Legislative Joint Auditing-Counties and Municipalities
Video
Transcript
1 document
Machine transcript
May contain errors. Verify important quotations against the official video.
About transcript accuracy
- Source
- Whisper
- Model
- ggml-large-v3-turbo.bin RTX5060
- Processing date
- October 8, 2026
Representative Danny Watson
Unverified
0:00
If everybody had their seat, call the meeting to order, Committee on Counties and Municipalities. First thing on the agenda, adoption of minutes of the October 10, 2019 meeting. If you had a chance to look at it, we have a motion, a second. All in favor? Aye. Motion approved. So, review reports you have in front of you.
Go ahead, Mr. Jones, when you're ready. Okay.
Speaker 4
0:40
Just going to give an update on two of the cities that are trying to get in substantial
Speaker 6
0:46
compliance with the municipal accounting law. Jericho and Fulton are two of those that are on the list. They are, just to give you an update, they are meeting with the Municipal League this week to try to get some of their issues corrected. So we just wanted to give you an update on that. And as we begin the review of the reports, we'll do what we do normally,
and we will review the reports where we have visitors here to answer questions. So we'll start with Ouachita County on page one. The collector's bank accounts were under collateralized by $4.2 million in October 2017 in non-compliance with Arkansas Code. A similar finding was issued in the two prior reports dating back to 2015. Tax
Speaker 8
1:36
collector David Norwood is here to answer committee questions.
Representative Danny Watson
Unverified
1:39
After you both are seated, if you will, again, give your name and identify yourself, and then you will be
Speaker 13
1:51
able to proceed. Go ahead. Sheriff and collector David Norwood, Washtenaw County. Chief Deputy Melanie Jackson. Thank
Speaker 15
2:02
you. Go ahead. As far as the findings and stuff that's being corrected, I think your auditor looked at the
Speaker 11
2:09
what she's done on the collateralization for this year and found it to be within y'all's standards. So
Representative Danny Watson
Unverified
2:21
in your words, everything is now corrected, correct?
Speaker 15
2:24
Oh, yes, sir. Yes, sir. Now, she was not the deputy collector at the time that these two incidents occurred. Now, the second time I wrote the bank letters telling them that we needed collateralization, they sent me back notice and stuff stating that under the tax
Speaker 11
2:43
ID number of Wachita County that anything over $250,000 was acceptable.
So I assumed that would be all okay, but apparently not. Any questions from the
Elaine Robertson
Unverified
3:12
committee? No questions at all. If you want to look one more minute.
Speaker 25
3:24
Go ahead, Representative Gonzalez. Go ahead. Thank you, Mr. Chair. So I guess I'd just like to hear from the auditors because this says that it was a similar finding was issued in the previous two reports. So has the auditor seen that this
Speaker 28
3:47
indeed has been corrected? If you'll remember, at the last meeting, the committee voted to issue a subpoena for the
collector's appearance, and then we decided to send an auditor over to visit with him instead, and she did come back and say that she looked at the collateralization for the deposits and said that it was adequate. But I think the issue here probably is that, and a good reason that she went last month in October is that's when the deposits would be so high is when the property taxes were coming in. And I think that may be when Mr. Norwood was missing getting the collateralization raised for this.
It's just when the taxes were so high when they were in October. But Amy Lowe, our auditor, did go by there and visit
Speaker 31
4:38
with him and look at what he had. Representative Cheatham, go ahead. Thank you, Mr. Chairman. This may be just for my benefit. What is the $100,000? What's the limit
Speaker 32
4:48
on the collateralization? $250,000. $250,000. FDIC insurance covers your first $250,000.
Speaker 31
4:53
Okay. And not just necessarily in this county,
but is there that much fluctuation among the amount of money they keep
Speaker 28
5:01
in those accounts? This time of year it is. Like I said, when the property taxes are all coming in to the collector's office, the deposits are substantially higher than they are the other times of the year. Can't the
Speaker 34
5:11
county ask for a letter at the first of the year for, can they just put a figure in there higher than normal, or is
Speaker 28
5:18
that? I don't know about that. I just know that we try to get them to keep an eye on what they have and keep in contact with the bank so that we can ensure
that all the deposits are properly collateralized. Okay. Thank
Representative Danny Watson
Unverified
5:32
you. Thank you, Mr. Chairman. Apologize to you, Senator Cheatham, identified you incorrectly. Any more thoughts or any
Representative Johnny Rye
Unverified
5:41
questions? Representative O'Brien. Thank you, Mr. Chairman. Like I say, this time of year, the taxes do come in during October, a big part of it. And then after the final settlement, all the breakouts that occur to all the cities, counties, and there's not near as much left in January 1.
Representative Danny Watson
Unverified
6:01
Is that not right, sir? Yes, sir. That's correct. Okay. Thank you all. No other questions? We have no further
discussion. Matters considered deferred. Filed, I'm sorry. Matters considered filed. I thank both of you all for coming on this rainy day. Okay, thank you.
Speaker 46
6:27
Thank you. Next. Our next report is the City of Bradley on page 3.
Speaker 6
6:35
Various restricted funds were deposited into or expended from the wrong bank accounts. As of December 31, 2018, $93,256, $3,497, and $10,209 were owed to the Solid Waste, Fireman's Pension Trust, and Street Funds, respectively, from the General Fund. and $1,643 was due to the street fund from the Water and Sewer Revenue Fund. A similar finding was issued in the prior three reports dating back to 2015.
The ending balance in the court fund bank account was not identified with the receipts issued for cases not yet adjudicated as required by Arkansas Code. A similar finding was issued in the prior four reports dating back to 2014. Recorder
Speaker 47
7:19
Treasurer Lakeisha Young and District Court Clerk Kathy Richman are here to answer questions. Thank you.
Representative Danny Watson
Unverified
7:29
If you will, repeat your name again and your title with the City of Bradley and then proceed on. Go ahead.
Kathy Richman
Unverified
7:36
My name is Kathy Richman. I'm the District Court Clerk. Lakeisha Young, Recorder Treasurer.
Representative Danny Watson
Unverified
7:42
Okay, appreciate it. What do you all like to go
Kathy Richman
Unverified
7:49
ahead and get started? Okay, well, as far as the court office is, when I came into office three years ago, the books were not balanced. The judge's clerk had been fired, and he had not had a clerk, so he did minimum work on getting the accounts balanced.
And I've been working on that ever since I came three years ago. I was up here last year to answer to $4,000 that had not been disbursed. We did a court order at the end of last year, and that was disbursed to DF&A and to the city as the percentages required. This year, the $4,000, I'm not sure what that is. Virtual Justice is our IT specialist,
and they worked with me yesterday on some criminal bonds pending, and we found $3,000 that had not been taken care of in the dispositions. And we did an administrative activity docket for my judge to sign off on next week when we have court. And so that $3,000, and I think it was $3,075, will be taken off, and that's probably part of that $4,000 or the $2,000 that I'm over this time.
Representative Danny Watson
Unverified
9:22
At least I'm over, not under.
Speaker 16
9:43
Great. That's a good thing in this case.
Speaker 57
9:48
We have any more questions from the committee? Okay. Ms. Young, go ahead. The $93,000 and the amounts that you all have before you were all due to a previous, a well-previous administration and her misuse of those funds.
