Legislative Joint Auditing-Educational Institutions
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right thank you all for being here we're gonna get started. I need a motion to adopt the minutes motion by Senator Sullivan. do we need I do need a 2nd 2nd
by Representative Long. all in favor motion passes and we're going to begin with the review of
Speaker 6
1:08
the reports Mrinnk thank you madam chair and good afternoon today there are47
Senator Fredrick J. Love
Unverified
1:13
educational audit reports to review of the47 reports 26 had no findings and those are listed on the last page of the synopsis as a as a reminder the current standing committee guidelines is to invite entity officials for deferred audit reports and reports with repeat findings there were three audit reports that were deferred from the July meeting we were going to begin with Brinkley but I think their superintendent stuck in traffic
trying to get here and so I am going to skip that one and go to Deermount Judy. finding one our examination of bank reconciliations and investments revealed the following the district's operating bank account as of June30,2024 had an unreconciled variance staff identified5,500 dollars in errors leaving an unexplained variant of $100 the district's
activity fund bank account as of June302024 had an unreconciled variants of $1100 the district's scholarship fund bank account was unreconciled during the 2024 fiscal year and revenues and disbursements of the account were not recorded in the financial statements additionally the bank account was not properly classified on the general ledger. Bank reconciliations were not reviewed and approved by entity personnel during the 2024 fiscal
year and interest revenue on the district's CDs totaling 1,302,600 we're not recorded in the financial statements for the fiscal years 2024 and2023 respectively finding two was a repeat finding our examination of payroll expenditures for 12 employees revealed the following accumulated sick leave records were not properly maintained by district personnel as required by Arkansas code the district could not provide proper documentation to support the payment of unused sick leave
totalling 880 dollars. One employee was not paid in accordance with their contract and stipend resulting in an underpayment of $1000.01 employee's contract did not agree to the approved salary schedule resulting in an underpayment. a similar finding was issued in the prior year audit finding three during our examination of capital assets we noted the following discrepancies the district did not establish procedures to ensure disposal of surplus or obsolete equipment was properly removed from the capital assets listing
for equipment assets with a cost exceeding $1000 were not added to the district's capital assets listing and discrepancies identified in the previous audit we're not we're corrected in the current year including one equipment asset with a cost exceeding $1000 was not added to the district's capital asset listing and five assets were missedclassified as building assets Finding for during our examination of the May2024 bank statement we noted se payments
totaling $14,000 were made electronically without board approval or an approved resolution in noncompliance with AdE commissioner's memo and Arkansas code this concludes the findings for Dearmount
Speaker 9
4:28
Judy School District. Members we do have some representatives from the district here if you all
have any questions take a minute to look over the findings and we'll bring them up to the table if if those folks from Dearmount and Judy want to come and join us at the end of the
table and identify yourself for the record and we'll see if the members have any questions appreciate you all coming up here and seeing us all.
Joshua Lawrence
Unverified
5:09
Good morning. my name is Joshua Lawrence. I'm the superintendent at Deermountain Judy. if
you can push that button in front of you and make sure that we've got the microphone on should get
Joshua Lawrence
Unverified
5:23
pull it a little closer to you maybe yes that's better thank you so much my name's Joshua Lawrence. I'm the superintendent at Dearmount Judy. and this
is my board president Mr. Justin Gilmore right thank you all for being here do you have any I know you have your response here and just give you an opportunity if you have anything else
Joshua Lawrence
Unverified
5:46
you want in addition that you want to say to the committee yes ma'am thank you committee members I entered this role as a new superintendent this year starting July 1
Speaker 24
5:56
and my bookkeeper also entered her role this year as a new bookkeeper for the district you on May6th after reviewing these findings we are currently doing internal audits to implement the policies and procedures to correct these actions that have been done previously right thank you senator Love did you have
a question no ok ok I sorry I saw your hand on
the microphone I thought maybe you did. Members are there any follow up questions or
anything that you have for the for them Senator Sulllovan you're recognized
Senator Dan Sullivan
Unverified
6:37
If I remember correctly this was the issue about travel from the last meeting
Chair
Unverified
6:40
you were here amm I on the wrong meeting ? ? I apologize sir but so was it not with the
superintendents travel there's not it I apologize so I have one quick question so these issues of the unreconciated statements that was previous administration and you guys have taken steps to ensure that they are going to be reconciled and
Speaker 24
7:15
in the future. yes ma'am we've partnered with APSRC and at the beginning of the school year we worked diligently with them and we have reconciled the operating account the activity account and the scholarship account along
with our CDs they were initially placed under activityc accounts and they have been reclassified appropriately as other investment accounts.
Senator Fredrick J. Love
Unverified
7:38
a question do now so under the under the rep repeat ex the repeat finding number two of the 12 employees revealed the following the accumulated
sick leave how did you all reconcile how how how how have you reconciled this? we are currently in the process
Speaker 24
8:00
of reconciling this my bookkeeper has gone with training working with APSRC as well to review our employee leave banks we've implemented processes so that employee leave is accurately documented through a paper trail and brought into the central office where I am the last signature before approval and it goes to formerly we have actually removed a central office staff member who was over this where the mistakes were made and
so we're actually looking at finding a new person but until then my bookkeeper has been working diligently to bring that so once we have that all reconciled and ready to amend and change we will take it to the board as the previous superintendent had issued for their response all right thank
Senator Fredrick J. Love
Unverified
8:47
you thank you Mrirsia thank you members are there any
other questions seeing no questions we will file the report if if without objection
so filed thank you all for joining us
and thank you for giving your answers and we look forward to not seeing you
Senator Fredrick J. Love
Unverified
9:16
next year that you'll have a nice clean report. thank you the next audit that was previously deferred was the Brinkley school district if you'll turn back to page one on your synopsis finding one the district's internal control system did not prevent or detect material errors in the financial accounting records errors
included principal and interest miscoded of 84,000 revenue not recorded of 81,000 revenue duplicated of43,000 and then in the other aggregate funds expenditures duplicated of 267,000 revenue not recorded of 150,000 and unrecorded accounts payable of 13,000 the financial statements were subsequently corrected during audit field work finding two is a repeat finding
we noted the following issues with payroll. The district did not provide timesheets for three employees totalling6,100 dollars the salary of four employees tested did not agree with the salary schedules a similar finding was issued in the prior year audit and finding three was also a repeat finding the district's bank account was unreconciled during the 2024 fiscal year with unexplained variances ranging
