Legislative Joint Audit
Educational Institutions Committee
February 12, 2026
Senator Tyler Dees All right, members, thank you for being here today, and I hope you’ve had a great week. So glad to see y’all. We will call this meeting to order. Co-Chair, any comments? Okay. All right. We’ll kick off.
First on the agenda on B is adoption of the minutes of the January 8th meeting. I’ll take a motion. I got a motion. And a second? Second. All in favor say aye. Opposed, like sign. It is passed. Members, now we are going to C. We have three reports today. And Mr. Fink, if you’ll read through the first one.
NWACC Audit
Staff Thank you, Mr. Chair, and good afternoon. Today there are 31 education audit reports for the review, three with findings. We will begin with Northwest Arkansas Community College, which was deferred from the January meeting. Instead of reading the findings in full, I’ll provide a brief summary.
Finding one was a repeat finding related to deficiencies in internal controls over financial reporting which led to material misstatements in the financial statements. ALA auditors noted various errors which are detailed in your synopsis, in the statement of net position, statement of revenues, expenses, and changes in net position, statement of cash flows, and notes of the financial statement. These errors were subsequently corrected by college personnel during the audit.
Finding two was related to a loss in tuition revenue totaling almost $144,000 due to an internal control deficiency in a new student information system that was implemented in April of 2023. Students who registered for classes after the academic period effective date were not charged student tuition resulting in the loss of revenue. Management has provided a response to both findings and they are also in attendance to answer any questions the committee may have.
Senator Tyler Dees Thank you, Mr. Fink. And we will invite Alex and Caitlin to the table. If you will introduce yourself for the record and we’ll welcome you.
Catherine Doner Hello, my name is Catherine Doner. I am the interim CFO at NWACC.
Alex Vasquez Good afternoon, Alex Vasquez, Chief of Staff and Executive Director for Government and Public Relations.
Senator Tyler Dees Thank you, Catherine. Thank you, Alex. Thanks for being here. Well, I know these are not always fun meetings to be at, but we appreciate your time and your comments today. You know, I’ll just kick it off with a framework. It sounds like, fortunately, we have accounted for the dollars, but maybe they’ve moved to different buckets.
And through the audit reviews, there’s been some best practices and some reviewing of how to work through that. But would love your initial comments of the findings today and set the scene for us.
Alex Vasquez Yes, that’s well stated. These are misclassification and process issues, so all the money is there. In fact, I think our net position was better than what initially was reported, so that’s all good news. But we are here and Catherine is the expert and knows all this information and numbers. So I’m going to let her address any questions specific about the audit itself.
Senator Tyler Dees Catherine, would you maybe just give us some comments about the findings and the process of the timeline of how we got here?
Catherine Doner So, timeline, as you stated, in April of 23 we instituted Student Workday. The FY23 audit was completed quite a bit after the time, so a lot of the errors that we found in FY23 were not cleaned up by the time we started the FY24 audit. On a separate note, the largest item on here was the overstatement of cash and cash equivalents in FY24.
For the first time in quite a few years, the college invested $5.5 million. And because those investments were under a year, they were placed into cash and cash equivalents rather than investments because the governmental accounting standards are for 3 months being the cutoff for cash and cash equivalent rather than investment. So that was the classification error, but the money was not missing. It was simply misclassified and that was corrected.
With the implementation of Student Workday, our scholarship allowance was the large difference in revenue. And expense overstatements were due to we had to find a way to calculate scholarship allowances differently because Workday did not allow us to capture that information in the detail that we had always used in the past. And it took us a while to be able to manipulate the data to get that information accurately. Those are the biggest things.
Speaking on the missed revenue, that happened, there was a workday update in September 23 that led to the missed revenue. It was due to the new release update. And that was something that we identified during that time but we fixed it after the end of the fiscal year. We had consultants brought in to help us get that fixed. And we also had to do a ticket with Workday for that.
Senator Tyler Dees Thank you, Catherine. Members, any questions? All right. Representative Beaty.
