Legislative Joint Auditing-State Agencies
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your seats. Before we move on to adoption of the minute, Senator Malick, do you have a guest today, I think? Hey,
Speaker 2
0:14
Landry, how are you doing? You going to teach us a couple
of things? Well, it's good to see you all here. Good to have you. All right, first thing, I'll take an adoption of
the minute from the November 7, 2019 meeting. I'll accept a motion to adopt those minutes. I have a motion. Do we have a second? Have a second. All those
in favor say aye. Aye. All opposed? Thank you. Tom?
Speaker 7
0:34
Today we're presenting four reports that have findings.
Speaker 8
0:38
We also have 11 reports without findings that are listed in the audit summary on page one. With
no questions, we will have a motion to file the audit support with no finding. I'll take a motion. Second. Second. All in favor say aye. Any opposed? Thank you. We'll move on to
Speaker 7
1:01
findings with reports. Our first report of findings is the Arkansas Beef Council June 30-19 report and this report contains
Speaker 8
1:10
one finding. As we've mentioned in previous audits, the agency receives summary and detailed information from the Department of Finance Administration related to the collection of beef tax assessments. From these reports, the agency can determine how much the assessment should be retained by the state and how much should be passed on to the national board and other states our testing again revealed that the ac did not adequately compare or reconcile the detailed tax assessment remittance reports with summary data from dfa including the gross
tax collection report as well as deposits to the state treasury as a result the ac may have overpaid the national board eleven hundred dollars and underpaid other states thirteen hundred dollars In response to the prior finding, agency personnel indicated they would perform monthly reconciliations, including communicating with DFA. However, there was no evidence that these actions are occurring. That concludes our finding for the Beef Council. Thank you. Do we have
any representatives from the Arkansas Beef Council? Please come to the front of the table and identify yourself for the record, please.
Speaker 14
2:12
Mark Lambert. I'm filling in for Travis Justice. He's the administrator of that
board. Mr. Lambert, do you have an opening
Speaker 14
2:23
statement or anything you'd like to say before we go to questions? Yes, the reconciliation of the gross tax collection report, I have actually shown Mr. Justice how to reconcile that with DFA's website there. However, that only shows us a gross number.
It does not actually break it down to which state it goes to, in which Eric Barrett there at DFA was glad to say that we could ask him which state, however, get a breakdown of which state and the national board that goes to. Okay, thank you.
Any questions, committee? I think we have one. Senator Hickey. Just one.
Senator Jimmy Hickey, Jr
Unverified
3:05
I heard you say you were filling in, but do you have a title or how? What capacity are you here on answering these questions?
Speaker 14
3:14
I work for, I guess, Arkansas Farm Bureau, and I guess under the state law that delegates that power to the executive vice president of Farm Bureau, and he delegates that power to that. Mr. Justice, he actually has a health issue, so that's why I'm here. Okay. I assume that will suffice.
Yes, sir. Thank you. Representative, you're recognized. Thank you, Mr. Chair.
Representative DeAnn Vaught
Unverified
3:44
I think my question probably might be for staff because he said, are testing again? Does that mean that they've already had a finding previously and it's something that we've not fixed that's been going on in the past? Yes, I hope for
Speaker 7
3:57
sure we had this last year. I can't remember if it goes back farther than that, but we have had it before.
Representative DeAnn Vaught
Unverified
4:05
Yes, ma'am. Okay, and it's the same issue? Yes, ma'am. And is there a reason that we can't
Speaker 14
4:10
fix this issue if we're having the same issue over and over again? Um, with, with these national boards or with the beef council, um, because there is social
security numbers, the tax identification numbers, uh, attached to who, who remits back to the state, uh, all that is held confidential. Um, I, you can, you can go through DFA's website and like I said, it gets you, it gets you the whole number um but it does not have that state breakdown where it goes to um and who who it may go to or where it's coming back in from it just says inbound state and outbound state checks holding and uh total but it doesn't it doesn't say uh we can ask we can ask dfa would just simply
send an email back to dfa and say um could you double check those numbers again uh and can we have the state breakdown, but that's pretty much all we can do. We can't identify who remits, where to remit, where it comes back to, where it goes to, because of those tax identification numbers and Social Security numbers. Okay, can I have a question for staff? Yes, ma'am, you're
Representative DeAnn Vaught
Unverified
5:17
recognized. Have y'all tried to give them an
Speaker 8
5:21
AFIX? I think that he, Mr. Lambert, also represents the soybean board. I think that's your primary responsibility.
