Legislative Joint Auditing

Good morning folks if you would please take your seats. Welcome to legislative eye push it you are being here today. The first order of business is adoption the minutes of the january twelfth twenty twenty four meeting do I have a motion. I have one motion do I have a second I have a second one in favour in the opposed. And that will be filed. This is the adoption of reports of the executive and standing committees the executive committee senator represent gas way. They give mr chairman. The executive committee met thursday february eighth twenty twenty four staff reported to the committee the audit special investigative in shortage reports scheduled to be presented to the standing committees and the full legislative joint auditing committee this month. Also stay up updated the committee on the status of the special report on the lector and purchase by the governor's office staff provided that the review was started october thirteenth twenty twenty three twenty individuals have been interviewed so far gill works should be complete about the end of next week the audit special report is in the drafting stages and boring no delays in the finalization process the anticipated completion date is before the end of march. Staff expressed appreciation to the committee members patients in the process of conducting a thorough and methodical review for continuity purposes the staff members were involved in all the reviews upon completion of the report the coach ears of legislative joint auditing community committee will be notified staff provided three ways the report may be released publicly early released upon approval of the codashchairs of legislative joint audit in committee. Presented at a special meeting of legislative joint auditing committee which can be called by either coach here where upon petition of ten regular members of legislative joint auditing committee. Or placed on the agenda of the next regularly scheduled legislative joint auditing committee beatty. In new business the committee approved a request for staff to review selected educational expenditures and contracts. In other business staff address questions raised at last month's meeting regarding clarification of applicable statutes of limitation particular to civil and criminal causes of action in general and as they as they may relate to penalties described in the three governmental compliance and responsibility. The arkansas governmental compliance act local fiscal management responsibility act in state fiscal management act some members of the committee expressed an interest in further study and possible legislation to act revisions of updates. The committee discussed a request to review policies and expenditures of the municipal improvement district that took no action on the request with no additional additional business to discuss the meeting was adjourned the next meeting at the committee of scheduled for thursday june thirteenth twenty twenty four or at the call of the chair I moved for adoption of this report. In is there a second I have a second all in favor any opposed. Minute is filed moving on standing committee on counties and minister metalities. Representative right you're recognized. The. Yesterday the committee adopted the minutes of the meeting here on january eleventh twenty twenty four the commercial considered requires from the towns of homes and jerk repay less in ten percent of general revenues from our own to the street find as required bark so code annotated twenty seven seventy two or seven. The committee approved the request from hangs to repay one hundred dollars monthly and approve jericho's request to repay a hundred dollars and two hundred dollars alternative each month for three years and then two hundred dollars mostly afterwards the committee reviewed for the third reports and eighty current reports officials from three initiatives were present to address repeat findings three previously deferred reports for vowed and one was deferred so that officials can address repeat findings of the eighty current reports reviewed three were certified to the governmental bond board and to will refer to prior student attorneys and to the attorney general the committee foul eighty of the current reports pursuant. To a emotion pay as that the january eleventh twenty twenty four meeting the box out mayor was invited to the meeting to follow up on the submission of out of reports by a private accounting firm and answer further questions staff received an email on january no excuse me the staff from a received an email on monday fairboard the field informative committee that they're admin and our break of co would not take among city officials and employees box at syria attorney chris madison attended the meeting and answered questions the committee voted to invite the mayor to the june made in to answer further questions mister chair I moved for adoptions report. Thank you representative right is there a second I have a second all in favor in the opposed. And it is filed. Moving on to the standard committee of state agencies i'm sorry of educational institutions senator sullivan you're recognizer. Thank you mister chair the committee reviewed eighteen school district audit reports for the eight year ending june thirtieth twenty twenty three there were four reports to contain findings and the remaining fourteen reports contained no fight findings the committee file the eighteen auto reports that were brought before it mister chairman I moved for adoption of this report thank you since the seller is her second. I have a second. All in favor any opposed. Then it is filed. There's we are standard committee on state agencies in center bright you recognize ten reports around the committee's agenda yesterday wonderful report and two current reports with findings were presented the department of commerce did not maintain documentation for pay raises and did not properly disclose related party transactions the arkansas lottery did not clearly define policy to follow in normal lottery draw processes fail in the department of parks here did tourism did not properly record asus values for museum collections and did not properly calculate sick leave want some payouts various agencies that members were present to report on how the agencies intended to address these indians and answer our questions during the committee we adopted ten report smith I moved to adopt this report thank you centre brought is there a second. I have a second all in favor in the oppose. And there has been filed. Next we have review of reports. An investigative report. Thank you mister chair. This report was issued in response to request from the second judicial district prosecuting and turning for legislative audit to review select and financial records and transactions of the city of marine districts court a specific concern was the