Legislative Joint Auditing-Educational Institutions
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meeting to order. Thank you for being here. Chair sees a quorum. Invite you all to stand up as Senator Sullivan is going
to start us in prayer.
Speaker 26
5:00
thank you senator members you've got the agenda in front of you um co-chair Furman and I. We're going
you for being here and getting here through
the rain. We appreciate especially our guests joining us and we'll kick it off. So first on the agenda is the adoption of the minutes. We need a motion. We've got a motion. We've got a second. All in favor signal by saying aye. Opposed like sign. All right motion is passed. All right we'll move to C on your agenda
Senator Jim Petty
Unverified
5:51
and let's review the reports. Mr. Fink you recognize. Thank you Mr. chair and good afternoon today there are 103 education audit reports for the committee's review there are 89 reports with no findings and 14 that contain findings we will begin with the
two audits which were deferred from the prior meeting the first one is camden fairview school district which had two findings finding one the district expended a little over ten thousand dollars from operating funds to host an end-of-year awards banquet for employees in conflict with arkansas constitution as interpreted in the referenced ag's opinion the following is a summary of the of the expenditures seven thousand two hundred and sixty dollars for meals for
employees and guests two thousand nine hundred and fifty eight dollars for door prizes four 450 for facility rental fees finding two the district discovered and we verified unauthorized credit card charges of 2100 on the district's credit card between september 9 2024 and february 27 2025 as of the audit report date the bank reversed charges of 1800 resulting in a loss of 262 dollars and that concludes the findings for camden fairview school district there are
representatives from the district present to answer any committee questions thank you mr fink
all right this time we will invite camden fairview to join us at the table as you're making your way down you can hit the button right in front on the microphone and if you'll introduce yourself for the record my name
Speaker 34
7:40
is ben goss school board president tara armstrong superintendent
Speaker 37
7:46
samantha dodson the business manager thank
you all right you are recognized um if you want just any opening comments to the findings we'd love
Speaker 36
7:57
to hear from your team okay good afternoon ladies and gentlemen of the standing committee on educational institutions chairman senator Dees and Representative Duke. My name is Tara Armstrong and I've served as the superintendent of the Camden Fairview School District since July 1st, 2025. Thank you for allowing CFSD to respond in person to the legislative audit findings from the 24-25 school year. Let me
understand, let me begin by saying that the district fully acknowledges the issues that led to both audit findings and under my administration we have implemented measures to strengthen and oversight, aligned decision-making, and actions with state laws and regulations maintain constitutional compliance and prevent similar mistakes from happening again. The district acknowledges the audit finding regarding the unauthorized credit card charges between September 9th, 2024 and February 27th, 2025, resulting in a loss of $262. With board approval, the district
ceased to use the impacted credit card and transitioned to a different credit card and this action has resulted in no new fraudulent charges to date. To strengthen internal controls, credit card statements are now reviewed monthly by the CFSD business office prior to payment and reconciled to supporting documentation. Any discrepancies are immediately reported to the issuing bank to ensure timely dispute and recovery of fraudulent errors. These measures are intended to reduce risk and improve oversight of district credit card activity.
The district also acknowledges the audit finding regarding the expenditures of operating funds for the Employees' Awards Banquet. After the finding, the district immediately discontinued the after-hours award banquet funded with district operating funds. To ensure future compliance, all meetings or professional development events will be held on district-owned property unless an alternate facility is provided to us at no charge. If meals are provided in conjunction with a legitimate district meeting or professional development activity, attendance will be limited to district personnel only and guests will
not be permitted in order to avoid the appearance of a social function. The district also implemented improved internal tracking procedures to document the receipt and distribution of donated items and meeting agendas now clearly reflect official district business. These measures are intended to strengthen internal controls and ensure constitutional compliance while the district cannot change the decisions that led to these findings we can control how we move forward we
can take these findings seriously and implement corrective actions to strengthen oversight maintain accountability and reinforce public trust the district remains committed to operating with transparency and maintaining our focus on serving the camden fairview school students staff and families thank you for your time and consideration thank you
any questions all right I'm seeing representative long let me get
you going here all right hold on all right
Representative Wayne Long
Unverified
11:14
thank you mr. chairman the the people that were in charge at the time these This activity took place are they still employed by the district? Can you clarify you talk
Speaker 36
11:27
about is there a new superintendent? Well, I thought you
Representative Wayne Long
Unverified
11:30
said that you started yes superintendent after this had occurred that is correct But so it was the superintendent that had no he has not No, I'm asking is he the one that was in charge of this or was it like a principal or no?
