Legislative Joint Auditing-Counties and Municipalities
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Speaker 1
0:01
Okay, let's call this meeting of City-County Local Audit to order, and ask everybody to silence your phones, and conversations, we'd ask that you take them outside, please. Ms. Steele, are you ready? I need to approve the minutes from last time. Yeah, yeah. First item is to adopt the minutes from the January 28th, 2020 meeting.
Speaker 2
0:33
Do I hear a motion from a member of the committee to adopt those minutes? Hear a motion, second. All in favor of adopting
Theron Mccammon
Unverified
0:46
of the minutes, say aye. Any opposed? Motion carried. Next item, item C is discussing of Arkansas
Speaker 8
0:58
Code Antonated 1459117. Ms. Steele. We are going to discuss Allport and Jericho again.
Speaker 10
1:03
They are the two cities that we are going through the process now of withholding term back due to non-compliance with the municipal accounting law. The update on Allport is that some improvements were made for 2018. We were supposed to meet with them this week, but the recorded treasurer had the flu and couldn't
Speaker 8
1:23
meet with us. But the last we knew, they had done nothing for 2019. So it's staff's understanding that they are still in substantial non-compliance with the municipal accounting law.
So it would be up to the committee whether or not to go to the next step with them, which this is, they're on their second round, they're already having all of their turn back withheld. And this would be on the second round for having 100% of their turn back withheld. which due to the bill that was passed a couple of years ago, if they go through one more step, then they would be at the end of having this completed for the second time within three years, which would make them eligible for the committee to have the option to dissolve
their charter. So they're still a step away from that, but it
Speaker 11
2:13
would be up to the committee as to what they recommend to do this time, whether to continue the process or not. Any
Chair
Unverified
2:41
discussion from the committee? Chairman, is there anyone here from Allport?
Speaker 10
2:45
No one was invited to be here. This is just the next step in this process.
Speaker 8
2:50
Their 60 days were up back in February. I mean, earlier this month, a couple of weeks ago. And this was just the next step
Speaker 21
3:02
in the process. Okay. Senator Johnson. Thank
Senator Mark Johnson
Unverified
3:10
you, Mr. Chairman. Ms. Steele, my question is, I want to carefully say this. And, again, I'm asking you for your opinion.
I'm asking you for some facts. Have the city officials been relatively forthcoming with information and trying to alleviate some of these things, or do you perceive that perhaps they haven't been as forthcoming as they should be? I said that well enough. This process started back
Speaker 11
3:41
in 2017. And so we've had since like October of 17
Speaker 8
3:47
up until now for all this to have gotten straightened out.
I know they have had some turnover in officials, and I'm not sure what's happened with the new officials. But again, we have been in contact with them. We contacted them just this week, and they couldn't meet with us. And so I don't know right
Speaker 31
4:10
now. but we will meet with them again before we go to the next step, and we will make sure that we go and look at their records before we do anything drastic.
Senator Mark Johnson
Unverified
4:21
Obviously, this is not something new or even in the last year or so.
This has been a chronic problem, shall we say. Yeah, it is. At the proper time, I would consider a motion, Mr. Chair. I'll
Speaker 2
4:39
yield back my time now. Thank you. In the meantime, anyone else have any comments? Representative
Representative Johnny Rye
Unverified
4:44
Rye. Thank you, Mr. Chairman. Ms. Marty, a question for you, ma'am. What do these folks need to do to get their self straightened out? What would be some guidelines that you would give them to get them on the right track?
Speaker 8
4:58
We have suggested they go to the Municipal League for training, which the Municipal League has excellent training. The steps they need to do are all lined out in the Municipal Accounting Law, reconciling bank statements, keeping journals, writing receipts, writing checks, all that is in the Municipal Accounting Law. And again, the Municipal League offers all kinds of training and the town is aware of that. So I don't know
Speaker 39
5:21
what else to recommend to them that we haven't already.
Speaker 40
5:29
You're welcome. Anyone else? Well, obviously,
Speaker 2
5:32
we have an ongoing problem, and we've started the process, and the process is not to
Chair
Unverified
5:42
the end yet. So, Senator Johnson, you
Senator Mark Johnson
Unverified
5:49
have something else here? If it is in order, Mr. Chairman, I will move that we instruct the staff to proceed with the next step in the process to consider revocation of the charter or any other sanctions that could help resolve this issue
and protect the interests of Arkansas taxpayers, if that is a proper motion. Yeah,
Speaker 44
6:16
I think she has something she needs to clarify on
Speaker 8
6:20
that motion. Just to clarify, we have one more step to go before that, and the committee will not meet again until June. So they'll have from now until June as well to make any improvements that they decide to
Senator Mark Johnson
Unverified
6:35
make. So if I were to withdraw my motion and simply request
that the staff continue with this process
with an eye toward some kind of a final resolution at our June meeting, would that be an appropriate way to handle it, Ms. Steele? No. All
Speaker 48
6:54
right. So that would be the process. Just continue the process is what your motion, yeah. Yes, sir. Is it clear now?
Senator Mark Johnson
Unverified
7:01
Yeah, it is. Chairman, okay. Thank you, Mr. Chairman.
Representative Johnny Rye
Unverified
7:10
or a discussion? Discussion, sir. Thank you, Mr. Chairman. Ms. Marty, you do a great job.
Boy, I would let these folks know just how serious this is because they're going to lose their town if they don't
Speaker 8
7:23
get this straightened out. They'll all get letters. the council members, the officials, they'll all get letters spelling it all out, just exactly where they are in this process. I think
Chair
Unverified
7:33
that's already been communicated to them, Representative Rye. Okay. Second. All in
Speaker 1
7:38
favor of the motion, say aye. Aye. Any opposed?
Speaker 11
7:47
Motion's carried. Thank you. On Jericho, we're at the end
Speaker 10
7:55
of the first round of this. We have, their turn back has been withheld at 50%, then at 100%. The step now would be to forfeit the turn back that has been withheld and it would be distributed to other municipalities. We visited with them this week and they also have made some improvements. However, we're still not getting bank reconciliations for
Speaker 8
8:17
general fund which would keep the council from making informed decisions if you don't know how much money you have
Speaker 10
8:27
and the financial statements have not been posted for 2018. There's still some several things that they have not done that it would make them in substantial compliance with the municipal accounting law.
Speaker 31
8:38
Staff would recommend that we proceed with them
Speaker 2
8:42
as well. Okay. Any Any questions concerning this item?
Chair
Unverified
8:50
Okay. Do I hear a motion from the committee to proceed with this group? I have a motion and second. All in favor say
Speaker 1
9:02
aye. Aye. Any opposed? Motion is carried. Next item is
Speaker 10
9:07
Steele. And just to let you know, they too will all get letters and they'll have every opportunity to improve and to come into compliance. Okay, so now I guess we'll start reviewing reports. Item D, review reports.
The first report we'll review is the City of Ozark. This was deferred in the previous meeting. We have a repeat finding on the district court clerk. This is on page one of your synopsis. Monthly settlements were not made in a timely manner as required by Arkansas Code. And I believe the district court clerk is here to address her
Speaker 2
9:49
finding. I feel like in 2000. Would you identify yourself, please, for the record? And you're recognized to proceed.
Speaker 67
9:55
Okay. Sherry Lowry. And I feel like in 2019, I've done better. I've put things aside and, you know, made that my top priority. There may be a couple of months that I wasn't on time in 19, but I feel like I've corrected this matter. Sometimes when you don't have a lot in your office, you have to figure out what's most important, and so we don't have extra help to take up the slack.
But I feel like I have corrected it and done a better
Chair
Unverified
10:43
job. So do you think you're in compliance with everything now? Yes, I
Speaker 2
10:56
do. Okay. Any questions from the committee? Okay. If there's nothing else, keep working and stay in compliance,
get in compliance with the things that you're not, and thank
Speaker 18
11:12
you for coming in. Thank you. Thank you. The next report is on
Speaker 10
11:16
page two, the city of Searcy. There was a repeat finding on the district court clerk. The district
Speaker 18
11:21
court clerk was unable to identify $127,000 remaining in the bank account with receipt numbers for cases not yet adjudicated and payments on all unpaid individual time accounts as required by code. A
Speaker 8
11:31
similar finding was issued in the previous six reports.
