Legislative Joint Auditing

This meeting of the joint legislative audit committee is here by called order. I would first move for an adoption of the minutes of the december eighth twenty twenty three meeting copy of those should be in your packet or you should have had a copy of those emailed to you prior to today i'm gonna give everyone a moment to review those and. Then i'll entertain a motion. All right heard a motion somewhere. Senator love second senator dots and all those in favor say I all those opposed. Has habit motion carries the minutes from december eighth twenty twenty three meeting being adopted next will move to the adoption the reports of the executive and standing committees. I'm going to wreck it as my coach here. Senator called well to read the report from the executive committee senator called billion exactly many better thursday general twenty twenty four staff reported to the committee the audit special investigative in shortage report scheduled to be presented to the standing committees and to the four legislative joint article committing this month in new business staff review the arts i'll go but complaints act local fiscal management responsibility act in state fiscal management act in a dress questions concerning these laws so members of the committee express an interest in further study impossible uh legislation to an act revisions and updates with no additional business to discuss the meaning was adjourned the next meeting of the commercial schedule for thursday february eighth twenty twenty four a move for adoption there's. Sooner cold well has read the report. He's moved for the adoption of the report as the second second representative rise the rediscussion. Seeing not all those in favor say i. Oh. Although suppose report has been adopted. Next we have the standing committee on counties and municipalities would recognize representative right to read the report. The committee after the minutes of the meeting here. December seventh twenty twenty three this was on january level twenty twenty four the committee considered request from the towns of jericho and dust to repay less than ten percent of general revenues for amounts old to the straightforward as required back so code annotated twenty seven seventy two seven. The committee also approved the request from dash to repay ten percent of general revenues annually instead of mostly. The commercial decline jericho's request to repay fifty dollars per month for you to ask your code to submit another repayment plan and request as a mayor at in february meeting to present the plan and discuss details of the city budget. The committee reviewed aid deferred reports in sixty one current reports and official from one energy was president to address repeat findings father the previously deferred reports were filed in three were deferred sold it officials can address repeat findings the committee discussed the failure of the monroe county sheriff to appear after being invited to a ten five meetings to address a repeat finding the commercial voted to recommend the four committee requires the legislative auditor issue a subpoena for the shares appearance at a fair war now has full committee meeting of the sixty one current reports reviewed three were certified to the governmental bond board and for were referred to prosecuting attorneys and attorney general. The committee filed fifty nine current reports and deferred to so that officials can provide adequate responses to findings or a teen of february meeting to address unresolved findings pursuant to emotion pays at the october twelfth twenty twenty three meeting the west for mayor and city council were invited to attend the median and explain the lack of timely audit private accounting firm staff received the twenty twenty and also the twenty twenty one west for all it reports since the last meeting the west fork finance director and private auditor contacted staff. To inform them that the twenty twenty two or it should be completed by the middle of january do the to the submission of the twenty twenty and twenty twenty one auto reports and the forthcome information of the twenty twenty two report serious facials respectfully declined the invitation to the meeting the commercial accepted the response of the city of west for pending the receipt of the twenty twenty two hour report by january thirty first pursuant to a motion pay est at an over a twenty twenty three meeting the box out my in city council members were invited to the medium to follow up on the submission of audit reports by private accounting firm the recorder treasure end of private auditor will present and discuss the twenty nineteen twenty twenty and also the twenty twenty one of the greater phone procedures and compilation reports which were recently submitted to staff the community voted to invite the mayor to the february meeting to answer other questions emission chair are moved for adoption report. The. Thank you representative. Having heard the report are there any questions or discussion on the report. Seeing none representative rise move for the adoption of the report to see a second. See a second representative dalby all those in favor say I all those opposed. The report has been adopted. Next we have the standing committee on educational institutions represent barry your recognized to read the report. Representative. Sorry interruption but we're having a problem getting your mike turned on. Never go. The committee owned educational institutions where the eleventh two thousand twenty four the community reviewed fourteen audit report consisting of one higher education report in eight school district reports of the year ended june thirty twenty twenty three. And three higher education reports and two charter school reports of the year ending june thirty twenty twenty two thousand reporter university of our consultant system was. Certified to the governmental bone board as well as referred to the applicable prosecuting attorney in attorney general the audit report of the arkansas or south are console college had a rep. Peak finding and representative the college were there to present an answer questions from the committee. Related to the foundings of the community filed fourteen audit reports that were brought before it. Miss chairman distance. Move for adoption of the report. Yeah. Representative barry has moved for the adoption of the report are there any questions or is there any discussion regarding the report. Seeing nine dollars a second. Representative right seconds the adoption the report all those in favor say I all those opposed. Report has been adopted next we have the standing committee on state agencies I would recognize representative richardson to read the report. Thank you mister chair eleven reports for one the committee's agenda yesterday three reports with findings represented the department of commerce had a fraudulently checked did not maintain proper documentation for pay raises did not properly disclose related party transactions and did not properly complete year and accounting entries the highway employees retirement system had two benefit over payments as well as the loss of phones through identity theft the department of energy and environment had an overpayment of career service payments and did not do not have sufficient collateralization of bank accounts various agency staff members who are president to report on how the agencies intend to address the audit findings and the answer committee questions during the meeting the committee filed ten of the reports the department of commerce report was deferred to the february meeting for the agency to be able to provide additional information and with that we moved to adopt the report. Representative. Richardson