Audit Education Institutions: Dec. 11, 2025

Senator Tyler Dees Thank you, members. We’ll call this meeting to begin here. However, for the public, we want to make sure we announce this. We are going to gavel in and then go straight to recess. We do see a quorum. We’re going to start our meeting, but we’re going to recess for 10 minutes because we’ve got some great holiday gift drives that are going on. We want to support that here at the Capitol for our foster kids programs. And so, 10 minutes. We will readjourn back in 10 minutes. Thank you. 

[Recess] 

All right, members, we will call this meeting back into order. Welcome back to Legislative Joint Audit Committee. We always start this meeting with a prayer, so we want to make sure we do that today. Senator Dotson, would you mind praying for our group today? 

Senator Tyler Dees Dear Heavenly Father, we thank you for the opportunity to serve you. Thank you for this wonderful time of the year and that everyone would have a very Merry Christmas. Thank you for another year in service to you. In Jesus’ name we pray, amen. 

Senator Tyler Dees Thank you. Members, we’ve got a pretty quick agenda in front of you, thankfully, which is actually great news. That means we’ve got a lot of school districts doing well. And so we’re thankful for that. But we’ve called to order, we’ve come back from recess, and we’re going to move on to item B on the agenda, adoption of minutes from the October 9 meeting. I believe we need a motion for that. See a motion. I need a second. All in favor, say aye. Like sign, say no. All right. Motion passes. Adoption of the minutes passes. All right, we’re moving to C on the agenda. This is review of reports, Mr. Fink. 

Audit Reports

Bay School District

Mr. Fink Thank you, Mr. Chair, and good afternoon. Today there are 10 audit reports for the committee’s review. There were five reports that have findings, and there were five with no findings. There are no reports containing repeat findings, and none of these were deferred from the October meeting. So we will begin with the Bay School District audit report, which had one finding that was referred to the prosecuting attorney and attorney general. 

Due to inadequate internal control procedures relating to the use of credit cards, the district paid $2,690 to a credit card company without adequate supporting documentation. Therefore, the validity of these purchases could not be determined. In addition, failure to obtain supporting documentation timely resulted in finance charges of just over $3,200 and late fees of $171. And that concludes the finding for Bay School District. 

Senator Tyler Dees Thank you, Mr. Fink. Members, any questions on this finding? All right. Seeing none, this has been referred to the prosecuting attorney, as a reminder, for an investigation. Let’s see, I believe we need a motion to file this. Is that correct? Okay. I see a motion and a second. All in favor, say aye. Opposed, like, sign. Okay, that is passed, and we will file that report. 

Mr. Fink The next four reports all contain audit findings. And as I mentioned previously, none of these were repeat and none were referred to the prosecuting attorney and attorney general. 

Senator Tyler Dees  If I can interrupt you for a second. Members, as he was starting to these findings, we’re going to have him go through all of these at once and just read through all five. If you’ve got questions or want to flag, just make note. We’ll come back to them for each district. But if you wouldn’t mind reading all five. 

National Park College

Mr. Fink The first is National Park College. I will just summarize the findings for National Park. It was related to material misstatements in the financial statements, primarily caused by turnover of accounting personnel. We noted issues related to duplicate posting of entries, errors in accrual entries, and misclassifications that resulted in misstatements to the financials. We brought these items to the attention of college personnel during our audit, and the errors were corrected by the college. 

Horatio School District

Next is Horatio School District. They had one finding. The district did not establish procedures to ensure disposal of surplus or obsolete equipment was properly removed from the capital asset listing, and three of ten items selected for inspection could not be located. 

Quitman School District

The last audit with a finding was Quitman School District. The district’s operating bank account was unreconciled for the periods of July 2023 through June 2024 with variances ranging from almost $16,000 to $285,000. The district identified but did not correct errors of almost $16,000. And during the audit field work, ALA staff identified errors of$12,071, which left an unexplained variance of zero dollars at June 30, 2024. And that concludes all the reports with findings. 

Senator Tyler Dees All right, members, any questions on those reports? All right, Co-Chair Duke, you’re recognized.

Representative Hope Duke Thank you, Mr. Chair. I just have a quick question on Horatio. So on this one, they basically got, if I understand correctly, they got money for the same item twice. So they’re going to reach out to return the money. Is that the anticipation? And will you guys follow back up on that on the next audit to see where that status is? 

Mr. Fink Yes, we will. That is what happened. They had expenditures that they had already been reimbursed by through the ARP SR funding, which runs through DESE. The emergency connectivity fund is a direct program to the school district, so it does not run through DESE. And what they’ll do is they’ll follow up with the federal agency. And when we come back to do our audit in FY25, we’ll ensure that that happened. And most likely, the federal agency will ask them to reimburse those funds. 

Representative Hope Duke Did they use it for the same– what did they use the duplicate funds for? 

Mr. Fink So these expenditures were related to tech equipment, which would have qualified under either program. You just can’t duplicate the reimbursement. They had some overlap on the years and so I think they weren’t positive what all they had moved over into the funds. And when they accumulated, they accumulated too much. 

Senator Tyler Dees Members, any other questions? All right, seeing none, without objection, those will be filed. And we’ll go to the reports with no findings. 

Mr. Fink The remaining five audits are listed on the last page. And those have no findings and staff recommends that these be filed as reviewed. 

Senator Tyler Dees Motion and a second. All in favor say aye. Aye. Opposed, like, sign. It was a motion to file, I believe, correct? Oh, did you have questions? All right, those will be filed. But before we say goodbye, we do have Arkansas State University is here in the room with no findings on the report. So can we give them a hand? Congratulations. And also congratulations on beating UALR this last week, okay, a little in-state rivalry. Good job in basketball. Congratulations. Members, without any other agenda, I don’t see any other new business, any other questions, concerns. All right, we will adjourn. Thank you.