Representative Howard Beaty In your response to the findings, you state that finance is going to develop a standard operating procedure for accounts receivable, accounts payable reconciliation each month. Can you describe that procedure to us?
Catherine Doner So we have come up with a closing list and dates that are being met each month. There may be some exceptions here and there, but in general, we are closing the months. Several of these errors were year-end accrual entries that were overlooked or made incorrectly. The pre-paid, there was an invoice that was miscalculated for the pre-paid accrual. But we have instituted closing months. We have a checklist. We have processes for approvals on journal entries to make sure that we’re getting the correct ones in place, getting the right numbers in.
Representative Howard Beaty And just a quick follow-up, who actually processes and approves your closing and adjusting entries at the university or at the college?
Catherine Doner That would be me. I am interim CFO, but my position, my formal position is the Executive Director of Accounting/Controller. And so that is myself. For the second time in two and a half years, I am acting as interim because we’ve lost our VP.
Representative Howard Beaty The errors where these were reversed twice, was that a staff member that had made those incorrect entries?
Catherine Doner It was made by a couple different staff by not communicating well with each other. So the checklist should prevent that from happening in the future.
Representative Howard Beaty That’s what I was hoping for, is that there had been procedures in there, who could create the entry, a secondary review approval, and then a review by you. So we shouldn’t see this error again.
Catherine Doner Yes. That’s correct.
Senator Tyler Dees Members, any other questions? All right, Co-chair Duke.
Representative Hope Duke Thank you, Mr. Chair. Thank you all for making the long trip down here. I appreciate it. I just have, and Representative Beaty kind of touched on it a little bit. One of my concerns is just, the finding one, we’ve had it in four previous audits. And so I would just like to hear from you all a little bit more about how you’re going to, what you’ve done to implement to make sure that we don’t have this finding at a fifth audit.
Catherine Doner So we have made some changes to hopefully do some things to bring in a Vice President that is very qualified and knowledgeable, so that we can attract better talent that hopefully will stay with us. We’re in discussion of reopening a position that hasn’t been filled since 21, which is an associate vice president of finance. And we have job openings with our recent compensation adjustments.
We’re hoping that those new, more marketable salaries will help us bring in better talent. We have had a lot of turnover, even continue to have turnover, losing people to some of the corporate and other universities in the area. We have trouble retaining our people when we get them, so we continue to turn over and be short staffed.
But we are widening our searches as we are cross-training so that hopefully that when one person does leave there’s someone else who can pick up and take over at least for the short term.
Representative Hope Duke How long have you all been without that vice president position?
Catherine Doner The most previous vice president left in November. The 12th was her last day. And so I have been acting as interim. She had worked for the college for a year and a half and I was interim for several months prior to that.
Representative Hope Duke Please, go ahead.
Alex Vasquez I’ll go ahead and add too, that we actually– excuse me, thank you. We actually conducted a search in the fall before she departed. She gave us a good notice and the college did try to fill that position in the Fall. It was an unsuccessful search, unfortunately, but we are reopening that search this spring to replace the Vice President.
Representative Hope Duke Do you have other positions that you aren’t able to fill in this department?
Catherine Doner Yes, I do. I also, at the end of the calendar year, lost my general ledger manager who had been working for me for two years. She gave notice and went to a corporate position and we have an assistant treasury manager position that is open or is filled right now but the incumbent is leaving in a couple of months. So, and then, of course, we have the VP opening.
Alex Vasquez And I’ll add, staffing just is a challenge for us. We are really a talent workforce feeder for the region in many ways, just even outside of finance. When I joined, there were two team members on my team, and within six months, had turnover in those positions. So it’s just, we give people some great training and opportunities, and then they find other places where they can move.
So we are continuing to work on this succession planning in place for each of these positions and really working hard to give Catherine and her team the resources that they need for the job. I just applaud Catherine for the work that she does and with a very lean team We really stand on top of what really is a huge operation.
