Legislative Joint Auditing-Educational Institutions

Gender looks Lee County school district is first on the agenda but the the we understand they're running just a little bit late so we will go ahead and. Go to the third page. And that will be but full school district in Mr new to. Turn that over to you. Thank you Mr chair. Batesville school district had three findings. Of the first finding or examination of credit card transactions totaling sixty nine thousand eighty seven dollars indicated the following. Three thousand to ninety six paid for purchases that were not properly approved. Nine hundred and eight dollars paid for undocumented purchases which consisted of five hundred eight for hotel charges one seventeen for meals thirty dollars for transportation service charges and parking fees and two hundred fifty three dollars for undetermined purposes. There was five hundred eighty seven dollars for meals without a documented business purpose. And six hundred and four dollars for meals without over not traveled over not travel in conflict in conflict with districts travel policy. On the next page we have finding to. Arkansas code states that a school district shall offer the same employer provided health insurance benefits to all full time employees and paid the same employer contribution rate for each eligible employee electing to participate in the health insurance program. In addition an attorney general's opinion indicates that the legislative intent of that Arkansas code was for a district to contribute a set dollar amount for each employee. The district pay the entire amount of the superintendents monthly health insurance premiums totaling five thousand eight hundred fourteen dollars during the period July twenty eighteen three November twenty nineteen of this amount three thousand sixteen was in excess of the employer contribution rate and in non compliance with Arkansas code. I review the superintendent's payroll records and contract for the same period revealed the following. Of the access insurance payments twenty one hundred paid in calendar year two thousand eighteen was not reported as the as income on the superintendent's W. to form. The contract stated that the district would pay membership charges and associated expenses for one service organization however the district pay dues and expenses totaling two thousand thirty seven for two organizations. Of this amount six hundred eleven paid in two thousand in the two thousand eighteen calendar year was not reported as income on the superintendent's W. to. An applicable payroll taxes were not paid. Of the twenty thousand four hundred housing allowance included in the contract fifty five hundred was not reported as income on the superintendent. W. to form an applicable payroll taxes were not paid. And the last bullet the superintendent's contract information was not reported on the district's website as required by Arkansas code. And then the last finding is on the next page. The district expended funds from the operating and general activity funds during the period July first twenty eighteen three November twelfth twenty nineteen for the following non business purposes in Khan in conflict with Arkansas constitution as interpreted by an attorney general's opinion. Seven hundred dollars for chamber of commerce membership dues four hundred dollars for meals purchased from a rotary club fundraiser for board of education members and staff. In addition to this this. House excuse me in addition the district expended four thousand to reserve three tables at the annual chamber of commerce meeting and gala due in part to the district's board and certain employees being nominated for awards in the leader in education category. Although the reserve tables were used by district board members and employees who attended the gala remaining seats at the tables were used by five non employees who also attended the expenses for non employees appear to be constitutionally suspect under Arkansas constitution as interpreted by the Attorney General. And that concludes a findings for Batesville school district. Of. List we. Did nor do we have any Representative from but for school district ID like to say something. Okay. Any questions from the committee. Mr. You're recognized thank you Mr is not really a question I guess it must be a comment I can't course represent the school but I wanted to kind of tell the membership about the chamber of commerce membership dues this may be something we need to fix annexation for years we've been telling school districts that needed to be involved in business and industry and for them to get dean then for two years being members of the chamber of commerce you gonna find several schools in your district are also going to be doing for the same exact thing and so I know of two more within just my Senate district of also had the same finding so like I said whether we put it in professional development appropriation or membership's probation or whatever I don't think it's right for us Ding on for being members of their chambers of commerce since most of your schools will be the biggest employer in your district so thank you Mr. Thank you. Miceli. Thank you Mr chair as far as of people who were sitting at the at the table you we just seems like seem like a natural thing that and I'm wondering about chief what extent is this may be a little bit picky if the chamber of commerce if they bought a table at the chamber of commerce I know it this needs to be reported but something else think about you've got five seats in their four seats left open that puts us in a position to serve either think one of two things is done deliberately so somebody could come free or maybe you just had five people who are going to come and they're just an empty seats and one not have somebody sit in them is something else I think we ought to think about because this really kind of you know seems like the staff is doing their due diligence and that there may be a lot I see a number of things in here that of some due diligence needs to be done but that one is the one that is the most striking the business of the chamber of commerce and how we do insist and then there was another one in here about they will seek I forgot which one is but they're gonna see some guidance from the department of education about just how many Groups to do are we allowed to to join or. If there is a number on it that would certainly need to be clarified because of the ones people are part of I think I would be guilty of maybe join in two or three or more you know as a school district to be a part of the community so good for pointed out to us but I think that's something we probably shouldn't just let go without getting some clarity coming up soon and my my last question I but they didn't have to be here today I guess but this is the first they don't have this is not a second finding. Correct the center was not a repeat finder required yeah and I think that's something that people see along a lot of findings like this and then they go like how could they not be here but I I always like to stress to people it's only it is on that when there's repeat no matter what we think of the rest that's what the rules all yeah. Senator hammer thank you can I have staff question please. Sure okay so let me give you a hypothetical scenario. You get a school district is trying to pass a millage and you got the chamber of commerce in that city pushing it and the school goes out and buys tables at this chamber of commerce banquet have they violated any ethics that you know others or anything that would violate any legislative audit guidelines doing that. well what I would have to refer that to lead our legal counsel to make sure I'm not for sure on that that that would be a legal question on that part okay maybe if you don't mind let me know please thank you. Is the that almost to the same question Trantor starts to to. Address or close to it. Okay. Centerville. My my question on this is I'm back to the to the chamber banquet how do we know that that. School district didn't have for NBC truck there in just the chamber by what was school latest up someone there. I'm sorry say that again to say that the the the school district had four tables available or four seats available the chamber bank what was full that if the seat for someone how do we know that the chamber distance it someone that