Legislative Joint Auditing-Educational Institutions
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call this meeting to order thank you for being here with the chair sees a quorum invite y'all to stand up as a senator umulllivan's gonna start us in prayer
Speaker 29
5:25
thank you senator members you've got the agenda in front of you cochair furman
and I we're gonna kick this off today. thank you for being here and 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 got a motion we got a second all in favor signaled by saying aye pose like sign. all right motion is passed. right we'll move to C on your agenda that's review of the reports Mr. Fink you recognize.
Senator Jim Petty
Unverified
5:56
thank you Mr chairir 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 we will begin with the two audits which were deferred from the prior meeting. the first one iscamden Fairview School District which had two findings finding one the district expended a little over $10,000 from operating funds to host an end
of year awards banquet for employees in conflict with Arkansas Constitution as interpreted in the reference to AG's opinion. The following is a summary of the of the expenditures7,260 dollars for meals for employees and guests $2,958 for door prizes450 dollars 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 and that concludes the findings forcamden Fairview School District. there are representatives from the district present to answer any committee questions. you Mrfink all right this time we will inviteen in Fairview and 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
Speaker 37
7:49
Armstrong, superintendent Samantha dodson the business manager. you all right you are
recognized if you want to just in any opening comments to the findings
Speaker 36
7:59
we'd love to hear from your team. OK good afternoon ladies and gentlemen of the standing Committee on Educationalstitutions chairman Senator Deeses and Representative Duke. My name iserra Armstrong and I've served as the superintendent of thecamden Fairview School District since July 1st,2025. Thank you for allowing CFSD to respond in person to the legislative audit findings from the 2425 school year. Let me understand. let me begin by saying that this district fully acknowledges the issues that led
to both audit findings and under my administration we have implemented measures to strengthen oversight align 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 regarded the unauthorized credit card charges between September 9,2024 and February 27,202 5 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 CFSDusiness office prior to payment and reconciled to supporting documentation. Any discrepancies are immediately reported to the issuing bank to ensure timely disput e 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 districtowned 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 to 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 thecamden Fairview school students, staff and families. thank you for your time and consideration. Thank you. I appreciate
right I'm seeingpresentative Long. let me get you going here all right hold
Representative Wayne Long
Unverified
11:19
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 are you talking about is there a new
Representative Wayne Long
Unverified
11:37
superintendent after this had occurred that is correct but so it was the superintendent that had he's 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 and second question on the finding number 2 it said unauthorized credit card was this like an unauthorized employee of the district or so it's like you know an outside hacker type situation thank you all rightpresentative painter
you are recognized in one second ho ne here there we go thank you Mr chairir. just
Representative Stetson Painter
Unverified
12:14
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 23,2422,23. for like no this was this was the first year that they had that after hours
Representative Howard M. Beaty, Jr.
Unverified
12:30
event was that the year of the 2425 school year. thank you all right senator Love you're
Senator Fredrick J. Love
Unverified
12:38
recognized thank you Mr chairir understanding that this is a new administration you have put safeguards in in place for this right sir Is there anyone left over from the old or the former administration well I was a
Speaker 36
12:57
previously an assistant superintendent but that was not in my scope. we have our general business business manager but she is very active in making sure that this issue doesn't happen again. all right thank you
So I I appreciate your opening comments. you had mentioned that some of that oversight reviewing statements monthly now how often were they reviewed before then? don't think I could speak to that but it wasn't monthly it sounds like ok so we've increased that that's a good check. members any other questions right seeing none oh, I'm sorry Representative beatty you're recognized thank you Mr chairir. I see how you're gonna do me today. my
Representative Howard M. Beaty, Jr.
Unverified
13:42
question is what what did you do to replace this for your staff and so in previous years we've
had an end of year just general meeting where we talk about end of your business
Speaker 36
13:54
we just that has been a long standing tradition for thecamden Fairview school district. we returned to that practice this school year. so that the people that received, you know, service awards we did
Representative Howard M. Beaty, Jr.