He was in charge of this. Okay in second question on the finding number two it said unauthorized credit card was this like an unauthorized employee of the district no so it's like you know an outside hacker type situation correct okay thank you all
right representative painter you are recognized in one second the microphone here there we go all
Representative Stetson Painter
Unverified
12:09
right thank you mr chair just curious is this the first time that you've guys
done this before or did this have you guys done the same
thing in in years 23 school year 23 24 or 22 23 for like no this was that
Representative Howard M. Beaty, Jr.
Unverified
12:25
was the first year that they had an after hours event was that the year of the 24 25
Chair
Unverified
12:31
school year okay thank you all right senator love you recognized thank
Senator Fredrick J. Love
Unverified
12:34
you mr. chair um understanding that this is a new administration um you have put safeguards in in place for this right yes sir is there anyone left over from the old or the former administration um well i
Speaker 36
12:52
was previously an assistant superintendent but that
was not in my scope um we have our general business manager um but she is um very active in making sure that this issue doesn't happen again okay all right thank you
so I appreciate your opening comments you had mentioned that some of that oversight reviewing statements monthly now how often were they reviewed before then I don't think I could speak to that okay but it wasn't monthly it sounds like okay so we've increased that that's a good check members any other questions
Representative Howard M. Beaty, Jr.
Unverified
13:25
all right seeing none oh i'm sorry representative baity you're recognized thank you mr chair i see how you're going to do me today my question
is what what did you do to replace this for your staff and so in previous years we've had an
Speaker 36
13:49
end of year just general meeting where we talk about end of your business we just that has been a long-standing tradition for the camden fair review school district we returned to that practice this school year um so that the people
Representative Howard M. Beaty, Jr.
Unverified
13:59
that receive you know service awards we did that as well as take care of some business okay
so just a meeting talk about the end of the year reward some of your performing students and and time service and honor maybe some of the
retirees yes all right thank you and that's a great point represent Beatty thank you for chiming in I'm glad we recognized you um uh but the door prizes I think that that piqued an interest a few
members um is that a common practice to have about three thousand dollars given indoor prizes for end of year so we um those were actually miscoded to the
Speaker 36
14:34
wrong account and of course the the correction was made after the new fiscal year and so therefore i think it caused a finding even though that was corrected but most of that if i'll be honest all of it came from um local businesses that donated to support our teachers and our um our district well if they donated it wouldn't be a charge of
three thousand dollars it well it was it was
Speaker 36
14:57
something that showed up because it was miscoded the way it was placed it looked like it was operating funds but it was not that was corrected okay after the fact and would not show up on
Representative Howard M. Beaty, Jr.
Unverified
15:09
this year's audit because it happened in the 25 26 school year when which
Speaker 43
15:15
we made that correction Okay, great. Senator Love,
Senator Fredrick J. Love
Unverified
15:20
you're recognized. Thank you, Mr. Chair. So let me go on record of saying this. Now, you said in previous years you all had a business meeting. You did recognize, you know, teachers are provided awards. Now, and then just the comment that you just stated,
you said that there was local businesses that pretty much gave door prizes to show appreciation. So I guess what I'm trying to figure out is moving forward, are you all not going to try to solicit door prizes and different things to do a teacher appreciation? Because what I don't want to happen is I don't want that your teachers are not appreciated because you had this finding. I think it's about, I guess, getting all our ducks in a row
so that things are not miscoded. But teacher appreciation needs to continue, so can you speak to that? Yes, sir, I completely agree. We did not
Speaker 35
16:18
give out any door prizes this year just because we had some inclement weather.
Speaker 36
16:22
We still had a student interaction day as well as our end of the year. We just didn't have time to do a lot of that kind of stuff, but it was our plan to continue to solicit businesses to try to get some things because it is something that I think anybody recognizes that our teachers
need all the support and recognition that that's out there and they did come together for our teacher appreciation week which we really were very appreciative of our community coming together to appreciate our teachers and staff okay
Senator Fredrick J. Love
Unverified
16:53
because I think I speak for the majority here we still want our teachers appreciated we just need to make sure that we're not using district money to do it But if you're soliciting and getting sponsorships from the community that actually wants to appreciate your teachers, I think that that should continue.
Chair
Unverified
17:15
we know how to code it now. OK. All right. Thank you. Thank you, Mr. Chair. Senator Murdoch, you are recognized. Thank you,
Senator Reginald Murdock
Unverified
17:22
Chair. And to echo on Senator Love's point, and I think since I've seen this a couple of times now, And there are several districts that are trying to celebrate our teachers for their, you know, for their work and what they do. And we know that we still don't pay them enough. So when we can do those things, it should be appreciated. I do think as we make laws that you guys have to follow, that sometimes there may be made in an egregious way to you maybe to interpret them so that you don't make a mistake in executing, trying to appreciate the teachers.
