Legislative Joint Auditing-State Agencies

Finding number two. Two oh three of the twenty twenty two fiscal session requires a department of corrections to conduct a conduct and annual audit of the firearms and ammunition known by and in the position of the correctional facilities with the originated to the secretary for review. After reviewing the audit submitted to the secretary we know that inconsistencies among the divisions in the systems they used to track and maintain records of firearms and ammunition as well as a lack of documentation of the procedures performing and completing the audit these issues seem to be calls by limited communication and coordination of management to all divisions regarding the expectations of the audit binding number three the agencies the vision of community correction in mate banking unit again has improper segregations of duties over cash receiving to the limited staffing or poorly designed internal controls we tested fourly forty daily deposits and noticed four exceptions three segregation of duty issues were where the same individual received and recorded a day's activity and one exception in which procedures could not be verified as the original supporting document documentation could not be located a similar finding was reported in the fiscal year twenty on. Phoning number four the fiscal year twenty one auto and included a finding regarding the division of corrections union and make counsels not receiving and or maintaining vendor invoices supporting purchases made during that fiscal year part of the agencies response to this finding included audit so they make councils by internal audit upon the request of the director warden or definitely warn. And upon a change in a war in position additionally internal audit was to form perform random audits of them make council's statewate the agency did not implement corrective action specifically we requested reports or other documentation of any auto completed from july twenty twenty two. July twenty twenty two to through june twenty twenty three which the agency could not provide. Burning number five the division of correction over estimated proceeds do from crop sales by approximately five hundred and thirty thousand dollars resulting in the overstatement of assess in the third and flows of resources related to revenues. A random the agency was owed a final payment on russia from the twenty twenty one calendar year crop cycle and as the vendor had not determined this amount the agency estimated what was to be received using proceeds from prior transactions and current market information the data used by the agency and calculating estimate was inaccurate and did not reflect actually events that occurred which calls and this statement. Finding the number six effective internal control over cash receipts should allow management to monitor areas that receive cash back maintaining logs or other wreckers at document to location of receipt books as well as the expected prenumber range receipts issued and outstanding. The agency is not a service a uniform process for obtaining receipt books or issuing books. To individual correction correctional units centers or programs of the department this physical receipt. Documentation is obtained independently by these areas without coordination through accounting shared services as a result we were unable to determine if our testing population of receipts was complete and accurate in the agency was unable to provide assurance that all receipts had been accounted for. Finding number seven adequate internal controls of the value valuation of limitory should include procedures to verify that arms purchased are recorded in an invetory management system at their correct cost. Our testing at the central warehouse identified twenty three exceptions between the value to the agencies emitory management system and the purchase press. Thank you mister morgan and if we could have members of the department please come to into the table. Yeah. The. If you were displays identify yourself linda wallace secretary for the department of corrections chair brown chief financial officer department corrections. Okay thank you both for being here members what I like to do for member from the past is just i'm gonna go through each finding individually to you secretaries in the sector as well we'll just go through finding one through finding seven individually and ask questions upon each finding if it's possible we're probably going to have to have a brought quite a few people with this we're going to probably have to have some help answers yesterday and app absolutely and so so with that as we go through each finding if you were just restate the the issue and then what the agencies don't potentially address the issue and then we'll open up for questions so we'll start with finding number one please i'm gonna allow mister jeff george to explain this when if that's alright with the committee please okay so this is the first time this has ever happened i've been with the agency for twenty years if you would sir please identify yourself i'm a gift care i'm the controller for the department of corrections thank you and like say i've been there twenty years in this first time we've ever had this happen we've always taken the departments to the bank in a bag and course they prove it later. And this is the first time that one. Showed up you are missing in the reconsilation process. And we have since converted to remote deposit to where we do it in house without a machine that we can run the money orders through they never even leave our location they. We get same day credit in our account. Okay any memorable questions for finding number one. This. Observed insolvent so who who was responsible for the deposit was a single employee that. Was supposed to get this to the bank