And they've had this same issue on theirs in the past, too, and they did a good enough job this year that we removed that on the soybean board. So you won't see that on the next report that we have. So I think they've moved in the right direction for that one. So before I don't think they were really looking at those reports at all, and I think now they've been working with DFA trying to get what they need, and the
Speaker 39
5:44
soybean board for sure has done a better job, and beef just needs to follow up with that as well. Okay,
thank you. Any more questions from the committee? Seeing none, I will entertain a motion to file this report.
have a motion we have a second have a second all those favor say aye any opposed
Speaker 8
6:08
thank you sir our next report as i mentioned is the soybean promotion board june 30 19 report and this report contains two repeat findings finding one as required by arkansas code non-exempt discretionary grants over ten thousand dollars are to be reviewed by the legislative council or the joint budget committee prior to being awarded the ac awarded four grants totaling $236,000 that were not reviewed by the legislature.
The second finding, to ensure compliance with Executive Order 98-04 and various other laws, DFA rules require that a contract and grant disclosure and certification form be completed for any contract or grant that is greater than $25,000. The agency failed to acquire the disclosure forms
Speaker 39
6:46
from two contractors, grantees with agreements totaling over $197,000. Mr. Chair, that concludes our finding. Thank you. Mark, you've already
identified yourself, so do you have any statement on either findings? Please give
Speaker 14
7:00
them this time. Um, these, these two findings, like, like you said, they were, um, in last year's, uh,
report. Um, however, we, I guess the, the finding number one, the $10,000 to reviewed these expenditures, um, were done in August before the, uh, actual finding from the last year's audit so i guess it was prior prior year expenditure um to get reviewed however we haven't made any more payments on any anything to get reviewed um i guess flipping flipping back the beef council actually went through this so we we uh actually know how to correct this where to send
the paperwork to how to get on the agenda for review um and i guess moving forward those those will be taken care of accordingly.
So let me interrupt you there. It sounds like on finding one, you're saying that from last year's audit, you realize there's a mistake and that this is catching before y'all
Speaker 14
7:58
realize a mistake and you were making the necessary changes. Yes. I think you can go on. And then number two, simply just going on Office of State Procurements website, getting those contract and grant disclosure forms. It's a matter of just signatures on those contract and grant disclosure forms,
sending sending on to um i think from here on um what we're going to do is just have everybody sign it whether they're exempt non-exempt whatever just have them sign it file it um since there's a bunch of kind of there's almost a gray area on that thank you any
Speaker 34
8:32
questions committee sir you recognize yes on
Senator Jimmy Hickey, Jr
Unverified
8:37
founding one and i see what you say i mean the law itself says it says it's supposed to be reported before it's done that has not happened the four
grants that were done though what I would like to see is that you bring it before legislative counter counsel or if it's during the fiscal session session did you bring it before joint budget I know you're gonna have to be so you're gonna have to say we've already done this we've made a mistake and we've corrected it but I would like for that oversight even though it's gonna be post, I'd like for that to still happen because we need to know who got $236,000 of that money.
Speaker 14
9:17
Yes, sir. Our funding cycles in, I guess, our meetings in January the 14th, which we'll do those. And so I guess we'll be on the calendar maybe for February or March for review. I'm talking about this 236. Senator Hickey, if I can interrupt you, I think Tom has those
four grants and who they went to to give you a specific number if you need it. Yeah, and I think that
Senator Jimmy Hickey, Jr
Unverified
9:39
would be good to hear it in here, but also, to be honest, even though it's not going to be complying with the law, I'd like for it to come at least before leg council
and joint budget also, or joint budget. So, I mean, because, like I say, they may have not have complied with the law as far as the timing, and they need to come before ALC and say, we didn't do it according to what the statute is on that part, but we are here to disclose to Lake Council who received it. So at least they'll get part of the law, even though that's not good enough. But I think at the very minimum, that's what needs to happen. I would like to hear it in here also, if you don't mind, Mr. Bullington.