Unverified
14:03
that as well as take care of some business. OK, so just a meeting to talk about the end
of the year reward some of your performing students and
and time service and honor maybe some of the retirees all right
thank you and that's a great pointrpson beatty thank you for chiming in. I'm glad we recognized you but the door prizes I think that that piqued an interest a few
members is that a common practice to have about3,000 dollars given in door prizes for end of year parties we those were actually miscoded
Speaker 36
14:38
to the 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 local businesses that donated to support our teachers and our our district if they donated it wouldn't be a charge of3,000 dollars.
well it was it was something that showed up
Speaker 36
15:02
because it was miscoded the where it was placed it looked like it was operating funds but it was not. That was corrected after the fact and would not show up on this year's audit because it
Representative Howard M. Beaty, Jr.
Unverified
15:15
happened in the 2526 school year in which we made that correction.
Senator Fredrick J. Love
Unverified
15:25
me go on record as saying this now he said in previous years you all had a business meeting you did recognize you know, teachers are are provide awards. Now and and then and you just the comment that you just stated you said that there was local
businesses that pretty much gave door process to show appreciation. So I guess what I'm trying to figure out is moving forward are you all are you all not going to try to solicit door process and different things to to do a a teacher appreciation cause what 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 and but teacher appreciation needs to continue so sir you completely agree we did we did not give out any door prizes this
Speaker 35
16:23
year just because we had some inclement weather. it kind of you know we
Speaker 36
16:27
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 is our plan to continue to solicit businesses to try to get some things because it is something that I think anybody recognizes that you know 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. OK because I think I speak
Senator Fredrick J. Love
Unverified
16:58
for the majority here we still want our teachers to appreciate that we just need to make sure that we're not using district money to do it but if you're soliciting and and getting sponsorships from the community that actually wants to appreciate your teachers. I think that that should continue to go on and assure you that we know how to code it now. OK, all
Chair
Unverified
17:19
right thank you thank you Mr Chair Senator Murdock you are recognized thank you chair and to echo on Senator Love's point and I think since
Senator Reginald Murdock
Unverified
17:27
I've seen this a couple of times now and there are several districts is 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 you know 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 of amend some of the laws to make sure they're 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 of amend some of the laws to make sure they very much touch where they need to touch it don't touch it because if they're donated funds
to a district then we don't have we shouldn't have a problem with donated funds being used to celebrate our teachers in whatever way that that the district makes deems necessary is take we don't want we want to make sure we don't take away from the academics and learning and all of that which is I know not the intent of of districts so just wanted to say it out loud again that we encourage and appreciate our teachers and we want to continue to celebrate them sir thank you thank you senator Representative beatty you recognized. Thank
Representative Howard M. Beaty, Jr.
Unverified
18:49
you again Mr chairir. First, on behalf of the
majority we definitely appreciate our educators staff and and all the the personnel that that help educate our students my question is for staff the circumstances with the awards program I I think I've said on a couple of these meetings where we've had similar findings is is this just a one off or do we have multiple school districts that that have the same issue we have two this year for the
Senator Jim Petty
Unverified
19:24
audits that we've 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 and and a
Representative Howard M. Beaty, Jr.
Unverified
19:40
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 do we know if that's part of the
education for school board members as well as superintendents that they're they're getting that training and specifically identifying this as something that's not acceptable
Senator Jim Petty
Unverified
20:08
I know that I have presented to school district officials about issues like this or issues involving Arkansas constitution Article 14section2 and AG's opinion 91411. I can't
speak to exactly what the school board members have gotten but I could I could try to look that up and and reach out and see if I can find out well as as
Representative Howard M. Beaty, Jr.