that I never made it well messaged she took it to the bank II guess it got whilst misplaced at the bank. The. Yeah. So does a bank not have cameras or anything there that you could go back to the check they and and they find they had video of her bringing it into the buyer the rest of the positives there to one just one it was several matches in the deposit this was just one badge. Okay. So the follow on it was it was a batch of money orders are about a back of cash the parts of money ordered about fifty of fifty money orders and aren't money orders that they have serial numbers in our tracked as far as as far as if if the money order is actually transaction and it's has to be reconciled back to western union and the end that was given credit on their account for the money order. And we we input the money order number into our system. This. But but we can't check it because we didn't bother many order. Then they could. Okay yeah. I made some refresher on how many orders works if I if I purchase the money ordered I gave it to the inmate and then may gave it to the department and the department to me cash to their deposited in there it's the department's not the the financial institution has to reconcile with the with the authority that issued the note so wouldn't the insurer the notes know who. Two actually got the final end funds of that money well I mean and there's like a receipt you can turn off a receipt when you get a money order so they should have a a copy of the receipt as well. Um. I guess i'm saying is the department getting issued twenty nine hundred eighty dollars to the inmate in mate support then mates they went to the bank to get credit for those but the banks as they never got them right does that mean if you went to look at the money order receipts that you all took in out on intake that you couldn't go back to the the issue in authority and said that anybody ever claimed these deposits well because within mam so it's it's not we we think we have the authority to do that because we we don't know where they were bob she can buy money orders many places which were due to write down the issuing money order number or anything from what handed record the number in our system yes I guess that's my question did you take that number and go to the issuing agency whether western union or moneygram and say have these been claimed well and we wouldn't know that we don't know that. Or who issue the number who issued the money order. So that but the number. I don't I don't know how that work. Yes it is a possibility to do that to find out who what entity actually claimed and put that cash in their drawer because of any notes just a note until you convert it I don't have a sudden you want to look at doing because you could absolutely find out which which the final authority received the actual deposit of the that the cash. Yes yes so mr chair and we will we will look back at our records and find the identifying information and look to see what we can find out about who actually cashed the money order okay I guess in and i'm i'm not i'm not trying to be unreasonable with this finding but it's it's either somebody didn't do what they're supposed to do and it's either on the the state didn't do what they're supposed to do because that a rover careless employee or the bank didn't do what they did because they have a careless around employee and I think it's income with that we know that we take these seriously so sir. Okay tomorrow morning i'm gonna without objection we're gonna hold that over to next month. So we can follow up on that. Okay so you know we will move on to finding number two i'll take this when mr chairman lindsey wallace secretary for the department of corrections after the fiscal session in twenty twenty two um there was a requirement that the department conduct annual audits on the number and type of firearms and ammunition owned by all divisions of the department there's a wide variance in the way the division of correction and community correction function and so II feel like this has been a little bit of a trial and error since we started this process community correction had readily used quickbooks for their ammunition and an inventory management with corrections they never had and I know that mr brown has spoken with some other department of corrections fiscal teams and they still conduct paper artists so trying to figure out a system um for inventory management has been a little trying I think on the division of correction side and director paying and his and major shores who kind of no more specifics about the subject matter they're here to help answer questions as well as director cheek from community corrections. But I will say initially I think when this funding came out the idea was we would utilize quick book for for the divisions of division of correction as well as community correction since it was functioning okay for a division of community correction I think in attempting to utilize that there were road blacks due to the operational issues staffing changes quickly there's no a set person who is on the division of correction side uhm assigned a gun they check them in and out depending on whatever their assignment is so it has proven a little more trebling there's a central armory but there's also an armory at each individual unit so. I don't I don't think quick books worked for them in terms of their their day to day activities and a way that was functional and we could do it accurately so we've been meeting regularly to try to talk through these things at the spirit of the law was so that we had an accurate and and a uniform as much as possible recognizing that there were going to potentially be some differences so and they've looked at division of correction has looked at utilizing a share point system create a barrt