Legislative Joint Auditing-Counties and Municipalities
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Speaker 9
0:49
a quorum in my eyes. Do I need to be good? I think we have pretty close to a quorum. You don't think about a challenge? Thank you.
Representative Danny Watson
Unverified
1:28
January 23rd 2020 this is counties and municipalities join audit to call the meeting to order committee if y'all won't be adoption of the minutes for the December 12th 2019 meeting we have a motion to approve and we have a second
Any further discussion? All in favor signify aye. Motion carried.
Speaker 22
2:02
Review of reports. Go ahead. The first report that we'll review today is one deferred from the the previous meeting on the first page, the City of Cave Springs. They had repeat findings under the recorder treasurer. The following receiving deficiencies were noted. Funds received were not receipted at the time of collection as required by code. Receipts were not deposited timely or intact. Receipt books were not maintained
as required by code. Therefore, we could not perform receipts tests for all funds for 18 and 17. Some revenues were receipted twice. Numerous posting errors were noted, including duplicate posting, receipts posted to disbursement accounts, receipts improperly classified, Receipt numbers omitted from the ledger. Similar finding was issued in the prior report. We'll continue on the next page, on page 2. A detailed fixed asset listing was not maintained in noncompliance with code.
Cash receipts and disbursements journals were not maintained for the city's debt service funds in noncompliance with code. Bank reconciliations were not completed properly, completed timely, or properly approved in noncompliance with code. The City did not remit timely settlements from the Administration of Justice Fund to the State Administration of Justice Fund by the 15th day of the month as required. The following disbursement deficiencies were noted. Cash disbursements journals were not properly posted as required by code.
Invoices and supporting documentation were not properly maintained and did not agree to amounts dispersed in noncompliance with code. um the following issues were noted while reviewing payroll records internal revenue service forms 941 for 18 and form w3 for 17 were not made available for inspection in non-compliance um and monthly monthly tax remittances to the arkansas department of finance administration were not made timely i believe the recorded treasurer ms hutchison is here to
Representative Danny Watson
Unverified
4:07
address her findings. Ms. Hutchison, if you would, when you can, go have a seat, give your name, and identify yourself
Kimberly Hutchison
Unverified
4:21
and proceed. Go ahead. My name is Kimberly Hutchison, and I'm the recorder
Speaker 11
4:24
treasurer for the city- If you would, would you cue the mic up, a little green button. Try it again. Try it again.
Speaker 31
4:40
Thank you. Kimberly Hutchison with the City of Cave Springs, Recorder Treasurer. Okay,
Speaker 35
4:48
thank you. Go ahead. Um, so I'm supposed to go over all my
Representative Danny Watson
Unverified
4:56
answers. Is that what I'm needing to do or?
If you would, a synopsis of the findings, just go ahead, if you will, go ahead and get started with them. A
Speaker 39
5:06
brief summary? A brief, yes. Okay. Since 2019, we have a new mayor now, and that mayor and I have worked together to look over all of these,
and we've actually fixed or worked out most of
Speaker 35
5:22
these from the January of 2019 following current. We've brought payroll in-house, so now we don't have payroll outsourced. QuickBooks was doing our payroll, which was having the issue of why everything wasn't getting paid timely.
We have, um, the mayor and I have worked on our fixed asset list. The bank reconciliations are now done, um, by myself. We actually outsourced that to another, uh, vendor who took care of all of our bank reconciliations. Well, now the city recorder treasurer does that. Um, the fire dues, the fire association gave that duty to, um, an individual. Now that has been brought back into house. so I will be taking that and collecting that money as well.
Monthly tax remittances was another issue that we had with the payroll company. That has also been taken care of due to the fact that we brought that back in-house. Receiving deficiencies, again, that was an issue that we had with QuickBooks, and then we have purchased CenterPoint software, so now we are using CenterPoint effective January of 2019. the disbursement deficiencies that was that job duty was given to our court clerk by the city council so after this has been done we are going to be taking that back to the council
and changing my job duties to bring that back to the city treasurer so then that way if the responsibility is the treasurer's then i need to be responsible for that financials pretty much that sums it up the mayor and I have went over this and we have definitely taken care of all of these issues Ms. Hutchison do
Representative Danny Watson
Unverified
7:24
you feel that you're on the right path now
Speaker 39
7:27
100% I have a mayor that is very very helpful he
Speaker 35
7:31
jumps in there and doesn't hesitate to help me in any way whatsoever. Any questions, Senator? Okay. So
Representative Danny Watson
Unverified
7:47
everybody's on board, and y'all going to proceed on, and most likely we won't hear from you guys this time next year. Hopefully
Speaker 39
7:54
you won't hear from me this time next year, but yes.
Representative Danny Watson
Unverified
8:00
Okay. We don't have any questions from the committee. We do. Senator Johnson,
Senator Mark Johnson
Unverified
8:06
go ahead, sir. Thank you, Mr. Chair. Ms. Hutchison, thank you for the work
you're doing to straighten this out. Thanks, sir. I did a quick little map on the item about your sanitation fund payment that went into the wrong account. Yes, sir. And it says you all are paying $100 a month back, and I did this quick little calculation. It said it would take 152 years to do that.
Is there any way that could be- For the sanitation fund? It says that because of the previous years where it was owed to the fund, that the total due to the sanitation fund was $182,416. That's on page three. And Ms. Steele, if I'm not reading that. Senator,
that will be on Madison. I apologize to the chair and to you. I know you had enough problems about me adding someone else.
Speaker 55
9:01
I'm like, we don't have a sanitation fund. Thank you, and apologies to the chair for looking at the wrong city.
Ernestine Broadway
Unverified
9:08
It's okay. Don't jump out. Any more questions from committee members? Okay. No
Representative Danny Watson
Unverified
9:14
further questions? Matter reviewed? Matter deferred? Matter filed. Thank you. We appreciate you coming in. Keep up
the good work. Thanks, guys. I appreciate you. The next report is on page three.
Speaker 22
9:32
It's the City of Madison. We have repeat findings under the recorder treasurer. Sales taxes restricted for sanitation of $27,118 were not deposited to the sanitation fund. Sales taxes for sanitation expenditures in previous years of $155,298 owed to the sanitation fund was not transferred during the engagement period. For a total due to the sanitation fund of $182,416. A similar finding was noted in the previous two reports.
And then cash receipts and disbursements journals were not provided for the youth committee and sanitation funds as required by a code. A similar finding was noted in the previous report. And we have someone here from Madison, Ms. Broadway, to address this. Ms. Broadway, if
Speaker 61
10:23
I can interrupt you, if you will, go ahead and
Ernestine Broadway
Unverified
10:26
key your mic up. And go ahead and identify
Speaker 62
10:32
yourself. My name is Ernestine Broadway. I'm the court clerk, and I also assist the recorded treasurer with her duties.
Speaker 63
10:38
Okay. Thank you, ma'am. If you will, go ahead and begin. Okay. We are currently paying $100 per month toward the sanitation and the street department for money that wasn't directly deposited in the account years ago. So we no longer have the youth committee. We hadn't had that in a couple of years, about three or four years now. So I didn't keep a leisure on it because we don't have that account anymore.
And the general fund, what happened was I didn't post some deposits before the end of the year. And that's how that got, um, we got written up on that one because I didn't, I didn't make the deposits on time. I'm sorry. I made the deposits on time. I didn't record it in QuickBooks on time. Okay.
