Legislative Joint Auditing-Educational Institutions
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Good afternoon everyone. Welcome to Education umm joint edits audit subcommittee we're gonna get started as is our tradition we are going to rise and Representative Harlan Bro is gonna open us in prayer if you all will join us Dearlord Jesus, I'm thankful
Representative Dwight Tosh
Unverified
3:03
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 think you that today in the the situations the rules the different situation we come come along with that you would give us the wisdom how to handle different situations and thank you lord we know that you're going to do and this time ahead and Jesus' name I pray amen thank you
if you'll take just a second members and look over the minutes and then we needed a motion for the adoption of the minutes motion do I have a second thank you all in favor motion passed and then I
guess we're ready to get going here Mr Fink, do you want to start us off? Thank you. thank you madam chair
Speaker 11
4:11
and good afternoon. today there are79 education audit reports for the committee's review
Chair
Unverified
4:19
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 go that way we can take care
Speaker 13
4:39
of those with representatives here first and so if you will turn to page two of the synopsis
Chair
Unverified
4:49
we will start with the Blythevillle school district audit. you
Speaker 13
4:56
will see in your synopsis that we actually did the Fy25 and Fy24 audits of Blytheville 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 May26th of 2025, the Arkansas State Board of Education
assumed authority of the Blytheville school district On June 2,2025, AdE requested that legislative audit perform the audit this request was was presented to Ljack and approved at the July11,2025 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 nonpayroll disbursements and receipts Additionally, as noted in the
finding for fy 25, 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 I 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 of50,000 dollars as required by Arkansas code. Although not listed as a repeat finding in both years we noted issues during payroll testing and Fy25 there were errors leading to overpayments and thenFy24 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 for an unused sickly payout due to lack of documentation and lastly during Fy24 2 board members were paid585 dollars and645 dollars 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 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
Blotteville School District. younk. if we could
have the representatives from Bythville if they could come to the table 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 doctorctor Vanessahopkins current superintendent of Bliville School District. good afternoon. I am Jennifer
Speaker 25
9:46
Blankenship currently the director of federal programs for the lava school district. Representativejoey carr district34. I'm here to support
Speaker 28
9:53
them they're in my district g re g rogers with department of Education. Ta Coleman Department of Education. thank you appreciate you all being
here I see we've got one in the queuepresentative
Mayberry you're recognized thank you I
Representative Julie Mayberry
Unverified
10:13
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 CPpa 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 no there
Speaker 37
10:41
wasn't an audit for the two years that are before you're right now they they had used a a private auditor in the previous years before that when the board voted to take Blythville under in level ive intensive support state takeover in May the the audit for 24 has still not been filed and looking at trying to get that done with the private auditors the auditor had sent notification to the current the previous administration at Blyville that because of lack of participation lack of
documents being received by the Blyville 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 the education board once they took him over and said will y'all do the audit for these two years and so that
Speaker 39
11:26
request went to the executive committee was approved leg audit did the audit for two years and that's the findings that you're seeing
Representative Julie Mayberry
Unverified
11:33
here before you. so but the year before the so I guess the23 audit would have
been done by a privaterrect. Were there any findings then
Chair
Unverified
11:44
yeah there would I don't remember what they were but yes there would have been findings back then too. I don't have them in front of
Speaker 45
11:51
me but yes there were they come to us then? Yes? OK so this has been ongoing yes so
Chair
Unverified
11:56
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 committee. just trying to figure out how we how we've gotten there and
Representative Julie Mayberry
Unverified
12:07
just trying to fill in some of those blanks obviouslyviously there were issues which led to the state board to take the action
Speaker 37
12:15
it did and taking doing his estate takeover and ones that say takeover was done the board was released the superintendent would at that time was released since then we've entered into a a transformation contract with AMS Impact Group, and that's when they've hired a superintendent now and that's we're moving forward with cleaning up what we see
Chair
Unverified
12:31
in these audits. Senator Love you're recognized thank you madam sheriff so help me understand this
Senator Fredrick J. Love
Unverified
12:47
they're under state takeover right now. So then that means you review do you all review everything that they Yes,
Chair
Unverified
12:59
I mean I guess what do you mean review everything they did well
Senator Fredrick J. Love
Unverified
13:02
we're looking at we're looking at all these audit findings so I'm just trying to I'm just trying to see see where the safeguards
Speaker 37
13:09
are so yes on the the the you looking at these two years of audit findings and their responses to those audd 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 thehyservice andport office and we're working with them on make sure that these these deficiencies are
Senator Fredrick J. Love
Unverified
13:32
taken care of in the future in the future. OK so did so now to the
superintendent the findings that we have before
Speaker 59
13:41
us did they occur under you or they did the superintendency of Bloville School District December 1st2025 but I was there
as we were looking for things to satisfy the audit so keeping in contact with them as well aspatm Caster with Crawley'sridge I had a lot of guidance on the findings
Speaker 62
14:00
and how we fix those based on the recommendations from the auditors
Senator Fredrick J. Love
Unverified
14:05
so so Blaville is understate takeover currently have a you have a you have
a ok you have a management company AMs
how how long has how long haslaville been
Speaker 37
14:25
under state takeover the board classify them as level ive intensive sport in May of 2025. ma'am AMS came on board
august of 2025. so I guess talking with you all about these. so
Senator Fredrick J. Love
Unverified
14:36
you all have a corrective plan for all this ok and a whole new finance team OK when do when do we expect to have this corrected
Speaker 39
14:50
what is the what is the expectation they're working on implementing the corrective action plans as soon as we got the results of this audit they started working 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 plans for the future
Senator Fredrick J. Love
Unverified
15:15
now tell me this what is your largest challenge in if if we were to see
just looking down what would be your largest challenge because if this comes before us again next year and then we 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. may take a
Speaker 59
15:41
little time just because the new people that we have in finance still are being trained and they're working
Speaker 62
15:46
on the job as they're being trained so I think our largest challenge is to make sure that we are starting off
Speaker 59
15:56
with lead balances that are correct for this year and that we are payroll is set up to where it 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
Senator Fredrick J. Love
Unverified
16:27
OK. madam chairir, I'm I'm gonna look over these findings. I haven't s reviewed them all but I might get back in the queue. thank you thank you umpresentative
Representative Stetson Painter
Unverified
16:41
painter you're recognized thank you madam chairir and this is a question for staff you said in 2024 I think Mr Fink that it was 2.4 million on account of for. can
you repeat the number for 2025? I think you're referring to the bank reconciliations and yeah
Speaker 13
17:00
the variants in fy 24 or Fy25 decreased down to 2,900,000,000 OK. and madam superintendent you do not under your tent you
Representative Stetson Painter
Unverified
17:08
have new personnel. 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
and you may not answer may not be able to answer that maybe the department of a can or maybe staff can there's
Speaker 37
17:40
nothing that I can think of all the time that would keep them from doing it but if the 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 Bloville that should raise additional concerns
Speaker 39
17:51
that any school district they may be 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
need to be bringing into their
Representative Stetson Painter
Unverified
18:03
school district. OK and one more question Mr Fink when when we have a new personnel like this. I know you and I have talked
offline but led ge audit is there to help train these new folks on what we're
Speaker 13
18:19
expecting correct so you know we have certain independence 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 AAEA 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 laws or
Chair
Unverified
19:12
just general good bookkeeping practices. OK thank you thank you madam chairir. I'm sure I got more questions. I'll
jump back in the queue thank you. thank you senatorullivan you're recognized thank you madam
chairir. So first thank you for taking
this on. it's a tough deal. how long have you been I missed that with the district
since december 1st,2025. and the other lady accompanying you how long have you been with
Speaker 25
19:45
the district? ' ve been with the district30+ years but this is my second year as the director of our title and federal programs and
what was your previous roles if you
Speaker 25
19:55
don't mind me asking for a few months I served as the interim superintendent 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 two of those
Speaker 59
20:15
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 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
Speaker 62
20:57
line and making sure she's going to the cospo trainings the asO trainings as well as connecting with Crawley's ridge and again Pamcaster 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
21:19
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 districts have been in a number of places so I have been in Georgia, Tennessee and New York and I'm from Missouri so I'm from Saint Louis I'veled leaders