department I know DIS uses that we've also got opportunities to use a system called smart sheets and which has sort of the audit functionality i'm not sure if the share point system does but with smart sheets it has the audit functionality that I know quick books um is they we love that about quickbooks because you can audit who checks things out and accuracy and things like that so. We're still working through specifically how to account for this in the the manner that the the law anticipates so without I want to pass to see if you have any questions that maybe some of the subject matter experts can help. With. Thank you for that does anyone have any questions for finding specifically related to how they are attempting to tackle this tracking issue. Representative we've got your security added instrument in front of us is that for this is just an example this was from february ninth twenty twenty three it's just an example and it starts out there is a written policy kept in the army established responsibility in its check it goes on to talk about documentation of weapons and it's just checked off we don't even know if there was a you said quick books are an excel spreadsheet. That it's just. I mean I can fill this out and probably come up with the same response and still not know what we have yes ma'am that is one of the things that this will be my first time looking at the audit as the secretary so we have a secretary of directive that former secretary solemn graves issued and it's pretty broad and terms of kind of the flexibility that is given to the division directors to implement whatever procedures uhm they spun necessary for the continuity of their operations it is my intent to make some changes so that secretarial directive but i'd a hesitate to make those until we're able to find a system that functions the way we want it to function cause I don't want to say just like we kind of deal with quickbooks and unrealistic expectation that we can't figure out the functionality to give you all what is anticipated about the more so I will say since this secretary directive has issued uhm director pain also has a standard operating procedure that has been worked through with major shores while they are trying to also meet the spirit of the law and division of community correction director jim chief has also issued a standard operating procedure that were not have been in place back at the time that this audit was conducted so II think there will be some more changes I will get their audits at the end of this month through the first of july so I think we'll have more of a basis to move forward and have better progress to report as far as this funding goes next time. I understand your concerns with the other mr both question how many lines of business have the authority to purchase reminition within the department. Just central so so just one is as authority to purchase whether if I are door ammunition for the central aren't the armories they dispense them out as needed to the units at least on the adc side is that same thing for acc as well so there are some some similarities that we can base some of these changes on and just make changes as necessary of central purchases them and then they can go out to the department of corrections or the community corrections and then from there so it's wine to two and then each wine about how many different locations are personnel access the fire you said they're checked in and out daily action side and community correction side officers law enforcement officers have their assigned weapon that they're responsible for and there's a discharge reports if they have to use anything and and again that's why I brought the subject matter experts cause they can tell you more specifically if you have some more questions about that okay II guess when just justice complete the loop for me so when the central purchases of firearm and then all the way to the point of where they dispose of the firearm how is it how is it currently currently inventory whether it's underneath the department of corrections or anything the access acc i'm gonna let them if that's alright with you come and answer some of your questions. Okay. Thank you gentlemen if you would decide identify yourself but the committee i'm dexter paying on the director for the division of the reason a major rate is short on the merchant prepared if coordinator for the debation of corrections jim chief director department a division of communication thank you gentlemen just to repeat the question as far as I look like there's two different division heads here as soon as you give the to give the authorization to go to central and pick up whether it's ammunition or firearms we'll just fire arms how is it controlled currently within your line of business currently the the first thing we had to do was right a standard operating procedure for all thirteen of our armories in the division of corrections so basically for of a unit is needing ammunition that would come from the central arm written went to one single ammunition insurance point he can order it ambientation the ammunition comes to that address and then he basically the unit comes in and he transfers that ammunition to that by paper we are currently using a share point with the paper but we don't want to get away from that signature that signature tells us makes that person responsible for that ammunition going back to that unit same thing with weapons if a unit needs a weapon the central armor orders that weapon through a requisition through mister paines office the weapon comes to that once central point at the time that it gives to that central point we then work through races to put that weapon on the department's inventory and it is the entrance for to that units armor. Okay and that's and you were directly for mr pain and