Since then, her and the chief she had at the time, they're all deceased now. So now we're trying to recuperate from that. And those files have been handed over to the FBI, and we don't know, because all three
Speaker 53
10:22
of them are deceased, we don't know what the FBI is going to do with the case at this time.
Representative Danny Watson
Unverified
10:30
I'm going to ask, how long has it been since the last correspondence that you guys have had from the FBI? How long has it been, Ms. Yeo, or either one?
Kathy Richman
Unverified
10:42
Can we ask the mayor? He's here. Have you
Speaker 57
10:54
six to eight months since the city has heard anything from the FBI.
Representative Danny Watson
Unverified
11:00
Okay, as far as that goes, this is an ongoing matter. I'm going to assume from what you all have just explained with the FBI, this will not be addressed with us right now. We're addressing these findings here right now that we have in
print, okay? Any more questions from the
committee? No further questions, this is considered filed, move on to the next one.
Speaker 46
11:36
Thank you both for showing up, be careful,
Speaker 6
11:49
thank you. Thank you. Thank you. The next report is the City of Hampton on page four. General fund disbursements succeeded budget appropriations by $150,348 in noncompliance with Arkansas code. A similar finding was issued in the prior report. On November 19, 2018, an individual used Citi Bank account information to process an unauthorized withdrawal totaling $2,285.
Bank's personnel initially discovered the unauthorized withdrawal, and the funds were recovered from the bank on December 3, 2018. Mayor Rick Sharon is here to answer questions. Okay.
Speaker 8
12:19
Thank you. Thank you, Mayor. Both of y'all, if y'all
Representative Danny Watson
Unverified
12:24
will, identify yourself and your titles, please, and proceed on. Go ahead. Okay. Mayor Rick Sharon, Hampton. Felicia Akers,
Speaker 73
12:30
recorder, treasurer. Okay. Thank you. Go ahead. Okay. Well, like I say, that's the case there. We did not revise the budget at the end of the year like it needed to be.
Speaker 75
12:42
The $2,200 there that was in that, that is going to be the one, I believe, that the guy had done that scam in, what, New
Speaker 75
12:54
I believe it was New Jersey. And the bank caught it before there was any money gone from that. The guy somehow or other was running some kind of a scam everywhere, and he had a check that was even signed by the recorded treasurer that was here.
Ms. Akers here just took over in March of last year.
Speaker 73
13:16
And so she was brand new to the treasurer's job when she come in, and she's done a real good job with the training that she's had Well, that's good
Speaker 60
13:27
to hear. So you are first on the checks and balances that are necessary these days for those kind of things? It was my fault because
Speaker 75
13:37
I just never did really tell her about that, and so I'll take responsibility for that not being revised.
Representative Danny Watson
Unverified
13:44
Okay, committee members, we have Representative Meeks, sir. Go ahead. Thank you, Mr. Chairman. My question
Representative Stephen Meeks
Unverified
13:53
is on the $150,000 that was over the appropriations. It looks like it's a repeat finding. What is your city's annual budget? How much is your annual budget? I couldn't even mention it. I'm not sure. Not right off the top of
Speaker 73
14:12
my head. I couldn't say just what my annual budget is because usually the treasurers have always been doing it.
They say the treasury, we did have resigned last year. But
Representative Stephen Meeks
Unverified
14:23
I guess what I'm getting at with my question is, you know, Hampton is a pretty small community. It's about
1,300 people. Right. And, you know, $150,000, I would assume that's a fairly large chunk of your annual budget. I wouldn't think on a town that size your budget would be, you know, half a million dollars or something, which is why I'm asking. So what was the $150,000 spent on?
And was it, you know, a lot of that was going
Speaker 75
14:56
to be, according to the article that looked at it, I think a lot of that was going to be construction. It's
Speaker 87
15:03
utility reconstruction that's going on. We've got widening of the highway through 167. Yeah, that's... That wasn't accounted for, and the budget wasn't revised at the end of the year and
Speaker 73
15:14
then amended. The 167, you know, widening coming through Hampton, and it's been all kinds of projects with water,
Speaker 75
15:20
solar lines being moved, and gas lines are being moved and the highway.
In fact, they're taking business today on that job. They have took business twice, and so far they've turned down all of them. They're still having lowered, so it is a pretty big
Speaker 76
15:35
project, and we've had all kinds of utilities moving. Sure. So this
Representative Stephen Meeks
Unverified
15:39
was an unanticipated when you did the original budget, and then when you did the— An unanticipated because of the— We knew the road was coming,
Speaker 73
15:47
but it kept on, you know, it's one of those things where they kept on, you know, saying, well, it's going to be three months, it's going to be four months,
and then bang, here it is now. Now we're going to do it,
Representative Stephen Meeks
Unverified
16:00
and that's what they wanted to do. Okay. All right. That makes sense. If this is like an annual ongoing thing, you're over 20% of your budget, just
Speaker 73
16:08
suddenly I would have questions. This has been about a two-year project, and it pretty well disrupted everything. Okay. So I'm a lot more comfortable with that. Okay.
Representative Stephen Meeks
Unverified
16:16
Yeah, I appreciate it. Thank you all for being here today.
Representative Danny Watson
Unverified
16:21
Any more questions, committee members? Mr. Chair, go ahead.
Speaker 95
16:27
How long did you say that you've been on the job? Me.
Speaker 97
16:32
And her? I started, it was actually February
Speaker 95
16:35
of 2018. Okay. Have you received any training on your job since
Speaker 97
16:41
you've been there? Yes. The previous recorded treasurer stayed for a few months part-time to
Speaker 95
16:48
help out and kind of make a transition. Okay. Are you aware that Municipal League will help you with training? Yes. Okay. All right. Thank you.
Representative Danny Watson
Unverified
16:58
Thank you, Mr. Chair. Any more questions? No questions? Matter considered filed.
Speaker 8
17:06
Go ahead. Okay. Our next report is Independence County, beginning on
Speaker 6
17:13
page 5. on november 2nd 1948 independence county voters approved a one meal tax pursuant to arkansas constitution amendment 38 which provides for an annual tax on real and personal property for maintaining a public county library service or system arkansas constitution amendment 72 changed
the language of the original amendment to include maintenance and operation and added a section allowing voters to dedicate up to three mills for capital improvements or construction of a county library. To our knowledge, no vote subsequent to 1948 has changed the purpose for which the Independence County Library millage can be used. The library loaned $2 million to the county on March 21st, 2017, and an additional $1.2 million in 2018 to fund the renovation of a county-owned building to be used for the library.
These funds primarily consist of surplus millage funds accumulated since the inception of this tax. A promissory note was issued by the county for the initial $2 million loan, indicated the loan would be repaid by December 31, 2017, and was not amended to include the funds loaned in 2018. The loan was still outstanding as of report date. The use of the library millage to fund these capital improvements appear to conflict with Arkansas Constitution Article 12, Section 11, which states, in part, no monies arising from a tax levied for any purpose shall be used for any other purpose.
It should be noted that Arkansas Code 13-2-404 permits the use of maintaining and operating funds for minor and major property repairs and upkeep and appears to permit the use of library millage funds for renovations. However, Attorney General Opinions numbers 2005-90 and 2012-140 prohibit this use. The county should request an Attorney General Opinion as to which legal authority governs the use of the funds in question and whether it is permissible to loan library millage funds to the county to be used for capital purchases.
