Audit Education: Oct. 9, 2025

Senator Tyler Dees Welcome to the Legislative Joint Audit Subcommittee. Thank you for joining us. We’re going to start today with asking Representative Furman if you would lead us in prayer today. Let’s stand. [Prayer…inaudible] Well, thank you all for being here today. We have a pretty light agenda, so we’ll move pretty quickly. But as always, if you’ve got any questions or comments, please make those notices aware.

Let’s see, madam co-chair, any comments today? Okay. All right, we’ll kick off. So first thing we have on the agenda, moving to B, is adoption of the minutes of the September 11, 2025, meeting. I see a motion. I see a second. All in favor of the motion signal by saying aye. Opposed, like, sign. It is approved. All right, moving to C. Mr. Fink. 

Mammoth Spring School District

Staff Thank you, Mr. Chair, and good afternoon. Today there are seven educational audit reports included on the committee’s agenda. Six reports contained audit findings, and there was one with no finding. None of the reports contained repeat findings. We will begin with Mammoth Spring School District, which was previously deferred. They had one finding. 

On May 2, 2024, the district promoted a board member’s son-in-law to high school principal for the 2025 fiscal year with an increase in compensation of approximately $11,000. Although meeting minutes indicate the board approved this promotion immediately after the board member resigned, approval was not obtained from the Commissioner of Elementary and Secondary Education as required by Arkansas Code. 

Additionally, the minutes of the board meeting held on May 2 indicated that the board member was present and participated in the executive session discussion immediately prior to his resignation in noncompliance with Arkansas Code. 

It should be noted that the board member resigned immediately following the board’s return from executive session and immediately prior to their approval of his son-in-law’s promotion. However, he was reappointed to his board position before the end of the same meeting. And that concludes the finding for Mammoth Spring School District. 

Senator Tyler Dees Thank you, Mr. Fink. I believe we’ve got some representatives from Mammoth Spring. We’re going to invite you to the table at this time. Welcome. And if you will, please identify yourself for the record. 

Mark Taylor I’m Mark Taylor, Superintendent at Mammoth Spring. 

Devin Smoot Devin Smoot, school board president. 

Senator Tyler Dees I’m sorry, Devin what? 

Devin Smoot Smoot. 

Senator Tyler Dees Thank you. All right, thank you for being here. We’ll just allow any opening comments from your team here to this finding, if you have any. 

Mark Taylor Well, I hope that safeguards are in place. I was not the superintendent at that time ,and I was the interim appointed in January of 2025. So I received the audit finding and came up with the response to the audit finding. 

Senator Tyler Dees Anything, Mr. Smoot? 

Devin Smoot I really don’t have any comments. 

Senator Tyler Dees Okay. Well, thank you for being here today. So I’m looking at the timeline. So this was May of 2024. And Mr. Taylor, you started January of 25, is that correct? 

Mark Taylor That’s correct. 

Senator Tyler Dees Okay. And Mr. Smoot, you were board president. How long have you been board president? 

Devin Smoot Just this year. 

Senator Tyler Dees This year. Okay. But you were on the board in May of 24? 

Devin Smoot Correct. 

Senator Tyler Dees Okay. Can you just give us maybe some color commentary about what happened? And it sounded like, frankly, it sounds like some maneuvering that went on to get this person promoted and someone resigning from the board. Was that yourself that resigned from the board and added back? 

Devin Smoot Yes, sir, that is correct. 

Senator Tyler Dees Okay. Will you just kind of talk through what happened in that meeting and what the thought process was ? 

Devin Smoot Well, so I wasn’t school board president then, but I was a board member. And my son-in-law applied for the job. I excused myself, had no part of the interviews, anything like that. And during that time, I contacted Mr. Cody Keys. 

And I said, Cody, what do I need to do here to do the right thing, what’s my options? And me and Cody visited. I believe he talked to Lucas also, one of the other lawyers. And he said, one, you could resign. Or the other option is to do what was stated in the minutes. 

Senator Tyler Dees Okay. And who is Mr. Keyes? Okay, wonderful. Yeah, you’re welcome to sit at the table as well. Thank you. Okay, so you said the option was resign and what was the other option? 