from516,000 to158,000 as of June302024. there was an unreconciled variance of almost52,000 dollars a similar finding was issued in the prior year audit and that concludes the findings for Brinkley School District. thank
you members we do have representatives from the Brinkley school district correct? superintendent Brenda Poole
and board the board president Ryan Medford if you all would join us at the end of the table and if the members have any questions and
just be sure to identify yourself when you get down there at the end and we sure appreciate you coming up here give you a moment if you have a statement that you'd like to make and then we'll take questions from the members Good afternoon make sure you got a tardiness thank you make sure to identify yourself for the record please of superintendent Doctor Brenda Poole thank you doctor Poole. board president Ryan Medford
thank you Mr. Medford. if you have a
Speaker 54
11:38
statement that you'd like to make or if you want to go ahead and take
Speaker 55
11:43
questions no I could make a statement up on taking my post at the rooklyn school
Speaker 54
11:49
district superintendent in 218 when I got in the seat two weeks in we did do a analysis of
Speaker 55
11:54
the finances and we found that we did have unreconciled bank statements that had been going on long before I got there we had gone
back as far as 2015 and have found some the bank statements had like $112,000 bearance and as we progressed into probably like the 2nd month of my being in that position they actually came in and put us in early intervention services and we started working with the department of Education with Cindy Smith at the time and
Donna atkins and they work with us on that trying to clear up those barriances and I'm telling you even beyond past 2015 they continued to find chicks that had not been cleared and so we got to a point even standing early intervention services for three years we were not able to continue to go back and find those variances and so when I took the seat there was also a new bookkeeper that also took the seat at that time and so
like I said it has gone on for years and it's still even though she made some clerical errors some of those errors were actually still back they're historical problems that we have not been able to find over the years we also have contracted with ASPR seat with umhazelurnett who used to work in the Ad finance department and she was trying to help us to locate those variances as well and since
then we've worked with vscan we worked withallia we have did all we can to go back as far as we can and try to reconcile those books from years back and so even like I say it went beyond 20fi5 in our findings and what they told us to do is start to working on it incrementally to try to get it done because we have to keep moving forward with the stuff that we needed to do and like I
said as far as the the interest being accumulated last year and not properly recorded my business manager at the time did reach out to Avpscan in different places like that to try to get some help because it was new to us about those bonds because that's what where that interest was coming from was from those bonds and so with the money was deposited and so she reached out no one could help us and we have still been reaching out as of
last year and we went to Miss Sharon Shulit at the depar at AAEA and she helped us to be able to figure out how to get that entrance recorded and like we supposed to an e finance and so we've cleared that part of that up and we have been moving forward clearing checks making sure everything is going is the way it's supposed to be going as far as the business manager and I signing off sitting down talking about those things but we still have those variances
and things from way back that we cannot clear up and we've hired multiple people to try to come in to help us clear up the department of Education has tried to help us as well and we still have that old stuff sitting out there there was times where we have sent out letters to different companies say hey we noticed that this check had not been cashed what's going on here even with our own employees we noticed that some of them were holding checks and so we put a 90 day time limit you must cash
them within 90 days so we've tried various things to in order to try to clear up these findings and so even the person that's working with us now has said look this is this is over me I can't find it the appscanned Mrs Donna Comer we've talked I say hey we need to be able to start from scratch somewhere and move forward and we know that there's some risk with that but at this point we don't know where they are because some of this was way back before that and my board is aware of that
I've tried to keep them abreast of all these things and so like I say some of the things that are happens yes the new business man the person who took the seat with me she made some clerical errors but she tried to clear them up as she went through and she was also in a mentor program as well so we're doing all we can to get this here reconciled and cleaned up and put internal controls in place because I sign off on everything I know when there's not a balanced book and we're like ok where is that let's go back and
check this let's check this but let's check this and even have have the accounts payable person to pull all the checks and with the office that's our size it's just we're really is more manpower work than the people we have in position thank you Mr Medford did
you want to add anything? no ma'am OK thank you
we do have several que several people have questions. I'm going to start with Representative beatty you're recognized
Representative Howard M. Beaty, Jr.
Unverified
17:13
thank you madam chairir. I I guess my question is maybe maybe
a little bit for staff on repeatat3 where you've got the unreconciled variants of51966 is that the same amount that was from the previous year is that number fluctuated
Representative Howard M. Beaty, Jr.
Unverified
17:32
based on that comment there that you you said this started in 2018. That number wouldn't fluctuate it would stay the same if there were unreconciled differences and you should note if you had an outdated or a check that was
you know backdated that came through the account and cleared our or or something along those lines so I'mm I'm not buying the issue that this is a problem that stems back from 2018 and something you've continually had to battle it sounds like it is a a continuation of a problem of somebody not understanding debits and credits and
how to post those and and the issues I have is anytime you see repeat and and on here you you've got a couple of repeat violations and
and I understand where you've gone to seek your help
but you need to seek help somewhere else and
get this reconciled and get this taken care of if it were the same issue stemming from 2018 forward that number would not change it might change a little bit but for the most part it would be the same number because those were old accounting issues and so I I guess my position on the committee is a repeat is not acceptable and I don't know I don't know if staff knows how long this has
been a repeat violation if it's been a repeat violation since 2018 or even prior to that but it's time to get that taken care of
and and if if the folks that you've gone out and relied on and talked to couldn't come up with an issue there are being an accounting entry or something for unreconcilable
differences that you can make to get your book straight and to move forward from that point on. So I would encourage you to seek proper accounting help and services that could
Speaker 54
19:24
help you get this in order and with my last email exchange with Nona Comeber Ad appscan we talked about that and she said that she would help us locate someone who is an expert in bank reconciliations because if the the help that we have been going to cannot help us then that's where we are looking
Speaker 55
19:44
for someone who is able to help us and my understanding staff
Representative Howard M. Beaty, Jr.
Unverified
19:49
is that this would be an and a variance that was in the district's favor
with with maybe more money you know a positive variance versus a negative variance on the district
Speaker 62
20:04
so throughout the year it fluctuated both ways exactly proves the
Representative Howard M. Beaty, Jr.