Representative Hope Duke And I was going to echo that sentiment as well, as far as Catherine. It sounds like you have been one of the steady forces there for the university when they’ve had so much turmoil, or not turmoil, but changeover. So do appreciate that. I have one other question, and it’s on finding two.
And I’m not sure if I’m understanding it correctly or not, so I’m just going to ask it to make sure. So on this, were not charged student tuition, these kids. So, are you saying these students, there were a number of students who were not charged tuition.?They basically went to school, to some degree, free?
Catherine Doner So this error was tuition only. So they did get charged all the appropriate fees and they did charge tuition in some of their classes. But if they did a drop-add and, say, added a class, that would be where the tuition line item didn’t get charged. And all of the tuition revenue is posted by class.
So again, it was just some classes, not all. And that error was corrected, but it was decided by our student services team that it did not make sense to go back to the student after the end of the semester and rebill them. So it was decided it would have been a financial aid related administrative problem. So, it was decided that we did not go back and try to collect that money. That was decided by the cabinet and student services.
Representative Hope Duke Okay. Thank you. That kind of answered part of my next question. Were the students aware that this happened? Were they made aware that this happened?
Catherine Doner I do not know that. I know that some of them were, but I do not know in general if they decided to contact those students.
Representative Hope Duke Just speaking as a mom of a college-age student who at one point had a fair amount of a scholarship double put into his account, and then we called and said, hey, you’ve got an error– not at your university, not your school, but at a different school. And we called and said, hey, listen, this happened and we want to make sure you know that.
And so I would hope that we would have individuals who would pay their bill. But if they’re not aware that they owed parts of it as well, they may not be paying, because I would have other kids in my family who may not were paying as close attention to what was going on on their accounts.
So I understand that kids may not necessarily catch that, but I would hope maybe in the future your cabinet will at least let them know. Because I think there are people up there who understand you did receive the service, so you still should be obligated to pay for it, just as a moral aspect of it. But thank you for clarifying that, because that was one of the questions I had was who determined not to have the students try to recover the money.
Catherine Doner I do know that it was a student who pointed out the problem, but I do not think that all of the students, as you say, many students may not look. It’s a rather long bill when you get it, so they may not look at it line by line.
Representative Hope Duke Kudos for that kid. And if you were in my class I probably would have given him the A for telling me that he missed the question. So I do appreciate that as well.
Senator Tyler Dees Thank you, Representative Duke. Representative Long.
Representative Wayne Long Thank you, Mr. Chairman. How big is y’all’s department that basically takes care of this portion?
Catherine Doner So we have, currently, we have six. If we were fully staffed, we would have, including myself, we would have nine. That includes budget, my budget team, which is three to four people.
Representative Wayne Long Any idea about how underpaid they are as far as compared to other universities?
Catherine Doner Very rough, because I’m not that familiar with what other universities. But I know that we had an employee who left and it was more of an entry level salaries position. And he left making 47 to 48. And he went to the university and took a job at 60. At that time, we were just about to implement phase three of our compensation adjustments that we’ve been working on for the last four years.
So we, his co-worker, in order to prevent losing him, we were able to give him some more money. But we could not convince the other employee to stay. But then a few months later, the worker that we increased his salary also left and went to U of A. I do not know what his salary was. But one of the factors in maintaining these people is the commute. It’s very hard for entry level people to afford to live in Bentonville or Rogers, so they commute from Fayetteville or West Benton County. And when you can take more money and be closer to home, they usually make that choice.
Representative Wayne Long Well, the reason I was asking is you mentioned y’all been working on a four-year plan to increase salaries. I was wondering, is there any effort to speed up this plan? Because these repeat findings, you can’t just continue with that. And there’s only six or nine people. I think if you reprioritize some other budget items, maybe you can get the pay. You won’t have that turnover.
Catherine Doner Yeah, so in July of 25, we implemented phase three of a four-phase plan, which phase three concentrated on the higher level employees, more salaried employees than the earlier phases and brought people up to mid-level in the market. However, some of the other areas continue to raise salary as well, so we can’t necessarily match some of the corporate areas. And we may fall slightly under the university as well.