And I believe Ms. Maddox, the
Speaker 74
11:42
Linda Maddox. Okay. You're recognized to make a statement. Thank you. We have struggled with this for the past several years, and it began when we changed a software system. We went to one that did not have a very good accounting component. We have cut this in half, actually, over the years.
And we remain working on it. My plan, if we can get it at a stable amount before the end of this year, is to pay it out so we can start
Theron Mccammon
Unverified
12:27
fresh. What software system are
Speaker 74
12:30
you referring to? This was Relativity Police Systems. I think in our case, our chief of police chose it, and it was a good system for them.
And in some ways, it was good for us, but we had the system probably three or four months before they even had it written, had a program written for us to settle our money at the end of the month. So, um, we just haven't fully recovered from that, but we, and then, and also we're shorthanded in that side of the court, and, uh, so we can't spare a lot of time working on it.
However, we have, uh, when we changed, uh, to context, then a lot of our theft of properties, Hundreds of them weren't imported, so
Speaker 75
13:32
we've had to do all that by hand, enter all
Theron Mccammon
Unverified
13:39
those cases. So is there money missing in this, or is this an identity of money? No, this
Theron Mccammon
Unverified
13:53
just unidentified. Yeah. Okay, so of the 127.371 that was identified in the finding,
how much of that has been identified now to this point? I really
Speaker 82
14:06
don't. I couldn't tell you. I really don't know at this point.
Theron Mccammon
Unverified
14:19
Okay. Okay. What does the response mean when it says it is our intentions to distribute the money when
Speaker 74
14:28
the amount becomes stable? Well, when it has fluctuated from year to year, just by small amounts,
we went from like $200,000 down to where it is now. And then there was a slight uptick in this finding. But I hope by the end of the year that we can have it stable enough that we can get at least back down to where it was so we can distribute the
Theron Mccammon
Unverified
15:02
money. So in six previous audits, we've
Chair
Unverified
15:06
had similar problems for quite a long time?
Speaker 74
15:09
Yes, sir, ever since we converted to that system.
Chair
Unverified
15:23
I'm not resuming. Okay. Okay. Okay. Any questions from the committee? Go
Representative Lane Jean
Unverified
15:33
ahead. You're recognized. I was looking on the final finding. It said $11,488 was unauthorized, withdrawn.
Y'all recovered it. Were y'all hacked? How did that happen? That's not our court, is it? Yes, it is. Can staff, it's the final finding under Searcy.
Speaker 18
16:02
That's one of those fraudulent check findings that so many of the cities have been hit with.
Speaker 8
16:09
So it was fraud? Yes, but it was someone outside from somewhere.
I mean, it's been nationwide. Okay. Some people have been getting hit with that. It
Speaker 96
16:16
didn't say that, so I'm just wondering, were they
Speaker 1
16:36
being hit by fraud? Yeah, they were. Thank you. Okay. Anyone else? Okay, nothing else without objection, we'll file it. Thank you for coming in, and you're dismissed.
Speaker 18
16:43
Thank you, sir. Thank you. Our next report is on page four. Actually, it starts on page two at the bottom of the town of Jericho. But the repeat findings are on the police chief,
Speaker 10
16:57
and that's on page four. At the top, this is another one that was deferred from the previous month. The ending balance remaining in the police bond and fine account was not identified with receipts issued for cases not yet entered on the arrest report as required by
Speaker 18
17:11
code. A similar finding was noted in the previous four reports dating back to 2010.
And the police bond and fine account was not properly reconciled as required by code. And again, this
Speaker 103
17:24
was noted in the previous four reports dating back to 2010. I believe the police
Speaker 106
17:30
chief is here to address these findings. Yes, I am. Okay, please identify yourself, please, and you're recognized. Okay, I'm
Speaker 108
17:37
Chief Roy Hill from Jericho here. First of all, let me apologize for this matter here. In the past, I think we just didn't know how to go about doing that.
But since we talked to the legislative audit here and we got people to show us exactly how it needs to be done. And at that point there, for the end of balance in the police bond and fine account, that extra money that was in there, they would suggest that we just take that extra money out there and put it to the general fine account. And the police bond and fine and bank account was not proper reconciling. They showed us how to do that, and that is being completed at this time. Okay.
Chair
Unverified
18:18
Any questions from the committee? Senator Johnson? Thank
Senator Mark Johnson
Unverified
18:24
you, Mr. Chair. Ms. Steele, what the Chief said about moving that around, is that appropriate way of handling those funds? And I'm not questioning if it's okay. I'm saying
is this the way it's done to fix things in other cases?
Speaker 112
18:41
What we normally recommend is that you wait and
Speaker 8
18:45
reconcile several months in a row until you're off the same amount every month,
so you know that that's probably an amount that you'll never find. and then you contact,
Speaker 31
18:55
you have an equitable method to distribute that between the general fund and the other places that that money
Speaker 108
19:02
would go. That is something that we have identified a certain amount there that we could do that. Okay.
Senator Mark Johnson
Unverified
19:11
And if I could follow up, Mr. Chairman. Sure. Chief, have you contacted anyone with the Municipal League to help you try
Speaker 108
19:18
to get this sorted out? Yes, sir. They was there on Tuesday and then the week before that, helping us with this.
Senator Mark Johnson
Unverified
19:26
Okay. Well, I appreciate you moving in the right direction on this and trying to resolve it. Thank you very much,
Speaker 1
19:35
Chief. Thank you, Mr. Chair. So have you identified people that this money belongs to? As far
Speaker 108
19:42
as I can determine, you know, before I came Chief there, that account was open, And that extra money was sitting in that account, so we don't know who it was. So after each court, we will move out all the money that was allocated for that money.
Then that money is just left there. So I don't know what that money is or who
Speaker 2
20:05
it does belong to. Okay, any other questions? Seeing none,
Chair
Unverified
20:11
without objection, we'll file it. Thank you for coming
Speaker 18
20:16
in. You're dismissed. Thank you. Thank you, sir. The next report we'll review is on page 14. It's the city of Gravett. We have repeat findings on the mayor and the city treasurer.
The repeat findings, the city improperly disbursed funds totaling 3,362 in apparent conflict with the public purpose doctrine. And Article 12, Section 5, as interpreted by Attorney General Opinion Numbers 9114 and 892-099, 2802 was paid on behalf of or dispersed to the Gravette Community Foundation related to a fundraiser and a gala event, and 560 was dispersed to the Greater Gravette Chamber of Commerce. A similar finding was issued in the prior report.
And then on down, we have, under other matters, we had another one of those fraudulent check findings that was referred to the
Speaker 10
21:09
prosecutor as well. And I believe someone is here to address these findings. Mr. Carl Raby. Yes, sir. Okay. Identify yourself
Chair
Unverified
21:19
and you recognize, please, for a stop. Hi. Afternoon, ladies and
Carl Raby
Unverified
21:23
gentlemen. My name is Carl Raby. I am the finance director for the city of Gravit. The mayor and the recorder could not be here today.
They have a very important item tonight on the council agenda. So they have to be there for the council meeting, which starts at 6 o'clock. So as far as the misuse or the use of funds not for public purpose, that is a misunderstanding on our part. We were under the impression that since the end use was for the public library, that we were okay being involved in that situation.
And the way that worked was the library commission put on the gala, and it was paid for through the community foundation. And we helped fund the original cost of the gala. and when the gala was put on and they collected ticket revenue we were then reimbursed for that money so there is no money missing quote unquote it's just a matter of we misinterpreted that we could use that
money to fund that project and we no longer do that we have stopped our involvement with the community foundation as far as that goes As far as the fraudulent check goes, we were able to recover those funds within about 10 days. We identified the fraudulent check. It was the out-of-state check from the state of Colorado,
where they had somehow gotten authorizing signatures that they then placed on that check. We were able to recover those funds. We have since instituted positive pay, which means that when the bank has to pay, we send over to the bank every day a list of the checks that we cut. And they're supposed to bump any checks they cash up against that list. So if they don't cash any checks, they're not originated by us.