they would not stand up well we had we we discussed it with the super with the administration there at the and I told us who had set there we know it was I can tell you exactly well now I that that that's fine I just need was here we want as an employees who it was okay but that sector I think it's something you need to add two years also for spouses a lot of times go to banquets. Thank you you're welcome. This may be. And thank you perhaps I missed it but why are they not here. Did I miss something. Of the rules of the of the current committee is your only invite if it if you're in fiscal distress or you have a rebate finding them because these are not repeats correct they were not repeat findings okay. It is especially since we have been so much discussion of this particular issue would be good to get their feedback and a little bit of information from them so anyway. Mr fish I also want to point out that there was response from them that's why first findings if there's a response they typically don't shows we want remember that too they have responded to these things. But they did have an opportunity to come if they would have chosen and we would have recognize yes I mean there is they're aware that it's pretty being present at the committee and they have all the opportunity to come if I would like and lack of Senator Pitsch said they responded all positively that they would get everything fixed. There was nothing negative in a responses. There any other questions. If not entertain a motion to file. Motion made missed he'll. Second. The service all those in favor say aye. Opposed motion carried. Mr new. Your. The our next school district is Camden Fairview school district of Washita counting. Their first finding was during our examination of high school receipts we noted the following receipts were not always deposited in a timely manner. Receipts did not always properly indicate cash check composition. Receipts for cash totaling three hundred dollars was not deposited into the districts bank account. And receiving and depositing procedures were not always appropriately followed. The second finding an authorized this withdrawal of twenty five. Two thousand five forty nine was made from the districts bank account in may twenty nineteen district personnel discover the on authorized withdrawal and the funds were recovered from the bank. Finding three. Finding three and FOR has to do with an administrative review by the child nutrition unit. number three an administrative review for the district was completed by the Arkansas department of education child nutrition unit in December twenty eighteen noting the following. Five of the fourteen free reduced price mail applications chosen for verification did not contain sufficient pay information documentation and one of the fourteen applications had a miscalculation on income pay stub. Of the five hundred twenty five free reduced price meal applications reviewed five applications did not include the guardian social security number. The eligibility status of three applications was determined and correctly and one application did not include an adult's signature and the determining official signature and I. And finally finally finding for an administrative review. Completed and noting the district's October reimbursement claim did not include sixty free mail status students and did not include preschool student meals. And that concludes the findings for Camden fair if you. Okay is three one from Camden Fairview the. Represents a district okay of members of the committee senator Chesterfield. Thank you Mr chair in reading all of these and indeed at the reading all. We keep finding where they're on authorized withdrawals and the bank is having to make it a. And it's gonna be a pattern. And I'm wondering what all I did was suggest to the school districts to preclude people from going in stealing and that's exactly what they're doing from these districts and then the bank having to make it up and it's causing a problem for them what are we doing as far as improving the technology that would preclude this from happening on such a wide basis especially in these findings that we found this session. Well for an audit perspective we just recommend that they implement the controls to catch it right away so that's a procedures to review that bank statement as quickly as possible and most of them that have experience with this now review their online bank account daily to make sure they catch these and a lot of a lot of schools and banks are working together to go into a positive ID system where that's in the exchange of data the school provides them their check amounts pay E. data and that's matched up as those banks of as those checks or peer data bank so if something doesn't match the bankrupt can alert the school that there may be a possible fraudulent disbursement going on so they are doing some some work to try to avoid these you were. As as as anything everything keeps the ball in and people keep coming up with new ways of trying to hack into a system. Is the AG being a part of this conversation because I'm saying is it for five school districts that at this happen in this in this audit along. now we had back in December that was thank you thank you don't higher ed institutions that had that as well yeah I believe And I hate to quote that the I. as the state D. I. S. system I think without some memos on probably some security purpose security for that to help them combat this issue so the reason I ask about the the Attorney General is because perhaps if we can find somebody we can prosecute them to the fullest extent and as our chief legal office you know I'm I'm just wondering if we brought them into the conversation thank you and they do and the this particular one Well I I that wasn't that's another one further on down but they usually turn it over to law enforcement and they share that information with other law enforcement agencies because it usually. And a similar individuals that's doing it at several of the school districts or it entities. Which may very did you raise your hand. Okay or any other questions. If not entertain a motion to file. Motion to file second. Second miss Mayberry all those in favor say aye. Opposed motion carried. The. Three. Forced. Mr new yes and this is the audit I was talking to you senator Chesterfield twenty five unauthorized withdrawals totaling forty three thousand five hundred fourteen were made from the districts bank account from April third twenty nineteen through may fifteenth twenty nineteen district personnel discovered the on authorized withdrawals upon review of the affected bank account and the funds were recovered from the bank. And again these have been these type of findings are also referred to the local prosecuting attorney so if he can. Have an investigation go one as well one now. The further questions restraint. Thank you Mr. Freshman member what you said man go this. Group that they have partnered with the sand staff banking positive pay system did you say that they do they do a daily check of the account. And I agree forced. on that particular one with Camden Fairview I don't think they've been implemented that positive pay system as of yet It's with green forest and that's in there for the inner response yes I have implemented that positive pay system and what that is they to exchange the school district exchange their disbursement data which is their pay the check number amount and so forth to the bank and the bank matches that data up with the bank that as the checks are coming in so if something doesn't match up they can alert this the school of a possible fraudulent transaction in the recesses in the responses city each month bank reconciliations are made to ensure but if you go look up the period of which the forty three thousand was taken. It's it it's thirty for almost forty five days and I was just thinking by the. If they were if the way to a month to they reconcile the bank account. It be the same problem re occurred you if they're not checking in on a more frequent basis for my mission brought that respond that situation they discovered. Fraudulent charges throughout that period it just total twenty five they didn't wait to the end of the period and I found out there was twenty five a are they just kept hitting on one after another after thank you. A further questions. If if