Representative Danny Watson
Unverified
11:41
QuickBooks appear to be working okay
for you. It is now. Okay. Committee
Senator Mark Johnson
Unverified
11:53
members, we have any questions. Senator Johnson, go ahead, sir. And I apologize to our friends up in Cave Springs that I had attributed this to you. Again, Ms. Broadway, it shows in the audit that at this time, the sanitation fund is due $182,416, and you're paying back $100 a month.
And again, my quick calculation said it would take 152 years to
do that. And I won't be around at that rate. And I would bet you probably wouldn't either, although you're significantly younger than I am. Is there any hope of this? And I also
wonder, that's a lot of money for a community the size of Madison. Do you have a longer term solution? I noticed down below that you had a negative cash balance at your general fund
of over $4,600 at the end of 2018. I guess my question is how can you all continue to operate this way? Well, I
Speaker 62
12:57
thought I cleared up the negative balance thing because I said I didn't post it to QuickBooks. It wasn't that
Speaker 63
13:04
the money wasn't there. It's just that I didn't post it on time, and that's why it showed a negative balance. And as far as us paying the money back in the street and the sanitation, we probably won't pay it back in my lifetime,
but we did agree to pay $100 a month, and that was what we were told to pay, and that's what we've been paying every month since we were told to pay that amount. So we have not missed paying it. But that money was money that was long before the mayor came in. and they were using the money for the general fund instead of the street and sanitation. So I can't give you any answer other than the one I gave you already.
Senator Mark Johnson
Unverified
13:51
Well, I'm not pointing a finger at you, and I recognize this was probably something that happened based on prior administration. I understand
that. Ms. Steele, is there any other hope in a debt of that magnitude? you as long as they're
Speaker 24
14:08
making some payment we i mean that's all we can do is recommend they they try to start paying it back
Senator Mark Johnson
Unverified
14:17
okay yeah i know i've understood the turnip theory before so
i will i will defer to that but thank you miss broadway for your candor and for trying to do the best you can
Representative Danny Watson
Unverified
14:32
on it thank you mr chair Thank you, Ms. Broadwell, y'all keep working. If you have any questions, follow
up with your municipal league as time goes on. Keep up the good efforts, thank you. If there's
Speaker 1
14:44
no further questions, committee members. Yes, yes, Senator T, go ahead. Perhaps Ms. Thiel, so are you
Speaker 83
14:50
saying the law doesn't just say that they're making a payment that that is sufficient?
Speaker 84
14:55
The law says that they're supposed to spend the money on what the
Speaker 77
15:01
money was supposed to be spent for. There is no law about repaying or not repaying. We always just try to see that there is some kind of agreement that they're paying something. But to my knowledge, there's not a law that addresses how they're to pay it back. They're just not supposed to do it to begin with. I understand that.
Speaker 1
15:19
Thank you. Thank you, Mr. Chairman. Any more questions, committee members? Representative Rye, go ahead.
Representative Johnny Rye
Unverified
15:26
Yes, sir. Thank you, Mr. Chairman. Ma'am, just have one question. On the finding on the third paragraph that mentions $29,359, you know, that really worries
me because that's actually state turn back money that's meant for the roads. And really, you know, are y'all planning on trying to rework something to something to send something in after, every four years you actually can get money from the state up to $250,000.
But if this is not paid back, it makes you wonder if we should kind of look
Speaker 90
16:08
at that just a little bit. We are currently paying $100 a month on
Speaker 92
16:14
that account also. Representative, do you have a comment? Go ahead, sir. Yeah, I'm just going to say to Representative Madison's in my district and As we've kind of talked about before, this was something that happened long ago, Representative Rye, and it's a very unfortunate situation, but this administration is doing all they can do. It matters as a very small community, and there's no revenue.
There's no money there. Come see us over there. You'll see that that $100 a month is really a tough stretch in itself, but they're doing a good job just to meet that. This happened years ago now, and that's what they inherited, so that's just the best they can do right now. Thank you, Representative Murdoch. Senator
Representative Danny Watson
Unverified
16:49
Sample, go ahead. Thank you. Who's the mayor there? Mayor
Speaker 96
16:53
Hodgley. He's sitting right there. I know. I recognize him.
Speaker 98
17:04
Okay. He's been here before, several times. That youth committee, I don't think it's been several years on it since we had the problems with it. And if I recall, it was just within the last two
Speaker 101
17:24
or three years. But anyway, I just wanted to ask
Representative Johnny Rye
Unverified
17:28
that question. Thank you. Thank you, Representative Rye. Go ahead. Yes, sir. Thank you, Mr. Chairman. Ma'am, what I would say, and I think to the mayor too, that that $29,000, y'all, that's
very, very important fund. Boy, being in a little town like you guys are, boy, that needs to be really utilized, sir. And ma'am, because without that right there, in a lot of cases, the little towns don't have enough money to keep their streets fixed up. So I sure hope that you can get that fixed up from here on
Representative Danny Watson
Unverified
18:02
out, sir. No further questions for the committee? From the committee?
I'm sorry. Representative Fite, I didn't see you.
Speaker 105
18:10
I apologize. Go ahead, sir. You're recognized. All right. Thank you, Mr. Chair. This will be for staff. How far back does this go right here, this $182,000 sanitation fund and also the state aid
Speaker 77
18:24
turn back money? Tim and Charlie will look it up here. It will take them just a minute to find that,
Speaker 104
18:31
but we'll get that information. Okay. Has
Speaker 106
18:34
this been – follow up, please. Yes, go ahead. Yes. Has this been in another
Speaker 60
18:40
audit before today? The sanitation fund finding has.
Speaker 24
18:43
That's why it's in bold. I don't know why the state highway fund one is not bold. Maybe since they were making payments toward it and they didn't put any more in the wrong fund this time, maybe it's why we didn't, it's not repeat. Again, we'd have to look back at the work papers and see, but we can get that information. All
Representative Danny Watson
Unverified
19:04
right, thank you. Thank you, Representative. Any more questions for the committee? No further questions? The matter is going to be considered, filed.
Speaker 22
19:16
Let's go ahead. Just below that, still on page three, we have the town of Twin Groves. The repeat findings are on the following page, on page four. Prenumbered receipts were not issued for all items of income as required by code. A similar finding was issued in the previous three reports. Cash receipts and cash disbursements journals were not established as required by code. State aid for highway funds from previous years of $66,000 was not transferred from the general fund to the street fund.
Similar finding was noted in the previous eight reports. Property taxes of $3,257 were not transferred from the general fund to the street fund as required by code. A similar finding was noted in the previous report. And I
Speaker 24
20:02
believe the recorded treasurer is here to address this finding. Yes, ma'am.
Representative Danny Watson
Unverified
20:09
Thank you, ma'am. If you will, identify yourself
Speaker 112
20:12
and go ahead. Robin Wai'ili, city clerk recorder, treasurer. Okay, go ahead and begin. Okay. I'm going to start with the street department, kind of like the small town here.
Those funds were spent years before I came onto ground, as far as the $66,000 go. And at the time, we had older mayors and whatever, and they just, all the money was coming to one account, and they were thinking it was just the city's money to pay bills, do whatever. We learned better in 2007 when one of the auditors explained to us that Code 1 goes to the city, Code 002 goes to the street department.