misappropriation of court revenue. Today we are presuming the summary of the report which was presented at this committee is meeting the last month at that meeting the committee adopted a motion to defer the report to the mean today and requests that the representatives from the cpa firm that performed the city's audience obtained the meeting to answer questions. As require bark and soco the cd has obtained an audit by private cpa firm since at least nineteen ninety eight for each of the four years ended december thirty fires two thousand and eighteen through twenty twenty one cpa firm issued an unmodified or clean opinion on the city's financial statements. However the city the cpa firm issued a material weight and spinning related to the district court in the twenty twenty one other. Our review of receipts and bank deposits revealed over four hundred fourteen thousand dollars was missed appropriate during the review period has shown on the slide and exhibit one on page three of the report. Review the district court financial records revealed deficient internal control over the receiving recording and aposting revenues specifically non complaints with arkansas district court accounting law in a lack of segregation of duties on fiscal oversight previous management from detecting the misappropriation of court funds. The. Mr court clark megan max will gouty was custodian of the misappropriate court phones. God is employment was terminated on december twelfth twenty twenty two and she was charged with one can affel any theft of property and eight counts of failing the forgery in august of last year a jury trial is scheduled for february twenty sixth mister chair this concludes my presentation the mayor of marine is also present to respond to questions. In memories are there any questions. Yeah if not I want to ask the staff with their recommendation. Thank you mr chair. Wednesday legislative audit received communication from the cba firm that representatives were not sufficiently prepared to attend the meeting today that was that rare involved specifically they stated that they would need time to review several years of potential records related to their auditor that occurred in the past at the same time the cpa firm had really reached out to its legal council and relation to the matter and I guess they stated that they would not be able to be present today they stated that they were willing to cooperate fully cooperate in the investigation or whatever might be needed asked if so desired it could be deferred till june if there was a desire of the committee. Um. Members do I have. Any questions. Go head centre brian in a have a question it's it's this shed flight on on district court issues in general whether or not see the district judges or for the state and what staff they have which is what city per providence to district courts. The. And in that context is that appropriate for discussion on this as far as your. Process is the controls district court to use and and where this particular court fail. We do have the mere present would you like to ask him any questions if yes I would. It would a mayor of marine please come down. In my rep if you would introduce yourself and i'm on a. Yeah. This is. She will stand and read your at hand. The. The. Do you saw me swear or firm that the test model you're about to give will be the truth the whole truth and nothing but the truth. Thank you mate you may have seen. Question. The. Go ahead center bright thank you thank you mister chair II guess my my first question is this is this court operated daily because they're always a judge there doing court functions on a daily basis or is it so one day a week today we could. On thursday so the I don't think your mike is out of it so the other days five days of the week are those court employees said the employees recycling it by the city and work was directed by the jerusalem directed by cities there it's a bit of a grey area I will say that i've been in office since general first but i've worked closely with the city for the past eight years and from what I understand the employees that are in the district court or employees add the city of marion there has been. Conversation back and forth of do they file under the jurisdiction of the judge or did they follow him with jurisdiction of the city. And the former mayor said that the chief court clerk at the judge within siers that his authority was over her and the city was on the other employees since i've been in office and working closely with just the warrant and when this came up and are correct of action plan we have shifted a lot more of the authority. Over to me under the city and and actually judge storm is retiring so we will have a new judge in in january in my interact is to make sure that we have those duties to let me add it as they should be because of the transactions that go through the court do they intermingle with city affairs whatsoever is it one hundred percent separate one hundred percent separate I spoke with city treasurer yesterday. He said that we do not have access to their bank accounts their login information and they're their funds tonight in a mingle with the city funds other than they go on to a city financials at the end of the month. Okay so the system that they use is that and this may be a question for staff is that a state system or controlled and operated by the city. They are actually own virtual justice south court software. Again are all district courts in the state or divert to justice or any courts left that do your own thing now they the court has a choice of different softwares that are out there the states can't take system as you use virtual justices used and there might be a few others that i'm on where okay I think that our system is under context. What happened toll that sounds what our court uses is kind text the same as virtual justice. Reserve that separate. What was your question she said that marion users context as their software context that's the states court software that that is virtual justice now virtual justice and separate hours understood okay I guess I guess we're for a context of the members as twenty twenty five comes in district courts fully rolling to the state I think representative dobby as of study on this but I think this highlights the the issues with district courts being intermingled with city affairs thank you representative you're recognized. Thank you mr chair I do have a question but if I may give a little leeway for senator writes inquiries but my question to the mayor i'm i'm far over here to your i'm sorry are you still using the same cpa firm. Yes back in white can you liberal okay thank you certain right is correct the house in senate judiciary committees do you have a task force that we're studying district courts because he is correct all of them become state district courts and that was because