Legislative Joint Auditing-Educational Institutions

respectively from total one federal awards. Finding two the district could not document the procedures are followed to select a construction manager for construction and multiple projects around campus as set forth and rules and regulations governing the use of construction management as a project delivery method as propagated pursuant to argue our code the construction manager was paid seven hundred and twenty six thousand for non projects daring fiscal year twenty twenty two. Funding three daring our examination of parallel records we noted the following discrepancies and I won't read these all but out provide just a brief summary three employees or underpaid and three employees were overpaid due to clerical errors time sheets provided for two employees where we're not properly documented contracted in them for four employees were not approved by the board of education. And stipends paid the four employees serving an additional roles were not included in the employees contracts. And finding for the district did not solicit bids for multiple construction projects as required by arkansas code. This was six projects and it told about twelve million dollars and that concludes the findings for four city school district. Thank you I got folks here from forest city right which all mine please come into the end of the table. Yeah. If you will probably need to turn your mike's on if if you'll start by just telling us her name in your title tip any harder superintendent forces go district. Keep them here yeah you pull them out is a little closer to you tif any harder it still being tended for citizen district. Uh as a rain or both assistance. Thank you think of for coming today if you were just kind of just an opening statement if there's anything you want to share with the committee or any detail you want to expound on that's in the report just take a couple of minutes and can I get a started with your explanation of the findings so I still went into the four forces go district I have had an opportunity to respond to the the four findings in my i'm i'm comfortable with the response that we provided in those their response we share an explanation of. Our understanding it will lead to the finding and then we also share what we will do move before to ensure that we do not have a repeat finding in those areas and so the findings range frauds will clear the arrows that we bought a radio address as well as some things for example with child's tap rules and how do we how we approach that so at this time i'm comfortable or open to questions that I may are in today. Thank you do you have anything you like to earn my first question it may go to mister fink but i'm finding four. In the response. A couple of sentences then you you state or the response states this has been a common practice in districts throughout the state. Uhm I guess maybe for mr fink is that your experience is there's something that's done in districts throughout the state so I can speak to this specific audit what drew us to take a further look into this and specifically the procurement method used for these projects was the significant cancel of the expenditures and the number of times that that method was used and so anytime we are going to conduct an audit we look at significant factors and so if we identify something that is significant dollar amount was or maybe qualitatively like the number of times you know a method is use during procurement than that requires additional audit consideration and so as part of our audit when we looked at that we saw six projects where a cooper person agreement was used and of those six projects in ended up totalling about twelve million dollars and so we asked for an illegal position for from our general council and after he did his legal research including looking at ages opinions we felt like the process outlined and code twenty two nine two of three should have been followed and we have not been presented with any legal argument that would cause us to change that. Okay thank you I guess recipe didn't harder did you write this response. Do you might say i'm just curious if you're saying this is something that's done around the state and it's legislative audit position at this is not falling the law that would mean there's other districts that we might need to be looking into doing their so do you know for effect other districts are using. Cooperative purchasing or tips taps for large construction projects so what I do know is that it just as recently as I think. Maybe or might the goal we we have meetings with aa so pretend it's across the state and at a meeting about two minutes ago we did have a visitor there from a asba who share with all of us out of the superintendents that they were aware that made of them had projects exceeding this amount and they were following this practice and that they could continue to approach the way they had been operating and their super tennis should not be uncomfortable contained when to operate that way. Okay. But I also will just want to ear the um while I feel like there is some some conflicts in the advice that we're receiving that I think for us will follow the bait process for over fifty thousand until we receive additional legislation or worth a very definitive directions on what we should be doing even if other districts are doing it. Okay so you don't intend on using the same process going forward for projects over fifty thousand dollars no but I would like to request that we have some specific guide it's just to ensure that we are following the rules okay thank you do you have questions if to clarify so when you had the superintendent's meeting and and adviser was there did the advisor advised the superintendence that the practice was