The other thing that we do is I reconcile the three operating accounts on a daily basis. So if anything does happen, I
Theron Mccammon
Unverified
23:56
know it within 24 hours. Okay. Thank you. Sounds like you're on the right track there, and you did institute
Speaker 2
24:06
procedures to stop the process from recurring on the use of the gala event fundraising activities. Yes, sir.
It's been a long haul. Okay. And any questions from the committee? Seeing none. Sorry. Seeing none. So without objection, we'll file it. And you're dismissed, and thank you for coming in. Thank you. Have a
Speaker 18
24:34
good day. The next report we'll review is on the same page, still under reports referred to the prosecuting attorney.
Speaker 10
24:40
It's the Ouachita County. We have a finding on the county judge and county clerk that was referred to the prosecuting attorney.
Speaker 18
24:47
The county paid a Christmas bonus of $1,354 to a former jail employee nearly two months after his employment ended. As of report date, the county has not attempted to recover the overpayment. Continuing on the
Speaker 10
25:01
next page, we have a finding under the county judge that is both repeat and referred to the PA. Five assets totaling $70,924
Speaker 18
25:08
were sold as scrap metal without the county assessor determining the assets were of no value to the county and were not properly reported to the quorum court. in noncompliance with 14-16-106.
Additionally, documentation was not maintained detailing the amount of revenue received from the sale of these
Speaker 10
25:24
assets as scrap metal. A similar finding was issued in the prior report. Then under the sheriff, we have two repeat findings. The sheriff's office is not providing a copy of the communications facility and equipment fund reconciled receipts and disbursement journals to the county treasurer by the 10th day of each calendar month in noncompliance with code. Additionally, commissary proceeds were not properly remitted to the county treasurer as required by code.
Speaker 18
25:49
A similar finding was issued in the prior report. Expenditures from the Sheriff's Communications Facility and Equipment Fund were not all made by pre-numbered check and noncompliance with code. A similar finding was issued in the prior report. And the county judge is here to
Speaker 10
26:05
address his findings, and I'm not sure if someone's here from the sheriff's office or not. No, ma'am.
Speaker 127
26:17
No. Good afternoon. I'm Robert McAdoo, Washtenaw County Judge.
Okay. And thank you for having me here. I passed out a sheet there that has the reportable findings and the supplemental findings. On the reportable findings, they're listed in one, two, three order. attached to it are copies of where we now use to address these reportable findings. And I have them in order so you can see examples of them.
Speaker 131
26:53
And I do want to talk to you just a second about the... Hold
Speaker 2
26:58
on just a minute. Has the committee got something he passed out? Did
Speaker 131
27:06
you not give him one? Sorry, miscommunication. You guys are getting it. She's got them. There's plenty.
Speaker 119
27:33
that's okay okay let's let's start over
Speaker 127
27:49
with that yes sir absolutely uh item number one there was written up a court order assessor of value and equipment is zero uh what happened on that one is it was written in 17. Uh, it reoccurred again in 18 and, uh, what reoccurred before my exit conference in
18. And so if you'll see, there's an example now of, uh, reporting, uh, court order to the treasurer identifying by serial number and make and value and, uh, also reporting to the quorum court monthly when anything is scrapped. Since this court order, nothing has been scrapped other
than rusted out pipes that come out from underneath roads, and they're not on fixed asset list. But that is also reported monthly now to the quorum court. Once again, nothing has ever been sold. It's always been either traded in or scrapped. Okay. But the procedure for scrapping was not followed by the annotated code, but it is now.
Speaker 2
29:15
in there that takes care of somebody selling publicly owned material for scrap for personal profit okay what's that no procedures uh allows somebody to sell scrap metal for personal profit that's taken care of as if that would yes sir that has never been in question
Speaker 127
29:37
yeah i know okay just noticing all right yeah when you said that i thought that caught me off guard yeah
And then on the $1,354, sir, and if you'll see on page 3, the inventory that we do every year, and I have 19's copy and 20's copy with me, each employee that drives a vehicle or operates a piece of machinery has to fill out this personal inventory sheet, and we put it, we check it against a fixed ASLAT. list but there is a problem and if we have a recommendation i will certainly listen to the
pro listen to it the problem is we've got
Speaker 131
30:28
numerous items listed on the fixed asset list since the 70s and the 80s well we no longer have those items we hadn't had them since i've been county judge, but I need to get those off so we can have a cleaner
Speaker 127
30:50
list where I won't be written for these things in the future. And I've heard a recommendation today that I'm certainly able
to fill with a court order to the assessor and report to the quorum court and then remove these from the fixed asset list, it
Speaker 149
31:08
will clean up the problem immensely. Okay.
Speaker 78
31:31
Back on page 14, a Christmas bonus. Yes, sir. Tell us
Speaker 127
31:40
about that. Absolutely. We had a, first of all, our jail staff is a revolving door. We can barely get them trained and they're out the door. So it's coming and going all the time. And we had a gentleman working in the jail that he decided to just quit. And he joined the military.
and between his departure from the jail to our county clerk in payroll and my administrative assistant, he
Speaker 131
32:15
fell through the crack. He didn't get the date that he
Speaker 127
32:23
left, put in our financial intelligence software, so Christmas bonuses came around, and it directly deposited his Christmas bonus.
So, the sheriff made an attempt to try to get the money back, okay? In the military, guys gone out of town, blah, blah, you know how it goes. Who wants to pay back $1,354? So, since then, as I wrote on my response, on January the 7th, I met with the county attorney, and he is proceeding with whatever measures needed to get that $1,354 back to the county as recommended.
But since then, the last page there, to address this to where it doesn't happen again, When someone quits, this is
Speaker 131
33:21
mandatory paperwork that has to be filled out by the jail supervisor and sent immediately to payroll, so we make
Speaker 127
33:31
sure that we try to avoid having this happen again. Okay.
Any questions? I would love to answer. Okay. Any questions
Senator Mark Johnson
Unverified
33:55
from the committee? Yes, sir. Senator Johnson. Thank you, Mr. Chairman. Judge, I understand the deal about your jailer, and I know that most counties can say that there's a revolving door. I actually recommended a fellow to get a job in jail, and I called the sheriff to see how he was doing it, and he told me he'd already quit. So I understand your problem on that, and I'm not worried. The thing that really bothers me, though, is when I see something that's $70,924.
clerical. I'm just not sure, you know, I see your procedures you put in there, and that makes sense, but if that were a much smaller amount of money, I could maybe see, but can you elaborate on what that is? I mean, I was looking at this here about the pickups, and one of them, it said it had a blown engine, but it was a, it was like a 2006, and you know, I've got a 95 pickup, and If it blew the engine, it'd still have a lot of valuable parts in it. It wouldn't be worth zero for scrap.
Speaker 141
34:50
So I just, could you elaborate on that a
Speaker 131
34:57
little bit? Absolutely. Yes, sir. Okay, there was one F750 truck that had a blown diesel engine in it, and it was a real 70s or 80s model. The 2006 truck that you're referring to, sir, we used in our jail on our litter crew. And no, I'm sorry.
It was a state bed truck that we had pulled parts off of numerous times to fix our jail litter control truck. Uh, and so, uh, the other things were like, we had four or five drag, drag line buckets that fit on old drag lines, just sitting around and they have no use.
They have no use. So they were taken across the scales. I don't know if they would ever have a fixed asset number on them or not, sir. But with the weight of those drag lines, it raises the amount that you're
Speaker 127
36:11
going to get back from it. We had another pickup truck
Speaker 131
36:17
that had a blown engine in it. It was in the 97 model. This was all stuff that was lined up on the fence at our county shop.
Speaker 127
36:30
and it was taking up room for places to where we needed to store pipes, where we needed to put gravel, store gravel. I had to
Speaker 131
36:41
clean it up. The mistake I made was this. It scrapped, and I know every single penny, and this is a procedure why
Speaker 127
36:52
I know it got to the county treasurer. When we drop off, it goes in a sealed envelope.
and the person that is handed the envelope writes on the back of it across the seal, it has to be turned in to the treasurer by the end of the day or if it's late in the day, first thing the next morning, 24 hours cannot pass before it's turned into the treasurer. The problem was this. I did not have the assessor deemed at zero value and also I had
Speaker 131
37:32
my shop man to keep up with all the serial numbers
and all those things on those items that had serial numbers and he
Speaker 131
37:47
going to put me in a bind with legislative audit. I told him he was going to put me in a bind with legislative audit. And here you are. Here
Senator Mark Johnson
Unverified
37:57
I am. Yes, sir. I think I'm starting to see the picture here, but correct me if I'm not seeing this correctly. When you see that big figure, obviously that jumps out to us.
