Legislative Joint Auditing - Executive Committee

I have a motion I have a second favor in the opposed nationwide movie on the stairs of special reports and believe that this i'm setting here to and thank you good morning and thank you mr chair this afternoon we have reports that are going to the standing committee on counties and cities that will be reported to the asking and tony as well as the attorney general and then tomorrow we have four reports and the first recently presuming again the million dispute court that had a has missed a population of court funds of over four hundred thousand dollars but committee to find the report in the question that the private accounting firm attempt to answer questions they want bodied they notified his yesterday that they will not be an attendance tomorrow kelly financial companies report is being presented tomorrow as well the committee asked mr member state about it turkey subpoenaed the shelf to appeal to answer questions concerning a repeat funding we have a special report on six regional solid waste management districts what we will be selected policies procedures and transactions this is the main accordance with our nineteen districts and we will make and the last report is for a county solid waste a management district some extra disposements in issued especially port their percent that money that concludes my report we must do the questions thank you mister question just to just come and know this call me and say that the sheriff would be at the city. Carries committee this afternoon and that so it may be necessary being the more but I was in the same car was just more sure that the membership thank you all the questions were just accepted we will accept the report now norman i'd like to give you an update of the government's office podium purchase from the band slc i'm not going to be taking questions or making additional comments regarding the report or the update but staff begin work on the immediately up on the province of the community of october thirteenth twenty three today our staff has twenty individuals involved in the purchase of the party and will reimbursement for the purchase of the podium you started the week of october sixteenth twenty three new at least three next week we have sought together communications and financial workers surrounding the purchase and reimbursement of the currently the special report is in the draft stages more in the east and process we interest report by the end of march we appreciate you patience in this process will proceed in many for community sake the same staff members because of the holidays thanksgiving in christmas and sometimes when we finish your report the coach. There's a legislation on the committee will be notified the battle report can be publicly released about the coach chairs cruising that a special meeting of the legislative joint community purchase that either coach or petition of members of the committee can be placed and the agenda president like scheduled legislative one all it in committee thank you sir thank you sure that's a very good update members moving down the new business we don't have a review of selected educational spectrums and representative hope duke you are recognized please is there a care thank you mister chair members of the committee for your time i'm here today or requesting that legislative audit do a special report they will include the following items and i'm just going to sum it because I know you have that letter in front of you number one asking in hodges and so solid as well and i'm sorry thank you especially in such great thank you I don't have some reality for a point number one i'm a game we all requesting and audit a big. Spend it shows basically how much is damaged money is being received in regard to these entities bought two again it was looking into the contracts and how they are injured in two thousand third bullet is looking at a review asking procurement process taking a special attention to the service that are being used for payable element and several and then the final one and i'm going to read the final one because I really wasn't sure how the best conditions that a review of expenditures including books on training and conversations made by employees of the arkansas education education so it is cops public school districts and public institutions are payer education in cases where those employees are also employed by a solution or any company associated with it or in cases were employees received any personal compensation from solution tree or any company associated with it we have visited with but just like they're audit staff to know this scope a little bit better and to answer some of those questions and we're happy to do that where they make it what best for them is they look into this and if I was a hot age ideas of senate solidarity chester fields I want to add they've been would love to have and then do so as well obviously if that is okay with you thank you so just recognize me to see this issue is like that exactly thank you private company that is a great deal of money in the name of advance and about children continued to ask some of the evaluations of their work those who don't want to deal with it you can't informative any summit to evaluation you continue to hear about the really doing a great job. But I could find out how many school districts have from an effort to a cease call expenditure dollars with solution we need to know specifically where up their private money but I think we ask seven years ago with the student ability of us to follow the money at the state of market south speeds with private entities and this will be a great example because of them continue to ask solution to the cars and some of the school districts making great I just think it's important that the people in this state now to home it's going so the better understanding why we explain so much money with them and is the money well spent that i'll take any questions you recognize when they can yeah some solidarity education are subcommitted so I can just want that a little bit of information here