Unverified
20:34
a former banker I I always looked at audits sometimes it was kind of tough but they were they were learning experiences and and he learned something from some of those findings and it made you a better a better banker and a and a 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 leaderader betty Senator Sullivan
you're recognized thank you. I'm over here so what grade did your district get and the grading
system ad I'm sorry a d and you're celebrating what now we were celebrating the end of the year
Speaker 36
21:21
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 and achievement scores but we're our students may growth. one of our schools made it to a C this year and we were very excited about that and we're going to continue to show growth but we were also recognizing retirees because educators umm I'm a secondgenation superintendent,2ndation teacher and I can say that it's a hard profession and we want to recognize those teachers for their years of service
Representative Howard M. Beaty, Jr.
Unverified
21:58
and especially if they're sticking withcamden fair years
in education yes sir'm aware of that you're giving out awards is it based on student achievement it's typically we didn't we don't have not done that because the
Representative Howard M. Beaty, Jr.
Unverified
22:09
va scores are not given to award for years of service years of service and we have teacher of the year we
Speaker 36
22:16
also have a readers's choice award 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
22:30
awards to to run our our teacher of the year
program. OK well I agree we certainly wanna appreciate our teachers but we've made the districts the state has made significant progress just as you stated schools are improving 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 will 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 clean this up and move forward
and thank you for being here this is without objection ffiled as reviewed right Mr. Fink you're dismissed
Senator Jim Petty
Unverified
23:16
thank you the next report for the committee's review is forre city school district which had one finding the district expended33,000 dollars from operating funds for an end of the year' celebration and entertainment event for staff in conflict with Arkansas
Constitution and in the reference AG's opinion the following is a summary of questionable expenditures $17,000 for decorations,10,596 dollars for catering and supplies4,235 dollars for entertainment and $1,215 for the facility rental fee that concludes the findings for forre City School District Thank you Mr. Fink. All right members we're going to invite our guests from Forre City School
District to join us at the table
and when you're ready hit the microphone button and introduce yourself for the
Speaker 109
24:12
record please. Hello, my name is Doctor Zarain onbos interim superintendent
Senator Fredrick J. Love
Unverified
24:20
My name's Brad Beavers I'm the attorney for the district my name is
Speaker 112
24:25
Yvetta Whitby I'm the four City school board president thank you for being
here thanks for recognizing yourselves today. all right we'll do just like we did before if
you've got any responses to the findings and opening comments we'd love to
Senator Fredrick J. Love
Unverified
24:41
hear from you. don't have a prepared opening statement I'd just like to say that we have reviewed the finding we we appreciate the fact that we have been invited to come today we heard what you've just just heard the finding obviously is very similar we understand what what the issue is we have reviewed it very carefully I think that in our case the the
major issue here was a misoper misinterpretation or maybe a misunderstanding about the fund that the money came from itu the money that 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 that was why that funding was used for this purpose as opposed to regular operational funding so perhaps I think that was where our our misunderstanding was the the staff obviously felt that it was an operational fund we're not we're not even gonna take the the 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 for in terms of going forward we have agreed that we won't do this we won't use this fund in that way any any further will treat it as operational funds we do understand that we 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 and do some board training if that's what we need to do and I think we do about this just as 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 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 every operational fund needs to be used that way it was to address the question this was a 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 errors we think which are being straightened out because
there were some nonexpendables that were for other items other than just this particular celebration or particular function that'll be used and have been used again already this year for things like graduation and the sports banquet and things like that so not all of this was expended for that one night so those are the type things that that we would bring to your attention. but the main thing to bring to your attention is that we're gonna 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 Do Bows is now aware of it as our interim superintendent.