okay aren't was not okay. The the directive that the there was share was their superintendents they referenced our item they they referred that they were aware of one district having this idea finding bar and they are based on the superintendents because there has been an outcome because mean of them have projects under way that they were able to continue. Their projects so we are an advisor to the superintendent who's advising old nature stupid advising all the superintendents that were the art finding determined their advising all the superintendents not to follow the directive of the audit legislative auto. So out I would prefer registered share exactly what they say it voices me given maping you know what I think should appreciate there but. It was shared that other superintendents districts have projects under way using the tips temps process and that they could continue their projects. Mister chair could you like to request that we find the name of whoever is advising there. And maybe we need to have a talk with whoever's advising our superintendence to follow a path that legislate of audit as deemed illegal and that let's not appreciate I know you're following the directly of advisors and i'm concerned if the advisor is taking the taking off down the road where the legislative article says it's not a good path to follow we need to check with them also thank you so I can just share that the members of a present woman was of aa and asba okay thank you thank you. If I could go back to finding one um so it appears that the district. Paid for professional development services for years in advance do you know how many years. In advance you are paying one year in advance. So it says the vendor was paid two hundred sixty nine thousand six hundred one hundred eighty six thousand four hundred and thirty six thousand eight hundred so that for one academic year yes it was in the economic year that we just finished we were in the middle of that economic. Okay so all of the services have been rendered and that bender was solution tree. We did not know we did not use solution to. We thought that the direction that we were given would apply to all vendors not just a little cheaper. Okay. Why does the response say solution to. Yep because I was sharing their in the past we have done work with solution and there because it is as state vendor supported vendor we have received emails even after my audit I received are email from solution to with the directions of prepaid for years of pd so I just want to share the the sometimes we're receiving count for conflicting guidance and we want to follow whatever is the correct address. Okay so you you do patient inter in advance for professional development but it was not a solution to. Alright that's helpful okay members does anybody have any other questions on any of these four we have four total findings representative duke thank you my question I guess is a little bit more broad in relation to these do you all have a school board school board attorney that you while use specific to your district as opposed to the schoolboard association attorneys yes. Okay may I have so in these instances here. Did you all ask them for any advice i'm i'm assuming i'm correct if i'm wrong that the person that you're referencing here was a school board attorney from ouzberth that was saying. This is okay for you all to go ahead and continue doing that was it one of their attorneys the person that was on the call was doctor her name days in that profile. Ok so no we did not advise a he we did not ask our attorney before these finding but it wasn't what the school border ten attorneys from the school for association that are told you guys it was okay to go ahead known continue doing that okay so. I'm gonna go ahead and go on thank you so how i've got several questions here because I did so run a school board several years as I know several others did here as well so how long have you been superintendent nine years so you've been doing this process more than once in going through this and this is a typical standard procedure for you guys. At your school district was to do things and aligned along these lines this was not unusual well it was it was unusual for us to prepay a car to some of the other things that tips towers some of those things were usual okay and nobody thought maybe we should call ours our school but attorney and see if they how they would advise us on doing this there was no question no because we we we've all have been doing private added about three or four years so before that we were doing a legislative idea for about five years and has never been a finding and so now that we know you will. We were corrected. This. Thank you members and the other questions representative of hollowell yes I understand you do a a private already is there a reason that you would pay for an instead of doing have a state on it our board voted about three years ago to choose to do a state added for what reason there would have been a question for the school board. Did you recommend. A private yes. So they probably followed what you said to do a private article. Yeah but I guess I can I don't want to project what they were thinking sold in in the past legislative audit has taken a considerable amount of time so even when you do a even when you don't do a private article you do a legislative added you stay in current quite a bit of house for overtime purposes so you recommended it all it so what would jury that would be your reason for private audit yes the amount of time in the amount of in your small organization the matter people that are being pulled out of regular day to day work. Okay i'll come back maybe if somebody else has a question. Yeah. Any other questions members forgot something else representing hollow