Senator Tyler Dees Thank you, Mr. Long. Representative Mayberry, you’re recognized.
Representative Julie Mayberry Thank you. Representative Duke asked quite a few questions that I was going to ask, but one little part of it, to the students who didn’t have the class charged to them, I’m just curious. Because I know that there are times when there’s a student who has received a scholarship, and at the end of that semester, if not all of that money was needed, they get that back. You know, sometimes it can be just a small amount. But if they weren’t charged for that class, did that student then also receive that money back to put in their own pocket?
Catherine Doner I’m not sure. I don’t know the answer.
Representative Julie Mayberry For a class that they should have been charged for.
Catherine Doner I understand. I do not know the answer to that. I do know that we do, as you say, we disburse the financial aid once we have satisfied their bill. And I do not know if we went back and adjusted the financial aid or the scholarships. I can find out.
Representative Julie Mayberry And I realize, I mean, that was quite some time ago. It’s probably really hard to go find that poor college student who probably got excited because they got a few hundred dollars back at the end of the semester to cover the other life expenses, their car, their transportation, their whatever to get there. But I just was curious if that was looked at.
And again, kudos to the– that was going to be a question is, was there not a student somewhere along the way? Because I know my kids. We always look at it and if something is being charged or overcharged, we look at our bill. And thank goodness there was a student who spoke up. And I don’t know what you’ve done for that student, but tell them thank you. Because this could have continued on for a pretty good amount of time, yes? Or would it have been caught the next semester?
Catherine Doner It was probably caught in a Workday release. I’m sure we weren’t the only school that had the problem. But, yes, if we had waited on external areas, it could have gone on.
Representative Julie Mayberry So you’re saying there’s other schools that probably have done this exact–?
Catherine Doner It was a workday issue. And it was a release, a software upgrade. And I’m assuming it didn’t just happen to us. That’s an assumption.
Alex Vasquez This coincided with the adoption of Workday for students, the SIS system.
Catherine Doner Well, yeah, it was an update.
Alex Vasquez So it was a system error.
Catherine Doner And like, yeah, it was an internal bug rather than a configuration error. So sometimes if you don’t set things up correctly, you might have a configuration area, but this was an eternal Workday issue.
Representative Julie Mayberry Okay. Thank you.
Senator Tyler Dees Representative Brooks.
Representative Keith Brooks Thank you, Mr. Chair. And this is probably more a question for Mr. Fink in Audit. Since this was a software issue which may have impacted other institutions, have we looked into if this was a larger problem that we need to investigate?
Staff I’m not aware of other issues that we’ve had specifically for this at other higher ed institutions. That’s not to say that there haven’t been issues noted in response to findings that we’ve have related to the software that’s being discussed. But I’m not aware of this specific scenario.
Catherine Doner NWACC was one of the first institutions in the state to convert over to Student Workday. So that may be why.
Senator Tyler Dees Well, thank you for being here. I did hear significant work to do your best not to be back. So we appreciate that. Thank you for putting those measures in place with the checklist that you described as well. So thank you for your service to the community and these students. We know it’s important work. Members, without any further questions and without objection, this will be filed as reviewed. Thank you for being here. All right, Mr. Fink, next finding.
Cedarville School District
Staff The next report for review is Cedarville School District, which had one finding. That was referred to the bond board, as well as the prosecuting attorney and attorney general. The district discovered and we verified improper credit card charges of $794. An elementary teacher who resigned in June of 2025 stated to district officials that these charges were for personal expenses.
The employee reimbursed the district for the $794. District officials contacted the school resource officer and a police report was filed. Additionally, this matter was submitted to the professional licensure standards board. That concludes findings for Cedarville school district.
Senator Tyler Dees Members, any questions on this report? Okay. Co-Chair Duke.