A similar finding was noted in the previous report. There's one finding on page 6. On September 17, 2018, a circuit clerk employee reported the theft of a bank deposit bag containing receipts totaling $6,488 to Independence County Sheriff's Office. The circuit clerk was able to obtain replacement checks totaling $2,145 from various employees. The remaining checks and cash totaling $4,343 were not recovered and were repaid from the circuit clerk commissioner's fee fund, which does not appear to be an allowable expense for this fund.
County Judge Robert Griffin is here
Representative Danny Watson
Unverified
20:00
to answer questions. Thank you, Mr. Griffin. If you will, again, identify yourself and your title, please. After
Speaker 104
20:08
you. Thank you, Mr. Chair. Robert Griffin, Independence County Judge. I will report that the Honorable Bill Wamsley, former state senator, vice chair of the audit committee, and Arkansas Court of Appeals judge and library chairman at the time we were doing these projects
and his current library chair had an accident on the way here, and was to come with me to help be sure we made clear what was going on. And so I do have a couple of accompanies here, but State Senator James Sturge and State Representative Stu Smith, they came in to sit in with me, so I appreciate that. The basic thing we have here is we have a disagreement with audit over technical terms, not use of money.
We concur and agree that the use of the money for capital improvements would not be acceptable. And in the handout that we have, the GSA form, which I'm working with USDA, trying to rent some now, 1364, and the state has similar forms, that tenant improvements enhance the rent and are a consideration for having a higher rent than the shell rent. Our initial rental of the building was a shell rent. Every document we had of agreement referenced that we were going to enhance the rent
according to the required occupancy as a library. We technically called something a loan, which was once again trying to save the taxpayers' money because you had this money sitting in an account receiving maybe a tenth of a percent interest, and instead of us going to the bank and borrowing $2 million, $3 million to do the project and then enhance the rent and recoup that, that year period would have cost the taxpayers $60,000, $80,000. So it was a prudent thing to do, and we should have just taken it instead of calling it a loan.
It should have been a rent advance or enhancement. And those are clearly shown by two things. Legislative intent, the Honorable David White, the late Honorable David White, That was County Judge a term before I came in, and he was aware of the problem. And he is one of the driving forces of trying to get the law changed to where rents were clearly defined as acceptable under the 38th Amendment. So when you look at Attorney Generals 209.019 and, as well, 204.319, they reference the
use as being permissible under the Constitution for rental payments being a component of M&O. So what we have here is not an inappropriate use of the money. It's simply technical ignorance, and I plead guilty to technical ignorance. But former State Senator Bill Wamsley was helping us create these pathways, and he knows the legislative intent. David Wyatt knows the legislative intent, and the intent is for the money to be used as rent, which was 100% how it was used.
Representative Danny Watson
Unverified
23:15
Needless to say, this one is pretty deep. At this point right now, do we have some
committee members that have any questions? Representative Rye, you
Representative Johnny Rye
Unverified
23:33
have something? Yes, sir. Thank you, Mr. Chairman. Judge, the money that was actually transferred from the excess millage from the library to the county general, was that not actually money that you guys used to build a building for the library?
Speaker 104
23:49
That is correct. And the initial building was given to us by the city of Batesville in an agreement with the Batesville Foundation, the county, and the city of Batesville. Zyla, who moved to Colorado, gave the building away. In fact, I was the first one to say Independence County cannot afford to own an empty building. But after the library board determined they wished to occupy that building, and we determined it could be made into a suitable library, then that historic building has been restored and has become an anchor for Main Street.
It is also acknowledged by the State of Arkansas Library Association as the eighth best library in the state. We did a fantastic thing in working this and provided a tremendous public benefit. The evidence, Representative Rye, of the community support, there is over a half million dollars given in naming rights to the library during the construction phase. That's how much support was given to the project. And a part of those funds, and I'll just go ahead and tell you, in this current year,
and it should not be a third finding because we have $673,000 total of private money that the library turned over to us to assist with the construction, but we may have spent another $50,000 or $60,000 finishing up the project this year. But that came from private funds turned over to us, and once again there's an AG opinion on that being clearly a permissible use of that fund for construction or any other purpose. So, yes, we turned it into a library. The usage is up. Judge Wamsley was going to explain how much.
We have 500, 250 Internet speed. We want to talk about broadband access in rural Arkansas. We have enhanced the ability of people to use Wi-Fi and computers. We have about 40 or 50 computers, public computers in there to use. This is a fantastic facility, and I appreciate that question, Representative Ryan. Thank you, Mr. Griffin.
Representative Danny Watson
Unverified
26:01
I appreciate the explanation, no doubt about
it. As far as the utilization of this library, the location, the meaning behind there is wonderful. Are there any questions, any more questions right now from the committee? Okay, Senator Johnson,
Senator Mark Johnson
Unverified
26:28
go ahead, sir. Thank you, Mr. Chair. Judge, first, thank you for your explanation.
And I know the late Judge White, former Senator, and Judge Walmsley, also former Senator, people I respect highly. However, the recommendation from legislative audit was that the county request an A.G.'s opinion on this has the, again, they are the one we have to turn to for expertise at this point. Have you requested such an opinion from the A.G.? The opinion would
Speaker 104
27:01
have to be requested from either the prosecutor or the state senator, state rep.
But with the current opinions already on file that clearly delineate rent being acceptable use, and we concur that capital improvements would not be an acceptable direct use, we have not sought that. Now, if Senator Sturge might be allowed an opportunity, I think he has a visit with the AG's office. And I appreciate that, and I
Senator Mark Johnson
Unverified
27:29
know my friend Senator Sturge will do what's necessary. I'm just, it is a bit of a sticky wicket, and there seems to be some, even some conflicting AG opinions involved.
And I just, I would just recommend that y'all move that in with Senator Sturge here. I believe you're in good hands on that, but I just wanted to see where you were within that process. Thank you, Mr. Chair, and thank you, Judge. Thank you,
Representative Danny Watson
Unverified
27:57
Senator. If there's no more questions at this moment, I'm going to ask from the leg audit, Mr. Frank Airy, If you will go to the end, say your name, your title, and if you get ready, go ahead and begin for your comments.
Speaker 115
28:23
Mr. Chairman, I'm Frank Airy, Legislative Audit.
Speaker 116
28:35
Thank you, sir. When you're ready, go ahead. I believe that Judge Griffin's answer to Representative Rye really kind of underlays our point. As I understand it, and I would defer to one of our local auditors who's here, but as I understand it, these $2 million worth of library funds were transferred directly into
or were used for construction. So whether you want to call it rent now, whether you want to call it a loan now, whatever you want to call it, it was used for capital improvement. However, at the time, the voters of Independence County said, yeah, we want this tax. The tax could only be used for maintenance. And we have AG opinions, again, dueling opinions, but we have AG opinions that say capital improvements are not the same thing as maintenance and are not permitted under Amendment 38. There is an AG opinion out there that says maintenance includes
rent. However, that opinion does not include these specific facts. The AG was not asked about this situation. All we are suggesting, and Senator Johnson, that's our point, because of this, because of this confusion in the documents and the justifications and that sort of thing, All we're recommending is that you get an AG opinion clearing this up, because otherwise to us, it looks like an Article 16, Section 11 problem. You have to use taxes for the purpose for which they were raised.