Speaker 7
10:21
Okay, so the four that make up the $236,000 are Mid-South Soybean Board, about
Speaker 8
10:26
$152,000, a little over $152,000. The Arkansas Soybean Association, $45,000. The Arkansas Farm Bureau Foundation, $20,000. and four-state fare association of 18-5. Okay. May I continue to ask him that?
Senator Jimmy Hickey, Jr
Unverified
10:44
Ask him another question, Mr. Chair? Go ahead, Senator. Okay. Are you
going to try to do that, sir?
Will you bring that just so that we can at least get part of the law complied with? Yes, sir. I will. In, say, the next 90 days or something of that nature? Does that sound adequate? Yes, sir. Yes, sir. I
Speaker 46
11:02
can go over. I guess I can briefly explain it. tell you what these are, if you will. I'll be honest with
Senator Jimmy Hickey, Jr
Unverified
11:07
you. I'd just rather it be done and laid counsel the way that the statute says. All right. All right. Thank you, sir. Senator Desmond,
Senator Jonathan Dismang
Unverified
11:18
you're recognized. Thank you, Mr. Chairman. It's really for staff, and I'm just curious. So we've had this finding, you know, we've brought it before,
you know, this committee just to let it be known. What is the, say it's a repeat finding. What is I mean, I'm assuming there's no penalty in place or anything along those lines for the, I mean, non-disclosure. So there would be nothing really that prevented an agency from continuing on. And I know that's not the case with this group, but what are, there is no. As far as I know, there's no penalty for that. I mean,
Speaker 8
11:49
all we can do is just report it to you as a post-audit agency. Just report it to y'all as a body and legislature, and it's up to y'all what you do with it from there.
Senator Jonathan Dismang
Unverified
11:59
I mean, like Senator Hickey's asking them to come back. But there's nothing – I mean, I would just even say there's nothing that can even enforce – I mean, Senator Hickey can't enforce that without, you know, the willingness of the agency to come forward. I mean, there is nothing – I mean, I'm not sure what – I guess we need to go back and look and see what this law actually even does because I'm not sure it accomplishes a whole lot. But that's a whole other discussion. I just want to make sure I was right that there was not a penalty in place. I'm not aware of any.
Senator Jimmy Hickey, Jr
Unverified
12:29
Senator Hickey, you're recognized. Yeah, just thank you, Senator Dismang. From what I would do is if they intentionally failed to comply, what I would do is during the next regular session go back and add penalties to a statute like that. So I think the thing is that from a budgetary standpoint, we might have some other avenues that we could proceed if they were to. And again, they're more than willing to do it, and I think that's all we want to see is that there's nothing intentional here
and that they're more than willing to let the people know how that money was spent. So that's where I was
heading. Thank you, sir. Any more questions, committee? Seeing none, I entertain a motion to file these two findings at this time. Is there a discussion on this potential motion? We have a first. Do we have a second?
Second. All those in favor say aye. Any opposed? It's been filed.
Speaker 7
13:39
Our next report is the Board of Architects, Landscape Architects, and Interior Designers, June 30, 2018 report. This is
Speaker 8
13:45
a two-year report and contains eight findings. I just want to note before we start with the findings that we were unable to get responses from the agency for the findings. The first finding, the office manager is a cardholder and a liaison for both the AC's purchasing card and travel card.