thank you for the comments yes
this does I think this does show an egregious error in judgment here I I think my first question is
before the the purchases were made before the charges were made did the board sign off
on on this on ahead of time before these were purchased I do not
Senator Fredrick J. Love
Unverified
28:57
think that there was a board a 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 was but I do not think the specific charges were
youpresentative Painter you are recognized. Thank you Mr Chair
Representative Stetson Painter
Unverified
29:20
like I asked the previous school how many times before has this occurred to my knowledge and
I and I stand to be corrected to my knowledge it had never occurred in
Senator Fredrick J. Love
Unverified
29:32
this format before where it was an after hours off campus type situation OKok and and I can 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 or one or another that was an employee of the district and to my knowledge I never recall anything like this. gott you but they did have end of the year, you
Representative Stetson Painter
Unverified
30:04
know like saying thank you to the teachers and all that stuff but just not what you mean as big as like33,000 dollars mean it's big I mean having an off campus
Senator Fredrick J. Love
Unverified
30:18
awards ceremony I I 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 and that type of thing like they did this year to make that big a deal about it to say we we really worked hard and we made some strides this year all right
Senator Fredrick J. Love
Unverified
30:41
Senator Love, you are recognized thank you and I guess my question may also be for staff but you are
is is it am my understanding correctly that these were private dollars that was that were provided to the school are these are these school operational funds which which one were they were they were to get 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 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 of transactions that that where how they donated funds to the district and they it was I don't know whether it was advertised I I don't know if it's advertising dollars on their side of the ledgerho or not from our side it was a donation because we didn't give them anything for it other than the right to put the
machine in our building so I guess now to Steph so Mister Fink are are these not classified are these classified as operational
dollars or are they are they private donations? I guess the I guess that's gonna be the that's gonna be the big determining factor I mean if it's a 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 de clarification from from the artist standpoint
Senator Jim Petty
Unverified
33:00
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 that don't we feel like our are not in accordance with the constitution as interpreting thatagG's opinion we have issued findings in the
past we feel that that those funds were operating based on the fun and source code that they were in if you look at it closer in their 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 you know criteria mentioned by the person donating we would expect those funds to
be using for use for school purposes especially because the contract was entered into by the school district 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
Senator Fredrick J. Love
Unverified
34:29
so the so technically they're not operational funds but once they reached 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 a combingling of that's my phrase a commingling of of accounts or buckets a mixture of operational funds and donation dollars and that's what brought some confusion.
Senator Fredrick J. Love
Unverified
35:01
OK. this is this is a interesting topic because but but will our
digress and our I will listen to further testimony. thank youenator Senatorulllivan you're recognized thank you Mr chairir. so essentially you're getting a kickback I
would I wouldn't say that you wouldn't
say that's where the auditor is saying the money goes
from you to them and then they give you money to put back in your
account and you can call it what you want and I'm ok with that but it goes back to your account correct? problem senator is we never give them anything
Senator Mark Johnson
Unverified
35:44
where you gave them the service they're providing a service for
you they they provided some machines well that's all they don't
Senator Mark Johnson
Unverified
35:53
want to get in that don't either but I don't know what we gave them other than a place to put a machine and they didn't they're
providing a product and for that product to be placed
there they're giving you an amount of money you and you are to put that back into the and I ask 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?
we had ad grade dle grade and so you celebration is a c and when you have a celebration it's
a celebration for what purpose? we were celebrating growth was
Speaker 139
36:40
your growth score? I'm not I'm not I'm not I'm I don't know at this time so you don't know if it was growth or not. Well I know that we were celebrate and grow based on the awards that we were given at that time so just trying to understand so you're celebrating growth but you
don't know that there was growth. No, I do understand that there was growth which is what we were celebrating can they
send that information to the chair what the growth score was we'll ask
staff please ok and and when you are rewarding your folks and I'm all for a rewards I think it's a great thing again you you get more of what you reward. so in that context what were you what was it you were rewarding your staff for? for their hard work during
Speaker 139
37:28
the year it is it by individual or as a group? Yes that was individual awards given at that time and
there are individuals who are rewarded for what purpose for growth fores to that that demonstrate that growth sir ok Mr chairir could I ask if we get that information also great thank you thank you very much thank you Senator Representative beatty
Representative Howard M. Beaty, Jr.
Unverified
37:54
agreement that you had with Pepsi is that is that still an ongoing agreement with the district and and Pepsie? that agreement was made in
Senator Fredrick J. Love
Unverified
38:05
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 and I could not find any one year addendums or anything like that so the only thing that
Representative Stetson Painter
Unverified
38:38
we could find was the 15 year contract and I think when we looked the the money and and Mr
Senator Fredrick J. Love
Unverified
38:44
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 decade so follow up question what's the balance still remaining in that account today?
