ADE takes over school district after audit reveals millions in "improper expenditures"

ADE takes over school district after audit reveals millions in "improper expenditures"

EARLE, AR (KAIT) - After finding evidence of more than $2 million in "unallowable expenses" and "substantial audit violations," the state of Arkansas has taken over the Earle School District, and the superintendent has resigned.

The Arkansas Department of Education announced Monday that it assumed authority of the district "because of significant findings that jeopardize the fiscal integrity of the district."

The decision follows an on-site review conducted Oct. 24 and 25.

The ADE said records revealed nearly $2 million in improper expenditures of state and federal funds beginning in the 2015-16 school year.

"Corrections to the 2017-18 budget were not made, resulting in unallowable expenditures continuing into the 2017-18 school year" the ADE stated.

Other issues the ADE found include:

• Inaction to implement ADE guidance to correct the district's budget and improper spending  
• Poor fiscal management procedures;
• Improper reporting of activity funds;
• Current expenditures that exceeded revenues;
• Inaccurate fund balances;
• Nonpayment to vendors;
• Outstanding debts; and 
• Issues with payroll and employee contracts.

In addition to fiscal issues, ADE reported finding "multiple violations of Standards of Accreditation involving student transcripts, teacher assignments, and special education teacher certification."

Superintendent Rickey Nicks has resigned. Dr. Richard Wilde, with the ADE School Improvement Unit, will serve as district superintendent.

ADE Commissioner Johnny Key has also suspended the school district's board of directors' authority. However, he offered them the opportunity to remain in an advisory capacity to the new superintendent, the news release stated.

"Ongoing input and guidance from parents and the community are essential during this transition," Key said. "I want every student and parent to know that buses will continue to run and school will be in session as we work to restore fiscal integrity in the district."

Copyright 2017 KAIT. All rights reserved.

Watch Region 8 News On Demand: On your Desktop | On your Mobile device

Region 8 News App - Install or update on your: iPhone | Android