This is when we learned. This is when we started trying to make sure it was done better. As far as the numbered journals, I'm not clear, to be honest, because we have sequential number receipt books, which we write every receipt for all incoming income. But one auditor told me, yes, it was good. The next auditor said he wasn't quite sure. The next auditor said she didn't think so, and the last auditor said, no, that won't get it.
but yet no one has told me exactly what I need to do to replace what I'm using. As far as the ledgers go, I told Ms. Hazlitt I am not good with an office XL, but by the grace of God, I also have a new mayor who has a brother that is excellent at XL. He has come and put this onto the computer, and just to let you know and see, I have start to get it right. So I am entering all of 19 now for our records and starting 20.
We do have one for all five accounts to be able to keep my ledgers done accurately. Also, with the street funds that come from the county as well as the ones that come from the state, they're now separated. The street fund checks states, road, out of the county, and, of course, we know the codes for the state. But every check is now separated. The city gets the check. The street department gets its road department gets its own check.
So there is no mistaking. There is no forgetting to move it over, point blank, period. It is done. It goes, it deposits into its own accounts. Your last name is Lee, correct? No, E.
Speaker 114
22:46
Lee. E-A-L-Y. We have any questions from the
Representative Danny Watson
Unverified
22:52
committee? Senator Johnson, go ahead, sir. I feel like
Senator Mark Johnson
Unverified
22:57
I could just play this recording over and over, and I want, Mr. Chair.
Ms. Ealy, Twin Groves is in my district, and I'm very sensitive to the need there. You have a very large geographic area. Twin Groves, for its population, has a lot of land. Yes, sir. And therefore, a lot of roads and streets. And I'm very concerned when we do something that is not done right with the street fund, because I can just imagine even with everything being done properly, it's a stretch to make those dollars take care of your street situation.
Now, but if you can do the math as easy as I can, $50 a month on $66,000 is not going to make much of a dent in it. And as I ask the folks from Madison, I'm going to come back and just because y'all don't get a pass because you're in my district. Do you have any kind of a longer term solution so we can deal with this? Because obviously I appreciate the work you've done in these other areas,
but on this payback, is there any plan that something that could help alleviate this?
Speaker 112
24:05
All I can tell you is that the council voted for the $50 a month because, therefore, as far as funding coming to Twin Grows, of course, it's not having any businesses. Only franchise money that comes into Twin Grows comes from Center Point Energy. It comes, I mean, yeah, from energy. It comes from Petit Gen Electric and Wind Streams. So when we looked at our budget of what we could afford to pay and continue to maintain our city, that's the best we could do,
as well as the last, besides this past year, the aldermen and mayor gave up salaries the last five months of the year just to make sure that we did not lose anything and maintain. So at this point, that's what we see. I don't know what's coming down the road. As I said, we have a new mayor. He's working on different things. and hopefully and prayerfully that we can. But that, again, was way before our time. And now that we're trying our best now to play catch up and do the best we can to pay toward that.
Speaker 54
25:07
Yes, ma'am. And I appreciate the job you're
Senator Mark Johnson
Unverified
25:10
doing. And please keep working at it because, obviously, any more mistakes pancaked on top of what you're already dealing with is going to make things worse and worse. And if there's anything that you need to contact me about, please do so. and we'll do whatever we can to try to smooth it over a little bit. But again, this is really troubling because I know the needs you have, and when you're having this kind of a discrepancy and you're pulling money out of what should be going into the streets
to pay something back, it's good that your citizens are going to be affected by this. Do you know former Senator Critcher who's sitting behind you to your left? But he is with the Municipal League, and they can sometimes help with some technical assistance to make this work. So I do want to commend him to you, and certainly I'll help in any way I can as well. Thank you so much
for trying. You're welcome. Thank you, Mr. Chair.
Speaker 119
26:08
Our new mayor, Wesley Tias, is sitting back here with me. So he's here for support. We're addressing
Speaker 120
26:14
issues as we find them, and we want to take care of the smaller things and move on to the larger things. I hate debt, and that's one of them, so we're going to do the best we can. Thank you. Any more
Representative Danny Watson
Unverified
26:32
questions for the committee? Ms. Ealy, we applaud your persistence. Keep reaching out. Keep going forward. Thank you, ma'am. Thank you.
Speaker 122
26:39
Matter considered, deferred. Motion filed. Thank you. Representative Feight, we got on Madison. The street finding goes
Speaker 22
26:53
back to 2009. The first time we had the sanitation finding was in 2014, but it went back further than
Speaker 77
27:00
that. We'd have to look further to see how far back that actually went.
Speaker 104
27:08
So, it would be safe to say that it's a continual issue there?
Speaker 60
27:14
Yes, sir. Thank you. Okay, the next report that we'll have is the City of Gould, which is on page 9 and 10. Okay, we have someone from Gould? Yes. Yes. We have several repeat findings,
Speaker 22
27:40
and then we have one finding that was referred to the bond board. The repeat findings, bank accounts were not reconciled monthly in noncompliance with code.
Cash receipts and cash disbursements journals were not established by fund in noncompliance with code. Invoices and supporting documentation were not maintained for 11 of 35 test items in noncompliance with code. Arkansas Department of Finance and Administration Report AR3 was not made available for inspection. And then on the next page, on page 10, the top finding under the district court clerk, this finding was referred to the bond board and also the prosecuting attorney. District court cash receipts exceeded cash bank deposits by $1,095.18.
The custodian of these funds could not be identified due
Speaker 24
28:25
to multiple employees having access to these funds. And Ms. Magnum is here to address our funding.
Representative Danny Watson
Unverified
28:33
Mangrum. Mangrum, excuse me. Go ahead, Ms. Mangrum, if you will, go ahead and identify yourself and your title, and also with the young man sitting at your table
Sheila Mangrum
Unverified
28:43
also, please. Yes, sir, my name is Sheila Mangrum Smith. I'm the recorded trader for the city of Gould. My
Matthew Smith
Unverified
28:50
name is Matthew Smith. I'm the new elect mayor.
Ernestine Broadway
Unverified
28:53
Okay, why don't you get ready to begin? Feel free
Sheila Mangrum
Unverified
29:00
to, okay? Thank you. About the bank accounts that weren't reconciled, they've been reconciled, the cash receipts and cash disbursement journal. I had them, but I couldn't put my hand on them when the
Speaker 135
29:23
Yeah. Are you at number three? Yeah. Cash
Speaker 138
29:32
receipts and the disbursements in the city
Representative Danny Watson
Unverified
29:34
post. If you would, sir, would you please key the mic up and speak into the microphone when you're ready? I'm sorry, sir. I was kind of reading
Speaker 139
29:42
my notes. I apologize. I was going to kind of help her out because I told her I'll come in and support her. I made a lot of notes on here for her, but I'm going to kind of just kind of go through one
because she probably can't understand my little scribbling. Number four there, the city posted annual financial statements. Did not include all the city's receipts and disbursements by fund, nor the city's indebtedness. Well, we have all the invoices and receipts. The biggest problem I was telling Ms. Mangum was, she is not, she's not organized. She can't put her hands on them when he asked for them, but once he left I come in and found all of them like number five
We have a ledger. They're seeing QuickBooks When I put it up, it was eight hundred and eighty six pages That you know that the auditor wanted to request that it shows every check that she's written from beginning of the year to the end so it'll show everything so that's the ledger that he wanted so all his information that he was requesting she actually had it but nervousness and she couldn't put her hands on it um and
Sheila Mangrum
Unverified
31:02
i also try to make copies of everything that i do with
Speaker 140
31:06
the checks and the deposits and whatnot i just couldn't put my hands on it i guess because and I had so much stuff going on with the death of my sister and me being in and out of the hospital.