Devin Smoot To do what was read in the minutes. 

Senator Tyler Dees Well, in the minutes, it said that you did resign. So what was the other option? 

Devin Smoot Or I could resign and walk away from the school board or I could resign and the board could reappoint. 

Unidentified  Well, could I clarify? 

Senator Tyler Dees Yes. 

Unidentified The other one would be he simply stays on the board but removes himself from the discussion. If the board so chooses to hire his son in law, then they would have to get approval from the Arkansas Department of Education. 

Senator Tyler Dees Okay. 

Unidentified So in this instance, he resigned. I mean, technically everything here was legal. I could see the optics of it since he was appointed back at that same meeting. Might have been better optically if they waited to the next meeting. But that was what they did here. They chose for him to resign so that his son in law could be appointed if that be the choice of the remaining board members. 

Senator Tyler Dees Okay, I’ve got some more. But members, any questions for the witnesses here? All right, Senator Sullivan, you’re recognized. 

Senator Dan Sullivan Thank you, Mr Chair. Guys, this just doesn’t look good. Do your thoughts on the optics of this, people resigning and hiring and coming back in. Nobody’s got a problem with that? I think it looks odd. 

Mark Taylor I felt that it looked odd. And so the optics of it were not good. And I feel that the new 60-day waiting period would help the optics of that, certainly. And also just the fact that you have to understand I have four out of five board members that have relatives that work for the school. 

So the optics, while appearing bad, they have the potential for being bad all the time. So we’re working to work through that and make sure that this doesn’t happen again. And, yes, I agree that those optics are bad. Had we had a time frame between the resignation and the reappointment, that would have had a better look to it. Or if the hiring of the principal was delayed a month after the resignation. Something would have made that appear 

Senator Dan Sullivan Okay, so in your comment you said we want to do something so it doesn’t happen again. If that’s true, why would you let it happen in the first place? 

Mark Taylor Well, I wasn’t there in the first place. So that’s why.

Senator Dan Sullivan Well, why would anyone let it happen, again, in the first place. We’re all in agreement it looks bad, and we’re leaving it in place. We’re leaving something in place that looks bad and that people agree was bad, but we let it happen anyway. That just doesn’t look good. The attorney, did you have a comment? 

Unidentified Oh no. I mean, it couldn’t happen anymore because a new law requires that they wait a period of 60 days. 

Senator Dan Sullivan Okay. 

Senator Dan Sullivan It’s your board. It’s your community. If your community’s happy and you guys get along with it and that’s the way you want to operate, I’m not going to step in and try to blow anything up. As a legislature, we see these kind of things happen and it gives us pause to think this happens and everybody goes, Okay, we’re all good. But it’s your community. 

Mark Taylor I understand that. And if the gentleman in question, the person that was hired to be the principal, was doing a poor job, that would be one thing. He has worked for the school for seven years and done an excellent job. He was our girls’ basketball coach and a teacher, English teacher, done an excellent job at that and was qualified to be a high school principal and had an opportunity to go for the position. 

Senator Dan Sullivan Yeah, listen, I’ve got no more questions. Your community’s happy. Everybody signs off on it. It just looks odd sitting up here in Little Rock. Thank you. Thank you, Mr. Chair. 

Senator Tyler Dees Members, any other questions? All right, co-chair Duke? 

Representative Hope Duke Thank you, Senator Dees. Appreciate it. I appreciate you all coming here. I’ve got several questions. I’m going to start with how long, Mr. Smoots, have you served on the school board? 

Devin Smoot Just about 17 years. 

Representative Hope Duke Seventeen years. So you’ve had training every year for those 17 years? 

Devin Smoot Yes, ma’am. 

Representative Hope Duke Whenever your son in law applied the first time, I assume you were on the board. 

Devin Smoot No, ma’am. 

Representative Hope Duke You were not on the board? 

Devin Smoot No. I did a 12 year stint from 2000 to 2012, and then I took eight years off and ran again for school board. 