Unverified
20:08
point that it's an accounting issue and a problem that you have and it's not something that's systemic that's been carried on since that's all good
Senator Fredrick J. Love
Unverified
20:19
thank you senator Love you're recognized thank you madam
Chair Now I'm going to kind of pick up where Representative beatty was
so because I'm trying to understand the variances what goes into and I'm asking Mrinnk what goes into
Speaker 68
20:36
the variances it could be various issues I mean if you
Senator Fredrick J. Love
Unverified
20:44
notice on that first finding I mean there was stuff that impacted cash so they didn't record revenue at all in some instances which would have impacted your cash you could have old outstanding checks that are
still on your books that have cleared so they should not be there anymore you could have duplicate entries so if you're entering expenditures multiple times that would also impact your cash and so it's a variety of issues you would see on a bank reconciliation but then also entries into your general ledger Do you have a follow up center lock? Yeah, let me, yeah, let
me get back in the queue. let me think about this. thank you youpresentative beatty I mean
Representative Julie Mayberry
Unverified
21:30
Representative Mayberry you're recognized thank you madam chairir. I was just wondering if someone from ADE can come up and just share some thoughts on things that you've tried or that might still be
available to try and help them reconcile thank you and if you would identify yourself for the record please
Speaker 82
22:07
greg rogers department of education so yeah so as she said
Speaker 85
22:11
in her her response that she has been working with Apscan. Apscan is the finance branch for ADE that does that Part of the problem I think is she referenced before is that it starts in they identified it back in 2018 so it is a thing that keeps continuing on year to year to year until you go back to 18 and you have to clear 18 then you have to clear 19 and you have to clear 2 so that takes time to go into through each one of those as well as
trying to get that current month done is also because during the during that time you also have checks that are written, checks are outstanding checks so the variance is going to change until you can go back to that first initial year where you identified it and tried to go forward that vv that's hard because you're trying to go back so it does take some time but in working with Abscan that's what they've been trying to do but as she said in my bpscan field reps are areje bookkeepers foreign people who have been working in the district like
that or just trained like that so something can get to that level Donor probably has been saying we need to get with AAEA or APSRC or someone that has more time and more capabilities to get back to those future those prior years to get that carried forward to
Speaker 54
23:24
get the wreck cleared out if may answer to to what he's saying like he was saying going back for clearing out 2018203 that's what I was talking about when I said we had to go back and we were noticing things as far as 2015 and we noticed some things
prior to 2015 those eventually have to be cleared out so you would see a fluctuation
Speaker 55
23:45
in the amount because we're clearing out some of them and then if that person is making some clerical errors along the way then it's still gonna keep it fluctuating but some of it is still way back because we've had people in looking at it and they cannot find so they're checking behind us and looking at that and they cannot find and if they caught something that my bookkeeper did they say ok you this year's right here you need to go back
and record this undeposit you deposited the money but you forgot to record it in e finance and so it is a process of trying to keep up with old stuff and clear those out and working forward with
Representative Julie Mayberry
Unverified
24:27
the new stuff So so you're telling me that there is one more layer of help maybe that that can be brought in to assist to get this cleared up so that they're not here again next time around
Speaker 85
24:43
I think it's going to continue to be a working process and we and we hope it gets cleared up but that's where they you know our physical services support branch they will have can can work with that but then if it's something that needs to be there on a day to day basis then it may be having to look for a third party person that might can sit with her bookkeeper each day and and because the bookkeeper also has day to day activities they're doing right now but having somebody that can just spend some time to go back and look at those old records it's going to take some time
right thank you umpresentative Long you're recognized
Representative Wayne Long
Unverified
25:15
thank you madam Chairman. this my question was really for staff umpresentative Beatty mentioned a moment ago about basically a process to zero out and be able to see from that point forward you know it has the underlying problem being corrected you know that that's really what I want to know is like are they doing it correctly now and it's just a matter of working back to fix things in the past or is it just a perpetuation of the same problem
Speaker 68
25:46
so what we would hope to see and I mean this isn't just school districts this
Senator Fredrick J. Love
Unverified
25:52
is any audit engagement that we do what we'd hope to see as we get to a point where we have a certain balance that's unexplained or unreconciled and in that balance would stay the same theoretically if all the entries are being made correctly each month and so the fact that there is fluctuation says that there's it's more than just one issue in the past because if we go back to 2022
they didn't have near this variance on their bank reconciliation as they do now correct you're welcome senator Love, do you
Chair
Unverified
26:31
still have a question two things in in
could you come back and join us
Senator Fredrick J. Love
Unverified
26:38
at the table please but here's my question to the superintendent though because is Mister Fink
explains as as you're going through this process I guess the number one thing cu I haven't been on this committee long but the same things kind of
Speaker 99
27:02
happen in other committees for cities and counties has has your bookkeeper have they been
Speaker 54
27:08
trained appropriately accurately at that time actually have a new business manager as of last august and the previous business manager had been there like I said since
2018 she and I took the positions at the same time and she had gone through castbo training and all of that
Senator Fredrick J. Love
Unverified
27:29
and so and so your current bookkeeper has just been here for.
Yes, this would not be any of her didn't under your current bookkeeper all right that's a good thing my second question though to MrRogers because we keep saying how we can kind of
if we could potentially start it kind of ground zero what's what is the what is the harm in doing that? what what would what would be the advantage of
doing that and what would be the harm in doing that? So say for instance if we're saying that we have this variance that is irreconcilable or unreconcilable what is the what would be the the pros and cons of like
starting from ground zero so that we could
Speaker 91
28:24
you don't I don't think you want to write off anything that is because they don't think like what
Speaker 85
28:30
auditors identified there's revenue ca revenues that have been recorded things that have not been put into the system that should have been checks should have been outstanding so I don't it it's never going to be as simple as just saying this is backdad I mean it's it's gonna have to reresearched and looked at and then it's going to have to be a request it's going to have to be made to AD and
like audit to let them know that these are irres and irres recyclable irres I can't even say it today unre
Speaker 110
28:58
can't figure out what it is not we can't reconcile well no no I mean but that's
Senator Fredrick J. Love
Unverified
29:02
what I needed to understand because I mean it's not it's not as simple as just saying hey we need to start at ground zero and because that's what was saying
Speaker 109
29:09
earlier is that not only you having to work on the stuff that's in the past but also your month to month,
Speaker 85
29:15
your daily stuff that's going on in this current year so you got to make sure that all your current revenues are being done, all your current checks
are being are taken off and they're cashed when they're knock out standing checks are checked as well as trying to figure out what last year was causing that variance to get everything caught up so it's it's a it's not going to be a one time ro you can't write it off you have to figure out where it is and what why that caused that to go forward in that you never want to start with zero because then starting at zero makes those current going forward books off too because you're still all
Senator Fredrick J. Love
Unverified
29:50
that stuff back there and in in these variances are you said they're they're like payments
that have been made that maybe checks and not have
Speaker 85
29:59
been cashed things that I mean think it think like in the ot report they're saying there was a lot it's a lot of different things it's revenues that might have been not recorded could have been recorded in the wrong place outstanding checks or duplicate enrollment duplicate payments made to school recorded in there is duplicate payments or duplicate revenue so there's a lot of a lot of stuff that has to be cleaned up first and
Speaker 54
30:21
this is what if I may say something that's what we've been
Speaker 55
30:26
looking at like unclear checks posted depos it bank errors and continue to look at the historical posting mistakes as well and so those are areas that we have been working in to try to
Senator Fredrick J. Love
Unverified
30:38
get this resolved so Dr. Poole, do you feel like your current businessmini current business manager is the person that can bring you out of this. I guess that's what I'm trying to trying to get confidence in here's what I'm
Speaker 103
30:52
gonna say she is new and we have been working with
Speaker 54
30:59
vpscan and we have been working with others to try to get this resolved and even people who have been in it longer than we have are yet to be able to
Speaker 115
31:09
figure it out. OK but I'm just saying the moving forward
Speaker 55
31:14
I'm saying moving forward not not she's doing a good job going in making sure that we are clear and checked checking the deposits we have another accounts payable that's also stepped in to go behind it making sure that she's looking at all the checks that
have been cleared so we're trying to do this as a team to say ok you deposit this and looking at those cause they send them out electronically now making sure you're posting all the revenue making sure we're putting things in the right place making sure we're clearing the chase going through the bank checking the bank's statements online to make sure that whatever we're clear we actually have it has processed through so we're trying to work through all those pieces thank you
p re s ent ative beatty you're
Representative Howard M. Beaty, Jr.