Representative Danny Watson
Unverified
30:06
Thank you, Mr. Airy. Any more questions at this time? Senator Cooper,
go ahead, sir. Thank you, Mr. Chair.
Speaker 95
30:14
I understand the usage of the library and the good things that the library has done is one thing, but that's the end result. But we have to follow the procedure to get there. And it seems like the procedure in this case is cloudy or maybe hasn't been followed.
What would you do if the same issue presented itself again? Would you follow this same procedure, or would you do something different?
Speaker 103
30:50
Mr. Chair, Vice Chair, I would absolutely make sure that we
Speaker 104
30:54
would have it spelled out, as the agreements do call for enhanced rent. When those transfers were made, they would be made as a rent advance, not as a loan. That's the technical thing we're guilty of. If the intent was there the whole time that they are rent, we concur completely with the audit's discussion about what the AG opinions decide, Article 17.
I mean, we're on complete concurrence with that. But the fact is we made a technical definition wrongfully that we should have said they were enhanced rent. So the only difference it would have made is how we collected advance rents in order to complete the project as was. We simply could have borrowed. If I'd known we'd have this much trouble, we'd just gone to the bank, borrowed $2 or $3 million, done the project, paid $60,000, $80,000 taxpayer money that was unnecessary to make sure the technical details were done.
But we have done the intent of the law. Well, we have complied with Article 17 and 38 because it was enhanced rent, not capital improvement expenditures for the direct use of the library fund. Thank
Speaker 95
32:06
you. Mr. Erie, after everything you've heard today, are you still of the same opinion that we still need an AG opinion on this? Yes, sir, we are. Okay. Okay. Senator Sturge, are you on board with requesting one of those?
Representative Danny Watson
Unverified
32:30
I can't come up yet. Thank you. I understand you are
on the affirmative to go forward on AG's opinion, correct? That is correct? Yes, sir. Okay. All right. Any more questions? Committee members,
Representative Stephen Meeks
Unverified
32:52
Representative Meeks, go ahead. Thank you. Just to kind of help me understand the whole enhanced rent
thing. So I might understand that the library is utilizing this building essentially rent-free until this amount of
money has been paid back. Is that essentially what we're doing? And if so, how long before the $2 million
Speaker 104
33:14
has been expired. Okay. In technical terms, it's already been paid as we completed the project to determine the exact cost. The library technically made the payment at that point because the money we'd already paid was considered to be an advance on rent. Technical term difficulty, and I so apologize for that. But we followed the agreements that we made from the
onset completely as we went through, and we just made a mistake. So all
Representative Stephen Meeks
Unverified
33:42
the money's been paid back? That is correct. So nobody owes anything at this
Representative Danny Watson
Unverified
33:51
point? That is correct. Okay. Thank you both for your explanations on here. Any more questions, committee members?
Senator Terry Rice
Unverified
34:01
Senator, go ahead. Thank you. Regardless, I'm fine with the explanation. I'm fine
with going ahead and requesting the AG opinion.
Regardless of what the AG opinion is, with the explanation, is there any precedence that this will set that's going
to cause a problem later on, or is it just one of those isolated things? Regardless of what the AG says, there's not missing money. There's a statement they would not do it again. And is there anything, is it going to come back to this committee for a final review?
Or could you give us what the plan is?
Representative Danny Watson
Unverified
34:43
I'm going to defer this to audit. Any comments? Mr. Ayer,
would you like to comment? Feel free to. Go ahead. Mr. Chair, if Senator
Speaker 116
34:55
Rice wants us to report back if there ever is an AG opinion, Senator, if that's the question, sure, we could do that. Um, you know, the bigger issue is you've got these Amendment 38 funds that can only be used for a certain thing,
and going forward, if this sets a precedent for other people to realize there are limits on that, that would certainly be beneficial. But, yes, sir, Senator, if that's the question, we'd
Senator Terry Rice
Unverified
35:25
be happy to report back on any AG opinion. And my statement is just that fact is whatever the committee wants to do. Uh, in this case, you know, I'm, I'm all for audit following the law and, and bringing that up. And, and hopefully it'll help others know in the future not, not to do it.
I don't see, uh, that this is going to change anything on the outcome, so I don't care whether it comes back or not. I'm just asking, are we going to do that? Are we going to file this thing and expect
Elaine Robertson
Unverified
36:04
that AG's going to, opinion's going to come I'll go
Speaker 116
36:09
ahead, Mr. Erie, go ahead. Senator Rice, I'm just a history major. I'm not an auditor, but my assumption is we would go back out next year.
We would look to see whether an opinion was requested. If that had not happened, we may have some finding or some supplemental finding again in the future. Is that Jessica fair? So, I mean, it may rotate back in that sense, Senator. Okay,
Senator Terry Rice
Unverified
36:34
and I'm sure, you know, I want Audit to be able to do their job, but unless committee has further options they want to look at, I would just move this be
Speaker 62
36:47
filed. Okay, Senator Sturge, did you have a question?
Go ahead, sir. I just had a few comments, Mr. Chair, if you don't mind.
Senator James Sturch
Unverified
36:54
Go ahead. I, of course, was state rep during this time, and at that time we had consulted with with the AG's opinion, that's when they made us aware, of course, the opinion by Senator Wyatt at the time in 2009. But it does appear later on that Senator Brian King asked for one in 2012. And although they kind of deal with different areas around this, it's the same issue. So when I'm looking at the law in 13.2.404, I'm saying as used in Arkansas Constitution Amendment 38,
maintaining and operating a public county library, repair and upkeep is included of property. I mean, it also goes on to say minor and major repairs, rent and lease payments. So I can't take credit or responsibility for giving advice or anything like that. But I kind of agree with Senator Rice is I'm kind of, I don't mind to ask for an AG opinion. Please don't get me wrong, but it's one of those things, what trumps what? The law or an AG opinion? And that's where I'm getting a little bit of confusion from leg audit is if we go ahead and
If we ask for one or if we don't ask for one, why
Representative Danny Watson
Unverified
38:02
then a repeat finding? Thank you for your comment. Appreciate it. Mr. Airy, any more,
Speaker 116
38:11
do you have any further? Go ahead. All right, obviously I agree with Senator Sturge's point. There's some conflicting stuff here. This later opinion, the one that was issued in 2013 that Senator King asked for as this line, the Constitution forecloses interpreting this statute, and it's referring
to one of the code sections around 404, as authorizing any diversion to a capital expenditure account of surplus M&O revenues realized from an Amendment 38 filing. So you have language in there where he's saying the statute notwithstanding, the Constitution would not let you divert Amendment 38 funds to capital improvement purposes. And so even though we have the 2009 amendments by Senator Wyatt, we still have a 2013 AG opinion that says Constitution isn't going to let you do this.
And that's where our problem is. We assume statutes are constitutional, but when we have an AG opinion that says, no, the Constitution wouldn't let you use Amendment 38 funds for capital improvement, that's what's got us on the hook. And we'd kind of like for the AG to say, well, okay, which is it? And that's our point. Senator Johnson, go
Senator Mark Johnson
Unverified
39:27
ahead, sir. Thank you, Mr. Chair. And I realize Senator Rice has a motion, and I'll try to be brief and move to the motion.