Representative Hope Duke Okay, so I, too, come from a school board experience, as several members of this committee do and also come from a small town. So I understand having people on the school board who have relatives who work in the school district. I was faced with that potentially if my daughter had decided to apply at our school district. What was I going to do? I’ve never seen anything like this happen. 

I’ve sat there and watched and have had school districts reach out to me because they were waiting on DESE. That bothers me, first of all, that you didn’t get the waiver from DESE. And you had to know you needed to get the waiver from DESE. And I realize that sometimes they take their time, and that’s sometimes where legislators come into play to make the phone call saying, not, ‘will you approve it,’ but, ‘can you get them an answer?’ 

So I think there’s some real ethical issues here. You may have been able to skirt the law, which I don’t know about that either. But ethically, I don’t think what you did here was right. I don’t think it was right to sit there and, whether you brought yourself out of that process or not, you should have gotten the waiver and made sure that was in place before he got the job. That should have happened. 

And that happens in school districts all across this state where they make sure that happens because there’s lots of small rural schools that deal with this. And whether the law, and I’m not sure what the law says on reappointments, but I have never seen a resignation coming out of an executive session. So you participated in executive session, correct? 

Devin Smoot Yeah, we talked about quite a few things. 

Representative Hope Duke Yes, but you can’t talk to us about what you talked about. So we don’t know if you talked about your son’s position or not. Nobody knows that. But what we do know is you came out of executive session, resigned, and then your board hired him. And then they reappointed you in the same meeting, which I’ve never heard of that happening. But your public had no notice. 

What if there was other people who wanted that position? And in my opinion, I don’t know what the law is, I always assumed the law– because the way I operated in school districts where people have resigned is you went through the process of letting people apply. Now we have a more legal process in place, but school districts had a process where other people from the community could participate in. 

And your son-in-law may be a fabulous teacher and a fabulous coach, and obviously you all are happy with him. But this just puts a cloud over everything. And it puts a cloud over him. And if you don’t think that the other employees in that district don’t notice stuff like that, I’m afraid you guys are kidding yourselves. Because they do. 

And the optics matter. It’s what teaches our kids how to behave. And so when I saw this, I was shocked. I was shocked at every level of it. The executive session participation, the resignation, the reappointment, the not getting the waiver, I mean, so many things. If you’ve served on 17 years, and whoever your former superintendent is, you knew you weren’t dotting these I’s and crossing these Ts. 

What was the urgency? Why couldn’t you wait to get the DESE approval? Because you could have hired him with you being on the school board, without there being any clouds to any of this. And it does happen all the time. What was the urgency? 

Devin Smoot I don’t think there was any urgencies. I know there was other candidates that interviewed for the job and they went through the whole process. So as far as being any urgency, I don’t think there was any urgency to hire him. 

Representative Hope Duke I find it hard to believe it was a lack of knowledge that you needed to follow these certain procedures. 

Devin Smoot Well, I mean, I went through the training and done all the stuff. I was unsure of really the process. That’s why I called Mr. Keyes on the phone, said, Hey, what do I need to do here? And those were the options he gave me. I’m just a railroad and a farmer. I mean, I don’t study law. I never have. I never will. So that’s why I picked the phone up and called Cody and said, Hey what do I do here? 

Representative Hope Duke Well, that ball got dropped somewhere. And Lucas has been with the school board association for a while and has given, I’m sure, countless school districts advice on this. So it’s hard for me, knowing that he’s given advice to school districts I work with, that his advice was this procedure here. So I mean, I do understand school board members are not paid. It is a hard time consuming job. And I have a lot of respect and appreciation. 

That’s why I guess it bothers me particularly whenever something like this comes up, because I feel like some of the school board members that are legislators now are constantly trying to support our school boards and appreciate the job that y’all are doing sometimes against the attacks. And so when something like this happens, I take it really seriously. Because I think it does feed into the narrative that is out there sometimes that school boards aren’t doing things above board. 

And so I would just encourage you in the future that when in doubt, make every phone call, call DESE too. Ask them as well, because they would have told you what you need to do here and make sure you stay out of that whole little piece, right, that executive session piece. Stay out of all of it so that there’s just no question whatsoever that anything improper was done. 