how does the department of community corrections issue those well actually cleared out there's actually two points of where they have purchased animal they actually purchased their animal we purchased ours we should not meet hers they're forty k hour to do so we're we're completely separate but the same way all of our stuff stored at central armory and literate when they need ammo and art eleven different offices. They can't pick it up we do a transfer she goes mark week books to their. Okay as far as the firearms purchase farms we recently trash ferred from forty to nine millimeter we we we purchased some are all the excess or either left in our safe they have vacant positions and they're offices we allow them to keep the weapon there but all of our weapons are maintained in asis okay there's any memorable questions for these department heads. Okay thank you gentlemen sorry representative sorry I just had a question. You said that all the weapons were put into asus yes ma'am okay and then when that west weapon is retired what happens to that what's the weapon gets to the point is not longer service to all the if it's at a unit and not in the central armory he brings it weapon back to the central armor he inspected to make sure that idiots on service mall in there we can't fix it or both parts to fix and put it back into service at that time we do a destruction of property form or a transfer to m and r form we send that through mister jeff jerry back there at our for our inventory in the negotiate m and r we will send paperwork up to him and our requesting for it to be turned in we make an appointment than we turn it into the m and r okay in the same goes for amount to correct absolutely okay and we were in this same room about a year or two years ago when yall reported in yakota to your credit you deed you call it they went the thirty two thousand rounds of amount went missing what have you done to prevent that from happening again mr paying put mid work actually we went to the central ammunition point it before that time each unit could order their own ammunition they could order the own ammunition right through the system so we went directly to a central location we built a central armory that allowed us to be able to store that ammunition next time we did it very real bus standard operating procedure for all those armories to make sure that the units understood how they would get their ammo from the central point inside that that standard operating procedure that we wrote we also entailed internal audits so that every shift or actually every day I guess you could say that armory at the unit has to be checked our phone and has to be signed that those weapons have came back inside that army brother into the shift or at least somebody knows that this web and has checked out it at the hospital and where everybody is monthly that. Inventory after that monthly invitorious done it goes directly to the unit warden unit warden sites offer and sense it up to the chief deputy director's office and to the central armor he then verifies there with the last one if there's any ammunition difference in the inventory he has to go back and check the discharge reports from that unit to account for that ammunition. So it's it's a very robust pay per system we're just working to try to find the right automated system to put it into okay thank you so sort of follow on with repairs or lunch trips of the discharge reports outside of you know the action of official line of business or line of duty is it just for you know the range yes yes are it's for training most of our discharge reports are for training they take up you know all should come up for gearly qualification at different times so the training also to unit will take the the individuals that need to trying for that month and then when he said he has to write the discharge report to count for their name initiative fired and he has to send it back to the chief depot he's office and the central arm and he keeps a file for that unit. I understood okay soon you may were have any questions. Okay see non gentleman thank you we'll let you take your seat and bring sector loss. Back up. Thank you membership with that objection i'd like to hold this one over as well sector walls do you think you could spend the next four weeks to counter give us a plan of action since we keep it on your front burner okay with that objection members will hold the final number two over till next month then i'll move us into finding number three. Thank you mister chairman i'll just give a brief overview so this is in the division of community correction and we call it in mate banking on both out of the house but this really has to do with collections for probationary paralee fees they command they we collect payment things of that nature we have a lot of turnover their lower level positions and that I think is what has lead to the segregation of duties uh founding since that time we have reassigned another person to continually help with those duties and then there is more they're more staff we have limited administrative staff in the headquarters building which is where a lot of these things take place um and we have assigned a floater if you will from the administrative location and pomble of to can continue to come and help with these things so we always have that proper segregation of duties. Alright thank you for that report is any member of any questions for finding number three. Representative sorry I guess it's my day. I want to make sure I understand when an individual is coming to the department of corrections and they give them cash what happens I wouldn't accept cash okay so can they pay by credit card or money order or what they can pay online with credit card or like in mailing the money money order they are also a box in the probation