But Judge Ayer, you are not an auditor, you are a historian, but you are also an attorney. And I had a slight fear that jumped out at me, is that while we're trying to decide which AG's opinion may occur in this particular situation, is there anything that would stop a citizen from filing an illegal exaction lawsuit and having some judge come in and tell us what the law is? I'm not recommending that to anybody or even threatening, but I see that as a cloud hanging over this if it's not properly resolved.
Could you comment on that? Senator, that would be our concern,
Speaker 116
40:13
that there's a problem with Article 16, Section 11. You can only use taxes for the purpose for which they were raised. And, yes, sir, I think somebody could bring an illegal exaction, whether they'd win or not. I'm not too good in the prediction business, but I think that would be our concern. Thank you,
Representative Danny Watson
Unverified
40:31
Mr. Chair. Thank you. Any more comments of the committee? Representative
Representative Johnny Rye
Unverified
40:35
Rye, go ahead. Yes, sir. Thank you, Mr. Chairman. And, you know, it may be, and Senator Sturge, it'd be a great thing for you to get what you can get there, you know, on the Attorney General.
But it may be that we need a law in Arkansas that actually comes back and says, look, let the counties have a voting and let there be an inclusion for something other than maintenance so that this thing would be clear. There's a possibility. Thank
Representative Danny Watson
Unverified
41:09
you, Mr. Chair. If no further questions, the committee very well sees much more deliberations and dialogues going to be occurring.
We have a motion on the floor to just blank here for just a second, to file it and to await for an attorney general's opinion. We have a second. No further discussion? Thank you, man. Motion to consider
Speaker 138
41:41
filed. Our next report is the Town of Dias.
Speaker 6
41:49
Our next report is the Town of Dias on page 9. The city paid credit card charges totaling $6,791 for meals, lodging, and fuel without sporting documentation or indication of a business purpose and $1,445 for other tested disbursements without adequate supporting documentation in noncompliance with Arkansas Code. The city paid $646 to the local food bank, a private organization, without a contract in conflict with Arkansas Constitution, Article 12, Section 5.
Bank accounts were not reconciled monthly as required by Arkansas Code. A similar finding was noted in the previous three reports dating back to 2013. pre-numbered receipts were not issued for all funds received in non-compliance with Arkansas Code. A similar finding was noted in the previous four reports dating back to 2011. Cash receipts and disbursements journals were not properly balanced and totaled on a monthly and year-to-date basis for each fund. Also, the general fund cash disbursements journal was not properly classified as required by Arkansas Code. A similar finding was noted in the previous four
reports dating back to 2011. A fixed asset listing was provided. However, the listing, again, did not include all additions and control totals and noncompliance with Arkansas Code. A similar finding was noted in the previous four reports dating back to 2011. Recorder Treasurer Maria Rivas is here to answer questions. Good
Speaker 70
43:14
afternoon. Good afternoon. My name is Maria Rivas. I'm the Treasurer Recorder for Dice.
Speaker 140
43:24
Thank you. When you're ready, go ahead and begin. Okay. On the,
Speaker 141
43:34
uh, for the credit card where they paid the charges for the meals and lodging, that was during the, uh, Municipal League of last year. And the clerk that we had at that time has quit and their seats kind of went with her. So I don't know where they went to. And we no longer have a credit card, so we don't have to worry about that any longer. And for the local food bank, the money that we donated to the local, that we donated to the
Haven, that was our mayor at that time had called the Municipal League and asked if that was okay to do, and they had told him it was fine. And so he had done that with the permission of the league. and we didn't think we had to go any further with that and it was in the minutes for our bank accounts that were not reconciled monthly a lot of them I had where there was no checks left over I had just left the back of it blank I wasn't aware that we had to fill out
the top part or the total or put a zero there or anything now we are doing the top part where on the back of the bank statements as well as if there's no checks that were gone We just kind of put a zero down at the bottom. So that has been taken care of. And the pre-numbered receipts, we kind of left that in the hands of our clerk to do. And she obviously didn't do it like she was supposed to. And I should have checked on her, but I didn't. And she is no longer with us anymore.
But we are doing that now. And then the fixed assets, I've got some questions on that. Do we need to put on the fixed asset list, do we have to put like the, where are we, the lost, oh shoot, I got this name. Yeah, depreciation, that's what I'm looking for, I'm sorry.
The depreciation value, do we put that on there?
Speaker 8
45:46
Go ahead. No, you don't have to put the depreciated value. You can just put the cost when you
Speaker 141
45:52
purchased it. At the time of purchase? Yes. Okay. Now, is it the number over $500 that we're supposed to put on the asset list, or is it everything? Okay.
Speaker 6
46:03
That will be, as far as the amount goes, the code requires the city to set a fixed asset policy, and that's part of the policy.
The city decides the amount. Okay. Okay, well, we have set the
Speaker 145
46:15
amount at $500, so if anything under $500, we don't have to put on the asset list?
Speaker 6
46:20
No, you don't have to. You may want to, for certain things, you may want to keep a separate listing
Speaker 8
46:25
for your insurance, but you don't have to
Speaker 141
46:30
for the municipal accounting law. Okay. All righty. That was one of my questions, and we do have the asset list other than that. On the state aid restricted for highway funds for the previous years of $163,096,
dollars. Uh, that was way before I took office, but we have been putting the a hundred dollars a month into the street fund to pay that back. We're a very small town. We're like a population of 400. So we don't have a lot of income coming in. And so we do pay, and we did have the agreement with the, uh, street, the people and the highway funds, and they did agree that a hundred dollars a month would be fine to pay back at $100 a month until we get it paid off.
And I'm just kind of curious why we keep getting rolled
Speaker 6
47:22
up for that when we're paying back. Ms. Jones, go ahead, sir. It's our policy to leave that finding in the report. If you'll notice, I didn't read that here today. It's our policy to leave it in the report to sort of hold the city accountable to make sure that money gets paid back. We've seen some other small towns where they had very large amounts due back to the street fund, and they ended up have paid a lot of it back.
So that's just been our policy to leave that finding in the report, as long as you have a debt back to that fund. Oh,
Speaker 141
47:53
okay. Okay. Got it. And then our bank statements that were not in compliance with the check imaging agreement, where the bank is supposed to copy the backside of the bank of the check, we wouldn't even know where they were supposed to do that. And so we had called the bank, and they are now making copies of the back of the checks for us with our bank statements.
Representative Danny Watson
Unverified
48:18
We appreciate it, ma'am. And I know, I feel that you realize that the Municipal League is a wonderful advocate agency for y'all guys to make sure y'all utilize them in the future, okay? Yes, sir. Do we have any more questions,
Representative Johnny Rye
Unverified
48:32
Representative Rye? Yes, sir. Thank you, Mr. Chairman. You know, a couple years back, we voted in a half-cent sales tax, and a portion of that money went to the counties and cities. And the state, I think, 70 percent of that. But every three to four years, every city can come into up to $250,000, you know, each three to four years.
And that money is to fix streets. And the city of Dice is in our district, Senator David. And, you know, we have a lot of things going on there, and those streets are tore all to pieces. Yes, they are. And you can do as you would want, but I would honestly say from this end that we need to fix those streets, and that money needs to be separated right because those streets and dice need to be fixed because it's tore a badge.
