ADE Director's Communication Memo Form

Memo Number : FIN-10-033

Date Created : 11/02/2009


Co-op Directors
other: General Business Managers

Type of Memo: Informational
Response Required: No
Section:   Fiscal and Administrative Services - William J. Goff, Assistant Commissioner
Act 286 of 2009-Audit Requirements Regarding Ethical Guidelines

Regulatory Authority:
Ark. Code Ann. § 6-1-101(b) as amended by Act 286 of 2009

Contact Person:
Patty Martin

Phone Number:


Act 286 of 2009 requires a statement regarding compliance with ethical guidelines to be included in a statutorily required audit of an educational institution.

Previous language in Ark. Code Ann. § 6-1-101(b) required the auditor to review and comment on substantial compliance with statutes that prohibit school officials from having interest in sales to the school and from receiving pecuniary profits for favorable actions. This requirement has been changed to require the auditor to review and comment on substantial compliance with ethical guidelines and prohibitions for board members, administrators, and employees as stated in Ark. Code Ann. § 6-13-628 and § 6-24-101 et seq.

The basis of Ark. Code Ann. § 6-24-101 et seq. comes from Act 1599 of 2001 and Act 1381 of 2005. Act 1599 of 2001 was for the purpose of prohibiting self-dealing in transactions between educational entities and board members, administrators, or employees. Commissioner’s Memo FIN-09-036 dated December 5, 2008, provides detailed information related to this Act. Act 1381 of 2005 was for the purpose of restricting school districts from employing relatives of school board members.

Superintendents, Education Service Cooperative Directors, and General Business Managers should review the requirements of the laws and maintain sufficient documentation demonstrating compliance. Auditors are required by law to check for compliance.


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