well except you're the only one in the what about the construction manager contract the old advertisement or take bids for that or who picks that or. Tell me about that the outboard picks it I think our response speaks to the process that we followed for children a construction manager. So they look at all the options. There are there are several companies they look at or they just yeah I think the rule is that they initially have to look at up to the three I think they may entertain the. And then how do they decide which one of those appear. There's a the other user presentation or information share with the board and then the board makes the decision one of the decisions that was made by our board they've one of the rule outside of the qualified firm was within paying attention to someone with proximity in for me air to with the area and so they told the construction manager that met their criteria okay back on the debate process for the construction have young. Heavy construction since the audit was released to back in the end of june in the new projects we have now started in a new projects since the audit we'd helped do how projects are in. Pricey progress i'm progressing that's like gem junior that was voted on before they added okay you didn't sick bids on that either. No wisd we followed the same prices but we the process was already in place and my understanding from the auditors but we met a estable question what will be helpful with giving the. The added tick took name mult it we were in a new fiscal year and we started something and they told me it will start from the day we were notified okay do seek bids for milk and bread. The process why is that probably a bit process in the others on I can't activate their so I guess a legislative decision II don't know. All right sounds like we don't have any more questions so with that thank you off for coming today and without objectionable consider this report reviewed thank you. Thank you. Okay mister fink if you would take us to the next item on the agenda yes the next two reports contain findings that were referred to the applicable prosecuting attorney starting with center point school district which had one finding the district discovered and we verified unaccounted for fundraising proceeds and state news turtling eighteen hundred dollars in the fccla activity account for the period july one twenty nineteen through july two june thirty twenty twenty two uh the sponsor who was custodian of the fines sand a garnishment agreement allowing the district to deduct one hundred dollars per month from her paycheck until our phones have been recouped and as of our report date the district cover covered seven hundred dollars of those funds and that concludes the findings for center point score district. The. Members any question on this report. Seeing none with that objection will consider that report reviewed. The next reporters he were screen school district which had two findings on october twelfth twenty twenty two the district discovered that an employee's perot direct deposit had been fraudulently diverted to another bank account it was determined that on september twelfth twenty twenty two the district made the direct deposit change after receiving an email request from what appeared to be the employees email account the district notified the bank and followed a police report however the fraudulent transaction resulted in a twenty four hundred dollars loss to the district. Finding two during testing we identified the amount requestive for reimbursement for the emergency connectivity fine was a hundred and fifty four thousand dollars greater than the actual amount of equipment provided to students or school staff with unmet needs during the year and that concludes the findings for heaver spring score district. Yeah. Any questions on this report. Yeah I was just sure was with the chairman sullivan that we see this kind of thing a lot in this committee it seems like where we have. Districts who receive fraudulent requests to change bank accounts and then we end up with direct deposits going to the wrong or fraudulent bank account arms I feel like we've had that discussion in here before about districts I guess for an asba I don't know if you all do any education or programming around that but I know we've talked about that in here and maybe the need for districts to require those changes to be made in person instead of making any change like that that comes in electronically because it's we see this in here all the time you know I think adean you can not have put out information to districts about this issue in making them aware thank you okay great any questions seeing none without objection will consider this reviewed the next five reports contained findings these were not referred to a pa and they were not repeat findings staff recommends that the committee take a moment to read over these and file in mass as reviewed. The. Are any questions about any of the reports with any of these findings. Okay seeing now without objection we will consider all of these reports reviewed. And then that just takes us to report the no findings correct. Okay so our last group east arkansas community colleges architect college cross county school district or now malvern potsville roseberg and watson chapel they had no findings and there are poor itself from chairman solved myself we say well done i'm not having any findings in your audits we always really like to see the school districts in harriet they don't have any findings in their reports so pre jobs all those no questions any objections will consider those reviewed as well. Yeah. Alright I think we've covered the agenda any questions concerns comments before we go. Okay members thank you for your time today and we're returned. The.