Unverified
32:05
recognized thank you madamir. again a question for staff how many accounts are we talking about here that we're unreconciled just an estimate on those numbers I'm
Speaker 120
32:16
gonna try to get that information from you for from our
Representative Howard M. Beaty, Jr.
Unverified
32:19
staff do you know how many accounts how many accounts do you have
Speaker 54
32:24
that these problems are isolated in the general account and it was the account with the construction with the bond the
bond money was deposited but the business manager at the time could not figure out exactly where to go we knew it'd need to be in a separate account but how to link it to the district as well as how to record that in that entry on
Representative Howard M. Beaty, Jr.
Unverified
32:50
there so that's what this last one came in from and again focusing on finding three where where you've
got that these variants raised from a negative516,245 dollars to the 158,878 positive
with that variance how what what dollar amount are we talking about in total as far as assets as far as that variance rolling in I mean are we talking significant funds or I'm trying to look at their total assets as far as what what the cash I'm assuming these are the cash the bank accounts yes, I'll try to get that answer for you as well.
Speaker 124
33:28
I don't have that audit report sitting right in front of me so I can't take
Representative Howard M. Beaty, Jr.
Unverified
33:31
I guess I was trying to look at it from a materiality standpoint if these variances were were material to the district and
to the presentation of their statements if
Speaker 125
33:44
someone yes understood on this one specifically
Senator Fredrick J. Love
Unverified
33:47
as far as their errors on their special revenue fund and their other aggregate fund that was a material weakness that we identified in our audit report so a reader of the statement would have seen that that was a material issue. well again what you've
Representative Howard M. Beaty, Jr.
Unverified
34:05
been doing since 2018 ain't working. so it's time to find something
that will work so I'm just going to state that again from the committee repeatat something that's been going on that long it's time to get it fixed and I'd encourage you to do that before your next time coming to
Senator Fredrick J. Love
Unverified
34:30
this committee. Thank you senator Love you're recognized my final question is this because I I think the the one thing I really do want to ask though is you don't have any money missing is that we do
Mr. you're asking me that same question not that I'm aware of all right so that's that's a positive for me that's a positive but I do representative beatty is is right but you said that you have a new business manager is that not correct? Yes that's correct. right so then if we if we actually see this next year it will it will only be a variance where it's going to kind of be
Speaker 55
35:14
it's that's the plan that's working on it that might be the plan we're working on it so that's what we're doing and we actually last year did contract with someone else who's still helping us as of right now and she's been digging and digging and digging and she told us listen see can we figure out how to zero it out and you all start up she hasn't been able to and she's an experienced business
Senator Fredrick J. Love
Unverified
35:40
person so well if you have a new business manager Do Poole I mean that's a
that's a good start but I I I do I would like to underscore kind of some of what umpresentative Beatty said because it will be I mean I do understand that you have a new business manager so I'll just leave it at that Representative Long you
Representative Wayne Long
Unverified
36:02
recognized thank you madam Chairman. superintendent I was wondering these other people that you've dealt with in the past were any of them like CPAs where they all been just kind of
bookkeeper type people no they've been school district type people
Speaker 54
36:18
you know I mean in the in you know I mean at the Ad at you know appscan the people who's assigned to help us with school
Speaker 145
36:26
finance yeah but you know given that they've not been able to help
Representative Wayne Long
Unverified
36:30
I'm thinking that you know it's won't be cheap but it'd probably be money ahead to hire like an outside CPA type person that you know probably could get to the bottom of it for you that way you won't be back here next year because we we really we just can't let
this just continue to rock on without without some sort of solution.
Speaker 53
36:49
Thank you. now I just say one time that me and her had a conversation yesterday about this and that was my exact was we need to go with somebody different we need to hire somebody different if there's a firm there's somebody out there that can help us. so that's that's the revenue we're looking to take right
I have a couple of questions before
I don't know Senator Love are you ok so my first question just could you remind me how long you've been
with the district? since 2018 OK and you also referenced that you had reached out to somebody about getting an expert to help you with this when did you do that? Miss Comeer
Speaker 55
37:36
it was around let's see we tried to do a journal entry to clear out some things and that's when the conversation started was late July 1st of august something sometime in august when she and I went to talk
because they were talking first with my business manager my accounts payable and then we was like we have to do something because it's not getting any better and we're doing what we can this year with this new business manager and so she was telling me the pitfalls and everything that could happen if we did that and so she was supposed to try to help us locate somebody who has expertise in bank reconciliations so
I guess my statement I guess would be my understanding is your district's around389 students roughly right so at the end of the day you're the superintendent and the buck stops with you and I have some small rural districts and they've had to fight to survive and have had challenges in my area but the at the end of the day the superintendent if you don't have business managers and so forth you were able to step up it's your job to know that information it's your job to be as well versed as a business manager in that
and sometimes in small districts you have to wear many hats but I also know large districts are superintendents have they want to make sure because they know they're the ones who end up coming down here and testifying right that they need to know that and after7 years, I, I would think that would be something that you would have a real good grasp of because I wouldn't want to keep coming down here and talking to this committee and explaining you know what's going on and why we can't do it because what it looks like to me is sometimes it's just the dailies, the things that are you should be expected
you know by your staff but primarily by you to make sure that it's getting done and if they're not doing it that's what happens when you're the boss is you are the one who has to make sure that it's getting done so I hope in this next year that your school board and hold you accountable and that you hold yourself accountable so that you're not back here having these conversations again. I mean you may have the variants but it shouldn't be fluctuating we shouldn't have all these unreconciled statements we shouldn't have some of those things that are that should be
this year taken care of because you know so I don't know if any other members have any questions seeing none without objection we'll file this report thank you thank you both appreciate you
Senator Fredrick J. Love
Unverified
40:14
the next report is Pine bluff School District. I did want to answer one question thatre representative beatty had concerning how many bank accounts that Brinkley had it was one checking account, one
savings account and twocDs. OK, Pine bluff school district was deferred from the previous meeting finding one a review of activity funds collected and receiped at the high school revealed receipts exceeded bank deposits by3,600 dollars um3,500 dollars in cash receipts and $87 in receipts for which the method of payment could not be determined the high school administrative assistant was custodian of these undeposited funds I will note
that it's included on the pine bluff is included on the deferred audits in this synopsis in the previous synopsis we did note that that was sent to the PA and the AG finding two was a repeat finding a test of the education stabilization fund disbursements revealed that 165 equipment items purchased and this was one invoice with a cost greater than $1000 each was not recorded in the district's equipment subsidiary ledger, the total
cost of the equipment was303,000 dollars. The subsidiary ledger was subs subsequently subsequently corrected by the district during audit fieldwork, a similar finding was reported in the previous audit that concludes the findings for palm bluff School District and they do have their superintendent here
Speaker 153
41:40
to answer any questions the committee may have all right thank you Mr. Fink. if you all could
join us at the end of the table. I expect there may be a few questions from members if you can hit that microphone and identify yourself appreciate it.