in Saint Louis as the leadership development I have also been the director of a $25 million it
sounds like you're well qualified. I appreciate it thank you thank you madam chair thank you
senator uhpresentative Mayberry you're recognized thank you just kind
Representative Julie Mayberry
Unverified
22:02
of following up with some of the questionspresentative painter was asking and maybe I'll just be a little bit
more direct and maybe you can't I don't know perhaps gregRogers you're allowed to to say so the the superintendent and the CFfo
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 probably could but I don't remember who they are right now. I I don't remember their names
Speaker 113
22:30
of who it was previously there I'm sorry I I could probably get it if I needed to I don't because
Speaker 37
22:35
who the superintendent was would be public record so I don't think there'd be any problem saying that just don't know if they're working at another school district then Yeah I don't know if they are
Representative Julie Mayberry
Unverified
22:49
but I can find out. I'm just curious because a a common theme that we 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 I I don't know how we stopped that so thank you
thank you Representative Mayberry. um, I'm sure appreciative of all the questions that we have here are y'all knocked out some of the questions that I had on my list so I'm gonna go topresentative painter you're recognized
Representative Stetson Painter
Unverified
23:44
thank you madam chairir. do we have any idea like for us on page se looks like nonpayroll
expenditures some are totaling 108,093,000 so forth. do we have any idea what those are I don't think so. I don't think I think that's
Speaker 37
24:01
part of what they were saying they were missing the documentation on that, which I'm assuming that matt could probably answer that some of
Speaker 113
24:07
that that's been turned over to the prosecuting because of the lack of documentation that was given on that. OK
Representative Stetson Painter
Unverified
24:14
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 people456 $1000 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 was aware that was going
Speaker 37
24:37
on. I know there's just a lot of the lack of documentation, if in the base of this audit it was some a lot 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 the referring it to the prosecuting attorney's office to try to, I think it would depend on them. I thinkit could speak better
Speaker 113
25:00
at that than I could of what the prosecutor would do if they decide to take that on we'll going through that
Representative Stetson Painter
Unverified
25:06
have we heard from the feds that are they actively working to try to take get some of that back no we we will have to communicate
Speaker 37
25:14
with them with the once these 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 funds can you try
Representative Stetson Painter
Unverified
25:29
to get us a number of what those federal how much total that federal funds it was 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's funded and when we see roney erroneous actions like this it it's 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 you have a few questions some
of the members have che touched on some of the ones that I had on finding for the seven items that were not available for inspection do we know what those items were and if you could just
clarify that that would be great. there were laptops smart
Chair
Unverified
26:27
boards cabinets they had purchased those between 1992 and2016 so I have I guess
Speaker 137
26:31
some of the same lines as representative
mayberry andpresentative Painter 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 I recognize that we don't we obviously don't have it off the top of your head off they're employed about what about disciplinary actions on any of these
was there anything that took place with that not to my
Speaker 37
27:04
knowledge no. I mean 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 who have applied for my for a position in my district 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? I think it would depend
Speaker 37
27:40
on the score the different school districts and like if it was a superintendent you know you have the interviews with the superintendent and the school board gets to to interview each one of them and those could be questions I asked there of course coming from Blaville or coming from a different place I mean that is questions that school boards probably should ask and look at the references but I think it would just really depend on the
Speaker 39
27:59
school boards and the different school districts which you're talking about OK thank you
I think that's something we need to remember and maybe the school board association or theation committee or department that might be something that should be suggested to a school districts or to school boards to look into and another question to ask because as we all know you you can't ask a whole lot of questions to find out information anymore but you can certainly and 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
Speaker 23
28:48
more about the contract and how all that's working within the district right now so AMS is a organization based
Speaker 59
28:54
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 it 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 they have a HR person that has helped us set up systems to make sure that we have those records straight because it 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 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 finance is different
Speaker 62
29:51
from knowing Arkansas finan finance Arkansas's way did you did the district choose this
Speaker 145
29:58
vendor or did the state choose it predates me I believe they
Speaker 59
30:02
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 d on behalf of the district was
secret Jacob Alifa yeah there was a there was anrp out put
Speaker 37
30:26
out through the the the school district under the transformation under Lawrence we can do the transformation contracts we did an RfP process took applications they were scored there was a 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 what is the contract terms like how many years are they going to be providing the service
Speaker 59
30:52
and how what is the cost and who pays it I assume it's the district districts it it's $1500 per student so enrollment is very important which meant last year the cost was 1.8 million based on the enrollment numbers and it is a3 to5 year contract.
OK so and 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 with this 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 looking at things rather than just via a zoom
Speaker 59
31:41
it depends we do have a touch point with the VP of schools who is doctorctor Charlie Heaton he comes sometimes it's more consistent like over the summer he just on boarded with us in April before him was another person and I would say maybe it would be a two week stream out of three weeks and then a3 week we didn't see them they were back in 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 of days and yeah you are largely depending upon I mean it sounds
like you have a good relationship I guess with your co op is that who's working Pamcaster is my direct mentor
yes OK I see I'm gonna step out of the queue here for
a second and go ahead and let one of the other memberspsentative Painter you're recognized
Representative Stetson Painter
Unverified
32:45
thank you madam chairir. how much of a financial burden did you have to start off with
with this new school year because of this erroneous unaccounted for spending we were not balanced as
Speaker 98
32:55
far as our understand as far as the budget we did start with a deficit but how much deficit if
you don't have that if you can get that to the committee
Representative Stetson Painter
Unverified
33:10
I would greatly appreciate that because I think that's a big deal
Speaker 62
33:17
we'll have to get that to you the last number I saw was near300,000. you thank
Representative Stetson Painter
Unverified
33:23
you and and want to echo Senatorulllivan's comments. thank you for taking this huge role and look forward to seeing it you guys getting out
of the hole because the previous people's actions. Thank thank you Representative Hall you're recognized
Representative Brad Hall
Unverified
33:51
thank you madam chairir. my questions for Department of Education when's the last time that a superintendent's been prosecuted for something like this I don't know. I'd had to
Speaker 70
34:04
go back and look I don't know off the top of my head. I can go back and see if we've ever
Representative Brad Hall
Unverified
34:09
had one and when it was I can get that. I got a follow up question and and
if if the prosecutors would actually prosecute these situations don't you think it would take care of itself on 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 know you said a3 to5 year contract so what is the process I guess even from the state standpoint know they don't have a board of members now because got my attention board members being paid or not I don't think they should volunteer their duty their time
a little bit and those type of circumstances personally but when are we looking at a board
being formed again and is there some goalposts that they're supposed to be meeting as a school district you're gonna get here and
then we're going to do this next and then you hit here and then you get the next step what does this look
Speaker 37
35:05
like for them because they are in like I said level5 intensive support so that's the the the five year process of that and so as goalposts are needed that is where they can do the advisor once it gets to a a better point they can't do
Speaker 39
35:16
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 on board again at that point but yeah there is a transition that it will go through based off the improvementss having 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 because of being underle and 10 support it it falls on
Speaker 39
35:48
the department under the secret ofducation and theli5 takeover school district so what does that look like for you all? What
does your all's accountability for them? Is it just making sure that they're they end up with a clean audit
at some point? What does it look like for you guys to make sure that they're meeting the
Speaker 37
36:05
needs it's it's everything it's it's making sure that the finances are getting better that the school improvement for the the students is getting better that they're they are seeing growth and literacy growth in all the different things that you need to have in the standards so it's not since they were they were taking over as level5 intensive sport, not a fiscal distress 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 all embedded in that as well so we'll
Speaker 39
36:31
yes we're overseeing ever all parts of that working along with the superintendent and IMs so this 1.