Because I know there are other districts trying to do the same thing. So we don't want to discourage that. We just want to make sure that we, and we may even can change some of the laws, amend some of the laws to make sure they very much touch where they need to touch or don't touch. Because if there are donated funds to a district, then we shouldn't have a problem with donated funds being used to celebrate our teachers in whatever way that the district deems necessary. We want to make sure we don't take away from the academics and the learning and all of that,
which is, I know, not the intent of districts. So I just wanted to say it out loud again that we encourage and appreciate our teachers, and we
Representative Howard M. Beaty, Jr.
Unverified
18:44
want to continue to celebrate them. Yes, sir, I agree. Thank you. Thank you, Senator. Representative Beatty, you're recognized. Thank you again, Mr. Chair. First, on behalf of the majority, we definitely appreciate our educators, staff, and all the personnel that help educate our students. my question is for staff uh the circumstances with the awards program i think i've said on a
couple of these meetings where we've had similar findings uh is this just a one-off or do we have multiple um school districts that that have this same issue
Senator Jim Petty
Unverified
19:16
we have two um this year for the audits that we perform we do you know over 200 school districts or 200 schools including charter schools and school districts these are the only two that i'm aware of that had this type of finding are the ones being presented today
Representative Howard M. Beaty, Jr.
Unverified
19:35
and in a follow-up that no rules no laws have changed that would
cause this to be a violation or an apparent violation these laws have been in place for some time um do we know if that's part of the education for school board members as well as superintendents that they're getting that training and specifically identifying this as
Senator Jim Petty
Unverified
20:03
something that's not acceptable i know that i have presented to school district officials about issues like this or issues
involving Arkansas Constitution, Article 14, Section 2, and AG's Opinion 91-411. I can't speak to exactly what the school board members have gotten, but I could try to look that up and reach out and see if I can find out. Well, as a former banker,
Representative Howard M. Beaty, Jr.
Unverified
20:29
I always looked at audits. Sometimes it was kind of tough, but they were learning experiences, and you learned something from some of those findings, and it made you a better banker.
So I would just like to see that there are folks that learn from, you know, you learn from the mistakes of others instead of sometimes your own mistake. Maybe we get that information out to make certain that we don't have this issue before this committee again with another school district. So thank you. Thank
you, Leader Betty. Senator Sullivan, you're recognized. Thank you. I'm over here. so uh what
grade did your district get in the grading system a d i'm sorry a d and you're
Speaker 36
21:15
celebrating what now we were celebrating the end of the year the work that our teachers had done as well as the growth that our students made you have to realize our school is a high poverty school and historically those students don't do as well in achievement scores but our students made growth one of our schools made it to a c this year we were very excited about that and we're going to continue to show growth but we were also recognizing retirees because educators I'm a second generation superintendent second generation teacher and I can say that it's a hard profession
and we want to recognize those teachers for their years of service and especially if
Representative Howard M. Beaty, Jr.
Unverified
21:53
they're sticking with Camden Fairview. 30 years in
education. Yes sir I'm aware of that. So when you're giving out awards is it based on student achievement? Typically we didn't we have not done that because the BAM scores
Representative Howard M. Beaty, Jr.
Unverified
22:04
are not given to us. So what's the basis for the award for a teacher? Years of service. Years of service. And we have
Speaker 36
22:11
teacher of the year. We also have a reader's choice award. And that is the teacher of the year selected? That is, they're selected by their peers. And we use the criteria that the state puts out for their teacher of year
Representative Howard M. Beaty, Jr.
Unverified
22:23
awards to run our teacher of the year program. Okay. Well, I agree.
We certainly want to appreciate our teachers but we've made the districts the state has made significant progress just as you stated schools are improving yes it happens you know you get more of what you reward and if we reward people just for years of service you'll get more people just for years of service if we reward people for our achievement in their classroom we'll get better achievement in their
classroom I appreciate it thank you thank you thank you senator members with no further questions thank
you again for being here we appreciate your intention
to um clean this up and moving forward and thank you for being here this is without objection file
Senator Jim Petty
Unverified
23:11
is reviewed all right mr fink you're dismissed thank you the next report for the committee's review is forest city school district which had one finding the district expended 33 000 from operating funds for an end of the year celebration and entertainment event for staff in conflict with arkansas constitution and in the
referenced ag's opinion the following is a summary of questionable expenditures seventeen thousand dollars for decorations ten thousand five hundred ninety six dollars for catering and supplies four thousand two hundred thirty five dollars for entertainment and one thousand two hundred fifteen dollars for the facility rental fee that concludes the findings for forest city school district thank you mr fink all right members we're going
to invite um our guests from Forest City School District to join us at the table and when you're
ready hit the microphone button and introduce yourself for the record
Speaker 109
24:07
please. Hello my name is Dr. Zarate on Bowes interim
Senator Fredrick J. Love
Unverified
24:15
superintendent. My name is Brad Beavers I'm the attorney for the district.