Representative Hope Duke Thank you, Mr. Chair. I have a quick question for staff. So I know it says additionally this matter was submitted to the professional licensure standards board. Can we get any update? Because we have several school personnel over the time that have some of these similar issues. How do we make sure or find out the information that this person doesn’t just go to another district and do the same thing?
Staff The only thing I’m aware of on this one is that I believe the school received a letter saying that no further action was taken. It was looked into by the PLSB, but I’m not aware of any additional action that was taken. And I’m not aware of any additional actions taken by the police department as well.
Representative Hope Duke Do you know if, in any of these instances, especially when we’ve had some really significant numbers, if they ever attach to their certificate? Because I know other items attach to teaching licenses.
Staff So generally, if they take that kind of action, we’ll know it. I know we’ve had some that we presented in the past where we knew that the PLSB actually took action. And if I have that information, I’ll typically share it with the committee.
Representative Hope Duke One more question, do you know if it goes in a file or in the personnel file or anything like that?
Staff I’m unaware.
Senator Tyler Dees All right, members, without any further questions, this will be– and without objection, will be filed as reviewed. All right. The last report with findings.
West Memphis School District
Staff Last report is West Memphis School District, which had one finding that was a repeat. During our examination of capital assets, the following discrepancies were noted. The district failed to capitalize $851,000 of construction expenditures related to the baseball-softball complex.
Eight items with an initial cost of $200,000 were included as capital asset additions, but due to errors, the asset values were not included in the total active assets and the total ending balance. One capital outlay purchase was not properly capitalized. And of the 10 items we selected for observation, four were not available for inspection. And a similar finding was noted in the prior audit.
Senator Tyler Dees Thank you, Mr. Fink. And I believe we have a representative from West Memphis. You’re welcome to the table. Introduce yourself and we will welcome you.
Eric Foister I’m Eric Foister. I’m the superintendent of West Memphis Schools. Apologies for Dr. Wolf, our school board president. She is out of state today. Otherwise, she would be definitely here.
Senator Tyler Dees Thank you, Mr. Foister. Thanks for being here, and we’ll just open it up like we normally do. We heard the report on the findings. We’d love some of your commentary and some thoughts. And I believe it’s probably relevant information to note, to say I’ve got to note you’ve been there about 13 months. Is that correct in your role?
Eric Foister That is correct.
Senator Tyler Dees Okay. So tell us a little bit about what’s going on here.
Eric Foister So we had our first Legislative Audit for FY24. The district had never done a public audit. So there’s a lot of processes and procedures that were never put in place. So before, I got to give credit to the school board, I wouldn’t want to do a public audit. But they had already agreed to do that.
So I started in December of 20, whatever, fiscal year. So I was on the tail end of that. We had just finished up the baseball-softball. I was not aware of those findings, to be honest, until after the audit came through. I was aware of our issues with fixed assets, which is the repeat finding.
So what we have done, we now have a process and procedure in place, not only for the fixed assets but we have a requisition PO process that goes through three levels before it ever gets approved. And when it gets approved, when it comes in, it gets received. We have the chain of duties, separation of duties is already in place. So now we have a tagging process for all our equipment.
The hard part for us, quite frankly, at this point is we have so many assets that were not, quite frankly, inventoried for years. So we are in the process of trying to retire some assets that should have been retired years ago.
We did retire a couple since I’ve been here. We’re in the processes of making some significant ones here over the next few months. Our department leads, building principals, they have a process laid out. They have a due date by May 15th to get back with me on where we’re at and then go from there.
Senator Tyler Dees Thank you for that description. I appreciate it. So will you kind of double click on what you had mentioned about some of the checks and balances maybe there, and where is your school board involved on some of that? Are they a part of it? Is it brought to them for final approval? What does that look like?
Eric Foister So we follow the same guidelines that, you know, ASBA school district. So anything over the significant dollar amount gets approved by the board. Typically being new, and I’ll just be frank, I’m the sixth superintendent since 2022. So there’s been a lot of turmoil. So I’m trying to be transparent.