But also know that if everybody here on the committee pitched in, we couldn't lift that drag line bucket. You're talking about a serious piece of steel that's heavy and therefore has absolute only scrap but scrap value. And is that what seemed to inflate that number so
Speaker 127
38:25
much? That's what inflated the number so much. And even to the point that I didn't have equipment to move that drag line bucket, the scrap metal place came actually on the physical site of the county shop
Speaker 131
38:41
and brought their cranes and stuff to lift that up and load it in their trucks and carry
Senator Mark Johnson
Unverified
38:48
it across the state scale. Okay. Well, then I understand now because that was the thing. That big number jumped out at me. Yes, sir. I could see how it could happen in this regard. And if the money's there and it just didn't get properly documented in the right way, then I can see how that could happen,
and I'm comfortable with it. But thank you for being forthcoming and for coming up here
Speaker 131
39:09
and answering this. Absolutely. Thank you for inviting me up.
I know you say that jokingly. It sounds jokingly, but I view legislative audit as a learning tool. And if
Speaker 127
39:21
we're doing anything wrong in Ouachita County, I won't legislative audit to tell me I'm doing it wrong. And so I certainly appreciate the opportunity to come up and, you know, see you.
Speaker 131
39:35
But I will tell you this, you won't see the scrap thing written again because I think I finally got the county shop cleaned up pretty good.
And the second thing is that you may see the fixed asset list again, but it's going to be, I know exactly what equipment we have in the county shop and the solid
Speaker 127
39:58
waste. I have the documentation here now. And after the first year that Charlie wrote it,
Speaker 131
40:03
I put in a place a personal inventory every year. I put my hands on everything every year. So I think we're headed in the right direction.
Speaker 149
40:17
We just got to get better on the clerical side and the legal side for me to get
Speaker 58
40:23
it taken off. Okay. Thank you. Thank you, Judge.
Speaker 131
40:25
Thank you, Mr. Chair. I'm sorry to take
Representative Lane Jean
Unverified
40:32
up so much time. You recognize me. Thank you, Mr. Chairman. Judge, I'm still on the clock here. Right here. Right here. Oh, yes, sir. On your Christmas bonus of $1,354, was that a Christmas bonus or was that a wage that wasn't caught?
Speaker 131
40:50
No, sir. It's not really a Christmas bonus. It was approved
Speaker 144
40:54
by the quorum court as a year-end bonus, but it wasn't a
Representative Lane Jean
Unverified
41:02
wage that wasn't caught. Okay. Okay, and y'all gave every employee $1,354
Speaker 131
41:09
for Christmas bonus? $1,500 for full-time employees, $750 for part-time employees.
Representative Lane Jean
Unverified
41:14
Okay, well, and that was approved by the Corn Court? Oh, yes, sir.
Yes, sir. You've got a lot more lenient Corn Courts than I'm used to dealing with. Yes, sir. Thank you, sir. Yes,
Speaker 158
41:31
sir. Well, we hadn't given it hardly any raises. That's the
Chair
Unverified
41:35
thing. Okay, any other questions? Representative Rye, you're recognized. Yes, sir, and thank
Representative Johnny Rye
Unverified
41:41
you, Judge, for being here. You know, Judge, you and that county assessor can do miracles together. If you've got someone that can actually come up with a good value,
McMurphy used to be down there. Remember that? Yes, sir. And he used to come up with a value pretty quick. Yes, sir. And if you could get you an assessor that could come up with some values and be accurate with that stuff, that
Speaker 127
42:07
sure would take some heat off you. I sure don't want to scrap anything else. Only thing going across the scales now is those old rusted out pipes that come out
Speaker 168
42:18
from underneath roads. Oh, man. Okay. It's been a nightmare. Fixed assets and junk has been a nightmare. Okay.
Speaker 2
42:25
Appreciate your response to that. And that takes care of your part of this, and you're dismissed. But, committee, we have some findings from the sheriff that's not here to respond to this. No, sir. He's out of state. And I think staff and the chair would recommend defer this without filing. Defer it and bring it back up on the next report.
Okay? All in favor of that, without objection. That's what we'll do, unless there's objection. Okay. Okay, next
Speaker 18
43:12
item. The next report we'll review is still under reports referred to the prosecuting attorney. It's on page 20, the city of Monticello. We have some findings referred to the prosecuting attorney and a repeat finding.
On page 20, under the mayor, city personnel informed us and we verified that $1,000 in revenue from the sale of scrap metal was used to pay for two holiday dinners for employees in violation of the public purpose doctrine in Article 12, Section 5. The city entered into a contract with Monticello Economic Industrial Development Commission for promoting and assisting in economic growth and development in Monticello and the surrounding area. The city paid utilities that were unrelated to the city and not included in the contract between the two parties in apparent conflict with the public purpose doctrine in Article 12, Section 5, as interpreted by Attorney General Opinion No. 1992-099.
A similar finding was issued in the prior report. And then we have a fraudulent check finding. Then on page 21, under the district court clerk, is a repeat finding. We noted the following deficiencies with the district court in noncompliance with 1610209 and other proper accounting procedures as indicated below. The balance remaining in the bank account of $9,006 was not properly identified with receipt numbers for cases not yet adjudicated and payments on all unpaid time accounts.
Bank deposits and withdrawals were not reconciled to virtual justice records. Credit card receipts were not reconciled to deposits. The district court made a non-monetary credit adjustment of $215, which reduced the amount of fines, fees, and costs due from the defendant. No documentation authorizing this adjustment was provided. We noted other adjustments made to dockets without judge approval to issue refunds for overpayments. A similar finding was noted in the prior
Speaker 10
45:04
report. And I believe the district court clerk is here to address her finding.
Julie Watkins
Unverified
45:10
Yes, my name is Julie Watkins. I'm the
Speaker 170
45:12
chief court clerk for Drew County District Court. And like I said last year, I was going to see you all again this year for the finding of the $9,006 because I did not disperse it until January of 2018. But it has since then been dispersed to the state. So that has been taken care of. The bank deposits and withdrawals not reconciled to virtual justice. I didn't have enough copies, so I only gave it to them up there.
but it states that it wasn't anything to do with me and saying that I didn't do anything wrong. It was out of my control, and it was an internal issue in the database. That was with MSI Consulting Group. We use virtual justice for the court system, and they are our programming, and that's who we go through. And then the credit card receipts, not reconciling with deposits. We had one clerk in control of all of the credit card receipts into virtual justice.
Since then, she is no longer with us because we have found many mistakes that she made. So we are still cleaning up that mess. And then the district court made non-monetary credit, 215. That is how we were trained to do our refunds. Um, say if someone sends us $200 and their ticket's only $180, we go in and bump up the fine to $200 so we can receipt in that $200.
Otherwise, we have nowhere to put that money. So, but then afterwards, we receipt it back down to the amount that the judge ordered, $180, and then that will give them a refund check at the end of the month. But the judge does sign off on it. Every month, I give him a list of everything that I'm going to refund, and
Speaker 171
47:10
he signs off on it. So it's not without the judge's permission. It is with the judge's permission. Okay.
Chair
Unverified
47:20
Thank you. On the software issue, tell me a
Theron Mccammon
Unverified
47:28
little bit more detail about what that is. it was out of your control, but it
Speaker 2
47:35
was an internal issue in the database. Are we talking about data, or are we talking
Speaker 174
47:40
about... It was in their programming. Programming software? Yes, sir. Okay. That was the
Theron Mccammon
Unverified
47:50
issue, was the programming. Okay, and tell me again, what's the status of that now?
Julie Watkins
Unverified
47:56
They said it's fixed. Okay. So... Okay.
Speaker 1
48:14
All right, any questions from the committee? All
Speaker 2
48:16
right, nothing else, staff recommends filing, so without objection, we will do that. And thank you for coming in. All right, thank you.