has read the report is there any discussion or any questions regarding the report. Seeing non representative richardson has made a motion to adopt the report I see a second. Second representative call out all those in favor say I all those opposed. Report has been adopted this time i'm going to recognize mr roger norman thank you mister chair today it's month of honor to recognize and express appreciation to frank area for his service to legislate of all. The legislative joint article committee the general assembly in the state of arkansas. Frank is retiring at the end of the month after sixteen years of dedicated service to audit he's got twenty eight years total service to the state of arkansas and various capacities as legal counsel to state agencies a governor and he is served as a circuit judge in a judge on the court of appeals. Frank is known for his in alert professionalism dedication and having a servant's heart he's a man of character and integrity and we are privileged to honor frank today for his public service and his family is wife eighty and daughters meg and made here here today. Thank you. Hmm. But we certainly appreciate mr erry he is done. Outstanding job during his time at the. The audit committee where the division of legislative audit I should say has had a distinguished legal and judicial career and he certainly will be missed next will move to the next adam on the agenda review of the reports. We begin with an investigative report related to a review of selected transactions concerning the city of mary and district court from january one two thousand eight through december thirty one twenty twenty two. This time I would recognize ms helping to read the report. Thank you mr chair. This report is issued. In response to a request from the second judicial district prosecuting attorney for legislative audit to review selected financial records and transactions of the city of marion district court of specific concern was the misappropriation of court revenue. The objective of this review the objectives of this review are to determine a fonds cost in fees where deposited in the court account and if internal control over the receipting and depositing process was adequate. Located and curtain county marion is administrative of the first class operating under the mayor council form of government the city council consists of six older men who govern the city. According to twenty twenty us and the spirit figures the city's population is approximately thirteen thousand seven hundred. The city operates the core which processed over non thousand cases in twenty twenty two. While the district judge is a state employee the other court staff. Or employees of the city the district court clark was the sole employee responsible for preparing a making deposits reviewing and reconsidering bank statements and posting transactions to the accounting system. Additionally the district court clark was the only employee with access to the safe located at the district court office. In compliance with arkansas code the city has obtained an audit by a private cpa firm since at least nineteen ninety eight the farm issued a material weakness founding relating to the court in the twenty twenty one article report. The finding of management's corrective action plan or provided on a pindict say of our report. Legislative audit's review revealed the cities process to account for court funds cost and fees was deficient. Specifically receipts were not issued for all phones received phones were night deposited daily and deposits were not reconciled with receipt reports. Additionally the court bank account was not reconciled monthly to context receipt journals or reviewed and approved by someone other than the preparer. Nine complaints with district court accounting law and a lack of segregation of dates and fiscal oversight. Preventing management from detecting misappropriation of court fines. Is shout on the slade and an exhibit when i'm page three of the report court receipts totalling over three hundred and ninety eight thousand dollars were not reported during we're not deposited during the review period additionally unreceived a check so many orders tuggling over sixteen thousand dollars were deposited. The district court clark was castodian of these misappropriate phones totalling over four hundred fourteen thousand dollars. Nine complaints with district court accounting law and accepted accounting principles include the following. Receipts were not deposited intact daily pre numbered receipts were not issued for all funds collected. Receipts issued were not reconciled with monthly bank deposits. Deposit slips denied contain the range of receipt numbers being deposited. Deposits and withdrawals per the bank statements were not reconciled to receipt and dispersement journals monthly. Cash receipt and dispersement journals were not properly maintained balances remaining in the bank were not identified with receipts issued for cases not yet adjudicated in the payments made on all and paid individual tom accounts. Manual receipts were not issued insequential order were not properly voided with all coffees retained and did not consistently indicate method of payment. When manual receipt book cannot be located supporting documentation was night maintained for non monetary credit suggesting fonds and cost for judges adjustments in gel time served. The court clark did not make direct monetary settlements on or before the tenth day of each month to the city treasurer county treasurer state administration of justice phones in other agencies that were doing funds cost and fees assessed and collected by their court. The court had over one hundred and twenty five thousand dollars and outstanding checks recorded in context they were over one year old as of december thirty first twenty twenty two. The court did not furnish the presiding judge a monthly list of all installment payment accounts for which a payment had not been received within the past thirty days. Cheques were not issued for all bond refunds entered into context. Docket numbers were not entered on the checks that were issued and restitution received as payable to third parties was disparsed without proper documentation. Additionally the court failed to maintain adequate segregation of duties including the following. All accounting duties related to the depositing process and reconciliation of bank statements and journals were performed by the same employee. The bank statements and reconciliations were not reviewed by someone other than the employee preparing a making deposits access to bank statements deposit slips and undeposited fines maintained in a safe in the court office was limited to one employee. The district judge is signature stamp was not secured from other court personnel including the district court clark. In city and court management did not exercise proper oversight of fiscal operation of the court or established internal controls to adequately segregate duties among fiscal staff. Legislative audit recommends the city and court management as well as the city council increase and maintain knowledge awareness and performance of operation and fiscal oversight accountability and photos theory responsibilities. Develop an implement policies and procedures to ensure compliance with disrecord accounting law and accepted accounting procedures adequately segregate duties among fiscal staff to the extent possible in interest settlements and dispersements of funds are accurate tomorrow and adequately documented. The. Additionally the dish court judge should review and paid installment payment accounts monthly and secure access to the signature stamp. District court clark megan mag maxwell goudy was castodian of misappropriate