The Hot Springs School District Board of Trustees unanimously voted Wednesday to hand over the investigation into a school employee accused of embezzling funds to law enforcement.  

A recent audit found that former school district Clerk and Business Manager Carmen Jackson gave herself unauthorized payroll advances, made personal purchases with the district’s credit cards and granted herself additional pay and stipends totaling more than $13,500. 

Jackson has since resigned from the district and was replaced by Barkley Flynn.  

A member of the audience at a June 11 meeting brought the financial irregularities to the board’s attention, according to a video posted on the district’s website.  

Superintendent Gerald Chouinard told the Daily Inter Lake he later sifted through credit card statements and noticed a few odd purchases. He contacted the school district’s legal counsel, attorney Elizabeth Kaleva, who recommended launching an investigation. 

The audit, initiated in July and conducted by Todd Watkins, investigated the 2024-25 fiscal year. These types of audits are costly, district officials said, and the investigation was limited to one year as a starting point. Flynn said this audit alone is expected to cost the school district $5,000.    

Hot Springs Watchdogs, a self-described nonpartisan community group, demanded a complete forensic audit investigation in a news release.  

“The Watkins report confirmed what many in the community feared — a lack of oversight allowed one individual too much unchecked control over public funds,” the group said in a statement “The investigation did not go back far enough and took a very cursory look of only one year.”

Dozens of residents filled the seats during the board's hour-and-a-half meeting on Oct. 15, pinging board members with questions and concerns. Many wanted to know why the school district’s annual audit, which costs $20,000, failed to catch any of the report's findings. 

“Where is that auditor?” said Tammy McAllister. "Get them in here. They owe us money.” 

Chair Ricky DePoe said annual exit meetings are held with the auditor and are open to the public. He encouraged people to attend.  

Still, DePoe said he agreed with McAllister.  

“That's the first question I have,” DePoe said. “What are we paying $20,000 for?” 

Trustees also announced that the school district’s 14 credit cards were canceled following the investigation, and five new cards were recently opened. During their regular monthly board meeting on Oct. 8, trustees voted to create a finance committee, which will review a quarterly report on the district’s credit cards.  

Trustee Chuck Stephens told the Inter Lake the new committee’s membership has yet to be determined.  

During Wednesday’s meeting, community members remained unsatisfied with the report, arguing it failed to answer questions, such as how many credit cards were used and what benefits Jackson may have received.  

One man demanded to know whether there will be a warrant for Jackson’s arrest.  

“That's where we go with legal counsel,” DePoe said, “to hopefully understand that more with law enforcement, to find out what is the next step.” 

Reporter Hannah Shields can be reached at 758-4439 or [email protected].