not. Limitation a motion to file. Motion made. Second. My concern. Okay and. All those in favor of the motion say aye. Opposed motion carried. Hello we're still in the school district is there anyone here to represent the. Okay. Mr date. A yes Helena west Helena had three findings. they also had one that was referred to the prosecutor and that's the last one that had to do with the ethics finding their first finding in our test of pyro and non payroll expenditures we identified an allowable calls totaling four hundred sixteen dollars were paid from the title one program. These calls were comprised of an allow payroll calls totaling two hundred sixty eight dollars and then allow non prior okay cost of a hundred forty eight dollars. Finding to on the next page. During our examination of payroll records for ten employees the following deficiencies were noted the district pay to employees before a valid contract was on file as required by Arkansas code. One employee was paid from July second twenty eighteen the July seventeenth twenty eighteen however the contract was not dated until July seventeenth twenty eighteen. The other employee was paid from January fifteenth twenty nineteen to may seventh twenty nineteen however the contract was not dated until may seventh twenty nineteen. And then one employee was over paid five thousand five seventy six due to clerical errors contained in employees original contract and contract addendum. And then finally finding three was an ethics finding the board passed a resolution to allow the district to employ a board member sibling contingent upon approval by the Arkansas department of education commissioner. The district hard descended into higher this individual but cannot provide documentation of a the approval as required by the ethics laws. And that's findings for Helena west Helena. Okay first of all is there anyone in the audience to represent school district Helena west Helena. If not. Are there any questions of committee. Okay. Motion made to file. And second Mister Flippo all those in favor say aye. Opposed motion carried. Next we have Crossett school district. Mr newt. Crossett head to findings of the first finding had to do with a Child nutrition report we obtained a review of the district's verification collection report by the Arkansas department of education child nutrition unit. The review disclose the district did not follow standard sampling procedures when personnel verified free and reduced price meal applications. The district only verified eight instead of nine applications required by standard sampling procedures. The district was instructed by eighty the child nutrition unit to verify an additional application. During the course of our audit the district was unable to provide supporting documentation verification documentation. Two four eight of the nine applications. And the second finding performance bonds were not obtained by the district for contracts for the basketball scoreboard. High school video security and the elementary video security projects as required by Arkansas code. And that's the findings for Crossett school district. You comment from board center it. Mister new. To to a sense of whether or not In these cases people Neil especially with the performance bonds. Knew what they were supposed to be doing and just didn't do it A what consent to seems like a no brainer that you would do it. A. I believe there's some confusion sometimes of what. A public improvement contracted is and that's what the law states that is for the the improvement of buildings infrastructure and public in general public improvements and when they get into these contracts for like a bad they're installing a basketball so bored I don't think that at this point or so there's some confusion out there we've discussed with AT on this and they actually put a memo out I believe on on the performance bond this it's been of about three months ago probably now okay well that's pretty recent I guess that maybe that might respond to some of the things that just seems that they should be clear on their faces but not looking at the law you know I I don't run it as the case so that that that memo would have been for clarification of how they're perceived how are there to proceed to so that we can have clarity about how everybody is going to be doing this yes I don't have that memo in front of me or what but was the I think it just kinda. Reminded them about the performance bond and referred him to the code on that that code was amended in the last general session by the way currently it's for contracts over twenty thousand dollars that you have to get the performance bond and now a it's thirty five thousand the embrace that but they did make reference to than to the law and just reminded schools at that of that law that they need to get these on these progress so now I'm a little bit confused because if the law is the confusing thing and then somebody tells me to follow the law and my better off physically do well was there any clarity in that memo I just be sure you know there wasn't clear to you on what a public input right and I think that's what needs to be fixed in the law define what public improved in the law itself yes because there's not currently at the Phoenician okay now I'm not no I know I'm I'm not. That but it but I can see where if that is the case because there's not there's little point somebody tell me the falloff I don't understand the law in the first place so I think that's just something for us to know about and and pay some attention to that that's all that this this whole report to me kind of RES like a cat not not just this one but the whole package RES come like a case study we could take up to fix a lot of little a lot of little things that are causing problems of their as some point I think of the work doing that because this one is just right with a lot of good stuff that we could fix I think. I'm in good stuff and quotes dial. People watching. Thank you senator. Did you have some playoff no Sir okay. Of anymore comments questions from the committee. If not earlier time motion to file. Motion followed second Mister Flippo all those in favor say aye. Opposed. Motion carried. That brings us to do in the school district correct. Yesterday yes Dumas school district had one finding it had to do with their paid lunch act forty calculation which is required by the federal regulations an examination of the fiscal year twenty nineteen paid lunch equity calculation prepared by the district revealed the district did not implement a required price increase of ten cents for paid lunches although the required increase was approved by the district board of directors. And I responded that they are now part of the community eligibility provision Program which allows each student of the district a breakfast and lunch at no cost. Okay is there anyone in the present. Represent day most if not. Of ash the ash any quite of early questions of the committee. We're doing this. If not there tied a motion to file. Motion missed by a very. Second the center. Page all those in favor of the motion say aye. Opposed motion carried okay. The first school district. Yes let fate county school district of of a county they had one finding. In our examination of pyro expenditures for example ten employees the district over paid to employees thirty five hundred dollars and two hundred fifty dollars respectively due to clerical errors. Okay. Any discussion by the committee. If not entertain a motion to file. I'm I'm sorry ms Mayberry did you have a question or was that a motion. You're recognized. Thank you yeah I was just trying to see if it was answered in in that response but so the district over paid the two employees the one that I'm more concerned about is the thirty five hundred dollars to how how was that Fixed. do you know I inquired whether the school already asked for reimbursement for that and they said they were They were waiting for the audit report to be this to be discussed at the board meeting to determine what their procedures will be next what they will if they were request reimbursement or not was it a one time thirty five hundred dollars given to him or just over time it that was a hundred dollars more each month for so many months or something like that yes they just miscalculated or at night it was distributed over that year the school year okay so they