Speaker 155
42:00
good afternoon Jennifer Barberry superintendent Pine Bluff School District. my board president could not be with us today he's had to work so forgive him thank you
do you have a statement or anything you'd like to
Speaker 155
42:12
say to the committee to get it started? yes ma'am thank you thank you board for this opportunity to speak about this. I will say this is actually my first official audit for Palmbluff School District as the superintendent so it was quite disappointing that I had to come before youreviously I've been here twice for palmbluff School District under other
people's audits. So when I said last year that I didn't want to come back I really meant it and so we've worked very hard to do some things to correct these I will say first the first finding specifically was a miskempt of the receipts the receipts were written and when we found out that the money was missing we immediately began an internal investigation it was actually the auditors that brought this to our attention and so when we investigated this situation the
principal from that year the adminis the administrator from that building from that year no longer works in the district the administrative assistant stated that that person did not take the money but we couldn't find the money and so this was something that when we looked back to see why we missed it on the district side it was the receipt books were turned in but the receipt numbers were not turned in in numerical order so the receipts were there but when the money was deposited not all those receipts were turned in in numerical
order since then well immediately we reassigned that administrative assistant. She no longer does that work anymore I can't say that she did it because I'm I'm not in a criminal investigator but I do know that we had to do a better job of training our bookkeepers and our business man I mean at each at each campus and so last year we I did not hire back any of the bookkeepers at
any campus. we made them reapply for their positions and take a bookkeeper assessment prior to being hired in those positions and we now have a training that everyone has to go through as part of being a handler of money for the district. That was something to correct this and then and that person obviously no longer handles money for the district and doesn't work for the district anymore as far as the repeat finding this was very irritating because fixed assets were a big deal prior to me taking the role of
superintendent palm bluff School District as you know if you don't I want everyone to be awareumbla school district annexed Dolllaway intoalmbluff School District and so through that annexation process two years in a row we found that there were thousands of pieces of equipment that were never logged in the face to asset log because they were part of Dolllaway school district and there was no delaware school district anymore so we couldn't even find their fixed asset logs so we employed a person to specifically handle fixed assets as a stipended position that person was in our
business office but we stipended that that position as well to work after hours to begin logging everything from Dolllaway School District into the fixed asset log on the efinite side as well as that person deleting we deleted over 2000 things that were never never part of I mean they were so old they were never part of anything in the district as well so we thought we'd cleaned up very very well all of our fixed assets when this happened this was a purchase of the panels that we
usedOVID money for learning the learning loss money to to purchase new panels for every classroom in the district and they were all on that they were all appropriately tagged they were appropriately coded which was something that was not done in the past. Everything was done accurately. Our our technology inventory and that's how we were able to identify everything. It was all inventoried. it just never those code numbers we never inventoried completely to the efinance side. So when you asked earlier about the different things you know we have different systems and so but the
one main system that we have to comply with is through the Arkansas Department of Ed and that's power power sourcece which also has efinance under there and so in the efinance system those numbers just hadn't been transferred over. We had them in our system just not in that system and so as soon as it was brought to our attention while the auditor was still on site before she closed out we were able to put all those in the efin ance system but because it was with federal money and it was over $1000 for each piece of equipment it was considered a
federal finding so quite disappointing but we did it and we fixed it and we have now and we use an outsource company that now has been in the district and they have gone through every campus identified everything that was over $1000 to make sure that it was tagged appropriately and that we have it all done so I'll eat my words again and say I don't plan on being here again next year for this finding thank you I appreciate that
detailed information know you answered my question before I asked it so I do appreciate that members do we have any questions
Senator Fredrick J. Love
Unverified
47:13
senator Love so I'm just saying for the finding number two you you said that is now corrected sir
Speaker 158
47:20
it was corrected before the auditors left. OK all right thank you members any
other questions see none without objection we'll file this report thank you for coming here and appreciate your diligence and work and we plan not to see you next next year I hope so thank you guys
Senator Fredrick J. Love
Unverified
47:46
the next 8 reports were referred to the prosecuting attorney and attorney general none of these reports had a repeat findings none of these reports were deferred from the previous meeting so there are no officials here to answer questions if you do have a question I'll do my best to answer it Batesville school district finding one the district purchased a refrigerator for600 dollars from the wife of the superintendent who held the position prior to March 2024 without approval from the board and the commissioner of
education as required by Arkansas code finding two the following exceptions were noted while reviewing capital outlay expenditures bids and or quotes were not obtained for the purchase of two outdoor playgrounds and cabinets in the amounts of 14,300 and48,000 as required by Arkansas code performance bonds were not obtained for the construction of bus transportation offices and a fuel tank project in the amounts of64,000 and67,000 as required
by Arkansas code and bids were not properly solicited by publishing in a locals newspaper or trade journal for the construction of bus transportation offices and purchase of gravel in the mounts of64,0 and52,000 as required by Arkansas code and that concludes the findings for Batesville School District. Members or
Speaker 34
49:08
questions Senator Love I just have one we're we're where the
Senator Fredrick J. Love
Unverified
49:13
employees were these new employees because
in in I'm gonna tell you the basis for my question because I guess on
the procurement law you would probably know this so I'm just trying to see if they actually have a new superintendent now the superintendent that was there at the time of these findings resigned around March of 2024 and the board hired a new superintendent and so this was actually under a previous administration all right thank you
and I should have mentioned this was our so previously before this Fy24 audit cycle we were not the auditor for Batesville when they hired the new superintendent he asked us to do the audit so did the board of trustees and so we started doing that in Fy24 so I would expect on some of these issues like as far as the compliance state compliance issues you know we look at those pretty closely we go over
