Legislative Joint Auditing-Educational Institutions
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Thank you.
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Good afternoon, everyone. Welcome to Education Joint Audit Subcommittee. We're going to get started. As is our tradition, we are going to rise, and Representative Harlan Brough is going to open us in prayer. If you all would join us.
Representative Dwight Tosh
Unverified
2:58
Dear Lord Jesus, I'm thankful to be here today, Lord.
I'm so thankful to be gathered with like believers. And, Lord, I'm thankful to know you personally as Lord and Savior. More than that, Lord, I just thank you that today and the situations, the rules, the different situations we come along with, that you would give us the wisdom how to handle different situations. And thank you, Lord, for the note that you're going to do in this time ahead. In Jesus' name I pray.
Amen. Amen. Thank you. All right, if you'll take it just a second, members, and look over the minutes. And then we need a motion for the adoption of the minutes. Motion. Do I have a second? A second? Second. Thank you.
All in favor? okay motion passed and then i guess we're ready to get going here mr fink do you want to start us
Speaker 11
4:06
off thank you thank you madam chair and good afternoon today there are 79 education audit
Chair
Unverified
4:10
reports for the committee's review 56 reports with no findings and 23 reports which contained findings there were no deferred reports from the prior meeting since we have representatives from several schools today we're probably going to jump around just a little bit on the synopsis and so i'll tell you page numbers on where to
Speaker 13
4:34
go that way we can take care of those with representatives here first and so if you will turn
Chair
Unverified
4:42
to page two of the synopsis
we will start with the blitheville school district audit
Speaker 13
4:51
you will see in your synopsis that we actually did the fy25 and fy24 audits of blitheville school district and those are both being presented today before we discuss the findings i wanted to provide background behind how legislative audit ended up conducting the audits for both years on may 26 of 2025 the arkansas state board of education assumed authority of the blitheville
school district on june 2nd 2025 ade requested that legislative audit perform the audit this request was presented to ljack and approved at the july 11th 2025 meeting since the fy24 audit had not been completed at the time of the request we were asked to do fy 24 and fy 25. prior audits were performed by a cpa firm instead of presenting the report separately i will
summarize the findings from the two reports and point out the items that we noted as repeat issues in both reports we noted issues related to a lack of supporting documentation for items we selected for testing as noted in finding one for both reports there was a lack of supporting documentation for payroll items non-payroll disbursements and receipts additionally as noted in the finding for fy25 there was a lack of supporting documentation and approval
for journal entries and board policy was not followed for various contracts executed by the superintendent in excess of the limit established by policy for the purchase of commodities due to the lack of documentation we were unable to obtain sufficient appropriate audit evidence for these specific items listed which led to a qualified opinion on the financial statements in accordance with auditing standards in both reports we tested the title one program and identified expenditures
that lack supporting documentation. Additionally, we had exceptions related to payroll expenditures and indirect costs claimed on the Title I program. In both reports, we noted that bank reconciliations were not properly prepared, leaving an unreconciled balance of $2.4 million in FY24, decreasing to $290,000 in FY25. Legislative audit staff was able to identify a large portion of the unreconciled variants.
In both reports, we noted that capital assets were not updated for additions and deletions. Items were not available for inspection and performance bonds were not obtained for certain projects in excess of $50,000 as required by Arkansas Code. Although not listed as a repeat finding, in both years, we noted issues during payroll testing. In FY25, there were errors leading to overpayments and in FY24, we noted an approved salary per contract was not listed on the salary schedule
and a sick leave payout where the wrong rate of pay was used to determine the payout. Additionally, during FY24 testing, we were not able to verify the total days available for an unused sick leave payout due to lack of documentation. And lastly, during FY24, two board members were paid $585 and $645 respectively to work at athletic events without a board resolution or authorization as required by Arkansas Code. Both reports were referred to the second judicial district prosecuting attorney
and the attorney general due to findings noted in the respective reports. The school has provided a detailed response for each finding outlining corrective actions they plan to take to mitigate issues in the future representatives from the district and desi are present to answer any questions the committee may have and that concludes the findings for blitheville school district Thank You mr. Fink if we could have the representatives from
blitheville if they could come to the table I think we have
some members with some questions and I would anticipate we will probably have some for the department as well but we
can start here when you all get to the table if you can just push the green button and identify yourselves your school and your position thank you thank
you for being here good afternoon everyone I am dr. Vanessa Hopkins current superintendent of
Speaker 25
9:38
Blymouth School District. Good afternoon. I am Jennifer Blankenship, currently the Director of Federal Programs for the Blymouth School
Speaker 28
9:48
District. Representative Joey Carr, District 34. I'm here to support them. They're in my district. Greg Rogers with Department of Education. Tina Coleman, Department of
Education. Thank you. Appreciate you all being here. I see we've got one in the queue. Representative Mayberry
Representative Julie Mayberry
Unverified
10:08
you're recognized thank you I I'm just trying to wrap my
brain around this because if I heard you correctly
there and you're required to have an audit so there was a private CPA firm that did an audit for the same years is that is that correct or was there never an audit done like how could there have been an audit and the private agency didn't find anything but our auditors found all this help me so
Speaker 37
10:36
no there wasn't an audit for the two years that are before you right now there they had used a private auditor in the previous years before that when the board
voted to take blightville under level five intensive support state takeover in may the audit for 24 has still not been filed and looking at trying to get that done with the private The auditor had sent notification to the previous administration at Blytheville that because of lack of participation, lack of documents being received by the Blytheville School District, they weren't going to do the audit. When we found that out, that's why we went to the executive committee as the education board once they took them over and said, will y'all do the audit for these two years?
Speaker 39
11:21
And so that request went to the executive committee, was approved, leg audit, did the audit for two years, and that's the findings
Representative Julie Mayberry
Unverified
11:28
that you're seeing here before you. okay so but the year before the so I guess
the 23 audit would have been done by a private correct were there any findings then yes yeah there
Chair
Unverified
11:39
would I don't remember what they were but yes there would have been findings back then too I don't have them in
Speaker 45
11:46
front of me but yes there were did they come to us back then yes okay so this
Chair
Unverified
11:51
has been ongoing yes so the FY 23 audit report that was
completed by the cpa firm the findings from that report did come before this committee and was reviewed by this
Representative Julie Mayberry
Unverified
12:02
committee okay okay just trying to figure out how we how we've gotten there and just trying
Speaker 37
12:07
to fill in some of those blanks obviously there were issues which led to the state board to take the action it did and taking doing a state takeover and once the take takeover was done the board was released the superintendent would at that time was released since then we've entered into a transformation contract with ams impact group uh and that's when they've hired
Chair
Unverified
12:27
a superintendent now and that's we're moving forward with cleaning up what we see in these
Senator Fredrick J. Love
Unverified
12:39
audits senator love you're recognized thank you madam chair so help me understand this all right they're
under state takeover right now So then that means do you all review everything that they do? Yes.
Chair
Unverified
12:54
I mean, I guess what do you mean review everything they do?
Senator Fredrick J. Love
Unverified
12:57
Well, we're looking at all these audit findings, so I'm just trying to see what the safeguards are. So, yes, looking
Speaker 37
13:04
at these two years of audit findings and their responses to those audit findings, how we're going to take corrective action plans on that, that is what they came up they did work on these corrective action plans how they're going to do it it was reviewed by the physical service and support office and we're working with them on make sure that these these deficiencies are taken care of in future in the future okay so did so now
Senator Fredrick J. Love
Unverified
13:29
to the superintendent the findings that we have before
us did they occur under you or
Speaker 59
13:36
they didn't So I took over the superintendency of Blyville School District December 1st, 2025, but I was there as we were looking for things to satisfy the audit. So keeping in contact with them as well as Pam Caster with Crawley's Ridge had a lot of guidance on the findings and
Speaker 62
13:55
how we fix those based on the recommendations from the auditors.
Senator Fredrick J. Love
Unverified
13:59
Okay, so now Blyville is under state takeover currently. We have a management
company, correct, and no board. Okay, you have a management company, AMS. How long has Bligfield been on a state
Speaker 37
14:20
takeover? The board classified them as level five intensive sport in May of 2025. And
I believe AMS came on board August of 2025.
Senator Fredrick J. Love
Unverified
14:31
Okay, so I guess talking with you all about these. So you all have a corrective plan for all this? Yes. Okay. And a whole new finance team. Okay. When do we expect to have this corrected? What is the expectation? They're working on implementing the corrective
Speaker 39
14:48
action plans. As soon as we got the results of this audit, their team started working. Like she said, they have a new finance team that's working through the corrective action plans now. So we would hope that we would see when the audit comes for this upcoming year that you see a lot of improvements.
I know you'll see a lot of improvements going forward on implementing the corrective action
Senator Fredrick J. Love
Unverified
15:10
plans for the future. Okay. Now tell me this. What is your
largest challenge? And if we were to see, just looking down, what would be your largest challenge? Because if this comes before us again next year, then we, I mean, I want to just kind of get into your mind of like, you know, hey, we can get this, this, this, this correct. but this may take a little time.
Speaker 59
15:36
It may take a little time. It's because the new people that we have in
Speaker 62
15:41
finance still are being trained and they're working on the job as they're being trained. So I think our largest challenge is
Speaker 59
15:51
to make sure that we are starting off with lead balances that are correct for this year and that payroll is set up to where it's accurate and it's something that I look at every week. We also are establishing those protocols in place
that when the state first took over, they did assign us some people from the state that set up SOP, and we are following that SOP and contacting the state when we have questions about that. Okay. Madam Chair, I'm going to look over these findings. I
Senator Fredrick J. Love
Unverified
16:24
haven't reviewed them all, but I might get back in the queue. Thank you. Thank you. Representative Painter, you're recognized. Thank you, Madam
Representative Stetson Painter
Unverified
16:36
Chair. And this is a question for staff.
You said in 2024, I think, Mr. Fink, that it was
$2.4 million unaccounted for. Can you repeat the number for
Chair
Unverified
16:49
2025? I think you're referring to the bank reconciliations. Yes. And, yeah, the variance in FY24 or FY25 decreased
Speaker 13
16:56
down to 290,000. 290,000. Okay. And, Madam Superintendent, you do not, under your, you have new personnel.
Representative Stetson Painter
Unverified
17:03
I just want to make sure that is correct. What happens to the folks when the state takes over with those folks that they got rid of?
Are they allowed to go to another school and do this same thing? Or does a track record follow those folks? because I think this is a huge grievance um that's and you may not answer it may
not be able to answer that maybe the department of ed can or maybe staff can there's nothing that I think
Speaker 37
17:35
of that would keep them from doing it but if the school district where they're going to is doing their reference checks and doing their background checks like they should have and they see the issues with Blyville that should raise additional concerns that any school district they may be
Speaker 39
17:48
trying to go to to ask a little more questions and get some clarity about what they were actually doing at Blyville and whether that person is the correct person they probably
Representative Stetson Painter
Unverified
17:58
need to be bringing into their school district. Okay and one more question Mr. Fink when when we have a new personnel like this I
know you and I have talked offline but ledge audit is there to help train these new
Speaker 13
18:14
folks on what we're expecting correct so you know we have certain independence um safeguards we have
to keep in place since we also do the audit but we do provide like i go out and speak and do presentations at different events hosted by ade aaa we've even gone to you know co-ops and spoken to schools as well about some of the common audit issues we run into and then when our staff is doing the audit there are things that if we note during our audit we bring to the attention of the schools
or the entities that we're auditing you don't always see that type of stuff in the audit report but usually we have some sort of recommendation we're making to the school to help either come into compliance with state laws or federal
Chair
Unverified
19:07
laws or just general good bookkeeping practices okay thank you thank you madam chair I'm sure I
got more questions I'll jump back in the queue thank you thank you
senator Sullivan you're recognized thank you madam
chair so first thank you for
taking this on it's tough deal how long have you been I miss that with the district
other lady accompanying you how long have you been with the district I've been with
Speaker 25
19:40
the district 30 plus years but this is my second year as the director of our title and federal programs and what was your previous
roles if you don't mind me asking
Speaker 25
19:50
I was a principal and then for a few months I served as the interim superintendent
okay so you know whenever you have these recurring problems
there has to be a core issue there are some core things that aren't working right can you identify what one or
Speaker 59
20:10
two of those are either either of you one of them was the expertise and knowledge level of the previous finance staff we are confident that we now have someone who is majoring in accounting so she understands the fiscal not just the fiscal responsibility but the good keep
bookkeeping practices that are expected and she's already following the policies I've met with her we've gone over the audit findings that were sent to us maybe two months ago and she's since her first day which she was hired a couple of months ago. She has been making sure those things are in line
Speaker 62
20:52
and making sure she's going to the COSBO trainings, the ASBO trainings, as well as connecting with Crawley's Ridge.
