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Governor Says AETN Chief Will Take Lesson From Audit

5 min read

Gov. Asa Hutchinson weighed in on ongoing controversies at the Arkansas Educational Telecommunications Network late Monday, assuring Arkansans that AETN Executive Director Courtney Pledger will learn from an audit report finding $400,000 in misused spending.

“These audit findings serve as a reminder of state accounting rules and that agency directors must take corrective action as needed,” the governor said in a statement to Arkansas Business in the wake of an Arkansas Department of Education audit that labeled the state public television network a “high risk entity” under state disbursement rules. The audit was first reported in the Arkansas Democrat-Gazette.

“I know Director Pledger will follow the guidance given,” the governor said. It was Hutchinson who appointed Pledger as AETN’s chief in March 2017. One goal was to shake AETN awake and bring the network into the 21st century, supporters said.

But friction with longtime staff began almost from the beginning. By late last year, Pledger was facing criticism from longtime AETN Foundation COO Mona Dixon about an arrangement for the independent foundation, which shares offices and some leadership with the network, paying for a contract to a content consultant, Rachel Raney.

Dixon’s interactions with foundation board members led to a rift between that group and Pledger, and Dixon was dismissed from her job in February. She has appealed the decision and promised legal action if a deal can’t be reached. On March 8, a letter from “concerned employees” of AETN cited the Raney contract as “a clear, documentable example” of Pledger’s “repeated attempts to misuse funding.”

As executive director of both AETN and the nonprofit foundation at the time, she oversaw the $36,000 consulting deal with Raney, a film documentarian and North Carolina public media executive. The dispute essentially centered on whether the consultant should have been paid with foundation funds or state agency funds.

The rift with the foundation board intensified when it voted to reject Pledger as its executive director, and even removed her from the board entirely. The state responded with an ultimatum demanding her restoral, and a list of other changes involving board membership. If not, AETN said, it would sever its contract with the foundation, ending a three-decade partnership.

Though the state set a deadline, months have passed without resolution, Pledger confirmed Monday in an email to Arkansas Business. “As of today, no agreement has been finalized,” Pledger said. “You are welcome to contact Board Chair Dr. Lynne Rich.”

Rich, a professor at the University of Central Arkansas, which shares its campus with AETN and the foundation, did not respond to requests for comment.

The governor said he hopes for a compromise soon.

“I know that Director Pledger, the AETN Commission and the AETN Foundation continue to work on a solution to recent conflicts,” he said. “I am hopeful that all parties will reach an agreement.”

Former and current AETN employees have said nobody in state government seems to be taking responsibility for repeated problems and tensions under Pledger’s leadership.

“I’m not sure the governor understood the underlying issue of Dixon’s firing — that she had exposed misappropriation of Foundation monies,” one Pledger critic said, speaking on the condition of anonymity. “In addition, there was a contract violation, and hiring ‘consultants’ with no paperwork or provable results to show for it.”

The Education Department’s audit report, as reported Monday in the Democrat-Gazette, criticized AETN for spending $409,092 in “non-project-related disbursements and unallowed disbursements” from a $2.8 million state grant in fiscal year 2019, which ended June 30. The grant was for educational internet programming the network provides to Arkansas schools, the Internet Delivered Education for Arkansas Schools, or IDEAS.

Pledger told the Democrat-Gazette that network officials “believe that we have operated the Arkansas IDEAS program in the best interest of all educators” and that they “were following previous guidance.”

She told Arkansas Business on Wednesday she and her team were boning up on Arkansas Department of Education requirements.

“Staff and leadership have been working through the ADE procedures and policies line by line to create crystal clear rules moving forward, to serve our children and educators,” she said. “AETN is developing more checks and balances systems to prevent any future errors.”

The AETN Commission’s relatively new chairman, Skip Holland, told the Democrat-Gazette that he did not view the audit report as cause to call a special meeting of the commission, though he said the issue will be on the agenda for December’s regular meeting, this time in Jonesboro.

The internal audit review found that between July 1, 2018, and May 20, improper disbursements of up to $333,000 in salaries and benefits to employees not providing direct services to the IDEAS program, along with another $76,000 in unallowed costs and expenses.

“By now [Pledger] has had a bad legislative audit with five red flags, an internal ADE audit that showed $400,000-plus in wrongful spending, a contract violation,” and a rapidly rising turnover rate in staffing, the former employee said. “We will see. So far, Pledger seems to be golden.”

The director, whose supporters say she was targeted by disappointed staffers looking to undermine her leadership, said she’s focused on moving forward. She has drawn praise for AETN’s new widespread streaming coverage of legislative hearings and for initiating broadcasts of the state high school football and basketball championships. Even her critics have praised a renewed focus on local and regional documentaries, including the upcoming “Indians, Outlaws, Marshals and the Hanging Judge,” by University of Arkansas journalism professor and filmmaker Larry Foley.

“We’ll continue to provide the highest-quality professional development for Arkansas educators through IDEAS and are excited about new initiatives with the Division of Elementary and Secondary Education at ADE,” Pledger said. “We are creating more engaging content for professional development, a new social component for educators to share best practices working in their schools, and a deeper focus on socially relevant issues in Arkansas that will strengthen educators’ awareness and ability to increase student engagement.”

As for the “guidance” the governor expects Pledger to follow, the Education Department monitors laid out several recommended actions, including AETN’s either refunding the misspent $409,092 or accepting a reduction of the same amount from next year’s grant. The department also applied the label of “high risk entity,” meaning compliance will be monitored by the department’s coordination office over the next fiscal year.

“We are still working through this process,” Pledger said.

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