with the district you know all the issues that we found and so I would hope that that would be improved when we
Representative Wayne Long
Unverified
50:39
Fy25 audit Any other questions members Representative Long you're recognized thank you madam Chairman. Mr.innk just for my own knowledge have what's the threshold for
when you have to get bids you know these are like 143,000 at what point are you required to get get bids to
Senator Fredrick J. Love
Unverified
50:53
their quotes so it depends on which law it's under if it's under Arkansas code621304 that amount changes every year but I believe for Fy24 it would have been around 24,500 or close to 25,000 and then under the public improvement law it would be50,000 dollars any other questions members
seeing none without objection we will file the report. next report that was referred to the PA and the AG ascamden Fairview School District that had one finding on July15th of 2024, the district initiated the payroll direct deposit of3,600 dollars to a fraudulent bank account after receiving an email request to change an employee's direct deposit information without verifying the authenticity of the request the district notified its banking institution but was unable to recover the funds and that
Speaker 38
51:55
includes findings for Camden Fairview School District. Members
Senator Fredrick J. Love
Unverified
52:01
any questions? Senator Love you recognized Mistering did we did we not go over this or did did the the the secretary issued a memo about this or is
this because umm I vaguely remember yes back in 2023
we met this committee met May11th and 12th of 2023 and a letter was sent to the commissioner of education at that time requesting that dese send out a commissioner's memo alerting school districts of the the cybersecurity risk around changing banking information especially for payroll and direct deposits you know very similar to this finding this is this is a
yes and then that that that alert or that commissioner's memo was actually sent out to the school districts on May19,2023. so these anything that we're presenting for fy 24 is after that time got you ok thank you and senator love to your point
that was a conversation we had a whole lot our last meeting and I believe at the end today Mr. Fink's going to have some information for us
on what he found out about all the fraudulent because I'm sure y'all have seen we've got a lot of those even in this report again. so are there any other questions
on ok so I did have no I didn't I just had a note about the the fraudulent funds so without
Speaker 68
53:42
objection we'll file this report see none Next report is Charlton Charleston school district
Senator Fredrick J. Love
Unverified
53:48
Arkansas code requires public employers to report to Arkansas legislative audit a loss of public funds including thefts of property of $1000 or more and as required the district
notified ALA via email that the district's bus garage was broken into on the night of July18,2023 and on the weekend of July202 July22nd and 23rd. itemdams taken included saws refrigerant drills and impact driver leaf blowers and grinders. these items with an estimated total value of4,400 dollars were used for district bus and facility maintenance and the police reports were filed thatclus the finding for Charleston. members any questions
? I have a quick one any any update on whether they ever
Senator Fredrick J. Love
Unverified
54:42
found anybody and recovered anything don't have an update on that now it would be included in our PAAG disposition report that we present to the full committee on Fridays every year so it will be included in that report. all right thank you without objection we'll
file this report ex t is is your county
Senator Fredrick J. Love
Unverified
55:06
consolidated school district finding one onoctober 25th the district discovered that an employee's payroll direct deposit totaling3,100 dollars had been fraudulently diverted and then additionally on November 21st the desert processed another payroll check totaling427 dollars but failed to change the employee's direct deposit information back to the correct bank account. The district notified the financial institution after both incidents they were
only able to recover441 dollars resulting in a loss of3,100 dollars finding two the district's operating bank account was unreconciled for the periods of July2023 through June 2024 with variances ranging from $1000 to449,000 during audit field work, ALA staff identified almost30,000 dollars in errors leaving an unexplained variances of548 dollars. Finding three, the district's internal control system did not
prevent or detect material errors in the financial statements non bonded debt payments of 186,000 were paid from the debt service fund which isclu which is included in the other aggregate funds the financial statements were subsequently corrected by adjusting entries that concludes the findings for Izzard County Consolidated School District members are there any questions ? Senator Lo
Chair
Unverified
56:27
you recognized OK so I guess this
Senator Fredrick J. Love
Unverified
56:30
this kind of reminds me of what we just dealt with with Brinkley
OK and so and this is the first this is this is not a repeat finding is it it is not a repeat finding I guess I am a little concerned about this one though what is the protocol on this committee I may want to hold this one and and speak to them because I think this is this is I guess the548 dollars I guess varies this is a little concerning though
so what what is the protocol usually with this? cause we we're we're talking
about just filing this report away with if the committee
Senator Fredrick J. Love
Unverified
57:28
wills we can defer the report to the next month OK because you're saying the variances range from
1,057 to449,000 dollars yes but at June30,2024 the variance was 29,000 Our auditors were actually able to identify a lot of the errors
Speaker 168
57:41
that were there and so there's only4548 dollars left that was unexplained
I think we've got someone else in the queue if it's all right I'll come back to
Representative Howard M. Beaty, Jr.
Unverified
57:58
you OK Representative beatty you're recognized Well I just kind of want to follow up on what Senator Love was speaking in the response they say that the accounts were properly reconciled as of July124 is that correct? Is it after you're adjusting entry and and they I guess wrote off548 dollars or whatever are they were they correct
Senator Fredrick J. Love
Unverified
58:18
at that point I I can't say for sure without looking at their Fy25 especially
the yearim balance so but I will say anytime that we have a finding we follow up on that finding in the very next audit we will look at it extremely closely to make sure it's been corrected and if it hasn't it'll be a repeat finding but but
Representative Howard M. Beaty, Jr.
Unverified
58:37
you found you found the big differences and got them reconciled down to548 bucks and then they're saying that they took care of that at that point so I I would hope we'd go ahead and just let this one go
Senator Fredrick J. Love
Unverified
58:54
Senator Loy recognized I guess I I I do understand that that reconciling it down to548 dollars is but when you say you have variances from 100 to57 dollars unless I'm just missing something to all the way almost to a half a million dollars Am I
the only one that's not am I the only one that's concerned about that I just want to understand something am am I missing something because that's a half a million dollars.