The purchasing card program guidelines state that an AC liaison should not be a cardholder due to security role issues in ACES and card revocation could result. The second finding, Arkansas Code states that the executive head of an AC is responsible for establishing procedures and controls to ensure accurate payment of obligations, management approval of expenditures, and retention of supporting invoices. We noted the following areas of noncompliance. There were 13 credit card statements totaling over $31,000 that did not include evidence of management approval before payment was made. There were also expenditures
Speaker 7
14:35
totaling about $9,500 that had inadequate supporting documentation or were improperly paid from quotes. The
Speaker 8
14:44
third finding, DFA's Financial Management Guide, states that agencies may not employ contract labor for a period longer than six consecutive weeks per calendar quarter. The agency exceeded the number of consecutive weeks for four quarters between July 2016 and March 2018, resulting in total contract labor payments for those quarters of $9,000. The fourth finding, there were five equipment items valued at over $15,000
that were not added to the agency's asset listing, resulting in an understatement of financial records. The fifth finding, the AC failed to adhere to state travel regulations as follows. A traveler exceeded the maximum per diem rate for lodging for four nights without a letter of authorization issued by the travel administrator. Written authorization was not maintained for a vehicle rental. A traveler did not use coach class airfare and as a result incurred an economy plus charge. The sixth finding, wasted the act of using or expending
resources carelessly, extravagantly, or to no purpose, and does not necessarily involve a violation of law. The A.C. made the following purchases, totaling almost $5,500. $2,400 for award trophies for newly licensed architects, $1,300 for food and supplies for the 2017 Holiday Open House, $650 for two sets of headphones, $500 in shipping, handling, and a rush charge for 50 lapel pins, $400 for a universal remote control and advanced keyboard
and weather apps, about $150 for fees and penalties due to late payments, and over $60 for Halloween candy. The seventh finding, in November 2018, the ACES database ceased functioning and a full system restore could not be performed, forcing the ACES to manually re-enter the data. This situation could have been avoided by performing database restore testing and having a disaster recovery plan in place. In the eighth and last finding, Arkansas Code permits the legislative auditor and authorize
employees of legislative audit to have access at all times to any records of any entity of the state. The agency did not provide requested minutes of board meetings held after April 26, 2018, which limited the scope of our assessment because we were not properly informed of recent board actions. Mr. Chairman, that concludes the findings for the Architects Board. Thank you, Tom. Do we have any representatives that would like to come to the front of the table? Do we
have any representatives who'd like to come to the front of the table?
Speaker 67
17:29
I'm Bill Hall, interim chair of the board. We do not have any staff present today. the director of the agency was not able to attend because of a medical situation. That's
Speaker 43
17:45
Mr. Glaslow? Yes, that's correct. Okay.
Well, I guess I'll get started. So we have eight different findings here, and it's very
atypical in these meetings for a government state agency
not to respond in any manner to our audit. I'd like a very thorough explanation why you denied multiple requests from audit to provide the information that we seeked. I was not
Speaker 67
18:15
aware that staff would not be here until late yesterday, and so I'm not really prepared to answer questions regarding day-to-day operations or
activities. Okay, let me ask you this question, Dan. On finding number
eight, it looks like we're permitted to have, by law, every record that we're authorized when there's a state meeting.
So it seems like we received records up until April 26, 2018, and then after that date, we received no records. My first question is, did y'all hold any meetings since April 26, 2018? Yes, sir. And that would have records
and minutes and other information correct? That is correct. Yes, we have. And by the law, you were required to give us those findings correct? That's my understanding. And why was it not provided to us? I do not have an answer.
Okay. I'll open this to the questions. Senator Hickey? Under the, and maybe you know this,
Senator Jimmy Hickey, Jr
Unverified
19:21
sir, Under the consolidation bill, who are you all under now? We are under the Department of Labor and Licensing. Okay. Of course, I will make a motion not to file this today if I need to. I'm sure there will be multiples, as I would guess. But I would like for them to be here in addition to the requesting of the staff or whoever at the next meeting because, like I think,
I think we need to go to who's over them now. Who would that be? That's Mr. Bassett. Yes, sir. That's correct. I will concur with
Speaker 15
19:59
that 100%. Mr. Hall, I don't think you seem like you're in a bad position today as far
as the information goes, but I think we need to have from both Mr. Glaslow, if he can make it, I don't understand you said he might have a medical emergency, and we're thinking about him if that's true, but if that can be cleared up by the next meeting, I would highly suggest that he be here. We'll also have Mr. Larry with the Department of Labor and Licensed Income as well.