I would just like to say from a chair standpoint, anybody has any material to pass out to the committee, do it through the chair, please. So we'll make sure everybody's got the same information and got the right information. Okay. Okay, next issue, Ms. Steele.
Speaker 10
48:59
The next report we'll review is on page 23 under Reports with Repeat Findings. The City of Ashdown, this is under the Mayor. The City did not solicit competitive bids for
Speaker 18
49:12
the purchase of phone equipment, costing $38,000 and police car equipment costing $21,000 in noncompliance with $1458.303. Additionally, the city did not provide documentation of state contract and or competitive bid solicitation on the purchase of a 2018 Ford F-150 truck costing $21,000.
A similar finding was issued in the prior
James Sutton
Unverified
49:38
to address this finding. Okay, Mayor. My name is James Sutton. I'm the mayor of Ashtown, Arkansas. I would like to explain our policy. We actually receive competitive bidding on all of these issues. Our problem is we don't have a local paper to advertise. The closest paper we have is in Texas, and I don't want to buy an automobile out of Texas
when I can go to a dealership in Arkansas to buy one. In 2018, we had an attorney that was going to work on our ordinance eliminating the competitive bid in the local paper because we don't have one. And since she didn't get it done, and now we have a new attorney that is fixing this problem.
He's working on it as we speak to rewrite our own policy that we don't have to advertise locally because we can't. So that's on all three of these issues. We did receive competitive bidding on the phone system. We had four competitive bidders on the phone system, And we went with one that our IT company recommended because they know our system and they know the people that we bought the phone system from.
So we went with that. On the police cars, they were actually state bid vehicles, which we didn't have to bid out. We did have to get them equipped. and each car required a little over $10,000 to equip it. Our mistake was they billed us for both vehicles on one bill. They should have been billed to us on each individual vehicle.
That way competitive bidding wouldn't have been required.
Speaker 2
51:52
Well, staff disagrees with you on both those issues. Can you explain?
Speaker 184
52:18
Yes, I'm Dwayne Bowden with the Legislative Audit. I'm the supervisor in the area there in charge of Ashdown. And on your competitive bidding on the, we're showing the police car to be the $21,000 on the bidding, you would have not gotten two police cars for $10,000.
James Sutton
Unverified
52:50
No, when we sent the vehicles over to. Oh, you're saying the equipment. Well, the equipment cost a total of $21,000, whatever. And if they'd have been billed to us individually like the state bid, they would have come in
Speaker 183
53:11
under $20,000. Okay. Did you provide us documentation? My chief
James Sutton
Unverified
53:16
is here. I'll get him to explain. Okay.
Him and I talked about this before we bought the cars, and we were under the
Speaker 8
53:30
impression. Hold on, hold on just a minute. It's my understanding that you can't split those bids. If you ordered the equipment, even if it was on two cars, it still should have been bid, even if individually they were less than
Speaker 2
53:51
$20,000. Together they were more. So, I think to boil it down, what they're saying is you can't avoid the bidding by splitting them up into separate issues.
Speaker 192
54:04
Okay, I understand what you're saying. Okay. Then the other issue was that, um, yeah, the local ordinance can't
Speaker 78
54:11
supplant state law. Local ordinance can't. If you have
Speaker 18
54:23
an ordinance that says you don't have to, um, advertise for bids, that doesn't trump the
Speaker 52
54:29
state law that says you do have to advertise for bids.
James Sutton
Unverified
54:32
Yeah, but doesn't the state law say we can go out for competitive bidding by phone and get bids from the companies that we're looking to buy from? I don't have that in front
Speaker 8
54:47
of me, the law specifically, but it's my understanding that no, you have to advertise. And there may be, correct me if I'm wrong, there may be an allowance to do it electronically. but I think
you still have to advertise. You can't just call. I think you still have to
Speaker 2
55:08
put it out for bids. If I remember right, didn't we deal with some of that in the last session or two? Wasn't there something we did? Yeah. I think we dealt with that, but it still requires bidding. But I do remember that we had something similar. When you go out
Speaker 178
55:26
for bids with no advertising and you get no bids, what do you do?
Speaker 8
55:35
And we've done that. You document that, that you didn't get any bids, and then I
Speaker 203
55:47
don't know, what was the next step, Dwayne? That's all. It was documented. I didn't get
Speaker 2
55:53
bids, yeah. But you have options to do it electronically, even though you don't have a paper in the area. I think that's
James Sutton
Unverified
56:00
what you're saying. Well, I realize you can get on City and Town magazine and accept bids.
Or the city of Ashdown is now accepting bids for whatever. But we didn't go that route. But if that's what's required, that's what we'll do. The attorney is working on this, and if he finds a fault in it, which he will, we'll go by whatever he recommends. Yeah. Okay. Yes, sir. And the Municipal League is good. They can give you
Speaker 204
56:28
some legal advice as far as that goes as well. Ms. Prezell is here. Our attorney has talked with the Municipal League on this issue.
Senator Mark Johnson
Unverified
56:39
Very good. Senator Johnson, you're recognized. Thank you, Mr. Chairman. Mayor, is Texarkana Gazette still in business? Yes, it is, but it's in Texas. Well, but it has general circulation in Texarkana, Miller County, and the surrounding counties, does it not? Yes, it does. Okay. And I believe that's the legal requirement of general circulation in the area. And I'm headed on this because certainly there's nothing.
I appreciate the fact you'd rather do business with an Arkansas company. I get that. but I also think you're needing to get the best price you can for your constituents and your taxpayers. So if you run an ad in there and you want to call a couple of dealers in the area and say, hey, we've got bids out for a pickup, you know, we'd like you to take a look at it. You might not be picking up the paper that day, but please take a look at that and bid. Would you be willing to do something like that? We'll do that. Because, again, if you don't advertise in a general circulation newspaper, then correct or not, some people would look at that as saying that there's some home cooking going on.
You just want to do business with some particular businesses. And you can see how bad that would look if you did that, where if those people come in and they're your best bidders and you know you can trust them and y'all do business with them, that's good. But the idea that you, you know, you've got to let the general public know that this is a procurement you're about to do. So I want to encourage you to
Speaker 178
58:22
take a look at that. I understand that. Does the state law not say that the mayor can accept or turn down all bids if he don't see one that he's satisfied with?
Senator Mark Johnson
Unverified
58:34
Yes. It's been about 40 years since I was in municipal government. But I can tell you that as long as you've documented these things, as Ms. Steele said, that you do have some flexibility. But without that documentation there, there can be some
Speaker 49
58:48
real problems. Okay. All right. And I said that right, did I not, Ms. Steele? All right. Thank you for coming in, Mayor. Thank you. Thank you.
Speaker 1
58:56
Mr. Chairman. Okay. Anything else from the committee? Nothing else. Nothing
Speaker 2
59:02
else. We'll file this report without objection.
And thank you for coming in. Thank you for
Speaker 18
59:11
your response. Thank you. Our next report is on the same page, on page 23, still under reports with repeat findings. The City of Evening Shade, there's a repeat finding under the reporter treasurer. Invoices and supporting documentation were not provided for tested disbursements of 5,476 in 2018,
Speaker 10
59:28
as required by 1459-105. A similar finding was noted in the previous two reports, and the reporter treasurer is here to address her findings.
Kimberly Grady
Unverified
59:37
okay you're recognized hello my name is Kimberly Grady and I am the recorder treasurer for city of evening shade the problem that we've had in the past is generally all of our department heads have had access to our filing some of it they'll come in like our fire department for instance has to get documentation and proof of payment to apply for Act 833 funding. And they will come in and pull everything out of the fire department file,
separate it, and it doesn't always get put back. And I should have recognized that and gone through everything and made sure it all matched up. But what we have done is we have a locking file cabinet now that the mayor and I have a key to. And if anyone needs a copy, we meet them at City Hall if we're not already there, and we make copies and put it back as it was so that nothing is disturbed. But that was going on with more than just our fire department.
So I feel like we've handled that in the year, this current year, as far as the invoices being not matching up. Okay. Any
Speaker 119
1:01:01
questions from the committee? okay well sounds like you're taking care of
Kimberly Grady
Unverified
1:01:04
the problem we're working towards it it's hard in small towns when i have a full-time job and i take care of my elderly parents and i know that's a sob
story but really this position needs to be a full-time we've been through five ladies in the past three years trying to train someone to do what i do and and i only started i was a council member. And the former treasurer said, I quit, I don't make enough money. And she walked out and that was the end of her. I said I would do it temporarily. That's been many years now. And I'm sure that that's common in many small towns that you have to deal with that going on.