Representative Stetson Painter
Unverified
39:08
Staff or 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 right and and then a quick follow up. how how many
Speaker 109
39:29
how many employees attended this event there are about 200 to250 employees 200 to250 sir so what would that be on that33,000 divided by 250.
Representative Howard M. Beaty, Jr.
Unverified
39:41
about $130 125 dollars an employee possibly yeah all right we'll wait and see if there's money left in the account and 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 how they were used in in previous years Well Representative beatty we we did look here Mr.
Senator Jim Petty
Unverified
40:11
questions awesome so concerning the the catering what we what we looked at we looked at the invoice and there was dinner catering for350 people dessert catering for300 people and the price came out to30 dollars a plate as far as the balance of that fund at June30,2025. it it was just over34,000 dollars.
and as Mr beaver stated it was the the balance was made up from a prior year. so and we had always included that for financial statement reporting purposes as an operating fund because it is recorded in fund2995 which is a general fund account. thank you thank youpresentative Mr beavers
did you said you had the contract from 2008. Maybe youd reviewed it or seen it what was that initial amount
for a five year contract? do you have that number? got
Senator Fredrick J. Love
Unverified
41:21
that I'm sorry I don't have that amount and I don't recall that it was a 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 a yearly and annual type donation and then then they were gonna pay
Speaker 151
41:42
so much for each case that ran through
the school. thank you uhpresentative Hall, you
are recognized Thank you Mr chairir. Hey, thank y'all for being here. Sometimes when
Representative Brad Hall
Unverified
41:54
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 of questions here. was it moved off campus this year so they could maybe drink alcohol or was they just drinking pepsi at the party it to my knowledge there was
Representative Stetson Painter
Unverified
42:16
and I don't know whether it was Pepsi but there was no alcohol is that
Senator Fredrick J. Love
Unverified
42:26
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 if you do it on campus then you you make it a celebration for the maybe the the licensed and maybe the 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 OK and final question, did you
Representative Brad Hall
Unverified
42:58
invite your state representative or state senator there to this I think that I've got one of each year and
Senator Fredrick J. Love
Unverified
43:07
I don't know the answer to that just I can tell you that their lawyer did not go all right thank you does that does that assist in answering your
question yeah yeah I guess so thank
Chair
Unverified
43:20
you thank you for the question Representative Holliwell you're recognized thank you Mr
Representative Steve Hollowell
Unverified
43:27
Chairman. I think you said that the that the board vote to do this or was there any input from the board that when they decided to do this
Representative Stetson Painter
Unverified
43:35
my my answer to thatpresentativehlllowwell was that I do not think there was a formalvo board vote I think it was discussed with the board that the that the that it was gonna happen with the purpose of it was that but I do not
think there was a formal board vote no
Representative Steve Hollowell
Unverified
43:52
sir OK another question is on the Pepsi slush fund does it do y'all were y'all aware of that before this audit? the pepsi funds yes sir but I don't
Representative Stetson Painter
Unverified
44:02
think they made any slushes out of them I'm sorry
Senator Mark Johnson
Unverified
44:07
y'all have y'all please excuse mepresentativeative Hoallowwell and I go back a long way but I yes we knew about the Pepsi funds
Representative Stetson Painter
Unverified
44:15
as early I I know that one thing I've seen as early as 2015
there was a question asked about using a certain kind of fund for something and the answer was we should rather than using the board's headad money we should use the Pepsi money because it is totally discretionary so it's been known that it was there it it has
Senator Fredrick J. Love
Unverified
44:37
been used for various items I don't think anything nearly this big representative Holliwell where was the location of
Representative Steve Hollowell
Unverified
44:43
the celebration? believe the civicent represents hall of pardon me again
ok that's all I got right now thank you members
any other questions well thank you again for being here I
think probably one of the biggest takeaways is totally discretionary is has been stretched I think a little a little far here I think that's why we're here appreciate you again for the the comments and the the learnings from all of us for this through this process members without any objection that will be filed as reviewed thank you again for being here thank you and again we will make every effort to see that this
Senator Fredrick J. Love
Unverified
45:22
does not reoccur and that we are not sitting in front of you again I think the last time for this district I
Representative Stetson Painter
Unverified
45:29
sat in front of this committee was nearly 20 years ago and I attend not to be here again when I'm90. so so
much all right members we will move forward in the agenda. I will give you a note that we 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 gonna come back and we're gonna 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 we give them a round of
applause when they come back but Mr. Fink, let's move forward
Senator Jim Petty
Unverified
46:08
with a few of these next reports the next three reports contain findings which were certified to the governmental bonding boardard and refer 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 we'll be
Speaker 171
46:54
presented to the legislative joint auditing committee after its completion.