Speaker 112
24:20
My name is Evetta Whitby I'm the four city school board
president thank you for being here thank you for recognize uh yourselves today um all right we'll do just like we did before if you've got any responses to the findings
Senator Fredrick J. Love
Unverified
24:32
and opening comments we'd love to hear from you i don't have a prepared opening statement i'd just like to say that we have reviewed the finding uh we we appreciate the fact that we have been invited to come today uh we heard what you've just just heard the finding obviously is very similar We understand what the issue is. We have reviewed it very carefully. I think that in our case, the major issue here was a misinterpretation
or maybe a misunderstanding about the fund that the money came from. The money that was used in our case came from a fund which had been in existence for a number of years, and it was originally from primarily a donation from a local business, and it was our understanding that that was a discretionary donation when it was used and was not an operational fund. So for that reason, that was why that funding was used for this purpose
as opposed to regular operational funding. So perhaps I think that was where our misunderstanding was. The staff obviously felt that it was an operational fund. We're not even going to take the position here that we disagree going forward because we can't change what we did in the past, but we understand what that position is. So in terms of going forward, we have agreed that we won't do this.
We won't use this fund in that way any further. We'll treat it as operational funds. We do understand that we need to follow this law and particularly this constitutional provision. And so if we treat that as falling as an operational fund, that's how it will be treated. We have already begun to do some financial training all the way up and down with our staff. I have agreed to come in and do some board training if that's what we need to do.
and I think we do about this just as was mentioned a minute ago was that perhaps the board needs some training on this and we've talked about that to make sure that they understand as well so that there's a clear understanding from the top of our structure all the way to the bottom of our financial structure that this cannot be used again like that and that every operational fund needs to be used that way. It was, to address the question, this was a big year for us last year.
We had made some strides that we felt needed to be addressed with the staff. They wanted to have a celebration for the staff that was for the entire staff, and so that's why it was taken off-site. There also were some coding eras, we think, which are being straightened out because there were some non-expendables that were for other items other than just this particular celebration or particular function that will be used and have been used again already this year for things like graduation and sports banquet and things like that.
So not all of this was expended for that one night. So those are the type things that we would bring to your attention. But the main thing to bring to your attention is that we're going to be very careful going forward not to run afoul of this constitutional provision and this attorney general's opinion now that it has been brought to our attention. And I will do everything in my power to make sure that the board and the financial staff is well aware of that. And certainly Dr. Bowles is now aware of it as our interim superintendent.
Thank you for the
comments. Yes, I think this does show an egregious error in judgment here. I think my first question is, before the purchases were made, before
the charges were made, did the board sign off on
this ahead of time, before these were purchased? I do
Senator Fredrick J. Love
Unverified
28:52
not think that there was a board, a specific board vote on these charges.
I think it was brought to the board's attention that the celebration would be held, and what the purpose of the celebration
Speaker 117
29:07
was. But I do not think the specific charges were brought
to their attention. No, sir. Okay, thank you. Representative
Representative Stetson Painter
Unverified
29:15
Painter, you are recognized. Thank you, Mr. Chair. Like I asked the previous school, how many times
before has this occurred? To my knowledge, and I stand to be corrected, to
Senator Fredrick J. Love
Unverified
29:27
my knowledge it had never occurred in this format before where it was an after-hours, off-campus-type situation.
And I can give you from some standpoint that I have been involved with the schools as their attorney since 1983. But more importantly, since 1984, up until about five years ago, I had a family member, one or another, that was an employee of the district. And to my knowledge, I never recall anything like this. Gotcha. But they did have end of
Representative Stetson Painter
Unverified
29:59
the year, you know, like saying thank you to the teachers and all that stuff, but just not what you mean as big as like $33,000.
Senator Fredrick J. Love
Unverified
30:09
No, I mean it's big. I mean, having an off campus award ceremony, I think they would have some kind of maybe end of the year where they'd recognize retirees and that kind of thing. But I don't know that they had one where they were recognizing, you know, growth and that type of thing like they did this year to make that big a deal about it to
Chair
Unverified
30:33
say we really worked hard and we made
Senator Fredrick J. Love
Unverified
30:36
some strides this year. All right. Thank you for the clarification. Thank you, Mr. Chair. Senator Love, you're recognized. I guess my question may also be for staff, but am I understanding correctly that these
were private dollars that were provided to the school, or are these school operational funds? Which one were they? To get very
specific, they were originally what was called Pepsi funds. And back in the early 2000s, Pepsi came in and signed agreements with the school that if we would exclusively allow Pepsi to sell on our campus,
they would not only sell and give us a commission on each bottle of Pepsi product, but they would donate significant funds to the school district as a donation each year. And on top of that, if you went to many, many districts across the Delta, you would see a scoreboard that said Pepsi, and it was donated as well. And those were the type of transactions that were how they donated funds to the district.