I don't have the time to give to this job that it needs, I feel like, but we're working towards training someone hopefully we can find someone in our area there's 400 people that live in our small town and there's the women that are retired that don't have to work that don't want to work there's the women that draw a check from the state or men too you know that don't want to work it's very very hard to find someone to fill a position like this in a small town when you have
Speaker 2
1:02:17
someone coming in to help you do you train them or does somebody else
Kimberly Grady
Unverified
1:02:22
i am training the one this year so okay i hope i don't scare her off
Speaker 2
1:02:27
well you know you can get help from the
Kimberly Grady
Unverified
1:02:30
municipal league and that's who i called and talked to that's what they suggested to you know that i be the one that is training the person and and our our check writing i do all of that but our payroll is handled through, um, a CPA and he, this past year was diagnosed with a terminal illness and has
informed us that he will no longer be doing that. So we'll be doing our own payroll. I noticed there was something on there about the treasurer not matching up, um, didn't have proof from the accountant. He just simply was not available to provide that proof this year, but we should have all of that for the year 2020 in our office and available for future. Okay, thank you. Thank
Chair
Unverified
1:03:14
you. Any questions from the committee on this one?
Speaker 2
1:03:19
Seeing none, without objection, we'll file it, and thank you for your presentation. Thank you. I hope I never have to come
Speaker 210
1:03:25
back. We do, too. Not that I wouldn't
Speaker 10
1:03:36
want to see you. next item is still that is all that I have of people who were invited who were here have I missed anyone is there anyone from any place that was asked to be here that I haven't called on okay if not
Speaker 216
1:04:02
the town of Alpena, let's see here, the
Speaker 10
1:04:11
report is on page 10 of your synopsis and, let's see, there was a finding on there referred to the bond board on the mayor and district court clerk.
The mayor discovered discrepancies in mileage reimbursements paid to an employee for use of her personal vehicle. Our review of checks paid to the district court clerk, who also serves as the water department clerk, indicated she was overpaid, a total of $3,700 for 266 duplicate mileage reimbursements from the general fund and the water department. And the mayor is here from Alpena, and I believe wanted to speak to this. Mayor.
Theron Mccammon
Unverified
1:04:57
Please identify yourself for the record, and you're recognized when you get set. My name is Theron McCammon.
Speaker 222
1:05:08
I am the mayor of Alpena, Arkansas. I have
Speaker 223
1:05:10
a brief statement that I wrote out I'd like to read and then answer any questions if I could. I want to thank you for letting me speak on behalf of the town of Alpena. Due to my inexperience as a mayor and due to the political implications of our situation, this has put me in a tough spot.
When I wrote my letters to the office, to this office, as well as the Governor, Attorney General, Colonel Bill Bryant of the Arkansas State Police, the Ethics Commission, and the 14th Judicial District Prosecutor, David Etheridge, it was my full intentions to get help to rectify these situations. It is my duty and honor as the elected mayor of Alpena to help in this situation, and I am paying the price for it. That is why I'm here. I'm getting zero help from anybody else. That is why I was so happy to hear from only two offices that I reached out to,
this being one of them and the Attorney General's office being the other. If there's any questions that I may help with or can clarify any of these answers, this is why I'm
Speaker 2
1:06:15
here. Thank you. So you were the one that discovered the discrepancies, it looks like. Is
Speaker 223
1:06:21
that correct? The ones in your findings, yes. Those were the second set of discrepancies that got the ball rolling on this. There was another issue. Okay.
And I don't know what all I can talk about here, too, so if you would help me
Chair
Unverified
1:06:45
out there. Okay. Questions from the committee? So, Senator Johnson,
Senator Mark Johnson
Unverified
1:06:49
you're recognized. I'll be real quick, Mr. Chairman. Thank you. I noticed there's a response from a district court clerk that says she, I don't know if it's a
she or a he, I assume it may be a she, says that they agree with the finding and make sure we try not to do that again,
but there doesn't seem to be any indication of restitution or straightening it out. I mean, I could see it could be a mistake, but Ms. Steele, do we
Speaker 36
1:07:15
have any documentation of a substantive response other than, okay, I did that
Speaker 11
1:07:19
kind of thing? This was referred to the prosecuting attorney and certified to the bond board, so I'm not certain what's going on between
Speaker 31
1:07:26
those parties. I don't know if they have discussed, I don't
Speaker 216
1:07:31
know what they've done with the court clerk.
Speaker 10
1:07:35
When was that done? When was what? Was it referred to the prosecutor? He would have gotten his letter at the same time it was mailed out to the others, but
Speaker 115
1:07:47
I believe he was aware of this before that. Okay. I made him aware of it. And Mayor, you said
Speaker 223
1:07:51
you communicated if you're a prosecutor. I did exactly what I was told to do when I found the discrepancy. I went to the prosecutor and he told me to go to the Boone County Sheriff's Office. And if there was, I forget the term he used, probable cause, I'm going to call it.
If there was probable cause, to go back to Alpena and cut her loose. That was his exact words. And that's exactly what I did. And I've been crucified for
Senator Mark Johnson
Unverified
1:08:15
it since. Okay. But the prosecutor is aware of it, and the sheriff is aware of it, and we have to kind of defer to the law enforcement people on that. Whether we like
it or not, absolutely. I appreciate your candor, Mayor, and I don't have any other questions at this time,
Chair
Unverified
1:08:35
Mr. Chairman. Thank you. Representative Fatt, you're recognized.
Speaker 227
1:08:38
Okay. Thank you, Mr. Chair. It was my understanding that she had been instructed in this over the long
Speaker 228
1:08:45
period of time. Is that correct? My understanding was
Speaker 10
1:08:48
that when she took these positions, that's how she was trained to turn in her records. That's my understanding. Okay. Thank you. Thank
Speaker 230
1:08:58
you, Mr. Chair. Anything else? Seeing nothing else.
Speaker 2
1:09:09
Without objection, we'll file the report. And, Mr. Mayor, we thank you for coming in and your statement, and you're dismissed.
Speaker 10
1:09:21
Thank you. Thank you. The next report we'll review is
Speaker 18
1:09:24
on pages 5 through 7. It's the Diamond City Community Center Review of Selected Transactions, and Ms. Williams will review those for us.
Speaker 233
1:09:37
Thank you. Kim Williams, Legislative Audit.
We were asked by the prosecuting attorney of the 14th Judicial District to assist the state police in reviewing selected financial records involving Diamond City and its community center. It concerned improper use of the center funds by the city's mayor, as well as other matters. The center is located in Boone County, and it was established as a nonprofit in 2014. The center had no employees, and despite its nonprofit status, it continued to function as a city service.
During the review period, the mayor also served as the center's treasurer and was custodian of the funds until December of 2016. The primary funding to operate the center was a $12,000 annual contribution, $1,000 a month to operate the center, which we found to be in conflict with Article 12, Section 5 of the Constitution because there was no contract between the city council and the board of the center as to the services that were to be provided. Other than incorporating and establishing a board and adopting its own bylaws,
the center really continued to function as a city department because the board did not meet, the bylaws were not followed, and the mayor acted as to treasurer. it appeared to us that the center simply incorporated to solely receive this thousand dollar funding and to circumvent disbursement oversight by the city council when we reviewed the disbursements we found that there was over five thousand dollars spent for cleaning services that were paid to the mayor her husband and to her brother in addition we have a list of
disbursements almost twenty thousand dollars that were made
Speaker 234
1:11:20
without any documentation to substantiate what they were for. It included a $700 payment to a sports chair and wear vendor, another $1,800 to the mayor for waxing the floors, donations to the Ladies Bass Anglers Association of $2,500, and another $7,300 to the mayor, the brother, and others for cleaning, again, that was not
Speaker 233
1:11:46
documented. Since we've been out there and done our review, we've turned it over
to the prosecutor, charges have been filed, and a trial is set for next month in March. Also, the city has been returned to the city's control and is now functioning
Speaker 235
1:12:02
under the city council. That concludes my presentation. Okay. I think we
Speaker 1
1:12:14
have the mayor here. Okay. You can come forward.