Representative Danny Watson
Unverified
49:29
Thank you, Mr. Chairman. Thank you. Thank you, Chairman Cooper. Go ahead, sir. On
Speaker 95
49:36
the pre-numbered receipts issue, you said that that clerk is no longer with you? Yes, sir. Did you hire another one? Yes, sir. And what about the
Speaker 141
49:49
training for that one? She's had training on it, and she's even open for any other type of training that's needed.
Speaker 95
49:55
Okay. She's willing to do it. Well, I just didn't want you to start all over again and have more repeat findings with a new person.
Speaker 141
50:01
Yes, sir. That's why I'm asking the questions I am to where I can relate them back to her, to where she can do what she's doing. But we are doing the pre-numbered receipts now. Oh, and do we need to have the monthly total of each of the receipts, books, and then the yearly total? I was kind of confused on that as well because we've not been making the monthly total and the yearly
Speaker 6
50:22
total of them. Ms. Jones? On the journals, yes, you're supposed to have a monthly total and a yearly total. So those monthly totals should help you in your reports to the city council every month when you're reporting.
Speaker 141
50:32
Okay, we generally do a budget every quarter, you know, like a quarterly budget as to how much we've spent each quarter. And when we have our council meeting, I have the bank statements from the QuickBooks, and they go right along with our bank statements on the QuickBooks. because our current clerk has, she's put the QuickBooks into the system, and it's helped a whole lot. And do we need to have, when we're reconciling our checks,
we do it on the QuickBooks, and do we need to have the electronic as well as written on the back of the check, on the back of the check, the bank statements, or is just the electronic good? If you have a bank reconciliation of some
Speaker 4
51:17
form, And you can give that to our auditors. It can be electronic and print it out and give it to us. That's fine. It does
Speaker 6
51:23
not have to be the one on the back of the bank statement. Okay. Terrific. Representative Hillman, go ahead, sir.
Representative David Hillman
Unverified
51:36
Thank you, Mr. Chairman. Ms. Redis, was it you say that the general fund owes the street fund $163,000 or something like that? Yes, sir. What year is that going to be paid back? However much $100 a month takes until
Speaker 141
51:50
we get the $163 paid back. I haven't figured it all out. You think you'll still be in office then?
Representative David Hillman
Unverified
52:03
it'll be 135 years in case you're wondering.
Representative Danny Watson
Unverified
52:10
We have a question, Representative Meeks. Go ahead,
Representative Stephen Meeks
Unverified
52:13
sir. Thank you, Mr. Chairman. Along that vein, you know, in 2095, you'll still be paying the city, the citizens at that
time will still be paying $100 a month for, you know, at that time probably roads that are breaking down because they're going to be almost 100 years old at that time. Do you, as Opportunity Allows, try to put more than $100 a month? You know, I don't care if it's an extra $5, but, and I know small towns, you guys don't have a lot of extra resources.
We have very little resources. You know, even an extra $5 or $10 a month over time would, you know, maybe knock it down to $120 a year. I don't know. But is that something you all even discuss, or is it just, you know, we're going to be stuck with $100 in perpetuity? Honestly, right now
Speaker 141
52:55
we haven't discussed it, but I can discuss it in front of
Representative Stephen Meeks
Unverified
52:58
the council members. Okay, because, you know, you put enough crumbs together and you get a loaf. Right. And, you know, we want you to be successful, and we would definitely like you to get rid of this $150. Oh, I would love to.
Yeah, and I know you would, too. And so I would encourage you to consider, you know, even if it's only an extra $10 a month, y'all may never see the
benefit of that. But people 100 years from now, you know, if you paid it off an extra 20 years early, I mean, that would be, you know, that would be beneficial to
Senator Terry Rice
Unverified
53:34
our great-grandchildren. Yes, sir. So thank you. Thank you. Thank you for the comment. Senator, go ahead, sir. Just going to comment. Do you realize, even though you're small, with some of the new taxes for road maintenance,
cities and counties both get part of that, and there should be some increase. I have no idea what your amounts are, but in following up with Representative Meeks, there will be some additional money, if you all discuss, that when that comes in, it could be applied to cancer. Yes, certainly, if it would come in, because right now we've
Speaker 141
54:04
not had any luck of getting a grant for our streets or anything else, and we have tried for at least four years to try to get them. It sounds like you've
Senator Terry Rice
Unverified
54:13
got the need to spend what money you get. Yes, sir. Instead of on the debt, but there is some money coming in.
And, you know, a lot of times money coming in, when you have a debt, there are, out in the real world, There are legal ways that they can make that be applied first to the debt rather than to other needs. So, you know, if y'all would just do something that showed some good faith on there, it might be worthwhile. Thank you. Yes, sir. Thank
Representative Danny Watson
Unverified
54:44
you, Senator. Any more questions from committee members? No more discussion. Matter considered filed.
Speaker 70
54:50
Go ahead. Thank you, ma'am. Thank you. Okay, our next report is the
Speaker 6
55:03
City of Harrison, beginning on page 11. Balances remaining in the bank were not identified with receipts issued for cases not yet adjudicated and payments on all unpaid individual time accounts as required by Arkansas Code. A similar finding was issued in the previous three reports dating back to 2015. District Court Sandy Wright is here to answer committee questions.
Representative Danny Watson
Unverified
55:25
Can you try to, let me see, we'll get you up again and get
Speaker 181
55:32
closer to the mic. Try it again, please. No. I'm Sandy Wright, and I'm from Harrison. I'm the district court clerk. At the end of 2018, in the audit, I had a substantial amount of money. The auditors, one in particular, was a great help in helping me identify that, which the majority of that money is hot check money from over years of the prosecuting attorney
not accepting partial payments, and so the other money's been in our account. And so over this past year, I have been able to identify that and pay out the majority of the money. This is a
Representative Danny Watson
Unverified
56:18
sound like a start of a good ending on here
as far as a repayment goes. Any questions committee members?
No questions? Motion considered, filed. Thank
Speaker 4
56:42
you. Thank you, ma'am. Our next report is Logan County. It is
Speaker 6
56:46
at the bottom of page 11. The two findings refer to the LMI software application. Passwords, again, were shared. Sharing unique login credentials of system users eliminates accountability, segregation of duties, and has a debilitating effect on audit logging and monitoring controls.
Again, management had no process to periodically review appropriate access security. The lack of adequate supervisory oversight over security permissions increases the risk of unauthorized access and misuse of information resources. Circuit Clerk Elaine Robertson is
Speaker 185
57:16
here to answer committee questions. Thank you, Ms. Robertson. Yes, sir. My name is Elaine Robertson. And your
Elaine Robertson
Unverified
57:28
title. Go ahead. I'm a circuit clerk
Speaker 186
57:30
from Logan County. Okay. Go ahead, ma'am.
I did have the communication with my software people through LMI, and they did tell me that they were unable to comply with the request that the leg audit is requiring. I have a software people coming in from Apprentice who I have been told by leg audit that they are sufficient and they should be able to clear up all the problems and do all the security that we need.
Representative Danny Watson
Unverified
58:07
Okay. Any comments from an audit on this? No? Okay. Any comments from the committee? Representative Meeks, go ahead, sir. Question. I chair the technology
Representative Stephen Meeks
Unverified
58:21
committee here in the House. So are you going to a different software vendor? Is that what we're understanding since the old ones are not going to be able to comply? Yes, I have no choice. Okay. Because as you can understand, cybersecurity is becoming more and more of an issue.