And again, Pam Castor has been her saving grace.
Thank you. And what was your previous responsibilities before coming to this job that qualified you for
doing what you're doing now? Because
Speaker 59
21:14
this is a tremendous undertaking. So like Jennifer, I have been in education for almost 25 years from a teacher to assistant principal or principal district level literacy. Which districts? I have been in a number of places. I have been in Georgia, Tennessee, and New York
and I'm from Missouri so I'm from St. Louis. I've led leaders in St. Louis as the leadership development. I have also been the director of a $25 million Okay, sounds like you're well qualified.
Yeah. I appreciate it. Thank you. Thank you, Madam Chair. Thank you, Senator. Representative Mayberry, you're
recognized. Thank you. Just kind of following up
Representative Julie Mayberry
Unverified
21:57
with some of the questions Representative Painter was asking, and maybe I'll just be a little bit more direct,
and maybe you can't. I don't know.
Perhaps Greg Rogers you're allowed to say. So the superintendent and the CFO maybe who were at the school district when this was taking place, Can you say who that is and where they are working now? Are you allowed to? I probably could, but I don't remember who they are right now. I don't remember their
Speaker 113
22:25
names of who it was previously there. I'm sorry. I could probably get it if I
Speaker 37
22:30
needed to. I don't, because who the superintendent was would be public record, so I don't think there would be any problem saying that.
Speaker 115
22:36
So you wouldn't know if they're working
Representative Julie Mayberry
Unverified
22:44
at another school district then? Yeah, I don't know if they are, but I can find out. Okay. I'm just curious because
a common theme that we see up here over and over again is that there were audit findings sent to prosecuting attorneys. Sometimes it goes on beyond that, but usually there's a new superintendent that comes into play, and they're saying, well, I wasn't here at the time.
And then we find out that the superintendent who was there has just moved to another school district. And then the same problems start picking up in that school district. And we just see the pattern going again and again and again. And I don't know how we stop that. So thank you. Thank you, Representative
Mayberry. I'm sure appreciative of all the questions that we have here. Y'all knocked out some of the questions that I had on my list. So I'm going to go to Representative Painter. You're recognized.
Representative Stetson Painter
Unverified
23:39
Thank you, Madam Chair. Do we have any idea, like for us on page 7, it
looks like non-payroll expenditures. Some are totaling $108,000, $93,000, and so forth. Do we have any idea what those are? I don't think so. I think that's part of where they
Speaker 37
23:56
were saying they were missing the documentation on that, which I'm assuming that Matt could probably answer that, but some of that
Speaker 113
24:02
has been turned over to the prosecuting because of the lack of documentation that was given on that.
Representative Stetson Painter
Unverified
24:09
Okay. And I guess, are we working on a plan on trying to get some of those funds back? Like, you know, I've seen in some of these statements here, we've overpaid people $4,000, $5,000, $6,000. Also, too, is was the school board aware of what was going
on? I mean, that's just a lot of things. I don't know how much the school board
Speaker 37
24:32
was aware that was going on. I know there's just a lot of the lack of documentation. If in the base of this audit it was some of the federal funds, the federal funds will have to be paid back if they were used for unallowable expenditures is what's going through this audit.
After that, I think, as Matt said earlier, referring it to the prosecuting attorney's office to try to, I think it would depend on them. I think
Speaker 113
24:55
Matt could speak better at that than I could at what the prosecutor would do if they decide to take
Representative Stetson Painter
Unverified
25:01
that on. Well, going through that, have we heard from the feds that are they actively working to try to get some of that back?
Speaker 37
25:09
No, we will have to communicate with them once this audit is filed. That is something that we will have to send to them and say, we found this, we're working through this. This is our resolution to fix it, and then they will tell us whether they accept that resolution or not,
which may include repaying some of those
Representative Stetson Painter
Unverified
25:24
funds. Can you try to get us a number of how much total that federal funds it was? Yes. And if you don't mind, and share that to the committee. It's just crazy because it's frustrating as a member of the education committee, too. We fight tooth and nail to try to make sure our school is funded. And when we see erroneous actions like this, it's very hard. And so I hope other schools that are watching take note
of this because this is not just a nickel and dime in the bucket.
It's quite a bit of money that could have been used to do something else for children
at the end of the day. Thank you, Madam Chair. Thank
you. okay i have a few questions um some of the members have checked touched on some of the ones that i had on finding four the seven items that were not available
for inspection do we know what those items were
Chair
Unverified
26:20
and if you could just clarify that that would be great yes there were laptops smart boards cabinets um they had purchased those
i have i guess some of the same lines as representative mayberry and represent paynard had on the superintendent i believe is the
finance director and the transportation coordinator as well i think there were some issues with all of those and i recognize that we don't you obviously they don't have it off the top of your head if they are employed about what about disciplinary actions on any of these was there anything that took place with that not
Speaker 37
26:59
to my knowledge no I mean that besides being terminated let go I
mean not that I know of no and so if I'm a different school district and I am interviewing these people have applied for my for a position in my district is is is is there any kind of standard procedure would they ask typically did you have any audit findings or do school districts typically go look up to see if a superintendent had an audit finding against them is that kind of a normal procedure I don't personally remember that being
a whole lot of conversation do you have any knowledge if that's something that they would look up typically
Speaker 37
27:34
I think it would depend on the school to the different school districts and like if it was a superintendent you know you have the interviews with the superintendent the school board gets to to interview each one of them and those could be questions I asked there of course coming from Blavio coming from a different place I mean that is questions that school boards probably should ask and look at the references
Speaker 39
27:52
but I think it would just really depend on the school boards and the different school districts which are talking about okay
thank you I think that's a something we need to remember and maybe the school board association or the education committee or
department that might be something that should be suggested to school districts or to school boards to look into and another question to ask because as we all know you can't ask a whole lot of questions to find out information anymore but you can certainly and I'm sure they google but if you go and read these reports it tells you a whole lot more detail so I think that's something in relation to this and to also to some other of our school districts that we have my next questions have to do as far as the state takeover portion of it so AMS can you tell me a little bit more
about them where are they from and a little bit more about
Speaker 23
28:43
the contract and how all that's working within the district right now so ams is a
Speaker 59
28:49
organization based in arizona they support the district visiting sometimes virtually we have meetings so it's kind of a regular cadence with one specific person with AMS who's our touch point but at different times if we
need support in say marketing they have a marketing person that will help us work out a SOP for what we need in that we they have an HR person that has helped us set up systems to make sure that we have those records straight because it really was a difficult thing to figure out who was working for the district and how much they were getting paid. We also have their support in the finance department, but we also rely heavily on the state team as well
as the regional team through Crawley's Ridge a lot to support because knowing Arkansas, lowering
Speaker 62
29:46
finance is different from knowing Arkansas finance Arkansas's way. Did you, did the
Speaker 145
29:53
district choose this vendor or did the state choose it
Speaker 59
29:57
predates me I believe they had interviews and they had a committee of people some involved some employees that were at the district level and how the choice was made I'm
not sure but the person that signed the contract for the on behalf of
the district was secretary Jacob Alipa yeah correct there was a there was
Speaker 37
30:21
an RP out put out through the the school district under the transformation, under learns, we can do the transformation contracts. We did an RFP process, took applications, they were scored. There was a committee that reviewed those, interviewed, I think, the top two or three of them, and then AMS was
selected from that. So what is the contract terms?
Like how many years are they going to be providing this service, and what
Speaker 59
30:47
is the cost, and who pays it? I assume it's the district. The district pays it. It's $1,500 per student, so enrollment is very important, which meant last year, the cost was 1.8 million, based on the enrollment numbers, and it
- Okay, so the reason why I'm asking a lot of these questions is because, I mean, now we're in charge, right?
And so we want to make sure that we don't have findings and just want to understand what's going on with this program. So, I know you said
something about virtual. Anybody who knows me in education knows I'm not a big fan of virtual. How often are they on site? And actually they're in person in the district
Speaker 59
31:36
looking at things rather than just via a Zoom? - It depends. We do have a touch point with the VP of schools who is Dr. Charlie Heaton. He comes, sometimes it's more consistent
like over the summer, he just onboarded with us April before him was another person and I would say maybe it would be a two-week stream out of three weeks and then a three week we didn't see them they were back in our Arizona and then maybe two weeks back on on site finance has been a little bit more consistent she comes right around payroll time for a couple days and yeah you are largely depending upon um
i mean it sounds like you have a good relationship
i guess with your co-op is that who's
yes working pam caster is my direct mentor yes okay i see um
i'm gonna step out of the queue here for a second and uh go ahead and let one of the other members
Representative Stetson Painter
Unverified
32:39
represent a painter you recognized thank you madam chair um how much of a financial burden uh did you
have to start off with with this new school year because of this erroneous on account
Speaker 98
32:50
of for spending we were not balanced as far as I understand as far as the budget we
did start with a deficit but how much deficit if you
Representative Stetson Painter
Unverified
33:05
don't have that if you can get that to the committee I would greatly appreciate that
Speaker 62
33:12
because I think that's a big deal we'll have to get get that to you the The last
Representative Stetson Painter
Unverified
33:18
number I saw was near 300,000. - Gotcha, thank you. And I wanna echo Senator Sullivan's comments. Thank you for taking this huge role and look forward
to seeing you guys getting out of the hole because of previous people's actions. Thank you.
- Thank you. Representative Hall, you're recognized. Thank you,
Representative Brad Hall
Unverified
33:47
Madam Chair. My question is for Department of Education. When's the last time that a superintendent's been prosecuted for something like this? I don't know.
Speaker 70
33:59
I'd have to go back and look. I don't know off the top of my head. I can go
Representative Brad Hall
Unverified
34:04
back and see if we've ever had one and when it was. I can get that. I
got a follow-up question. If the prosecutors would actually prosecute these situations, don't you think it would
care of itself on them moving to other school districts it
would help thank you thank you I'm gonna follow up with I think one other question at least on my part what is the and I use it a three to five year contract so what is the process I guess even from the state standpoint know they don't have board members now because got my attention board members being paid or not I
don't I think they should volunteer their duty their time a little bit in those type of circumstances personally but when are we looking at a board being formed again and is there
some goal posts that they're supposed to be meeting as a school district you're going
to get here and then we're going to do this next and then you hit here and then you get the
Speaker 37
35:00
next step how what does this look like for them yes because they are in um like i said level five intensive support so that's the the five-year process of that and so as goalposts are needing that is where they can do the advisory once
Speaker 39
35:11
it gets to a better point they can do the advisory board that doesn't have voting but it is an advisory one that helps in the day-to-day stuff and then transition on to
hopefully getting released and having their own board again at that point but yeah there is a transition that it will go through based off the improvements happening at the district
and do you guys i guess the the department oversees this ams to verify that they are doing and living up to
the standards that we have for them? Are you all the ones that are overseeing them? Yes, because being under level five and ten support, it falls on
Speaker 39
35:43
the department under the Secretary of Education under level five takeover school district. So what does that look like for you all?
What is your all's accountability for them? Is it just making sure that they end up with a
clean audit at some point? What does it look like for you guys to make sure
Speaker 37
36:00
that they're meeting the needs? It's everything. It's making sure that the finances are getting better, that the school improvement for the students is getting better, They are seeing growth and literacy growth and all the different things that you need to have in the standards. So it's not since they were they were taking over as level five intensive support, not a fiscal district, school district. So they're going to be really concentrating on the academic side of it.