Speaker 139
31:23
And I apologize for that, but I'm going to do better. And the plan is, starting in February, we're moving away from QuickBooks, and we're going to the CenterPoint CSA app. And Melinda from CenterPoint will come and set it up on the 1st,
and I also go through the training, and then it'll alleviate all of these findings because we have a simplified system. QuickBooks is good, but it's actually very complicated. It's got a lot of layers to it, but I'm a computer guy, so I really kind of like it, but Ms. Mangma's having a hard
Sheila Mangrum
Unverified
32:03
time with it. Yes, sir, because of flip numbers. you can put in you can write checks and before i uh write the check i can look at the number and
the number is right there and then after i print the check and go back in with another another the number is different so quickbooks is not working good for me so i talked to the counselor and asked them if we could get csa center point and they said yes and we're supposed to be getting the next month at the first uh like the first of february and i have someone from star city by the name of alicia hawkins uh she's the recorded treasure and she's going to come and help me
Speaker 139
32:44
and they already have the csa program so she's going to be a a supporting assistance tool and so am i uh can i back up to the part up there about the mayor i don't know if you read that part or or not, but number one that states that we paid off the IRS and Department of Workforce Services, which we did, we're completely out of debt. We actually paid them $154,000. In workforce, we paid them $50,000.
So at the end of this year, of 2020, we should have in the black upward $150,000 in the bank. And I'm through
Speaker 70
33:29
talking. We have any questions about committee
Representative Danny Watson
Unverified
33:41
members? Make sure, needless to say, make sure you utilize all sources.
Don't put things back. Keep going forward. Make sure there's no procrastination on here. because these things will, as both of y'all well know, they are not going to fix yourself. Y'all know that. Yes, sir. I applaud for the $154,000. Y'all did, you guys did get paid back. But keep going forward. Feel free to utilize the services of the Arkansas Municipal League. Don't just, make sure we don't just get our head down. Keep going forward on this. Yes, sir.
Y'all doing good service for your community. We need it. The state of Arkansas needs it. Y'all keep going forward. Thank you, sir. If no more questions
Speaker 22
34:35
at this time, the matter is considered filed. Thank you all. Thank you. The next report that we have visitors for is on page 29. Under reports of the repeat findings, the city of Joyner. Under the recorder treasurer, bank accounts were not properly reconciled for each fund in non-compliance with code.
A similar finding was issued in the previous two reports, starting back to 16. The cash receipts journals were not properly posted for the public safety and Act 833 funds, and the cash disbursements journal was not properly posted for the public safety fund in noncompliance with code. Similar findings were issued in the previous three reports dating back to 13. The following issues were noted when reviewing payroll records. The recorder treasurer's bonus was not properly reported on the Internal Revenue Service Form W-2. Wages reported on the IRS 941 forms, IRS W-2 forms, and the city's payroll journal were not consistent.
Calculation errors were noted on the IRS quarterly 941 form for total taxes due. Payments remitted for state payroll taxes were less than the amounts reported on the Arkansas AR-3 report. Due to these errors, we were unable to determine if the city properly remitted the federal and state payroll taxes. A similar finding was issued in the previous report. State aid and property taxes restricted for highway funds of 14,283 and 205 respectively were not transferred to the street fund as required by code.
Restricted funds from the previous year of 24,484 were not repaid, leaving a total due street fund of $38,972. A similar finding was noted in the previous three reports dating back to 2013. And I believe Ms. Vasquez is here to address her findings. Yes, my name is Josie
Josie Vazquez
Unverified
36:20
Vazquez, and I'm the Recorder Treasurer. Thank you, Ms. Vazquez. Go ahead and begin. Okay. Well, on the bank statements, I am now still working on getting training on that.
I have reached out to an accountant for that. I was trained to do it incorrectly, and while I was working on them, it was really difficult to understand it. And so the person that trained me really didn't know what she was doing either. So that's why it was a repeating finding. but I have now started the training on that. Hopefully, we will prevent this from happening again. The cash receipts journals, the public safety and Act 83 didn't get the proper filing on those,
but the general did because by the time I trained myself on that, I was able to start on the general, but I didn't get enough time to finish the public safety and Act 833. So that finding shouldn't be repeated again for 2019. The payroll, the Christmas bonus actually wasn't applied to none of the employees. It wasn't just me. And I found that myself because I didn't know that we were supposed to add it to the net pay since taxes weren't being deducted on it.
But once I found out that you were supposed to, I went ahead. 2019, you shouldn't find that finding in there because I did apply it for the 2019. um and then the the 941 forms and um the city clerk was the one that was doing all of this before I came in in 2017 but she was the one who was doing the training on it as well but once she left I kind of took over both departments and that's how I noticed about some of these forms and I've ended up finding the 941 forms from the previous years and I kind of used that to
guide me through the 2018 forms. I have reached out to an account as well to get the proper training of filling those out. Um, so I am working on that as well. Um, the street funds, the street funds, um, the mayor has, has agreed to pay $800 a month starting this month, um, to pay off the debt that we have $38,000. And we're looking to pay that off and for the next four months four years I'm sorry the next four years to clear that um that amount the um the
bank fees on the street department that was due for not having turned back deposit into that account which I did get it corrected since October of 2019 that funds has been now added on there since then I haven't had any draft fees so hopefully that will be another finding that won't be on there as well, since I am overseeing that activity now. The credit card, it was actually an in-store card that we had with a parts store, and somehow, I guess, the billing got lost with
the previous clerk that we had, because she was the one who would give me the mail. Well, when I found out about it, it was a little too late. It was sent to the agency. And so I've agreed to, we have a settlement that we are going to pay it in full by March to get that covered. And we settled to pay it off, I believe, for $4,000 that we settled for $4,000 to pay that fee. So that should not be on there for the following year. And that's all I have.
Representative Danny Watson
Unverified
39:55
Ma'am, what was the amount one more time? On the credit card? No, to pay back for the
Josie Vazquez
Unverified
40:01
street fund. $800 a month starting this year, starting at the end of January. Okay. And we're looking to pay it off within the next
Speaker 150
40:18
four years. Senator Cooper, go ahead. Thank you, Mr. Chair. On this issue of not being able to properly report the Internal Revenue Service
or see how much was owed there, what kind of feedback are you getting from the IRS? Okay.
Speaker 152
40:34
So on that, the previous recorder that was in the position before me, I didn't find any paperwork trailing for the past two years. So
Josie Vazquez
Unverified
40:44
I really didn't even know what a 941 was until the auditor that asked for them was explaining to me what they were. And I thought, oh, wow, I didn't know nothing about that. So I believe that's why I tried to calculate the numbers myself.
And I guess it was incorrect, which I have reached with an accountant, to try to work on those numbers and recalculate them and pay back if we owe anything back.
Speaker 153
41:13
Um, so they have not sent you a letter or
Speaker 154
41:16
anything, um, holding a lien on, um, municipal buildings or property. No, no.
Josie Vazquez
Unverified
41:24
Um, as far as I know, we, uh, we haven't, I did receive a letter saying that we had money that, um, was, um, that we overpaid.
Um, so I, that's when I called and they asked me, how did we want that money back in return if they wanted to keep it for a previous payment or refund it back. I asked, did we owe anything? And they said we did not at the time. How long
Speaker 155
41:53
have you been in your position? This 2018
Josie Vazquez
Unverified
41:55
was my first audit. This will be my third year. Okay. Okay, thank you.