problem here in north of rock they can drop the money order again and they're given a receipt for their payment. Now. The. They get a receipt for a credit card payment can they get credit on their books also for payment of those fines and fees and whatever the mountains. Okay probational reviews their account with them and and who balances that account when someone a probation officer takes that money who make sure that money is credited to that individual probation officer never takes anybody. Okay. Yeah. Thank you. Thank you representative II think what i've circled here in in the findings was the agency did not implement corrective action the agency could not provide you I guess what what could you provide to us that proves that you have this under control or is it something that is out of your control because you just can't hire the appropriate personnel I think like sector while it's there I mean it's it's a lot of turnover trying to keep positions field ever since covered we've had a hard time keep in positions for you at this level and i'll actually say we've with a sign of floater to cover to keep someone back there more than one person so that they can swap batches whoever ads that one badge better person put to the. That type of thing they take terms entering it into simmons and throughout deposits though you don't do one if you do one thing and then. Torrented the the other one and the other person does the other stale. So it looks like there's I guess if it's one of those affair did you go to provide a different additional training and guidance on segregation duties additional staff we made available in the absence that's that's all the agency can do to address is that I don't I guess staff there wasn't anything missing is just a matter of controls procedures that is correct okay doesn't i'll give you example so the level of a grade of position is low enough to wear when we advertise if we go through the process of filling a position sometimes that can take two weeks sometimes they can take thirty days for example we just hire a young lady about a month to go. And she quit within three weeks and so that starts our process all over again and there times we advertised for these positions and I believe they're admin administrative specialists so so that's down around the gs so far gso six range on the pay scale it's for worse it's even lower than that so. It's just been a difficult time finding staff in some of these administrative responsibilities because when we do which is seems like we. Continuously trained people so even when we have a floater we're not one hundred percent sure that flowderal stick around and then we find ourselves in the same situation over again we could advertise a position three or four times and not find anybody uh. It has the ability to do this where they don't accept the position based on the salary range okay and so outside of just the financial management guide that the state uses what what other what are their risks so we don't accept cash what are the risks opposed to the state and the amazed not receiving the required allotments for what what they're got deposited. Well in so every mate was quite every account was credited issues a matter of one person did every step but they process. Okay. Okay there's any member of any more questions on finding number three. Alright without objection will file uh finding numbered free and move on in the final number four. On this when this is a division of correction issue this has to do with i'm sorry. In my councils at each well at most units there isn't and make counsel at each of them there they have been previously allowed to sell goods except cash we've changed procedures and there are no sales particularly at units at this point jeff speak up on some of these things we don't allow cash receipts we've limited some of the issues uhm this particular one that this finding was on is closed now so it's not an issue per se and also this is one of those where we are utilizing internal audit mr quarter bomb here somewhere the internal auditors that report indirectly over to the office of the inspector general they are required to develop an audit plan and so we're working with them to see what that audit plan looks like and then just trying to figure out ways that we can incorporate them as we said we would into this process to make sure these checks and balances are happening. Okay thank you for that is any member that has questioned on plenty number four. I guess and and looking at the work again where this is actually where it says agency did not implement the correct of action from a finding in the previous audit and then we're looking at you know the response being transformation moved it to the interspectral general's office. I guess it is is there is there a time frame where you'll have an anticipated process or policy implemented in utilized so with this one out i'm working we're working with the inspector general's office I will say also we only have we have to internal auditors and there's a pretty robust kind of schedule of things that they are expected to do two the two ladies I don't know they need that we need to increase training department wide about everything um on audit procedures and all of those things so that may play a part in this um if I can report back to you on that as far as the process for getting this I would appreciate the opportunity to do that next minute absolutely members of that objection we will hold over finding number four until next month. And without move on to find a number five check out what I was this is the the farm fanding do we need to have david if it's alright I would like to have day before ball come up and help explain this one. Yeah. Is they be fair beautiful form administrative. This is when we do our crops and progress we we