may look at just slowly taking that back out of it paycheck and not making that person suddenly. Riley five hundred my experience they normally just. Deductions taken out to get that taken care of. And you're welcome. For. Okay Mister Flippo you still make a motion to file. And second. Motion made second all those in favor say aye. Opposed motion carried. Magie school district Mister the. And they had one finding a monitoring review conducted by the Arkansas department of education special education unit identified on allowable costs totaling six hundred seventy five paid from the special education program. Okay a discussion a discussion McGee school district. If not entertain a motion to file. Motion to file second missed may very all those in favor of the motion say aye. Oppose motion carried. Cozart middle school district. Yes Ozark mountain had one finding the district's capital asset records were not updated for additions deletions or depreciation during the fiscal year twenty nineteen. The discussion by the committee. McGee school district. If not. Your honor those are. I'm sorry number. A been corrected by my co chair. Not much school not McGee school district goes out round school district. Three discussion on that. If not entertain a motion to file. Motion made the mystery will second by a. Missed Flippo all those in favor of the motion say aye. Opposed motion carried. Okay a solemn springs school district Mr new. And they had one funding as well the district district discovered that a trailer with an estimated value of thirteen thousand three eighty seven was missing from the maintenance department on November fifth twenty eighteen. A police report was filed that same day according to the public district management the solemn springs police department's investigation of the matter has been completed and no charges were filed. The question to the committee miss Chesterfield yes Sir in reading this I just found it interesting that. Nobody in the response ever said whatever to the trailer. Where's the well of and the police reports investigation didn't indicate that just close the investigation disclose investigation of the trailer were thirteen thousand dollars just disappear their findings that indicated thing that done about it so we're is to try. They did have surveillance video but the they seen a truck if I remember up the truck hooking up to a trailer. But then. There is a after that okay so there's a missing video is what I understand from the police report is just go properties my free instead who cares. It's thirteen thousand dollars worth of something that I have not gotten a response to and I just found it interesting in reading it that there that the response did not contain what we couldn't find the trailer we at the all this survey must in turn it up but nothing is here to say to us how this was resolved and and that's of concern to me and in this particular instance and I I think the Well they don't say that in response but they turned it over to the asylum springs police department which investigated it says says no charges were filed which deal does not get us back to where's the choice but thank you. Centerville. This say anywhere they turn it over to their insurance company. I'm sorry did they turn it over to their insurance company they do this I they did not the they didn't have coverage for theft so it was not there was not covered by insurance. They need love their insurance policy. Senator it. Do not that it how is it that the video was missing do they know how that's the case Ainsley who took it what where did it go. You get the And as yes so the state. That was missing video. I know and then on the serious side of a video video missing is all Sirius's that something's just a ridiculous that's why you kind of live sometimes but if there's video missing they also did not do any any best investigation into how the video happened to come up missing that was not a long stretch by some secretary that. But did something to the video yeah I would too young to know about Nixon arching. How is how is that possible I mean that that those kind of things because it's not you know if I can see something like this happening but This just give me back more and more to this one just seems to be the perfect case study for things that are just like okay I got to go all help me out the and. The Senate thank you Mr chair it doesn't really help me to help you out but I have a question for Patrick nude. It seems to me and I apologize if it's not a truism. But you audit more than just the ten to twelve we see every month. But we seem to see probably thirty of the hundred eighty school districts on a regular basis and I don't have that that's anecdotal is just but it it to your earlier comment it's been kind of haunting me a little bit the perhaps we need to go into those thirty school districts. And check work with them to their policies or procedures there get it right let's not have pay roll mistakes or clerical mistakes or whatever is that something that could be done I know that's not the purview of the audit committee. But at some level I'd be interested in some data longitudinally of how many different entities we've heard in audit. And what's the repeat. Of audit of the school districts that make sense form kinda because your comic kind of drove me to that that gosh we just being to do some training here but it seems to me like over the span of the last eighteen months we keep seeing similar type school. Being involved maybe we're getting all whatever we have hundred eighty school districts but I'm seeing. Thirty five it turned thirty five whatever it is and and we always see ten to twelve each month. And they're probably ten to twelve out of a batch of maybe I'm guess and forty to fifty. Maybe I mean I always tell my local school districts I'm gonna be right in your basket if I see you in this report but it's if I your comment about it's almost training and whatever really kind of sticks to me I mean it would you care to comment on that I mean well some of it is training I mean if you look through. some of the findings I mean there is this just maybe some training or is there just not I mean and and and some of its not following procedure so it's that that beginning of the year orientation for a lot of these schools to get these employees to know what the procedures are and so. Okay maybe we should talk off line because I I got to believe I'd like to know the percentage of schools you audit that end up with a finding in front of this committee because I think that's going to drive us to corrective action yes of course I'm you can count I mean we had fifty seven here today and forty as the Forty six seven that had no findings cell so it's a majority are again of the tenant vast majority of them have no finding sign. Representative Jeff to fill our excuse me yes it's okay we would get the house it's it's not the. One of the things that we used to do is to have. Each legislature for. Representing that school district given notice of. A school district with findings are we still doing that. Or they go away somewhere. And we're not we're not currently doing that now we may have been a practice in the in the past not because we had S. we had asked several terms ago that we be notified of our school districts that are having these findings so that we can work with them perhaps show them to the state department of education or whatever we're calling them today of so that they could have. A better communication with them and we could act somewhat as the buffer with our districts because a lot of times we can go in and ask direct questions because I I would hate to see what is there to explain why we had the problem with the. The goal not goal posts not being a part of whatever it is the bonding thing and all of that because a lot of chance we have so many regulations and rules and this Senator Sturch pointed out we have personnel changes but if we knew that our school districts have findings then we would be able to work but they're not only them but the department of education as well. And even though I show up here a lot I don't have a vote and I don't have a motion power but I would ask that we think about doing that again because then I could work with my districts and you could work with your districts a little bit better if you knew they were going to come down here rather