court funds totalling over four hundred fourteen thousand dollars. Goudy's employment was terminated on december twelfth twenty twenty two and she was charged with one count of felony theft of property in accounts of felony forgery in august of last year a jury trial is scheduled for february twenty sixth. Mr share this concludes my presentation managed to make responses provided in its entirety in pindict b and the representatives from the city or present to respond to committee questions. Thank you miss. Do we have members present from the marine district court believe we do. It looks like we have at least one question in the queue so a few few guys would come forward. Good morning. Thank you both for being here judge thorn good to see you. As part of the state as part of our customer tradition in this committee. And I was informed by mister are you recently that. We needed to begin swearing all of our witnesses and to be consistent. And so we're gonna have to do that this morning if each should be would stand and raise your right hand amounts where you both then. Do each of you solemnly swear firm that the testimony you're about to give will be the truth the holiday that nothing about the truth. Alright thank you very much. All right senator hammer you are recogniser thank you miss share good morning oh here too far left. Good morning if you'll just push that button you're mike should go red net I mean that the mike is hot. Yeah. Okay good morning. Yeah. Just a general explanation how it got by so long before it was discounted if you atlanta can like to hear yells explanation please sure. And let me say also that mayor brick was sworn in and twenty twenty three cell sheet. Is the one helping fixed the problem so she was not there during this period of time. We had a private out just like. Some courts have the legislative come out and do their out in of each year. And course I didn't realize it wouldn't full automatically like a space holiday spot out you know they come out pull certain random records and so forth. So from that standpoint I thought things were going pretty good and also. As you well know each month we have to erm. Issue checks to short energy is based on the phones received from the court. Up to you about. Fair worry or march of twenty two. We were saying I was signing the checks to be sent off to the different entities like. State arkansas city amanda current and county so for. Probably in march or april. Yeah. They added and started questioning why I wasn't getting those checks to san in my clerk. It would determine had full trustee and was telling me there was an issue with context. And she was trying to resolve their issue. I'm bent owned me added no she wasn't making daily deposits because she was aware that you spoke to my daily deposits to the accounts and nobody in the office was tell me otherwise. Problem about. I think we started making some of those payments probably because she started getting more money she could make. Back back rare checks. The. About junior july I started noticing there was I think it was july there wasn't daily deposits. A debt point myself and the. City attorney to term mister hale we address that issue whether you're laugh first time september. I mean in august. And she swarmed out all the money was there. There was eighty thousand that's safe that she squares had a combination while it did not. And she departs with all that money into the bank. So there without at that point and we told her at that point you need make daily departments you know you should make them. I checked about a week or two later on cause she was a machine daily deposit. So some point. She returned december but we actually in november started a. Uh suspended her. And when I thought to see about getting the money out of save cause she said that money was in a safe after I told her my daily deposits and. Can get in the safe we had actually found somebody worked or four years ago or five years ago that had made the daily position she opened a safe force of course it was empty. So the answer to your question is. About what the rat is every year. With the checks going into the appropriate parties every month. Add in foresee that it was being shorted and it came to this. Amount that we're looking at now. Is then anti question sir yesterday and appreciate the in depth the explanation gives inside the one thing I did notice and were wrong that. That there. The problem goes back to where it started back in two thousand and eighteen is that correct. According to the legislative out of gold back to eighteen that's about the time that she. The. Became a chief okay I have i'm in an office and starting actually smaller and the reason. I'm wondering is if it's if the problem shown two thousand and eighteen. The firm has been ordered in you such nineteen ninety eight. But yet it was actually sound like you that discovered the problem i'm wondering why the private auditors did it detect something earlier given the fact unless i'm misreading it it started back in two thousand eighteen. Well I change a can answer their except I believe the answer from my perspective is they were doing what as it was a spot out they weren't doing a complete out. Of the whole year's transactions and based on what they were pulling is minor standing it it passed most of whether. And and then. It said however the cpa firm issued a material weakness finding in twenty twenty one. The problem goes back to two thousand eighteen but they didn't issue a finding until twenty twenty one did you happen to ask why it took from two thousand and eighteen to two thousand twenty one for them to detect a material weakness because if she was stealing money since two thousand and eighteen it seems like they should have the identified that sooner if I can speak for them but. Actually I was surprised that's the first today that I heard in a twenty one they made that signing in eighteen. And I don't know what that signing was as the first today is the first time either I missed it in this report or it just it just hit me today one last question who's the cpa firm who who is the cpa firm. If you know or have it handy i'm out aware of the name I can get it for you if you want that despite michel uh miss chairman who have a motion before we adopt his report please. Thank you sir thank you ma'am alright thank you senator hammering i. And I apologize I should have had you both introduced yourselves course as a referred to judge door and i've known judge thorn for several years when he was spread in a deputy prosecutor but he's been judged the warm for several years now and if you would if you would please introduce yourself for the committee I managed for it to order the elected district judge in curtain and county arkansas I have six courts married being one of those courts. I've been elected since two thousand thirteen before that I was a stay prosecutor for twenty something year or so. I am retiring it into the sheer because my term is a it's time to go on i'll be seventy four and a half at eight of this year or so. And my wife says the same average man i'm tracybury I was elected in november twenty two and serve as mayor of the city of merion. All right. Committee to see any other questions. Seeing no other questions senator hammer you recognize for your motion. Rich chairman. We we said in these committee meetings and there are private firms that. Are auditing entities on this particular one unless I misread appreciate the chairs correct me if i'm misreading they've been doing the odds since nineteen ninety eight it wasn't until twenty twenty one that the determinated material weakers however upon or auditing department going in it identifies that it started in two thousand and eighteen before I make an