when y'all made the charter application or making this change. I know it's a relatively new charter and, uh, probably still working out, you know, some of the kinks on things, um, but if I understand right, you have very specific mission, you know, not your typical student body. I think you're working with, you know, a lot of children that are coming out of the. The foster care system and things like that. Yes, sir, primarily with children that have experienced trauma that haven't been successful in a regular public school setting. Uh, these children have often been, um, sent away from their home district, whether they're homebound or they get expelled because of behavior. We work hard to try to get them to recognize how they can be successful in public school and hopefully transition them through to where when they move on to their next school, they have the tool set to be successful in a regular public school. Yeah, so So the, the finance person, and I understand the education funding is more complicated, but the finance person that you did have was that person a CPA new one is, yes, yes, ma'am. What about the previous one? I'm not aware of whether she was or not. OK, thank you. Any other questions from the committee? OK, seeing none, we will go ahead and dismiss you. Thank you for coming to join us today. Without objection, we will consider that report filed as well. Thank you. Uh, the last report that was deferred from the July meeting is uh Marvel School District, uh, finding one, there was no documentation of board approval for $12,000 paid to the superintendent for attendance of meetings and training prior to the beginning of her contract, documentation of the days were available for audit inspection. And finding two was a repeat finding. The district's operating bank account was unreconciled during the 2023 fiscal year with unexplained variances ranging from 9300 to 923,000. As of June 30, 2023, there was an unreconciled variance of $78,000 a similar finding was reported in the previous two audits, and I believe there is an official here from the school to answer any questions the committee may have. All right, folks from Marvel, please join us. If you would just please make sure your microphones on and give us your name and your position, please. Good afternoon. My name is Tran. I'm the new superintendent of the Marvel Lane School District. Scott McCray, director of finance. Thank you. I'll just say new superintendent? Yes, sir. So, um, um, as you know, Marvel Lane was part of the first Transformation Act, um. By our new governor. And so we uh friendship took over day to day management. So everything that happened, um, based upon this audit was based upon the previous superintendent, and so we're just here to answer any questions you may have. OK, thank you. Any other initial comments you want to share with the committee about the findings in the report? I mean, with everything that that has happened, we have gone in to make sure that our finance department is a little bit more structured. Uh, we're partnered with APSRC to help us with the actual finance with Mr. Scott McCray as well to help with that. So at the end of the day, I think our all our processes, procedures a little bit more aligned with everything that we need to do. And so with the external help and plus with the Department of Education, helping us to ensure That um everything is moving accordingly at the Marble Lane School District. If, if I could, I'd like to speak to the bank. You know, when we took over or started working with the district, uh, a year ago this month, um. You know, I was aware that the school district had previously, previous year issues with the bank reconciliation. So that was our number one priority, or at least mine going in. Uh, so our goal was, um, you know, through that first year is to do all the processes, um, Financial process is each month and balance those month to month, but also going back and trying to determine the discrepancies for the previous year. So we were able to accomplish that and as of September, we do have a 0. Variances on our bank wreck. Uh, we were actually able to get it down to a $1200 credit for the district. So we were happy to do that and, um, So going forward, we shouldn't have any issues and we should see a zero variance every month. Great, that is a very good news. Thank you for sharing that with us. Uh, I do have one question either for you gentlemen, or maybe for Mr. Fink, just on finding number one, this $12,000 that was paid was that returned or recovered, or did we, did the superintendent. that money So just a little context on that, um. Those were off contract days which occurred before the superintendent was hired to the position in July of 2022. Um, following the passing of the former superintendent, and, um, the days were documented, but there was no evidence of approval by the school board. The board actually went into executive session at the October 2022 board meeting, but there was no motion or action documented concerning the payment and so we just could not verify that the school board had approved, they did have, um, uh, documentation available to us that we could look at. And so we did confirm, uh, what each payment was for. Um, it looks like, uh, there were 24 off-contract workday at $500 per day, and these days were from meetings, trainings, and conferences. I, I'm not aware of it being. Paid back, um, I could, it hasn't been paid back. OK. S Irvin. Thank you. What is the name again of your y'all y'all came alongside, correct? Because of the Learned Act, is that correct? Could you just talk me through that just a little bit? I'm just really interested in how this is working. So, so