The State Board of Education is meeting today to determine whether three school districts - the North Little Rock School District, Pulaski County Special School District, and Earle School District - should remain classified as "in fiscal distress." Each district received notice from the Arkansas Department of Education and had the opportunity to appeal. The North Little Rock School District did not file an appeal. The board voted that NLRSD will remain classified as in fiscal distress. Right now, the Earle School District is making its case as to why the distressed classification should be lifted. You can watch online here. Also, you can check ADE's blog for timely news on what's going on. Updates can be found on the jump as the meeting proceeds. The board voted that the Earle School District should keep its "in distress" status as well (Details on the jump).
Assistant Commissioner for ADE Bill Goff made a presentation regarding the Earle School District. He said the school's financial statements showed insufficient funds to cover payroll, salary and benefits for employees. Goff also cited the school district's failure to provide timely and accurate, legally required financial reports to ADE, legislative audit and the general assembly. The school district's attorney, Jay Beckett, said the last 15 months "could charitably described as a crisis management situation."
"The criticisms are understandable, predictable and justified," Beckett said. "However, the district, led by Mr. Nix, has made an incredible and aggressive effort in strategic planning for the fiscal recovery process going forward. The district has been very aggressive in cost control and efficient management of the district's financial and revenue resources."
Becket cited the school's recent sale of some farmland for $1.5 million, saying the deal was not a liquidation. The sale was not made under duress, he said, but the move was a calculated decision aimed at solving some of the school's financial troubles. The school's superintendent Rickey Nix told the board that the district is "not in distress," and that gains had been made over the past 15 months. When asked by board members if he thought the department's findings were in error, Nicks said no, but the problems were "correctable and were being corrected."
The board's position was that even though strides have been made to correct past problems, it might actually benefit the school to remain classified as "in distress," as they work with the state to put the past behind them. The board then voted to classify the Earle School District as in fiscal distress.
Goff, presenting the education department's findings against the Pulaski County Special School District, said PCSSD had a number of fiscal issues over the past few years citing audit reports that found inadequate controls for reconciling bank statements and documenting funding sources for employees' salaries, misappropriation of funds, and issuing blanket purchase orders exceeding the district's policy of limiting contracts to $1,000 per vendor per month.
However, Goff said, ADE did not have any indication that these problems had negatively impacted the district's ability to provide educational services.
A spokesperson for PCSSD told the board that the district had addressed every item that remained after the legislative audit investigation and had sufficiently addressed other audits as well. Education board member Vicki Saviers said some of the findings against PCSSD were troubling and that she hoped they would be corrected very soon.
Board member Toyce Newton asked PCSSD Superintendent Dr. Charles Hopson if it was reasonable to assume that anyone would conclude that there is not a reason to put the district on fiscal distress?
"I will respect however you choose to go about [making your decision]," Hopson said.
After a very long meeting, the board voted that PCSSD would remain in fiscal distress.