Legislative Joint Auditing-Educational Institutions
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we're going to begin our meeting as we always do with an opening prayer if you all would join me in sand I've asked Representative Eaton if he would say the prayer for us
thank youpresentative.embers glad to have all of y'all here today umenator deeses is not able to be here this afternoon but we're going to go ahead and carry on without him. before we get started just want to remind everybody as you look over these reports that if there is a report that you'd like to hold over or defer to the next meeting obviously that's always available to us if we have additional questions and with that I will turn it over to staff Oh did I forget oh no we got to adopt the minutes so do I have a motion to adopt the minutes from the previous meeting? Second
all right there we go all in favor none opposed motion carries
and on we shall go, Mrinnker, are we ready? all
Speaker 11
1:30
right thank you thank you madam chair and good afternoon today
Representative Keith Brooks
Unverified
1:33
there are57 education audit reports for the committee's review there were52 reports with no findings and5 reports that contain findings we we will begin with the three audits which were referred to the prosecuting attorney and attorney general starting
withcamden Fairview finding one the district expended $10,668 from operating funds to host an end of year awards banquet for employees in conflict with Arkansas Constitution as interpreted in the AG's opinion. The following is a summary of the expenditures7,260 dollars for meals for employees and guests $2,958 for door prizes and450 dollars for facility rental fees
finding two the district discovered and we verified unauthorized credit card charges of $2140 on the district's credit card between September 9,2024 and February 27,2025 as of the report date the bank reversed charges of $1,878 resulting in a loss of $262 and that concludes the findings forcamden Fairview School District. all right members do we have any questions
Speaker 18
2:52
Representative Mayberry you're recognized I was just wondering if we have any members from
Representative Julie Mayberry
Unverified
2:59
the school district to be here to explain anything so since
Representative Keith Brooks
Unverified
3:06
these are not a repeat finding or a deferred audit report they were not required to be here but they were notified of the meeting. OK and this has
Speaker 22
3:15
been sent on to the prosecuting attorney that's correct to be looked at I
Representative Julie Mayberry
Unverified
3:23
mean that's a significant amount. it's not so much that the school district had an event for the teachers or something it's that they use the school funds to do it like if a private individual private business pTO raised the money to do something like this it would be ok, correct? would agree that's a significant amount of money OK, thank you
members are there any other questions right I had a couple of questions so I will
go ahead and ask them and then we can see if we want to go ahead and compete with this or not right I'll I'll do the best I can so can you can you explain a little bit more about the breakdown on this and if the board was aware of what occurred and if so when
Representative Keith Brooks
Unverified
4:27
so we look to see if if this was brought before the school board prior to them hosting the banquet and there was nothing documented in the minutes that would suggest the school board was aware or gave prior approval and so concerning like the the breakdown I guess are you talking about like how many employees and guests ok so for the mills what we looked at we were provided a list by the school district and
they had 216 employees that attended as well as 132 guests and so that came out to about you know $22 a person on the meals on the door prizes those some of some of the items this is not all of the items but there were Airods there was a missing fan. there was a crock pot, a grid d le a TV an air fryer and a ninja slushing machine that we noted and then the facility fees is
is exactly what it is just some you know offsite facility that they rented for the purpose of the banquet.
OK. I am inclined and we have another one if you've all looked on forest City as well and they're that number's a little bit more significant for their end of the year party and since we've had a at least a question or two about this of if there's not an injection of deferring this till the next meeting which I know is not until June. and asking is that correct and asking some representatives from the
district to be there my understanding is we may not the superintendent for one is umm new and was not in charge is that correct withcamden Fairview? that's correct and how about can we go ahead and do forestity at the same time since it's a similar item or do we need to wait as we to get to that
Representative Keith Brooks
Unverified
6:17
whatever you would prefer I can read the finding if
Speaker 18
6:20
you'd like. Yeah well well I'm sorry Senator Love,
Senator Fredrick J. Love
Unverified
6:23
did you have a question well I know that you stated that to hold it but if if they have a different superintendent I'm I'm
not sure what we would do in regards to kind of holding this for the current superintendent to answer questions about the previous superintendent I guess that's my that would just kind of be my now if it was the if it was the current superintendent that was in place then I would want to talk to him but I guess kind of not saying beating up on him but talking to the new superintendent I'm not sure if that I guess if we would just want to reinforce that this
shouldn't happen again I guess that would be fine but go ahead ok so that's kind
of my thought process not just that but also for the board members because at the end of the day I think the board members are accountable for this as well and knowing what's going on in your district33,000 dollars for the next one is a pretty significant number as well we can wait till we get to that finding on that one but I do think it's important especially as we discuss funding for school districts and concern with public schools that they understand the importance of their duty with those public funds and what they're going to
spend it with to just kind of reinforce it because they do understand that it's not necessarily the superintendents and they have they gave a good report response I think you all saw that as far as they're not going understand they shouldn't do that again but I think it also reinforces that to that district and maybe to other districts the importance of not using funds in that way when money is tight so without objection I'd like to go ahead and defer this report to the next meeting. seeing none and then if you want to go ahead and read Mr.fink forre City's
report forest City had one
Representative Keith Brooks
Unverified
8:06
finding which was also referred to the prosecuting attorney and attorney general. the district expended33,436 dollars from operating funds for an end of the year celebration and entertainment event for staff in conflict with Arkansas the Arkansas constitution as well as interpreted in the AG's opinion. the following is a summary of questionable expenditures $17,390 for decorations which included a
portable dance floor, illuminated trees, drapery amongst other items $10,596 for catering and supplies which included the food, the servers and the setup fees4,235 dollars for entertainment which included adja and live performances and $1,215 for the facility rental fee and that concludes the findings for oest cityity School District. members do you have any questions on this? Representative Brookshire
Speaker 35
9:05
recognized I'll defer to an actual member of the committee first if there are others babies you have one I'll let you OK much like the thecamden Fairview do you have a breakdown of how many people
Representative Keith Brooks
Unverified
9:22
were served on the party yes so her review of there were two invoices for the catering for this the regular dinner there was350 and then
on the dessert for the dessert vendor they had marked down as300 so we're assuming around350 people attended are there other questions
Representative beatty you're recognized thank you madam chair
Representative Howard M. Beaty, Jr.