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 it it depends on you
Speaker 37
36:53
know, the different things that theyMS contract is is given
Speaker 39
36:57
to them the support is given the finance help is getting the different I don't know, I don't 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
37:08
of like she said that 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 3 to5 years of his life of this contract and so that's what that's pointing 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 you usually
Speaker 39
37:34
have to have those expenses for and this is what that fee's
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 is
this upcoming year what does that do to their budget is it gonna cause them any physical stress? nos this shouldn't it shouldn't in there the
Speaker 37
38:04
way that the that that's why I was looking over y my physical sport 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 no physical distress issues that'll come
Speaker 39
38:16
up with Blatteville. OK, great because I mean obviously we all
know there's some issues there but that 1.8 million I just know that that can be a little you know cumbersome to districts especially if you're not anticipating it so great thank
you so much umpresentative Mayberry you're recognized thank you iss there a
Representative Julie Mayberry
Unverified
38:33
professional licensure board PSB yes would there be some
like outside of a prosecuting attorney would there be some consequence there you're getting in I don't know enough about I don't
Speaker 37
38:49
know enough about that to be dangerous. I know there's ethics that that that they could have complaints filed against him on there which might could fit under something
in the PLSB board but that's about as far
Speaker 39
39:02
as and I want that I wanna wade into cause I don't know
Representative Julie Mayberry
Unverified
39:07
all the pieces of eLSP I'm sorry OK
Chair
Unverified
39:11
anyone from audit know more so under Arkansas code617426 the legislative joint auditing committee may refer an audit report of a school district to the department of ofducation 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 says that the department shall submit the audit report referred in subdivision A one 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 a
Representative Julie Mayberry
Unverified
39:56
motion to do what you just said? 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 I so I have served4 times on this committee and I've never seen 11 pages before. like this is the longest I've ever seen. I I mean there's probably been some other egregious things that have been out there but this is a really long compiled list
Sorry 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 audit tomorrow if that's correct Mr.innken then they would vote whether we should refer it is not as well. And so I was just asking that question so
Chair
Unverified
41:01
that she'll know so if if this committee chose to do that under Arkansas code it would be included as part of the chair
Speaker 18
41:07
report that's read tomorrow with the full committee and then the full commit full committee votes on that chair report.
Representative Julie Mayberry
Unverified
41:21
So I guess I I make a motion to do that
if you want to make a motion to do that we 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
Representative Tracy Steele
Unverified
41:44
got a point of order. Wella ok senator well we'll start with Senator Steely you're Thank you madam chairir. point of order but maybe just a point of clarification you indicate that the board will
Chair
Unverified
41:51
investigate that's what so Arkansas code go ahead Arkansas code gives the legislative joint auditing committee the it says may refer an audit report of a school district that has repeat findings so same issues and back to back reports to the Department of Education and then the Department of Education shall submit the audit report
to the PLSB. and when you say board you meaning board of education professional licensureanards board I believe is what it's referring to madam chair could I get Courtneyhollis
Speaker 113
42:35
ford to come up here about PLSB stuff before we get deeper into that and I say something stupid
Speaker 194
42:55
Good afternoon Courtney Salisfod, chief of staff for the department of Education. I do this to Greg enough I guess he felt like he needed to get me back yeah yeah, I'm happy to answer any
Speaker 195
43:09
questions about the PLSB the professional licensureandards 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.
um, 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.
Senatorulllivan you're recognized. Yes, so tell me again what is the motion that
we're voting on well rus that have maderry hang on two If I'm understanding correctly cause I've
Representative Julie Mayberry
Unverified
44:21
not 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 iss that that is my understanding and then
they would they would review it I guess and then move on to the we're looking into we I mean
if you're gonna 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 my assumption is those who
Representative Julie Mayberry
Unverified
45:18
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 AC and be pinpoint who those people are within the motion thank youenator Sullivan courtney
can you tell us on if it goes to 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 right they have
Speaker 195
45:56
a wide range of of sanctions they can impose fines, coaching and and learning
sessions suspension revocation would be the ultimate, I would agree with Senator Sullivan that they when they when the pplSB is looking at taking action. there needs to be a named person so if you wanted to name the superintendent who was 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 who 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
decisionmaking role. Representative mayberry recognized do you want to
Representative Julie Mayberry
Unverified
46:47
are allowed to say a name
Speaker 195
46:51
Yes, that Veronica Perkins was the superintendent of the Bloville school district during the majority of the time
Representative Julie Mayberry
Unverified
46:58
that this audit covers. OK and this would this motion then for say Veronica Perkinskins ok 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 that it gets sent to prosecuting attorneys. they are overwhelmed with so many other big things and they just kind of looked 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 an avenue and just now discovering it's an avenue to to
you know give some type of consequences. so it
Speaker 195
47:46
you're making a referral to the prosecuting attorney. they're looking at criminal offenses, criminal charges and 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 are7 ethical standards that all licensed educators are held to so they will look at the referral for what you 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 in 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 they recommend that that sanction can be. that does not equate to criminal charges and 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 we're only looking at
ethical standards. I I I I've
Representative Julie Mayberry
Unverified
48:49
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 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
Speaker 194
49:17
I think it's been around for about 10 years but I I can't say that for
certain. I know it's been a while we have do we have a motion in a second on the table senator yes we do so is the discussion now centered on the motion or have we moved
over to other things we're on 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 you a promotion therepresentative Mayberry
umpresentative 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 we need to if she
Speaker 225
50:00
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 it when you read so the the law says the legislative
Chair
Unverified
50:20
joint auditing committee may refer an audit report of a school district to the division of elementary and secondcondary 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 the division shall submit the audit report referred in this section to the professional licensureandards Board
and the board shall investigate any referrals made by Ljack under its investigative procedures that's that's what the law states Yeah, so I I will say my variation from the typical
Speaker 195
51:07
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.