And it was, I don't know whether it was advertising, I don't know if it's advertising dollars on their side of the ledger sheet or not. From our side, it was a donation. Because we
didn't give them anything for it other than the right to put their machine in our building. Okay. So I guess now to Steph. So Mr. Fink, are these classified as operational dollars, or are they private donations? I guess that's going to be the big determining factor.
I mean, if it's private donations, then that's one thing. If it's operational dollars, it's another. And so I'm just trying to kind of clarify, because just like the previous, there were private dollars, and I'm not sure why the schools are being dinged for using private dollars to celebrate teachers. So if you can provide me with that clarification from
Senator Jim Petty
Unverified
32:55
an audit standpoint. Yes, sir. We've been pretty consistent in our practice for a long time. probably going back, I would say, 15 years or more on this issue with these Pepsi or Coke contracts.
When we've come to expenditures that we feel like are not in accordance with the Constitution, as interpreted in that AG's opinion, we have issued findings in the past. We feel that those funds were operating based on the fund and source code that they were in. If you look at it closer in their response, they said historically this fund has been used to support various school purchases.
In addition, the governing agreement for this funding source does not clearly outline specific allowable or unallowable uses. And so if there is no specific criteria mentioned by the person donating, we would expect those funds to be used for school purposes, especially because the contract was entered into by the school district. um and so we would expect that to be used for a proper business purpose we've had we've looked at a lot of ag's opinions over the years concerning this issue and we've been very consistent with
writing findings related to it and that would be our our position all
Senator Fredrick J. Love
Unverified
34:26
right okay so the so technically they're not operational funds but once they reach the school balance sheet they become operational funds senator I think they
they are operational funds and that was part of the testimony we heard today that there
was a commingling of that's my phrase a commingling of accounts or buckets a mixture of operational funds and donation dollars and that's what brought some confusion okay this
Senator Fredrick J. Love
Unverified
34:58
is this is a interesting topic because but but I will I would
I would digress and now I will listen to further testimony thank you senator senator Sullivan you recognized thank you mr. chair so essentially
Speaker 128
35:16
you're getting a kickback I would I wouldn't
say that I know you wouldn't say that but that's what the blr say that's what the auditor is saying the money goes from you to them and then they give
you money to put back in your account now you can call it what you want and i'm okay with that well you but it goes back to your account correct the
Senator Mark Johnson
Unverified
35:39
prop the problem senator is we never give them anything well
you gave them the service they're providing a service
Senator Mark Johnson
Unverified
35:46
for you? They provided some machines. That's all they put. I don't want to get in an argument with you, but I don't know what we gave them other than a place to put a machine.
They're providing a product, and for that product to be placed there, they're giving you an amount of money, and you are to put that back into the, and I asked this to the chair, that money was to go back, and the finding was the money goes back into into the general fund is that correct that is correct
according to the constitution and the opinion of the AG thank you and what grade did your school receive oh we
had a D grade D letter grade and so your celebration is assault and when you have a celebration
it's a celebration for what purpose we were celebrating
Speaker 139
36:35
growth and what was your growth score I'm not I'm not I'm not I'm not at this time so you don't know if it was growth or not well I know that we were celebrating growth based on the awards that we were given at that time so I'm just trying to understand so
you're celebrating growth yes sir but you don't know that there was growth
Speaker 109
36:56
no I do understand that there was growth which
is what we celebrate mr. chair can they send that information to the chair
Speaker 141
37:03
what the growth score was we'll ask you
to get that with our staff please okay okay and and when you are rewarding your folks and i'm all for rewards i think it's a great thing again you you get more of what you reward uh so in that context what were you what was it you were rewarding your staff for yeah for their hard
Speaker 139
37:23
work during the year so is it is it by individual or as a group yes there was individual awards given at their time and
their individuals were rewarded for what purpose for growth for and they had scores to that that demonstrate that growth yes sir okay mr. chair could I ask we get that information also absolutely great thank you thank you very much
Speaker 38
37:45
thank you senator representative Beatty you're recognized thank
Representative Howard M. Beaty, Jr.