emotion among correct on that. Uh. So senator less my understanding but once again we may want more clarification from staff or from the witnesses. Yes or that is correct most chairman my motion is that we hold us over till next month and that we have the cpa firm come before stance your questions regarding their history of auditing the city so we get a little further inside his wife took so long for them to detect material flaws and loudly to go on that long before it came out that's my motion was true. Mr chairman. Can I can look at my phone because actually I guess. Email. Yesterday from that clark about the firm and memphis coming hovered to do it two thousand twenty two whatever they're out can I look and see me about giving that name. Yes I don't know if I have it because my parents sometimes don't think with my phone so I know it's on the irp mischairman I think staff just showed me the name in the report not just did see it so I think we got the name ok all right look looks like we've got the name so appreciate that so my understanding of the motion is that we hold this matter over. To next month for the private cpa firm that conducted the audit to appear before this committee to give an explanation as to why they failed to detect the insecurities from two thousand and eighteen forward is that correct or at least to give us further insight whether they missed it or not will determine through the questioning about like him come before. Answered questions okay all right. You've heard the motion members is there any discussion on senator hammer's motion. Is there a second on senator hammer's motion. Sorry somebody said second second senator darton. All right any discussion. Seeing nine all those in favor of holding this matter over. Two have the cpa firm come before this committee to give an explanation. As to their accounting practices in this matter say I all those opposed. The as habit this matter will be held over for the cpa firm because before this committee. All right seeing nothing further on this matter. I hate do I need to come back in february i'm just asking per you know I have to get somebody but about our outcome back if you tell me I had to just go to make plans to get somebody home accord sure well I hope not so we'll love but we're let you know thank you but. This matters concluded thank you very much. When we moved to the next item on the agenda which is a special report related to a review of the arkansas apartment of education child nutrition unit. The national school breakfast and national school lunch program spore the twenty twenty two twenty twenty three school year this time recognized miss herzog to present the report thank you mr chair. This report is issued pursuant to act six fifty six of two thousand twenty three which requires legislative audit to review the arkansas department of education trouble nutrition unit to determine whether each scores participation in a child nutrition program complies with federal and state law and rules as well as effectively serves the intent of the general assembly to expand students access to free mails in public schools specifically act six fifty six created a means by which students who qualify as eligible for reduced price meals began receiving free meals at score beginning in the twenty three twenty four school year. Legislative audit had five objectives for this review. The first objective was to provide the number of students by category who qualified for male program eligibility. These totals are shown on the side and provided by category and district in schedule wine on pages six through ten the eligibility categories were free reduced and direct certification. Direct certification as a process to verify to verify meal program eligibility for students in households receiving snap benefits students who do not qualify for any of these three categories are categorized as full priced paid for the twenty two twenty three school year over a fifty eight percent of students are eligible for the free or reduced mail program. The second objective was to describe reviews and audits of the child nutrition program. Legislative audits annual statewide single audit includes the child nutrition program as a selected federal program at least every third year with subsequent your testing being performed when significant findings occur meal reimbursement payments from eighty eight to school districts are tested for compliance with program attributes reporting requirements and internal control processes. For fiscal year two thousand twenty two twenty five school districts were selected for testing. From an expenditure population of two hundred fifty six school districts based on government auditing standards there were no reportable findings noted during that review. The. Sorry. In accordance with federal regulations annual audits of school districts by legislative audit and private cpa firms regularly include the child nutrition program. For fiscal year two thousand and twenty two the charnutrician program was included in legislative audit single audit testing for thirty five school districts resulting in reportable findings totally in over thirteen thousand and eight over claims in over twenty seven thousand in question costs for three districts. Other audit procedures performed for an additional school district rebuild question cost of over 7800 corrective action regarding these findings was implemented by the respective district. Eighty eight child nutrition unit also performs three reviews to ensure school districts compliance with federal and state line rules. Administrative reviews are performed for school districts on a three year rotation on basis for their twenty two twenty three school year eighty one school district reviews were performed resulting in findings primarily related to application errors income verification and male counting procedures as well as two other payments totally over a hundred and thirty five thousand. These overpayments are subject to recoup due to around east reimbursement claims submitted by the district. Procurement reviews are conducted alongside administrative reviews. For the twenty two twenty three school year finished primarily related to inadequate bid solicitation language. And proper procurement procedures and over six thousand and question cast at seventh at seven districts corrective action was documented for each finding. For analytical reviews eighty child nutrition unit. Compares each school districts enrollment data with prior your data and investigate significant changes of greater than eight percent. At both the district and individual school level for the free and reduce meal eligibility categories. For the twenty two twenty three school year the child nutrition union provided supporting documentation demonstrating appropriate reviews are being performed. The third objective was to identify dash ports of information related to child nutrition and the mail programs the following information is available on various ede websites. Information about the channel nutrition unit which administers the mail programs the number of students who are eligible to protest paint in the mail programs each school year. And the percentage of students eligible for free and reduce lenches for three school years. The specific website addresses are provided on page four of the report. Ask school districts and charter schools in this state participate in the middle programs with the exception of five as discussed on page four of the report of participating school districts properly reported to the chinetrician unit. The fourth objective was to summarize write offs of student accounts receivable balances for meals exhibit one shown on the side and on page four of the report provides