One educational group escaped scrutiny in the consolidation debate that occurred after the Court’s decision in Lake View: Arkansas’ education service co¬operatives. Much of the debate about K-12 consolidation revolved around the student enrollment threshold to be used as criteria for closing districts. Gov. Huckabee proposed a 1,500 threshold and some legislators suggested a lower number before 350 students was decided upon in PA 60 of the 2nd Extraordinary Session of 2003. A similar debate about the educational co-ops did not occur.

The Murphy Commission reported audit findings of co-ops, noting, “audit reports are in a variety of formats, thereby making management analyses difficult. However, the following major management discrepancies were noted in 1995 and 1996 audit reports for two or more co-ops:

  Uninsured and uncollateralized deposit of funds;

  Unauthorized and undocumented disbursements;

  No construction bonds required for construction contracts;

  No bids required for construction contracts;

  Duplicate payments to vendors;

  Inadequate fixed asset controls and records not maintained ina manner to ensure accountability.

Audit reports also cited the following unauthorized disbursements: meals for a director’s spouse, airline tickets, purchase of an art object, purchase of groceries, gasoline for a private car, tires for personal use, party barge rental, golf fees and lodging for children and spouses of co-op employees. Reports released since 1998 have noted other problems with education co-ops.

If Arkansas were a wealthy state it might be able to afford an education co-op system with tighter controls on spending. Despite four decades of increased public school spending Arkansas remains near the bottom of national income rankings. The state, quite simply, cannot afford the co-op system and its inefficiencies.

  All existing educational co-ops should be merged into a single professional K-12 educational services center under the aegis of the Director, Department of Education. The center shall be known as the Arkansas Educational Resources and Services Center (AESC).