all right members any questions right without any questions this will
Senator Jim Petty
Unverified
47:08
be reviewed and filed Next is magnolia school district it had one finding our analysis of high school activity funds for the period July12024 through June30,2025 revealed undeposited funds of $8,249
the high school secretary who resigned effective June30,2025 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 turning to the secretary was not deposited that concludes the finding for magnolia School District. thank you members any questions on this finding? right see 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 from
Arkansas state and I'm sure proud of we've got someone from John Brown University my almond waterer so so thankful y'all are here. welcome and we'll hopefully connect with you after our meeting today thank you give him
Senator Jim Petty
Unverified
48:51
a hand thanks all right Mr. Fink the next finding next report is Westside School District which had one finding a review of district credit card transactions for the period July1,2024 through January31,2026 rebuil30,000 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 chargers totaling $20,000. The remaining credit card charges totaling $9500 and listed below could not be substantiated with the business purpose. of this amount charges were made by the superintendent which included3,464 dollars charged at
local restaurants,3,395 dollars 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 mill purchasesc according to the superintendent $1,161 of this amount was used to purchase mills for athletic teams participating in school-related events. However, without supporting documentation, the validity of
these purchases could not be determined. $2023 charged for miscellaneous items 1,872 of which was purchased using the superintendent's credit card $1797 charge for fuel50 dollars of which was not documented in $1723 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 charge personal items totaling $1200 on the district's credit cards. All personal charges were reimbursed to the district in a reasonable period except415 dollars 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
you've heard this any questions OK seepresentative Long you recognize
Representative Wayne Long
Unverified
51:10
Thank you Mr Chairman and Mr Fink does the superintendent still work from this district yes sir, I believe he does and and what level of incompetency does it take to before it becomes a criminal matter as far as referring it to prosecuting attorney this this finding
Senator Jim Petty
Unverified
51:30
was referred to was referred to the prosecuting I'm very sorry I I mis misheard that thank you
the reserve long there are as leg audit reviews and goes through their audit process some are automatically triggered to prosecuting referred to prosecuting attorney and that this is definitely one of those all
right members any other questions right we'll move forward that
Speaker 178
51:58
will be filed without objection. the next report was referred
Senator Jim Petty
Unverified
52:04
to the prosecuting attorney and attorney general. and it was for Boonville school district it had one finding the district
paid7,300 dollars 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 of5,000 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 desse after reviewing the board's resolution Desse denied the exemption request on May5,2025. that concludes the findings for Boonville School District. Members any
Senator Jim Petty
Unverified
52:58
remaining 8 reports with findings or the remaining e reports 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 right members
take a quick second to scan through those 8 and if there's no questions I'll give you a second. 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 remaining 89 reports
Senator Jim Petty
Unverified
54:00
on the last few pages of the synopsis were audits with no findingstaff 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
hopefullypefully 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 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's a great example of that 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 right members see 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 12
Senator Tyler Dees Chair
Unverified
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
Senator Fredrick J. Love
Unverified
Speaker 35
Chair
Unverified
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 171
Speaker 178