right just a second. I've got several in the queue but I don't know are you all speaking on this motion well 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 of 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 Lobbier in the queue iss
Senator Fredrick J. Love
Unverified
52:11
I'm through the chair to representative maybebypresentative Maybeer you've discussed multiple things are you 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 is that what I'm hearing from
you? I just want to clarify that I can't
Speaker 235
52:33
speak for prosecu I'm sorry you're recognized I
Representative Julie Mayberry
Unverified
52:37
can't speak for a prosecuting attorney. 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 they don't do anything and so there has to be some type of consequence and follow up
all right well then that that's that's you know if prosecuting attorneys look into it that that's but that's outs that's outside
of our ability and this is something that we can do well I guess just
Senator Fredrick J. Love
Unverified
53:15
turning 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 were 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
Speaker 69
53:35
madam chairir. rosa painter you're recognized thank you madam
Representative Stetson Painter
Unverified
53:43
chairir. I just want to make sure a couple of things on here we did have that individual's name in that motion correct? OK I thought we would have to have that individual's name to referred into that motion to 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 chairir, but if we're asking the new superintendent these questions. I 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 cause I I'm good with the motion
but I 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 that's all I got.
OK, 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 it 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 representative painter I will recognize you to finish up
I guess your question you had there then I would respectfully ask Representative Mayberry
Representative Stetson Painter
Unverified
56:15
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 Painner I would assume that you would have to repro withdraw the second. OK so the motion the second half with withdrawn so we are no longer in that discussion and give me just a second because this is new territory for
me by by a lot to make sure that we're doing everything the way that we should be doing stuff so just give me just a second.
right thank you members for your patience and for the audience for your patience as well let me so I understand doctorctor Veronica Perkins is here if you could join us
at the table I think there's several members that have questions and hopefully you'll be able to enlighten
us thank you Courtney for we may need to hang in the wings there for us thank you. and if you can say your name and position for the record appreciate it thank you
Speaker 246
57:51
Good afternoon. I'm Doctor VeronicaRoberts Perkins previous superintendent from the Bliville school district for the 20 2232324 school year thank you members
Speaker 247
57:59
are we have her down here are there questions that you have that
you would like to ask doctorctor Perkins? OKpresentative painter you are recognized. Oh I just like to hear the explanation
that maybe her her side of the story here
Representative Stetson Painter
Unverified
58:22
of of some of the spending and not accountability and that kind of so forth that I think it would be helpful for the committee to hear her's perspective whether we agree with it or not but at least hear it and maybe she can give some light to
Speaker 251
58:38
some of these erroneous spending things absolutely
Speaker 252
58:40
so during my time in Blythville I assumed the Bliville school district was a district
Speaker 246
58:45
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 physical distress but there were practices and stuff that were not conducive to effective management physical processes all those kinds of things and in the year that I was there I had two bookkeepers who were district bookkeepers and neither of them having a lot of background in those pieces so we moved through trying to do the very best that we could 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 24 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 during the audit so I'm going to say that some of the pieces are probably legitimate because of poor practices because of their 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 p re s ent ative Mayberry
Representative Julie Mayberry
Unverified
1:01:25
you're recognized thank you for coming up and and speaking and and sharing my thought is is that we're we're
not we're not the judge you know, I'm 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 you know it so it doesn't end here. there's further discussion is is really what my goal is and if the
licenger you know they come back and they say no problem they're no ethic violations then then that's what it is. it's just another avenue to to look at that so anyway, I 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 so help me to understand maybe what the bigger picture is and getting someone with the qualifications to handle this. I meant this is your financial person is really important and to hire someone who you hired I assume you hired the the the staff there to oversee that what were the complications in getting the
right bookkeeper in in northeast Arkansas
Speaker 246
1:03:12
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 nonprofit sector so she looked good on paper and she went through all the training still did not have the background I think to make the turn so then we had a second bookkeeper who was there who had been a
bookkeeper at a 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 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 when she comes and really learns because there are a lot of rules regulations that are in in fiscal budgeting and unless you have really savvy people who have been in the business in school business doing doing the budgets doing financial pieces you can easily think you have the right person and not have the right person. so our goal is to make sure
Speaker 59
1:04:37
not only that we vet who we bring on but that we keep accountability
with them in 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 to that we're not overpaying vendors anymore those are things that I caught my first month that we started to put process in place for and just to let you know I
Representative Julie Mayberry
Unverified
1:05:04
didn't even know that that avenue existed. I'm kind of learning right you know as we were discussing of oh ok well
maybe this is something so you know all'll I'll hold on to my my motion and let it go. you had an opportunity to speak. I I just you have to understand we here 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 of what is that process
you know that 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 Thank you Representative Mayberry
Representative Sil you're recognized thank you madam chairir.
Representative Tracy Steele
Unverified
1:06:43
I think Representative Maybeyrry has said most of what I was going to
say and and and thank you for that but I do think it's important to actually find out M Perkins actually when were you hired at at Blythville school district. I came tolivi
Speaker 246
1:07:00
School District in July of 22. and how long did you hold
Representative Tracy Steele
Unverified
1:07:06
that position leftlyville in we really February
Speaker 262
1:07:24
say august of 24 and when you took over the school
Chair
Unverified
1:07:29
district were there any audit findings the previous year we had not had an audit finding to my
Speaker 246
1:07:37
knowledge and we had an outside vendor who was who was doing our audits and how many how many findings did you have during your administration?
Sure OK I will have to go back and find the audit but to my recollect I had not been to
Representative Tracy Steele
Unverified
1:08:13
the legislative audit no I have not thank you madam chairir. I think that we should be very cautious before mentioning names in these motions because I think our investigative committee and staff is 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 chairir. thank you I do have a question can you can you give me a little bit of your background before you
Speaker 246
1:08:47
came to Blythevile and not just like where you were but also what you did ab I started off as a classroom teacher at pinevill School District came to Pulaski County as a principal assistant principal district
language arts coordinator moved to LittleRock as CAO for LittleRock School District for five years went to four City as the deputy superintendent for 2 2.5 years before moving to Blythville and a doctorate in educational leadership from Arkansas State University at Jonesboro. OK 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 about the
background is because many of us serve on other committees and many of us serve on education and we're also
looking for areas in which through these findings that maybe we need to fill some gaps or make some improvements 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 surrounding the new
although not new but something that a tool that we can utilize that we have not utilized before. So with that objection we will hold this report over till the September meeting any objections
to that OK umpresentative Painter you're recognized thank you
Representative Stetson Painter
Unverified
1:10:17
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
Speaker 59
1:10:45
of action we definitely can get that to you it was a number of things that we asked the principals to meet around and we really try 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 got you thank you thank
you madam chair thank you senator Sullivan you're recognized
thank you madam Chair. just to comment on the motion I think I'm very favorable to making a a motion to refer this to professional licensing how 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
it 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 Senatorllivan 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 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 gonna hold this over and hopefully members will continue to dig in and ask questions as needed thank
Speaker 133
1:12:22
you thank you for your time Mr Fink if you will skip down to page
Chair
Unverified
1:12:29
14 of the synopsis the next report we will review is theIP delta ub lic charter school Fy25 audit
ri or to the Fy25 audit the audit for KIP delta was performed by CPA firm. ki p delta requested legislative audit perform the annual audit and that request was approved byljack at its June6,2025 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 was 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 usingation stabilization funds finding five was a repeat
finding for not maintaining time certification records to support salaries and wages for amounts charged to theation stabilizationgrame. finding6 during our testing of special education expenditures we noted unallowable costs charged to the federal program. Finding7 was a repeat finding for unreconciled and unexplained variances on the bank reconciliation finding 8 bank deposits were not properly collateralized in accordance with Arkansas code
finding 9 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 noncompliance 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 general injuries 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 a response for each finding outlining corrective actions they plan to take to mitigate to mitigate issues in the future and represented this from the charter school are present to answer any questions the committee may have thank you
Mr Fink. if we could have the representatives fromiltlp to join us down here at the table and recognize yourself for the committee please your name and school and position thank you.