than finding it out when we get the information the email. I'll check it to see what it what you're saying that it had that it did happen in the past I'll see what the procedures was in the past and I'll I'll just confirm whether we do do anything I am not aware of anything but I will check on that well if not I would appreciate it if I would consider it because it would be helpful I think to each one of us we don't like surprises and I districts don't like surprises in there are things that we can do to help them get through the muck and the model sometimes with which they are unfamiliar and that would be helpful I think to write districts that come in here on a regular basis most of home I just trying to do a good job every day. Thank you. This. Of senator hill you still have questions. Yesterday the the I don't know if this will be more of a question are you statement. Not I know this for the trailer was thirteen thousand dollars this school district did not help they'll what that even a hundred fifty to a thousand dollar school bus that was telling that's unacceptable. I mean I do not know of any business that does not have the oft injured. This is not being a good steward of the people of money anyway you look at this is unacceptable. And I and I don't know what their coverage if that was just failed to be insured or not when I inquired of that I just said it was not an insurable loss okay in a very well could have a happy death when I said that thirteen thousand dollars that's a lot of money but it's not like with a school bus and they didn't have theft. Thank you. Mr Murdoch yes Sir just begging the patient for the committee just a few more minutes the superintendent is here now he's parked outside Lee County and he's on his way in the building now so I appreciate your patience and okay market possible. Thank you the we can go ahead we have one more. We have one more Mister Smith. Thank you Mr chair I. These questions about loss and recovering loss or insurance lack of insurance causes me to wonder with the one school that did a ten percent. Staff or faculty review this you know audit. When they found to over payment that. That's twenty percent out of that ten I was wondering well did then. An audit take place with maybe the next twenty or forty faculty and staff because if you find to. Problems out of that limited number of respondents or interview these what with the toll will be for that school forty we just move on and not leave it up to the school. Well we expand if we think there's a on an ongoing issue that we need to further look into it we will expand our testing in this particular clase ID we we so we had the ten employees and that same pretty Representative of that problem so we just we wrote the finding on that and told him to recommended that they implement procedures for that follow up in real quick. What's the total number of employees in the school system that was live fire A are you talking about live fire. I believe it was love failing last one we went over yes I don't know per the for sure that's a small school district five hundred forty one state and so is less than one hundred employees I would present. I mean if you if you have a twenty percent finding on key in. Thank about. Your twenty percent finding on one hundred. That multiply by five the yes so I mean that might be worth going back in reviewing that are looking at that again just to make sure that these ongoing clerical errors are not still occurring. Just a suggestion. Fortner. Thank you Mr chairman of. I am on this committee and I'd like to pursue senator Chesterfield so the suggestion about us being notified. When are the schools in our district to have the errors. I'd like to I'd like to pursue that I'd like to see that happen because It appears. The entity is repetitive month after month there's always things and it's thirteen thousand here its embezzlement there it's was anybody prosecuted well sort of but we couldn't find them But if they know. If my if the my superintendents know that I'm going to know and I'm going to confront them about a trailer or anything else it will make a difference it is so met so often. And our school district I do believe they're doing the best that the best they think they know how but they can do better. But they're like everybody else are just like me I need to be held accountable for the final somebody's going to check on me and make me accountable I want to be more responsible. And I think they will be if they know we're watching and we're going to confront and I I'd like to see that happen is if. You let me know I'd appreciate yes I'm I'm going to check on that and I can give you an update on we don't meet any get again until June but I can give you the update of. If we are actually doing that I don't I didn't sound like that we are doing now well if we're not I I'd like to and let me know what is going to take to make it happen and I wanna see if I could do it okay I will thank you Mr chairman this maybe. Thank you well I'm just thinking that the same type of ideas should be applied to cities and counties to I mean I I'm not sitting in that meeting over there but from what I understand it's kind of the same type of stuff that comes up but I don't know if the counties that I represent are getting you know their hands laughter what's going on there and I can't address if I don't know about it either so. You know. It. I'll just I'll I'll check it for the overall Take those suggestions back to the To his people. Then the. Maybe we'll have a response next next time we may wish for do you need that in the form of a motion. I'm sorry do you need that in form of a motion. To make it happen can can we just hi I can I can check on all that I mean if that's something we go we go we'll be glad to do that and I'll just check on what the like senator Chesterfield said had done been done in the past I'll check to see how that was done and see what we need to do to get that have to happen okay thank you we get you missionary to check on that and okay shoring that back to the next time we meet not I'll make a motion that. To. Mr here. Is that have to be checked on March are being for next month our is that one of the things that can be made a motion can be made tomorrow you'll take care of it tomorrow. A motion for Mister due to check on it not enough of the story get okay and you you are met bringing up tomorrow. You have a voted on the they're not a. Yeah everybody. I can check with Mister Norman to see how they can be brought up to market to if if it can be brought up to at tomorrow's committee meeting. Works. Can I get the microphone yes. Mister chairman I one of the things that's the natural evolution before we get to Lee County here is senator Chesterfield is exactly right in that she's asking that we notify. The the the to me the next common sense is this Billboard you get what you measure and I'd like to see the schools in the school district maybe the counties and cities of how many times were getting findings. And. This running chart of keeping track of who's been in front of us could. At some level I don't want that to be a beat him over the head but rather a drive for corrective action and you know her her having a legislator go and talk I think it's great. But finding out they're gonna be here next month three days before hand as opposed to they had nine findings over the last twelve months. Tells me that I've got corrective action that I need to be doing as a legislator with my districts so at some level it would be beneficial that we had who the people are that are the ten to twelve each month as you said we had fifty seven and forty three didn't have findings I think forty six forty six so can we do that over the last twelve month period of how many different those twelve OR and generate that. I'm sure certainly identify those for you over the last twelve months I I think that would be a beneficial I don't know committee may feel differently but I'd like to see the school district that we're seeing on a. You know if it's a one time thing then that legislator should say Hey I saw you but if I've got a school district that's on here five times in twelve months for findings then I need to probably be asking for some help in getting policies that the corrective actions we may have to talk about that because of course the school districts only get an annual all