ADE Director's Communication Memo Form

Memo Number : FIN-10-049

Date Created : 12/30/2009


Co-op Directors
other: General Business Managers

Type of Memo: Informational
Response Required: No
Section:   Fiscal and Administrative Services - William J. Goff, Assistant Commissioner
Athletic Expenditure Audits

Regulatory Authority:

Contact Person:
Julie Kreth

Phone Number:


Each year the Division of Legislative Audit produces a special report regarding athletic expenditures for Arkansas public school districts. Each year the Division of Legislative Audit selects approximately 20% of the state’s school districts for a special audit related to athletic expenditures and publishes its findings. Those reports can be found on the Division’s web site located at Select “Special Report” and search for “Athletic Expenditures” to see previous reports.

As a follow-up to the 2006-2007 audit of athletic expenditures, auditors re-visited the school districts that had a variance of 10% or more for 2006-2007 and audited them again for 2007-2008. Of the 19 school districts re-visited, 17 improved during 2007-2008 as compared with 2006-2007.

In Section 8.06 of the Arkansas Department of Education’s Rules Governing the Arkansas Financial Accounting and Reporting System and Annual Training Requirements (Rule), it states:

“Beginning in 2008-2009 school year, any school district that submits erroneous data to the Arkansas Department of Education that causes a material misstatement of any student or financial information shall receive a citation. A material misstatement is one in which the submitted data has more than a five percent variance from the correct data. If a material misstatement occurs for two consecutive years, the school district shall receive a probationary violation in the district’s Standards for Accreditation report issued by the Arkansas Department of Education.”

If section 8.06 as stated above had applied to the 2007-2008 school year, eleven of the 19 school districts re-visited by the Division of Legislative Audit would have received a probationary violation due to having a material misstatement of athletic expenditures for two consecutive years. Since 2008-2009 is the first applicable year for section 8.06 of the Rule, the 2007-2008 audit findings will not result in citations or probation. However, all student or financial data relating to 2008-2009 is subject to the sanctions described in section 8.06 of the Rule.

Superintendents and General Business Managers are encouraged to review the Athletic Expenditure Audit Reports to help ensure compliance with the reporting requirements pertaining to athletics and avoid the sanctions stated above.


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