try to figure out what equity we get left in the crops we always market a rice through riceline foods and through their pool program so there is payment scale throughout the year and when our physical urians in june thirtieth we try to uh still usually get two more payments after that so someone in accounting went back and looked at the sales from the previous years. And made a determination based on previous years sales and we did not accurately. Forecast what we had come any and due to the fact we had got some payments earlier that year so that's reason it was overstated. Okay thank you sort of the negative impacts to the state. Like what it what is that funding used for like whatever you obviously you sell the rice grown on state property then you feed inmates and you sell the excess that is that correct yesterday in we work off her own revenue so it was just the only definite was to us because we work off our own revenue okay. Alright as is that it's pretty easy one is any member of a question on funding number five all right without an objection we will will file finding number five and move on to planning number six. Thank you and this had to do with. Uhm receipt books and there was an issue no controls over that I will tell you the way that we have uh handled this in august of twenty twenty three we implemented a process where I jeff keeps all of second sequentially numbered receipt books in his possession and they get dispensed out to the unit as necessary they're preprinted pre numbered so the the opportunity for this particular type type of lack of control should have been alleviated if uh mr jerry has anything else to add all at him to get in in the past where we just use them like office depot receipt books just really cheap. Uhm office shelf and we've set scott our or its operational industries program to current as books better prenumbered it says department correction it's got everything we need is places for the unit signatures it's a much more robust receipt. And process. Okay my initial questions is how do we get along first how do we get get by for so long we did we did every year with just an office deeper okay there's any any memorable questions for finding number six. So I guess audit just didn't find this and the past is that others are families before I guess though. It's just okay. I guess the other in a year audit here team is just one of the normal uhm checks that we do controls that we do or something you popped up. Yes it is up then we look at every year but is a part of an audit we're not testing a hundred percent of being areas and. This will may just be more than the same for due to rotation there was just something we picked up twenty two some camera okay all right thanks so this I mean does this look like a legitimate fixed all as. Yeah correct everything. All right thank you controlled in. The county department account insured services knows. Which units which centers have nature seamless and no what you see never to expect I think that take the definitely. Okay thank you. We have a control long of the stable books and like when a business manager from a unit or somewhere else want a new book they come and signed for it bring us their old one so we know who has what book and their october at admin eastern palm worth. Ah so kept secure and just three state that for for members I couldn't hear they got it staffs that you know what we don't check one hundred percent of all measures during each audit so this is one it just has happened now I get checked consistently so they believe this is a good fix. To a not not have problems in the future city member have any other questions for finding was without objection we will file finding number six. And move on to finding number seven i'm going to defer to mr jerry to explain this one. Uhm I believe this I believe this is uh related to our warehouse central warehouse of a food insurance I believe the problem was uh at the employees were entering the the purchase in quickbooks maybe based on a state contract price not really referring to the purchase order of any additional charges or maybe a price change and they we have since. Uh done some more training there's a lady in my office that does follow up to check which sort of against a quick books to ensure that the the price match. The. Okay thank you the zero memory of any question for not funny number seven. Once once she checks those does she report inaccuracies or do we find out what the problem is we can we can call it with the warehouse and get them to update. Okay and and is there a way to prevent friday changing their inventory in the receipt and all that good stuff. Well there's quickbooks is really good about a control log audit and audit log so you know if if something like that does happen we would know who did it um but they have access to that that's their job is to put this into quickbooks so we just try keep the numbers the same. Okay thank you. And it do you recall if if most of these when I really looked at the twenty three exceptions worded where they on average higher than the actual purchase amount or lower. Maybe mark I don't know mark and hit me maybe I don't know what it was an individual I was univers. Product or whatever you w. Totally. And three thousand dollars. Yeah we didn't extravolate that to the whole population that was just for the item. Okay. Okay does any member have any questions for finding. The. All right without objection we will file finding number seven. So just to recap we are going to hold over findings number one to and for a move to file findings three five six and seven alright thank you guys so much for being here today. Okay last only agenda is the special financial records interactions transactions reports for the harrison house of hope mister morgan yes our last report today is a