Audit finds $851,000 not capitalized at West Memphis; members press role of legislative audit vs. private audits

Legislative auditors reported a repeat finding at West Memphis School District: the audit team identified $851,000 in construction expenditures related to the baseball/softball complex that were not capitalized and multiple errors in capital-asset records. Of ten sampled items, four were unavailable for inspection.

Superintendent Eric Feuster, recently on the job about 13 months, told the committee the district had previously relied on private audits and that many asset-management processes were never established. Feuster described steps the district has taken: a three-level requisition and purchase-order approval process with separation of duties, receiving procedures, an equipment-tagging and retirement process, and deadlines for building principals to report inventories by May 15.

Senator Love and other members asked whether unavailable items were high-value; staff said the four missing items totaled about $6,000 and were largely fully depreciated. Members also probed why repeat findings persisted when districts used private auditors. Mr. Fink explained that private CPA audits and legislative-audit work papers are reviewed by staff and DESE; any audit of a public district with findings is presented to the committee. The Executive Committee can authorize Arkansas Legislative Audit to perform its own audit when necessary.

The committee filed the West Memphis report as reviewed. Members said the district’s procedural changes and an improved requisition/approval chain will be important to resolving repeat findings.