Arkansas Code of 1987 (2023) › Title 6 - EDUCATION (§§ 6-1-101 — 6-87-104) › Subtitle 2 - ELEMENTARY AND SECONDARY EDUCATION GENERALLY (§§ 6-10-101 — 6-28-206) › Chapter 20 - FINANCES (§§ 6-20-101 — 6-20-2704) › Subchapter 22 - ARKANSAS EDUCATIONAL FINANCIAL ACCOUNTING AND REPORTING ACT OF 2004 (§§ 6-20-2201 — 6-20-2210) › Section 6-20-2202 - Budget and expenditure report

(a)
(1)
The board of directors of each school district, open-enrollment public charter school, and education service cooperative annually shall prepare a budget of expenditures and receipts that shall be filed with the Division of Elementary and Secondary Education by September 30 of each year under this subchapter.
(2)
(A)
Each budget shall be approved by the board of directors of each school district, open-enrollment public charter school, and education service cooperative at a legally held meeting and shall be signed by the president of the board of directors and the ex officio financial secretary of each school district, open-enrollment public charter school, and education service cooperative.
(B)
The budget shall contain the information and be prepared in an electronic format prescribed by the Division of Elementary and Secondary Education governing financial accounting for Arkansas school districts, open-enrollment public charter schools, and education service cooperatives.
(3)
(A)
The electronic format required by the Division of Elementary and Secondary Education shall be available for completion by school districts, open-enrollment public charter schools, and education service cooperatives not later than September 15 of each year.
(B)
The Division of Elementary and Secondary Education shall declare when the electronic format is accessible to school districts, open-enrollment public charter schools, and education service cooperatives via the Commissioner of Elementary and Secondary Education memo.
(b)
(1)
(A)
Warrants or checks of a school district, open-enrollment public charter school, or education service cooperative issued after the date required by subsection (a) of this section shall be invalid unless a budget has been filed as required by this subchapter and in compliance with appropriate rules.
(B)
The ex officio financial secretary of a school district, open-enrollment public charter school, or education service cooperative and his or her surety shall be liable for any warrants or checks countersigned after the date required by subsection (a) of this section if a budget has not been filed.
(2)
After the Division of Elementary and Secondary Education has met all deadlines for providing information to school districts, open-enrollment public charter schools, or education service cooperatives, distribution of all grants and aids from the state for which the school district, open-enrollment public charter school, or education service cooperative may be eligible shall be suspended until the requirements of this subchapter are met by the school districts, open-enrollment public charter schools, or education service cooperatives.
(c)
(1)
(A)
School district, open-enrollment public charter school, and education service cooperative budgets filed pursuant to this section shall be reviewed by the Division of Elementary and Secondary Education to determine whether the requirements of state law and the rules of the State Board of Education regarding the use of school, open-enrollment public charter school, and education service cooperative funds and expenditure requirements are being met.
(B)
(i)
The review and the determination shall be completed not later than February 15 of each year.
(ii)
If the Division of Elementary and Secondary Education determines that the financial records are deficient, then the school district, open-enrollment public charter school, or education service cooperative shall be notified and shall have thirty (30) days to respond before suspension of the grants and aids.
(2)
Upon approval by the Division of Elementary and Secondary Education, copies of the approved budget shall be filed with the school district, the open-enrollment public charter school, the education service cooperative, the county treasurer if serving as school treasurer, and the Division of Elementary and Secondary Education.
(d)
(1)
(A)
The ex officio financial secretary of each school district, open-enrollment public charter school, and education service cooperative shall keep a record of the following information in a format required by the Division of Elementary and Secondary Education:
(i)
The daily expenditures and receipts of the school district, open-enrollment public charter school, or education service cooperative; and
(ii)
(a)
Information on fund balances maintained by the school district, open-enrollment public charter school, or education service cooperative, including, but not limited to, the:
(1)
Sources of the funds maintained as fund balances, to the extent practicable;
(2)
Reasons for maintaining, instead of spending, the fund balances;
(3)
(A)
Amount of funds transferred between various funds during the past year.
(B)
The school district, open-enrollment public charter school, and education service cooperative shall identify the funds transferred between and the amount of funds transferred; and
(4)
Amount of fund balances dedicated for the construction, maintenance, or repair of academic or athletic facilities.