So any large ticket item, I put it in front of the board whether that’s the right way. I don’t want anything that’s considered, we’re trying to do something we’re not supposed to be doing. So I have a deputy superintendent. When I started, I don’t want to say nobody, had very limited– the people retired around me. So for about six months, it was just me. So our business manager is very sharp. She’s in place now. We have a Deputy Superintendent. I have two other guys in that lead office.
So the process goes, it was also a federal program. So the dollar amount, because they have to get checked off by the chief academic officer over that grade level, it goes to the principal, him, then to the Deputy Superintendent. And if it’s anything over a significant amount, then it goes through me. So three steps before it ever gets approved. And then we have separation duties. We have two accounts payable. And then we have receiving as well that comes in a different way. So we’ve really tried to– the operational excellence is something we’re striving for.
Senator Tyler Dees Senator Love, you’re recognized.
Senator Fred Love Thank you, Mr. Chair. I’m looking at, I think it’s the fourth bullet point, which is of the ten items selected, there was four that observed that were not available. So were those big ticket items or were those– I mean, were they old? Were they big ticket?
Eric Foister To my knowledge, they weren’t big ticket, but they were older.
Senator Fred Love So you’re doing a clean up? You’re kind of cleaning out your inventory, tagging things?
Eric Foister That is correct.
Senator Fred Love Okay. Do you have any items missing? I mean, like, to your knowledge, are we truly cleaning up or are you going to come back and say, Hey, you know what, we have some tractors that are just missing?
Eric Foister Yeah, to my knowledge, nothing big-ticket like that, nothing at all.
Senator Tyler Dees I think staff can read a couple of these that might be helpful, too.
Staff So for the four items that were unavailable for inspection, the total cost of the four altogether is around $6,000. They were purchased anywhere from 2007 to 2019. All items except one were fully depreciated. One was a desktop computer. One was a Macbook, a musical instrument, and a podium.
Senator Fred Love No useful value. Other than that, you’ve cleaned them out of your inventory.
Eric Foister We’re in the process, yes.
Senator Fred Love Okay, thank you.
Senator Tyler Dees Thank you, Senator Love. Representative Beaty, you’re recognized. Oh, you are good now? Representative Mayberry, you’re recognized.
Representative Julie Mayberry Thank you. I’m just asking for some clarifications, because maybe I just misunderstood you. Did you say that you’ve not had a public audit until the last year? Do you mean that you’ve not had our auditors do it or do you mean, like, has there been a private auditor?
Eric Foister There has been a private audit.
Representative Julie Mayberry Okay, so there has been an audit. It’s just not been our auditors who do this all the time and know it backwards and forwards, right?
Eric Foister I say all the time, if I don’t know it’s broke, I can’t fix it.
Representative Julie Mayberry Right. Okay. But there has been an audit before?
Eric Foister Yes.
Representative Julie Mayberry Just private. Thank you for clarifying.
Senator Tyler Dees Senator Love, you have a question?
Public vs private audits
Senator Fred Love I have a question for staff. The superintendent said that West Memphis has never had an audit. Is there a reason why we have not looked at them?
Staff No, so previously their school board had chosen to use a CPA firm that was not Legislative Audit to do their audit. So they’ve had an audit every year. We keep up with that. We track that even for the audits that we don’t perform. I keep a list of every audit that’s done. So it’s not that they haven’t had an audit. They chose, their board did, to start using Arkansas Legislative Audit for their FY24 audit. So now we are the ones doing that.
Senator Fred Love Okay, so when they have their private audit, do we review that audit? Are we looking at things in the audit saying, Hey, these may be questions, and so we may want to do our own audit? Or are we just filing it away?
Staff So we receive the audit. We review it. DESI also receives that audit and looks over it. We look to see if there are any findings. If there are, they come before this body.
Senator Fred Love Okay, so tell me this, from last year then, were there any issues on the private audit that we picked up that were on the public audit? I mean, like, did the private auditors do exactly what they were supposed to do, or were these issues just looked over?