details regarding these write offs totally in over eight hundred ninety one thousand for the twenty two twenty three school year. The arkansas financial accounting handbook and app scan have specific accounts to record the write off bad debt related to student meals and the use of operating funds by the district to reimburse the food service account. However all in paid mill charges for the twenty two twenty third school year and may not be reflected in app scan due to very district level policies regarding unpaid meals. The fifth and final objective west is summarized the number of free meals served to students qualifying for reduced price meals. As mentioned previously act six fifty six rated a means by which students who qualify as eligible for a reduced price meals began receiving free meals at score beginning in the twenty three twenty four school year. In accordance with this act districts are to no longer collect the reduced price co payment from student households subsequently dispersed appropriate state phones. To remerse districts for the co payment ensuring that students who qualify for reduced price meals receive them at no cost. As shown on schedule to on pages eleven through thirteen a hundred sixty districts serve just under five hundred seventy seven thousand. Free mails to students eligible for reduced price meals in july august of twenty three. Mr chair this concludes my presentation representatives from eighty year present to respond to committee questions. Thank you miss herzog. This time with the representatives from the department of education please come forward. You state your names for the record grad gardens with primary education. See say in david department there. Eric saunders department education. All right once again in accordance with the policy this committee reach of you stay on to be sworn. Raise your right hand. Do each of you sell and we swear affirm that the testimony you're about to get will be the truth the whole truth that nothing but the truth thank you all right looks like we do have some member questions began where senator hammer you're recognized mischarity market center dispay let him go ahead and be first please say that it is my incorrectness. Thank miss chairman and appreciate you guys for being here today to answer a couple of questions and also appreciate the quick implementation of the program this year in some so my putting my questions are really historical and just to see how that's going to overlay with how we move in the future and that's on page four and I think this is kind of along the same lines that send. A hammer had questions also get exhibit one which list out various districts that have a written off their balances and it's my understanding you're going to read that each district or there's a lot of difficult obviously doing it very different and I think it's a matter of priority if i'm interpreting things right you that districts that as opposed to doing a write off made a transfer from whatever fund balance they had to be able to cover those expenses in that sort of thing it is impossible and should we purchase towards having I think yet one or two yet should be pushed towards creating some uniformity across the district system for how they handle write offs because they're still an exist maybe not for the reduced price in a population but for those above because it no student can be turned away. Based on a prior while you carry that this one. The. Susan davidson usda allows districts to develop their own policies and procedures for this matter and then that's why I think we have some districts that do and some distance and don't report those and pay bills from mail charges you have some districts right now that are fundraising locally to cover these balances right him in which. That is true especially if the community wants to be engaged at that level but it's also that's insight when it's again it's a matter provision for how you spend funds at the district level and I think that's part of what this reward what was trying to look at so I give my question years I understand that that may be allowed and that may be happening but should we offer some guide instead how those are done especially in light of what we have right now with the law change in the fact these reduced price lunches can be covered the house and uniformity across the districts again I mean I have to follow it maybe they're recluded from haven't followed but should we require me should we at least give some galleries on how to report right offs. Does that make sense I mean we're in a new kind of a new world recovering what was previously written off at some districts or government throughout the phones I think that we can definitely explore that the only concern that I would have just to make sure that the distribute still have the flexibility that scratching it to them by usda and so as long as we were compliant with the usda rules and. You can look into that yeah I don't want to take way flexibility and I definitely don't want to take away from the districts that have made a priority to feed students at what another buyer's big fair but for us to be able to. You know. Put in a contact him in and put it in a report in in summarized things if everyone's doing it differently and all we can get in zip or you know one for instance the list of these schools that handle this particular way through abscan. Then when we can't see the full picture. And at maybe that be a question for item to make sure that i'm looking at it right and understand some previous conversations correctly. The. Kevin wait center that is correct as far as the information that what you were able to acquire from department of elementary and secondary education and then also from abskin is just that that's recorded in the bad at expanse you'll department does have some guides out there as far as recording of entries and and abscanning and accounts to use and this is what was this what was recorded within that accounting system. The. And it lastly is it you know minute very excited about the recent announcement about the summer school lunch program summer programs not sure. Somewhere I guess besides temperature large program term but in a just a brief. Comment about how you think those two these two things are going to be able to enter trying to gather. For a student so math if i'm understanding it right essentially we're going to be able to feel kids you're round by the meshing of the two programs at least those that are in the reduced price and then in an understand level in the summer month. If you don't mind it's gonna. If you don't have any comments on that be great. The. And i'm not sure I understand exactly what you're asking for. Yeah. Because we're right now summer ebt is what we're got a deep into some of the favorite has been around as long as susan's been in this position as better while but the funding has an existed every district is that correct. This is AAA significant increase in eligibility and funding if I understood at least the press release correctly. No I don't know the jve increase in funding I think you may be referencing the summary program you notice a new program that yes does start this summer in what that is is that allows students that qualify that they can get benefits to if you were bridged the gap when they're not receiving the small launches during those summer months for three months at that time yet that that was the clarification yeah I just wanted to come to get a little bit about how those things are going to mesh together because there's a lot of potential out there. For districts to take advantage in utilise essentially bible right mills you round at this point yes so there are some just in regards to that so the summary bt program