the voters voted on it the voters voted to turn him into state district court but there was not a lot of four thought as to how they are state district courts in so we are looking at all of those and we're also looking at is there a need to collapse some of these district courts that are sitting out in cities that maybe we just need one court that's operating five days a week that will handle those in regard to the context question that is the software system that remember the supreme court has now because we gave on the money they've developed a completely new system that they are going to be requiring all of the courts whether their district are circuit courts to be on the same system now the real issue that becomes cause we see this all the time these. Accounting errors and and theft out of district courts because if if you know anything about district courts they are a money making court that's basically what they're doing is collecting fines and fees but the accounting system is so complicated in detail because you may take a finer fee that settling say a hundred dollars for example out of that hundred dollars two dollars and fifty cents may go here five dollars may go there ten dollars may go over here and we have done that to the court system because everybody wants to help out. Their little pet project and so we tag on a two dollars and fifty cents or whatever and so the folks the district clerks are having to figure out where all this goes and so sometimes there's problems with that and I think audit can certainly agree that there is that you don't get the right money in the right part the supreme court does a great job working with the district courts and with the clerks trying to educate on they'll go in and help them when there's issues as to accounting now we can't do anything if somebody's bound determined to steal they're going to steal but as far as trying to figure it out so the long and short of it is in this task force we are trying to get a handle on that we're into cipating we're going to be following some legislation to maybe streamline their to stop some of the us arm so hopefully that will answer your questions we welcome you to come to any of our tests force meetings because every one of you has a district every single one of you and so and they phoned a lot of things cities depend on a lot of the money that comes from district courts as does the counties so anyway there are a lot of issues but certain branch exactly right at the end of this year they're all going to be state district courts but we got a figure out how those refunded in the vote that was not something that was considered when the voters voted to turn into state district I hope that answers any questions if you have any additional ones similar and i'll be happy to explain I probably sit in the only i'm probably the only district judge. I served in that position for a couple of years filling out a term so I have a little bit of maybe inside baseball on that position so be happy to answer any questions at any point thank you thank you mister chair for the latitude that you represent dobby and senator brian you recognize your negative steer in just to follow up for staff for maybe representative galvy as far as the county procedures ever district court is that done through statute or done through ministry of rule through the digital. The district court accounting lowers are static so the district courts in the statute of apply the accounting rules of the statute there's no a separate accounting rules inside it's a hard making authority legislator it's arkansas code and take it sixteen t and two okay alright thank you. Yeah. Members are there any other questions. Represented home and clarified and said emotion to file. Yes okay. So we have emotion a second one. Recommendation to file. All in favor say I any oppose. And it would be filed. The. Next we'll have the fan financial in the complaints reports in. Mr georgia recommends her. Thank you mister chair. This presentation covers the financial combat report from monroe county for the year into december thirty first two thousand twenty one. The only finding contained in the report was for the sheer. Who failed to attend multiple meetings of the standing committee or county's administrative to respond to repeat finding. As shown on this slap slide a finding was issued in two thousand nineteen noting the balance remaining in the common serious bank account totalling approximately four thousand dollars was not identified a repeat finding was issued in a falling two years with the unidentified balance increasing to over forty seven hundred dollars in two thousand twenty and over thirteen thousand eight hundred dollars in two thousand twenty one. The. Based on the standard practice of the standing committee on county's administratives the sheriff was asked to take committee meetings to respond to the repeat finding. Specifically the sheriff was invited to attend five separate meetings regarding the two thousand twenty finding and failed to do so. In december two thousand and twenty two the committee filed the two thousand twenty report. In the two thousand twenty one report legislative audit issued a repeat finding in the sheriff again failed to appear at five meetings to which he was embarrassed. Has result the standing committee on county's minispalities boated at its meeting held on january eleventh two thousand twenty four to to deferred the report to the full legislation auditing committee for its review additionally the standing committee recommended that the full committee requests the legislative auditor issue subpoena for the sheriff's opinion appearance at today's meeting. The full committee adopted the recommendation of the standing committee had its meeting held on january twelfth two thousand twenty four. In a subpoena was issued on january twenty third two thousand twenty four and served the next day. Mister chair this concludes my presentation share of michael kneel is here today to respond to committee questions. Shift deal if you would please come down sir. The. With it. The members before I swear the sheriff in or there any questions. See none. Chef near few would please announce yourself. Michael nail money share thank you sir in this time so i'm worse where you in do you some is where our firm that the test model you're about to give will be the truth the whole truth and nothing better truth thank you sir you may have a seat. The. Chief near so would you like to make a statement yesterday we have addressed through research with my staff I never received the documents for the request to come. We went through the signatures we're not even sure who signed for them was told they were put in a file and were never given to me have corrected that activity and I won't be a problem. Sorry for the inconvenience. In representative you are recognized thank you mister