And since we were having all these audit issues, the finance is embedded in that as
Speaker 39
36:26
well. So, well, yes, we're overseeing all parts of that, working along with the superintendent and AMS.
So this $1.8 million that they're doing, or I guess that was this last year, for this contract, obviously that's something that they
don't typically plan for to be paying for in a school district, correct? I think that
Speaker 37
36:48
it depends on, you know, the different things that the AMS contract is given to them.
Speaker 39
36:53
The support it's given, the finance help is getting, the different, I don't know, I can't think of everything in the contract now, but it's the level of support that they're getting, and that's what the contract's based off
Speaker 37
37:03
of. Like she said, they have the people coming in from Arizona that are helping a little bit with the finance, although they have to go back to the co-op and our team because it's Arkansas Finance a little better. But there is support that AMS is continuing to give them and will continue to give them over the three to five years of this life of this contract, and so that's what that's supporting. So anything else that you're having to do for, like, legal service,
finance service, anything that a district might be typically having to do that, I think that's what they're trying to get to is what do
Speaker 39
37:29
you usually have to have those expenses for, and this is
what that fee is covering. So it's not from your calculation. I mean, that's what I'm wondering. If you're a district,
and I don't know what they were looking at before, but if this was not something you were budgeting for and anticipating to pay for, and now you're paying one point, and I'm not saying obviously they need some help, right? They need some help. But what does that $1.8 million, and potentially what it is this upcoming year,
what does that do to their budget? Is it going to cause them any fiscal stress? No, no,
Speaker 37
37:59
it shouldn't. It shouldn't in there the way that that's why I was looking over at my fiscal support team. No, because they're working with them on the budget to make sure that it doesn't. That's part of what we're doing also is to make sure that there is
Speaker 39
38:11
no fiscal distress issues that will come up with Blighville. Okay,
great, because, I mean, obviously we all know there's some issues there, but that $1.8 million, just know that that can be a little cumbersome to districts, especially if you're not anticipating it. So, great, thank you so much.
Representative Julie Mayberry
Unverified
38:24
Representative Mayberry, you're recognized. Thank you. Is there a
professional licensure board? PLSB, yes. Would there be some, like, outside of a prosecuting attorney, would there be some consequence there?
Speaker 37
38:44
I don't know enough about that. I don't even know enough about that to be dangerous. I know there's ethics that they could have complaints filed against them on there, which might fit under something in the PLSB board.
Speaker 39
38:56
but that's about as far as that I want to wade into because
Representative Julie Mayberry
Unverified
39:02
I don't know all the pieces of
Chair
Unverified
39:06
PLSB. I'm sorry. Okay. Anyone from audit know more? So under Arkansas Code 617-426, the Legislative Joint Auditing Committee may refer an audit report of a school district to the Department of Education if the audit report of the school district identifies a substantial issue of noncompliance with state or federal financial reporting requirements or other state or federal law or regulation.
And the same issue is identified in two consecutive audit reports. It says that the department shall submit the audit report referred in subdivision A1 of this section to the PLSB in forms approved by the department. The board shall investigate any referrals made by the committee under its investigative procedures. So does that mean we can make
Representative Julie Mayberry
Unverified
39:51
a motion to do what you just said? yes can i repeat what you just said and make that motion
i don't know or maybe we just want do we want to just hold this for a little bit and have greater discussion as to i i've so i have served four times on this committee and i've never seen 11 pages before like this is the longest i've ever seen i mean there's probably been some other egregious things that have been out there but this is a really long compiled list
so i was just asking some clarifications on that as far as for me just if you were the motion the second then we go to uh audit tomorrow that's correct mr fink and then they would vote whether which you referred is not as well and so i was just asking
Chair
Unverified
40:56
that question so that you'll know yes so if if this committee chose to do that under arkansas code um it would be included
Speaker 18
41:03
as part of the chair report that's read tomorrow with the full committee and then the full commit full committee votes on that chair report okay so i guess i i make a motion to
Representative Julie Mayberry
Unverified
41:17
do that if you want to make a motion to do that i
would like to make a motion to do that if it's voted down it's voted down but do i have
a second oh we've got a point of order whoa okay senator uh well we'll start with uh senator steel you're recognized
Representative Tracy Steele
Unverified
41:39
thank you madam chair uh point of order but maybe just a point of clarification uh you indicate that the board will investigate that's
Chair
Unverified
41:52
what so arkansas code okay go ahead okay arkansas code gives the legislative joint auditing committee the um it says may refer an audit report of a school district that has repeat findings so same issues and back-to-back reports um to the department of education and then the
department of education um shall shall submit the auto report um to the plsb so when you say board you're meaning board of education professional licensure standards board i believe is what it's referring to uh madam chair could i get courtney's hall's
Speaker 113
42:30
board to come up here about plsb stuff before we get deeper into that and i say something stupid yes you may thank
Speaker 194
42:43
Good afternoon, Courtney Solis Ford, Chief of Staff of the Department of Education. I do this to Greg enough, I guess he felt like he needed to get me back. Yeah, I'm happy to
Speaker 195
43:04
answer any questions about the PLSB. The Professional Licensure Standards Board is a statutorily put-together committee board of educators and other representatives that can review complaints made against licensed educators
and determine whether it's been a violation of any of the ethical standards that licensed educators are held to. Even if a referral is made, the ethics committee has to authorize investigation, and then our staff will do an investigation, submit a report back to the board for their consideration there is a subcommittee that then makes a recommendation to the full board on whether there should be a sanction against that educator's license and then that goes to
our state board of education for final approval senator sullivan
you're recognized yes so tell me again what is the motion that
we're voting on well to maybe hang on to if I'm understanding correctly because I've not
Representative Julie Mayberry
Unverified
44:18
done this before so help me out for the committee I guess to refer this to the Department of Ed for them to look into if it should be referred to the professional licensing board is that that is my understanding
and then they would they would review it I guess and then move on to the who
is it we're looking into we if they're gonna look for a professional license there's got
to be a name of somebody whose license is at risk and I'd like to know what those who those people are and specifically what they have done before we look at yanking their license they may well deserve it but to make a motion that we're going to
look into people is not very specific I'd like to know who we're doing this to well my
Representative Julie Mayberry
Unverified
45:13
assumption is those who were in charge of
the finances at the school district at the time that we can't make an assumption we
have that would have to be a part of the motion I would
believe that we're going to look into the professional licensure of ABC and be pinpoint who those people are within the motion thank you senator
Sullivan Courtney can you tell us on if it goes the licensure board they don't necessarily revoke the license what they could do they could put a probation
or a suspension they have a wide range of what they could do with this is that correct?
Speaker 195
45:51
Right. They have a wide range of, of sanctions they can impose fines, um, coaching
and learning sessions, um, suspension revocation would be the ultimate. Um, I would agree with Senator Sullivan that they, when they, when the PLSB is looking at taking action, there needs to be a named person. So if you wanted to name the superintendent who was, um, in charge of the district at that time, I'm not saying that's what you should do. I'm saying that would be the most likely person that you would want to name as ultimately responsible because anyone like the bookkeeper or finance staff aren't going to be licensed and so plsb would have no authority over
them it would be someone who was in the final decision making role
let me represent maybe you're recognized do you
Representative Julie Mayberry
Unverified
46:42
want to are we allowed to say
Speaker 195
46:46
a name yes the veronica perkins was the superintendent of the blightville school district during the majority
Representative Julie Mayberry
Unverified
46:53
of the time that this audit covers okay and this would this motion then for say veronica perkins okay um would
allow the department of ed to just look into whether or not prosecuting attorneys see anything wrong because that that's what happens so often here is it gets sent to prosecuting attorneys they're overwhelmed with so many other big things and they just kind of look the other way I mean this has been over and over and over and over again and then we see that superintendents just move from one district to another and I don't I I guess I've never known that this was a an Avenue and just now discovering
it's an Avenue to you know give some type of consequences
Speaker 195
47:41
process when you're making a referral to the prosecuting attorney attorney, they're looking at criminal offenses, criminal charges, and I'm not going to speak to their decision making. When you are referring to PLSB, it's purely an ethical consideration. So there are seven ethical standards that all licensed educators are held to. So they will look at the referral for what is being claimed or alleged. And they will say, if this is true, would that
violate one of our seven standards? If so, then they will authorize investigation and our staff then does a full investigation, questioning witnesses, providing all the evidence. They will submit a report back to the subcommittee who, again, then determines whether there was a violation and, if so, what they recommend that that sanction can be. That does not equate to criminal charges, and a prosecuting attorney could look at that and make a decision or could not, but we in no way are making any determination of whether a law has been violated.
Representative Julie Mayberry
Unverified
48:39
We're only looking at ethical standards. Okay. I've never heard of this. And so this is like, wow. There's been so many situations, I think, in years past that we've just kind of been frustrated on the committee of what can we do. And I think this is one avenue of just having someone look at it further and give some consequences and maybe that helps long term so there you go I think it's been
Speaker 194
49:13
around for about 10 years but I can't say that for certain I'm
sure do we have do we have a motion and a second on the table yes senator yes we do okay so is the discussion now centered on the motion or have we
moved over to other things I think we're centered on trying to number one establish what the motion if she needed to have a name in it which I think
that has been established on whether we need to have a name in that motion and so i think moving forward i guess senator i mean a senator gave your promotion there representative mayberry um representative
mayberry is it sounds like she wants to i guess we need to amend i don't think we do we need to amend this how do
Speaker 225
49:55
we need to if she wants to pursue doing that motion do you want to do you want to yeah
just clarify that part of it and i think this is i don't know that we do need to have a name in
Chair
Unverified
50:11
it when you read so the law says the legislative joint auditing committee may refer an audit report of a school
District to the Division of Elementary and Secondary Education if the audit report of the school district identifies a substantial issue of non-compliance with state or federal financial reporting requirements or other state or federal law or regulation, and the same issue is identified in two consecutive audit reports. The Division shall submit the audit report referred in this section to the Professional licensure standards board and the board shall investigate any referrals made by LJAC under
its investigative procedures that's that's what the law states yeah so I will say my
Speaker 195
51:02
variation from the typical process in accordance with the law would then be if you all make that referral of the report then we would refer it over to PLSB regarding this the superintendent who was in charge at the time and then they would investigate all
right just a second I've got several in the queue but I don't know are you all speaking on this motion
well I we had a point of order in the middle of
the motion so the first motion so I don't really know what the precedent is on that one because I recognize the point of order we're kind
of in the middle discussion so I think we had
a motion yeah I think the second was representative Painter if I remember correctly and
then we had the point of order so are we on on the discussion on the motion so I've got Senator Love you're in the queue is this on the motion
Senator Fredrick J. Love
Unverified
52:06
chair to Representative Maybeard. Representative Maybeard, you've discussed multiple things. Are you saying that you don't have confidence in the prosecuting attorney that they would actually follow up on this on the said individuals? Is that what I'm hearing from you? I just want to clarify that. I
Speaker 235
52:28
can't speak for a prosecuting attorney.
Representative Julie Mayberry
Unverified
52:34
I just know that we've had lots of things. I mean, this is
an issue over and over again that had been sent to prosecuting attorneys, and sometimes they don't do anything.
And so there has to be some type
of consequence and follow-up. Okay. All right. Well, then. That's, you know, if prosecuting attorneys look into it, that's
outside of our ability, and this is something that we can do.
Senator Fredrick J. Love
Unverified
53:10
Well, I guess just turning it over to the
prosecuting attorney, usually they, I would say usually they get to the person, if they have committed some sort of crime, they would then prosecute. I mean, we turn up turn over to prosecuting attorneys all the time. I mean, reports like this, especially when they're egregious. So, OK, I just want to clarify that. Thank you, Madam Chair.
Speaker 69
53:30
Rosa Painter, you're recognized. Thank you, Madam Chair.
Representative Stetson Painter
Unverified
53:38
I just want to make sure a couple of things on here.