the state is contracting with Friendship Education Foundation in Arkansas to go ahead and do the management of the Marvelland School District and so I worked for Friendship, but I'm, I'm their superintendent at Marvel Lane. And so what we do is we provide day to day management overseeing instruction, overseeing facilities and everything, everything that has to do with a school. Um, it's just that we've had experience, you know, in running schools and turning around schools. And so with that, um, they asked us to come in and actually run that school. OK. And um, so apart, I'm just curious if I could have a little bit of latitude, um, just because I think this is the first time that we've had somebody in your position kind of talk to us, talk to me more about, um, I'm interested in the finances and I think you've done a great job obviously of turning that around, but could you tell me a little bit more about like, how are y'all being received, how's the culture there? Are you, is it, are y'all able to have an impact just beyond the finances with the culture with the student body, with the faculty, if you don't mind, I, I'm really interested to hear that. we actually present to the State Board of Education, I think it was in June. So it's been great. Let let me say this, when we first started it, it was like they saw me and go, huh, what are you doing here, right? Because it's in the delta, right? So it was kind of like, um. Coming in new as a new kid and trying to actually change things. Um, I can tell you when. The year before that we had kids that were walking around the school, right? They weren't in classrooms, they weren't doing what they're supposed to do, it was just it was a different culture and so what we came in was we tried to actually stabilize that. We had a we had a new principal, high school principal who had a lot of work in certain culture, um, I finally like, this was probably May, June. We actually found out that we had an elementary principal. Right, um, because she wasn't, she wasn't given the opportunity to run her school. And so coming in, we, we managed to stabilize the school. Kids are actually in the classroom learning now, right, whether it's in and out, but they're in the classroom instead of actually walking the horse. Um, culture is different. We managed to get rid of crocs. Um, the shoes because that was posing a lot of a lot of issues in that creating uniforms. It's just the culture was different. The culture now is about learning and not just, you know, passing the the students on. Um, when I first came in, we found out through different set of testing that a lot of our kids in the in our upgrade level, they didn't know what to do. Like they were like 5 to 6 years behind, um, you know, we got 7. Greatest 8th grader, 5th grader, 6th grader, they didn't know how to add and subtract multi-digit numbers, generational neglect. That's pretty much it. It was just moving the kids along just for the sake of moving kids along. And so I think with everything that we are trying to do now. You know, we can't do everything within a year because that's just impossible. But I think we're making a lot of impact. There's a lot of growth, um, when we actually did our test results, um, we use Dels as one of our testing, and Debos is a is a reading testing program. We started at the beginning of the year, and again, please don't quote me this because it's, it's been a few months since I looked at the data. But we started the year with some of our kids reading at 20 words per minute. We ended the year with kids reading at 50 words or more per minute. And that was in the higher grade level, not the lower grade, that was in the upper grade level. So at the end of the day there's a lot of work to be done. There's still a lot of work to be done because again, like I said, you can't catch up with with the decades of misinstruction, but we gaining ground, given a few more years, I think we'll be able to get where we're comfortable with, um, at this moment in time, you know, I think the is better Um, parents know me. I mean, I, I'm able to go into, uh, we had a parent, I'll give you a scenario, we had a um a parent, um. Bad experience Right? Bad experience from previous Administration, um, didn't like it, so and so forth, but I was met, you know, I did a lot of home visits and was able to change that parent around. So this moment in time that parent's like, like I met her yesterday, she said, whatever you need. You just need to tell me whatever you need. So it's, it's the work of getting to know the community. It's the work of getting to know your parents, right? The work of getting to know your students, because when we first met our students, the only thing that they wanted to do was learn. Like I literally asked a few of them, say, what is it that you want to do different this year with us? And the only thing that they say is I want to be taught. That's pretty much it. So at the end of the day, That's easy, right? Go inside the classroom. And teach those kids. We're having issues with, you know, when we started, because we're in the adult, it's hard for to get like quality teachers, human resources, because it's not much there. And so what we've decided to do was actually build from within. So our teachers go through, they just went through a two-week, um, boot camp where they looked at the standards, the new standards, because you know, uh, um, we have now the Atlas testing, so they have different standards. So we went through standards, we went through pacing, we went through assessments. So for those two weeks, they went through and they tried to master it and understand what is it that they need to teach our students