An audit into Arkansas PBS’ “procurements and related processes” continued to raise concerns from state lawmakers about the educational television network’s business practices at a Friday meeting.
The Legislative Joint Auditing Committee sent the audit report to its State Agencies subcommittee to be discussed further next month before the full committee will vote to file it.
Auditors have referred the report — which examined the network’s expenditures, purchasing procedures and “internal controls” from July 1, 2021, to Dec. 30, 2023 — to Attorney General Tim Griffin and 20th Judicial District Prosecuting Attorney Carol Crews.
The committee asked Arkansas Legislative Audit to conduct the investigation in November 2023 after the regularly scheduled 2022 audit of the network indicated that officials might have sidestepped state laws related to contract bidding. Purchases of more than $20,000 would have triggered a bidding process, and the network made several purchases just below that threshold from the same company, according to the 2022 audit.
Intentionally circumventing procurement law is illegal, according to the audit report. Executive Director and CEO Courtney Pledger told the committee there was no such intention, which she has told lawmakers before.
Arkansas PBS has taken steps to ensure the “mistakes and errors” that drew concern from lawmakers won’t happen again, Pledger said.
For example, PBS “limited the number of employees who touch procurement,” hired “an experienced procurement manager,” created a new fiscal manager role and hired a new controller, accounting coordinator and chief financial officer, she said.
The special audit’s findings included:
- The network’s infrequent use of standard contract documents for procurement, instead using “scope statements,” or detailed descriptions of projects for vendors;
- A lack of a clear definition of what constitutes a “project” for procurement purposes;
- 44 instances in the review period where Arkansas PBS paid multiple vendors that were located at the same address;
- Two instances, totaling $32,750, where the network paid for goods and services before receiving them or before vendors completed them;
- A $131,843 penalty from the Corporation for Public Broadcasting for filing a financial report late, though CPB has reduced the fine to less than $33,000 and will deduct it from a future grant;
- $14,265 paid during the review period to an out-of-state law firm that had been on the network’s retainer since at least 2014. The Attorney General’s office is responsible for state agencies’ legal counsel, and auditors could not find documents authorizing the firm to represent the network from 2019 onward.
Pledger told lawmakers last year that Arkansas PBS was training its entire staff in state procurement law. Auditors recommended in the report that this training continue.
Auditors also recommended that the network comply with procurement laws, submit reports to grantors and oversight organizations in a timely manner, and seek approval for outside legal counsel when necessary.
Lawmakers from both parties asked Pledger for reassurance that future audits will not yield the same results.
“Are we not going to have these bids that are $19,999 that go to the same vendor?” said Sen. Linda Chesterfield, D-Little Rock.
Sen. Kim Hammer, R-Benton, said he was not convinced the audit findings were “mistakes and errors” as Pledger said and suggested that “perhaps time will tell that some of this stuff was done intentionally.”
Pledger said the Legislature “can count on” Arkansas PBS to learn from its “errors in judgment.”
“We will not do any of the things listed in here ever again,” she said. “For the $20,000 benchmark for bids, nothing anywhere near will go through our shop without bids.”
Sullivan’s questions
The committee voted to file the 2022 and 2023 regular audits, as is standard practice for audits of state agencies. Lawmakers deliberately delayed filing both until the special audit had been completed.
Rep. Justin Gonzales, R-Okolona, made the motion to send the special audit report to the State Agencies subcommittee, which will meet Oct. 10, in response to questions from Sen. Dan Sullivan, R-Jonesboro.
Sullivan has been the legislature’s most vocal critic of Arkansas PBS. He unsuccessfully tried to reduce the network’s spending authority in the 2022 and 2024 fiscal sessions. The governor appointed Sullivan’s wife to the Arkansas PBS Commission earlier this year.
Arkansas PBS, formerly known as Arkansas Educational Television Network (AETN), is technically part of the Division of Elementary and Secondary Education within the state Department of Education but acts independently of the two entities. Sullivan asked Arkansas Department of Education officials whether the state has any responsibility for ensuring that PBS corrects the issues revealed by the audits.
The network is required to submit a corrective action plan to the department before receiving any additional grant funds, department CFO Greg Rogers said.
One such grant from the department funded Rise and Shine, a program Arkansas PBS started broadcasting to boost school-aged children’s learning during the COVID-19 pandemic. Sullivan asked Pledger if the network measures increases in students’ learning, test scores and the quality of Arkansas schools based on the reach of supplementary education programs like Rise and Shine.
Pledger said she did not think there was any way to “draw that line.”
“That’s reasonable, I get it, but the answer would be no, we don’t have the data,” Sullivan said.
He mentioned that earlier this year, the state withdrew a contract with an Indiana-based education company following pushback from lawmakers on the proposal’s high cost and the vendor’s apparent ineffectiveness.
Chesterfield, a former teacher, offered a different perspective.
“It’s very difficult when you’re dealing with supplemental education to determine that it has a direct impact on whether or not great improvement is taking place,” she said. “We know that Arkansas students still have a long way to go, and PBS is not the reason.”
She added that ADE is responsible for measuring the impact of programs while Arkansas PBS is simply responsible for distributing those programs.
“I think in this conversation [about audit findings], we lose some of that knowledge about what you do well,” Chesterfield told Pledger. “In my opinion, we can’t just deal with what you do poorly. We must also deal with things that you do well.”
This article was first published by Arkansas Advocate and is republished here under a Creative Commons license.