Arkansas Code
Subchapter 19 - Arkansas Fiscal Assessment and Accountability Program
§ 6-20-1908. Fiscal distress plan

(a) Those school districts identified by the Division of Elementary and Secondary Education as being in fiscal distress shall file with the division within ten (10) days after the final classification by the State Board of Education a written fiscal distress improvement plan to address any area in which the school district is experiencing fiscal distress as identified by the division.
(b) Each school district shall seek and obtain approval of its plan from the division and shall describe how the school district will remedy those areas in which the school district is experiencing fiscal distress and shall establish the time period by which the school district will remedy all criteria which placed the school district in fiscal distress status.
(c) A public school district in fiscal distress may only petition the state board for removal from fiscal distress status after the division has certified in writing that the public school district has corrected all criteria for being classified as in fiscal distress, has not experienced any additional indicators of fiscal distress, and has complied with all division recommendations and requirements for removal from fiscal distress status.
(d) Except under § 6-20-1910(e), a school district shall not be allowed to remain in fiscal distress status for more than five (5) consecutive school years from the date that the school district was classified as being in fiscal distress status.
(e) Any school district classified as being in fiscal distress status shall be required to receive on-site technical evaluation and assistance from the division.
(f)
(1) The division shall evaluate and make written recommendations to the district superintendent regarding staffing of the school district and fiscal practices of the school district.
(2) The written recommendations of the division shall be binding on the school district, the superintendent, and the school district board of directors.

(g) Every six (6) months, the division shall submit a written evaluation on the status of each school district in fiscal distress to the state board.
(h)
(1) The division may petition the state board at any time for the consolidation, annexation, or reconstitution of a school district in fiscal distress or take other appropriate action as allowed by this subchapter in order to secure and protect the best interest of the educational resources of the state or to provide for the best interests of students in the school district.
(2) The state board may approve the petition or take other appropriate action as allowed by this subchapter.

(i) Except under § 6-20-1910(e), the state board shall consolidate, annex, or reconstitute any school district that fails to remove itself from the classification of a school district in fiscal distress within five (5) consecutive school years of classification of fiscal distress status unless the state board, at its discretion, issues a written finding supported by a majority of the state board, explaining in detail that the school district could not remove itself from fiscal distress due to impossibility caused by external forces beyond the school district's control.