in the coming year. And so we're working with them to Build them up to make sure that they become the best teachers in their district because at the end of the day, like I said, it's, it's hard to get teachers to come to the delta and the teachers that we have, they're great teachers. They want to be there. They love teaching. They love our kids. So why not build from the inside instead of trying to get people from the outside who don't understand the community, right? You don't know the kids. Because of a lot of our kids face a lot of trauma. Homelessness. So at the end of the day, um. You know, we're trying to build that up because our teachers showing a lot of love. They come to school because they love those kids. It's not there because of a job, because trust me, you know, teaching is one of those professions that you don't, you don't get paid a lot, but they're there because they care for the kids. Thank you so much. Thank, thank you. That's probably the best thing I've heard all month. I really, really appreciate it and again it's, it's with the, the partnership with the department, it's with the, the Secretary of Education. It is It's with everybody combined together that makes this work because without them. Because we just us, right? We need people to come in and do everything to help out to raise that community. Thank you. Thank you so much. Thank you, Mr. Chair. Thank you all for sharing that. I think we, we recognize you have a big challenge in your hands, but we're rooting for you and I hope you have a lot of success in trying new ideas and new models and so I appreciate that. Representative Carr, you have a question. Thank you, Mr. Chair. It sounds like things are going great. The backward design. Because you're talking about the, the assessment, then the standards and you, you mentioned Dibbels. What other intermediate assessment are you using NWA map, yeah, so we have that and we, we continue to use that because again this year the department is putting out the screeners and atlas tests, but I know there's still some kinks in the system and so we're still keeping that, that um that uh platform to ensure that what I was hoping you would say that because with that dibbless and your backward design, everything is ma tic and everything is scientific, and you'll be able to monitor that, uh, follow-up question? Sure. Thank you. Uh, What have you been doing in terms of celebrations. Yeah, most definitely. Our, our kids love it. So, you know, kids love to be bribed, right? Like we provide a lot of positive behavior um incentives, like when, um, for example, last year after the Atlas test we we told everybody, hey, you do well on this Atlas test because a lot of times kids don't want to do anything, right? They just click click, click and and be done. So we asked them, hey. Take this seriously, do what you can, right, and look at the questions and if you do that all, we'll take you to a skating rink. I loved that, right? Uh, we've had, um, during the month, like next um in during this month, we're going to celebrate like those that are behaving for the week, we're gonna try and have a cake, uh, a cake bake where our our teacher, our security officer for some reason I just found this out yesterday. Greatest baker ever. everyone loved his cakes, right? At a school resource officer, right? So he's gonna bake the cakes. We can go ahead, those that actually behave for that week. We'll get a piece of cake and a Coke and the enjoy that, then we're gonna have a staff game where students will compete with the staff. So just different things to actually motivate them, but with the biggest event, we try to like take them out of marvel like to the skating rink to um to field trips here and there, just, just to make it different. Well, and, and that goes back to like you said, visiting with that parent, it all boils down to relationships. And so I think, I think you're hitting it all around, uh, and I look forward to seeing the progress because I know there's gonna be progress. with what you've got going on, thank you, Mr. Chair. Thank you. Thank you. Any other questions in the committee? All right. Thank you all for coming and answer our questions, and again, good luck in the future. OK, thank you. Thank you. Thank you. With that objections, we'll consider this report filed. Thank you. OK, that's Or All right, committee, we're going to jump to repeat findings. It's page 15 of your packet. If you want to go to page 15 and Mr. Fink will walk us through that. Yeah, Senator Um On the Osceola School District of Mississippi County on that report. I'm not sure if we're gonna look at that or not, but I really think they need to come and answer about what happened here. Are we going to go back to this one or yeah, we're going to go back to that one, yeah. Uh, there were 2 reports that had repeat findings. Uh, the first is Jasper School District. Um, our examination of bank reconciliations revealed the following. Bank reconciliations were not prepared for the district's operating bank account for the periods July 2022 through May of 2023. The district's operating bank account reconciliation as of June 30, 2023 reported an unreconciled variance of $51,000. However, multiple journal entries were entered to cash by the district for the June 2023 period subsequent to this reconciliation, resulting in a variance of $159,000. ALA staff identified $157,000 in errors during audit field work, leaving an unexplained variance of $202,200. Um, and then in your finding, uh, in your synopsis, you'll see uh details related to those errors. I'm not going to read each one of those. And, um, as I stated previously, a similar finding was reported in the