chair thank you sure for coming here today but I have a hard time believing it it was a total of tin times they're due that you would nor that you mean you're telling this committee that you have no one in your office that would think this is important enough to let the sheer of no we ten times sure if that's a lot to ignore committee so this is the first time today that the have known about ten times i've only known about a few in the past year though previous years I have no no documentation to that at all. So the problem with it is as when the mail is delivered sometimes it comes into the jail and a jailer picks up the mail and it may not be distributed we have staff there only the jail administrator will now get the mail and distribute it out throughout the jail. In representative lobbied you have a follow up well I do for staff mr chair could staff tell us how they notify individuals to come to our committee meetings whether it's the sheriff for anybody else is strictly by mail is it by emails that by phone call if the staff could she had some light for the committee out appreciate it thank you. The. Okay and our accident conference to the when we have a repeat repeat finding we do let the official know that they will be involved. And we do have the receipts for the certified mail that it was was signed for. It's hard to tell some of the signatures are obviously not the sheriffs. Some of them get tell who they are but those those letters were delivered and our staff does let the officials know if the exit conference when there's repeat money they will be invited to come to the standing committee. Reps follow and went again for mystery judge so was their sufficient. The. It in the room at the exit conference that he would have heard your say you're going to be invited to come to the audit committee or to audit. Yes okay thank you. Members are there any other questions. Okay a senator chesterfield thank you mister good morning share powering to the committee. Or not as the case may be were you in the room I was in the room yes I did was notified the could be asked again were you given a specific date as to when that might happen thank you. Good morning sent to go well do you have anything to add do you have anything to air to this you just therefore support. All right thank you thank you mister chair. It should are a reps of yes what you are recommended then you mister chairman so the underlying reason I guess why we're here in the first place is this these discrepancies that it existed. You're after year in the commercial account is there any explanation as to what's going on with that why they're in these discrepancies and. Has that been resolved. Believe it has been result we have hired a cpa to come in and go through the books are the cba wax of the next month to go through our books again that make sure everything's identified about protocol that we're given to us about. This is something we inherited and share previous administration had the same troubles and we are now looking for a different comma sary company to go forward with to start this the commercial company that we have now software is out of date and they don't give a city technical support. So we're now looking to change companies so we don't have this problem again. Members are there any other questions. Centre brought you a recognizer. Thank you mister chair so the commercial we're talking about like wood was citizen to pay and two to for the people behind bars too. Purchase toilet trees and things like that while they're increased rated that is correct. In so. Is there a is there a local internal procedures that are followed whenever cash is received or do you receive cash or is it all only their electronic means most of it is down by like tronic but there is a machine in the front that someone can come into the lobby in her cash into it and then it is documented at that point as far as an employee taking cash hand to hand no it has to go through the machine that way all money is documented to prevent theft okay so enough in the three years where this is been a problem that you're at your facility has any citizen or inmate complained that I should have x in there but I have not do not have any money not to my knowledge okay thank you. The. Representative brown you recognize me thank you mister chair cheer when family members put money into the commercial account for someone in the jail if the person in the jail doesn't spend all the money is that money just stay in the common serious account I mean it's like money that came in but did not get spinning does it just kind of build a. Or I mean is that the reason I mean i'm just trying to vision how the numbers could be so hard sure yes I am sometimes the money will build up and that is from what an inmate in the prior system we were using a hand check was written to the. So if they made head fifty cents or a hundred dollars whatever it is there is a check written given to the end mate when they leave the jail now if that check is not deposited. Cashed whatever that money stays in the account. So that's where some of that has built up and some of it was from where we were missing you you'll see a big job and the numbers where it went from four thousand thirteen thousand and the problem with that we found was we we were defunded in the jail the jail administrator position was cut. Therefore there was no one moving that money out of the system nobody went in and checked the system to move the balance the profits over to the communication equipment but so that's where a lot of that build up. So so there is profit there is generately to go to them yes and then there are refunds that are issued to people who don't spend all the money that's correct and from my knowledge with cba says that that money will be turned over to the state for the the last and found money because when we try to get hold of an end may they they don't call the jail back for some even when we want to give money thank you very much yes ma'am. The. Members are there any other questions. See man do I have a motion to file. I have a motion and I have a second all in favor say i. Any opposed. Then this will be filed. She had nil thank you for being here date thank you for your top sir. The. It members are next report is especially report and these six regional sales was measurement districts. Will be reporting to us. Thank you mister chair this report is issued persuade to the requirement barclays or code that legislate about it review selected policies procedures and transactions of arkansas regional solid waste management districts for this report ala randomly selected six districts for review. The object objectives of this review were to department if the districts that here delaws and regulations pertaining to districts and their boards of directors competitive bidding payroll landfield use and transactions involving