Representative Danny Watson
Unverified
42:06
Any questions? committee members, uh, representative fight. Go ahead, sir. Thank
Speaker 105
42:12
you, Mr. Chair. You show you have a negative balance of $11,773 for 2018. What's your anticipated revenue for the, uh, this coming year? Um, let's see. I'm not
Speaker 152
42:26
sure how they came up with that because I don't, I don't see that is on the general fund.
We didn't have a negative $11,000 on there.
Speaker 106
42:39
Okay, in the finding, am I looking at that wrong, Ms. Steele? I
Speaker 159
42:43
noticed that as well, but I wasn't sure what
Speaker 22
42:46
that meant. No, sir. As the finding says, the report shows a positive balance of $45,000, but then when it was brought to our attention how much money was owed between the IRS and the credit cards and the amount due to other funds, um we normally present these reports in just on a cash basis but we feel like this is important
information so we have a finding in the last schedule of the report this is shows how much goes how
Speaker 24
43:14
much is owed to each fund where we came up with the with the negative 11 000 so if you have a copy of
Speaker 104
43:29
three at the at the end Ma'am, your anticipated revenue, I never did hear you say
Josie Vazquez
Unverified
43:34
what your anticipated revenue for the year is. For the year 2018, 2019, about $60,000.
Speaker 105
43:43
This can be very difficult, is it not, to pay back all these funds in that short period of time with the $60,000 anticipated revenue? Thank you,
Representative Danny Watson
Unverified
44:02
Mr. Chair. Thank you. Any more questions, committee members? No questions, a matter considered, filed.
Speaker 22
44:13
Keep going forward. Thank you, ma'am. Thank you. The next report we'll review is the City of Sparkman. It's at the bottom of page 30. They have one repeat finding under the district court clerk. Arkansas Code requires the ending cash balance to be identified with cases not yet adjudicated and payments made. The ending cash balance on December 31st of 2018 was $48.15 less than the bond's pending report. A similar finding was issued in the prior report.
And the court clerk, Ms. Fite, is here to
Representative Danny Watson
Unverified
44:49
address this. Thank you, ma'am. Go ahead and identify yourself and your
Speaker 167
44:52
title, and you can begin. Thank you. Okay. I'm Rita Fite. I'm also the recorded treasurer and the district court clerk. Whenever she told me this balance the next year after I got the audit, I contacted our VJ, which is virtual justice, on our court clerk. And he told me, he'd give me a way to go through it, and he showed me and
he said that everything looked fine. And he told me that on my cash, my criminal cases, bonds pending, there was like 15, 2015, 2014, and on back. And he said those didn't need to be on there and that I need to get rid of them. I need to go through and do a disposition on them. And then that would take care of it once they'd been. I did that, and I did this.
In fact, I was like $5,000. Well, when the auditor came again last year, she said that didn't help the matter. So I really don't know what to do on this because the VJ, virtual justice, thinks I did everything right. I have no idea unless I need to get a CPA to go through them.
Speaker 24
46:17
Go ahead, Ms. Steele. Thank you. Ma'am, the issue is that you need to know who the money that you have belongs to. And if we can't determine, if you don't have a
Speaker 22
46:30
list of receipts or cases with amounts that add up to what your reconciled bank balance is, then something's wrong.
Speaker 167
46:38
Okay. I have a list, but every time I go through that list and do that, it doesn't work out.
Speaker 22
46:48
That's the issue then. Are you off the same amount every month? Pardon me? Are you off the same amount every month? Yeah,
Speaker 167
46:55
this has been the same amount the last two years. It hasn't went up. It hasn't went down. It's just been the same amount for two years.
Speaker 22
47:04
If the amount stays the same, you can talk to your judge, and he can do a court order, and you can get with the administrative office of the courts. They'll help you with how
Speaker 167
47:17
to distribute that money. Okay, because last year, in 2017, it was that amount.
2018, it was that amount. In fact, the auditor told me it's not going up, and it's not going down. So, you know, that's why I don't even know where I'm
Speaker 22
47:33
going at. That's what I would suggest you do. If it's the same amount every month that you don't have identified, talk to the administrative office of the courts and your judge to see about having a court
Speaker 170
47:45
order to distribute the money. Okay, but am I in the negative or am I in the positive on that?
Speaker 22
47:52
I thought I was in the negative on that. You're right. You are in the negative on that. I don't know what to tell you. that something's wrong in your report
Speaker 167
48:10
that's not matching up with your bank. You've distributed too much. Well, when I first thought of it, whenever I went to virtual justice, I was doing manually and computer, and I thought that was the year it might have been, but it wasn't. It turned up two years later.
Speaker 77
48:22
again I don't know what to tell you there's something wrong with your report or you
Speaker 22
48:35
distributed too much money one or the other again I would talk to the administrative office of the courts maybe they can help you in how to figure this out or what to do with it all we can see is that your bank balance is less than what it shows it should be.
Representative Johnny Rye
Unverified
48:55
Okay. Any more questions, committee members? Representative Riegel. Yes, sir. Thank you, Mr.
Chairman. Ma'am, could you tell us which fund or which line item that we're dealing with
Speaker 167
49:14
that's actually making that go into the negative? It's our cash bonds. It's our cash bond spending, which would be the bonds and fines account. See, bonds and fines, you split up every month between your court costs, and it goes to
administrative justice, and we pay so much out of there, and also the miscellaneous fees and fines, it goes to there, and then it goes to the police department. Now, whenever I do my
Speaker 170
49:42
reports every month, it shows me which one gives how much. by the, what I had put in for the month. Yes, go ahead. Yes, ma'am.
Representative Johnny Rye
Unverified
49:58
Question for you. Does the court not bill you each month to let you know exactly how much each, each particular entity would owe? They don't. That way you would know exactly how much you should pay, and
Speaker 172
50:16
if you paid that amount, it shouldn't be in
Speaker 167
50:19
the negative. Well, on the, on the bonds of fines, no. So what they're doing, what the virtual justice shows, which the police department, the department of finance, the part pay, not part pay, administrative justice,
it shows which amount, how much amount from that month that you made, like, okay, for December. January the 1st, I did the reports. So whenever the middle of the month comes that I pay them out, They show me which one gets the same amount, but this has been going on for two years. And I go by that list and how much that money is.
Representative Danny Watson
Unverified
51:03
Any further questions, committee members? No, thank you. Ms. Fiedt, keep reaching out. I believe you're so close that you don't even know it. We don't even know it. Keep reaching out on this, and we'll get this one finding. taken care of. Okay. All right. Thank you. Okay. Thank you.
Speaker 22
51:26
Go ahead. On page 31, we have the city of Wilson. We have one repeat finding. The general fund cash receipts and disbursements journals were not properly classified and posted in noncompliance
with code. A similar finding was noted in the previous two reports dating back to 2014. I believe Ms. Dawson is
Representative Danny Watson
Unverified
51:44
here to address this. Ms. Dawson,
Speaker 187
51:52
your name and your title. Go ahead, ma'am. Linda Dawson, recorder treasurer. Go ahead. Because I have another part-time job, I'm not able to be in the office all day, every day. So the mayor had hired a clerk that did our posting. As of May 2019, she was terminated after several warnings about the
mistakes that she continued to make. Also, the 1st of January of 2020, we changed our programming that we posted our books on to CenterPoint, and we are in training for that at this present time. Any questions, committee
Representative Danny Watson
Unverified
52:34
members? Thank you, Ms. Dawson. matter filed. Thank you.
