Education company receiving $144 million didn’t violate Arkansas procurement law, audit finds

An Indiana education company broke no Arkansas procurement laws during its seven-year contract with the state, according to an audit lawmakers requested in February.

Legislators requested the audit of contracts with Solution Tree after learning the company was collecting money from school districts, education service cooperatives and higher education institutions in addition to its multimillion dollar contract with the state. Arkansas Legislative Audit, a nonpartisan entity that reviews government spending for compliance with the law, presented the report to the Legislative Joint Auditing Committee Friday.

Lawmakers have also criticized the company’s effectiveness in improving student test scores.

Between July 1, 2017, and Jan. 31, 2024, Solution Tree and its affiliates were paid $80.1 million from the Arkansas Department of Education, $63 million from school districts and education cooperatives and $1.6 million from higher education institutions — a total of $144.6 million, according to the audit.

Of 30 districts reviewed, auditors reported 18 paid nonrefundable advance deposits totaling $1.2 million in compliance with their contracts, but noted using public funds for advance payments is not a recommended business practice.

Of the employees identified to have a relationship with Solution Tree, no roles or responsibilities appear to conflict with Arkansas ethics requirements, according to the report. Services and goods purchased from the company also appear to comply with state procurement laws. 

Sen. Jon Eubanks, R-Subiaco, said he’s received positive feedback from educators about the company’s services and said he was disappointed the audit was requested because he felt like “it was almost an attempt to impugn the reputation of Solution Tree.” The company “deserves an apology,” he said.

“I think when this went out for bid this past year that the scoring indicates that they are the best in the country with regard to the services that they provide,” Eubanks said. “They’re not the cheapest by any stretch — we can see that and we know that from how the bids came in — but if we are genuinely interested in addressing public education and the needs of our children, then I think we need to put our money where our mouth is.”

Sen. Linda Chesterfield, a Little Rock Democrat and one of the legislators who requested the audit, said she has for years asked for an evaluation of Solution Tree’s work. While it’s great that teachers feel like they’re working together better, Chesterfield, a retired educator, said she’s not seen “an appreciable increase” in test scores.

“I don’t care how people feel, I want to know how kids are doing, and if that’s not the whole purpose of this whole thing, then we are wasting our time,” she said. “…It is not an insult to ask how state monies are being spent. The governor has to say how her money’s being spent, the treasurer has to say, and it is not untoward to ask an entity that’s been with us for seven years and has been given over $100 million to see where that money goes.”    

Arkansas first awarded a $4 million no-bid contract to Solution Tree in 2017. After its proposal earned the highest score from evaluators earlier this year, the company was selected for a new seven-year contract worth $99.4 million. Other vendors’ bids ranged from $19 million to $26 million.

Arkansas education secretary withdraws Solution Tree contract after legislative opposition

When presenting the contract to lawmakers for approval in late May, Education Secretary Jacob Oliva asked the contract be withdrawn from consideration following much debate during a legislative meeting. Solution Tree’s CEO rescinded the contract a few days later. 

The debate centered on lawmakers’ questions about why Solution Tree’s proposal was more costly than other vendors and whether the state should continue working with the company when it hadn’t helped improve student achievement during its first seven-year contract. 

According to a report from the University of Arkansas’ Office for Education Policy, participation in Solution Tree’s PLC at Work program yielded “no statistically significant effect” on weighted student achievement or student value-added growth.

Because state law requires $16.5 million be provided annually for professional development, the state education department sought permission from legislators (which they granted in August) to seek proposals from multiple vendors to provide these services. Instead of having one provider, state education officials said districts would have the option to select which qualified vendor, if any, they’d like to work with. 

Solution Tree was one of 17 qualified vendors approved by ADE in October.