those benefits go directly to the family they go directly to the student but there are additional summer feeding programs as schools and districts can pretty spideo and where parents onto our families and students can come and get food in different kinds of savings there is a few different options I can explore that and typically to district just goes upon whatever they think it's going to work best has worked best in the district historically what they think will work in the future. Alright. The. Sir does make every more question okay representative springer you're recognized that thank you missed here and thank you for allowing the ask the question I too this is exactly one card my eye is there some reason why this particular school district that has this four hundred and fifty three thousand amount is there a reason why they're so great it's compared to the other districts. That's a question at the local district or have to answer my am because we don't have the reason for that. Alright I will and we don't we don't collect the information in our office even though it's reported in abscan we can go in and look at it periodically if need be. But we don't collect it within our unit I will ask them i'm very interested in there adam and state and some of it could be carry over sometimes we have district security it from year to year. The. Because as long as it's considered collectable are usda meaning it for chargers one grade of the next but do you still in school so it's still collectable it can stay on the books did not have to be written off. And they may write it off again those are questions you would have to ask the local district. Kevin wipe staff yeah that's exactly correct you know this is going to be at the I think it's plasky counting special school district is particular on your asking about your one thing I would say is that there are told revenue for a special revenue which was would be part of is forty million dollars so it's quite a bit of funny i'm not sure how much is specific the televisation program itself but it could have been over multiple years that this bad debt was being written off over. Senator hammered recknessed. Thank you miss chair. So just curious why would why would they not want to report it. Or were the reasons that we're giving us to why they did report so so i'm a friend this up to slow different make sure that we're understanding this so when a district writes off the bed at the t c that list of the districts across the state that's written off that bad that that's according to their local policies and procedures how they decide to do that. The. Now in regards to student fine so that's really what we're looking at here so a district may have a policy that at the end of every school year they ride off all student debt in there for when they do that they have to make that transfer from their operating funds into the food service account and you can see those amounts right there you may have a district that says we only write off the bad date of those students that are no longer enrolled with us and so it could just be a reflection of those students as they leave the district and they no longer have a way to. Recoup those funds that are doing that write off and that could be why you're seeing those that does not mean in any way that that's the limit of school finds a school launch binds for students across the state that suggests those that have written off that date in the amounts that they've done okay and just try to get understand here so could these numbers reflect by a dead of those that they could have been reimbursed for head to qualified and bad debt of those that would not have qualified the bill just to get paid or is are these numbers truly those that would have qualified ahead they've been able to collect. Yeah. Those that qualify for free and reduce meals should not have that there unless it had possibly been a reduced price child prior to this year whenever that copay has now been taken care of because historically reduced price children and fallen through the crack and this piece of legislation was the best legislation the spate of arkansas ever done towards our programs and it's very much appreciated state wide the other if it if it were for a eligible rate for your reduced child. It possibly could be that the district let them charge some olicar items and that's where they have all accord lines in high school or in schools a lot where you can back extra items. So if the district were allowing that which we would know that unless we were on side and saw that that could be part of this like say there is a lot of different things I think that could go into widest data and what makes up this day. Okay so moving forward given and sell this main these these numbers are passed but under the new legislation moving forward. Should there be a reason why a district would not seek to invest the effort in order to get the reimbursement of the funds that are now available that work before what what you'd reason what a district have not. Yeah. We've been hearing from districts that a lot of the debt that's being in curve nail. Are your paid students not paying for their meals. The one on qualified they are not qualified for free and reduced benefits but they still can participate all children that are relieved in participating the program but it's your pay students which is our fifty percent that are charging. Because you can't and I had children meal if they don't have. Money to pay for the meal now. And there are the paid students that are going through whose parents are not putting money in their accounts or either there are not sending money with the student to provide them a meal. But that's where that that's where most of this day it has come it is not come from your free and reduced eligible children. Okay and and upload questioning mr contract in my mind rather so moving forward the numbers that you will or that will be available to us to review. Will you have it split out as far as the debt. That is from what you just described versus what the school is turning in for reimburseable that is allowed under law will that that'll be available moving forward moving forward there should not be any debt from eligible free and reduced children unless the district is allowing them to purchase something all accord and allowing them to charge that. Whatever the amount of money is for that show that if we want to get the amount of debt that a district is writing off because of parents not sending the money that that won't be handled by your will have to go to individual districts and find out what the. No no if the district is writing it off it will be reflected in this report however in other words they could have a lot of fines money that is to them that they do not ride off it could be advantageous for a district not to write it off for example if their food service fund is in the black through operating in the positive then for them to write off the what that would do is that would decrease their operating funds and it would increase the child nutrition phones for which they're already in the positive so it could be advantageous to the district not to write off the debt in that sense okay thank you. Just want to point out that it was senator dismaying a representative who carried senate bill. Four seventy seven I believe it was. The just received their very high compliment so. I regulations do you guess well it it it is again. It makes hard warm very good very good senator live your readiness. The. Thank you miss share and some trying to better understand it so this is debt from from students there are not free or reduced. But they're students they do not qualify for friend reduced is that which is telling me I would think that was