Speaker 60
52:48
That's all the reports that I'm showing we have visitors for. Is there anyone
Speaker 22
52:53
here to speak to any of the other reports? If not, we'll go back to the first page and catch
Representative Danny Watson
Unverified
53:01
up on the others. At this time,
Speaker 154
53:04
Senator Cooper, did you have something, sir? Yeah. Ms. Steele, has anyone calculated the amount of money that is out there that is owed in these funds that they're supposed to be reimbursing to?
Speaker 192
53:19
Do we have a number on that? No, sir. How could we come up with a
Speaker 154
53:30
number on that? We would just have to go entity by entity and make a spreadsheet. Would that be very difficult to
Speaker 22
53:38
do? No. We can do that. I'd like to see that. Okay. Thank you. Sir, the only thing, they may not be, since the years are not all the same, some will have like a 2018, the others
Speaker 192
53:47
we might have like a 2017 might be the latest report.
Yeah. But we could just note that on the
Speaker 154
53:53
spreadsheet. Yeah. I'd like to know how much is owed to the state in regard to
Speaker 60
54:04
that. Thank you. Thank you. That could be handy. Appreciate it. Okay, on page one, at the very top,
Speaker 22
54:09
we have the Midway Public Water Authority that was deferred at the last meeting. We did receive a response letter on that, stating that the deposits had all been collateralized, and staff would recommend we file.
Representative Danny Watson
Unverified
54:28
No questions matter. Consider file. Go
Speaker 60
54:33
ahead. The next thing we have is on page 7 and 8, we have the Pope
Speaker 22
54:39
County Library system. It's an investigative letter or report, letter, and Ms. Williams will review that. Go ahead, Ms.
Speaker 197
54:49
Williams. Thank you, Mr. Chair. The Fifth Judicial Prosecuting Attorney had received some allegations that a donation had been diverted to a non-profit rather than going to the Pope County Library.
Therefore, he asked us to go in and research this matter. We went in and reviewed the records from December of 2013 through October of last year. What we found was that not only did the library, which is part of the county exist, There was also a foundation for the library, that's the non-profit. And it had been established to assist the library. So what we found was that the library director, who resigned last year in August, received the check for over $170,000.
It was a, represented a share of a charitable trust. But rather than placing it, and it was designated for the library, rather than placing it with the library in the control of the county treasurer, this money went into the foundation. So we got the foundation records to determine how this money had been used. And even though it had not been put in the proper spot, we found that the money the foundation had used had been used on behalf of the library. We also looked at some grants that the library applied for and received.
And some of these grants were for specific purposes. And we found two instances where they weren't used for the intended purpose. That kind of concludes, that's a very short version of this. The prosecutor has been sent this letter, and there's no one here from either the county or the library board, but I understand that they have taken steps to ensure the new director to ensure the grant funds are used properly, as well as they're in the process of trying
to recover the remaining amount of the donation of $170,000 that has not been spent recovering it and putting it into the library fund instead of into the foundation. We heard an
Representative Danny Watson
Unverified
56:52
explanation. Any questions on the committee? Committee members? No questions at all.
This matter is going to be considered filed. Thank you for the explanation on here.
Speaker 22
57:09
The next report we have is on page 11 at Sharp County. This is a report that was referred to the bond board. The finding is under the county judge and sheriff. During an interview with the county sheriff's office personnel on May 2nd of 19, John Huffmaster, a reserve sheriff deputy and former road department employee, acknowledged using the road foreman's personal identification number to obtain fuel from the road department fuel pumps for personal use. Huffmaster used the road foreman's pen 30 times without authorization during the period
January through April of 19 to obtain 493 gallons of fuel valued at $1,035. Huffmaster was charged with theft of property, a Class D felony, on August the 14th of 19. Review of road department fuel records revealed additional questionable transactions. The road foreman's pen was used to obtain 341 gallons of fuel valued at 717 outside normal business hours. Because several employees knew the road foreman's pen, we were unable to determine who actually obtained this fuel.
Sheriff's Office employees and reserve officers obtained fuel for their vehicles from the road department. To document the transactions, the employees and reserve officers record pertinent information, the officer's name, number of gallons, odometer reading, et cetera, on fuel slips. We reviewed these records for five selected months and determined that 319 gallons of fuel valued at $671 dollars, did not have supporting documentation recorded on the fuel slips. Due to the same pin being used by all reserve officers and lack of documentation,
we were unable to determine who actually obtained this fuel.
Representative Danny Watson
Unverified
58:55
Any questions on Sharp County? No questions, a
Speaker 22
59:09
matter considered filed. Continuing on page 12, this is under Reports Referred to the Prosecuting Attorney. We have an investigative report, the Morriston Volunteer Fire Department, and Ms. Williams
will tell you about that one as well.
Speaker 197
59:23
Go ahead, Ms. Williams. Thank you, Mr. Chair. Again, the Prosecuting Attorney of the 16th Judicial District had filed charges against the former fire chief last August when it was discovered by the department that he had had used the fire department funds to purchase a motorcycle. He asked us to come in and look at other transactions that had occurred at the fire department. And we just looked at a small period from January 19 through August of 19.
This fire department is in Fulton County. It serves about a 20 square mile area with fire department services. We found, after looking at disbursements, that there were, including the motorcycle, which cost $3,600. There was a total of $8,000 that we did not think were proper, included lodging that wasn't for department purposes, motorcycle parts and accessories, sunglasses.
All of this appears to have been purchased by the fire chief. We also found a 3,000 cash withdrawal from the bank that had been made by the fire chief. We examined equipment and found that there were two light bars, costing a little over $1,000 that could not be located. And we also learned from talking to department personnel that the department had used over $600 to buy supplies for a fish fry for a fundraiser known as fill the boot, which was held.
But what we found that there were no deposits, of course all of this would have been in cash. no deposits occurred after this event to record any proceeds from the fundraiser. As you can imagine, we found many problems with the financial records and a lot of internal control deficiencies. The current fire chief, which is on staff now, has a detailed response in this report. It's over two pages of things they've implemented to correct a lot of their problems. One thing they've done that I think is useful is they've increased their board from six.
And the six that were there, they were married or in the same household, now have 14 board members. So this has been referred to the prosecutor, like I said, he'd already filed charges. I don't know if he'll file any additional charges based on the additional amounts we found missing. Currently, there's a trial scheduled for this in March that
Speaker 206
1:01:50
concludes my summary of this. Thank you,
Representative Danny Watson
Unverified
1:01:57
Ms. Williams, on this in-depth investigative one.
As we understand, it has to be referred on to the prosecution. Yes,
sir. Okay. And we're going to make sure this motion is considered filed.
Speaker 60
1:02:16
Thank you, Ms. Williams. Thank you. Okay, on to page 14. We have several findings throughout these refer to the prosecuting attorney
Speaker 22
1:02:23
that involve the fraudulent check issue that we've talked about before. Do you all want me to read every one of those? No. Okay.
Okay, so Dover, that's what that was. So down below that we have the City of England. This is under reports referred to the prosecuting attorney still. Under the mayor and police chief, the council meeting minutes of March 23rd of 18 recognized a police department auxiliary officer for donating two new sport utility vehicles, vehicle one and vehicle two, to the department. Subsequently, in September of 18, the auxiliary officer purchased vehicle one and vehicle two with a police package option at a cost of $51,243 each.