about the request I know if anyone similars especially education committee might not be familiar with the company but we stay interested in to contract with solution to be back in twenty seventeen and the company provides professional development resources for teachers we have the state contract to a solution to since twenty seventeen initially that contract was over the years and the contact with the states now up to sixteen dollars a year and again that was also several months ago as a community member that's we have been following the somewhat close over the years and my understanding of this contract that was. As far as I know if the same but a few months ago we kind of became aware that they were receiving payments not just from the state or the department of education education service cooperative school districts and higher institutions it's about its resources but once we kind of start working at the bigger scope here you know we found that they've probably perceived somewhere close to maybe an excess of a hundred and forty million dollars which was far more than so that's really that the intent of the audit mister first we're just trying to ask for all expenditures to solution or any companies associated with them because we know that they do a companies and say about concern so we're just looking for all those payments and to these different institutions at the state level and and to the district as well as on second board point we talk about this particular request but there's a way of knowing the scope on this we're happy to work with but because of the amount of money that's been spent we just want to better sense of the contracts to the beginning of them to with this company kind of would have understand that how those have come to be an internet in this something so sold solid and I came across in our same committee we just want to know in general the process is being fire in the business being conducted with a solution to particularly attention on these refunds we have a school district said the committee who told us that solution tree had been encouraging districts to use as her phones to pay in the advance for professional services and talking with added staff and we believe that that might be a violation of our policies and so and i've seen solution for these websites that open the market including school districts to use as for funds to pay for professional dance so that's one thing in particular wanting to look at is. Rules and procurement rules being followed in particular that comes to the dollars because I suspect a lot of the money that has been spent of the school district as I was in the federal western funds and so we just wanna have a better sense of uhm in that rules the last point may be a little confusing essentially we know that this company hires school district personnel to be consultant so by books different things that we've come across we've seen another states occasionally in some cases those employees might have a conference of interest in their position and a school district when I believe in books a current having employees that the screen district the ten social conferences and making those decisions and using school district funds benefit the company that also working for we have a specific service member states when that's happened so I know we might need to work about it still identifying some of those individuals and I we found some of them are said there might be another company to get a better sense of how many people were talking about and said the balkans looking at expenditures with the company and saying that there's any potential conflict of interest in school personal but we want to special attention to make sure the school district resources of education cooperative resources are being sent to these companies and those employees and also working for the company and confirm those people conflicts of interest so there's a few four five points we're asking for trying to come in the focus we were down to those financial questions just to get a better sense of you know at the state department of that love all the education service cooperate this will district how much money that we spending of these companies in which how many companies are there and I would like to serve it. I think we especially with peace we've been able to find some financial efforts but because it's separate and not in the same financial systems who haven't been able to get a sense of the spinning and high website so happening certain questions everything thank you such a broad recognized I think I think my question might be for stamp procedure but maybe just gets gets the bunnings mistake or cooperate spending do they have to go back to a state for permission to enter into these contracts for make the state of where i'm just against whether view each each without an each is that something that can just be the table every school and they would coop in the state won't be able to to find that information but this is become secure varied group of entities that it's it's very difficult for us to follow them that's why this is critically important because the tentacles when it was introduced to us would go into coops and to school districts of funding to a contract before it was supposed to provide professional communities training for teachers that was that they were going to call up to provide we didn't know that the school districts was going to kick in that's why this is such a different kind of animal because we don't know when. Major concerning there was the education peace but also wanted to know the money going into these tentacles that we are coming across is really disturbing so it will be up to it to some extent to the focus but I think since all of them have state money coops get money from the state this money from the state second we get money from the state all this is our money so we're going to have to figure out how they tend to reach out in these areas and the money being spent as a show center you recommend thank you mister chair and who can answer this but curious as to whether or not solution trees and I