And the last thing we want you to have to deal with is ransomware or a data breach. And so if it takes going to a new vendor to get that done, I applaud you for
Speaker 186
58:48
doing that. Well, that's been a lot of the problem, too, is because of the price that's going to be entailed and the conversion of all the land records and such as that. But, you know, we don't have any choice. We have to do
Representative Stephen Meeks
Unverified
59:01
it. And have you talked to other circuit clerks? Yes. And this is
Speaker 186
59:04
what they're doing as well? Yes. Okay, awesome. I have checked with various counties around the equivalency of the size of our county to check who their vendors would be.
And this is the best information that I've collected so far. So I have received a quote from Apprentice. I have signed off on the quote. And they should be coming in sometime this month to go ahead and get started on the project. All right. Good. We're excited to hear
Representative Danny Watson
Unverified
59:31
that. Thank you. Thank you, ma'am. You, as well as Audit, is looking forward to the new software. Hopefully this will be a remedy and get you all on the path that you all need to be on. Any more questions from committee members?
No further discussion. Matter considered filed. Next. Thank
Speaker 6
59:48
you. Thank you, ma'am. Okay, as far as I've been informed, that's all the reports with visitors we have, unless we have a visitor that has arrived a little bit late. Is there anyone here that is here to address audit findings? If not, we will go to page two.
Speaker 8
1:00:08
where we'll continue going through the findings.
Speaker 6
1:00:17
The bottom of page two, we have Center Grove Water Users Association, and this was deferred in the previous meeting because we had no response. Now we have one. We'd be glad to answer any questions
Speaker 8
1:00:29
if you have them, best we can. If not, staff would recommend filing the report. Senator Johnson, go ahead,
Senator Mark Johnson
Unverified
1:00:42
sir. Thank you, Mr. Chairman. Mr. Jones, when it says
uninsured, does this mean they went over the FDIC limit on the
individual bank? Is that what that
Speaker 6
1:00:52
means? Yes, they went over the $250,000 and the monies were not collateralized. Okay. All right. Thank you, sir. Thank you,
Elaine Robertson
Unverified
1:01:03
Mr. Chair. No further questions about it are
Speaker 7
1:01:09
considered filed. On to the next. Okay, page four. The Outside Kingsland
Speaker 6
1:01:17
Rural Water Association. It's the same situation. In the previous meeting, we didn't have a response.
Speaker 8
1:01:23
Now we have one. No questions, staff would recommend filing. Questions from committee
Elaine Robertson
Unverified
1:01:31
members? No questions matter. Consider filed. on to the next.
Speaker 8
1:01:46
city of Centerton. On December 7th, 2018, one unauthorized withdrawal totaling $2,282 was
Speaker 6
1:01:52
made from the city's bank
account. Instinct personnel discovered the unauthorized withdrawal upon review of the affected bank account, and the funds were recovered from the bank. And this is the first of seven more reports we have, just like this one, where there were unauthorized withdrawals and the city recovered the funds, usually due
Speaker 8
1:02:11
to the city reconciling the bank account timely or the bank notifying the city. Questions, committee members, any questions?
Representative Danny Watson
Unverified
1:02:27
No questions. A matter considered, filed.
Speaker 7
1:02:30
Thank you. Okay. Okay. The next six are going
Speaker 6
1:02:37
to be just like this, and so I'll continue to read those. On December 17, 2018, one unauthorized withdrawal totaling $2,709 was made from the city's bank account. Entity personnel discovered an unauthorized withdrawal upon the review of the affected bank account, and the funds were recovered from the bank.
Representative Danny Watson
Unverified
1:02:59
Any questions, committee members? No questions about
Speaker 202
1:03:09
it. Considered filed. All right. The next is the City of Forest City.
Speaker 6
1:03:16
The Advertising and Promotion Commission paid a total of $9,407 to the following organizations in violation of the Public Purpose Doctrine in Arkansas Constitution, Article 12, Section 5, which states, in part, States in part, no city shall obtain or appropriate any corporation, association, institution, or individual.
$3,411 to the four-city area chamber of commerce in excess of the contracted amount, and $5,996 on behalf of the JB Sports for the four-city baseball, softball, showdown tournament. Any questions? Committee members in reference to four-city findings.
Representative Danny Watson
Unverified
1:03:50
findings. No questions, a matter considered filed. Next. The next page is City Brinkley.
I should have made a note that
Speaker 203
1:04:03
these findings we're reading now have been referred to the prosecuting attorney.
Speaker 6
1:04:11
City of Brinkley, on December 17, 2018, an individual used the city's advertising and promotion bank information to process an unauthorized withdrawal $2,924. The entity The personnel immediately notified the bank, and the funds were recovered from the bank. Questions, committee
Representative Danny Watson
Unverified
1:04:29
members? No further understood, filed, and sent on to the prosecuting attorneys. On to the
Speaker 8
1:04:38
next. Okay. City of Clarendon. The city paid a
Speaker 6
1:04:43
total of $21,438 for service charges, overdraft fees, late fees,
interest and penalties from January 1, 2018 through March 31, 2018 in conflict with the public purpose doctrine, disgust in Attorney General Opinion No. 91-410 in Arkansas Constitution Article 12, Section 5. These changes resulted from the city not remitting tax withholdings, retirement benefits, child support deductions, and payments for utilities and other services timely. A similar finding was issued in the 2016 report. It should be noted that the city clerk entered into an agreement to repay the city $3,041 for a portion of these charges.
The city clerk resigned on February 28, 2019, leaving a balance of $2,416 due to the city. An individual used the city bank information to process 38 unauthorized withdrawals, totaling $92,421 from December 4, 2018 through February 14, 2019. the city's discovery of these withdrawals was delayed because bank accounts were not reconciled for several months as a result the city was unable to recover the funds from the bank
the city clerk and fire chief's daughter received full benefits and was paid 547 dollars plus a 100 dollar incentive to serve as a city firefighter from january 1st 2018 through march 31st 2018 However, her permanent residence was outside the county, which appears to conflict with city policy. Due to lack of documentation, we were unable to determine if she attended regular fire meetings and responded to fire alarms as required.
On the next page, we have one more that we need to read. The city clerk did not file paperwork timely to enroll six newly hired firefighters in the local police and fire retirement system, which resulted in the city paying lot fee $9,600 and delayed retirement contribution. Lost interest
Speaker 8
1:06:46
in premium tax funding resulting was not
Representative Danny Watson
Unverified
1:06:55
calculated. Committee heard the numerous findings from the city of Clarendon.
any questions, comments? Senator Johnson, go ahead,
Senator Mark Johnson
Unverified
1:07:03
sir. Thank you, Mr. Chair. Mr. Jones, is
reference to the city clerk and fire chief's daughter, uh, one, this, the fire chief is either also the city clerk or is married maybe to the city clerk? Is that the relationship there? They're married. Okay. And then the next question had to do with, uh, uh, we referenced the city clerk that resigned on February 28, 2019.
This is all the same person. Is that correct? Yes, it is.
Representative Danny Watson
Unverified
1:07:38
Okay, thank you, Mr. Joe. Thank you, Mr. Chair. Any more questions, committee members? No further filed is explained. This
Speaker 8
1:07:50
has been sent to the prosecuting attorney. Next. Okay, next report is the
Speaker 6
1:07:57
city of Diaz. On November 19th and November 27, 2018, An individual used city bank information to process three unauthorized withdrawals, totaling $6,752.