Unverified
9:53
I'm assuming we don't have anyone from school district here that's correct since it
Representative Keith Brooks
Unverified
10:01
was not a repeat finding and it was not
a deferred report they received a notification of the meeting but they were not required to attend what what
Speaker 43
10:13
could we do to require their attendance defer the report
Representative Howard M. Beaty, Jr.
Unverified
10:19
defer the report it has has anyone entertained emotion to do such? I'd be happy to you have such amo offer a motion to defer the report and request there attendance have a motion do I have a second
2cond all in favor ay opposed motion carries we will defer this report and ask for their require their attendance for
Representative Keith Brooks
Unverified
10:50
this as well the next meeting thank you Mr.innk. the last audit that was referred to the prosecuting attorney and attorney general was a finding at Nettleton school district between March 18th and April4th of 2025, the district initiated for transactions totalling 1.9 million to a fraudulent checking
account after receiving emails requesting changes to bank account information for two vendors without verifying the authenticity of the change request the vendor whose email was compromised an architect built the district on behalf of themselves and a contractor on April8th of 2025, the district discovered the error when it was notified by one of the banking institutions that the name on the account and the name on the payment were different the district recovered 1.5 million from the bank and the vendor agreed to
reimburse the district $204,890 with monthly installment payments resulting in a loss to the district of $204,890 and that concludes the findings for Nettleton School District. Senator Love, do you have a question
Speaker 33
12:00
just messing with me but but I do I guess
Senator Fredrick J. Love
Unverified
12:04
I was interested in in the fact that the vendor did the vendor receive any of this money Mr
Fink at all because I'm I'm curious why they would want to repay some money
Representative Keith Brooks
Unverified
12:21
that they didn't they didn't receive so I can't speak to all of their intent what I can say is is that their employees email was hacked and so the school you know they did not verify the authenticity of that request since it was only via email and so I guess the the vendor in the school worked it out to
where they would each split that final loss 5050 so
Senator Fredrick J. Love
Unverified
12:51
the so the bank recovered 1 point would say 1.5 million leaving the 204,000 or I guess
that but that doesn't even so 24,000 I guess double that I guess that would be the 1.9 that's just that that is interesting that the that the vendor would would choose to split
the loss when they didn't receive any of the money. I would be curious to see if the vendor received any of the money or did the bank is it just the bank just recovered it from that vendor cause I just don't see a business voluntarily saying I'm going to pay you $24,000 and I did not receive any of this money at all I would just be very curious about that Are you would you like to
Speaker 3
13:43
hold this over as well? is that what you're
Senator Fredrick J. Love
Unverified
13:48
yeah that mean unless we could just get an answer without them coming. I mean I don't want
to but I'm I'm just curious I mean that that's that strikes me odd that somebody would say I didn't receive any money at all but hey I'm gonna repay you $204,000. and unless anybody can shed any light on it. Yeahu I guess I would like to question the Nettleton school district so is that a motion motion do I have a second
got a second all those in favor to hold this over to the June meeting opposed
motion carries so we will hold this over as well to the June meeting and see if we can get some answers
Representative Keith Brooks
Unverified
14:38
to those questions the next report and neither of these last two were referred to the prosecutor or the AGE these are just you know normal findings Cedarridge School District finding one during our test of payroll expenditures we
identified $9200 in salary and fringe benefits that was paid from the title I program for a nonitle I certified teaching position the the employee was previously in a title one position but got reassigned in the 2025 fiscal year but the district continued to pay the employee from the Title I program finding to the superintendent was overpaid750 dollars in a certified employee was underpaid $249 due to clerical errors and finding three the district's operating bank account was
unreconciled throughout Fy25 with an unexplained variance of 1el,943 dollars at June30,2025 and that concludes the findings for Cedar Ridge School District. Mayor Burs do we have any questions for staff
on this finding? See none without objection
will file the report and the last report
Representative Keith Brooks
Unverified
15:50
with findings was Greene County Technical School District they had one finding in October 2025 the district discovered that a
check for $1400 which had been mailed to a vendor was fraudulently diverted to another bank account after the district contacted the vendor about a balance due the district notified its banking institutions and the funds were recovered and that concludes the findings for Greene County Technical School District. Members do you have any questions on this report?