Chair
Unverified
1:12:21
State your name and position for the record, please. I'm
Speaker 236
1:12:25
Linda Miracle, the mayor of Diamond City. And what I'm here for is that we're going to have that same problem in 2018. When I took office in 2019, I did just like the mayor of Alpena. I went through the books, brought him to legislative audit, took him to the district attorney. Our only problem is that I have taken the community center back, But we have some of the same players that caused the problem that we're in trouble with now.
And so I'm fighting them tooth and nail because they're trying to put it back like it originally was, knowing that we're here on Capitol being, again, you know, being taunted for it or what I'm cited for it is the word I'm trying to use. So in such time, what I did is we have taken back the community center 100%. I treat the community center just like I would treat my public works department or any other department. I'm the department head of it.
Also, in the meantime, we've hired a CPA. And with that CPA, we do our checks and balances 100% different. We have a paper trail that goes for anything that we need. We have a check and balance. If there is a check written out to reimburse somebody, there has to be a PO made out. After the PO is made out, it has to have a receipt that goes with it. After the receipt and PO is there, then I have to sign off on it.
Then it's sent to the CPA. The CPA writes a check for it. Then it comes back to the treasurer, and then she puts more paperwork with it and a filing system. And also, everybody had a key that came in and came out. A lot of our documents are gone in that. I also changed the locks, and now only certain people are able to get access. So now that we can have the proper paperwork, paper trail, whatever that you want to call it.
We now do no longer fund the city hall. The community center is put in the general funds. but with it being put in the general funds, it has its own paper trail. So it has its own deposit slips that go in there. It has its own checks that ride out of there. So that way, any money, even though it's part of the city hall, any money that's given in or given out or taken in or rented, it all has its separate statute for it.
If there's anything else that I can answer on this, But I did go to our district attorney, and I did call our attorney general. We have a recorder and a treasurer, and our treasurer, who we originally had when I came in, worked for the school. So she changed our books over to the school books. Our recorder, we have no books. I mean, if you came and audited us for 17, 18, and 19 and asked where our minutes are, where this is,
I couldn't tell you because we don't have a recorder. Now, the last three months, I have put an interim recorder in there and trying to get the books caught up. But I just look to see you back here next year, and I really don't want to. But I am trying to fix them. You know, all of this took place when I came in. So I am trying to
Speaker 119
1:16:15
Questions from the committee? I thank you for your time. Okay. Thank you for coming in, and I encourage you to
Speaker 1
1:16:32
continue to try to do things right, and
Speaker 236
1:16:34
I think you'll get there. It's going to be a long battle. We've still got some of the same players that caused this big audit that we have right now still in there. And so it's just a daily fight of trying to make it what's right and what's legal and what they want to do.
Speaker 2
1:16:49
But I appreciate you taking the time. Thank you. We commend you for trying to do it right. Thank you. And with that objection, we will
Speaker 18
1:17:02
file it. Next report, Ms. Steele. The next one will be on pages 8 and 9. It's another investigative letter on the Lead Hill Water and Sewer Department. And Ms. Williams will present that one
Speaker 234
1:17:15
as well. Thank you. Again, we were asked to go in and assist the state police by the 14th Judicial District Prosecuting Attorney
with discrepancies with the water and sewage usage billings at the water department. This lead hill
Speaker 233
1:17:28
is also located in Boone County, and the elected recorder treasurer also served as the department clerk, the water department clerk, and she was sole custodian for the five-year period that we looked at. What we found were $3,600 in unauthorized and undocumented adjustments to the amounts owed on three water accounts.
These were her accounts, her spouse's accounts, and a family member's. We also noted that the clerk's spouse account was not charged a minimum billage or usage, which would have amounted to about $1,800, and also meter reading reports were adjusted for 52,000 gallons of water for the same three customer accounts. And lastly, we had a $2,000 payment to the department superintendent for vacation and comp time
Speaker 234
1:18:29
in violation of town's policy.
This individual was related to the water clerk. After her term ended in 2018, her role as water clerk did as well, and she has been charged with theft of property, and a trial is scheduled for May of this
Speaker 239
1:18:51
year. Thank you. Sole custodian is none.
Chair
Unverified
1:19:01
Any questions from the committee concerning this item?
And is there anyone here in
Speaker 1
1:19:06
regard to this? Apparently not. So nothing else. File the report without objection. Next item is still. We have one more investigative
Speaker 18
1:19:18
letter. This one's on the Cushman Volunteer Fire Department, and it's on page 11 of your synopsis. And Ms. Williams will present that one
Speaker 234
1:19:28
as well. Again, we were asked by a prosecuting attorney of the 16th Judicial District to go in and look at allegations concerning allegations of salary overpayments
and unauthorized disbursements. This is a department that's located in Independence County, and the department secretary was responsible for all the depositing checks, issuing checks, and all the financial records. We looked at a two-and-a-half-year period and found that she was overpaid more than it was authorized by $3,400. We looked at the disbursements and found that there were around $3,200 of charges made at Walmart for items like a crisp-cut machine,
which I understand is some type of sewing machine, an infrared fireplace, a heater, Bluetooth speakers, a CD shelf system, and other small household appliances. We also had a missing computer and laptop, and then we found that supplies were purchased for items that, for like printers and other things that the city did not own. We were not able to determine who held the credit card where the disbursements were made.
And she's not in office anymore, according to the current fire chief, and that he will remain proactive in segregating the duties. And this was sent to the prosecutor last Friday, I believe. Thank you. Okay.
Theron Mccammon
Unverified
1:21:02
Any questions from the committee? Seeing none, with an objection, we'll file
Speaker 8
1:21:11
it. Next item. Is there anyone else here to speak to any findings, any reports?
Speaker 216
1:21:16
If not, we'll start back at the beginning and just pick up the ones that we've missed. Okay, on page, on page four, we have the city of Parkin. This
Speaker 10
1:21:35
was deferred from the last meeting and the treasurer was invited to be here and I have not heard from her and she didn't know to show up. Staff would recommend we defer this one. Without
Chair
Unverified
1:21:50
objection. File it. Defer it. I'm sorry.
Speaker 8
1:21:55
We'll go then to page 12 to the City of
Speaker 18
1:22:11
Arkadelphia. This had a couple of findings referred to the prosecuting attorney. Under the city manager and treasurer, the city paid $1,700 to replace the driveway on private property in conjunction with replacing a city drainage pipe that ran under the driveway. the city agreed to split the cost of replacing the entire driveway with a property owner,
which conflicts with Article 12, Section 5, which states in part, no city shall obtain or appropriate money for any corporation, association, institution, or individual. Though the property owner reimbursed the city $750, Attorney General Opinion No. 2017-088 states that such payments do not resolve the underlying public purpose conflict. And then down under other matters, they had a fraudulent check like the others we've discussed. If there aren't any questions, staff would recommend we file.
Speaker 10
1:23:02
Without objection, file it. Next item. On page 13, the city of Bald Knob,
Speaker 18
1:23:12
they also had a fraudulent check. And I'll be happy to read
Speaker 8
1:23:17
these fraudulent checks findings, but in the past few meetings, the committee has recommended that I
Speaker 2
1:23:21
nod. Unless the committee requires it, we're going to omit that. So staff would
Speaker 189
1:23:27
recommend we file a bald knob. Without objection, file it.
Speaker 18
1:23:32
On the same page, 13, the city of Blyville. This is still under reports for further prosecuting attorney. The AMP chair was asked to be here.
Speaker 10
1:23:40
I got a call requesting that we defer this to the next meeting, so staff would recommend we defer this to June. Without objection, deferred to June. On page
Speaker 18
1:24:00
16, this is still under reports referred to the prosecuting attorney.