Unverified
37:49
you mr. chair the the agreement that you had with Pepsi is that is
that still an ongoing agreement with the district and
Senator Fredrick J. Love
Unverified
37:58
and pepsi no sir that agreement uh was made in 2008 it was a five-year agreement and so whatever funds accrued from that agreement have been there since that agreement ended i i want to say and and i i cannot say this for sure that it may have been extended for two or three years on a yearly basis after that but I am not positive of that
Representative Stetson Painter
Unverified
38:27
and I could not find any one-year addendums or anything like that so the only thing that we could find was the one five-year contract and I think when we looked the the
Senator Fredrick J. Love
Unverified
38:39
money and Mr. Fink may be able to tell you tell me this that I don't think there was any money deposited after 2014 or something like that so there's been nothing put in that account for well over a decade so that money has just been sitting there for well over a
Representative Howard M. Beaty, Jr.
Unverified
38:57
decade so follow-up question what's the balance
still remaining in that account today staff or
Representative Stetson Painter
Unverified
39:09
the school district you you just got too
far in the weeds for me we'll have staff look that up here yeah i'm trying to get that information all All right, and then a quick
Speaker 109
39:24
follow-up. How many employees attended this event? There are about 200 to 250 employees. 200 to 250?
Representative Howard M. Beaty, Jr.
Unverified
39:29
Yes, sir. So what would that be on that $33,000 divided by 250? About $130, $125 an employee? Possibly. Yeah. All right. We'll wait and see if there's money left in the account and if there are clear guidelines on how that money can be spent. Did we go back and look as part of the audit on funds expended from this account in the past to see exactly how they were used in previous years?
Well, Representative Beatty, we did look here. Mr. Fink has a note
Senator Jim Petty
Unverified
40:08
on some of your questions. Awesome. okay so concerning the the catering um what we what we looked at we looked at the invoice and there was dinner catering for 350 people dessert catering for 300 people and the price came out to 30 a plate um as far as the balance of that fund at june 30 2025 it it was um just over 34 000
dollars and um as mr beavers stated it was the the balance was made up from a prior year so um and we had always included that for financial statement reporting purposes as an operating fund because it is recorded in fund 2995 which is a general fund account good
thank you thank you representative Mr. Beavers, you said you had the contract from 2008.
Maybe you had reviewed it or seen it. What was that initial amount for a five-year
Senator Fredrick J. Love
Unverified
41:16
contract? Do you have that number? I'm sorry. I don't have that amount, and I don't recall that it was a lump sum. I think it was so much per year and that they would do the school board. I mean, I think it was, you know, a yearly and annual type donation.
Speaker 151
41:37
And then they were going to pay so much for each case that ran through the school.
Okay. Thank you. Representative Hall, you are recognized. Thank you, Mr. Chair. Hey, thank
Representative Brad Hall
Unverified
41:49
you all for being here. Sometimes when stuff like this comes up, the people won't even show up, you know, to be accountable for it. So I thank you all for that. I just had a couple questions here. Was it moved off campus this year so they could maybe drink alcohol or was they just drinking Pepsi at the party?
Representative Stetson Painter
Unverified
42:10
To my knowledge, there was, and I don't know whether it was Pepsi, but there was
Speaker 74
42:17
no alcohol. Is that right? No, there was
Senator Fredrick J. Love
Unverified
42:21
no alcohol. Okay. Okay, and the reason, let me clarify, the reason to move it off campus that I was explained was that they wanted to make it a special celebration for all the staff, and if you do it on campus, then you make it a celebration for the, maybe the licensed and maybe the academic staff, but the food service people have to work, the janitorial staff has to work.
Whereas if you move it off campus, you can celebrate everybody's work. Okay.
Representative Brad Hall
Unverified
42:53
And final question. Did you invite your state representative or state senator there to this party? I think that I've got
Senator Fredrick J. Love
Unverified
43:02
one of each here, and I don't know the answer to that. Okay. I can tell you that their lawyer did not go. Okay. All right. Thank you. Does that assist in answering your question? Well, yeah, yeah. I guess so. Thank you.
Chair
Unverified
43:18
Thank you for the question. Representative Hollowell,
Representative Steve Hollowell
Unverified
43:22
you're recognized. Thank you, Mr. Chairman. I think you said that the board vote to do this, or was there any input from the board
Representative Stetson Painter
Unverified
43:30
when they decided to do this? My answer to that, Representative Hollowell, was that I do not think there was a formal board vote. Okay. I think it was discussed with the board that it was going to happen, what the purpose of it was, that. But I do not think there
Representative Steve Hollowell
Unverified
43:47
was a formal board vote. No, sir. Okay, another question is, on the Pepsi slush fund, were y'all aware of that before this audit, the Pepsi funds?
