Ark. Code Ann. § 6-20-814: Default or threatened default

(a) In the event of a default or threatened default in the payment of the principal of or interest on any revolving loan bonds or revolving loan certificates of indebtedness, the Commissioner of Elementary and Secondary Education is authorized and directed to withhold from the apportionment otherwise due any borrowing school district, moneys in amounts sufficient to obviate or avoid any default or threatened default.

(b) The Chief Fiscal Officer of the State shall prescribe the method of procedure to be followed in any such event to obviate or avoid any default or threatened default.

(c) Under such rules as shall be established by the Chief Fiscal Officer of the State, all maturities of principal and interest, as and when due, may be withheld from any such apportionments when mutually agreeable to the commissioner and the board of directors of the debtor school district.