So I mean like like is this is this common? I'm I'm just trying to understand something is is this a common to go from 1000 to half a million and nobody
like it it depends on the school district. I don't know that I can say it's it's common amongst all schools I think there can be fluctuation throughout a year where you have items that you figure out before year end maybe you
weren't as timely as you should have been in reconciling the bank which can also cause problems at times and so it's hard for me to say that this is this is common per se but we do have bank account reconciliation issues as you all have seen over
every meeting we've had OK and then and then for the finding three none none
bon debt payment of $186,000 orpa from debt service so this
one should have been paid out of the general fund because it is non bonded debt and if you were to look at like the appscan manual so what they're gonna use to prepare their financials inner items into their general ledger it should not have come out of the fund that it did because that fund is specifically for bond related payments so did they reimburse that fund they they would have basically we would have made a an entry when we did the audit to show that payment correctly out of
the correct account and then we would follow up to make sure that they've if the other fund was owed we would
Speaker 168
1:01:08
follow up to make sure that that transfer happened so did you make ok so this this
Senator Fredrick J. Love
Unverified
1:01:13
is what I'm just in my mind this is what I'm I'm trying to reconcile you know I guess I'm
gonna talk to you Mister Fink just from the the standpoint I think you might understand this so'm making a lot of references to the city county local because this is this is what happens so they
take the money since they don't have it in the general fund they don't have the money they spend it out of the street fund and what I'm saying is
Speaker 68
1:01:43
this is this is this kind of is this so no it it's not it's not that it's not like that with cities
Senator Fredrick J. Love
Unverified
1:01:50
no sir then so then tell me if if you if you pay out of the you
know none did bonnet funds if you take the money and pay it somewhere else I I guess is it
reconciled I mean what I'm saying is do does a school district have the money do they have the money in the general fund and they just made a a mistake and took it out of one fund or did they not have the money and so they paid it out of a fund
those are two totally separate things because yeah I'm not looking at the financial statements specifically but I would say they do have the funds to cover that payment they just paid it out of the wrong account they would have made a transfer when we notified them of the
error that they made we follow up on that to make sure that the school district enters
Speaker 168
1:02:42
a journal entry to correct it and so they would have had the the the funds to cover that payment yes
Senator Fredrick J. Love
Unverified
1:02:48
ok so help me understand if if it's a journal entry what I'm saying is I understand what you're saying on paper but what I'm saying is what actually is happening is is that mean the money
came from the correct fund in the the other fund was reimbursed all right thank you
on the bank reconciliation and this is kind of the representative beatty's question earlier in point per ab scan the school has a zero variance at May31st,2025.
Speaker 153
1:03:24
members any other questions right so without objection are we good to go
ahead and file this report seeing none go ahead and file the report
Senator Fredrick J. Love
Unverified
1:03:44
Next is Marvel school district finding one the district discovered that an employee's payroll direct deposit totaling $1500 was fraudulently diverted they did not verify the authenticity of the change request they notified the financial institution but they did not recover the funds bi ing two during our examination of payroll records we noted that one certified employee was overpaid3,400 dollars and one was underpaid482 dollars due to clerical errors
and finding three during our examination of education stabilization fund payroll expenditures we noted internal control deficiencies that resulted in the district paying almost $18,000 of unallowable salary payments and overpaying 1 employee58 dollars and that concludes the findings for Marvel School District. Members do you have any questions I have
a quick one on when it says without properly verifying the authenticity of the cha the change request what is standard
what was the expectation that they should have done
Senator Fredrick J. Love
Unverified
1:04:52
there to verify that so in that case they would have relied on an email only and you don't just want to rely on an email you want to follow up with a phone call to the individual from your from the school's actual records of the phone number not from the phone number on the email you can also do this practice in person which and we have seen
Speaker 153
1:05:15
both of these items being done at schools
now that they keep running into these issues all right members are
Senator Fredrick J. Love
Unverified
1:05:29
there any other questions right without objection we will file the report ex t is manynard school district the district made payments totaling $8200 for related party transactions without proper approval in conflict with Arkansas code6,700 dollars paid for plumbing services to a company in which an administrator had financial interests without approval by the board or desse
and $1500 paid to an employee for equipment rental without approval by the board. That concludes the finding for Maynard School District. Members are
there any questions all right I do have a quick one on this one so the administrator they had an
interest in it is that administrator still employed with the district was there any do we know of any action
Senator Fredrick J. Love
Unverified
1:06:16
taken on that? I'm not aware if the district
if the employee was still with the district or not I'm assuming they are but I don't have that information. I
mean I can understand that they might still be because sometimes those are
just just kind of curious because those things can kind of grow on school districts all right if there are no
other questions with that did you have onepresentative Long? yeah well that that
Speaker 191
1:06:42
seems pretty you know out of the ordinary I'd kind of like to hear
Representative Wayne Long
Unverified
1:06:54
if the person's still there and if not why why are they still there because that's it seems
Speaker 193
1:07:01
like a blatant disregard of the good ethics I guess could you and and maybe
Desi can are you gonna find that do you want to just come
back to this report and go through the others or at the end yes I can try to find out that
Senator Fredrick J. Love
Unverified
1:07:26
information for you this this does happen from time to time instances like this in this case it was the district treasurer it was the district treasurer's father-in-law's business and then the husband worked full time for the business on the plumbing services as far as the equipment rental it was a maintenance employee that they rented a tractor from and they should have gotten school board approval to do that and in the first instance they should have gotten school board
approval and they should have gotten approval from the commissioner ofducation because the district treasurer is considered an administrator under Arkansas law. did you guys bring
this to their attention or did the school board catch any of this ? I'm assuming our auditors found
Senator Fredrick J. Love
Unverified
1:08:17
this when they were doing the audit we we have procedures to look through these laws specifically on every engagement that we do so I would think it was our auditors who found it. I mean
unfortunately don't think that's uncommon probably in smaller school districts where you have more limited maybe resources it's not necessarily someone trying to do something wrong it may sometimes be someone trying to help actually I would
Senator Fredrick J. Love
Unverified
1:08:41
note that this was referred to the prosecuting attorney and the attorney general anytime we have a finding under the ethics code it automatically gets referred so it would and we will follow up with the prosecutor and attorney general to find out what action they did or did not take.
unfortunately just think sometimes people forget sometimes they're uninformed as well I don't know that always it's someone trying to do something wrong as maybe just not informed or ignorant of the of the law hopefully that's the case all right are there any other questions ? right without objection we will file
Senator Fredrick J. Love
Unverified
1:09:24
this report. the next report is mammoth Spring School District on May2,2024, the district promoted
the board member's son-in-law to high school principal for the 2025 fiscal year with an increase in compensation of 11,000 dollars. Although meeting minutes indicate the board approved this promotion immediately after the board member resigned approval was not obtained from the commissioner of Education as required by Arkansas code. Additionally, the minutes of the board meeting held on May2,2024 indicated that the board member was present and participated in the executive session discussion immediately prior to his resignation in noncompliance with Arkansas
code it should be noted that the board member resigned immediately following the board's return from executive session and immediately prior to the approval of his son-in-law's promotion. However, he was reappointed to his board position before the end of the same meeting and that concludes the finding for mammore School District. So members I have
several questions and if it's the will of the committee and you might agree
with me I would like to request them to come before the committee next month.