previous audit, and that concludes the findings for Jasper School District, and they do have officials here. Yes, if you would please join us at the end of the table. Probably know the routine by now, but please just turn on your microphones, tell us your name and your position, please. on. I'm Kendra Brazil. I'm the superintendent for the Jasper School District. I'm tall brass alumna board president for the Jasper School District. I'm Morgan Hodge on the district treasurer. Thank y'all for coming, uh, if you would just give us your kind of initial statement about the findings. OK, we definitely acknowledge the findings and just want to say that this is not what we want to be indicative of the way we do business in our district, for sure. Um, we did have 2 years of similar findings. They weren't the same finding, but they were both bank reconciliation issues. And what we discovered is we need better attention to detail. We need to realign our Central office, so that's what I did. I removed some duties and a small rural district, we wear many hats and everyone in my office has to wear many hats and what I discovered is that maybe we weren't being able to give the time and attention needed for these variances. So I realigned, uh, the duties. And we entered into an MOU with APSRC finance specialist, so that every month, uh, we are zooming with them and they're helping to have extra eyes on those bank reconciliations and also answer questions related to other finance, um, things that we might need assistance for. OK, thank you. Any questions from the committee? OK. Well, you know, anytime, uh, the committee typically pays special attention to repeat findings just because we don't like to see, you know, the same mistakes made year after year. So do you feel confident now that You won't be before the committee next year with the same findings. I feel confident. Yes, I'm assuming that with this extra help and extra eyes with specialists that do this all of the time, they know exactly what to look for for these variances, how to get the proper codes on the front end so that we're not having to do journal entries to try to fix mistakes and have more errors. OK. All right, seeing no questions, this one will be a fast one, but thank you all for coming and answering our questions. We appreciate it. Without objection we'll consider this report filed. Alright, and this will be the last one where we have folks present and then we'll circle back on the agenda. Uh, Rector School District had two findings. The first one was a repeat, um, bank reconciliations were not performed for the year ended June 30, 2023. AL ALA staff identified $511,000 of the unreconciled variants, leaving an unexplained variance of $3100 and then finding two on June 30, 2023, the district paid assessed penalties of $26,000 for failure to file quarterly tax reports for quarters ending June 30, 2022 through December 31st, 2022. Additionally, the district paid the assessed penalty of $99,100 in interest fee of $1500. For state taxes for the period ending December 31st, 2022. And that concludes the findings, um, and there is an official here to answer any questions the committee may have. OK, yeah, if our representative from Rector would please join us. If you would please state your name and your position. Hey John, I'm, I'm a little nervous. Johnny Fowler, superintendent of Rector School. All right, thank you for coming today. If you would. Just share any information you'd like to with the committee about these findings? We have some findings where we had several months that were not reconciled and we also had some taxes that were not paid. Since then we have a new bookkeeper. Taxes have been paid. We're good standing there or reconciliation will be taken care of by the end of December. OK, thank you. So these uh I'm finding to. Where we have uh penalties. The district paid assessed penalties of 26,423. And a $9000 penalty. As well as interest. Looks like those were. Where those federal and state. Yeah. Yeah, this is one I have, it's been a while since I've seen, but, um, we saw a number of these at least a couple of years ago on another committee gave special attention to these, we really Uh, don't like to see districts, you know, having to pay penalties on top of taxes owed, um, especially being public schools. We hate to see taxpayer money going to pay penalties to the government. Um, so it has been a while since we've seen them, but um. You know, the responses are a little bit short, um, but could you just go into a little more detail about what changes are being made to make sure that that doesn't happen again. As far as taxes, uh. I know I know the bookkeeper is the new bookkeeper doing her job or she makes sure they're paid each month. And every time a teacher told what to do, she makes sure it's paid and I have confidence in her and I do sign off on what she does. Do y'all work with anyone like APSRC or any of these other groups skin right now, but that's on reconciliation part. OK. And has your new bookkeeper gone through any training with the department or school board associate, I guess it wouldn't be a school board but she, she go to all the training that's required, yes. OK. Any other questions from the committee? OK, Sean, thank you for joining us. Appreciate it. Thank you. Alright. And with that objection, we'll consider the director report filed as well. And then Mister Finkwood will go back. A Page 8 in your packets. Mr. Fink. The, uh, mountain Pine School District was referred, uh, to the PA and the AG as well as certified to the Bond board, uh, finding one. During our review of 21st century community learning centers, uh, payroll expenditures, we noted the