what the majority is for answer. Okay so i'm i'm trying to represent I have a I have a stood in an in school and I can remember a term which I guess it was under the pandemic. The architect receiving lunch in art I kind of scratch my head about there. But there now that we're moving out of the pandemic are we saying that our students regardless of if they're free reduced by going to get a meal even if their parents can pay. I'm trying to I mean. You can correct if that dear in the pandemic all students were able to eat at no charge when the pandemic was over districts had to go back to what is called standard county and claiming and taking of applications. And determining elseability of children so. That's. II guess i've lost betraying a farting excuse me that that's a hazardous. Yeah. Senator in fact if I could help out maybe you are a correct last two years were free meals everyone who was you know whether they were pay or they were reduced they were provided the three meals in the scores this is actually capturing that first year where they were no longer free meals for everyone and I want to be clear in specific and that the write off could include those from the last school year who ran that reduced category and had an accounts receivable related to reduced under this new legislation again the school districts have understanding correct school districts are not allowed to charge even that reduced amount so they would not have a write off instead they would be receiving the state finds out so i'm on it and to i'm going into the kids that they can't afford it. The people they can for a cell so safer instance. I just say. In our can afford it. Are the schools. Charging march they are if the child does not have money in his account or money on his person to pay for his mail yes it's been charged there's a charge building does the school trying to go back and recoup that depends with the skills local policy. They work my opinion. I don't I don't remember what it was weight six years ago I think that in arks always pass there was a bill that was passed at any student will perceive the normal mail that is provided at each school district regardless of of pay status so the district can't withhold the meal they can as they had a student to click the money if the student doesn't have money that day for that meal they still receive the new that ever the student receives and it's just considered a charge at that point and if those continued that charge will still go on there and according to the district policy where that charges ever written off or not or how that is collected. Okay. Her in the parents own how with your plan on dec is that I don't know how I feel about that yeah I mean I feel that we should provide feeding for every student that's that's without down. I have a for those that can afford it. Have i'm thinking that that are me asked pay for my son's meal that's just power so. Argue with you all off line on that let the school to this summer the summer ebt. Because i'm trying that I was trying to catch up and read on there so so are our school districts are are they now summer feeding sites that this is kind of comprehensive. School feeding is has been around for for quite a while. So now school districts are just becoming summer feeding sites I mean just kind of just. Summers that schools can elect to do some feedings at their sites and some will do it at parks there are some that do it at parks in different other places ebt for summer is going to be a benefit paid through dhs snap. Then goes to the child to purchase food other than summer problem it's not really gonna fact the summer that elder building are the operation of the summer feeding programs okay so it's still not being administered through DHS nat native silly through the school districts oh yes that the summer ebt is administered through dhs are I just want to monitor clear understanding on that okay thank you mister. Representative alterature recognized thank you mister chair thank you for being here today I see the number of meals you've provided you know a percentage of arkansas students who qualify for free mails roughly what is the percentage of students are they get on the chart for twenty two twenty third was like fifty eight percent it is there it is been around fifty eight sixty percent for a number of years that's kind of what the percent of free reduced eligibles are right thank you very much what would the percentage be if you added in the meals that are being written off or the number of meals are students that are being written off i'm trying to figure out what would that take that total overall percentage too if we know that there's an additional there's sixty percent to qualify is there an additional twenty percent that aren't they're not paying for whatever reason or i'm trying to see where we are on the total percentage of students in arkansas that are not able to pay for their own meal. I don't know I don't know where I answer I don't know that we would not because we had through the collect the the forms that you had felt for the income verification and that's how we obviously see who is approved for primitive lunches and without that information you know if the pant chooses not to turn out information here for some reason we would we would never know what was actually going on there so they're not anyway that I can think of right now that we would be able to come up with that except for these are the parents that are turning into eligible before a free reduced lunch and balance mischief. You're witnessed would you admit and earlier I think when said your hammer dismaying was asking about the route offset route off his handle the department of their correct. For the school districts. Reported to the department of the. So the write off so we we have an accounting software that all districts use app scan in within that whenever a write off as the they have to intervene in app scan and that's what you see on that page right there on that chart those are the total writers offs of that date for that year but there's no way to divide that out by district to see a best guest estimate percentage of what number of students then are qualified for the part of the radoff. Yeah. It would depend on the districts pay percentage and of course when you're talking you've got an eligible percentage which is your free reduced and paid eligible status but you've also got a protest a patient percentage. Which is determined by actually how many of those eligible children come into the cafeterian eat so. The. Just. I guess now i'm not asking for your foreign answer off the car figure I just I think it'd be important for this body to have some version of that information to know what we're dealing with are we doing with eighty percent of arkansas students that that for whatever reason can't afford to pay and that's what i'm trying to determine because at that point I think we've need to take some additional looks as a body but thank you mister chair. Thank you representative duke you're recognized. Thank you mister chair thank you all for being here for this information not here a lot about that from schools in my district I was wondering in my apologies if you've answered this and I didn't catch it so the districts that that choose how or are able to have your private entity that comes in and pays off that debt for them are you all able to see as their record of how many of those the amount of lunch is that were not paid off but that they absorbed or another entity came in and paid for it is there data on that not my knowledge so may I follow it so we don't know because i'm I hear their special outlook districts and there's a district in my area that has a private entity that comes in and is able to help pay