We did have that individual's name into that motion, correct? OK, I thought we would have to have that individual's name to refer into that motion refer it to the board second of all
is to my understanding that person is here today and I don't know if the committee would like we want to open that can of worms or not that's up to you I think madam chair but if we're asking the new superintendent these questions I personally think it's fair game to have the previous superintendent here that's already here to answer some of these
questions and then maybe after that the committee wants to go with that motion but I think if our job is to ask superintendents and individuals of these school districts to answer for these audits I think it would only be fair to for us as committee members to maybe ask some of these questions to the previous superintendent that's already here and then maybe we can make that want to go further with that motion or not because I'm
good with the motion but I think if the superintendent's here I mean I think they should be answering these questions
because if they're going to another school district, my concern is, are they going to do the same thing or not? So that's all I got.
Okay, so my understanding is that we're in the middle of discussion right now. And so it can only be members that can have that discussion. So if the committee were wanting to do something to invite her up to answer those questions, we would have to have Representative Mayberry withdraw the motion and the second so that we were no longer we could go ahead and go into the testifying portion again
because right now we're in the middle of discussion on a motion in a second that doesn't mean that that's where
we're going to go with this just saying that that would be the procedure that would need to take place in order for that to be discussed so
I'm representative Painter I will recognize you to finish up I guess your question
Representative Stetson Painter
Unverified
56:10
you had there okay then I would respectfully ask representative Mayberry if she can pull down her motion for a minute
here and let us go down that route if the committee wants to and then let's entertain you
know entertain that at the proper time represent Mayberry you're recognized I will withdraw the motion
and representative Painter I would assume that you would have to refer through all the second okay so the motion the second has been drawn so we are no longer in that discussion and give me just a
second because this is new territory for me by a lot to make sure that we're doing everything the way that we should be doing stuff so just me just a second
All right, thank you members for your patience and for the audience for your patience as well. Let me, so I understand Dr. Veronica Perkins is
here. If you could join us at the table, I think there are several members that
have questions and hopefully you'll be able to enlighten us. Thank you Courtney for, you may need to hang in the wings there for us, thank you. And
if you can state your name and position for the record, appreciate it, thank you.
Speaker 246
57:47
Good afternoon, I'm Dr. Veronica Roberts Perkins, previous superintendent from the Blyville School District for the 22-23-23-24 school
Speaker 247
57:54
year. Thank you. Members are, we have her down here, are
there questions that you have that you would like to ask Dr. Perkins? Okay, Representative Painter, you
are recognized. Oh, I just like to
Representative Stetson Painter
Unverified
58:13
hear the explanation of maybe her sound of the
story here of some of this spending and non-accountability
and that kind of so forth. I think it would be helpful for the committee to hear her perspective, whether we agree with it or not, but at least hear it and maybe she
Speaker 252
58:35
these erroneous spending things absolutely so during my time in Blyville I assumed the
Speaker 246
58:40
Blyville school district was a district already in turmoil when I when I arrived there and we worked to try to move ourselves out of some of the pieces that were we weren't necessarily in fiscal distress but
there were practices and stuff that were not conducive to uh effective uh management um physical processes all those kinds of things uh and in the year that I was there I had two uh bookkeepers who were district bookkeepers uh and neither of them having a lot of background uh in those pieces so we moved through trying to do the very best that we could uh are some of those pieces erroneous I would say that they are because I, when I was dismissed in April of 2024, part of my pieces around my contesting leaving was that there are pieces that I did put in place, but I felt like there were other pieces that were at play.
And so while I agree that there are some egregious things here, some of those pieces I do not agree with, but they were findings nonetheless. When we had our audit, when I left the district at the end of 24, there were allegations of misdoing, but the audit report did not show all of these pieces. So I was here today trying to read through to see which of these pieces are legitimate, that there were poor processes in place, and which of those came about, bubbled up during the audit.
So I'm going to say that some of the pieces are probably legitimate because of poor practices, because of there not being the people in place who were, and I was a new superintendent myself which is no excuse because I take responsibility for what's in the audit but to say that we were willfully doing those pieces or that I just was not trying to adhere to rules and regulations is is not true and to think that I was being is
accused of being unethical because there were pieces that I was trying to do that were unethical that's just not true. So I do appreciate the gentleman who came up to say, give me an opportunity to respond. Representative Mayberry, you're
Representative Julie Mayberry
Unverified
1:01:20
recognized. Thank you for coming up and speaking and sharing. My thought is, is that we're not, we're not the judge. You know, I'm not
saying that, but there seems to be a lot here. And that's why I felt like it needed to go to be looked at a
little bit more maybe there's not something that is legally the prosecuting attorneys would say legally this is wrong but to give an opportunity for that discussion that you just that you just said um you know it so it doesn't end here there's further discussion uh is is really what my goal is And if the licensure, you know, they come back and they say, no problem, there are no ethic violations, then that's what it is.
It's just another avenue to look at that. So anyway, I am curious. So you were saying that the bookkeepers that you had there perhaps didn't have a lot of training. And I think, if I remember correctly, you said that the bookkeeper that you have now is majoring in accounting so she's not an accountant yet is that she has two classes left two classes almost there okay um so help me to understand maybe what the bigger picture is
in getting someone with the qualifications to handle this i mean this is your financial person is really important and to hire someone who you hired i assume you hired the the staff there to oversee that what were the complications
in getting the right bookkeeper in in northeast
Speaker 246
1:03:07
arkansas there has been a challenge with recruiting and retaining adequate staff so we had one who looked very good she had done work in the non-profit sector
um so she looked good on paper and she went through all the training still did not uh have the background i think to make the turn so then we had a second bookkeeper who was there uh who had been a bookkeeper at a neighbor neighboring district who who we thought had the the background as well still did not have the savvy to move from the that's a large budget in Blyville so if you don't have a really good tight team in place where there's a good tight
checks and balances piece you'll have peace people that I mean things just you just can't get the right people to come and to stay which I hope that this young young lady that they have now uh when she comes and really learns because there are a lot of rules regulations that are in fiscal budgeting, and unless you have really savvy people who have been in the business, in school business, doing the budgets,
doing financial pieces, you can easily think you have the right person and not have the
Speaker 59
1:04:32
right person. So our goal is to make sure not only that we vet who we bring on, but that we keep accountability with them. In the numerous meetings that I have, as well as me checking the bank statements, the checks that are written, making sure we have the spreadsheets filled out, that we're not overpaying vendors anymore, those are things that I caught my first month that we started to put processes in place for.
Representative Julie Mayberry
Unverified
1:04:58
Okay. And just to let you know, I didn't even know that that avenue existed. I'm kind
of learning, right, you know, as we were discussing of, oh, okay, well, maybe this is something. So, you know, I'll hold on to my motion and let it go. You had an opportunity to speak. I just you have to understand we hear comments like this all the time every single time we have
a superintendent come up and say I wasn't here before and so therefore it's not my responsibility that that is what is most commonly said every single time and then we find out that the superintendent has moved to another school district and similar things are happening and there's just got to be some way to to help break that cycle and that's why when I was hearing about the licensing maybe you know it's an opportunity to put a little red flag that that it doesn't mean you can't be
hired but it means that you're hired on probation you're hired with maybe a little extra eyes of what is that process you know that we know that there was a red flag someplace else and need to help them through and and sometimes that it is that is it that you need more assistance you need more help and maybe the department can help guide some of that so thank
you representative Avery representative still you're recognized
Representative Tracy Steele
Unverified
1:06:38
Thank you, Madam Chair. I think Representative Mayberry has said most of what I was going to say, and thank you for that. But I do think it's important to actually find out, Ms. Perkins, actually, when were you hired at Blyville School
Speaker 246
1:06:55
District? I came to Blyville School District in July of 22. And
Representative Tracy Steele
Unverified
1:07:01
how long did you hold that position?
Speaker 246
1:07:10
I left Blyville in, well, really February, until I was terminated in,
Chair
Unverified
1:07:24
And when you took over the school district, were there any audit findings? The previous year, we had
Speaker 246
1:07:32
not had an audit finding, to my knowledge. And we had an outside vendor who was doing our audits. And how many findings did you have during
Representative Tracy Steele
Unverified
1:07:42
your administration? Well, I would have to go back and find that audit. Sure.
Speaker 246
1:07:55
Okay. I would have to go back and find the audit. But to my recollection, I had not been to
Representative Tracy Steele
Unverified
1:08:08
the legislative audit. You had never come to this committee? No, I had not. Thank you, Madam Chair. I think we should be very cautious before mentioning names in these motions because I think our investigative committee, as staff has already indicated, I think it would be more appropriate to allow them to do their due diligence.
thank you for allowing me to ask a question madam chair thank you I do have a question can you can you give
Speaker 246
1:08:42
me a little bit of your background before you came to Blytheville and not just like where you were but also what you did absolutely I started off as a classroom teacher at Pine Pineville School District came to Pulaski County as a principal assistant principal district language arts coordinator, moved to Little Rock as CAO for Little Rock School District for five
years, went to Forest City as the deputy superintendent for two, two and a half years before moving to Blyville, and a doctorate in educational leadership from Arkansas State University at Jonesboro. Okay, thank you. I just, and I think you answered that question
a little bit earlier. I think it's
helpful to know a little bit what the background is, because many of us serve on other committees and many
of us serve on education and we're all also looking for areas in which through these findings that maybe we need to fill some gaps or make some improvements
okay just a second members if you all without objection i would like to hold this over until the september meeting i know there's a lot of questions on this i think that there will likely be some more questions as we proceed and I think there's a lot of questions even though surrounding the new not new but something a tool that we can utilize that we have not utilized before so without objection we will hold this report over till the September
meeting any objections to that okay representative Painter you're recognized
Representative Stetson Painter
Unverified
1:10:12
thank you I just had a quick question for the new superintendent and I'm just curious, with this contract being $1.8 million, do we have an idea of where we had to take that money from to pay that? And if so, you don't have to get it to me now, but I think it would be beneficial to get that to the committee because I would like to know what area in the school district did this $1.8 million have to come from
and what had to suffer because of this kind of action. We
Speaker 59
1:10:40
definitely can get that to you. was a number of things that we asked the principals to meet around and we really tried to be responsive to the needs of the school and then think about what we could do without to move the district forward hopefully to a more balanced
budget but definitely to better structures financially gotcha thank you thank you madam chair
thank you oh senator Sullivan you're recognized thank
you madam chair just to comment on the motion I think I'm very favorable to making a motion to refer this to professional licensing however as you said there are so many questions right now that we need some time to make sure we're taking the right legal steps for that to end up where we wanted to end up with what body we wanted to end up with and I have several questions about that but I appreciate the motion to hold this over to September thank you thank you Senator Sullivan um I don't
see any other members in the queue I want to thank each of you for
coming up to the table and answering the questions and just know that everyone here is on the same page I
think that you all are on we're all trying to do what's best for kids and to produce successful um scholars as they move through the public school system while also keeping into account the public dollars the taxpayer money that's going into each of these programs and so I just wanted to let you know how much we appreciate you all and we're going to hold this over and hopefully members will continue to dig in and and ask questions as needed thank you
Speaker 133
1:12:17
thank you for your time mr fink if you will skip down to page 14
Chair
Unverified
1:12:24
of the synopsis the next report we will
review is the kip delta public charter school fy25 audit prior to the fy25 audit the audit for kip delta was performed by a cpa firm kip delta requested legislative audit performed the annual audit and that request was approved by l jack at its june 6 2025 meeting instead of reading each finding I will provide a summary of findings and point out the items that we noted as repeat issues finding one during our testing of credit card
disbursements we noted that adequate supporting documentation was not maintained for all transactions tested finding two is a repeat finding related to non title one employees being paid with title one funds finding three was a repeat finding related to documentation not being maintained for three expenditures that were selected for testing and documented approval not noted on expenditures prior to payment finding four was a repeat finding related
to proper record-keeping of equipment acquired using education stabilization funds finding five was a repeat finding for not maintaining time certification records to support salaries and wages for amounts charged to the education stabilization program finding six during our testing of special education expenditures we noted unallowable costs charged to the federal program finding seven was a repeat finding for unreconciled and unexplained variances
on the bank reconciliation finding eight bank deposits were not properly collateralized in accordance with Arkansas code finding nine capital assets were not properly maintained during FY25. Finding 10, related party transactions were not properly presented to and approved by the school board in non-compliance with Arkansas code. And finding 11, journal entries were not always approved by someone other than the preparer and supporting documentation was not maintained for three of the journal entries that we tested.