board members administrators and employees other objectives work to assess internal control. Process process is related to cash revenues receiving and dispersement. Arkansas code requires the districts to obtain an annual audit of their financial statements from a private cpa firm. The auto reports from the counter year ended december thirty fires twenty twenty one contained no foundings for the carol county faultner counting in west river valley districts the audit reports for both the boston mountain and upper southwest districts for the calendar year into december thirty first twenty twenty one contained one finding related to lack of segregation of financial accounting duties due to limited resources. The report for the white river district for the fiscal year into june thirtieth twenty one contained two significant deficiency findings including lack of segregation of duties and a material mistaken to the financial staples all districts reported that corrective action have been taken. Exhibit two on page three of the report provides a summary of the findings by both private cpa firms and legislative article for the six districts reviewed. The legislative audit issued at least one findings for old one finding for our districts except fast and mountain. For the carol county district legislative audit issued too finding. First in twenty twenty one the carol county district paid over eleven thousand dollars to the executive director spouse for cleaning and miscellaneous services without board approval. This fiving was referred to the nineteenth east judicial district prosecuting attorney and the attarding general. Second accepted accounting practices provided all income being formally received by use of receipts pre numbered by bringer or an electronic receipting system the carol county district did not issue pre numbered receipts for all income received. For the rest west river valley district legislative audit issue three findings. First check images provided for district bank accounts did not include both sides of cancelled checks and non complaints with arkansas code. Second the district did not issue pre numbered receipts for all income received. And third the composition of the districts board appears contrary to arkansas codes sitting danville has a population over two thousand but does not have represent representational addition. For the upper southwest district legislative audit issue two findings first the composition of the district board appears contrary to article code. Because the board contains members authorized in the district bill alls rather than code. Second the district did not always issue pre number receipts for all income received. For the white river district legislative audit issues one finding the district did not always issue pre numbered receipts for all received. This. For the fault of county district legislative audit issued nine findings first the following three payroll items were not properly proved by the board. Payments totalling forty one thousand two hundred sixty one dollars made to employees family members. Balance is telling two thousand one hundred eight dollars paper the director office manager administrative assistant and recycling collector and salary and wage rate. The. Second the district dispurse seven hundred and ninety two dollars for deletes meat boxes given to board member staff and other individuals in non compliance with the public purpose doctrine the office manager steps wouldn't reimburse the district two hundred and fifty dollars. These first two findings were both referred to the twentieth judicial district pros king declining the attorney general. Hired the districts board meeting minutes to not document the review the prior auto report as required by arkansas code. Number four. The district did not issue pre numbered receipts for. Or retain documentation for revenue received. Additionally the district did not prepare deposit slips for details of payments received. Via. The district did not establish an electronic plans payment system with written policies and procedures for internal accounting controls and documentation for audit and accounting purposes. Six the district did not solicit competitive debates for the purchase of a truck telling over thirty seven thousand dollars as required by arkansas code. Number seven check images provided for district bank accounts not included both sides of cancelled checks and nine complaints with arkansas code. Eighth the district did not maintain supporting documentation for all dispersements and there was no indication of management approval and finally the district board includes the mayor receiption that does not meet requirements found in arkansas code and an additional member from fault her county was approved by the board even though the number of members was greater than five. This report for six regional sideways management districts concludes the first three year rotation of review of selected policies procedures on transactions for the nineteen districts and the state is required by consolidate the district's responses to the findings are contained in the entirety in their report. This concludes my report. Thank you mister kemp. Sue to give more. Sure you recognized that you miss chair do we have someone here who can come and speak to this. The. Which district guards into your more well all of them actually but faultner will start with faulter. It's for you jump off you would please come forward. In before the german recognized staff has a statement I have recognized mr white senator get more this kevin wine I want to just mention that we have representatives from faultner county regional seller waste district as well as white river solid waste district here and available we're gonna have the next report also addresses faultner county regional solid waste district we did not invite all of the districts to be here today as this is a rotational report we do six every time so in consideration we reached out to some fault protection of city I might wish to attend and they chose to attend force today just want to make their statement thank you thank you I think it was wise to have faultner here. German if you will raise your at hand. State your name employer in position. The. Repeat after me do you saw this where our firm that a test more you are about to give will be the truth the whole truth and nothing with the truth. Thank you sir you may have seen. If you will go ahead and pressure button. Yeah. They're not the super gear more did you have I think it's only fair to allow them to open with a statement if they sometimes or actually all right thank you for for your term and attention again i'm alan dutch in the county judge folder county took office as january my can tell you it is no fun being here to just want to get that out the way to humbling experience the look at our state legislature. Both