Arkansas News Bureau
LITTLE ROCK — The state Board of Education voted Monday to classify Hermitage (in Bradley County) and the Cutter-Morning Star school districts as fiscally distressed because of dwindling funds.
The Hermitage district did not contest the status. Districts that are placed on fiscal-distress status have two years to turn their finances around or face mandatory consolidation or annexation.
In November, Hermitage Superintendent Richard Rankin said he anticipated the district would be placed on the fiscal distressed list because of a major bookkeeping error, extraordinary personnel expenditures and what he said was ill-advised spending.
The budgeting error was discovered Oct. 5 while he was in Little Rock reviewing the Bradley County district’s financial records with Department of Education officials, Rankin said in November.
Independent reporting for Pine Bluff & Jefferson County since 1879.
The discovery of the bookkeeping error forced the district to borrow $300,000 from First State Bank of Warren to make the October payroll for faculty and classified employees, Rankin said, adding the loan would be repaid ahead of schedule.
After being placed on the list, the district must develop a financial improvement plan approved by the state department and would also be prohibited from incurring any debts without state approval.
The district was taken off the state’s “academic facilities distress” list in 2009 after two years on the fiscal distress list. The latter occurred after three years of declining financial balances, dropping from a $975,000 balance in 2004-05 to $77,000 in 2006-07.
Meanwhile, on Monday, Cutter-Morning Star Superintendent Lance Robinson asked the board not to issue the classification for his district, saying that they had a plan for turning the finances around. Board Chairman Ben Mays of Clinton noted that in the 2009-10 school year Cutter-Morning Star spent $232,946 on its athletic program, not counting a concession stand that cost $92,788. He said that amounted to $3,740 for each participating student.
Also, the board unanimously rejected a recommendation that the Clarksville School District’s athletic director be disciplined for unethical conduct in obtaining bids for athletic equipment.
The board rejected the Professional Licensure Standards Board’s recommendation that Gary Thompson receive probation and a $75 fine for actions that the panel said subverted the open bidding process required by state law for purchases of $10,000 or more.
Larry Fugate contributed to this article.