it so you may only we if you limited to that twelve month period you're not on scene but one time on their well whatever appropriate time frame we can kind of give a we'll talk about and we can kind of get the information that you would like I would like to make that recommendation as we go forward to that we see how many times schools are repeat finding a repeatable not necessarily the same finding. Reporter would that satisfy the. Your concern. If you're recognized I'm sorry caught red handed. You know you know what I what I'd like to do is just I'll just I'd like to make a motion if I don't get a second if it doesn't fly that's okay too but I'd like to make a motion that the legislators in the school districts are notified when there are findings in their districts. In you make that in that's a motion that's my motion you've heard it the vote you've heard Mr. Orders motion in. And Mr flowers did you second the. Okay and is there any further discussion on the motion and the second I I would like you if represented foreigners okay if we've done this in the past which were not sure we have or haven't there may be a very legitimate reason for us not to and I would like you just to consider what senator Flippo on Senator hill did which is give him this afternoon to find out what that was I to want to see and know if any of my schools are here but if he finds out some can't be done then with this committee has a motion till next June saying we have to do something could be done. Well I think the motion the second on the floor we can continue discussed the vote on only yeah. Flippo you have. Thank you Mr chair I was worried. If if if it is a little bit more time to consult with someone else about the specifics of this we could still make that motion audit tomorrow correct you wanna chairs me so we can do that tomorrow even if we make that motion here today would still need to be made in order to Morrow so curry done a so we need to make it tomorrow either way. Yes yes thank you I believe that's correct. Miss Chesterfield. Thank you Mr chair I think it's bill today but. Why I think maybe I am maybe it is but I know like if you can hear every. Reporter we get something. This is a legal you are. For. Any person in this. There if they should not be a problem with saying to us before three days out judiciary seven o'clock. We're not talking. We're not talking about anything that would require great effort. It's a simple matter if out of forty six out of fifty something you got forty six with nothing in ten or eleven with something ten notices you can do that via email and the second saying in your district this is happening so I'm trying to figure out what the logistical difficulty would be in making it happen if they're only like nine or ten of them with findings and you're saying to them your district as a fighting you don't have to go into what the findings are. But a simple notification of their your district has a finding you will meet with your school district and find out from them what you can do to help or whatever so either way you do it is finances I don't have a vote on this one just got a mouth. I am just saying this is totally doable because we don't have massive amounts of these reports each month you're not asking for the specificity of what the problem is you're merely asking that you be notified that you will be before on it that's a. Related flowers on I'm sorry. Absent for. Arkansas car with ever the comments that have been made and would just add that you know as we make this decision and if it passes there are no parameters on it or requirements that it. in terms of that time line in between now and the next meeting of for whatever the reason was that we don't do it anymore you know so I just would echo what's been said and. I ask that we go ahead and and do this so that. Staff can know that it's something we want to see and then can determine how to do it and not necessarily whether to do it. Thank you. I'm sorry I'm taking some notes here go ahead. This is their. Given what he finishes his notes. Okay. Yeah I was just gonna yes this pertaining to the motion I was just going to offer this because I have to say you know I don't see the urgency right now but I respect the urgency that people are are putting out there so I was just going to suggest that If we do go ahead and pass the motion today and Is it will be a matter of been in the report. And. if it makes sense with the other subcommittees it seems to me it it should. That we have a superseding motion tomorrow before our report is adopted to say because we can find out in the mean time if it's a problem. If if this is a part of our report and tomorrow before a report is adopted I would offer a superseding emotion motion or and. Replacement or whatever might want to call it that'd this motion is something that would reply to all subcommittees so that everybody can have their cake and eat it too. This that makes sense. I might. Does that make sense to young. Because we just want to do it in here. And they made find out in the mean time there is no problem with making that motion apply to all of our subcommittees then we can just amend our report by another motion and get the whole thing over with the cost I don't think we have to keep on discussing this I think is the main thing in this mode in the motion to Mister Jordan have set lego made would would not be just. A motion for this committee both all all no I'm saying it would but I will go ahead and pass it for this committee yes and then in the meantime Mr new can find out you know what the issues are if there are no issues and have an superseding motion before we adopt our report like I would make a motion if somebody were to say we amend our report to include all of the subcommittees in that motion for audit tomorrow because all it is going to vote on it one way or the other the second vote not report that makes sense okay alright I'm just I'm putting that out there so in case somebody if I make the motion somebody else does don't know what we're talking about you will have to think somebody just making up stuff and to be contrary that's that's what I would like it just be understood today if you don't have any problems with that then. Okay you should tell me now otherwise. I call the question on the motion. Okay page why she's called the question so we need the. Okay. Motion the call the question. No because I had the money I had the Mike. Question. Daily seven. So we have we have a motion on the floor. Motion then. So you need to find out that she's actually making. The bill. somebody called. Please enter seventies. So we have a. Well motion on the floor. We have a motion yeah you do from Jack Fortner. We have a motion by the Jack and the same Brandon. Representative flowers. To. Report to the proper representatives who. May have school districts on this report before the meeting so they can review. Is that right Mister Fortner she called the questions on can leave my question on. All those in favor of the motion say aye. Opposed nay same size nay. Motion of the. The ayes have it. Question. Okay the motion passed go ahead with Mister hammer. Can I ask staff question. Can with help me understand some if not wrong so I called I ask about something that I hear about going to come out and I can't get access to those reports before they are publicly release my right on that. The other not thank. Most of are not public released until the day of the committee how are you going to be able to manage the motion that was just made by telling us that there's a river finding coming and what kind of positions that going to put this in with what was just done Ron and I think I might have to discuss that with staff attorney just to make sure we're okay with the With the Public information make sure it's not released the fords if the effects. Durable. Without okay hurting them if you're just maybe come prepared in the morning yes thank you. Mr Porter. We're only to mobile phones here yes we are and I know there's a lot of conversation and a lot of people aren't even on this committee and and I'll go with whatever the body once but this report was out on Friday I don't know what you're talking about we can't get it if you want online was it not available Friday. It was mailed out Friday to all us to the all the staff member to all the committee members and to the local school districts