house to and I can tell you as a former county attorney for two different carriers one of the foreigner county and one lono count ever sensitive to ethical issues and the need for proper controls and tell you that when I first became aware of a potential findings my first thought was to look and see on my goodness as anybody is there any criminal interest anywhere and I too have not seen that i'd like to at least say that. Up front and then and then lastly I would just say that water the controls that we need put in place we don't ever want to be here again as the format term but I take full responsibility. As people's representative for for accounting the chief executive and would be happy to answer jerk do you want to introduce yourself I guess yes i'm the director of the district and if you do have our responses for these findings they have. Some of them were several the districts had the same issues are the front the back of the checks in the number of receipts and that sort of thing but they have often corrected this point. Members are there any questions yes sir may still recognize you're sure you are going to go more thank you thank you judge so just for clarity sake all of these issues pretend you taking office correct yes and then to the gentleman there to your right. How long have you been in your position obtained okay so these were all under your watch yes so if you will occur so let's talk about these for a second. Reading through this I find it disturbing i'm i'm glad to to hear you say you don't think there was any you know criminality or criminal intent I guess these some of these have been referred to prosecutor turns office in the age of all we'll wait to see what they have to say so i'm sorry sir what was your name again direct jack bill check me miss well do you aren't walking me through is it common practice has been common practice to hire family members. The the family member of it that was a full time four time employee was hired before before our came on board okay she had been a long term employee did you did you terminate that person or I did not occur we were not aware that that was was improper she was a good employee pretty well ran the place and she was there. Granddaughter met office manager. Okay. So but is it also common practice to buy. Christmas hams for board members at been standard for how long several years i'm not sure exactly how long okay do you think that all of those items the employee family members you obviously state now that you didn't realize that was an issue in probably won't happen again to you so I mean do you think it's good to practice the spin public phones on buying christmas hams for board members I don't know okay i'm glad to hear you say that you you see gentleman here here's the problem we we've had several solid waste districts come before this committee and other committees and we have a problem a shortfall if you will have been able to manage those districts and especially the relates to solid to the the tire and waste disposal and so it's it's not uncommon to hear these districts come in in begin and cry and say we need more money yet we see expenditures that are agreed just such as this one and it begs the reason are we just spitting our money unwisely and I would argue in a lot of cases we certainly are would what is your response to that we just want to wear last week. The the the guest for the board membership I didn't see them was private citizens there more board members. A end they saw about the server district for no but no pay. Just appreciation yet for them. Go. Well i'm sure that everybody who is served by the solid at waste district in the sense that have their trash picked up would probably have also appreciated christmas hand but i'm glad you'll didn't tuesday expenditure money in that way. Mr chair I will I will stand down and yield to other members but I may have other questions or comments thank you thank you soon to give more certain brought you a recognizer thank you mister chair so I guess the question for mr bell been here ten years and I was seeing note about it in the findings that everything references are are considered headed code if you have questions about should I do their can I do this what what is your first. Inclination to do when you have a question like that. Could you play the question yet when it when you have something that you would like to do. Maybe you've ever had been done in the past but you like to continue to do it but there's a flag that goes off your head like can I do this who do who do you ask at at the level to get affirmation that a I can do this. I guess our board chairman. This is he an attorney is the z was not it was accounted urgent. And when this took place he was done. Okay so so there's nowhere you could go at at an oversight level to ask these questions how how does your board get trained out any of these boards get trained to you do you have any. The as far as I know there's no training for a board they are the mayor the county judge in the mayors of the cities over five thousand in a over two thousand and eight okay judge the evening the you can add to that thank you for the opportunity didn't realize that would be a tough discussion but II think that's a great point to bring out our county is blessed with having on staff council in folder county as you know many of the counties do not and we will often ask our county attorney which is not generally within the scope of is for her everyday duties. But in most counties that architect there were just not be available and honestly it's a great area we hate to devote too much of our county resources to something that's. Not accounting entity minutes learn basically as the courtesy to a non profit with which the county is involved okay so so you don't have any state agency that can overseas your operations i'm sure eighty q probably comes and to check logs and obviously legislative audit comes in to check behaviours but you don't have any state agency to report to or to go to whenever you have a a critical need a better appropriate one okay alright thank you thank you mister. Send to go more you recognize her. Thank you so I guess is more of a question for staff and since we have fault recounting and I don't want to jump head of staff. Yeah. Can can we discuss the damage that will get fault in accounting the table can we discuss the overall report of the various districts. Or might getting the head of things. This. Center again more yes it's absolutely appropriate for to ask any questions over the the first report thank you in certain. So we've we've talked about family members we've talked about christmas hands can we talk about the. Beds for the purchase of the truck there were no. A competitive bids can you want me through that at judge and that predate you as well it does have familiar with it though and i'm happy answer okay well i'll