Speaker 279
1:15:21
good afternoon George cotton senior chairman of the KIP preparatory school board Kevin Smith executive director of the school And Alex
Speaker 282
1:15:32
Daoley our chief Thank you thank you all for being hereembers I'll give you a
second to look through the findings again just to see if you have any questions. I
I'll start off well I'll start off with a 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 and 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 gonna change or this is how we're gonna 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 is 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 and when we look through and I'm sure you've seen some of the the responses we get from other districts gives you a little bit more confidence that things are gonna 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 at least give you guys that feedback that that gives me concern that you're gonna 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 obviouslyviously I don't expect you to give a different response now to everything but it it would be at least for me more helpful to have a little bit
more meat to how you're going to fix things. Again thank
Speaker 288
1:17:30
you for the opportunity andpresentative 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 the fact that you're concerned is is not only legitimate it's it's also representative of the fact that we were concerned I'll also say that and uhrector
Speaker 279
1:17:55
Smith will be able to talk more 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 fix ing you're seeing fixing because they're dragging us into 2627 and quite frankly we'll probably take a little bit more time to address so you're right
the specifics will be able to talk more about today but the other thing I will will mention one of the reasons that you're seeing us say quite frankly people have been replaced and new people are are owning the responsibility quite frankly the reason we're saying that is because that is exactly what we've had you know this this is not a technical term but things were really screwed up before the people before you assume 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.rector Smith, most of you know was a former member of 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 we'll be very
very able and willing to provide you more detail if that's necessary. you all mean you referenced that
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 issues. I'll give a quick
Speaker 288
1:20:32
answer and then I will will let our superintendent expand on it to one answer is
Speaker 279
1:20:38
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 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 we're not in place with when Mrs Smith was hired and Mrs Smith did come in and make specific changes
Speaker 284
1:21:34
madam chair members of the committee Mr Fink and staff I want I wanna say we can go into specifics as
Speaker 294
1:21:41
long as you want to I thought it's probably better just to answer questions but I want
Speaker 284
1:21:48
to recap quickly just for context we our school had a we're kind of a school on
Speaker 294
1:21:55
a combat we had a lowest point was during this period of the audit in the middle of this fiscal
year will light in about the middle of it and a lot of dramatic changes were made since that time we had a3.6 million dollar variance I heard that mentioned earlier today as of this month in e finance we're at zero we worked with Arkansasublic school uhoent in Scottsmith and their team and still do to get our finances straight academically last year we had
two bees two Dess but they previously were Fs and we are outlets scores this year among the best in the delta and the best in our counties we're by the way 2 K1els 1 preK through 12 in helena 1k through 12 in bloville ourselves and I was a member I know that because don't likes with you guys but I was a member of this committee for 10 years and yes uhpresentative Mayberry and madam chairman and others the issue of turnover and the issue
of prosecuting people all the things jobball mentioned today we're we're stressful and issues when I was here and and I I get that we did make I I don't know what to say except one thing one of the things that we did when I was here which meant 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 but I just thought I'd tell you about that the transitions in 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 then we
Speaker 282
1:24:28
had one or two people that weren't frankly that you know well anyway we
Speaker 294
1:24:33
didn't 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 Eucation or anybody else we asked last year Mr Fink probably remembers we asked the legislative audit committee to audit us. We most charters do get private audits unless they've done something wrong in 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 $90,000 a year because that's how much 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 followed in the 20 plus year history of the school but because they were private audits they didn't get maybe they didn't get tagged and one of the reasons I wanted to us and and the chairman wanted
us to do this is because it is it used properly an audit as a guidance tool to show us how its it's supposed to be done and certainly finally and then we'll take we'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 and 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 and just a reminder on some of those things as well and for your work that you're doing there umpresentative
painter you're recognized for a question thank you
Representative Stetson Painter
Unverified
1:26:32
madam chair and I echo the comments that you made earlier in in for more detail and I appreciate you three being here. 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 or 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 six which is in finding7 you request a write off of of the variants 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 because of this and if so if you know how much
Speaker 284
1:27:17
yes sirpresentative Paer our no sir we're not starting off with the deficit we're starting
Speaker 294
1:27:23
off with the zero balance and and that represents an awful lot of hard work down from3.6 million dollars a year and a half ago and I want to give credit to the Arkansas Public School Resource Center who whose staff we contracted with to help us with that 100,000 1re
Speaker 302
1:27:49
you want to press your mic I can't remember the
Speaker 303
1:27:53
last three digits but it was right at $100,000
Speaker 294
1:27:58
middle but right at 1000 and the reason for that is because from3.6 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 this other things you see here there was an adequate documentation the
coding was wrong bulk of it was coding finding the documentation you get to a point where it's a consistent variance it's kind of like your checktbook is really what it is e finances the state check 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 with the $100 is it's it's kind of it's kind of moot at that you know you and you you ask in this archive you asked 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 at zero and then kind of go back to my first
Speaker 122
1:29:02
and and I think you said this but I just
Representative Stetson Painter
Unverified
1:29:05
want to make sure I heard you correct. 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 is that new accountability look like moving forward you have two people to sign off on it it's to
go in front of the board. how does can you kind of
Speaker 294
1:29:26
give me that detailed explanation that's excellent question I I would say the internal control issue is the biggest issue and so there's schools are infinitely complicated when it comes to finances and you already
Speaker 284
1:29:39
know that but we s we started a we implemented a process where multiple people have to sign off on most transactions
Speaker 294
1:29:51
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 and compliance with our policies and procedures and also we updated our policy and procedures and financial management or financial policy procedures which was the first time in345 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 y and regulations that happened here so that they would be accurate so that when we get legislate otters there who look at the regulations not just at the bookkeeping we'll be in compliance
Speaker 284
1:30:38
because we will know what the rules are because we've updated our and then we have Pd you know we we intensely focused on professional development of all of our
Speaker 294
1:30:48
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 and again I can't say enough good things about the we agree with the audit and it can't stand enough good things about the staff this is a 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 and I appreciate you guys being here and look look forward
Representative Stetson Painter
Unverified
1:31:19
to seeing you guys one day on the no findings list that where
everybody wants to be I appreciate it thank you
madam chair thank you uhpresentative Mayberry you recognize thank
Representative Julie Mayberry
Unverified
1:31:32
you and thank you for your comments it's
just you know, been just frustrating so anyway, thank you. soIp delta, you have more than one school this is just Phillips County. is it just this side it represents both schools both schools in Phillips County Helena andlisville are where the
schools are Anne Blytheffill so it's all of them ok which is where the other school district was as well
so yeah ok 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 it yes ma'am ok thank you Representative Stil you're recognized thank you madam chairir. senator always good to see you
Representative Tracy Steele
Unverified
1:32:25
you you fixed you fixed a lot of things while you were here in these halls just let me drill down a little bit more on how you're going to fix this one as far as personnel you've already alluded to that from uhpresentative 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 the first changes were in
Speaker 284
1:32:56
designating people you know we have we have done a lot and
Speaker 294
1:33:00
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 and show promise can do what they do and that's really what I've spent a year and a half years doing and our chief academic officer Jennifer Ell 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 CIO position in the person who'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 and we had somebody again very talented capable and I put him in the right position and it's really paid off especially on these subjects here thank you madam chairir. no more questions thank you my final question would be
what are you all doing? it seems like you are 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 and you don't have to give great detail on it just is there a systematic approach to you know this month we're gonna 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 uhpresentative Duke and I'm I'm actually glad
Speaker 288
1:34:56
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 drill deeper into the audit
Speaker 279
1:35:07
findings but also sat as a mandate that we would revisit in September greater detail and one of the other things that we do now is we at board meetings we have more specific and detailed 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 great attention to detail but we're asking for that as a regular part of the board meeting you think that's great I think it's a pattern