This report was referred to the first judicial district prosecuting attorney and the attorney general due to a finding noted in the report the school has provided their response for each finding outlining corrective actions they plan to take to mitigate to mitigate issues in the future and representatives from the charter school are present to answer any questions the committee may have
thank you mr fink if we could have the representatives from kilt delta kip to join us down here at the table and recognize yourself for the committee please your name and school and
Speaker 279
1:15:09
position. Thank you. Good afternoon. George Cotton, Sr., chairman of the KIPP Preparatory School Board. Kevin Smith,
Speaker 282
1:15:27
executive director of the school. And Alex Daly, our chief of staff.
Thank you. Thank you all for being here. Members, I'll give you a second to look through the findings again just to see if you have any questions. I'll start off with one, and then we'll jump into the queue. So one of the things that I noticed when I looked through these findings is a lot of the responses were pretty similar. The school has changed personnel, implemented and improved oversight and management, and most of those responses that you give are just that, the same little paragraph. It doesn't give a whole lot of detail, it doesn't give a whole lot of this is how we're going to change or this is how we're going to improve, which just leads us to fill in the blanks, which obviously that doesn't give us a lot of confidence in things changing, and this is a repeat on some of these, is that correct, Mr. Fink?
And so I didn't go back and look at previous audit reports, but my guess is those are the similar responses from last year. And so I personally would like to see a little bit more detail when we look through, and I'm sure you've seen some of the responses we get from other districts. It gives you a little bit more confidence that things are going to move a different direction when there's a little bit more detail on how we're going to try to improve things or what we're going to try to do. So I don't know. That's a lot
to try to fill the blanks in, but I wanted to at least give you guys that feedback that gives me concern that you're going to be back here next time because it's left so, so broad and
we're going to fix things and we're going to do better, but not specifically how we're going to fix it and how you could be held accountable to that.
So I don't know if you have anything to add. Obviously, I don't expect you to give a different response now to everything, but it would be, at least for me, more helpful to have a little bit more meat to how
Speaker 288
1:17:25
you're going to fix things. Again, thank you for the opportunity. And Representative Duke, the comments that you're making actually are some of the comments that the board had put to administration. And we want to begin by saying, first of all, the fact that you're concerned is not only legitimate, it's also representative of the fact that we were concerned.
I'll also say that, and Director Smith will be able to talk more
Speaker 279
1:17:52
specifics, we, as a board, we looked at this and determined that this was kind of a lagging indicator. Many of the problems that you'll see us talk about today, unfortunately, are a result of findings that we discovered ourselves back in 2025. And a lot of the things that we're fixing, you'll see fixing because they're dragging us into 26, 27. And quite frankly, we'll probably take a little bit more time to address.
So you're right. These specifics we'll be able to talk more about today. But the other thing I will mention, one of the reasons that you're seeing us say, quite frankly, people have been replaced and new people are owning the responsibility. Quite frankly, the reason we're saying that is because that is exactly what we've had. This is not a technical term, but things were really screwed up before the people before you assumed the roles and responsibility that we have.
Several people have left the district and been replaced, and quite frankly, one of the answers to fixing the situation that we're in is that we had to replace people. So that is one of the answers. The other thing that I will say also gets to the fact that we've spent more time as a district and as a board paying greater attention to detail. Director Smith, most of you know, was a former member of this body and has come to the table requesting and demanding specificity from his team.
Alex, you will hear from her later. So simply put, many of the reasons that it says the same thing is because different people with different levels of understanding as to why we need to fix this are in place. I had just assumed the responsibility of chair so yes we will try today to give you more specificity and where we don't will be very very able and willing to provide you more detail if that's necessary is the turnover that you all I
mean you reference it some of that is because you've had turnover is this turnover some of the people that you guys hired in response to the previous findings have you had that kind of turnover you all hired someone they didn't work out and so then you had to hire somebody else again and I do understand especially in the finance area the space is a little bit challenging but what has that
looked like for you guys since you since you all have tried to address these
Speaker 288
1:20:27
issues I'll give a quick answer and then I will let our superintendent expand on it. Two, one answer is
Speaker 279
1:20:35
the people we have hired, including the superintendent, was not in place at the time that many of the issues that we're talking about started to surface. We had a different superintendent and we had a different administration. We had a different accounting and finance team. So on one hand, no, we're not talking about just moving the deck chairs around. We're talking about totally different people who weren't in place. When Mr. Smith was brought in as superintendent, the former superintendent was let go
and the administrative and finance team was not the same team that was in place. Some of the people that we hired as a board were in place when I was there but were not in place when Mr. Smith was hired and Mr. Smith did come in
Speaker 284
1:21:29
and make specific changes. Madam Chair, members of the committee, Mr. Fink, and staff, I want to say we can
Speaker 294
1:21:36
go into specifics as long as you want to.
I thought it was probably better just to
Speaker 284
1:21:43
answer questions. But I want to recap quickly just for context. We, our school had a, we're
Speaker 294
1:21:50
kind of a school on a combat. we had a lowest point was during this period of the audit in the middle of this fiscal year we'll late in about the middle of it and a lot of dramatic changes were made since that time we had a 3.6 million dollar variance I heard
that mentioned earlier today as of this month in e-finance we're at zero we worked with Arkansas Public School Resource Center and Scott Smith and their team and still do to get our finances straight. Academically last year we had two B's two D's but they previously were F's and we our Atlas scores this year among the best in the Delta and the best in our counties. We're in by the way two K-12s one pre-k through 12 in Helena one K through 12 in Blymouth ourselves.
and I was a member I know because no life's with you guys but I was a member of this committee for 10 years and yes uh represented Mayberry and madam chairman and others uh the issue of turnover and the issue of prosecuting people all the things job mentioned today were were stressful and issues when i was here and and i i get that we did make i don't know what to say except one
thing one of the things that we did when i was here which maybe somebody else can enlighten me we passed a law that said if a superintendent has particularly criminal findings or things submitted to the prosecutor they will follow that superintendent that person when they apply for other Arkansas school jobs. Now, as a mechanical matter, I don't know how that actually works or if it has actually worked, but I do know we passed that law, and it was specifically because of the frustrations you're talking about.
Now that I'm on this side of the table, I have no intention of being one of those people, but I just thought I'd tell you about that. The transitions in personnel have been dramatic. Since that time, besides our variants, most of these issues are created because we didn't have correct coding in our finance team. At one point, our school had no finance team before I got there.
Speaker 282
1:24:23
Then we had one or two people that weren't, frankly, that, you
Speaker 294
1:24:28
know, well, anyway, we didn't have enough support. And so it's been a struggle, and it's probably the biggest thing that remains from that period. The other thing I want to point out is that without any suggestion by anybody, Department of Education or anybody else, we asked last year, Mr. Fink probably remembers, we asked the Legislative Audit Committee to audit us. Most charters do get private audits.
Unless they've done something wrong with the Department of Education or Legislative Audit Committee is asked to come in because they've done something wrong. we didn't do anything wrong there wasn't anything nobody asked her or any of that stuff but not only did it save us ninety thousand dollars a year because that's how much the private audit costs but we wanted to be transparent and also we wanted the guidance that comes with a much more thorough widespread audit of the school than a private audit can offer and this is the very first audit from that process so there are a lot of processes that probably should have been
follow in the 20 plus year history of the school but because they were private audits they didn't get maybe didn't get tagged and one of the reasons I wanted us and the chairman wanted us to do this is because it is it used properly an audit is a guidance tool to show us how it's supposed to be done and certainly finally and then we'll take I'll stop talking we we don't want to be back trust me and I hope we won't be back next year we have put all a lot of
processes and people in place and I feel very confident I think that variance is a good example of this that we are coding things correctly that we're doing the things that you see in this audit correctly now thank you appreciate that clarification
and just a reminder on some of those things as well and for your work that you're doing there represented
painter you're recognized for a question thank
Representative Stetson Painter
Unverified
1:26:27
you madam chair and i echo the comments that you made earlier and for more detail and i appreciate you three being here a couple of questions i have is on some
of these larger expenditures did they ever go in front of the board was there i mean two three people layer how did these kind of get so high without really anybody knowing and then second question is is i understand on our page 16 which is in finding seven you request a write-off of the variance prior to fy27 i'm just curious how much is that write-off and then i guess one last question is is did you are you starting off this school year with a deficit uh because of this and
Speaker 284
1:27:08
And if so, if you know how much. Yes, sir, Representative Payne. No, sir,
Speaker 294
1:27:18
we're not starting off with a deficit. We're starting off with a zero balance. And that represents an awful lot of hard work, down from $3.6 million a year and a half ago. And I want to give credit to the Arkansas Public School Resource Center, whose staff we contracted with to help us with
Speaker 302
1:27:42
that. hundred thousand you want pressure Mike I can't remember the last three digits
Speaker 303
1:27:47
it was right at a hundred thousand a hundred
Speaker 294
1:27:53
in the middle okay okay and the reason for that is because from 3.6 million we a lot of some of those things were were not even negative they were positive things but We couldn't find any documentation. And because of the other things you see here, there wasn't adequate documentation. The coding was wrong. A bulk of it was coding, finding the documentation.
You get to a point where it's a consistent variance. Kind of like a checkbook is really what it is. E-finance is the school in the state checkbook for the school. And if you carry a balance, you know, several months in a row that's $100, and you're not exactly sure what the $100 is, it's kind of moot at that, you know, and you ask, and this is our case, you ask the Department of Education to waive it so that we can start at zero and stop carrying that balance because it's just not findable,
and this goes back several years. So they did approve it, and we are at zero. Okay, and then kind
Speaker 122
1:28:57
of go back to my first question, and I think
Representative Stetson Painter
Unverified
1:29:00
you said this, but I just want to make sure I heard you correct. Oh, yeah. you kind of got a new finance team, right? So moving forward, I guess, one of the details I would like to ask, so now when there's expenditures and stuff, what does that new accountability look like? Moving forward, do you have two people to sign off on it? Is it going in front of the board? Can you kind of give me that detail explanation?
Speaker 294
1:29:21
That's an excellent question. I would say the internal control issue is the biggest issue. And so there's, schools are infinitely complicated when it comes
Speaker 284
1:29:34
to finances, and you already know that, but we started a, or we implemented a process where
Speaker 294
1:29:41
multiple people have to sign off on most transactions, and documentation has to be presented and archived in a way
that multiple people will catch it if it's not in real time. Large expenditures definitely and contracts go before the board in compliance with our policies and procedures. Also, we updated our policy and procedures and financial policy procedures, which was the first time in three, four, five years that had been done. So that was a big part of it, is to adopt and update those procedures to incorporate some of the laws and regulations that happen here
so that they would be accurate, so that when we get legislative auditors there who look at the regulations, not just at the bookkeeping,
Speaker 284
1:30:33
we'll be in compliance because we'll know what the rules are because we've updated our... And then we have PD. We've intensely focused on professional development of all of our
Speaker 294
1:30:43
staff, so there's no excuse for not knowing. They have to sign forms showing that they got trained, all those kinds of things. And, again, I can't say enough good things about the – we agree with the audit.
And I can't say enough good things about the staff. This is a good example, and I hope next year you'll see that as well, of how it can be a guidance tool to get it right. Well, I appreciate you guys being here and look forward to seeing you guys
Representative Stetson Painter
Unverified
1:31:14
one day on the no findings list where everybody wants to be. I appreciate it. Thank you, Madam Chair. Thank you. Representative Mayberry,
you're recognized. Thank you, and thank you for your
Representative Julie Mayberry
Unverified
1:31:27
comments. It's just, you know, been just frustrating.
So, anyway, thank you. So, KIPP Delta, you have more than one school. This is just Phillips County, is it just? This is both. This side, it represents both schools. Both schools in Phillips County?
