Panel OKs requests for LR schools audit

State to open ongoing fiscal reviews

A legislative panel Thursday signed off on requests from the state's education commissioner and the former interim superintendent of the Little Rock School District for the Division of Legislative Audit to conduct an audit of the district for the fiscal year ending June 30 and subsequent fiscal years.

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The Legislative Joint Auditing Committee's executive subcommittee approved the audit request submitted to the audit division by state Education Commissioner Johnny Key in a letter dated April 6 and by then-Little Rock School District Interim Superintendent Dexter Suggs in a letter dated April 20, one day before his resignation.

Key said the school district has a private accounting firm that prepares financial statements for the district, and "we request this practice be discontinued."

Committee Co-Chairman Sen. Jimmy Hickey, R-Texarkana, said the Arkansas Legislature earlier this year authorized the audit division to create two new auditing positions to help the division conduct the audit of the Little Rock School District.

"We had actually somewhat anticipated this," he said. "We don't know that it will be enough to do [the audit], but we at least have something for this division to kind of minimize the impact of this."

On Jan. 28, the state Board of Education voted 5-4 to take control of the Little Rock School District, immediately removing the seven elected school board members and placing Suggs under the direction of then-Education Commissioner Tony Wood.

The 24,800-student district, the state's largest, is the second district in Pulaski County to be placed under state control. The Pulaski County Special School District has been operating under state control after being declared in financial distress, with a state-appointed superintendent and no elected School Board since June 2011.

At the outset of the meeting, Hickey told the executive committee members that "we try not have any politics involved" in authorizing the Division of Legislative Audit to conduct audits.

State Rep. John Walker, D-Little Rock, said the Little Rock School District hasn't had the Division of Legislative Audit conduct an audit of the district for years, so he asked the director of the audit division, Roger Norman, "When do you decide you are required to do it and when [do] you decide you aren't required to do it?"

Norman said the audit division conducts audits of state agencies and colleges and universities and counties under state law, while cities and school districts have the option of using the audit division's services or a private certified public accountant.

The audit committee "determines which of those audits we do and don't do and part of it relates to how much time that the staff would have to do it as part of the request," Norman said. He said he also has discretion to start audits as the legislative auditor.

The committee's executive subcommittee subsequently approved a request by state Rep. Kim Hammer, R-Benton, for the audit division to "examine the manner in which the $500,000 appropriated to [Pulaski] County by Gov. [Mike] Beebe for western Pulaski County as a result of damage sustained by the April 27, 2014 tornado, was utilized" as part of its annual audit of Pulaski County.

Hammer, a former co-chairman of the committee, said in a letter dated Jan. 9 that he would like to know what projects were funded, who oversaw the distribution of funds and how much of the governor's appropriated funds were spent "on actual cleanup and rehabilitative services in the area impacted by the tornado."

Sen. Linda Chesterfield, D-Little Rock, said the audit division should comply with Hammer's request.

But she urged the auditors "to stay out of the neighborhood conflict because a lot of this is stemming from that."

Norman said, "We will, I assure you, do our jobs in an objective manner."

The executive subcommittee also approved a request by Sen. Stephanie Flowers, D-Pine Bluff, for the division to conduct an audit of the Jenkins Memorial Center in Pine Bluff, a nonprofit corporation that Flowers said receives state funding.

Flowers wrote Norman in an email dated Monday that the center provides services to the developmentally disabled and a federal tax lien has been filed against it for more than $2 million for failing to submit employees' tax withholdings.

The panel also approved a request by Sen. Bryan King, R-Green Forest for the division to determine whether the assessments owed by rice buyers to the state Department of Finance and Administration are paid or collected as required under state law.

Metro on 05/08/2015

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