Springdale district responds to issues revealed in audit

Handling of money in schools, undated receipts cited by auditors

SPRINGDALE — The School Board reviewed a report at Tuesday’s meeting regarding the financial review recently done by the Arkansas Legislative Audit revealing some receipt and other issues and the district’s responses.

Springdale is one of about 40 school districts that has a private firm do its audit instead of the state’s legislative audit.

On Nov. 6, 2015, the Legislative Joint Auditing Committee approved a request from Arkansas Legislative Audit staff to do limited procedures on school districts contracting with private certified public accountants to do annual financial and federal compliance audits.

Random districts were selected for 2017 and they looked at July 1, 2016, through April 30, according to a letter from Larry Hunter, deputy legislative auditor, to Springdale Superintendent Jim Rollins.

The Arkansas Legislative Audit members found two issues that will be in their official report to the committee.

Rollins said the people who “did the audit were very professional and very thorough. I think, like we do with every audit, we look at it from the standpoint of how to get better and improve deficiencies if they exist. The kind of suggestions they made will help us get better.”

In a district the size of Springdale, there are also opportunities to improve, Rollins said.

One issue was how cash was being handled in several instances throughout many schools.

They looked at travel for the superintendent, credit card purchases, related transactions and cash receipts, said Kelly Hayes, School District comptroller.

They should be able to see a clear audit trail showing money goes from a patron, student or parent to an employee then to the schools office then to the bank, Hayes said.

“Going from the school office to the bank, we were top notch, 100 percent no problems. Going from the teachers to the office, we were not as clean as we needed to be,” he said. “That sounds scary, but more often than not, if a teacher was writing some receipts the amount they ended up depositing was more than they have written receipts for.”

The issues include receipts not having dates or the wrong date or no signature. There were 58 instances of undated receipts at Har-Bar High School, for example.

The district has worked to correct the issues and have instructed principals and office personnel at the school to be more vigilant, according to the district’s response to the audit. The receipts teachers have are now numbered to track them more closely, Hayes said.

The other issue raised was the district paid $15,342 for bus repair to someone who was also a bus driver for the district and $14,732 for cheerleading clothing from a sporting goods business of which a teacher is part-owner. Both relationships were disclosed to the School Board, but it wasn’t authorized from the state Department of Education, which is required by law for anything more than $10,000.

“We are going to double our efforts to make sure this does not reoccur,” Hayes said.

Since the audits are random, the district doesn’t know if they’ll be selected again next year, but Hayes said they’re operating like it could happen at any time.

Other issues were raised, but which Hayes said will not be included in the official report, include non-voided blank district receipts, an improperly authorized electronic transfer and not obtaining notarized statements from some bus bidders.

They also found the district didn’t follow it’s established guidelines regarding unsupported credit card charges.

“We are redoubling our efforts to make sure that we have a receipt for each and every thing. If we don’t have a receipt, we are asking the employee that used the credit card to reimburse the district,” Hayes said, which is also stated in the district’s response to the review.

“It’s a challenge to keep everyone on the same page because, let’s be honest, we didn’t hire them to be bookkeepers. We hired them to be teachers. We are doing the best we can to meet [the auditors] expectations.”

The board may have to take some official action on these findings, but it’s unclear at this time, Hayes said.