can sell company but I know they have an office with six thousand five but it's not important company proceed but they do have an office and they have come to rest quite a while so i'm sure I can I don't know that they are we would not be into a contract with them in a while we better take the roads dictionary as far as if they're an arkansas base company or not that does not affect jurisdictions based on the public funds in the expenditure I mean that could be a a barrier in getting all the information we need it just depends but something evaluated that point thank you thank you I can answer that and I was social set of indiana and other companies on a resources I think is out of colorado but my knowledge incorporated here a part of the same court. I think that's what some interesting because we want to wait you know business and namings part of the same couldn't go on about the various tentacles in the happen I think the more the state needs to know about this particular entity so then you recognize an appreciate the center saying it's exactly right transparency is what this we don't know who owns them but some number one responsibility to know how money is being once the transparency is out there then we can make decisions as to if we need to get people and I think ever have a group committee that we chair we're very willing to work with it to make sure we got something manageable so we need to scale the back and do you know small pieces at a time to see where that were very well and to do that as soon as going to process so we'd like to pick with the most important pieces but those in left a few months we're going to be voting on the end of some things that we find out when i'm comfortable with them the legislature needs to be aware of saying we stop funding that there's all the parts of it whatever that is thank you matter membership questions so johnson thank you mister thank you for your community work open santa character at tune to nose when we have seven years things in a question in this committee. And eight things come up with questions and figures I really think that solvent just said that it's going in the physical session and we're committed perhaps maybe start maybe it's but this thing should have grown there must be what you know what i'm in partialize american growth that was the one they can thank you but this this is extremely concerning uh because of the dollar man and i'm sure yeah I think that teachers helping teachers and learning communities all wonderful you just wonder how in the world it could get could grow like this and I love the word technical that senator chesterfield well that's what it sounds like so if it's needed I don't think it being there to the chairman but I would have emotions proper time it needed thank you sir representative you'll recognize your yes sir thank you thank you mister chairman you know something that representative grant broader called you know services rendered and payment before the service was rendered and I think that's something that we really do need to look at because i've never ever known anything that was legal that was paid for before you actually perform the work so representative grant appreciate you bring that to us thanks sir. Move alone other business we've got to continue discussion of procedures for addressing findings and we have miss emily white and to get something for see that will do. Good morning chairman wallace chairman gas away members of the committee I mimilly why legal council legislative article i'm here today in response and to provide information to several questions that were posed by you all at your january executive committee meeting at that meeting staff was asked to answer specific questions with regard to applicable statutes of limitations in criminal proceedings in in civil causes of action in general as well as criminal offices and civil causes of action that may result from three specific compliance and responsibility that mister arey spoke about in detail at our january meeting drawing your remembrance back to mr arey's presentation those three acts provided this governing body tools within which you can respond or take action to miss management of public fines i'll start my comments with a general overview at the statutes of limitations for criminal officers in the statutes of limitations in general for civil causes of action generally all misdemeanor level criminal offenses have a one year statute of limitations a question was raised at our january meeting about the levels of misdemeanors whether AB misdemeanor and a sea misdemeanor also has a one year statute of limitations pursuant to tarify they do as well as criminal balance and unclassified misdemeanors so it doesn't matter what the level of the misdemeanor criminal offense is our law mandates a one year statute limitations for which a prosecuting attorney can proceed in petition that court to hear a case. Most felony level offences relevant in potential criminal causes of action that we might see as a result of violations of these acts are three years that's for lower level felony offenses that's not a wide felony that's not an a felony that seize nd's to give you some examples of what we might see criminal offences that could be uh pursuant to violations of these acts you could see seafarni theft of property financial identity fraud fraudulent use of a credit card things of that nature all of those have a three year statute of limitations pursuant to total five generally started supplementations began to run the day after the authorities incident or conduct occurs now that's pursuing to the language and title five in entire sixteen which is our practice procedures in courts section of the arkansas code there are exceptions to that statement however for instances of kinda that involve fraudulent concealment or a continuing course of illegal conduct statutes of limitations can be extended particularly as an example in five one one oh nine you all have extended statutes of limitations up to ten years at a time for certain criminal offences a transition now to talk to you about the three