following discrepancies. Timesheet documentation was not provided for one employee for payments totaling $275. Timesheets for 3 employees totaling $1000 were not signed by the employees direct supervisor. Additionally, time sheets totaling $2100 were not signed by the applicable employees. Time sheets for 2 employees totaling $418 appear to have been completed and signed by someone other than the employees. The site coordinator was overpaid $1900 for time sheets that conflicted with the employee's existing contract. And additionally, time sheets totaling $7500 were not signed by the employee's direct supervisor. The program director was overpaid $180 and $620 respectively for hours that conflicted with the existing contract and for duplicate hours. Additionally, time sheets totaling $21,000 for the site director were not signed by the superintendent or the district designee. Finding two. During our review of 21st century community learning centers program, non-payroll expenditures. We noted $4800 in expenditures for conference registration, airfare, hotels, mills, local transportation, and parking fees during a professional development conference because supporting documentation of conference attendants could not be provided, we were unable to verify that the employees attended the conference. Additionally, we noted unallowable costs paid from the 21st community grant totaling $1100 for conference registration and airfare charged to the program in error. Specifically, these costs should have been charged to a different program. Finding 3, review of a candy bar fundraiser revealed that $4300 in revenue should have been collected. However, only $79 was deposited in the district's bank account, leaving unaccounted for fundraising proceeds of $4300. The district librarian was the fundraiser sponsor and custodian of these unaccounted for funds, and that concludes the findings for Mountain Pine School District. All right. Thank you, Mr. Fink, and Remind me these are reports that were referred to the prosecuting attorney or they typically asked to come to these meetings? They get a notification, but it's not within the committee rules that they receive an invite to actually attend. OK. I have 2 questions. First, I'm finding 3. Is this district librarian still employed by the school district? No. OK. And then I'm finding two do we happen to know which conference this was where these funds were used? Um, it was a conference in Orlando, Florida. I don't have the exact name of the conference, but I could get that for you. OK. All right. Any questions from the committee about mountain pine representative Duke? Thank you, Mr. Chair. Since you asked that first question, I'm thinking I can ask this one. Has there been any changes in, um, personnel in the 21st century program. I believe that, um, the two individuals who were involved are no longer at the school district. Uh, any further questions about this report? OK, seeing no. Can we just continue with all the prosecuting attorney reports? OK. Um, the next 3 reports were referred to the prosecuting attorney and the attorney General. Um, Deer Mount Judy School District, finding one our examination of payroll expenditures for 13 employees revealed the following. Um, I will not read each one but provide a quick summary. Uh, there was issues with accumulated sick leave records, uh, employment contracts, um, documentation of unused vacation days paid to an employee upon retirement, um, unused sick leave, paid to 4 employee. and additional pay to another employee, additionally, with payroll, um, the documentation of board approval could not be provided for the substitute daily rate of pay. Um, during our examination of 58 non-payroll expenditures. Uh, we noted adequate supporting documentation was not maintained for non-disbursements totaling $27,000 in credit card transactions totaling $66,500. And then, uh, we also noted internal control issues, uh, with journal entries, bank reconciliations, um, as well as Capital Asset Records, finding two during our examination of expenditures, we identified 4 capital expenditures totaling $34,000 paid from the COVID-19 education stabilization fund, in which the district did not obtain prior written approval, approval from DESE, those, uh, uh, are all listed there in the finding. In detail. Finding 3, there were 3 unauthorized withdrawals totaling $88,400 made from the district bank account. Uh, entity personnel discovered these withdrawals and the funds were recovered from the bank. Finding 4 in March 2023, 34 fraudulent charges totaling $1800 were made to a district district purchasing card. The district discovered the charges but failed to dispute the charges with the financial institution timely. As a result, the charges were not reimbursed and that concludes the findings for Deer Mount Judy. OK, thank you. Any questions from the committee on this report, Senator Urban. Do we know what this window of time is on on the, the fraudulent 34 fraudulent charges in the time frame. Yes, um, and so when they got a new superintendent, the new superintendent actually disputed these charges and talked with the bank, spoke with the bank, and what they, um, told the superintendent was is they had to be, uh, disputed within 60 days of it occurring. So 60 days that a bank policy? That's, uh, bank they use, that's their, OK, I'm sorry, but I just think that's ridiculous. This, they, they need to get to another bank. I mean, I'm just gonna say that because this, the fraudulent charges that are occurring are just unbelievable and they're happening all the time. And it makes, I mean, this is, we've had this in this committee before. This is something we have to refer to