special report on the harrison house of hope one of our staff marcus oral is here in to present this. The. Yeah. So. Thanks sir staff margaret sorry this report was issued and response to request from the fourteenth judicial district prosecuting attorney to review funding received by the hairs and house of hope from the emergency solutions grant program which is administered by the arkansas dhsthe review period was primarily july first of twenty one through november thirtieth of twenty three the harrison house of hope is the five one c three nonprofit serving six counties in north central arkansas. Is stated purpose is providing services to homeless near homeless and unemployed individuals to meet their basic needs and to provide a support system that empowers them to reach their potential. The policy making body is the sport of directors which is to be made up of citizens of the county served with the board overseeing an executive director who manages the business and daily affairs. It's primary source of revenue or donations from private individuals however it also receives grants from state and federal sources during our review period a little over four hundred and fifteen thousand and was received from the emergency solutions grant program. Who's stated purpose is outfitting buildings for use as emergency shelters for the homeless for the payment of certain expenses related to operating the shelters street outreach for the homeless and for homelessness prevention and rapid rehousing assistance the three objectives of ala's review were to determine if grant funds were used properly determined if house of hopes owned by loss were here to end to determine if their financial records were sufficient the grant program is reimbursement based so the house of hope fronts all expenses and then biles reimbursement through DHS there are expense matching requirements for the grant program and reimbursement funds are held in combination with other operating funds so we expanded the initial scope of our review to include additional expenditures of the house of hope that we're outside the grant program as to the results of a review a review indicator exceptions with grant requirements in harrison house of hope by laws as follows. Program requirements prohibit conflicts of interest from any person in a decision making role or possessing inside information regarding activities assisted under the program during his or her ten year and during the one year period after their ten year we identified fourteen payments in april and may of twenty one to a former board member that was within the one year period following their ten year totaling just over ten thousand dollars. These payments were submitted and rejected for reimbursement to the house of by dhs administrators and were left to be paid using locally donated funds. Additionally not compliance with house of hopes by laws was noted and that the board was to be composed of twelve to fifteen members however for the majority of the review period this was not followed with only eight board members noted on november thirtieth of twenty three and as of the report date the board had only six members. Finally as I noted house of hope is required to match expenses reimbursed by grant program funds with local funds payroll costs cannot be paid and reimbursed directly from grant program funds but they can be used as matching. For this reason ala reviewed employee payroll and noted that approved pay rates weren't documented in board meeting minutes late was able however to trace payroll amounts in total to the budgeted salary levels so no impropriety or other overpayments were indicated in these payments. A summary of the house of hoops expenses reimbursed by the grant program during the review period is provided incident one of the report the house of hope executive director's response to alas report is provided in its entirety in the pinnix a of the report the report was provided to the fourteenth judicial district prosecuting attorney. And the executive director for the harrison house of doctor william taller is available this afternoon to answer any committee questions. Great thank you for that report amazment to let her feel it sir come to the end of the table and. The. State your name for the record and maybe give us a brief report about harrison house hope so will you talk. I'm the executive director of harrison house when we were contacted by the organs on legislative audit committee we fully have complied with the auditors as stated we work with homeless and near homeless. Um the activity that was in question on the tent payments or the payments that little over ten thousand dollars. Was handled underneath the previous director who had retired and he was not aware of the when you're quite period where a former board member cannot be engaged and have under relationship with house of help. Real housing opportunities are difficult in order to secure enough to place individuals and housing. But over that three year period we placed an excess of six hundred and fifty families and to permanent housing using the covered relief phones and we. Mr can I the former director made the submission he wasn't aware of it I had worked with the esg program for about ten years at that time with two different agencies here in central arkansas before I relocated to north central arkansas. And when he approached me about it after he got the response from the ESG analyst I suggested one little statement that sort of buried in the whole book that states you have that one you're cooling off period and uh and so they dared encourage us to make an appeal to her which we did and it was denied and so there was never any reimbursement that took place to the house of hope. We have altered our bombards the intent was that have no more than twelve to fifteen. And