Representative Stetson Painter
Unverified
43:57
Yes, sir. But I don't think they made any
Senator Mark Johnson
Unverified
44:02
slushes out of them. I'm sorry. Y'all, please excuse me. Representative Hollowell and I go back a long way. But, yes,
Representative Stetson Painter
Unverified
44:10
we knew about the Pepsi funds. I know that one thing I've seen as early as 2015, there was a question I asked about using a certain kind of fund for something, and the answer was we should, rather than using the Boar's Head money, we should use the Pepsi money because it is totally discretionary.
Senator Fredrick J. Love
Unverified
44:30
So it's been known that it was there. It has been used for various items. I don't think anything nearly
Representative Steve Hollowell
Unverified
44:38
this big, Representative Hollowell. Okay. Where was the location of the celebration?
Speaker 159
44:43
I believe the Civic Center, Steve. Civic Center, okay. I mean, Representative
Representative Steve Hollowell
Unverified
44:46
Holloway, pardon me again. Yes. Okay, that's all I've
got right now. Thank you. Thank you. Members, any
other questions? Well, thank you again for being here. I think probably one of the biggest takeaways is totally discretionary has been stretched, I think, a little far here.
Yes. I think that's why we're here. Yes. Appreciate it again for the comments and the learnings from all of us through this process. Members, without any objection, it will be filed as reviewed. Thank you again for being here. Thank you,
Senator Fredrick J. Love
Unverified
45:14
and again, we will make every effort to see that this does not reoccur and that we are not sitting in front of you again. Thank you. I think the last time for this district I sat
Representative Stetson Painter
Unverified
45:24
in front of this committee was nearly 20 years ago, and I intend not to be here again when I'm 90. Good. Thank you so much.
All right, members, we will move forward in the agenda.
I will give you a note that we missed some
of our esteemed guests that just stepped out. We've got some interns that are joining the legislative audit team. They're going to come back, and we're going to recognize them. Let's make sure we give them a round of applause. We may even try to scare them and tell them they have to do the national anthem or something. But make sure we give them a round of applause when they come
back. But, Mr. Fink, let's move forward with a few of
Senator Jim Petty
Unverified
46:03
these next reports. The next three reports contain findings which were certified to the Governmental Bonding Board
and referred to the applicable prosecuting attorney as well as the Attorney General. The first is Conway School District, which had one finding. Former employees in the maintenance department of the district misused district funds and resources for personal use. The misuse of district funds was discovered through an independent investigation performed by an attorney investigator brought on by a whistleblower i wanted to add just one item to this legislative audit was requested
by the prosecuting attorney to do an investigative report on this matter and that report is still ongoing and will be presented to the
Speaker 171
46:48
legislative joint auditing committee after its completion all right members any questions
all right without any questions this will be reviewed and filed
Senator Jim Petty
Unverified
47:03
next is magnolia school district it had one finding our analysis of high school activity funds for the period july 1 2024
through june 30 2025 revealed undeposited funds of 8 249 dollars the high school secretary who resigned effective June 30, 2025 was custodian of the funds. Furthermore, through inquiry of district staff and examination of activity fund sponsor receipts, it appears an additional $13,539 collected by the sponsors and turned into the secretary was not deposited. That concludes the finding for Magnolia School District. Thank you members. Any questions on this finding?
All right. Seeing none, that'll be filed. and members let's pause here
for a second if we could recognize as they're coming through in the back of the room we've got a great group of our interns that are interning for the legislative audit team let's give them a hand now i believe they are making their rounds across the different committees and subcommittees today but i want to make sure we shout out we've got members joining
us from harding from uca from university of arkansas uh from uh arkansas state and i'm sure proud of we've got someone from john brown university my at almond water so so thankful y'all are here welcome and we'll hopefully connect with you after our meeting today thank you give a hand thanks all right mr
Senator Jim Petty
Unverified
48:46
fink the next finding next report is west side school district which had one finding a review of district credit card transactions for the period july 1 2024 through
january 31 2026 revealed thirty thousand dollars in credit card charges that were either not documented or had no documented business purpose at the time payment was issued subsequent to audit review the district obtained documentation that supported the business purpose of charges totaling $20,000. The remaining credit card charges totaling $9,500 and listed below could not be substantiated with the business purpose. Of this amount, charges were made by the superintendent, which included $3,464 charged at local restaurants, $3,395 of which was purchased
using the superintendent's credit card, $2,235 charged for travel meals and lodging, all of which was purchased using the superintendent's credit card and $1,186 of which consisted of undocumented meal purchases. According to the superintendent, $1,161 of this amount was used to purchase meals for athletic teams participating in school-related events. However, without supporting documentation, the validity of these purchases could not be determined.