While Vehicle 1 was titled in the name of the city and added to the city's fixed asset record and insurance coverage, Vehicle 2 was titled in the name of the city and the name of the auxiliary officer and was not added to the fixed asset record but was added to the city's insurance policy. When this individual resigned as an auxiliary officer on January 28th of 19, Vehicle 2 was removed from the city premises. City personnel indicated that the auxiliary officer was unable to title Vehicle 2 in only her name because it had been purchased with a police package option,
which required a government entity name on the title. In the process to remove the city from the title of Vehicle 2, the current city attorney stated that this auxiliary officer indicated she had a written agreement drafted by the former city attorney with the former mayor and the former police chief that the city would provide insurance and license tags for Vehicle 2 as long as she remained an auxiliary officer. According to the current city attorney, the auxiliary officer never intended to donate Vehicle 2 to the city, since she had her name included on the title. As of report date, vehicle two remains titled in the name of the city
and the former auxiliary officer on the city's insurance policy and in the possession of the former auxiliary officer. Now, we did get a response on January the 16th that stated the city's name has been removed now from the vehicle's title and the vehicle has been removed from the city's insurance. If there are no questions, staff would recommend
Representative Danny Watson
Unverified
1:04:30
we file. No questions for the committee. Representative Gonzalez, go ahead, sir.
Speaker 212
1:04:37
Yes, I just wonder who owns the vehicle now. She can't title it. What happens with that? She's got
Speaker 22
1:04:46
the vehicle, and I assume, I mean, I guess that's on her. As long as it's out of the city's name, how she titles it would be between her
Representative Danny Watson
Unverified
1:04:58
and the state. All right. Just wondering. Any more questions? No further questions? Matter
Speaker 22
1:05:05
considered filed. Thank you. At the bottom of page 14 under Green Forest, we have one of the fraudulent check issues.
Representative Danny Watson
Unverified
1:05:11
Staff would recommend we file. No questions on
Speaker 22
1:05:22
Green Forest? Matter considered filed. On page 15, under the City of Lepanto, we have a finding referred to the prosecuting attorney. A council member who served concurrently as code enforcement officer received a weekly salary payment without an authorizing ordinance or supporting documentation in apparent conflict with 1442-107 and 1459-105.
If there are no questions, staff would recommend we file. Any
Representative Danny Watson
Unverified
1:05:47
questions on the City of Lepanto? No. No questions, matter consider filed.
Speaker 22
1:05:58
At the bottom of that page, under Mount Ida, we have another fraudulent check issue. If there are no questions, staff would recommend we file. No question, matter filed.
On page 16, we have the City of Newport. This is still in the reports referred to the prosecuting attorney. A review of retirement payments to a former mayor indicated the city did not adhere to Arkansas Code Annotated 24-12-12-123 when calculating the benefit amount. The former mayor left office in 94 with 22 years of service. On March 14th of 96, upon reaching age 60, he became eligible for retirement, and the city began paying monthly benefits of $1,344. However, according to City Council Minutes, the monthly benefit should have been $1,275, based on the mayor's annual salary of $30,696,
and Arkansas Code Annotated 24-12-12-12-23 is interpreted by Attorney General Opinion 2009-003. This difference resulted in overpayments totaling $19,356 during the period from March 14th of 1996 through August 31st of 2019. It should be noted when the mayor was initially elected, the position was unpaid. We were unable to determine when the former mayor began receiving a salary and what amount was used to calculate the benefit amount paid because his first person L file had been destroyed
in noncompliance with 1459-114, which designates employee retirement documents as permanent records. We recommend the city and the city council and the mayor obtain legal counsel to determine and how to resolve the overpayments. And then we have a fraudulent check under that. If there are no questions, staff would recommend we file.
Representative Danny Watson
Unverified
1:07:47
No questions, committee. Matter filed. Thank you.
Speaker 22
1:07:55
On page 17, under reports referred to the prosecuting attorney, we have the city of Ozark. The district court clerk actually had a repeat finding, was invited to be here today, but she had concerns about the weather, and so she requested to defer this until February. They did have a finding referred to the prosecutor, too. The city moved two certificates of deposit from one financial institution to another, which resulted in early withdrawal penalties doubling $2,354 in conflict with the public purpose doctrine.
as discussed in Attorney General Opinion No. 91-410 and Article 12, Section 5 of the Constitution. Staff would recommend that we defer this into the February meeting. Any questions for the
Representative Danny Watson
Unverified
1:08:45
committee? No questions deferred until the February
Speaker 22
1:08:53
meeting. On page 18, we have the City of Searcy. we have two findings referred to the prosecuting attorney and one repeat finding as disclosed in
our 17 and 16 audit reports that is september 5th of 18 november 2nd of 17 a review of payments to three individuals who qualified for retirement benefits indicated the city did not adhere to the 24 12 121 through 123 when calculating benefit amounts paid through september 30th of 17 we recommended this mayor and city council obtain legal counsel regarding how to resolve the amounts over and underpaid to these three individuals and to assist with calculating future retirement benefits. On February 18th of 18, the Attorney General issued opinion number
2017-123 addressing one of the retirement overpayment matters. Then at its April 10th of 18 meeting, the council instructed the city attorney to request a declaratory judgment from the applicable circuit court regarding the retirement benefit payments, which he requested on July 10th of 18. The city has continued paying the benefits awaiting the court's ruling. The repeat finding is under the district court clerk. She was unable to identify 127,371 remaining
in the bank account. Her husband was having surgery today, and she requested to defer to of the February meeting. And then the other matter referred to the PA was a fraudulent check. Staff would recommend we defer this
Representative Danny Watson
Unverified
1:10:27
to the February meeting. Or the explanation on Searcy. Any questions,
we're going to defer this on to the February meeting. Thank you. The city of
Speaker 60
1:10:39
Swifton is next, and if you'll go to page 20.
Speaker 22
1:10:44
There was just a fraudulent check issue on that one. Staff would
Representative Danny Watson
Unverified
1:10:52
recommend we file. No questions. Matter filed. The
Speaker 22
1:10:56
same with Star City, which is just below that. It's also the only finding was a fraudulent check
Representative Danny Watson
Unverified
1:11:04
issue. Questions on Star City, committee members? Matter considered filed.
Speaker 107
1:11:12
Okay, Yale County, also on page 20, still under reports referred to the prosecuting attorney.
Speaker 22
1:11:18
An analysis of the sanitation funds accounts receivable subsidiary ledger revealed that two trash collection businesses owed sanitation fees of $41,160 and $22,109, respectively, December 31st of 2018. At June 30th of 19, the balances due for these same two businesses were $55,545 and $21,609, respectively. These balances conflict with Arkansas Constitution Article 12, Section 5, which states that no county shall appropriate money for or loan its credit to any corporation, association, institution, or individual.
Additionally, the county does not have a policy in place regarding collection of amounts due for sanitation fees. And if you'll go to page 21, we have another finding there regarding the EMS department. In 2016, we issued an investigative report that reviewed selected transactions of the Yale County Emergency Medical Services, which is a nonprofit organization governed by a five-member board of directors appointed by the county judge. Issues disclosed in this report included unauthorized and or undocumented payments totaling
$528,000 to EMS Director Sidney Ward and $119,000 to bookkeeper Donna Ward, as well as $31,000 in health insurance premiums paid on behalf of her dependents. The employment of both individuals ended October 27th of 2015 and both subsequently pled guilty to felony theft charges. Our recommendations include that the board review the EMS Personnel Policy Manual and update the policies, if deemed necessary, to ensure the manual contains current board directives. The manual also should include types of compensation and all other benefits available to employees.