I understand your heart. I understand the dilemmas sometimes. But it was really not well done and really puts a cloud over that area. So I do thank you for your service. I thank you for coming down here. Hopefully that will help in the future to make better decisions and make sure because I know you need– those people that work within your district, because they’re school board members’ families, they care a lot about those kids in a different way and in a different community. 

So we need to have those. But we just need to make sure that it always meets the smell test. And I’m afraid this action here didn’t quite meet it. Thank you. 

Senator Tyler Dees Representative Brooks, you’re recognized.

Representative Keith Brooks Thank you, Mr. Chair. Gentlemen, thank you for being here. Just a quick question. It talks about the increase in compensation, $11,236. Was that additional to what he had made in his role as a teacher and a coach? Or was that above what the previous principal was making? 

Mark Taylor No, that’s above what he was making as a teacher and a coach. That’s the principal’s salary. That’s what that would be. 

Representative Keith Brooks Okay, perfect. Thank you, Mr. Chair. 

Senator Tyler Dees Any other members? Well, gentlemen, thank you for your time today. I think Representative Duke summarized it well. That’s our goal, that’s all of our goals, is to do things the right way. And I think that’s the probably biggest highlight of this is we want to not disparage any of you or your principal, that it’s all earned on merit and done the right way and can stand the test with transparency. Members, with no further questions, without objection, this will be filed. Thank you. All right, you’re dismissed. Thank you. Mr. Fink? 

Helena-West Helena School District

Staff Thank you, Mr. Chair. The next three reports contained findings which were referred to the applicable prosecuting attorney and the AG. Helena-West Helena School District had two findings. Finding one, on October 10 of 2024, the district discovered that an employee’s payroll direct deposits totaling $4,451 had been fraudulently deferred to another bank account after the employee contacted the district about not receiving their direct deposits. 

It was determined that the district made the direct deposit change after receiving an email request from what appeared to be the employee’s email account without properly verifying the authenticity of the change request. The district notified the financial institution. However, as of our report date, the funds had not been recovered.

Finding two, during our review of payroll, we noted the head football coach received the athletic director stipend in addition to being paid via timesheets for duties that appeared to be covered by this stipend. He was also paid $2,400 for performing three years of off-season duties, even though the employment contract was for 240 days. And this was done without documented approval of the superintendent. During our review of payroll, we also noted the executive director received an overpayment due to clerical errors. That concludes the findings for Helena-West Helena School District. 

Senator Tyler Dees Thank you, Mr. Fink. Members, any questions? All right. Without objection, this will be filed. Let’s go to the next. 

Mountain View School District

Staff Next report is Mountain View School District. On May 23, 2024, after an employee contacted the district about not receiving payroll direct deposits, the district discovered that the employees’ April and May deposits totaling $2,422 and $2,485 have been fraudulently diverted to two different bank accounts. 

It was determined that the district made the direct deposit changes after receiving two separate email requests from what appeared to be the employee’s email account without properly verifying the authenticity of the change request. The district notified the financial institution, but they were unable to recover the funds. And that concludes the findings from Mountain View. 

Senator Tyler Dees Mr. Fink, I do have a question, just clarity on this. Was this a cyber offense? Was this the employee had two different accounts? Is there any more detail on the two different accounts on this? 

Staff Yes. So what happened is a bad actor sent an email to the school district bookkeeper acting as if they were an employee of the school. They asked for basically the authorization form to be able to update their banking information, did it one time, then emailed again another time and said they needed to change it again, apologize for the inconvenience, all that, and change it to actually another bank. So the perpetrator, the bad actor, used two different banks to do this fraud. 

Senator Tyler Dees Members, any questions? Senator Scott, you’re recognized. 

Senator Jamie Scott Thank you. I do realize I’m not on the committee. But this is two different school districts that this has occurred in. Is there anything we need to look further into as far as this being a potential issue across the state of Arkansas? You know, as crimes are escalating via cyber, it’s just concerning to me that in the same report, two different districts. 

Senator Tyler Dees Appreciate that, Mr. Fink. Any comments there? 