Speaker 314
1:31:46
Yes, Helena and Blytheville are where the schools are. And
Representative Julie Mayberry
Unverified
1:31:50
Blytheville, so it's all of them. Okay, which is where the other school district was as
well. So, yeah, okay, that's all interesting. I didn't know, that's what I was trying to understand,
if this was just Phillips County or this also included Mississippi County, and it's all of
Chair
Unverified
1:32:16
it. Yes. Okay. Yes, ma'am. Okay, thank you. representative still you're recognized uh thank you madam chair uh senator always
Representative Tracy Steele
Unverified
1:32:22
good to see you you you you fixed uh you fixed a lot of things while you were here in these halls uh uh just let me drill down a little bit more on how you're gonna fix this one as far as personnel you've already alluded to that uh from representative painter's question but what personnel changes
have you made not individuals but that can help you move forward and take care of this expeditiously
Speaker 284
1:32:48
the first changes were designating people you know we have we have done a lot and
Speaker 294
1:32:55
what I like to say is that my chief contribution has been to remove barriers to so that people who can shine and have talent and show promise can do what they do and that's really what I've spent a year and
a half doing and our chief academic officer Jennifer else is not here but she was our chief curriculum person and she we had an open position there and we put her there brought on a new chief executive a chief of staff for operations and also we brought in a whole new team on finance and also we created a CIO
position the person's been there for 14 years working in data but you know technology has changed to the point that you can do some of this reporting some of the financial internal control processes and all that so much more cheaply and easily now if you know what you're doing and we had somebody again very talented capable and I put him in the right position and it's really paid off especially on this subjects here Thank You madam chair no more questions
thank you my final question would be what are you all doing it seems like you are trying very hard to create that transparency and accountability what are you doing as far as to your board the discussions that you guys are having in relationship to the audit and just what you're doing and you don't have to give great detail on it just is there a systematic approach to you know this month we're going to talk about the audit or how we're
not the audit but how we are making sure we're moving in the right direction yes representative Duke
Speaker 288
1:34:52
and I'm actually glad you said that because as recently as a couple of days ago I think it was a couple of days ago the board not only had a chance to
Speaker 279
1:35:02
drill deeper into the audit findings but also set as a mandate that we would revisit in September greater detail and one of the other things that we do now is we had board meetings we have more specific in detail reporting on finances it wasn't that we didn't have them previously it's just that quite frankly I don't think we have the people in place who were able to help guide us through so now we're
setting that those board workshops we've set a date in September to drill deeper into both the budget and the audit findings and that's going to be a regular as I mentioned earlier I was not chair at the time when a lot of this happened director Smith was not in place and the chief of staff Dooley was not so now not only we're paying greater attention to detail but we're asking for that as a regular part of the board meeting thank you I
think that's great I think it's a that other districts should follow as well I think it just helps everybody be
on the page and the public to be on the page of what happens happening I don't see anybody else in the queue so
without objection we will file this report thank you all for being here today appreciate it thank you for
Speaker 133
1:36:13
the opportunity thank you madam chair members of the committee all right mr. Fink thank you madam chair If you will skip down to page 18 of the synopsis, we will review the remaining audit reports with repeat findings.
Chair
Unverified
1:36:31
Brinkley School District had two findings, and both were repeat. The first finding was related to errors in the financial statements causing misclassified revenue in the special revenue fund and uncorrected errors that were noted in prior years. We also noted material errors in the other aggregate funds, including items that were not corrected from prior years and unrecorded items. The second finding was related to bank reconciliations that were not properly reconciled and another account where no bank reconciliation was prepared.
Management has provided a detailed response to both findings and representatives from the district are prance present to answer any committee questions. All right if we have representatives from the Brinkley
School District would you join us at the table here and press that green light and recognize yourself your name and your position in your district please thank you we're glad to have you here today. Well we'd rather you not be here
for these reasons but we're happy to meet you and get to visit about it I'm Ryan
Medford president of the school board I'm bringing the pool of the superintendent thank you appreciate having a school board member here as well I'm sure the superintendent does as well do you all have anything that you'd like to say to start us off or we can I've got
Speaker 334
1:37:56
one question in the in the queue but if you have a statement or something like to say to begin with feel free we're ready Jumping in if you all are we are right here last year last October and we did anticipate and being back here this year simply because When we came last year we knew that we still had a finding just based on the conversations
With the auditors that was exiting where we had those bond accounts and money market accounts and that had not been connected So we were pretty sure that we would be back here this year year someone actually asked um do you think you'll be back will we see you again and then we told them probably
Chair
Unverified
1:38:31
because we knew that we were ending that year with a finding okay well thank you for your transparency
on that i have representative painter in the queue representative you're recognized thank you madam chair i think you're rubbing off
Representative Stetson Painter
Unverified
1:38:43
on me a little bit with the questions
here um just curious on our page 18 it says significant errors here can you give us just a synopsis of some of this like unrecorded investments of $2.6 million, $795,000 non-recorded revenue. So what kind of revenue is that? Just a little bit more details in some of that just so I can understand what's those significant, that's a significant amount of money. It is. It is from our
Speaker 334
1:39:15
bond account. We put our bond account in a separate account as advised and it was with the
Main account in the same bank, but it was there never had been Connected with the main account. So the revenue wasn't being Counted in with the main account revenue as well as the other part was not Recording the interest as well. Okay, so a lot of this is around those having those multiple accounts and when you are new to something that's related to construction bond in which I was which the business manager was as well
Just not knowing the money is in the bank. Just not knowing how to attach it and Recording that interest and then like I said, we also had another account Which was with Cadence, but it wasn't related to the bond account. It was actually Terminite Terminite settlement that we had gotten and so that was over there in another account as well it wasn't having that entries recorded as well and even like if you do the journal entries it will mess with your cash flow so when we do the um sometimes the journal entries weren't
done to get it connected to the main account so it looks like it's just money just sitting out there
Representative Stetson Painter
Unverified
1:40:41
somewhere gotcha and and then kind of going down that avenue to uh what prior years were left uncorrected um for i think
Speaker 340
1:40:49
it was the previous year but some of that is because we go from one physical year to
Speaker 334
1:40:56
the next year and not having um gone in if it was with the business manager because we transitioned with a new business manager probably i think we had that one for two years
and it was late um that person went out i think at the end of june sometime july um we ended up getting a new person in august so with some lapse in time in between that point and trying to get things done before close out and some things like that what revenue was not recorded uh it's normally like when you send your state receipts in okay when they send them in through those remittance which i didn't have access to those um you they have to make sure that they're going in and taking
those things and put it in the e-finance side
Speaker 343
1:41:42
gotcha okay and my last one here the unrecorded accounts payable that's almost two million
Speaker 334
1:41:48
dollars like I said that there goes back to the when it's talking about the I can't even remember what we said about that the unrecorded accounts payable but I'm thinking that's still related to those loans and we're paying out money to those construction do you still sorry
Representative Stetson Painter
Unverified
1:42:05
madam chair last question uh do you still have the the kind of
finance team that you have before
Speaker 334
1:42:15
mean how no we have a new team uh actually um we have um you know like i say that person just was inexperienced with the number of accounts that we had and we recognized that and i knew that and um so we also transitioned out to um asprc this year here um and we started with them july 1 but i can i can say that when we left here last
october um the desi team reached out to us um as well as we started working really close with app scan and um a lot of it is that you know we have to go back and do a lot of journal entries like i said we had to do a lot in order to recapture that interest that had been sitting out there uh since we first got the bond money since we first got the term and i so we did have to go back into other years and open it up and anytime you have to go back in the other year it's going to keep things fluctuating and so we have been working closely with them since october
uh now we are into because um we started having um some monthly check-ins and things like that with desi and they were saying how can you get it down at one point we thought we had it down it's about five thousand and then we had to go back up we went back up because we had to open do some more journal entries which I absolutely hate but you you have to do it if you want to record that money correctly and so we knew going into this year they kind of put us in early intervention services not
because of you know needed to be on debt service or anything like that for fiscal problems but because of the ongoing bank reconciliation problem that I'm I was fully aware of knew about it trying to do all I can I even went back myself have been certified and cat you know I'm doing the cast both trying to try and do everything not last year even prior to that trying to figure out so I know the right language to have and the conversation to talk about with whatever business manager and I think some of the people here have already expressed it
is extremely hard to find people that have that experience and finances in the way that you need it for school finance and even as a superintendent i didn't i didn't receive that kind of training in school but i've got more of that training and i tell them since i've been working very closely with the abscan and with the you know asprc they have been wonderful answering my questions if i'm confused around some things and uh like i say i meet with them weekly on zoom and talk to them and so they've made themselves available and we call and we talk
and we email all the time. So I'm pretty confident that we'll eventually get the variance cleared up. We did actually end the year with the $41,000 variance, and we understand why there were some errors that were kind of made with, you know, continuing again, not adding all the accounts together, not going back and making sure that you're receiving things, or sometimes it was double receipts. Then you have to do that journal entry out. Sometimes it was coding and reminding the staff you have to keep going back
and making sure you have the most current coding manual. They change things in those manuals every year. And as a superintendent, you've got so many moving parts, and you try to catch those things. Even putting myself in three-part of the approval process. And so sometimes we as human, we all miss something, but it's not because we're not trying. We're actually trying and willing for the help and support anytime. Well, thank you for that. I can share that
Representative Stetson Painter
Unverified
1:45:49
every time we do adequacy funding study here. I have to train myself again. So, no, I appreciate you too.
Thank you, Madam Chair. Thank you. And one final question that I have, and I don't see any other members in the queue as of yet. So you gave a lot of information, and I really appreciate your transparency, and it's really good to hear the support that you're getting and the weekly feedback. What kind of dialogue do you have with your school board as
far as, I mean, Like what are you all expecting from her to give you as far as not just like there's
a going over the report. That's granted you're going to do that. But throughout the year to make sure that you're on track, to make sure that you're getting things reconciled, to make sure things are getting posted.