I do have I think Mrin it might be nice if you
could update members and just remind them some of the actions that legislative audit is doing to remind school districts on how to protect themselves on these
issues that we continually see
Representative Keith Brooks
Unverified
16:34
so we've done a trying to do a few things one anytime I go speak at different events where school officials are we try to talk about the issues on altered checks electronic payments being you know any type of banking information being processed just through email especially changes that's not acceptable there needs to be
some other form of contact with either a vendor or an employee and we think schools should you know try to figure out with their vendors with their employees what that looks like what we're seeing some do is they're requiring people to just come in person to make changes to banking information not to say that's the only way you could do that but that that is a a pretty good way of handling those changes and so we're on each audit
now when we go out we try to ask questions along these lines to see how they're processing changes to deposit information we're also trying to see what kind of controls they have with the bank on checks kind of like positive pay or positive pay plus or how often they're looking at their their bank account online obviously not just waiting until they do their bank reconciliation to look at those things since this has been such a huge issue over the
last few years so from an audit standpoint we're doing you know as much as we can to to find out information and then to also make recommendations when we see weaknesses in internal controls thank you members do y'all
have any questions? Representative Beatty you're recognized just a question
Representative Howard M. Beaty, Jr.
Unverified
18:24
with with the first two reports that were presented did staff reach out to the chairs to see if maybe it would have been a good idea to have these two schools in attendance
today was that an option we did not discuss that mean just think when you see something as egregious as as those first two reports and and knowing how this committee goes even on on sometimes significant but minor issues it probably would have been a good idea to have requested that they be in attendance today just to address and put some of these at at rest
think that so I just wondered just because they don't have to be here and and but maybe it would have been prudent to to move forward and and request that they be in attendance to address these issues my understanding that's part of the committee rules, but
is there a reason why we can't can we go ahead and make that request as chairs if if you ask us to we we will OK thank you for that pointing that outpresentative Bedy and we'll look to do that in the future because I think that is an important change that
Representative Keith Brooks
Unverified
19:39
we could make and there are some schools and higher eds that if they see that they're findings going regardless of whether they have a repeat finding or deferred they're usually here and so we do notify at the very least that that you know someone with your audit reports going whether you have findings or not members are there any other questions on this report? I do think it it
would be a good idea a reminder for all of us to speak to our schools and remind
them of these opportunities that are afforded to them on training from legislative audit or from the auditors when they're there because we are seeing some of these over and over and over again so maybe if they hear from us that we'd rather them not have to come down here and be it sit at the end of the table and get out ahead of this at home. So without objection we will file that
Speaker 11
20:32
report seeing none the remaining52 reports listed
Representative Keith Brooks
Unverified
20:34
on the last two pages are audits with no findings and staff recommends these be filed as reviewed
I'd encourage you to take a minute and look through those when we have these ones that don't have findings that's a really big deal and we need to celebrate those here so if you have a school that you want to highlight or celebrate them back home but make sure you congratulate your schools I know I have one in my districtentonville is in a lot of different representatives districts but I'm proud of them for having a clean report and if any of the rest of you all want to recognize your schools now's the time and then please do it again at home because we are very proud of these schools that had no findings.
right we just file these all together all right without objection we will file these reports we have no new business so members thank you for being engaged and participating in this this stuff matters especially when we're dealing with the people's money and their dollars and making sure they're being used well in our schools especially so without any other business this meeting is adjourned
Agenda
A. Call to order by Co-Chairman.
B. Adoption of Minutes of the February 12, 2026 meeting.
C. Review of Reports. Refer to the Synopsis
D. New Business.
E. Adjournment.
Documents
| Title | Type | Pages | Source |
|---|---|---|---|
| Agenda — LEGISLATIVE JOINT AUDITING - EDUCATIONAL INSTITUTIONS, Mar 12, 2026 | Agenda | 3 | Official source ↗ |
Speakers
Representative Hope Duke Chair
Unverified
Speaker 11
Representative Keith Brooks
Unverified
Speaker 18
Representative Julie Mayberry
Unverified
Speaker 22
Senator Fredrick J. Love
Unverified
Speaker 35
Speaker 41
Representative Howard M. Beaty, Jr.
Unverified
Speaker 43
Speaker 49
Speaker 33
Speaker 3