and to the all but it's it's not been released until this afternoon publicly. But it is available to us. Okay that is correct but I I will check with or legal counsel just to make sure we mail it ahead of time so you have it before the meeting of course. but let me check with legal counsel to make sure. That we're not. If we do send out an email that will be okay two to three days before the meeting Okey dokey. Okay thank you. Of. Before we go back to Lee County latest. We need to so file so. Okay we have our own. Of we need to go back to Salem springs and I need a motion to file. Your turn a motion to file for solemn springs. I Mr chair could I ask Mr new would it be I'm not against filing it necessarily but I know there been times in here we ask somebody for further information would it be a proper request to ask them to just give us an update on the kind of insurance they have that would explain to us why this of this trailer or any other of their assets may not be covered and advance of theft yes Sir okay yes I can get in a. Inquirer that's school district and we can see what kind of insurance coverages they did ask that I that particular one was not code yes yeah that would be good to know to know that there's not that might remind them that they need to do something differently and a second question I'd like you to ask them is if they could account to house one a Footage of the the film footage what's missing if they would include just do an inquiry into that some just give us some notion of why that would be the case if they just ran out of whatever that's fine because I'm not looking for some big old deal here I'd something just need to make a little bit more sense and that's one. And and with that Mr chair I'm I will move to file the report motion made file slaloms brings report. Your second segment Mr he'll all those in favor say aye opposed. Motion carried. Of. Before we go back to Lee County. We have a forty six. Audit reports with no findings. If you own the very back the report if you like to. Look at those right quick and see if there's something. Then there that you have a question on before will fight will batch file these all together. If that's okay with the committee. Of. Motion to file and second. All those in favor say aye opposed motion carried. Okay We'll go back to the very first one on your agenda the Lee County school district in. Representative from Lee County if you would. Enter the identify yourself tells so you are and then we'll go to Mr nicht. Go it. A dog is a rainbow superintendent of the county school district. Okay. Mission if you would explain the. Findings. yes thank you Mr chair Excuse me. The first funding for Lee County the district administration reported and we verified missing funds related to a school fund raiser our review revealed that activity funds toting two thousand six seventy one we're not deposited into the district bank account. An alternative learning environment teacher subsequently acknowledge misappropriating these funds for personal use. Finding to is a repeat finding the district did not implement proper proper controls related to employee health insurance benefits such as reconciling billing statement details receive from the employment benefits division to district records which resulted in the following discrepancies during the period January twenty nineteen through December twenty nineteen. The district overpaid eleven thousand three seventy five two EVD on behalf of twenty eight employees as a result of errors the district made in not properly withholding health insurance premiums from the salaries of these employees. The district with health insurance premiums totaling two thousand nine thirty nine more than the amount of according to the be the billing statement and did not remit these funds to EVD. And a similar finding was reported in the previous audit. On the next page we have finding three. Our examination of cash revealed the district's general ledger cash balance at June thirtieth twenty nineteen was understated by ten thousand thirty dollars. Additionally the district's bank reconciliation balance at June thirtieth twenty nineteen was three thousand three oh five less than the general ledger balance balance. Significant corrections to the cash balance and bank reconciliation were made for the following errors. Checks totaling ten thousand nine oh five were manually voided by the district but not void in the general ledger and were included as outstanding items on the district's bank reconciliation in error. Other errors totaling two thousand four thirty one were noted on the district's outstanding checklist. Improper your heirs not increase not corrected by the district total twenty nine thousand nine eighty one and nineteen thousand two team in in the operating and special revenue funds respectively. A similar finding was noted in the previous four audits. Funding for. Is a repeat finding during our examination of payroll records we noted the following discrepancies. Four employees were underpaid four thousand seven eighty five. One hundred sixty forty seven and one thousand four eighty six and three employees were over paid seven hundred seven eighty eight six oh six and fifty five hundred respectively. One employee was paid a stop in of eight hundred forty dollars that was not included on the district's approved salary schedule. Three employees were paid stop installing fifteen hundred fourteen hundred and fifteen hundred that were not included on their respective contracts. Properly approve time she documentation was not provided for two employees totaling two hundred sixty seven and three thousand eight twenty five. Properly approved and signed contracts were not maintained for for employees additionally no contract was maintained for one employee. A similar finding was reported in the previous four audits. Finding five on the next page in our tests the pyro expenditures we identified on allowable costs totaling four thousand four thirty seven were paid from the title one program. These calls were comprised of undocumented salaries tellings three thousand seven fifty an over payment to one employee telling six hundred eighty seven. In a similar finding was reported in the previous sought. Finding six employee sick leave records were not maintained in noncompliance with Arkansas code. In addition vacation leave records were not maintained for applicable employees. And finding seven although standard payroll documentation. Supporting employees work in a title one program was available for audit inspection monthly personnel activity reports were not prepared for seven of the ten title one employees tested who also worked other activities. And that's the findings for Lee County. Okay though the seven findings of. Do you. We'll offer you the opportunity to explain any of those. And then we'll have questions from the committee go ahead if if if this okay I would star would take any questions that you all may have. This might. He needs the identify himself or sorry this is. Nine. Hello sign as a rental bows superintendent Lee County school district. I apologize that was my fault. I thought you did not thought you'd already entered dexter says. I'm sorry. The pilot couldn't hear me over the sake any the model is inside the house who rose up. Good may come in donating your findings that you'd like today and okay would you prefer that go through each finding And I I guess that what I can do is is maybe try to provide a kind of a summary I guess of some of the next steps that the district is taken since receiving the findings of course I'm the new superintendent of appointed by the commissioner keys I think I started in June June feels as though I have been working now and probably seeing you maybe five seems like five years I've been in the sea. But it hasn't been that long so but what but what I can say is that the previous administration of course upon company and we did the necessary valuations of moved those members from the fiscal team we brought in a new fiscal team who I will I will readily admit do lack experience however with the lack of experience that the team might have a we have found a lot of support with the DSE eighteen and also the feel asking and re upstate work to our local cooperative Those of their roles have been defined my most me myself I have taken on the ownership of pursuing my cast both