that other districts should follow as well I think it it just helps everybody be on the page and the public to be on the page of what is 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
1:36:18
the opportunity thank you madam chair members of the committee all right Mr Fink thank you madam chairir if you will skip down to page 18 of the synopsis we will review the remaining audit reports with repeat findings
Chair
Unverified
1:36:37
Brinkley's school district had two findings and both were repeatat. 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 re con ci led and another account
where no bank reconciliation was prepared Management has provided a detailed response to both findings and representatives from the district are 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 and 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
Speaker 330
1:37:42
about it. I'm yan Medford president of the school board.'m
Brendao 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 one question in the in the queue but if you have a statement or something you'd
Speaker 334
1:38:01
like to say to begin with feel free. we're ready to jump in if you all are we were here last year lastoctober and we did anticipate 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 artist who 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 someoneone actuallyxx do you think you'll be back when we see you again and then we told them probably because we knew
Chair
Unverified
1:38:36
that we were ending that year with a finding
well thank you for your transparency on that. I have Representative Painter in the queue. Representative painter
Representative Stetson Painter
Unverified
1:38:48
you're recognized? thank you madam Chair. I
think you're rubbing off on me a little bit with the questions here just curious on our page18 it says significant errors here can you give us just a synopsis of of some of this like unrecorded investments of 2.6 million uh795,000 nonrecorded revenue. so what kind of revenue is that just a little bit more
details and some of that just so I can understand what's those significant that's a significant amount of money it
Speaker 334
1:39:20
is it is from our 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 and 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 so a lot of this is around those having those multiple accounts and when you are new to something that's related to construction bonding which I was which that business manager was as well just not know ing the money is in the bank just not knowing how to attach it and recording that r 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 that 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 sometimes the general entries weren't done to get it connected to the main account so it looks like it's just money just sitting out there somewhere Got
Representative Stetson Painter
Unverified
1:40:45
you and and then kind of going down that avenue to what prior years were left uncorrected for I think it was the
Speaker 340
1:40:54
previous year but some of that is because we go from one physical year to the next
Speaker 334
1:41:01
year and not having gone in if it was with the business man cause we transitioned with a new business manager probably I think we had that one for two years and it was late that person went out I
think at the end of June sometime July 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 it's normally like when you send your state receipts in when they send them in through those remittance which I didn't have access to those you they have to make sure that they're going in and taking those things and putting in the e finance side
Speaker 343
1:41:47
and one here the unrecorded accounts payable that's almost $2 million like I said that there goes
Speaker 334
1:41:53
back to the when it's talking about the I can't even remember what we said about that the unrecorded accounts payer but I'm thinking that's still related to those bonds and we're paying out money to those construction people do you still sorry ma'am chair last question do you still have the the kind
Representative Stetson Painter
Unverified
1:42:10
of finance team that you had before or do you have a new team? I mean how how does
Speaker 334
1:42:19
that we have a new team actually we have 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 so we also transition out to ASPRC this year here and we started with him July 1 but I can I can't say that when we left here lastoctober the deci team
reached out to us as well as we started working really close with appscan and a lot of idiots 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 since we first got the bond money since we first got the terminite so we did have to go back into other years and open it up and any time you have to go back and the other years it's going to keep things fluctuating and so we have been working closely with them sinceoctober now we
are in too because we started having some monthly checkins and things like that with Dey and they were saying how can you get it down at one point we thought we had it down to about5000 and then we had to go back up we went back up because we had to 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 physical problems but because of the ongoing bank reconciliation problem that I I was fully aware of, knew about it trying to do all I can I even went back myself and been certified in ca you know doing the cast both training trying to do everything not last year even prior to that trying to figure out so I know the right language to have and the conversations 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 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 vscan and with the you know ASPRC they have been wonderful answering my questions if I'm confused around some things and 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're eventually get the variance cleared up we did actually end the year with the uh41,000 dollars bearing and we we understand why there was some errors that were kind of made with you know continue again not adding all the accounts together, not going back and making sure that you're receiving things or sometimes it was double receipts and then you have to do that journal entry out sometimes it was coding and
reminding the 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 did not trying we actually trying and willing and for the help and support anytime thank you for that I can share that
Representative Stetson Painter
Unverified
1:45:54
every time we do adequacy funding study
here I have to train myself again so no I appreciate
you too. thank you madam chairir. thank you and I 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 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 there's 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 of you know maybe inoctober 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 on on correcting the issues or
whatever may be going on iss there that dialogue going on ongoing I
Speaker 334
1:46:54
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 published you know at the board meeting talking about the various 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 a pretty transparent with all that with the board and stuff like that and trying to be letting them know we're being 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 him 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 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 be a good fit would you like to add anything Mr
Speaker 330
1:48:31
is it Medford? yes ma'am no that's it's so I'll say you know the the last couple of years as far as the board, we've knew that we had a personnel kind of an 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 I didn't like being here inoctober but afteroctober it was kind of like all right look you know we got this isn't what we want to do but we gotta 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. that's
good to hear. I don't see any other members with questions so with that objection we will file the report. Thank you. thank
you all for being here and we look forward to not seeing you next
Speaker 347
1:49:24
year. thank you Mr. Finky recognize the next report
Chair
Unverified
1:49:28
with a repeat finding is hopepe 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, dditionally we noted issues related to the bank reconciliations receding employee leave records nonpayroll expenditures in 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 charterauthorizing panel approved the voluntary rescission of the charter school effective June30,2025. and even though they're clothes a representative from the charter school is present today to answer any questions the committee may have right. thank you we appreciate you being here
today. if you want to recognize yourself and give your name and the school that you did represent we
Doug Hess
Unverified
1:50:34
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 of3 steps and and that ultimately falls to me I would like to thank the legislative audit Mrinnk 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 but they were very helpful and 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. umpresentative Mayberry you're recognized thank
Representative Julie Mayberry
Unverified
1:51:52
you madam chairir. 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 of5569 is that that was when you
Doug Hess
Unverified
1:52:07
closed officially and that was taken care of through 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's 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 that
Representative Julie Mayberry
Unverified
1:52:42
we were clean and that's really what my question was was there money left over? I 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 did that so nothing is owed to the state or taxpayers and and all that no ma'am OK thank you so much and and I'm sorry that it it didn't work out. I know that there was probably great effort in trying to make it work and it
Doug Hess
Unverified
1:53:09
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 sppringdale 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 brick and mortar position anymore you make a presentation to a committee not
Representative Julie Mayberry
Unverified
1:53:47
too long ago? Was that your group? yes ma'am that wasn't me
aging and youth maybe or you know some other some other committee I I I'm I'm having as you're talking about this this is all kind
of going through my head of h I've heard of this yes ma'am that might have been our
Doug Hess
Unverified
1:54:04
CEO Rebecca Mitchell who might have been with the person that's with Hope school
Project uhjessica Floher or our chief programme officer ashley Inslow. they might have they've come down here quite a bit. OK. 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 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 we will file that report. thank you very much thank you
Chair
Unverified
1:54:42
right Mr. Fink 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 10 items selected for observation was not available for inspection and4 from a test of five equipment purchases with a cost exceeding $1000 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 re yourself with your name and your city and position thank you for being Good evening. Michael Stone superintendent of schools
Representative Tracy Steele
Unverified
1:55:34
thank you Mr Stone. do you have anything you want to s say to start off?
