A legislative panel Thursday approved a lawmaker's request for the Arkansas Legislative Audit to begin randomly checking the state's 40 school districts that contract with private firms to do their annual audits.
The Arkansas Legislative Audit audits the state's other school districts. The state has 232 school districts, according to the state Department of Education.
State law gives school districts the option of having audits done by the Arkansas Legislative Audit or contracting with private firms to do them, said Legislative Auditor Roger Norman.
The 40 school districts that use private, certified public accountants to do their audits include Benton, Bentonville, Conway, Fayetteville, Fort Smith, Hot Springs, Jonesboro, North Little Rock, Rogers, Russellville, Springdale and West Memphis, according to a list from the Arkansas Legislative Audit.
State Rep. Charlotte Douglas, R-Alma, said in a letter to the Legislative Joint Auditing Committee's executive committee that school districts frequently contract with private auditors after state auditors have identified issues.
The Arkansas Legislative Audit doesn't have enough auditors to handle all of the state's school districts each year, so "our solution is to do an abbreviated audit on a random selection basis of those districts with private auditors," Douglas wrote in her letter.
"Districts should not be able to predict when it is their turn. I believe this is critical for integrity and accountability," she said.
Douglas said in an interview that her request for randomly checking school districts that have private auditors wasn't triggered by any particular school district or audit.
Deputy Legislative Auditor Larry Hunter told lawmakers that "we don't want this to be a re-audit.
"What we envision would be like some compliance-type testing and maybe some high-risk testing, and this would not be an audit and be more a special project type report, if you ever find anything.
"We envision for a couple of weeks going out and doing some random testing," Hunter said.
Norman told lawmakers that legislative auditors have a good relationship with the private auditors, "as long as they know we are not out there trying to ding them, which we are not.
"The only purpose of it would be to go in and basically serve the General Assembly and let these schools know that ... the people who [are] appropriating money for them [are] going to come in and look at that," he said. "Even on our audits, we do it on a test basis, there is a lot of stuff that we miss for years that we don't catch.
"But it is just another set of eyes. Since it is public dollars and, of any of the entities in the state, probably education is the one where the greatest lion's share of the money is going," Norman said.
He said Arkansas Legislative Audit workers could randomly check the school districts, and "if we do something other than that, we could bring it before the executive committee."
Norman said in an interview that he doesn't plan to hire more employees to conduct the random checks on these school districts.
Asked if the private contractors' audits are as thorough as those done by the Arkansas Legislative Audit, Norman said: "They are subject to the same standards that we are.
"From that standpoint, if an audit is substandard, then that would be something that the state Board of Public Accountancy would need to look at. And we are certainly not making any allegations that any of them are substandard," he said.
He said it hasn't been determined how many of the districts with private auditors will be checked each year.
The other school districts using private CPAs for audits are: Alma, Arkadelphia, Blytheville, Cross County, Dardanelle, Earle, El Dorado, Farmington, Fordyce, Fountain Lake, Greenbrier, Greenwood, Hackett, Junction City, Lake Hamilton, Lakeside, Lavaca, Marion, Mountainburg, Ozark, Parkers Chapel, Prairie Grove, Rose Bud, Smackover-Norphlet, South Conway, Van Buren, Watson Chapel and White Hall, according to the Arkansas Legislative Audit.
Metro on 11/06/2015