$2,023 charged for miscellaneous items, $1,872 of which was purchased using the superintendent's credit card, $1,797 charged for fuel, $50 of which was not documented, and $1,723 of which was purchased using the superintendent's credit card. In addition to the items listed, the district lacked internal controls over credit card purchase as evidenced by the following. Employees charged personal items totaling $1,200 on the district's credit cards.
All personal charges were reimbursed to the district in a reasonable period except $415 that was reimbursed by the superintendent when notified by audit staff. Numerous items purchased with the district credit card were shipped to employees' personal addresses. And that concludes the finding for Westside School District. Thank
you, Mr. Fink. Members, you've heard this. Any questions? Okay, seeing Representative Long, you're recognized. - Thank
Representative Wayne Long
Unverified
51:07
you, Mr. Chairman. Mr. Fink, does the superintendent
still work from this district? - Yes, sir, I believe he does. - And what level of incompetency does it take before it becomes a criminal matter as far
Senator Jim Petty
Unverified
51:25
as referring it to prosecuting attorney? - This finding was referred to the prosecuting attorney. -
Representative Wayne Long
Unverified
51:30
I'm very sorry, I misheard that. thank you
no that's it's a good call it though reps of long there are as leg audit reviews and goes through their audit process some are automatically
triggered to prosecuting turn referred to prosecuting attorney and that this is definitely
one of those all right members any other questions
Speaker 178
51:53
all right we'll move forward oh that will be
Senator Jim Petty
Unverified
51:59
filed without objection the next report was referred to the prosecuting attorney and attorney general and it was for boonville school district it had one finding the district paid 7 300 to a board member's son for part-time seasonal groundskeeping services performed from june 2024 to december 2024 arkansas code prohibits the
district from hiring a board member's family member and paying compensation in excess of five thousand dollars unless the commissioner of education issues a letter of exemption and improves the employment contract on march 11th 2025 the board approved a resolution to hire the board member's son and submitted the exemption request to desi after reviewing the board's resolution desi denied the exemption request on may 5th 2025 that concludes the findings for boonville school district
Speaker 171
52:47
members any questions all right with that objection be filed
Senator Jim Petty
Unverified
52:56
the remaining eight reports with findings um or the remaining eight reports uh with findings contain findings that were not repeat and these were not referred to the prosecuting attorney or the attorney general staff recommends the committee take a moment to look over these reports and file in mass as reviewed all right members take a
quick second to scan through those eight and if there's no questions i'll give you a second
all right again these are not repeat findings these were not referred they've been
in communication with the districts while they work through these findings just like they would with every audit but has not been referred to prosecuting attorneys all
right members without any questions these will be filed in mass without objection the
Senator Jim Petty
Unverified
53:55
remaining 89 reports on the last few pages of the
synopsis were audits with no findings staff recommends that these be filed in
mass as reviewed all right members any questions on the
89 with no findings all right congratulations to those school districts hopefully you're seeing those from your districts that you represent and I would recommend that you tell them great job and that in fact that's something that staff and I we we talked about um today that you know the bulk of the work that we spend our time on are on the situations that get that have findings that that need to be brought to the table but the overwhelming
percentage of our school districts have no findings and so today is a great example that after the audits are completed we have 89 in this wave that had no findings so congratulations to them we really cheer them on as well all right members seeing other questions no other new
business, we will stand in adjournment. Thank you.
Agenda
A. Call to order by Co-Chairman.
B. Adoption of Minutes of the March 12, 2026 meeting.
C. Review of Reports. Refer to the Synopsis
D. New Business.
E. Adjournment.
Documents
No documents posted.
Speakers
Speaker 1
Speaker 2
Speaker 7
Speaker 10
Speaker 12
Senator Tyler Dees Chair
Unverified
Speaker 26
Speaker 29
Senator Jim Petty
Unverified
Speaker 34
Speaker 37
Speaker 36
Speaker 41
Speaker 43
Representative Wayne Long
Unverified
Representative Stetson Painter
Unverified
Representative Howard M. Beaty, Jr.
Unverified
Chair
Unverified
Senator Fredrick J. Love
Unverified
Speaker 35
Senator Reginald Murdock
Unverified
Senator Dan Sullivan Chair
Unverified
Speaker 109
Speaker 112
Speaker 117
Speaker 128
Senator Mark Johnson
Unverified
Speaker 139
Speaker 141
Speaker 38
Speaker 151
Representative Brad Hall
Unverified
Speaker 74
Representative Steve Hollowell
Unverified
Speaker 159
Speaker 171
Speaker 178