just answer your questions well right now I don't have any ques anyone in the queue. I do have think I have a question for staff or
Chair
Unverified
1:55:57
maybe you can answer that what were the items the equipment item that we were unable to sight 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 right 25 that were not added to the listing where a
small baggage scanner computer scanner, a freezer and a gas stove. and those were corrected while you all were
there is that correct? don't I'm not sure on that ok
we do have one question Representative Steele you're recognized thank you
Representative Tracy Steele
Unverified
1:56:36
madam chairir. just real quick Mr Stone that a official member of this committee but try to kind of keep up with my notes but isn't
Chair
Unverified
1:56:47
this a marked improvement from the last few years in your
Representative Tracy Steele
Unverified
1:56:52
district as far as we we've had the number of findings well we've had we've had no findings for the last several years since I've been there and then this this has been a finding what we've had the four of the five I think equipment that haven't been rectified yes we've added we've done what we need to do for that and just put it added it on to to the what we
need to do with adding it but to your question yeah we we've had no findings since I've been there and this is one that's come up this is a repeat finding because we had a similar finding before because we've we tore down a building a school building and 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 in the 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 see none thank you
appreciate you being here today and hopefully we won't see you again next year and with that objection we will file this
Chair
Unverified
1:58:09
report. thank you have a 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 during our examination of payroll records we noted that one certified employee was overpaid $1300.01 employee was underpaid $3500 due to clerical errors a similar finding was issued in the previous report and representatives from the school are present to answer any questions the committee may have. thank you all for being here thank you know the drill at this point. Just join
us at the table and if you'll recognize
yourself with your name and school district and position we'd appreciate it
Speaker 368
1:58:55
good afternoon Tran from the superintendent from Marvel School District. Manager Vicky
Representative Stetson Painter
Unverified
1:59:02
Jones operations manager Scott Mcree director of finance forriendship
Speaker 371
1:59:08
Education Foundation. 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 but if you'd like
to okpresentative painter you are recognized thank
Representative Stetson Painter
Unverified
1:59:22
you madam Chair. So with us overpaying
an employee and then underpaying one did you did y'all recruup the overpayment or how do you deal with that issue and then I would hope 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. OK well I hope
Speaker 10
2:00:05
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? ma'am and what was the cause these are repeat findings what is the progress made you have to refresh my memory or maybe Mrinnk from or you all can from the previous year we shrunk the number of
findings going ok so I think that's important to be highlighted too I thinkpresentative Steele kind of pointed that out earlier that if you've gone and
improved from year to year and 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 hopefully we will not see you next year thank you the last report with repeat
Chair
Unverified
2:01:01
findings is stronghudddock school district which had one finding during our testing of payroll we noted the following3 employees received underpayments of757 dollars $160 and $140 due to clerical errors one employee was over overpaid5,800 dollars 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.
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 school district thank you VeronicaRoberts Perkinsronghuddock
Speaker 247
2:01:43
School District superintendent in dy Smith, a strongheed school district board
Speaker 374
2:01:49
president ry s tal Johnson, I'm the bookkeeper for the Stronghodding School District. OK do
Speaker 375
2:01:55
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 been here quite
a while so far sores representative painter I'm gonna go ahead
Representative Stetson Painter
Unverified
2:02:10
and recognize you and get it started. thank you madam chairir. Again I'm gonna go kind of the same line I did at previous school. So those underpayments of757160140 have you paid those employees that underpayment and then second of all, what is the plan to deal with the overpayment of5800 dollars with the pre an employee It's our intention that we're
Speaker 252
2:02:34
going to go ahead and make those payments to those employees who were underpaid and then
Speaker 246
2:02:38
we're going to seek restitution from that individual where the5,000 dollars was overpaid. OK got you thank you can you 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 year 20 I serve on the board for 20 years
wow that's a long time God bless you and board president
for 20 you've been board president for all 20 of them oh my goodness ok. all
right hit that green button for me. I'm sorry it's kind of testy like
Speaker 246
2:03:20
that thank you I've been in education for the last 32 years only in Arkansas and this is my first year at Stronghudted. came
Speaker 375
2:03:29
to the district the 222122 school school year.