Are you all having a set, you know, maybe in October or November we're going to review this or every month we're going to review this. just to make sure that we're moving in the right direction on
correcting the issues or whatever may be going on. Is there
Speaker 334
1:46:49
that dialogue going on? Ongoing. I am very transparent with my board for the most part. I'm giving them weekly updates on where we are with finances, academics, facilities, everything, and he can attest to that. even after leaving here we made sure that we publish you know at the board
minutes talking about the variance there as well letting them know we still have a variance this is what's going on so I try to keep them abreast step by step of what's going on our board reports they get the board reports they also get all the bank statements as well so we try to be pretty transparent with all that with the board and stuff like that and try to be letting them know we've been a good steward of it and then even acknowledging where we've gone wrong as well and I've had conversations with them if I had concerns about personnel so nothing is ever just hidden from them I'm like
yeah I do have some concerns I'm trying to make sure that I am getting that person the right support making sure they're going to the meetings but sometimes I do still see some things and I had to check myself on that and say, hey, sometimes you have misplaced mercy when you just need to, you know, just take the stand and say this particular person may not be a good fit for this position, and not just necessarily, not a bad person, not doing anything
intentionally, just making, sometimes the skill sets are not there for what we need. And so I had to examine myself on that as well, you know, like the person, but just may not
Speaker 330
1:48:27
add anything? mr is it medford yes ma'am no that's it's uh so i'll say you know over the the last couple years as far as the board uh we've knew that we had a personnel kind of a issue with some of it and
that's something that we after last year coming up here last year i don't like being here today i didn't like being here in october but after october it was kind of like all right look you know we gotta this isn't what we want to do but we got to move a different direction and the whole board knew that it was something we you know and we talk about it weekly and monthly and you know it's I think from here forward I think we're on the right we're on the
right page okay it's good to hear I don't see any other members with questions so without objection we will file the
report thank you thank you all for being here and
Chair
Unverified
1:49:23
in you next year. Mr. Fink, you recognize? The next report with a repeat finding is Hope Academy of Northwest Arkansas. And I'll provide a summary of the finding. We noted material errors in the financial statements related to cash, receivables, payables, revenues, and expenditures. The financial statements were subsequently corrected during audit fieldwork. Additionally, we noted
issues related to bank reconciliations, receding, employee leave records, non-payroll expenditures, and journal entries. And a similar finding was reported in the previous year. The charter school is no longer in operation. In May of 2025, the ADE charter authorizing panel approved the voluntary rescission of the charter school effective June 30, 2025. And even though they're close. A representative from the charter school is present today to answer any questions the
committee may have. All right. Thank you. We appreciate you being here today. If you want to recognize yourself and give your name and the school that
Doug Hess
Unverified
1:50:31
you did represent, we appreciate that. Thank you, Madam Chair and committee. My name is Doug Hess
and I'm the former superintendent of Hope Academy of Northwest Arkansas. As Mr. Fink noted, we did choose to voluntarily not renew our charter after our five years. We were making baby steps towards limiting our findings, and I feel
like had we kept going, we might have been able to get there. But unfortunately, we just ran out of runway and had made the decision to close no excuses there's a lot of factors that go into it turnover and you know not doing the proper five steps instead of three steps and that ultimately falls to me I would like to thank the legislative audit Mr. Fink and our auditor for the past two years for being nothing but professional informative and courteous because we struggled
we struggled with school finance a lot um but uh they were very helpful and um they didn't beat me up once so that was good thank you and we are
very thankful and proud of our staff here they do do an excellent job um representative mayberry you're recognized thank you
Representative Julie Mayberry
Unverified
1:51:47
madam chair um so i i'm looking at this and if i'm understanding because the first thing
that went through my mind is you've closed was there any bank balance but if i'm reading this right there was a deficit of 5,569 is that and that was when you closed officially and that was taken care of through
Doug Hess
Unverified
1:52:05
our parent or we always had a parent umbrella of what was called the Northwest Arkansas Children's Shelter we have recently rebranded our organization is now called Everhope because we've expanded our services to be just more than the children's shelter and so we were constantly putting money into hope academy in northwest arkansas and at the end of the day we made sure that our balance was zero we weren't encumbered by any debt or anything like that and made sure
Representative Julie Mayberry
Unverified
1:52:36
that we were okay and that's really what my question was was there money left over i knew it wouldn't be a whole lot but maybe there
was a little bit you know and what happened to it but obviously there was a deficit and you're just saying private funds yes did that so nothing is owed to the state or taxpayers and and all that no ma'am okay thank you so much and and i'm sorry that it didn't work out i know
that there was probably great effort in trying to make it
Doug Hess
Unverified
1:53:04
work and um well it didn't work out as a physical charter school but we've since taken the lessons
that we've learned and turned it into the hope school project where we are partnering with school school district currently spring springdale school district in northwest arkansas and trying to help children that have behavioral and intervention needs before they end up getting expelled or before they end up getting homeschooled or before maybe they get taken away from their parents so we're really focusing on helping those children of trauma be successful in school not just in a
Representative Julie Mayberry
Unverified
1:53:40
brick and mortar position anymore did you make a presentation to
a committee not too long ago was that your group uh yes ma'am uh that wasn't me but children aging and youth maybe or perhaps some
other some other committee i i'm i'm having as you're talking about this this is all kind of
Doug Hess
Unverified
1:53:59
going through my head of her i've heard of this yes ma'am that might have been our ceo rebecca mitchell um who might have been with the person that's with hope school project uh jessica floor or our chief program officer ashley inslow they might have they've come down here quite a bit
okay thank you I don't see any more questions I want to thank you for being here and
thank you for the efforts that you are doing now we met several of us are members of the Education Committee as well and we know that that is a space in which there needs to be a lot of assistance and help so we wish you all the best as you all proceed with that and thank you for being here without objection
Chair
Unverified
1:54:42
we will file that report thank you very much thank you the next report to review is Lee County School District they had one finding
which was a repeat during our examination of capital assets one of ten items selected for observation was not available for inspection and four from a test of five equipment purchases with a cost exceeding a thousand dollars were not added to the district's capital asset listing a similar finding was issued in the previous report and representative from the school is present to answer any questions the committee may have thank you if you want
to join us at the table and just give your recognize yourself with your name
and your city in position thank you for
Representative Tracy Steele
Unverified
1:55:29
being here good evening Michael stone superintendent of schools thank you mr. stone do
you have anything you want to say to start off oh no I just
Speaker 359
1:55:39
I'll ask answer your questions okay well right now I don't have
any question anyone in the queue I do I think I have a question for staff or maybe you can answer that what were the items the equipment item that
Chair
Unverified
1:55:53
we were unable to cite was a bus that was acquired in 2000 and we were told the bus was disposed of but it was still listed on the capital asset listing is active and then the four items that were purchased in f-25 that were not added to the listing were a small baggage scanner computer scanner a freezer and a gas stove and those were corrected while you all were there is that correct yes don't I'm
not sure on that okay we do have one question
Representative Tracy Steele
Unverified
1:56:28
representative Steele you're recognized thank you madam chair just real quick mr. stone I'm not a official member of this committee but try to kind
Chair
Unverified
1:56:39
of keep up with my notes but isn't this a marked improvement from the last few years in
Representative Tracy Steele
Unverified
1:56:47
your district as far as we've a number of findings well we've had we've had no findings for the last several years since I've been no fine and then this this has been a finding what we've had the four of the five I think equipments
Have it been rectified? Yes, we've added, we've done what we need to do for that, and just put it, added it on to what we need to do with adding it. But to your question, yeah, we've had no findings since I've been there, and this is one that's come up. But this is a repeat finding because we had a similar finding before because we tore down a building, a school building, and we built some houses there.
And so there was something that was asked of that was located in that building, I believe a server or something like that, that was an old building. So now we're repeating this finding, something that's similar to that finding. Thank you, Madam Chair. members are
there any other questions seeing none thank you appreciate you
being here today and hopefully we won't see you again next year and without objection we will file this report thank
Chair
Unverified
1:58:04
you have a good day you too the next
report for the committee's the next report for the committee's review is Marvel School District which had one finding which was a repeat repeat during our examination of payroll records we noted that one certified employee was overpaid thirteen hundred dollars and one employee was underpaid thirty five hundred dollars due to clerical errors a similar finding was issued in the previous report and representatives from the school are present to answer any questions committee may have thank you all for being
here I think you know the
drill at this point just join us at the table and if you'll recognize yourself with your name and school
Speaker 368
1:58:50
district and position. We'd appreciate it. Good afternoon. Tran from the superintendent from Myrville School
Representative Stetson Painter
Unverified
1:58:57
District. Manager, Vicki Jones, operations manager. Scott McRae, director of
Speaker 371
1:59:03
finance for Friendship Education Foundation. All right, thank you. Do you all have anything
you would like to say, or we can go ahead? We do have one question right now in the queue.
No, you can go ahead. Okay.
Representative Stetson Painter
Unverified
1:59:17
Representative Painter, you are recognized. Thank you, Madam Chair. So with us overpaying an employee and then underpaying one, did you all recruit the overpayment, or how do you deal with that issue? And then I would hope, I assume, once you find that error that you underpaid an employee, was that a quick turnaround
to get that employee compensated? On the overpayment for the employee, she resigned.
And she went to another school district. But in the meantime, we've discovered that she is terminally ill. So we did not try to recoup the money. And the underpayment, we have not paid that employee as of yet. Okay. Well, I hope
Speaker 10
2:00:00
you do. Thanks. All right, members, I do
not see any other questions. I just want to make sure, because I kind of recognized, you guys are under a transformation contract. Is that correct? Yes, ma'am.
And what was the, because these are repeat findings, what has the progress made? You have to refresh my memory, or maybe Mr. Fink from, or you all can, from the previous year. Have we shrunk the number of findings
going? Okay. So I think that's important to be highlighted, too. I think Representative Steele kind of pointed that out earlier, that if you've
gone and improved from year to year, and obviously this is something that you are able to address and appreciate your compassion as well as a school district. But anyway, I don't see
any other people in the queue. So without objection, we will file this report.
And thank you all for being here today, and
Chair
Unverified
2:00:54
hopefully we will not see you next year. Thank you. Okay. The last report with repeat findings is Stronghutdick School District, which had one finding. During our testing of payroll, we noted the following. Three employees received underpayments of $757, $160, and $140 due to clerical errors. One employee was overpaid $5,800 due to errors
while the employee was receiving workers' compensation benefits. And a similar finding was noted in the previous report. Representatives from the school were present to answer committee questions. Thank you
all for being here. If you guys
would hit that green button and identify yourselves with your name and position and just repeat again the
Speaker 247
2:01:38
school district, thank you. Veronica Roberts-Perkins, Stronghutic School District
Speaker 374
2:01:44
Superintendent. Cindy Smith Stronghuddy School District Board President Crystal Johnson I'm the
bookkeeper for the Stronghuddy School District okay do you all have anything you want to say before we get started with questions
or we could jump in them appreciate that I know we are we've
Representative Stetson Painter
Unverified
2:02:05
been here quite a while so far so represent a painter I'm gonna go ahead and recognize you and get us started thank you madam chair again I'm gonna go kind of the same line I did a previous school. So those underpayments of 757, 160, 140, have you paid those employees that underpayment? And then second of all, what is the plan to deal with the overpayment of $5,800 with an employee?
Speaker 252
2:02:27
It's our intention that we're going to go ahead and make those payments to those employees who were underpaid. And
Speaker 246
2:02:33
then we're going to see restitution from that individual where the $5,000 was overpaid okay gotcha thank you okay um can you um clarify for me
all three of you how long you have been in the district or how long you've served on the board I'm in a year 20 I've served on
the board for 20 years yes wow that's a long time
God bless you and board president for 20 you've been board president for all 20
of them yes oh my goodness. Okay. All right. Hit that green button
Speaker 246
2:03:15
for me. I'm sorry. It's kind of testy like that. Thank you. I've been in education for the last 32 years, only
Speaker 375
2:03:24
in Arkansas, and this is my first year at Stronghood. I came to the district the 21-22
school year. All right. Thank you. Members, are there any other
questions for the school district all right
i don't have anyone else in the queue so without objection we will file this report thank you all for being here and i guess i'll say the same thing i said previously hopefully we will
Speaker 133
2:03:52
not see you next year thank you thank you okay if you will
Chair
Unverified
2:03:57
go back to the first page of the synopsis we'll go back and review the reports that we skipped around on earlier um there were two reports that were certified to the governmental bonding board and
also referred to the applicable prosecuting attorney and attorney general the first is guy fenter education service co-op which had one finding the cooperative discovered and legislative audit verified a program coordinator submitted improper mileage for reimbursement totaling a thousand dollars the coordinator resigned on may 15th of 2025 and the funds were recovered from the coordinator's final reimbursement forms and final paycheck additionally this matter was submitted to the professional licensure standards board and effective november 7th 2025 this individual's
current license and activity status is designated as probation until november 7th of 2027 that concludes the findings for guy fenter education service co-op all right i have a
question on this one so this one was referred to the professional licensing standard board what triggers
that versus some of the other things that we have been talking about
Chair
Unverified
2:05:10
so that that was done by the co-op they they referred that matter to the professional licensure standards board so they have the
authority to do that and then who was on the previous maybe we haven't gotten there yet there's another one that has been referred and maybe we haven't talked about it yet i can't remember we've done a lot today we'll get to it okay so i'm gonna have that same question like so but we obviously we don't have the we don't go directly to professional licensing board but we go to the state board of education no department of education and they from there can refer to the licensing board but anyway i'm kind of pointing that out i think that's kind of one i think information we
need to know and i'm also going to be curious how many other entities out there can refer and we're seeing things i
mean not that this is not a big deal it is a big deal and we're seeing issues with the activity funds and other districts but i think it is worth noting that this committee and its abilities to do things too because we're seeing some bigger numbers than some of this in areas And we have yet to have utilized, I don't know if they have in the past utilized, referring it to the Department of Education and then on to the Professional Licensing Board.