The city immediately notified bank personnel of the unauthorized withdrawals, and funds were recovered from the bank. Any
Representative Danny Watson
Unverified
1:08:20
questions, committee members? No questions considered filed. Refer to a prosecuting attorney.
Speaker 8
1:08:25
Okay, the next report is the City of Greenland on page 10.
Speaker 6
1:08:32
It came to our attention that on December 6, 2018, an individual used city bank account information to process an unauthorized withdrawal totaling $2,926.
Entity personnel discovered the unauthorized withdrawal upon reconciliation of the affected account, and the funds were recovered from the bank.
Representative Danny Watson
Unverified
1:08:55
Any questions on Greenland? No questions filed, sent to the prosecuting
Speaker 6
1:09:01
attorney. Thank you. All right. City of Harrisburg. Four unauthorized withdrawals totaling $9,406 were made from the city's bank account in December 2018. Entity personnel discovered the unauthorized withdrawals upon reconciliation of the affected bank accounts,
Representative Danny Watson
Unverified
1:09:15
and the funds were recovered from the bank. Questions on
the City of Harrisburg Committee? No questions filed for
Speaker 6
1:09:32
her to prosecute an attorney. Okay. All right. City of Keebler, on January 25, 2019, one unauthorized withdrawal totaling $2,950, $54, was made from the city's bank account. The unauthorized withdrawal was discovered by the bank and the funds were recovered.
Representative Danny Watson
Unverified
1:09:47
Committee members, we had any questions on Keebler? No questions. No questions.
Speaker 8
1:09:58
Filed. Referred to. Prosecundee attorney. City of Mountain Pine. On December
Speaker 6
1:10:02
21st, 2018, one unauthorized withdrawal totaling $2,770 was made from the city's bank account. Entity personnel discovered the unauthorized withdrawal upon review of the affected bank account, and the funds were
Speaker 201
1:10:10
recovered from the bank. Do we have any questions on City of Mountain Pine?
Representative Danny Watson
Unverified
1:10:17
No questions. Filed. Refer to a prosecuting attorney. Okay,
Speaker 6
1:10:27
on page 11, at the top of the page, Mississippi County. Landfill funds of $2,219 were not deposited for the period of August 2018 through June 2019. Doris Thorpe, part-time landfill billing clerk, acknowledged that she misappropriated cash from the landfill fee deposits. Thorpe's employment was terminated on
Speaker 203
1:10:47
June 18, 2019, and she reimbursed the county $1,000 as of September 18, 2019.
Speaker 95
1:10:55
We have a question from Chair, Senator Cooper. Go ahead, sir. Is there anyone here from this? No, sir. Does this have to do with that other landfill issue up there where people were going, avoiding the scales, and there was an FBI arrest on that? This is a different situation? It's a different situation. Okay.
Representative Danny Watson
Unverified
1:11:21
Thank you. Any more questions, committee members? No further questions.
Matter of file, refer to
Speaker 8
1:11:31
the prosecuting attorney. Okay. On page 12. We
Speaker 6
1:11:39
have the City of Umphrey. As noted in the prior report, the City has not provided correspondence regarding current negotiations with the Internal Revenue Service for tax liabilities on salaries totaling $1,026,776 from 2011 through 2017. Federal taxes have not been remitted for these salaries.
However, IRS Forms 941 and tax payments for 2018 salaries have been remitted to the IRS. Recorder Treasurer Kimberly Burgess was originally invited to the meeting. She responded. She was really put into, she was really employed after these problems with the IRS had surfaced. and she really had nothing to do with it during her time
and the mayor and the city attorney are working
Speaker 8
1:12:33
on it at the moment. And unless the committee would like to visit with the mayor and the attorney, staff would recommend
Representative Danny Watson
Unverified
1:12:44
filing the report. Committee members have heard the findings. Are there any questions on this particular
one? No questions? Matters considered, filed.
Speaker 6
1:13:00
Next report is the Town of Pratsville. An agreed-upon procedures and compilation report was not obtained for the Town's Water Department as required by Arkansas Code. A similar finding was issued in the prior report. Mayor David Paxton was invited, but he contacted us, and he has a medical issue, and he's not able to be here. But he did send us a letter from a CPA where they have engaged to do the water report.
We would, unless we have questions, staff would recommend we file the report.
Representative Danny Watson
Unverified
1:13:37
Committee members, we have any questions on this particular one? Town of Pratsville? No questions. Matter considered. Filed. On
Speaker 7
1:13:50
to the next. Okay. At the beginning, at the
Speaker 6
1:13:55
bottom of page 12, we have three reports with findings and we received responses just recently.
Speaker 8
1:14:02
So staff recommends filing these reports unless there are committee questions. Question
Representative Danny Watson
Unverified
1:14:09
from committee members on these particular ones. No
questions, matter considered, filed. On to the next.
Speaker 6
1:14:23
On pages 13 through 17, we have 13 reports with findings with responses. We'd be happy to answer any
Speaker 8
1:14:29
questions. If there are no questions, staff recommends filing these reports.
Representative Danny Watson
Unverified
1:14:35
Y'all go ahead and make sure you look over them real quick. If they have any questions, I'll give you just a minute. You've asked 13, is that correct? 13 through 17. Okay.
Committee members appear good on it. No questions.
Speaker 6
1:15:36
Matters considered filed on this. On pages 18 through 19, we have 37 reports with no findings. Staff recommends filing
Representative Danny Watson
Unverified
1:15:47
these reports. No questions from committee members, matter considered, filed.
Nothing else to come before the committee. Meeting adjourned. Thank you.
Agenda
A. Call to Order by Chair
B. Adoption of Minutes of the October 10, 2019 meeting
C. Revi ew of Reports (Refer to the Synopsis)
D. The next meeting will be December 12, 2019
E. Adjournment
Documents
| Title | Type | Pages | Source |
|---|---|---|---|
| Agenda — LEGISLATIVE JOINT AUDITING - COUNTIES AND MUNICIPALITIES, Nov 7, 2019 | Agenda | 1 | Official source ↗ |
Speakers
Representative Danny Watson
Unverified
Speaker 4
Speaker 6
Speaker 8
Speaker 13
Speaker 15
Speaker 11
Elaine Robertson
Unverified
Speaker 24
Speaker 25
Speaker 28
Speaker 31
Speaker 32
Speaker 34
Representative Johnny Rye
Unverified
Speaker 46
Speaker 47
Kathy Richman
Unverified
Speaker 16
Speaker 57
Speaker 53
Speaker 64
Speaker 73
Speaker 75
Speaker 76
Speaker 60
Representative Stephen Meeks
Unverified
Speaker 87
Speaker 95
Speaker 97
Speaker 103
Speaker 104
Senator Mark Johnson
Unverified
Speaker 115
Speaker 116
Senator Terry Rice
Unverified
Speaker 62
Senator James Sturch
Unverified
Speaker 138
Speaker 70
Speaker 140
Speaker 141
Speaker 145
Representative David Hillman
Unverified
Speaker 154
Speaker 181
Speaker 185
Speaker 186
Speaker 7
Speaker 200
Speaker 202
Speaker 203
Speaker 201