I think we need to have a good discussion about this. And since I don't think there will be much more information gleaned, I will take more questions. But I would suggest we move on
Senator Jimmy Hickey, Jr
Unverified
20:34
from this and defer to the next meeting. I have one more if you don't mind. Go ahead, Senator Mickey. Is this medical condition, is that just for the day, or did that have to do also with these findings not being answered? Has this been ongoing?
Speaker 67
20:48
It's my understanding he had a procedure schedule for this morning. I'm not sure what that is. Okay, all right.
And I would suggest, like I said, having procedures is an absolutely normal part of life, but the way I understand it, our staff contacted him multiple times and was not reciprocated. So I suggest that he, in the future after he recovers, answer our
Speaker 75
21:09
staff. Okay. May I ask one more of the staff? Yes,
Senator Jimmy Hickey, Jr
Unverified
21:12
of course. During budget hearings, I know that audit is usually there. Will this be a finding that you will go over with us whenever
Speaker 51
21:20
it gets to that particular, their cash agency? Well, it's my
Speaker 8
21:25
understanding, just go around, Senator Hickey, for a fiscal session,
we won't talk about all the agencies. I think there's only five or six normally that go before budget hearings. Isn't that correct? I mean, off the top
Speaker 8
21:39
health, education, corrections, the institution of higher education. It seems like there's one more. Maybe public safety. Maybe it hasn't been done in
Speaker 39
21:45
the past, but possibly we're all these guys. No, I'd suggest
when we do the research to find out, I'm sure
we have some kind of authority to pull a budget and use them there with a certain amount of vote threshold. That would be my quick interpretation without
Senator Jimmy Hickey, Jr
Unverified
22:07
knowing it. Senator Hickey? Right. If you don't mind, with the chair's approval, I would like for staff to kind of research into that and see if we have any options from that standpoint.
I think it would be appropriate and maybe bring up a report next meeting explaining what that would be like, what that would look like, and get it to BLR as well if needed. Yes. Thank you, sir. Make a motion. I'll take a second on that. So moved. Second. All in favor say aye.
Aye. All opposed. So we'll have a report for the next session. With
Speaker 41
22:34
that, I will make a motion. Representative, do you have a question? Yes, I'd like to make a motion that we hold these reports until the next meeting. That's a good motion.
We have a second. All in favor say aye. Any opposed? Thank you. Thank you, Mr. Hall.
Speaker 8
22:56
Our last report, Mr. Chair, is the Game and Fish Commission June 30, 2018 report, which contains two findings.
The Game and Fish Commission notified legislative audit of the following theft of state property. In December 2018, a pair of night vision goggles valued at $2,700 and a rifle valued at $750 were stolen from an enforcement officer's state vehicle in Hazen. Incident and police reports were filed for this incident. The second finding, as noted in the past, buildings are again not sufficiently distinguishable by the recorded description and lack corresponding identification on the structures.
Indistinguishable property has resulted in the demolition of structures that were not subsequently removed from the AC records, and in addition, structures in use by the AC were not included on the ACES fixed asset listing. As a result, there were some assets that could not be independently verified for existence. The AC had been working on this for a year or two, and ACES asset adjustments submitted by the ACES DFA in June 2019 reflected that 15 buildings with an estimated original cost of $2.8 million had never been added to the ACES fixed asset listing,
and 158 buildings with a total cost of $1.6 million had been demolished but not removed from the ACES fixed asset list. So as of June 30, 2018, the net effect on the finance statements is an understatement of fixed assets totaling $1.2 million and an unrecorded loss of around $300,000 on the removal of the 158 demolished buildings because some of those were not fully depreciated. And that concludes our findings. Thank you. Do we have anybody from
the agency who would like to come up?
Speaker 85
24:38
Please say your name and your position for the record. Good
Jami Fisher
Unverified
24:50
morning. Pat Fitz, Director of the Arkansas Game and
Speaker 43
24:54
Fish Commission. Jamie Fisher, Chief Financial Officer with Game and Fish Commission.