(b)
The Division of Elementary and Secondary Education shall promulgate rules that require reporting of fund balances sufficient to verify whether funds allocated for educational purposes, including, but not limited to, student academic needs and the maintenance and operation of public school district facilities, are used for their intended purposes or retained by the school district in its fund balances.
(B)
(i)
An annual report summarizing the information required in subdivision (d)(1)(A) of this section in a format required by the Division of Elementary and Secondary Education shall be filed by August 31 of each year with the Division of Elementary and Secondary Education.
(ii)
A final close must be performed in each school district's or open-enrollment public charter school's or education service cooperative's applicable general ledger database no later than September 10 of each year.
(iii)
The Arkansas Public School Computer Network shall ensure that proper controls are in place to prohibit changes to the aforementioned data after the final close has been performed.
(2)
If the Division of Elementary and Secondary Education determines that the financial records of any school district, open-enrollment public charter school, or education service cooperative are not properly maintained or that the financial affairs of the school district, open-enrollment public charter school, or education service cooperative are not administered in accordance with state law or state board rules, grants and aids from the state to which the school district, open-enrollment public charter school, or education service cooperative may be entitled shall be withheld until it is determined that the fiscal records of the school district, open-enrollment public charter school, or education service cooperative are in order or that the financial affairs are being properly administered as established by statute or by rule promulgated by the state board, provided that the Division of Elementary and Secondary Education has met all deadlines for providing information to school districts, open-enrollment public charter schools, or education service cooperatives.
(e)
(1)
The Division of Elementary and Secondary Education may withhold state aid from any school district, open-enrollment public charter school, or education service cooperative that fails to file its budget or any other required report with the Division of Elementary and Secondary Education by the deadline established by statute or by rule promulgated by the state board or by the due dates established by the Division of Elementary and Secondary Education pursuant to subdivision (e)(2) of this section, provided that the Division of Elementary and Secondary Education has met all deadlines for providing pertinent information to school districts, open-enrollment public charter schools, or education service cooperatives.
(2)
The Division of Elementary and Secondary Education shall submit a list of all required financial accountability reports along with due dates to each school district, open-enrollment public charter school, and education service cooperative by July 1 of each year.
(f)
The state board shall promulgate the necessary rules to fully implement this section.
(g)
(1)
The Treasurer of State shall withhold the monthly distribution of county aid provided under §
19-5-602(c)
from any county whose county official who is the preparer of the tax books fails to provide by March 15 of each calendar year information concerning the annual abstract of assessment that reflects the aggregate value of the real and personal property for each school district located wholly or in part in the county as follows:
(A)
If the county is capable of providing the information electronically, then the information shall be provided to both the Division of Elementary and Secondary Education and the Assessment Coordination Division; and
(B)
If the county is not capable of providing the information electronically, then the information shall be provided only to the Assessment Coordination Division.
(2)
The information transmitted to the Division of Elementary and Secondary Education and the Assessment Coordination Division shall also include:
(A)
The previous calendar year's property assessment that will be used for ad valorem tax collections in the current year; and
(B)
The millage rates, which shall be listed by the type of millage, levied against that property assessment.
Amended by Act 2021, No. 544,§ 49, eff. 7/28/2021.
Amended by Act 2021, No. 544,§ 48, eff. 7/28/2021.
Amended by Act 2021, No. 544,§ 47, eff. 7/28/2021.
Amended by Act 2021, No. 544,§ 46, eff. 7/28/2021.
Amended by Act 2019, No. 910,§ 1652, eff. 7/1/2019.
Amended by Act 2017, No. 741,§ 5, eff. 8/1/2017.
Acts 2003 (2nd Ex. Sess.), No. 61, § 1; 2005, No. 77, §§ 1, 2; 2005, No. 730, § 1; 2006 (1st Ex. Sess.), No. 26, § 1; 2006 (1st Ex. Sess.), No. 27, § 1; 2006 (1st Ex. Sess.), No. 28, § 1; 2006 (1st Ex. Sess.), No. 29, § 1; 2007, No. 617, § 22; 2007, No. 858, § 1; 2009, No. 1469, §§ 12, 13; 2011, No. 989, § 72.