(a) As used in this section:

1. (1) “Accounts payable” means a debt owed by a school district on June 30 immediately prior to administrative consolidation, excluding:

   1. (A) Bonded indebtedness; or
   2. (B) Other long-term debt;

2. (2) “Available funding” means funds that are:

   1. (A) Available to a school district for paying accounts payable; or
   2. (B) Reasonably expected to be collected and available for payment of accounts payable;
3. (3) “Excess accounts payable” means accounts payable of an Act 60 school district that exceed available funding; and

4. (4) “Improper expenditure exceptions” means an erroneous expenditure of federal or state funds that:

   1. (A) Is noted as an audit exception; and
   2. (B) Has been determined by the Division of Elementary and Secondary Education to require an expenditure of funds by the resulting school district to be correct.

(b)

1. (1) The amount of the supplemental funding provided under Arkansas Code § 6-13-1610(b) and subsection (b) of this section shall be equal to the amount of the excess accounts payable and improper expenditure exceptions assumed by the resulting school district.

2. (2) The amount of accounts payable, excess accounts payable, improper expenditure exceptions, and available funding shall be determined by the division based on information provided in:

   1. (A) A final audit; and
   2. (B) Other verifiable fiscal information available to the division.
3. (3) The audit of an Act 60 school district required under Arkansas Code § 6-13-1610 and this section shall be completed within the time under Arkansas Code § 6-20-1801(d) for school districts in fiscal distress.

4. (4) No supplemental funding shall be paid under this section until after completion of a final audit by:

   1. (A) Arkansas Legislative Audit; or
   2. (B) A private certified public accountant that may conduct school district audits under Arkansas Code § 6-20-1801.

(c)

1. (1) Beginning on January 1, the division shall:

   1. (A) Have authority to oversee all fiscal and accounting-related matters of all school districts with fewer than three hundred fifty (350) students; and
   2. (B) Require these school districts to have accurate records necessary to close all books within sixty (60) days of the end of the fiscal year.

2. (2) No contract or other debt obligation incurred by a school district for which the division has oversight authority under Arkansas Code § 6-13-1610 and this section shall be valid or enforceable against a resulting district unless the contract or other debt obligation is preapproved in writing by:

   1. (A) The Commissioner of Elementary and Secondary Education; or
   2. (B) His or her designee.