I guess that would be my question because I don’t think with how the superintendent explained it, it seems like this has been going on for years. Well, if they’ve been doing a private audit and the private audit didn’t pick it up and then all of a sudden we picked it up, I mean like, I’m just kind of curious to see, like, then what have we been reviewing, number one. Number two is, if these were pervasive issues, then why did we not get involved sooner? I guess that’s what I’m asking. Do you understand what I’m saying?
Staff So yeah, so first, though, when it comes to the audit, I mean, we don’t look at a hundred percent. So the CPA firm, they’ve could have done all their work. They could have done it correctly. And in their samples that they pull for capital assets, they may have pulled other items that the school district had on hand. So I really can’t speak to that. We started doing the audit in FY 24. We noticed issues. Anytime we notice an issue, we’re going to follow up on it in the next year to see if that issue is still there. So, I really can only speak to the work that our auditors perform.
Senator Fred Love Okay. All right. Thank you.
Senator Tyler Dees Thank you, Senator Love. Representative Beaty, you’re recognized.
Representative Howard Beaty I just want to follow up. You mentioned in the audit, and this is for staff, that a similar finding was reported in the prior audit. Was that prior finding, was it related to misclassification on the capitalization of the assets on construction, or was it more on their fixed asset side? Is it the entire four points were on there in the previous audit, or was it just that they were having trouble with their fixed assets?
Staff So we had similar issues on the first, second, and fourth bullet point.
Senator Tyler Dees Thank you. Representative Long, you’re recognized.
Representative Wayne Long Thank you, Mr. Chairman. My question was for staff also. I would assume Legislative Audit does not charge the schools to do an audit. Is that correct? Why would a school choose to pay a private firm rather than have it free by the state?
Staff I can’t really answer that question.
Representative Wayne Long Can you give me an idea about how many school districts approximately do the CPA type audit rather than a Legislative Audit?
Staff So we do 197 school audits and there are 38 schools that choose a private auditor.
Representative Wayne Long Thank you, sir. Maybe that’s what we need to look into. Thank you.
Senator Fred Love Okay. So I’m back on this, Mr. Fink, because I can’t let this go for some reason. So if we look at the audit, if there was a repeat findings that we’re saying these were repeat findings, if the school board did not elect for us to come in, would we have gone down to do an audit? I guess that’s my issue because if we know from their audits that they were having an issue and the school board didn’t elect for us to come in. And we were to continue to let this go on. I guess I’m trying to figure out when is it to Legislative Audit to say, Hey, wait, we see this as a pattern and we’re now stepping in as Legislative Audit.
Senator Tyler Dees I’ll give my commentary. I believe West Memphis is actually in good faith. They’ve given– I know, but just as an example. They have an independent audit that they go down. They have some findings and they communicate with Leg Audit as well. And I think that’s probably the rhythm. That’s probably a similar rhythm to what the 38 other school districts go through. That’s an assumption. That’s my commentary.
Senator Fred Love Well, I was just thinking, I mean, if they would have elected not to have us come in, they would just continue to have the same issues. And then they would continue to go. And I guess that’s where I guess my rub is. It’s like, they didn’t invite us in. I mean, when is it our job to say, hey, you know what, we see this audit, we see that these are repeat findings, and so now we’re going to step in to actually do an audit from Legislative Audit perspective?
Senator Tyler Dees So maybe this, Senator Love, this could be a question for staff. So what’s in front of you is an audit from the state, but maybe staff can clarify this way for both of us. Whether a school district has an independent audit or not, they’re always eligible, potentially eligible for an audit from the State. And so Mr. Fink, could you maybe describe that for all of us? What’s the regular rhythm for school districts going through an audit, whether they have independent auditors going on or not?
Staff So typically, just in terms of if there’s a private CPA has done it in the past, there will be basically brought before the Executive Committee a request for us to do the audit. We’ve seen it where the superintendent and school boards are the ones who do that. We’ve also seen it with the Executive Committee learns of certain issues, and they come and they request that from us. We’ve done that. I think back in 2022, we did that. And so, but typically we just do whatever the Executive Committee of LJAC approves. I hope that answers your question.