specific acts that mister eri spoke of he spoke of the arkansas government governmental excuse me compliance act the local fiscal management responsibility act in the state fiscal management responsibility act that first one the arkansas governmental compliance act curious criminal penalties for violations into refresh your recollection those criminal penalties are either a see mister meter for first defence AB misdemeanor for a second offence or an a misdemeanor for a third offen. But regardless of the classification the statute of limitations applicable is one year always one year for the prosecutor and law enforcement to investigate and get the charges filed in a court of law non compliance with the various fiscal management respo- in responsibility laws by a public servant leads to notification of that noncompliance by this committee by the legislative joint auditing committee mr area provided a long list of those fiscal management laws last mac if a public servant fells to correct their conduct after having been notified by this committee that failure to correct is what actually triggers the running of the statute of limitations for this particular act. Irrespective of the classification again that's a one year statute limitations a transition now to the second act that's the local fiscal management responsibility act penalties for violation of this act or civil that means that a civil lawsuit can be filed by the profit securing attorney in the district or the attorney general's office to pursue a violation of this act fourteen seventy seven one ten says all actions in procedures under the provisions of the chapter at this chapter excuse me our civil and nature and governed by the appropriate rules and regulations in laws regarding civil actions and remedies this persicular code section ladies and gentlemen does not specify a statute limitations and because of that we have to look to tide or sixteen which is the practice procedure in courts section of arkansas cope when I statute under which a cause of action is brought does not specify a statute limitations for bringing a specific cause of action courts in arkansas will utilize what we lawyers call a catch our provision statutory provision in code and that catch our provision is sixteen fifty six one fifteen in its at five year window ladies and gentlemen so long as the violator the public officer and or employee the violator would be a public officer or an employee is not a sheriff or a corner any civil action to pursue violations of this particular act would probably be within that five year window after the conduct has occurred if however it is a share of a corner or statute are clear and that statute limitations is two years now I say likely because when language in its in the statute is vague uhm in the it it's veg in this because there's no specific language specifically saying what the statute is for this particular act the minimum could be a three year window. But more likely it is that catch our provision which is a five year window for which the prosecutor or the attorney general can fall as civil suit against a public official or an employee for violating a provision of this act of transition to the last act now and that's the state fiscal management responsibility this act also says all actions in procedures under the provisions of this subchapter or civil and nature in government the appropriate rules and laws regarding civil actions and civil remedies based on current language the applicable static limitations for a civil action brought by the attorney general pursuit to this act would likely also be within the three to five year window with both the local fiscal management responsibility act in the state physical management responsibility act that applicable statute of limitations would begin to rhine when the public servant or the public employee is been put on notice of their nine compliance non compliance ladies and gentlemen is the trigger after that notification by this committee that tire that their conduct falls below the standard aspects of our statue it's that non compliance in that failure to correct that triggers the beginning of the running at the station of limitations in conclusion regardless of whether a statute calls for a criminal penalty or a civil penalty that statute limitations in any action means it is the period of time for which a court has jurisdiction to pure a case you are the general assembly can extend repeal amend or modify statutes of limitation at wheel in nineteen seventy six our arkansas supreme court said establishing a statute of limitations for a particular cause of action is a matter of public policy determination of which lies almost ex. Exclusively in the legislative domain and decisions of the general simply in that regard will not be interfered with by courts in the absence of power public error in exercise of that legislative judgement examples of eurobillion into do so in the past have been with child support obligations you all have amended statues of limitations in the eighties and the nineties with regard to child support obligations and how far parents can go back to to collect a rearages you have done it in insurance fraud cases and you have most recently done it in civil causes of action for sexual soft victims the general simply has the power to specify center modify a statute limitations in civil actions in criminal actions related to violations of any of the acts discussed last month or again briefly today by me legislative article will continue to prepare the necessary research and gather all necessary documents relevant to this topic in anticipation of continuing this conversation and with that mister chair I will yield the market phone and did my best to answer any questions that you will have thank you ma'am members do we have any questions so to pay thank you mister chair and thank you miss why there is a great presentation great job thank you i'm not a lawyer I just play one in the road so you said a couple things about the civil cases that might be brought yes with the question before the court be the failure to