training just to kind of learn more about the finances of the district I am a first you superintendent of I had to have experience though I've been a deputy superintendent for city for five years and then I was also a member of the state department of for four years as a school turnaround specialist and then also in school improvement passes under the sea grant. Okay thank you of. Miss Mayberry. Thank you I'm going to just concentrate on a number of finding number one maybe others can ask about the others it I I find it interesting because it says that it knowledge misappropriating funds for personal use I kind of really see that is stealing and not necessarily misappropriate. and so that I wondered looking down at the response number for the appropriate disciplinary action was taken and funds are currently being withheld from said employees so I take it that the employee is still there after stealing funds can you explain what's happened to the employee and what have been the appropriate disciplinary actions and it is what will course with it being a personal issue there's a there's a lot there's only so much that I can say is it is a personal issue and is also an ongoing investigation that we have at this time so they are for the actions that that they will follow the on just what is in response. Follow up so has this been sent to the prosecuting attorney vis a look at it yes Sir yes we time the findings over to the prosecuting attorney and they've been pretty much devise a nose each step of the way as a matter of fact receive a Carly this week from them about some of the things that we need to work together all okay thank you isn't. Mister fields. Thank you Mr chair in welcome to paradise lost thank you. We appreciate you being here and I I was interested in your background as a first year since we can and I was wondering why they threw you in the lands to dean and to try to turn this around but you said that you have experience at the state department in doing turn around yes ma'am what districts have you worked in that have allow you to grow old your your skill set so that you would be able to take on this very challenging role yes I worked in the school the with me for school district it okay. Right now with the the errors the people who have been both under paid and overpaid have you rectify that situation so that those individuals who did not receive the moneys that there do gap what they what they deserved and are you taking monies out of the checks and those who were overpaid yes we've done it already yes all right that concludes my question thank you. Any other questions. Pitsch. Not the question Mister chairman that a point of reference. Personal preference I think we should introduce our former lieutenant governor bill alters showed up in the audience behind us so welcome to our committee thank you for joining us. Hope you're doing well. Any further questions I just I just one more Mr chair a doctor bowls you know what efforts for these seven find is and I realize you knew there and all that which of course that that is a lot and I'm just wondering from for use it now and where you see us going forward do you have the staff you think you need to make these corrections and continue progress and and back to find all the issues that are before us or do you see the need for having further For the training for is trying to get different people I definitely feel like we have the right people on the in the right positions I do feel as though the support has been we receive a lot of great support of the coop has really been instrumental for us as they conduct ongoing trainings in the in their available at any request that you might have I've also kind of explored over the past week or so actually looking at contracting out some services as well what what we find is we do have a very novice team and so is is going to take time to develop those members in even myself to really develop in role to really understand the nuances of the findings and you know just real how to avoid them I with all good intentions right so but but I but I am very confident that scene that we have and that was in the other thing I wanted to just explore a little bit it's how new is this team because as usually one of the things that we do when we get into the situation and get a new team and part of the issues we find and some of it has to do with just geography having that people there we have a lot of turnover because yes pay people that much to remain in these positions. Do you foresee that being the case upcomming with some of the people that are there and and if the case these are the kind of things we need to start the governor's committee how do we help school districts aboard that right yes Sir certainly retention is always an issue what will we found a lot is we we we train those individuals and we get on to a level of proficiency in the in to your point that there snatched up and and they're gone so sustainability is definitely something that we've been trying to think think ahead of but is is really one of those things it is just so difficult to to overcome what I will say is that the members that were selected for this team or actually members in the community they actually work for the district and just kind of looking through certifications and backgrounds and so forth I mean we're very fortunate that we found we actually found to members of the team that actually have background in finances and so we were able to bring those two up and and they've caught on very quickly I had the opportunity is deputy superintendent for city of to work with actually one of the federal programs of persons who was named federal programs person of the of Arkansas and I was able to recruit that person to the district two comma give us of some services on a part time basis so again I feel as though we're we're we're building the right team or establishing the right foundations and I'm what my hope is is with more of a grow your own approach we can keep those in the district this is actually from the from the that's good because I I'd like to I like the notion one of things I've just been trying to think about because a lot of times response of poaching because everybody's just trying to get the best person if we might begin even going to think about how people especially with a lot of financial expertise could serve more than one school district A and rather than we have so few people to start with if we would have. Rules of policies of whatever that would allow you know school districts to the work for the school district but you can figure out some kind of a regional thing where everybody could have more expertise that seems like that but it would make sense to me but thank you so much and under we have a lot ahead of you and good luck to you thank you. Mr Murdoch. Thank you and thank you both for being here along those lines of which you just mentioned senator Elliott of the I will post of department about some of that regional those regional think that we can bring efficiencies by using the talent that we have this limited through some out of the box innovative prop approaches to what we're dealing with in the total the ten years I've been here we've had obviously issues year after year and some of it has to do what capacity and levels of capacity and you see the route to delta so I do agree with you and hopefully we can get to a point with the secretary of the commissioner in us doing something a little different what you've seen before and trying to combat some of these issues by bringing together attempt to do that so thank you for for for yes my motion. What for. Hi good but the point I'm secured we already kind of have a model for that because we have inter district schools but all we do is exchange students we can exchange where the students because we have a model already here so it should not be a hard thing to do other things so good for you guys. Any other comments for our questions from the committee. Sir do you have any more comments. A no Sir. This is a vital unity. Okay if there's nothing else so entertain a motion to to file Lee County some of. Some of motion motion made. Second. Motion made second all those in favor of the motion say aye hi. Close motion carried and if there's any not anything else from the committee. Mr new. I have nothing further Mr chair. Of. All. Our committee is now adjourned.