The school district at the center of a landmark 2002 ruling by the Arkansas Supreme Court that changed the face of K-12 education in the state fared poorly in an audit released last week that outlined delinquent unemployment taxes, outstanding bills, and a general fund deficit.
The Division of Legislative Audits inspection of the Lake View School District covered the fiscal year that ended June 30, 2004. At that time, the district was absorbed by the Barton-Lexa School District.
Under new education finance laws approved by lawmakers in early 2004, all districts with fewer than 350 students were consolidated into larger districts.
According to the audit, Lake View School District had 10 years of delinquent state unemployment taxes and related fees totaling $44,136 as of Oct. 19, 2004. Only $11,529 was paid toward that delinquency during fiscal 2004. The audit also stated that the district was $22,864 behind in payments to Delta Hardware Store, which was under contract with the district to complete $44,500 of school repairs and renovations.
In addition, the audit found that the Lake View district paid 16 employees unauthorized compensation in excess of their employment contracts. That amount totaled $23,572. Salary and benefits of $16,521 for the districts treasurer were improperly paid from a grant from the U.S. Department of Education, and more than $40,000 of federal money was improperly used to compensate district employees.
The districts general fund had a deficit of $62,820 as of June 30, 2004, the audit said.
Lake View in 1992 filed the first of a series of lawsuits against the state alleging that school funding in Arkansas was inadequate and inequitable. The states high court ruled that the district was correct, a decision that sparked a series of education reforms, including higher sales taxes and mandatory property tax levies.