without objection all right we're gonna defer that until next
Senator Fredrick J. Love
Unverified
1:10:42
month. thank you. the last report that was referred to the PA in theagG was Viola school District finding one they had45,000 dollars in credit card payments that we tested and we identified improper charges of $1300 1000 dollars of that was undocumented charges to various vendors and restaurants and due to the lack of documentation we could
not determine the validity of these disbursements that $264 in unallowable purchases for gifts and staff parties in conflict with Arkansas constitution as interpreted by theagG finding two the district overpaid a certified employee7500 dollars due to clerical errors and finding3, the district paid $296,000 for installation of an Hvac system from theducation Stabilization Fund without obtaining a written contract that included the prevailing
wage rate provision and weekly certified payrolls were not submitted to the district that concludes the findings for Viola school district Members are there any questions on this
report? Senator love you're recognized thank you madam chairir. I'm so
Senator Fredrick J. Love
Unverified
1:11:52
guess do the audit and then I'm looking at finding three there was no written contract for this
so there was a written contract because this was able education
stabilization fund money there are specific requirements under the Davisacon Act that has to be followed they did not have a a clause that was required to be included in the contract they just didn't have the costs but they did have
a written contract yes ok right I understand the rest all right thank you any other questions
seeing none without objection we'll file the report the next
Senator Fredrick J. Love
Unverified
1:12:32
10 reports contain findings that were not referred
to a prosecuting attorney and they did not contain repeat findings staff recommends that the committee take a moment to look over these findings and file in mass as reviewed. I do want to make one note East Arkansas Community College they they're representatives are here for the meeting today and so if you have any questions for them they're here to answer those questions but I just want they did not have to be here so I want to make that note. all right members if you'll take
a quick minute and look over those hopefully maybe looked
over these reports before the meeting and we'll give you a second and see if we have any questions members do we have any questions?
Unknown speaker
1:13:39
want to be respectful and give you plenty of time
right I actually do have a question for the East Arkansas Community College if you all don't mind coming to the table thank you for joining us and appreciate that and if you could hit the microphone button and state your name for the record.
Sure, Chancellor Kathy Klein of the University of Arkansas East Arkansas Community
Representative Wayne Long
Unverified
1:15:01
College. all right uhpresentative Long do you have a question yes ma'am starting with finding two weren't really sure but is this basically asking Mr Fain the deposits were made over and above the insured amount like FDIC type deal sir
chancellor how'd that come to come to happen which finding
Speaker 204
1:15:28
too are you specifically referring to? I'm not seeing one relevant to FDIC at the moment under finding number two it's talking about I don't have the same document just thank you I don't have your summary I apologize oh the uncollateralized deposits yes banks are required to
collateralize your deposits we can't possibly call every bank every day and say hey are things collateralized today but we did work with the with that bank to ensure that they are running a new software every night to check collateralizations and with Msarra Smith's help she is also working with all CFfos in the system to check at least monthly to say every day are these collateralized but they they can run it on any given day and if a bank has not
properly collateralized it that finding falls on us it doesn't fall on the
bank. Senator Lovy you seem like you're trying to decide if you have a question or not you're recognized if you do. right
members any other questions thank you Doctor Klein is that correct? ma'am thank you we know you didn't have to be here so we appreciate your presence so that you could answer that question thank you thank you madam chair right members I'm not seeing
any other questions on these reports so without objection we will file these en masse
Senator Fredrick J. Love
Unverified
1:17:01
the remaining 26 reports listed on the last page have no no findings and so staff recommends that these reports be filed in mass as reviewed and as I said before in previous meetings take a second to make sure
if you have one of your schools or universities on here that didn't get a finding and
you if you want to recognize them here but be sure you make sure you
recognize him at home because we all know that's a big deal to to have a clean report and we want to make sure we recognize them without objection we'll file these do I have do you
Senator Fredrick J. Love
Unverified
1:17:37
have somein love I want to ask one question about Hebrew spprings and them
not getting a performance bond what what is the what is the what is what does Arkansas code say about not getting because this is a $4 million I guess it was a4 million dollars project
and they didn't they didn't get a performance bond that's it if it's over a certain amount which I believe is50,000 dollars and they're doing a construction project they were required by law to get a performance bond for that construction and and this instance they did not I mean they did note that I think they use a construction manager on this based on their response to the finding so I'm thinking maybe they thought that either
the construction manager was going to take care of it or maybe that they did not have to have one but either way
Speaker 168
1:18:32
they all we check for to see is did you have a performance bond or not in accordance with law they did not
OK all right thank you right ok so without objection we will file these reports in
mass seeing none we'll file those and before you leave members Mr. Fink has a quick update on the questions we had about the problems we're having with fraud in our schools on emails and so forth so he's gonna share that data with you
Senator Fredrick J. Love
Unverified
1:19:14
real quick and if you have any questions be sure and let us know. so at the previous meeting in July there was a request made from committee members concerning unauthorized withdrawals you saw several of those in the
findings that were listed today for our schools so what I did is I went in and I summarized the information. So for the Fy24 audit cycle and this is for known occurrences. it could be that something did not get reported to us or that we did not see it when we were doing the audit or they may use a private auditor and didn't report it to us and so there could be those instances but there were 26 schools where we had an unauthorized withdrawal finding of those 26
schools it was65 incidents on average the number of days between the incident and the discovery was around 8 the total amount of unauthorized withdrawals was648,000 dollars the total amount recovered was a little over605,000 dollars and so the actual loss to the school district specifically was42,353 dollars on in most cases the loss happened because
of and that's kind of why we put that in those the findings that we report to the PA and theagG we say without verifying the authenticity of the requests in most cases that is the reason for the loss it wasn't necessarily because of the time because in as I said usually it was within 8 days that they you know found the incident it's generally because they did not have proper controls in place so I just wanted to provide that to the committee
could you send that report or that that information out to the members of the committee so they can take a look at
that as well and and the ones who are not here with us I think had questions on that as well are there any questions for Mr. Fink on that? if you get away from it and there's some more thoughts that you have or more questions you have on this particular
issue we know it's an issue not just here but in our cities and counties and elsewhere let us know and Mr. Fink can see if he can find the answers to those questions umm seeing no more business I guess we are October
we'll be meeting inoctober. I don't remember the date at the moment but we do have that one that we've deferred for sure along with some others so thank you guys for your work today appreciate y'all being here and we'll see you in October meetingeting is adjourned
Agenda
A. Call to order by Co-Chairman.
B. Adoption of Minutes of the July 10, 2025 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, Sep 11, 2025 | Agenda | 3 | Official source ↗ |
Speakers
Representative Hope Duke Chair
Unverified
Speaker 6
Senator Fredrick J. Love
Unverified
Speaker 9
Joshua Lawrence
Unverified
Speaker 24
Senator Dan Sullivan
Unverified
Chair
Unverified
Speaker 38
Speaker 54
Speaker 55
Representative Howard M. Beaty, Jr.
Unverified
Speaker 49
Speaker 62
Speaker 68
Representative Julie Mayberry
Unverified
Speaker 82
Speaker 85
Representative Wayne Long
Unverified
Speaker 98
Speaker 99
Speaker 91
Speaker 110
Speaker 109
Speaker 103
Speaker 115
Speaker 120
Speaker 124
Speaker 125
Speaker 145
Speaker 53
Speaker 153
Speaker 155
Speaker 158
Speaker 34
Speaker 165
Speaker 168
Speaker 191
Speaker 193
Speaker 204