out that debt but it is a real problem for them right and that money could be used to help meet people's needs elsewhere in the commuting. So is it would it be possible in the future for us to get that information from districts because it does kind of skew for us what's going on as far as the people who are able to pay better for whatever reason and there's a variety of them are are not paying that but if we if the districts are absorbing that and god bless them for doing that and the people are community or able to do that it's it's still can excuse for us a little bit the larger problem I at least I may be wrong but that's kind how I see it especially for that district because they're absorbing the problem but they still have a problem so without be away that we could find that information out from them in the future. If he allows to look into that a little bit more and possibly get back with you on that I think we'd like to discuss it see if if there might be something existing or something possible in the future. Senator dismantle recognized he ensured I think you now have heard from representative that sad the room that are saying the exact same thing that we were saying on this southern room very beginning which is there needs to be some uniformity in the reporting so we understanding what's happening now we have a very small glimpse just because these districts have decided to do it through asking others have not so it's really hard to understand what may be happening in your individual districts and so you know to circle back to the beginning I think the request is and we can do it more formally if we need to can we ask the districts to be uniform on how we're the response because the big question if i'm understanding it correctly would be mine too is we're gonna cover everyone that's you never reduced and below but now there's a cliff right and so how many of those kids. That are going in are ultimately never able to pay and it's not the care that comes in one day and forgets you know the whatever it is to pay and they pay the next day but how many kids are actually not able to eventually pay for their lines for the parents ultimately not providing the money I had to pay for the reliance what what is that look like as far as a number and we can't do that because each district does it all differently. So that that's that's really I think with the request is in just a little bit of clarification I think on your training kids away so what is everyone understands I think what was happening is there maybe a kid in the line that doesn't have the money. Appearance have been given to them whatever it may be in members reduced price here whatever whatever they were there were districts that were publicly shaming those kids for not being able to pay for the launch that wasn't the kids for is the parent's fault and that's the reason that while exist and you may have a district that would give them an apple on a piece of toast and say there's your lunch because you weren't able to pay the day before whatever it may be so this just make sure that that kid can't be publicly shamed is getting the same is getting the same launch as everyone else as they go through and yes that's created a situation in which there's some parents to just never pay and that's pitiful and I hate it but it's also not the kids fault so that's that's what's happening and why are some of these write offs exist that was a while it was based by the end reps in the davis back of you search. Representative right right thank you thank you mister chairman let me ask this mail if unless you're saying a score district you had fifty eight percent of the children that were eligible for free. But the school elected to go ahead and pay. So that ever child could receive meals. Is that something that we can do by school district number two question would be is this a situation that were having here we had a certain amount of children at war night maybe it also but we may be charged a federal government having a county interested in that point right here your first question yes sir the districts could. Absorbed the cost of those other children eating and provided what i'm going to call a universal program for all their students within their district if the district chose to do that the district would still have to take applications in count and claim the meals so that they could get their federal reimbursement from our office which they do get a small amount for each paid meal that they serve to a paid student but the district certainly could elect on their own to use some other nine federal phones to put into the child interesting unit or challenge rational account to cover those meals for those children that were not eligible therefore everyone who wanted to come in and eat at no charge could do that. The. Represented right I did one respond on your question there we do have in the state I think it's approximately a little over three hundred school three hundred schools that participate in either provision to our community eligibility provision and if they participate in that all of their students even at no cost and so that's in place than roughly about a third of the schools however there is a a criteria for a district to be able to do that and many times it depends upon the level of the what percentage of reduced students I have so some districts are schools are not able to do it just because I do not have enough kids that would be able to. And. One thing that usda does allow school districts to do if they there is an excess balance in their challengers account is they can provide a universe versus breakfast at no charge to any child but they can't watch and that's a usda regulation not state or anything regulation so if if you've got districts in your area that may be have an excess balance in their challenge and account the district could have some conversations well you know what about a universal breakfast program for for our stat. Representative right. Thank you mister chairman maybe I see us. Would it be based on the income of the folks the murders and day at in other folks that are in that area being low income or high income with that have a lot to do with it. To do with what to be in a special if I example let's just say in little rock you you're norm would maybe forty three thousand dollars for a family but maybe luck in marine with you say it was only twenty seven twenty eight thousand dollars would debt would have some play there I don't know that because eldability is established on what's called income god lines which is based on household size and the gross income that the family receives. So that's what's put on the meal application when they apply for meal benefits from your reduced. The man and so that's that there's a usda income eligibility thank you again thank you mister representative painter and recognized. Thank you mister chair over here appreciate you being here just question remember during cobin when all the mills were paid for you know how much organs are received from the federal government yes are our reimbursement right now almost three hundred million dollars three hundred million dollars okay thank you mister chair appreciate. All right seeing no further questions thank you for being here and. The. We will consider that report filed and reviewed. Well skip over other business new business see no new business on the agenda for today. Next with the guard other business the next meeting of the legislative joint auditing committee will be held thursday february eighth and friday february ninth twenty twenty four and with that I would entertain a motion to adjourn see emotion and a second all those in favor say I all those opposed this meeting is adjourned thank you all very much.