insurance and commerce Committee because I mean, it, it's, it's, I mean, it just happened to me recently. I can't use my own debit card, but then the bank won't stop. Because and I, they won't stop fraudulent charges from being taken from my account, but they won't let me use my own debit card if I don't report that I'm traveling to Mississippi. It's insane and there's got to be a level of, because we're seeing this repeatedly and 60 days is just not enough time for people that are dealing with an education finance model. That's got to be addressed. I mean, even if it needs to be addressed legislatively, I just think that that something has to give here, but I, I'm sorry, this is not, I guess, my really question was just, that's a bank policy. So we. We need to have some discussions with the Arkansas Banking Association if I may, um, that, so the fraudulent charges took place in March of 2023. And, uh, the note I made says that the, the new superintendent attempted to dispute those in October of 2023. But that's, I mean, that's reasonable. OK, thank you. Just out of curiosity, have you come across this before in audits where banks are Denying schools the ability to challenge fraudulent charges. Most of the time if the schools have good internal controls in place and they, uh, bring this to the attention of the bank, um, in a reasonable amount of time. I don't know the timing of each bank, but if they do, they usually recover the funds. You'll notice in finding 3, they actually recovered those funds. Um, now, I don't know if the difference is because one was. You know, actually on a credit card and one was most likely on a check, right, so, um, there may be a difference there, but most of the time, if the district has good internal controls in place, um, and they dispute it timely, they will recover the funds, but we do see this all the time. Yeah I agree, Senator Irvin, you know, we see this they have insurance for this type of thing? I mean, sorry. And it's something I think school districts need to be asking their banks as if this does happen, what is the bank's policy uh for them to challenge any charges. So thank you for pointing that out. Are any other questions about Deer Mount Judy? I believe our final. Reports or we have Viola. OK, yeah, Mr. Fink, yeah, since we have no questions, we'll move to Osceola. OK, Osceola School District was referred to the PA and the AG finding one during our review of board meeting minutes, we noted the following on September 11, 2023, the board failed to adopt a motion to hire the superintendent's spouse as a novice teacher mentoring specialists. Subsequently, on September 26, 2023, the district executed the contract totaling $112,000 with a company owned by the superintendent's spouse. Services for the novice teacher mentoring specialist position. This contract, which was not approved by the board, was for 8 months commencing on October 9, 2023, and concluding on May 31, 2024. On June 12, 2023, and again on July 20th, 2023, the board failed to adopt a motion to hire a family member of the assistant superintendent as an ESOL and and dyslexia specialist. Subsequently, on August 25, 2023. The district executed the contract with a company owned by the previously mentioned family member for services pertaining to ESOL and dyslexia. This contract, which was not approved by the board, stipulated the district would pay the company $2600 per day for dates worked from July 11th to August 12, 2023. $201,000 for the remainder of the 2324 fiscal year, 220,383 per year for the FY 25 and FY 26 years. During audit procedures, we also noted that the district paid $6600 for services to the same company owned by the assistant superintendent's family member during the fiscal year ended June 30, 2023 without seeking approval from the board and commissioner of the Arkansas Division of Elementary. Secondary education. As required by Arkansas code. Failure to obtain board approval for contracts raises concerns relating to conflicts of interest and conflict with Arkansas code, which states in part, an administrator's family members seeking to contract with the public educational entity employing the administrator. Shall first present the request with all relevant facts and and circumstances justifying approval to the board currently employing the administrator at an open meeting. It should be noted that that the superintendent resigned on March 14, 2024, and the district notified the two companies that their respective contracts would be terminated effective May 31, 2024. Finding two, is related to, uh, payroll issues. I won't read each one, I will read the, the last bullet there. On November 3rd, the board approved a retention bonus to licensed personnel of $2500. During our testing of employees' compensation. We identified 5 licensed personnel were paid a retention bonus of $5000. Upon further examination, it was noted that 92 licensed employees were paid a total of $230,000 in. Excess of the approved amount. Um, finding 3, was related to internal control issues with the use of credit cards, um, they did not have adequate supporting documentation, uh, on 46 transactions. It did not indicate any form of approval or authorization. And then we also noted issues with exceeding the, uh, IRS per diem rate, which was the district's written established policy. Finding 4, during our examination of the March bank statement. We know the payments that were made electronically without board approval. Uh, these are not done with, uh, in accordance with Arkansas code and the ADE's commissioner's memo listed. finding 5, which is the last finding, um, the district's bank's accounts, the district's bank accounts were unreconciled by $90,000 as of June 30. Um, staff identified $41,000 of the unreconciled variants, uh, leaving an unexplained variance of $48,000. Additionally, we noted that the reconciliations, um, did not have the superintendent's approval from October to June, and that concludes the findings for Osceola School District. All right, and we don't have anybody from Mosilla. Today Uh, we do not, I, I would point out that they have a new superintendent now, um, I think they've, they've also, uh, hired a former, not, not a part of this administration, but a former district treasurer to come back and help them with their finances, um, and as noted in that first finding, um, the district notified those two companies that their contracts would be terminated on May 31, 2024. is the assistant superintendent that was referenced in the first finding. We know if that person's still with the district? I'm going to ask that question right now and get you an answer. OK. All right. um, obviously a lot of findings, um, yeah, I believe there's been some media coverage of this, um, so folks are probably somewhat familiar, but, uh, Senator Irvin, you had mentioned, do you want to make a motion on this one? Yeah, I, I make a motion that we invite them to come before the committee and the, and the reason why is this, and, and I want the school board to come before the committee. Um, I want to know what their reading scores are, their math scores are, and why they feel like this just is a slush fund. For their friends versus actually an education institution because that's what it appeared to have been, so, um, I, I make that motion because this is just unbelievable to me, and they should, they should come and answer. So the motion if I. Understand Mr. Fink would be to defer this report until our October. Meeting we can invite folks, particularly school board members from Osceola to come to the committee. So that's the motion to the committee is to defer this report to next month. Do I have a second? Alright, I got a second, um, any questions or comments? On the motion before we vote. OK. All right, so all in favor of deferring this report to next month. Say aye, all opposed. All right, we will defer this report. So I'll ask Senator Irvin, he said that typically we would invite superintendent and the school board president. Is that what you have in mind? Would you like some other school board members to be invited as well. If I'm not sure how long the school board president has been there, um, uh, you know, and was a part of this. Or New school board president Representative Carr. I'm just saying this, the people that were on the school board while this was happening, in my opinion, should be here. So Staff's OK, why don't we go ahead and just invite? School board members and the ones that can join us can join us. And Mr. Chair, Mr. Fink, do we know what funding they used for these retention bonuses. COVID was that COVID? So, you know, ALC did make a recommendation of a $5000 bonus. I think that's probably what you're referring to. They did that like they were supposed to. They passed an additional the board did $2500 retention bonus, but when they paid it, they actually paid $5000 to each to licensed personnel. And so they did do the ALC $5000 like they were supposed to. This was an additional payment. Not related to that ALC bonus. So what you were asking. Yeah, so we don't know exactly what their funding source was, just general revenue that they think so, but I'm gonna, I'm gonna find that out for sure. So some people got a $10,000 bonus. If I'm doing the math correctly. Yes, they had, they had multiple bonuses that were approved by their school board. But the school board did approve those. Yes. Just, just not the extra $2500 to the 92 licensed employees, which ends up totaling $230,000. Thank you. All right, so since we've deferred. It's no longer there OK. So in answer to my question, the assistant superintendent is no longer with the district as well. Thank you for getting that answer for us. OK, we have our last district for the uh reports referred to the prosecutor, uh, hang around if you can. I know we have a report coming from Mr. Saunders as well, so a little bit of a longer education audit meeting that we're used to, but we are getting close to wrapping up. So thank you all for sticking with us. Yeah, Val, the school district just had one finding, uh, the district used $1300 and $1500 in the 2024 and 2023 fiscal years, um, in operating and general activity funds to purchase gift cards and other gifts for employees in conflict with the Arkansas constitution as interpreted in the AG's opinion. That concludes the findings for Viola. And if I may, it was general funds that were used. Any questions from the committee on the Viola report? OK. Seeing none other than the Osceola uh report. If there are no objections, we'll consider all those other reports filed. Um, there were 12 reports that contained, uh, findings. These were not referred to the PA or the AG and these were not deferred, nor did they have repeat findings, uh, and management provided a response to each of these staff recommends that these reports be filed en masses reviewed. Um, staff also recommends that the 7 reports with no findings that are on the last page of your synopsis, uh, be filed en masse as reviewed. Any questions about any of those reports? We about approving them as a batch. OK, see then then we will consider all those reports filed. All right. And lastly, I was not at our last meeting, but I believe there was one report the committee had asked for. Uh, at the previous meeting in July, the committee approved a motion that the audit standing Committee on Educational Institutions, review