direct it to the director okay. We are we bought this truck in twenty twenty one that the county has a process of good bids. We're not part of the county but we were able to. Piggy back on them I guess you say they gave us it was. And the truck would be got for a eighteen percent under market value under you misrp the same rate as the the county had gotten their pickups. From the same deal so following long lines of the testimony of the questioning rather center brian asking whether you know you have someone advising you walking you through the process whether there's an expert that you listen to to guide you into what seems ethical or not or what is appropriate and the wall or not you know again II just find it difficult to believe that it's you can look at these things and take these actions and not know hay there's probably a process we should follow sort you just completely unaware of of our processes that should be followed or maybe walk us through your your thought process there. I was I bought him aware of the the the big process just seemed like a good opportunity to. The two are. Get good a truck at a good price. Yeah. Following up with that with the county's purchases. Okay so you were you were aware of the process. Yes okay. Okay I yield mr. Sent a paid in your recognizer thank you mr chair so while we're on the subject of the truck had the county taken bids and had a supplier and so basically. The solid waste district bought a truck at the same rate that the county. Was buying them and the county head went through the bid process is that correct yes okay thank you. Your representative right you recognize your thank you mister auditor kevin at the present term barclays all long what is the amount there ave here is price day at four a bidding process detected to date. Represent a rife I understand the question correctly the current dollar amount where bidding is required is at thirty five thousand that's the threshold where biddings required thank you thanks sure thank you. Members are there any other questions. The. The. So to get more your recognition again II i'll i'll stop at this point II guess I just would like the assurances from gentlemen the table this these activities don't plan to continue because as you can see from our standpoint when we're trying to solve and deal with a solid waste issues as we are tire problems as we are understanding that you know again we've had solid waste districts come to us and tell us we just don't have enough money to operate and this is I don't know the second third or fourth time we've had a solid waste district under it. Who have made expenditure such as this. I hope you can see at least my frustration i'm sure I made sure that with several my colleagues so again I ask now that you're under I was in here at the table do you plan to continue these kinds of activities not sure. Thanks sir they they've they evaluate discontinued. The the employee question has is gone. And the others have been correct. And then if I could I would just point out that the tire district has its own set of problems and this is separate from the fortern county and solid waste district cast control appropriate use public funding applies to both into these but just for clarification it's a it's a whole. Duality of a set of of issues but there is any separate from this this boat a server our district tire board as well but. Different entity. Just out of respect for their entity on which i've served. Thank you at judge. Centered chesterfield you recognize. I have others in them the queue at the properties thank you ma'am so to get more you recognize. Actually mister yield I was gonna speak to the last comment made but i'll i'll yield a center chest for. She just feel good hit me. The. And I have a motion in a second all in favor say I in the opposed. Same then this will be filed. The. Next we have an investigative report on a review of selected disbursements mr trolley camp. Thank you mister. After identifying questionable withdrawals and dispersements made by the fault of county district in the report just presented legislative audit staff conducted additional procedures primarily for calendar year twenty twenty two. The. Upon review of the payroll bank account district personnel discovered six on authorized withdrawals towing over seventy five thousand dollars from the district's bank account between july fifteenth and july twenty seventh twenty twenty two. Of this amount nearly thirty eight thousand and withdrawals were either recovered from or stopped by the bank the remaining thirty seven thousand was initially refunded by the bank. However on december twenty eight twenty twenty two for the bank recoup these funds from the district. After meeting that same month between the bank in district personnel. During which interest rate negotiations for the districts account accounts occurred the bank departed pro rated interest towing thirty seven thousand two hundred and twenty dollars into three non payroll district accounts. As a report date the unauthorized withdrawals are being investigated by long. Additionally the district made questionable expenses totalling over sixteen hundred dollars on behalf of board members and employees. These included eight hundred and ten dollars for christmas and for board members and employees as well as a gift card for an employee. Five hundred and fifty nine dollars for employee appreciation and employee fair whale parties. Two hundred seventy five dollars for undocumented employee medical expenses. Legislative audit questions whether these disparcements comply with the part of public purpose doctrine in the state of purpose of solid waste management districts provided in arkansas code. The board also did not properly approve salary and wage rates souring contract labor payments towing over seventeen thousand dollars may to employees family members and bonuses towing twenty four hundred dollars played to the executive director office manager administrative assistant every cycling collector. Management's response is provided in its entirety in impet- in the pending saver report and has been forwarded to the twentieth judicial district prosecuting attorney and the attorney general. This concludes my report mr chair. The. And i'm all at the stairs to white yet so the previous report was a review of six regional solid ways districts and went through the period december thirty first twenty twenty one it's a review that we perform based on legislation requiring us to review the sex during the course of that review there was additional items of concern in relation to fartner county that resulted in as issuing the subsequent report just presented. Since a chest field you are recognized thank you mister chair because it is confusing at that we just dealt with bottom of county so the motion was for the previous report and this is an adendant this is another