Senator Fred Love Well, I guess this is what I’m saying though. When do we decide that if they’ve had repeat findings? For instance, the CPAs turned over this, they haven’t corrected year one. Then year two, similar repeat findings. Year two. Is there any time that Legislative Audit is going to step in if they’re not invited?
Staff Staff serves at the will of the committee. So we’re going to do what the Executive Committee and what the full Joint Audit Committee requires us to do.
Senator Fred Love Regardless of if you see this, if you see,hey, West Memphis has had repeat findings two, three years in a row after you all reviewed it. You all would not go in unless the school board requests or unless it just gets so– I mean, are you missing what I’m saying?
Staff So we did the audits for FY24 and 25 for west Memphis.
Senator Fred Love But I’m talking about the years before because it seems like this has been a pervasive issue.
Staff We wouldn’t have known about any issue unless it was in the audit report. If it is in the Audit Report and it’s a repeat finding, it’s going to come before this committee.
Senator Fred Love Whether it’s a private? Okay, all right, correct.
Staff Yes, sir.
Senator Fred Love That’s what I was missing. Okay.
Staff Any audit that a CPA firm does that involves a public open enrollment charter school or public school district comes before this body.
Senator Fred Love Okay, that’s what I was missing. I was like, all right, we’re not going look at it? Okay.
Senator Tyler Dees Thank you. Representative Duke.
Representative Hope Duke Just a quick question and going along with the senator’s question. So it all comes before us. I guess I think, kind of with the gist of what he is saying here is, what’s the protection? It comes before us, we hear the reports, but we can do a little bit of a dig or dive.
So would that be at the Executive Committee that would say? Do they have the ability to come in and say, okay, we’re getting some private reports here that are concerning to us. Now we want to know more information. Or if the school district says, no, hands off, we’re doing a private audit, where’s the accountability?
Is there additional accountability as a resource or the ability of legislators, whether Legislative Audit with the Executive Committee or this committee, and this has nothing really– he’s just kind of taken us down a direction. But I do understand it. Because as a private audit, if you don’t have that type of accountability, then why would you not just do it? So I’m assuming there has to be a layer in there that allows the legislature to ensure everything’s on the up and up.
Staff Yes, so the Executive Committee, if the Executive Committee makes a decision that Arkansas Legislative Audit is going to do the audit of the school, then we’re going to do the audit of the school.
Senator Tyler Dees Thank you. Representative Beaty.
Representative Howard Beaty I’m glad we finally got that cleared up, that regardless of private or if it’s something that’s performed by the state, it still comes to this committee with the findings. And even on the private side, there’s even a secondary review layer that all of those private audits go through where someone pulls the audits and reviews the working papers to make certain that findings and procedure.
I think that’s done by the CPAs within the Arkansas Certified Public Accounting Association. They do peer review and look at those things. So I mean, regardless of what the finding is or who found it or who performed the audit, those things still come to this committee. And then this body has the authority to take action on those.
So I guess the main thing is that the findings are there and that we’ve got good auditors working both in Leg Audit and the private audit that are taking care of these. But I’m glad that we finally got around to the point that private or Leg Audit, that those reports do make their way to this committee and then on to Leg Audit on the full committee.
Senator Tyler Dees Thank you. Members, any other questions for West Memphis, besides our own rules? Okay. Thank you for being here. I appreciate it. Without objection, this will be filed as reviewed. All right, members, that takes us through the reports with findings.
We do have 28 school districts with no findings, whether private or Leg Audit. And you’ll see them listed on the back page of your deck. If you’ve got a school district that you represent there, shoot them a note would be my recommendation. It sounds like Rep. Beaty’s got some school districts that are passing with flying colors. Give them the kudos they deserve, and so that is a big deal. We appreciate that.
Members, any other business? Seeing none, we are adjourned.