Finally, management should ensure adequate employee time records are maintained to document regular and overtime hours as well as annual and sick leave accrued and used. Until it was leased to a private firm, the county operated the EMS department from July 9th of 18 to February 21st of 19. During the period of county control, multiple EMS employees received payouts for unused annual, including holidays, and sick leave, totaling $79,453 and $5,273, respectively, as noted in the table below.
According to county policy, employee annual leave does not accumulate year-to-year and is only paid upon separation of employment up to certain maximums for the current year accrual. Regarding the payment of sick leave, the policy is silent. In addition, leave records were not available to substantiate the accrual and use of annual, including holidays, and sick leave for employee 1, and the pay rates per hour were not supported with documentations for employees 1 and 3. And you can see the amounts in that table below.
Speaker 194
1:14:03
If there aren't any questions, staff would recommend
Representative Danny Watson
Unverified
1:14:09
we file. Any questions, committee members? No questions, a matter filed.
Speaker 22
1:14:28
On page 23, we're still under the reports referred to the prosecuting attorney. We have the town of Biggers.
The town paid expenses of $11.69 and $4.87 and $18 and $17, respectively, on behalf of a volunteer fire department for retirement and other benefits without a contract in conflict with Article 12, Section 5 of the Constitution as interpreted by Attorney General Opinion No. 92-099. If there are no questions, staff would recommend we file. Any questions for the committee? Representative Rye, go
Representative Danny Watson
Unverified
1:15:00
ahead. Yes, sir. Thank you, Mr. Chairman.
Representative Johnny Rye
Unverified
1:15:06
Marty, one question here, which speaks about the 1169 and 487. Yes, sir. And it goes on down even farther, and it mentions other benefits without a contract. Now, what does that mean, Marty? The Fire Department, the volunteer
Speaker 22
1:15:21
Fire Department would be a nonprofit agency, and the town just can't give money to them without some kind of agreement. All they need to do is come up with a contract, you know, to say something like, in exchange for services of the Volunteer Fire Department, fighting fires, whatever,
we're going to pay these expenses. They could do it if they would just do a contract. Thank you,
Representative Danny Watson
Unverified
1:15:49
Marty. Thank you, Mr. Chairman. Any more questions? Committee. No further questions. Matter filed.
Speaker 22
1:15:55
Okay. At the bottom of that page, we have the City of Carraway. The first finding referred to the PA. It had to do with a fraudulent check. There's another one on, excuse me. You know, that's all on Carraway. Staff would recommend we file if there aren't any questions. No questions.
Speaker 192
1:16:12
A matter filed. On page 24, we have the
Speaker 22
1:16:19
Town of Cash. The Town paid $8, 10, $3, 36, 86, and $2, 47 for tobacco products, meals, and other undocumented items, respectively, from local convenience stores without supporting documentation or indication of a business purpose in noncompliance with $14, 59, and 105. Based on conversations with the mayor, recorder treasurer, and police chief, these items were approved by the mayor and primarily for the county jail work release inmates who performed services for the town.
However, documentation was not provided to support this claim. If there are no questions, staff would recommend
Representative Danny Watson
Unverified
1:16:54
we file. Any questions on the town of Cash? No questions.
Speaker 22
1:17:05
have the City of Gilmore, still on page 24. The recorded treasurer, this was referred to the prosecuting attorney, the recorded treasurer payroll preparer received salary payments of $9,242
without supporting documentation and noncompliance with code. Therefore, we were unable to substantiate that the amounts paid were proper. And that's the only one on Gilmore that was referred to the prosecuting attorney. If there are no questions, staff would recommend we file. If no
Representative Danny Watson
Unverified
1:17:39
questions, committee members, matter filed. On page 27,
Speaker 22
1:17:53
we have the city of Mulberry, they only had a fraudulent check finding.
Staff would recommend we file. Any questions, committee members? No questions. A matter of file. Still on page 27, and we're still under reports referred to the prosecuting attorney. On the city of Reno, the city paid expenses of $5,506 and $4,004 and $18 and $17, respectively, on behalf of a volunteer fire department for utilities, retirement,
and other benefits without a contract in conflict with Arkansas, Constitutional Article 12, Section 5 is interpreted by Attorney General and Opinion Number 1992-099. This is the same situation we discussed just a minute ago. If there are no questions, staff would recommend we file. No
Speaker 223
1:18:48
question, committee members. Matter filed. The city
Speaker 22
1:18:52
of Walnut Ridge had a fraudulent check. Staff would recommend we file. No questions.
Committee members, Matt are filed. On page 28, we have the city of Weiner. They also had a fraudulent check. Staff
Speaker 107
1:19:15
would recommend we file. No questions. Matt are filed. Just below that, still on page
Speaker 22
1:19:20
28, and still under reports referred to the prosecuting attorney, the county clerk's office employees reported, and we confirmed that the county clerk overpaid eight employees and non-employees a total of $7,628 in gross salary from April 17th of 2018 through September
3rd of 2019. The overpayments resulted from direct deposits being made into bank accounts of individuals who had left county employment or were on leave or the overtime rate instead of the regular rate being used to calculate salary payments. Our review also revealed that overpayments were included in two employee salary reported on their 2018
Speaker 194
1:19:51
W-2s. If there no question, staff would recommend we file. No questions. Matter filed.
Speaker 22
1:20:09
On page 30, now we're down to reports with repeat findings. We have the city of Parkin. The clerk treasurer was invited to be here today. I did not hear from her. Staff would recommend we defer
Representative Danny Watson
Unverified
1:20:26
this to the February meeting. Any questions or explanations? City of Parkin deferred the
Speaker 22
1:20:39
February meeting. On page 31, up to the top of page 32, we have four reports that we call with findings.
These are some that we had not received response letters to when this was printed. Since then, I have received responses
Speaker 194
1:20:53
on each one that adequately addressed each of their findings. Staff would recommend we
Representative Danny Watson
Unverified
1:21:02
file these. Any questions, committee members? Matter
Speaker 107
1:21:11
filed. Okay, so now on between, let's see, from page 32 to 35, we have
Speaker 22
1:21:16
14 reports with findings that have adequate responses.
We'll be happy to answer any questions about those, but if there are no questions, staff would recommend
Representative Danny Watson
Unverified
1:21:44
we file these reports. No question, committee
Speaker 107
1:21:49
members. Matter filed. And then on pages 36 and 37, we have 57 reports that had no findings.
Representative Danny Watson
Unverified
1:21:54
Staff would recommend we file these as well. Any questions on these? No
questions, a matter filed. Senator Cooper, nothing else come before the board? We're adjourned. You
Agenda
A. Call to Order by Chair
B. Adoption of Minutes of the December 12, 2019 meeting
C. Review of Reports (Refer to the Synopsis)
D. The next meeting will be February 27, 2020
E. Adjournment
Documents
| Title | Type | Pages | Source |
|---|---|---|---|
| Agenda — LEGISLATIVE JOINT AUDITING - COUNTIES AND MUNICIPALITIES, Jan 23, 2020 | Agenda | 1 | Official source ↗ |
Speakers
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Representative Danny Watson
Unverified
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Kimberly Hutchison
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Senator Mark Johnson
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Ernestine Broadway
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Representative Johnny Rye
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Sheila Mangrum
Unverified
Matthew Smith
Unverified
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Speaker 70
Josie Vazquez
Unverified
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