all right thank you. members are there any other questions for the school district? 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 not see you next year. thank you. thank
Speaker 133
2:03:57
you OK if you will go back to the first page of the synopsis
Chair
Unverified
2:04:02
we'll go back and review the reports that we
skipped around on earlier there were two reports that were certified to the governmental bonding boardard and also referred to the applicable prosecuting attorney and attorney general the first is Guy Finerducationervice co op which had one finding the cooperative discovered and legislative audit verified a program coordinator submitted improper mileage for reimbursement totaling $1000. The coordinator resigned on May15th 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 licensureandards Board and effective November7,20 25 this individual's current license and activity status is designated as probation until November7th of 2027. that concludes the findings for guyy Finter Education Service co op. right I have a question on this one. so
this one was referred to the professional licensingandard
board. what triggers that versus some of the other things that we have been talking about
Chair
Unverified
2:05:15
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 or 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. OK 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 you know I'm kind of pointing that 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 utilize I don't know if they have in the past utilized referring it to the department of Education and then on to the personal 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 first maybe a little bit different amounts. so that's that's all that I had I see thatpresentative Mayberrry is in
the queue. Representative mayberry you're recognized thank you madam
Representative Julie Mayberry
Unverified
2:06:44
chairir I I I don't think I need to make this as a motion but I I I would request I guess that at
our next meeting could we have someone from the licensgerandards boardard 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 I've 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 if 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 that some 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 then we'll do that because I understand we do need to have a better understanding of and to your point what's the different options are available through the professional licensing board even though we don't have that we can't make the determination of what they use it is helpful to know is a variation scope of what they can do. so we'll check into that and then I'll get with the staff and we'll see where we can go from there and I'll get back
Representative Julie Mayberry
Unverified
2:08:09
with you you educate us is my my thank you all right, I don't see any other
questions so without objection we will file this
Chair
Unverified
2:08:21
report. the next report that was certified to the bomb board and also referred to the prosecuting attorney and attorney general is the Hope school district which had one finding the district discovered in legislative audit verified undeposited activity fund receipts of $832 during the period July1,2024 through February5,2026 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 February5,2026 and that concludes the findings for Hope school District. All right, I don't see any questions. so without objection we will
file this report. the next report to review is North Arkansas College
Chair
Unverified
2:09:19
College management identified 9 ghost students oh in this this finding was referred to the prosecuting attorney and attorney general. college management identified 9 ghost students enrolled for the 2025 spring semester through an online fraud and identity theft scheme. These students appeared eligible to receive federal aid totaling57,000 dollars and the funds were dispersed by the college subsequently the college was required to reimburse the US Department of Educ ation resulting in a loss to the
college of57,000 dollars as of the report date the funds had not been recovered and that concludes the findings for North Arkansas College. OK Representative
Mady Mayberry you're recognized thank you. Help me
Representative Julie Mayberry
Unverified
2:10:04
remember, didn't we have a very lengthy discussion on something similar.mind me what school it was, what university it was East Arkansas Community College.
Chair
Unverified
2:10:13
so again it was a community college right
Representative Julie Mayberry
Unverified
2:10:21
is this the second is this only the second one to have that happen? Am I missing another
Chair
Unverified
2:10:29
one? I believe this is the only two that we've included in our reports to you all just maybe we're going to start
Representative Julie Mayberry
Unverified
2:10:35
seeing more and more of this and do you want to Mr.innk add some of that clarification
of what we've learned what the federal government's doing to try to address this problem. so this is a
Chair
Unverified
2:10:47
national issue kind of as we discussed last
time there's been major problems that reported in California, Minnesota, Utah along with various other states in april of 2026. so just recently the US Department of Education started using a realtime fraud detection capability within the FfaFA 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 acubo 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 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 right. uhpresentative Painter you're recognized I
just want to make sure I heard
Representative Stetson Painter
Unverified
2:12:14
the number correct there's only been two that we know of that have had this incident is that correct?
Chair
Unverified
2:12:21
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 Fy24 audit report all right thank you I'm seeing no more questions without objection we will file this
report thank you the next report was Blythville so
Chair
Unverified
2:12:49
you can skip to page 12 of the synopsis
and we will reviewutter Morningstar school district which I will provide a summary of the finding in our Fy23 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 desse45,000 dollars and reduced state aid funding by55,000 dollars. subsequent to this review, the Arkansas State Board of Education met to review findings noted by the professional
licensureandards Board ethicsittee during the meeting held on April10th,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 a30 dayy suspension of license,
a two year probation of license and completion of required coursework and readings.dditionally at a special school board meeting held on February 2,2026, the superintendent was placed on paid administrative leave through June30,2026 this report this finding was referred to the prosecuting attorney and attorney general and that concludes the findings forutter Morningstar School District. Representative painter you're recognized so
Representative Stetson Painter
Unverified
2:14:35
just want to make sure I heard you correct. So once you did this report and you share it with Desse they're the ones that made the decision to
Chair
Unverified
2:14:49
cut the the state aid is that correct? so theEE office
of public schoolccountability they actually did a monitoring visit and based on their monitoring visit we reported the45,000 dollars that they had to reimburse back to Desse 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
2:15:15
just glad to hear that because I just want to make sure we have a mechanism to do that and and maybe I'll get with desi 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 and with the time so I appreciate that thank you.
are there any other questions members all right seeing none without objection we'll
Speaker 360
2:15:53
file this report. OK. the next report to review is the eureka springs school district and
Chair
Unverified
2:15:59
that should be right after the cutter Morning Star school district it had one finding and it was the district used3,300 dollars
in operating funds for staff mills 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. don't see any questions so
with that objection we'll file the report the
Chair
Unverified
2:16:29
next report is Garfield Scholar's academy this was a new charter school that opened their first year of operations
was in Fy25 finding one the charter school paid3,500 dollars 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 ction 59 of the charter agreement and the regulatory basis of accounting finding three during our testing of expenditures we identified the following6 disbursements
totalling $1700 did not have adequate supporting documentation in noncompliance with Arkansas code. these payments that 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 utilize a debit card and did not obtain written authorization for elect ron ic payments as required by Arkansas code. finding for is the last findingloyee leave records were
not maintained by the charter school as required by
Speaker 133
2:17:44
Arkansas code and that concludes the findings for Gararfield Scholar's academy. seeing no questions
without objection we'll file the report OK if
Chair
Unverified
2:18:06
you will skip ahead to Wilbur de 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 officefice of Medicaid inspector general that a speech language pathologist with whom the cooperative contracted and whose time was funded by the Arkansas Medicaid programme was paid77,000 dollars for 2,766 therapy service hours not actually worked from January11
of2023 through March31st of 2025. The co op reimbursed the Arkansas medicaid programme the full amount of the overpayment on June30th 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 forililburd Mill'sducationervice co op. have a question on this one so
how how many schools because I'm assuming shoot they were going out to schools to provide the service and it was it the audit that caught this or the school district catch it and did they catch it because districts were piecing together they weren't getting the services the co
Chair
Unverified
2:19:34
op reported the matter to the inspector general that's who that's who found it was the co op and whenever something like this
happens I mean how how what is the awareness in some of the other co ops
to be watching for something like
Chair
Unverified
2:19:54
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 will not be serviced? that's kind of
I mean I don't know if you know if that's how a rose because obviously there were kids not getting services through
Speaker 133
2:20:38
this too, correct? can't say for sure as it pertains to that question right I don't see any other
questions so with objection we'll file the report. the last report that was
Chair
Unverified
2:20:52
referred to the prosecuting attorney and attorney general wasinlon 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 May19th of 2025 that concludes the findings of the Woodlawn school district.
seeing no questions without objection we'll file the
Chair
Unverified
2:21:31
report. The remaining 8 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. members take a minute and look over those
and indicate if you have a question please.
right I'm not seeing any indication or questions. so without objection we will file these reports en masse. thank you The remaining56 reports on the last two
Chair
Unverified
2:22:18
pages of the synopsis were audits with no findingstaff recommends that these file these reports be filed in mass as reviewed. members we spend 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
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 113
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 330
Speaker 334
Speaker 340
Speaker 343
Speaker 347
Doug Hess
Unverified
Speaker 368
Speaker 371
Speaker 10
Speaker 374
Speaker 375
Speaker 360