the school districts that have been placed under state control. Uh, there are currently 4 school districts under state control. That is Lee County School District, Marvel, Earl, and Helena West Helena and Eric Saunders from, uh, the Department of Education is here to present information concerning the school districts currently under state control. And then we also have um information that Eric's prepared that's going to be distributed, uh, to each member. OK Thank you if you would, uh, just give us your name and title for the record. Eric Saunders, associate deputy commissioner at the Department of Ed. Thank you. All right. We'll let that report get. Handed off to the committee. And Yeah, Mr. Saunders, you recognize. All right, thank you. Good afternoon, committee. Uh, in the report, so what I did was I compiled basically the the last 5 districts that have been under state control. And when a district is under state control, it can be for different reasons, not necessarily financial. And so just to keep that into perspective. Uh, but if you do look at the report, you do see that the first few pages I go in and explain a lot of the different supports that we provide, uh, some districts. May, may get all of these supports, some may not, and it just depends upon what their need is. And so we, we look at each, uh, district we provide, we go on site, we will do, um, analysis on their, say, procedures and processes, uh, we'll give advice, we'll work with them on that. We, you know, many times we'll even have them come on site as well. But you can see the different, uh, supports that are provided to them, uh. Probably one of the, I, I'd say most common one is we do have monthly Zoom meetings with each of those, and there's interactions in between, but with those we continually go through their budgets and their processes and trying to keep them fiscally sound, probably, uh, to stay fiscal fiscal fiscally healthy for a district. I would say the number one determinant it's going to be their staffing. And so that's what we really focus on is the number of kids that are enrolled and the number of staff members. They have and how they can afford to do that. But with that, I included all the supports that we provide. As well as a report for each district that just a little timeline on the history of each district in regards to, uh, state control, uh, you will see fund balances as well as audit findings for those years as well. So with that I would. Open it up if you have any questions. Sure, if you would, could you just remind us which districts are currently under state control. I know they're in here, but Earl. Yes, Earl Lee County. Helena, West Helena does have partial on that and marble. Which one's been under state control for the longest? Is it Lee County? I'd have to look at each one. I don't, don't know off the top of my head. Sure. I think it's probably Earl School District area because I had them as November 6, 2017 as the state control date. It very well could be, and I know they were released from the fiscal distress and then they're because of academics, um, are under state control at this time just because of that. But we still, even though they're released from the fiscal distress, we still work with them. Literally daily. And when a district is uh taken over by the state, so to speak, is the school board. Dissolved or loses its authority in every case, or is that only uncertain? It it is in a lot of cases, in some cases, for example, I believe in Helena that, uh, The state has authority over personnel and the local board still has authority over everything else. Um, so you do have that sometimes, uh, you know, in every situation's done different and it's up to the state board of Education to make that decision, but, um, sometimes they will, uh, Keep the current board as an advisory board, or they may disband the current board and start a new advisory board if they don't feel. I guess, confidence in the current board, so it could look a lot of different ways, but even the advisory board would not generally have powers or authority, but they, other than to make recommendations to be considered. The State Board of Education has to vote to do a state takeover through the board that has all the authority for these cases. That is my understanding, yes. OK. Senator English. Yeah, so I guess I'm wondering the Earl has been under state supervision since 2017 and isn't it it's over 5 years. And so then what happens to Earl when their 5 years is up, which should be about now. Yeah, so actually the 5 years, uh, on the financial end of that was, that would have expired in I believe in 2023 and they were released on the fiscal end, um, but at that time, because of their test performance, uh, they're in level 5 support from, so they're under state control because of academic performance. So I think to go back to Senator Irvin's thing, I, I think the contract. With Marvel is really unique and something that is hopefully making a very big difference in the past, I mean, what, what's going on in the past and what is going to happen now, uh, for the students. Do you have any idea how many kids are in that, that school district? In which district Marvel, Marvel, let me look, it's 200 and 2324, um, I'm sorry, in 2023 It was right below 300, um, I know it's above 200 right now. That's 12. Yes, ma'am. OK. All right. Thank you. OK. Any other questions from the committee? Uh Thank you, Mr. Saunders, for this report. Thank you. members, anything else on the agenda we need to get to? All right. I guess we've gone through all of our agendas, so with nothing else. No other questions or comments on the committee, then we are adjourned. than Yeah.