comply or the failure to correct for these specific acts it's non compliance in non compliance is really a failure to correct the way the language of these statutes is written in the way that I read it so the non compliance happens and then we review it and then we can inform them that they're out of compliance but the statute of limitation starts on their failure to correct so I was just. Curious if if that was what would be the question before the court or if the question before the court would be the fact that they messed up in the first place generally speaking when a cause of action is brought before the court singer in our patent and less the defendant in this cause of action raises stationary limitations the court probably wouldn't entertain it uhm it would have to be raised by defendant in that particular circumstance in most of the law that I have read in this particular regard it's very factually specific so it would depend really on how the lawyers friend the argument as to whether it is the failure to correct because is it or the noncompliance that causes the statute of limitations to right if I understand your question correctly well and if I could I think I think we're square on the statute of limitations but another words if if you're going to if the attorney in general is going to sue in civil court would they have to prove the failure to correct yes that would have to prove that since okay thank you thank you mister chair you should send your jobs and you recognize your thank you mister chairman who's quiet thank you for an excellent report of. I'm i'm okay with the terms of the statute of outline I just want to make sure that we understand when the statute told and you mention the notification which is important I get there but if you know we have cases where in adelaide and carries minister powell these we may be up to three year more years behind on the audit where especially if it's done by private form and we we've had instances you know you know auditors get sick and hard to you know these things take longer than they should but I just want to make sure that nothing that nefarious falls through the crack because of that so there's the statute toll when the the internet is reported to lac or is it does it toll when it is discovered by the auditor or exactly which point does that that stop watch click senator the way that I read the current status of the law there's no tolling provision right now there are instances however where you all have crafted tolling provisions for instance in five one one oh nine you have a very specific exception crafted in criminal statues that references when a public service engages in following us conduct and here she actively engages in consilement of that conduct here she can be prosecuted criminally even if it's a seriously felony up to ten years in some instances so you walk and craft language similar to that provision relevant to these you have the authority to do it but as our read it right now I do not find any sort of previous statutory provision that tolls it just because notification is made. Okay so my where i'm coming from obviously is mister chairman we want to set it up where you can't hide it through the laborious process that sometimes we find in other words if nobody's working on this in bad activity doesn't come to light during the status to repeat it and and i'm i'm not sure there's a simple answer to what that number should be but I perhaps we need to look at the ad and i'm i'm not like any of us today prepared to come up with any specific answers but I think that's a question we need to work on maybe even something that could be taken up within twenty five regular sessions out thank you so much for his wife for the service thank you mister chair members are there either the questions represent right thank you mister chairman let me ask you the we know that once once you actually uncovered this the same division of legislative our church it would begin the next day I would think well let me ask you the s what would you do in a situation if this had been going on for safe seven or eight years could you go back that for to begin that process there are instances statutorily representative rob where I believe you could I think some of the language captain right now entitled allows for that if it is a public servant that has engaged in active consumer of that conduct. Pressure email. Shirt johnson sir you recognize thank you mister I will be very brief members of query ahead of a request made by ugh city director of murak uh b j wirich and she it discoverage to me she's related to an improvement district in her war of the city she just trying to get some answers on procedures and in the how the some funds were used a tolerant would notify our committee but in council I was staff I want to report that just the volumes number of improvement districts we just don't obviously do this accept in extreme situations but I want to say that that mister white was very helpful to me and helping me point out an alternative thing in a war let the commit know that I contacted a train general group and he is consumer protection division or another part of the ag's office we can help them figure this out obviously it's each improvement district financial responsibility to have their artists done everything and if we took a man we'd be tripling our staff and i'm not from him suggesting that but but I did since this was brought to me by a little rock city director it won't inform the committee of it in hopefully that general group in his staff will have some answers for them that would keep our already over houndable and long suffering start from having to deal with it so I want that mister clark for that mischairman and I will will uh tell director warrick that I will be glad do whatever I can to help her coordinate with the ages office and thanks for the opportunity to make that report thank you since you're johnson. Members are there any other subjects to be brought up. C non the next meeting of the exact committee will be held on june thirteenth twenty twenty four adder at the call of the chair