report altogether ma'am okay so we're going to have to get public if the members with the member so desire thank you because II was confused because I thought we had already thank you so much. Certain brand new recognition thank you mister i'm just looking at the unauthorized withdrawals talling seventy five thousand one eleven but as I look through the the detail provided in the report of questionable expenses I know that doesn't add. Adapted barely half the amount so what's the total unauthorized. Expenditure that seventy five thousand dollars was electronic debits from the districts and payroll bank account that. A apparently were made by some outside see this kind of falls in land with the. With the unauthorized withdrawals that you see the time from cities and counties from their bank account. The. So it wasn't anything that appeared to be done by the district it was appeared to be an outside. **** about your records so old way fried somebody was. Packing their account and pointed out and it and that was proven that it was a hacker equally that's not improved in this being investigated by the other law enforcement agencies at this point. Due to no what did you say that that occurred for a year of her just for you look at it from january first to december thirty first. That was the toll amount that the. Came out for the year for the report period I think they were done over pretty short period of time. So I guess II would like to ask maybe the solid waste district do they not reconcile his reports monthly and see that there was a mismatch of what was approved to go out versus what was not jamma view at all please come back up I remand you that you are still under oath. So i'll repeat my question free gentlemen if you know if i'm running quick books or peace tree or any software and I know what's going out and I reconcile my bank account it's going to equal zero at the end of the month that's is that not a practice in a partner counting solid waste history is this all your sir yes it happened over a very short period of time so. Just kind of want payroll period and they were. A quick books. The. Mistakenly authorized some some payroll checked it came out of our account. The uh the bank caught most of them as they went out in the year. The rest of reimburse later is determined that we were not at fault that it was a hacking but it is only one short period. Yeah back there okay so so you I use quick works and quick works payroll service no more. Okay and it is quite works payroll today take any liability for this enough. Okay i've never never heard of the abused quick books for years i've never heard of them having this problem so okay thank you. Members are there any other questions I see your recommendation thank you mister journey and this may be for a staff as much it is for the district but i'm trying to. Interpret how the. The interest negotiations with the bank were being affected by this part of this seventy five thousand. The. Yeah. The turn up. Center patent question we have as well we also saw that it was. Didn't make a lot of sense quite unusual that's part of the purpose it's in the report and this has been just referred onto the prosecuting attorney in terms of general to see if anything else is of concern. Do you have any explanation from the district is I mean I guess you have interest bearing accounts here we have out and there's no interest rates went up significantly and leave. Talk to them about about increasing your interest rates they explained that they had reimbursed us for quite a bit of money. So I write to an upsome but not to the right. You know that we. I'd hope well I mean look at the math here there's seventy five thousand one hundred eleven dollars. That went out of the bank account unauthorized. And the bank reimbursed thirty seven thousand eight hundred ninety one dollars and then instead of the bank reimbursed in the rest of the fraud. They're somehow. Claiming that that has to do with interest they just don't make any sense. It is. I guess was part of negotiation that that we we had less interest. The bank took responsibility the mean day they stopped about half of the payments from going out prior to them going out. So you want your state there is not all of the seventy five thousand went out about half of. The thirty seven eight ninety one evidently yes. If it was a it was a short period of time it. It was. There was from fraudulent employee well I just like they are up on the our accountants are very very good at their job and when you reconcile the bank statement. It would attend a month or whatever it is I mean. If the seventy five did not go out. Then I can't imagine that they were the flag did is having one out. But. Yeah. About have have it did go out. That's not what this service this says seventy five one out thirty seven eight nine one came back in that left thirty seven to twenty in limbo and somehow that got credited with as interest the the withdrawals were debited from the bank account as they were electronic debits from the bank account in its own point. Before it got away from the bank they were able to pull it back and cancel. Those debits on the fire speed. The second ones they got all the way out and they couldn't get him back so so the. The solid waste district account was never. Given back the money in the second part. It was eventually give it it was the bank refunded it took it back. And being gave it back to them again as interest. Twelve I gave it back to him as interest it was due then they didn't give it back to him. But now I thank you I think I think we have a banking problem there b. Central love you recognize it. Thank you misses schert at oh I won't be here generally good morning let me ask you what what bank do you are bank with a first service first first service okay first service are thinks that it had paid in covered a lot of my questions are but I guess i'll just need clarification on one thing so the unauthorized debits are a thinking hurting your conversation was that a a person from the salad waste district that is no longer there or or was it something that mistake bad the bank i'm just trying to clarify there who it was a hack. It was a heck yes or our accounts got had. Gotcha nope bills been determined that no one within the district former employee. Was a involved okay so no former employee was involved it was just a hack correct sir okay all right thank you sir thank you mister. Members do we have any other questions. The. See now do I have a motion to follow. I have a motion I have a second all in favor in the opposed. Have one of those it will be filed thank you john thank you thank you very much dismissed. The. Members in other business. The next meeting at the legislative joint auto committee would be hill thirty june thirteenth and friday june the fourteenth or at the calls of the chair. And with that we are journal.