But it's there for a reason, and I think it's something that we need to realize other groups are doing it for even, for maybe a little bit different amounts. So that's all that
I had. I see that Representative Mayberry is
Representative Julie Mayberry
Unverified
2:06:39
in the queue. Representative Mayberry, you're recognized. Thank you, Madam Chair. I don't think I need to make this as a motion, but I would
request, I guess, that at our next meeting, could we have someone from the Licensure Standards Board come and speak to us, or the Department of Ed, just have a
greater discussion about what that is and what are some of the things that they do see and that they can do,
just so we have a better understanding of when does it meet that level of, yes, we want to send it on to you. Like I said, I've not heard of this. This is new to me, so I want to be educated on it. When is the right time to send it further for more discussion to be looked at?
So if you would be all right with that, would you
give us the time in the next few days that we can kind of figure out,
is that the best place to go here? Is there another committee maybe that would be better served to have that conversation with? i don't know but will you if we'll look into that and see and if it needs to land on that september
meeting um then we'll do that because i understand we do need to have a better understanding of and to your point what the different um options are available through the professional licensing even though we don't have that we can't make the determination of what they use it is helpful to know it is a variation scope of what they can do so we will check into that and then i'll get with the staff and we'll see where we can go from
Representative Julie Mayberry
Unverified
2:08:04
there and I'll get back with you thank you educate us is my my request thank
you all right I don't see any other questions so without objection we will
Chair
Unverified
2:08:13
file this report okay the next report that was certified to the bond board and also referred to the prosecuting attorney and attorney general is the hope school district which had one finding the district discovered and legislative audit verified undeposited activity fund receipts of $832 during the period of July 1, 2024 through February 5th, 2026, due to a missing receipt book, the exact amount of funds collected could not be determined. Therefore, the amount of unaccounted for funds could be higher.
The employee responsible for receiving and depositing the funds resigned on February 5th, 2026, and that concludes the findings for Hope School District.
All right, I don't see any questions, so without objection,
Chair
Unverified
2:09:04
we will file this report. okay the next report to review is north arkansas college college management identified nine ghost students oh and this this finding was referred to the
prosecuting attorney and attorney general college management identified nine ghost students enrolled for the 2025 spring semester through an online fraud and identity theft scheme. These students appeared eligible to receive federal aid totaling $57,000, and the funds were dispersed by the college. Subsequently, the college was required to reimburse the U.S. Department of Education, resulting in a loss to the college of $57,000. As of the report date, the funds had not been recovered.
And that concludes the findings for North Arkansas
College. okay representative mayberry you're recognized thank
Representative Julie Mayberry
Unverified
2:09:59
you help me remember didn't we have a very lengthy discussion on something similar remind me what school it was what university yes it
Chair
Unverified
2:10:08
was east arkansas community college okay so
Representative Julie Mayberry
Unverified
2:10:11
again it was a community college um right is this the second is this only the
second one to have that happen am i missing another one i believe this is the
Chair
Unverified
2:10:25
only two that we've uh included in our reports to you all okay just
Representative Julie Mayberry
Unverified
2:10:30
maybe we're going to start seeing more and more of this and
do you want to mr fink add some of that clarification of what we've
Chair
Unverified
2:10:42
learned what the federal government's
doing to try to address this problem yes so this is a national issue kind of as we discussed last time there's been major problems reported in california minnesota utah along with various other states in april of 2026 so just recently the u.s department
of education started using a real-time fraud detection capability within the fafsa when it's first completed in an effort to mitigate this issue additionally the usdoe in may of 2026 issued an electronic announcement to institutions of higher education that includes best practices to prevent this type of fraud and protect federal aid funds further we legislative audit presented
at an ocubo workshop which includes most of our business officials from public colleges and universities in arkansas and this was information that we presented to them and pointed out to them. And so I do think that that awareness is being raised pretty quickly due to the issues. And hopefully this change by the USDOE will help to mitigate this risk. All right. Representative Painter, you're recognized. I just
want to make sure I heard
Representative Stetson Painter
Unverified
2:12:09
the number correct. There's only been two that we know of that have had
Chair
Unverified
2:12:16
this incident. Is that correct there's two reports with this incident that had come before this committee for review just this year or period i believe eacc i believe that report was an fy 24 audit report okay all right thank you i'm seeing no
more questions without objection we will file this report
Chair
Unverified
2:12:41
thank you the next report was Blytheville so you can skip to page 12 of the synopsis and we will review cutter Morningstar school district which I will provide a summary of the finding in our FY 23 audit report we issued a finding related to issues noted during a Desi Office of Public School Accountability Monitoring Visit, which required the district to reimburse
DESE $45,000 and reduced state aid funding by $55,000. Subsequent to this review, the Arkansas State Board of Education met to review findings noted by the Professional Licensure Standards Board Ethics Committee. During the meeting held on April 10, 2025, the superintendent of the district was found to have exhibited inappropriate disposition, inclusive of professional and ethical behavior, which included violation of district, state, or federal policies or law, failure to
honestly report enrollment, misuse of public funds, and misuse of school property. The board issued sanctions including a 30-day suspension of license, a two-year probation of license, and completion of required coursework and readings. Additionally, at a special school board meeting held on February 2nd, 2026, the superintendent was placed on paid administrative leave through June 30, 2026. This report, this finding was referred to the prosecuting attorney and attorney general,
and that concludes the findings for Cutter Morningstar
Representative Stetson Painter
Unverified
2:14:30
School District. Representative Painter, you're recognized. So just want to make sure I heard you correct. So So once you did this report and you share it with DESE, they're the ones
Chair
Unverified
2:14:44
that made the decision to cut the state aid. Is that correct? So
the DESE Office of Public School Accountability, they actually did a monitoring visit. And based on their monitoring visit, we reported the $45,000 that they had to reimburse back to DESE and the reduced state aid funding.
We reported that in our FY23 audit report. Does that answer your question? Yes, I'm
Representative Stetson Painter
Unverified
2:15:10
just glad to hear that because I just want to make sure we have a mechanism to do that, and maybe I'll get with DESE offline and see moving forward with other schools that have made a whole lot bigger monetary erroneous things that they can continue to maybe pursue those with the time. So I appreciate that. Thank you.
all right any other questions members all right seeing none without
Speaker 360
2:15:48
objection we'll file this report okay the next report to review is the Eureka
Chair
Unverified
2:15:54
Springs school district and that should be right after the cutter morning star school district it had one finding And it was the district used $3,300 in operating funds for staff meals without a documented business purpose in conflict with the Arkansas Constitution, as interpreted in the referenced AG's opinion.
And that concludes the findings for Eureka Springs School
District. I don't see any questions, so without objection,
Chair
Unverified
2:16:24
we'll file the report. The next report is Garfield Scholars Academy. This was a new charter school that opened their first year of operations was in FY25. Finding one, the charter school paid $3,500 for consulting services to a company owned by a board member without a resolution or authorization by the board as required by Arkansas Code.
The charter school, finding two, the charter school did not maintain capital asset records as required by section 5.9 of the charter agreement and the regulatory basis of accounting. Finding three, during our testing of expenditures, we identified the following. Six disbursements totaling $1,700 did not have adequate supporting documentation in noncompliance with Arkansas Code. These payments were to vendors that appeared to be for a legitimate business purpose. Checks or warrants were not always signed by the dispersing officer of the board
and by the director in noncompliance with Arkansas Code, and the charter utilized a debit card and did not obtain written authorization for electronic payments as required by Arkansas Code. Finding four is the last finding. Employee leave records were not maintained by the charter school as required
Speaker 133
2:17:39
by Arkansas Code, and that concludes the findings for Garfield Scholars Academy. Seeing no
questions, without objection, we'll file the report.
Chair
Unverified
2:17:51
Okay, if you will skip ahead to Wilbur D. Mills Education Service Cooperative, which is right at the conclusion of the kip delta findings they had one finding the co-op reported to the arkansas
department of inspector general office of medicaid inspector general that a speech speech language pathologist with whom the cooperative contracted and whose time was funded by the arkansas medicaid program was paid 77 000 for 2 766 therapy service hours not actually worked from january 11 of 2023 through march 31st of 2025 the co-op reimbursed the arkansas medicaid program the full amount of the overpayment on june 30th of 2025 the speech language pathologist
whose contract with a cooperative was terminated was charged with medicaid fraud and the case is pending that concludes the findings for wilbur wilbur d mills education service co-op I
have a question on this one so how how many
schools because I'm assuming they were going out to schools to provide this service and it was at the audit that caught this the school district catch it and do they catch it because districts were piecing together they weren't getting the
Chair
Unverified
2:19:28
services the the co-op reported the matter to the inspector general that's that's who found it was
the co-op okay and whenever something like this happens I mean how what is the
awareness in some of the other co-ops to
Chair
Unverified
2:19:49
be watching for something like this I can't say for certain on that what I can say is when we do presentations at these different meetings that we go to which we have
one coming up in September actually we present some of the recent findings that we've had that have gone through this committee and so this is one that we will certainly point out and bring to their attention do you know if there were any
complaints to the co-op from school districts that their children are not being serviced that's kind of I mean I don't know
if you know if that's arose because obviously there were kids not getting services through this too correct i can't
Speaker 133
2:20:33
say for sure as it pertains to that question all right i don't see any other questions
Chair
Unverified
2:20:41
so without objection we'll file the report okay the last report that was referred to the prosecuting attorney and attorney general was Woodlawn School District, which had one finding. The district discovered and legislative audit verified candy bar fundraiser proceeds totaling $1,362 were not deposited into the district bank account. The teacher who was the sponsor of the fundraiser reimbursed the district for the amount of funds not deposited and subsequently resigned on May 19th of 2025. That concludes the findings
of the Woodlawn School District. Seeing no questions
Chair
Unverified
2:21:26
without objection, we'll file the report. The remaining eight reports with findings on pages 22 through 27 of the synopsis were findings that were not repeat and were not referred to the PA or the AG. Staff recommends the committee take a moment to look over these reports and file en masse as reviewed.
All right, members, take a minute and look over those and indicate if you have
a question, please. All right, I'm not seeing any indication there are questions, so without objection, we will file these reports en masse. Thank
Chair
Unverified
2:22:13
you. The remaining 56 reports on the last two pages of the synopsis were audits with no findings.
Staff recommends that these reports be filed en masse as reviewed. All right, members, we spent a lot
of time today looking at reports that had schools that had issues, so I would just really encourage you to take a minute or two and look through those ones that did not have findings and to celebrate your schools in your districts that did not have those findings. Congratulate your school board members, all their officials, because that is a big deal, as we all are aware of, and they do need to be celebrated on that. So with that, seeing no questions, without objection, we will file all of these reports with no findings.
All right, and that brings us to a conclusion of this meeting. Thank you, members and everyone that remained in the audience for your work today, and we will be meeting again in September. I'm not exactly sure the date, but you all can check the calendar. And the meeting is adjourned. Thank you.
Agenda
A. Call to order by Co-Chairman.
B. Adoption of Minutes of the June 4, 2026 meeting.
C. Review of Reports. Refer to the Synopsis
D. New Business.
E. Adjournment.
Documents
No documents posted.
Speakers
Representative Hope Duke Chair
Unverified
Representative Dwight Tosh
Unverified
Speaker 11
Chair
Unverified
Speaker 13
Senator Dan Sullivan Chair
Unverified
Speaker 25
Speaker 28
Representative Julie Mayberry
Unverified
Speaker 37
Speaker 39
Speaker 45
Senator Fredrick J. Love
Unverified
Speaker 59
Speaker 62
Representative Stetson Painter
Unverified
Speaker 71
Speaker 113
Speaker 115
Speaker 137
Speaker 23
Speaker 145
Speaker 98
Representative Brad Hall
Unverified
Speaker 70
Speaker 18
Representative Tracy Steele
Unverified
Speaker 194
Speaker 195
Speaker 225
Speaker 234
Speaker 235
Speaker 69
Speaker 246
Speaker 247
Speaker 251
Speaker 252
Speaker 262
Speaker 133
Speaker 279
Speaker 282
Speaker 288
Speaker 284
Speaker 294
Speaker 302
Speaker 303
Speaker 308
Speaker 122
Speaker 314
Speaker 334
Speaker 340
Speaker 343
Speaker 130
Speaker 330
Speaker 347
Doug Hess
Unverified
Speaker 359
Speaker 368
Speaker 371
Speaker 10
Speaker 374
Speaker 375
Speaker 360