in so the board voted to alter the boundaries to seven we had six at the term of the audit and we have a seven board member at this time we were just in a weighting period for them to come on the board. And then lastly the the concern about salary is not being listed percentages were listed inside the minutes but not individual salaries that percent was then keyed into the payroll system which came up with the final dongle or amount of whatever that pay increase was going to be. And so that was implemented. And after the finding request was for the dollar amount to be listed we had a special called word meeting and entered into our minutes the salary or the pay rate per hour of those that were non exempt employees. Okay thank you for going through that with this i've just got a couple questions that popped in my mind as far as the previous director receiving payments within that one you're cooling off period for vendor opportunities can you describe what what bender roll they were interested in sure he was a local relator in town and he perches a former holiday in and converted it into single room occupant seeing buildings to use for a single individual center on the streets and homeless and so it was for rent we could pay the security deposit in the first month's route and renew the conditions of rapidly housing which is part of the estimate and so we are approved those payments because we are not all the other documentation and we were immediate payment to that former aboard member and then when it was submitted for reimbursement is when it was declined. Okay understood. And then the last question for me now opened up the committee the the bilaws originally stated twelve to fifteen minutes you stated the chilli had six members on there I guess what what was the result of a corn to make sure the bills are followed to. Reduce the amounts in the by laws from from twelve fifteen down to six when that's where I had explained that. When the board mad and they were trying to decide how many board members do we want to have never rerun in the ballots update you know. And you know someone saying well if you get a board larger than twelve of fifteen. Uh no small larger than an agency that we are. You're gonna have different coffee funding of people in our community field those positions. And then secondly. The more people you add to the more the heart it is to get a consensus to move forward. And so what was eliminated in the draft that was approved what's the word maximum they wanted a maximum of twelve to fifteen. And so. When I contacted the board after we got the information back from the auditors in written format. I said. Our air has one created this issue that we need to correct. In secondly how many board members do we actually successfully need to provide good leadership over oversight to the house of hole and that's when the board said what we need seven. Individuals the board chair would not vote in any involved that we have unless they need to break the vote so there would be six that would be voting and if it was started three to three then the more chair would be the one that would vote to break the tar. I'm not a body member okay so does the board select its members. They got through an application process that storage where they sent an individual submitter and well recommendations submitted to me I contact the individual when we set down we talk about the house of hope what are vision is what we do in the community give them copies of our bombards financial statements and application packet they completed then they meet with the executive committee the executive committee then brings a recommendation to the board and regards to adding a new mort member. Okay. Okay can you remember having any questions. Representative from yes you your says your bilaterals indicate that the principle body must have are shall consistent of twelve to fifteen so you moved a changer by laws are you just decided. I mean this this is a bilas change on how you were set up since two thousand and twelve. There was updated and the bar laws were updated in twenty. Twenty. Two I believe. And that's when they say we did not want to have more than twelve to fifteen but the word maximum never got inserted into the ballots when it was modern own and approved by the board. And so the board came back as a result of that finding in the audit as far as a procedural issue and they said it would be better for us to stay in exact number that we want to have then it would be to state a maximum and so the board volted to change the bar last to seven okay thank you surely this seven members can just just for my information and you serve six counties as it required that one come out of each county or is it just you can have six from bone county and we move on we try to see people outside of just boom county. But because the services we provide or largely reynold in nature we don't have any officers and those counties if those individuals have a name for homeless prevention where they're facing indiction and they need renewal assistance they actually have to come to our office and harrison fill out the application in so we we try to work with just through the connection of professional individuals across the counties and this time. And believe all of our board members there may be one that is outside of the county of doom county. Okay thank you member have any questions. Okay thank you sir for being here today we appreciate your your candor and willingness to answer questions and then members what without objection will file this report see none of the reporters filed. I don't think that takes care of business on today's agenda there are next meeting will be held july eleventh two thousand twenty four then get emotion for a german motion for a german with that we are adjourned thank you.