Speaker 85
24:58
Would you like to have a statement or something about these findings? Yes, sir. On finding number one, the theft of the rifle from our wildlife officer's vehicle, we certainly are very concerned with the targeting of law enforcement officers around the state and their equipment.
We have taken steps to try to get in front of that through vehicle alarms and self-locking gun devices. And we've gone even further than that since the latest theft, and we're exploring more advanced locking systems for those weapons in those vehicles. We are also moving towards having our officers, when they are off duty for an extended period of time,
removing those weapons from their vehicles and storing them inside their homes. Now, that's very difficult when they are on duty because these officers are responding very quickly late at night to different kinds of circumstances where one slip up and one oversight of having that weapon with you during that encounter could put that officer or the public in danger. So we are working very hard. We are also pouring our assets into the investigation of these thefts.
We had a firearm stolen in 2016, and our officers were involved in that investigation with those local investigators, and we have recovered that rifle. So our hopes are that we can also recover the latest rifle. We have recovered the night vision, so we're still working towards that. And I would certainly like to pass this to our CFO, Jamie Fisher, to discuss finding number two, if you would allow.
Jami Fisher
Unverified
26:51
Ms. Fisher. So we have developed an internal process over the last 18 months, roughly, for our building tagging and
tracking. Those are now assigned to individual employees. And as we conduct our equipment annual inventory each spring, we will now be doing so with the buildings as well. They each have an identifiable marker on them and are numbered, and that information has also been captured in ACES as well. Thank
you. Well, I'll start off for our opening question. On finding number one, we hate that happened. It's obviously something you
all don't anticipate, but I'll say I do appreciate you self-reporting to audit.
That's a step beyond that we usually don't see in
Chair
Unverified
27:27
here, so I will give you appreciation for that. Any questions from the
Speaker 90
27:36
committee? Representative? Thank you, Mr. Chair. I've got many, many questions for Director Fitz. Unfortunately, it doesn't pertain to this, so I'll go ahead. On the removing the weapons from the vehicles, which anyone that's been in law enforcement, this has happened before, either badge guns or whatever, but going into the house,
that just moves the target into the house. Is the agency thinking about putting some type of cabinet into the wildlife officer's home or just requiring them to do it? We've
Speaker 85
28:08
not had that specific discussion. I will say that most of our officers are sportsmen and hunters, and a lot of them do have safes in their homes. Now, that would be something that we would have to look at if we found ourselves in a position where they did not have that available.
Speaker 90
28:29
Well, I appreciate it, Director Fitz. I mean, you're not the only agency that's ever had this happen to, and there's something with today getting the weapons and using them, and another crime usually against an officer is something we need to think about. Thank you. Any more questions, Committee? I
Chair
Unverified
28:48
think Senator Hickey, did you have one, or was I incorrect about that? All right, any more
questions? Seeing none, I entertain a motion to file this report.
We have a motion, we have a second. We have
a second, all those in favor say aye. Aye. Any opposed? Thank you. With that, I think our next meeting will be held January 23rd, 2020. With that, we are adjourned.
Agenda
A. Call to order by Chairman.
C. Review of reports. (Refer to the Summary)
E. Adjournment.
Documents
| Title | Type | Pages | Source |
|---|---|---|---|
| Agenda — LEGISLATIVE JOINT AUDITING - STATE AGENCIES, Dec 12, 2019 | Agenda | 1 | Official source ↗ |
Speakers
Senator Trent Garner Chair
Unverified
Speaker 2
Speaker 7
Speaker 8
Speaker 14
Senator Jimmy Hickey, Jr
Unverified
Representative DeAnn Vaught
Unverified
Speaker 39
Speaker 34
Speaker 46
Senator Jonathan Dismang
Unverified
Speaker 67
Speaker 43
Speaker 15
Speaker 75
Speaker 51
Speaker 77
Speaker 41
Speaker 85
Jami Fisher
Unverified
Chair
Unverified
Speaker 90