Staff I actually prepared a report of all the findings for FY24 school districts. Many of you should have received that email if you were on the committee.

Senator Tyler Dees Can we share that with the full membership, maybe full House and Senate? 

Email Paycheck Fraud Amounts (FY24)

Staff Yes, so here’s what we had. We had for the FY24 school year, 26 schools were impacted. There were 65 incidents that had some sort of unauthorized withdrawal, which that could be anything to like an altered check that was stolen in the mail. That could be these situations where they’re adjusting payroll information. And it could also be related to vendors as well. And so  the total was about $648,000. Of that amount, $605,000 was recovered from the bank. So the net loss was basically around $42,000.

Senator Tyler Dees It’s helpful context, for sure. 

Representative Hope Duke And I think also, Senator, that one of the things that, if I remember correct, Mr. Fink, that they’re seeing that in other areas like the cities and municipalities, too, in larger numbers this year than what we’ve had. So I think a lot of people are looking at how to change our processes. 

And I think we as a legislative body, if we can come up with solutions for this too, are definitely going to have to look at it. Because the criminals, the bad actors, are finding every which way they can. I think a lot of schools are going to having them come in person and sign very old school style now if they want to change things. 

Senator Tyler Dees Thank you. Senator English, you’re recognized. 

Senator Jane English So I’m wondering, so these people whose payroll checks were stolen, did they get paid? 

Staff Yes, they did. 

Senator Jane English Okay, thanks. 

Senator Tyler Dees Great. All right. Any other questions, comments? All right. Without objection, this will be filed. Mr. Fink. 

Nevada School District

Staff The next report is Nevada School District. Finding one, during our examination of payroll records, we noted that one employee was underpaid $4,200 from their contracted amount. Finding two, a review of credit card disbursements revealed $2,800 in questionable transactions. We noted transactions that had no supporting documentation. We noted transactions that appeared to be allowable business purpose but did not have adequate supporting documentation, and then $377 that were related to interest and late charges. And so without adequate supporting documentation, we could not verify the validity of these payments. And that concludes the findings for Nevada School District. 

Senator Tyler Dees Members, any questions or comments? All right. Seeing none, without objection, we’ll file this report. Next. 

Cabot and Danville School Districts

Staff Okay, the next two reports contain findings. These were not referred to the prosecuting attorney or the attorney general and these did not contain repeat findings. Staff recommends the committee take a moment to look over these findings and file as reviewed. 

Senator Tyler Dees All right, members, take a few minutes just to look at these with Cabot and with Danville. As a reminder, these were not referred to prosecuting attorneys. All right, members, any questions or comments? Yes, Senator English, you’re recognized.

Senator Jane English So $67,000 is a lot of money. Is that one person did that? 

Staff Yes, that was one check actually made out to an engineer and architect firm. The check was intercepted through the mail and it was altered by a bad actor. 

Senator Jane English And so we’re not going to refer these to the prosecuting attorney? 

Staff So the school recovered these funds. And so it would have been in the bank’s hands at that point. And that’s been our standard policy for the last four years at least. If they recover the funds from the bank, we typically do not refer those to the prosecuting attorney unless it involved someone within the actual school district. And we don’t believe that the bad actor was within the school district. 

Senator Tyler Dees All right, members, any questions or comments for Cabot or for Danville findings? Seeing none, without objection, those will be filed. 

Staff The remaining report was one with no findings. And that was the University of Central Arkansas. And that is on your last page, and staff recommends this be filed as reviewed. 

Senator Tyler Dees Members, any questions, comments with the non finding? All right. Seeing none, without objection, that’ll be filed. Members, any other business to bring forward? All right. Thank you for your service today. Record meeting from what we’ve had. I really appreciate your service. 

And the reason for that is a lot of the reports and findings of all the reports have been worked through, for the majority’s sake. Staff tells me that that will pick back up around March or April. So hopefully we’ll have a nice streak of lighter meetings here. 

Representative Hope Duke Hopefully they’ll come back with no findings. 

Senator Tyler Dees With no findings, hopefully, as well. Appreciate everybody. Have a great week. We’re adjourned.