Legislative Joint Auditing-Educational Institutions

Thank you members for we'll call this meeting to begin here we are however for the public we'll make sure we announce this we are going to to gavel in and then go straight to recess we do see a quorum we're going to start our meeting but we're going to recess for 10 minutes because we've got some great holiday gift drives that are going on we want to support that here at the capitol for our foster kids programs and so 10 minutes we will readjourn back in 10 minutes Thank you.

Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you.

All right, members, we will call this meeting back into order. Welcome back to Legislative Joint Audit Committee. We always start this meeting with a prayer, so we want to make sure we do that today. Senator Dotson,

would you mind praying for our group today? Dear

Heavenly Father, we thank you for the opportunity to serve you. Thank you for this wonderful time of the year, and that everyone would have a very Merry Christmas. Thank you for another year in service to you. In Jesus' name we pray. Amen. Thank you. Members, we've got a pretty

quick agenda in front of you, thankfully, which is actually great news. That means we've got a lot of school districts doing well, and so we're thankful for that. we've called the order, we've come back from recess, and we're going to move on to item B on the agenda, adoption of minutes from the October 9th meeting. I believe we need a motion for that. Let's see a motion. I need a second. Take it all in favor. Say aye. Like sign, say no. All right. Motion passes. Adoption of the minutes passes. All right, we're moving to C on the agenda. This review

of reports. Mr. Fink. Thank you, Mr. Chair, and good afternoon. Today, there are 10 audit reports for the committee's review. There were five reports that have findings, and there were five with no findings. There are no reports containing repeat findings, and none of these were deferred from the October meeting. So we will begin with the Bay School District Audit Report, which had one finding that was referred to the prosecuting attorney, Attorney General. Due to inadequate internal control procedures relating to the use of credit cards. The district paid $2,690 to a credit card company without adequate supporting documentation. Therefore, the validity of these purchases could not be determined. In addition, failure to obtain supporting documentation timely resulted in finance charges of just over $3,200 and late fees of $171. And that concludes the finding for Bay School District. Thank you, Mr. Fink. Members, any questions on

this finding? All right, seeing none, this has been referred to the prosecuting attorney as a reminder for an investigation. Let's see, do we, I believe we need a motion to file this, is that correct? Okay, I see a motion and a second. All in favor, say aye. Aye. Opposed, like sign. Okay, that is

passed, and we will file that report. The next four reports all contain audit findings, and as I mentioned previously, none of these were repeat, and none were referred to the prosecuting attorney and attorney general. Mr. Fink, if

I can interrupt for a second. Members, these last, as he was starting into these findings, we're going to have him go through all of these at once and just read through all five. If you've got questions or want to flag, just make a note. We'll come back to them for each district, but if you wouldn't mind reading all five.

The first is National Park College. I will just summarize the findings for National Park. It was related to material misstatements in the financial statements, primarily caused by turnover of accounting personnel. We noted issues related to duplicate posting of entries, errors in accrual entries, and misclassifications that resulted in misstatements to the financials. We brought these items to the attention of college personnel during our audit, and the errors were corrected by the college. Next is Horatio School District. They had one finding. The district received federal reimbursement of $110,794 from the Emergency Connectivity Fund for expenditures that were previously reimbursed through ARP ESSER. The next is Omaha School District. They had one finding. During our examination of capital assets, we noted the following issues. Six assets were not added to the capital asset listing. The district did not establish procedures to ensure disposal of surplus or obsolete equipment was properly removed from the capital asset listing, and three of ten items selected for inspection could not be located. The last audit with a finding was Quitman School District. The district's operating bank account was unreconciled for the periods of July 2023 through June 2024, with variances ranging from almost $16,000 to $285,000. The district identified but did not correct errors of almost $16,000. And during the audit fieldwork, ALA staff identified errors of $12,071. which left an unexplained variance of $0 at June 30, 2024. And that concludes all the reports with findings. All right, members, any questions on

those reports? All right, Coach Chair Duke, you're recognized.

Thank you, Mr. Chair. I just have a quick question on Horatio. So on this one, they basically got, if I understand correctly, they got money for the same item twice. So they're going to reach out to return the money? Is that the anticipation? And will you guys follow back up on that in

the next audit to see where that status is? Yes, we will. That is what happened. They had expenditures that they had already been reimbursed by through the ARP ESSER funding, which runs through DESE. The Emergency Connectivity Fund is a direct program to the school district, so it does not run through DESE. And what they'll do is they'll follow up with the federal agency. And when we come back to do our audit in FY25, we'll ensure that that happened. And most likely, the federal agency will ask them to reimburse those funds. Did

they use it for the same? What did they use the duplicate

funds for? So these expenditures were related to tech equipment, which would have qualified under either program. You just can't duplicate the reimbursement. So they just did it for additional ones? Yeah. They had some overlap on the years, and so I think they weren't positive what all they had moved over into the funds, and when they accumulated, they accumulated too much. Members, any other

questions? All right. Seeing none without objection, those will be filed, and we'll go to

the reports with no findings. The remaining five audits are listed on the last page, and those have no findings. And staff recommends that these be filed as reviewed.

All right, questions, motion, and a second. All in favor, say aye. Aye. Opposed, like, sign. We had a question. That was a motion to file, I believe, correct? Yes, sir. Oh, did you have questions? No, she asked me a question. Okay, all right. All right, those will be filed. But before we say goodbye, we do have Arkansas State University is here in the room with no findings on their report. So can we give them a hand? Congratulations. And also congratulations on beating UALR this last week, okay, and a little in-state rivalry. Good job in basketball. Congratulations. Members, without any other agenda, I don't see any of their new business, any other questions, concerns. All right. We will adjourn. Thank you. Now,

that was Jim. Mr. There we go. Yes.