Pulaski County has three findings that were referred to the prosecutor. The first one had to do with a fraudulent check. Then under the county judge, using county purchasing cards, four county employees bought items totaling $5,000 for a non-profit organization in apparent conflict with Article 12, Section 5. We verified the non-profit reimbursed the county for all purchases. In addition, one of the employees used the P-card for personal purchases, totaling $315, which was reimbursed to the county. Then under the sheriff, two cashier's checks totaling $7,900
made payable to an inmate were deposited to the sheriff's inmate trust account. One check for $39.50 was signed over to a bail bondsman before the sheriff's office learned it was fraudulent. These funds have not been recovered. The second check for $39.50 was deposited, but the funds were not released. If there are no questions, staff would recommend we
Speaker 189
1:24:51
file. Without objection, file it. Next item, please. On page 17,
Speaker 243
1:24:58
the city of Bono, there was a fraudulent check.
Speaker 18
1:25:09
If the committee has no questions, staff would recommend we file. Without objection, file it. Next item. Just below that, the town of Fisher, under the mayor and bookkeeper, the town purchased $515 in food for a non-business purpose in conflict with Article 12, Section 5. If the committee has no questions, staff would recommend we file. Without objection, file it. Next item.
Speaker 10
1:25:41
On page 18, the City of Haifel, this is still under reports referred to the prosecuting attorney.
Speaker 18
1:25:46
Under the Mayor and Recorder Treasurer, review of disbursements indicated the city did not adhere to 1459-105. 11,000 of credit card charges were either not supported with adequate documentation or not supported with any documentation. Although these charges were made with vendors normally used, without adequate supporting documentation, documentation, we could not verify the business purpose. In addition, interest in late payment fees were incurred and paid because the credit card statements were not always timely paid.
1900 was paid for mileage reimbursements and credit card charges for travel costs, including meals and lodging, that were made without a written approved city policy. Disbursements were not always made by pre-numbered check, and invoices were not always denoted as approved. If there are no questions, staff would recommend we file. Without objection, file
Theron Mccammon
Unverified
1:26:37
it. Next item, please. On page 19
Speaker 10
1:26:45
at the top, this is still under reports referred to the prosecuting attorney.
Speaker 18
1:26:50
The city of Hoxsey and the city of Mansfield both had fraudulent checks. If there are no
Theron Mccammon
Unverified
1:26:57
questions on those, staff would recommend we
Speaker 18
1:27:10
file. Without objection, file it. Next item, please. Still on page 19, the city of Monette, under the mayor and recorder treasurer, the city paid $3,327 for guns for three officers in 2018, with costs to be repaid to the city
through weekly withholdings from the officers' salaries. As of December 31st of 2018, unpaid balances for the three officers totaled $418. A fourth officer who is paying for guns purchased in previous years is no longer employed by the city and had an unpaid balance of $366 as of August 30th of 19. In addition, an officer reimbursed the city $898 for his home internet service that is in the city's name during 18. These arrangements conflict with Arkansas Constitution Article 12, Section 5, which states in part, no city shall obtain or appropriate money for any corporation, association, institution,
or individual. Then below that, the city paid $513 for meals without supporting documentation or indication of a business purpose in noncompliance with Article 12, Section 5. If there are no questions, staff
Speaker 189
1:28:09
would recommend we file. Is that a common
Theron Mccammon
Unverified
1:28:13
practice? Do you know about cities buying officers' weapons? If we see it, we
Speaker 246
1:28:22
write it up. I don't know how common it is. Okay. Normally, I know
Speaker 1
1:28:27
they do that, but I know a lot of them just buy their own,
Speaker 31
1:28:31
and that's their personal weapon. The officers buy their own or they remain city property and the officers use
Speaker 142
1:28:39
it. Okay. All right. Thank you. Next item. File it.
Speaker 18
1:28:49
On page 21, still under reports referred to the prosecuting attorney, we have the city of Rockport. The city disbursed funds tolling 844 in apparent conflict with the public purpose doctrine and article 12, section 5. 480 for tickets to the Hot Spring County Chamber of Commerce Banquet
220 for membership in the chamber and 144 for food purchases without a business purpose If there are no questions,
Theron Mccammon
Unverified
1:29:16
staff would recommend we file Seeing none Without objection,
Speaker 18
1:29:28
file it Next item, please On page 22, still under reports, refer to the prosecuting attorney, the City of Scranton. Under the Mayor, the City paid a non-profit organization $2,000 for community child advocacy services without a contract in apparent conflict with Article 12, Section 5.
If there are no questions, staff would recommend
Theron Mccammon
Unverified
1:29:48
we file. Without objection, file it. Next
Speaker 18
1:29:51
item, please. Right below that, the town of Sedgwick. The town paid $15.49, 2016, and $15.14 to a fuel vendor without a documented business purpose in 17, in 18, and from January through September of 19, respectively, in conflict with Article 12, Section 5. According to the recorder treasure, fuel purchases were for both town and personal use. However, the amount of fuel purchased for town use could not be determined due to inadequate records.
If there are no questions, staff would
Theron Mccammon
Unverified
1:30:23
recommend we file. Seeing none, without objection, file it.
Speaker 10
1:30:31
Next item, please. On the same page, general reports refer to the prosecuting attorney. Cross County, under the county judge,
Speaker 18
1:30:37
the county disbursed $3,500 to the Tri-County Fair, a private nonprofit corporation without a contract for services in conflict with Article
Speaker 189
1:30:44
12, Section 5. If there are no questions, staff would recommend we file.
Theron Mccammon
Unverified
1:30:51
Seeing none. Without objection, file it. Next item,
Speaker 18
1:31:02
please. On page 24, under reports with repeat findings, there's a second judicial district. He had a repeat finding but could not be here today, and Mr. Ellington requested to defer this until the June meeting. Staff would recommend we defer
Theron Mccammon
Unverified
1:31:17
it. Without objection, defer. Next item, please.
Speaker 18
1:31:22
On the same page, under reports with findings, this means that they had findings, but we did not receive a response or an adequate response. We had some findings under the county judge that we have not received a response for. Staff would recommend we defer this until
Speaker 10
1:31:38
we either get a response or that he be invited to come to the meeting next time.
Theron Mccammon
Unverified
1:31:46
Prairie County. Prairie County. Yeah. Okay, without objection, defer. Next item, please.
Speaker 252
1:31:52
Do you want him to come or do you want
Speaker 1
1:31:58
me to just try to get a response? We'd like to have him come, I think. Or, yeah, yeah, the committee would
Speaker 10
1:32:16
like to see him. Okay. Okay, on page 25, we have the Bradley Water and Sewer Fund for 16 and for 15.
Speaker 18
1:32:24
You can see the invoices could not be provided for the disbursements that are listed there. We did later after this was printed get a response. When new administration came into office, many files have been shredded and taken from the office of the Water and Sewer Department. The new administration believes they have
Speaker 10
1:32:41
done all they can and They understand the problematic nature of
Speaker 31
1:32:45
this, and they're going to do better. Staff would recommend we file the new administrations. Question? You're recognized.
Senator Mark Johnson
Unverified
1:32:56
Thank you, Mr. Chairman. Ms. Steele, when you show these businesses that the invoices would have
come from, has any effort been made to speak to that business to see if we can get a
copy of the invoices? I mean, if Bradley lost them, I mean, you know, it is what it is, but a lot of times
the businesses are a little more careful about having those records. Has that been tried? I understand
Speaker 10
1:33:19
that, and if we were doing the audit, we would have gone that route, but these were done by private auditors, so I don't know.
Senator Mark Johnson
Unverified
1:33:28
So I guess the thing would be for someone to contact the private auditor and say, why didn't
you do this? Or, I mean, some of these are, well, other than the one that says general fund, these are people or companies that should be able to
be located. And, you know, I'm not presuming they're responsible, but they could be forthcoming and clean this up. I'm just curious. Obviously, the auditors probably got paid.
Speaker 18
1:33:59
Oh, I would assume so, or they might not have
Senator Mark Johnson
Unverified
1:34:02
released the reports. Okay. Just, you know, if we're going to let them use outside auditors, that's fine. But I assume that the general accepted procedures would require that they make some effort with these vendors to follow up on that, correct? That's what
Speaker 10
1:34:15
we would have done. And if you want, we can defer this and we can try
Senator Mark Johnson
Unverified
1:34:21
to do that. I think Mr. Hillman seems to agree with maybe we should
Speaker 243
1:34:25
defer that then. Thank you, Mr. Chair. Okay. Without objection. Okay. Defer. All right.
Speaker 18
1:34:30
Next item. Okay, the end is in sight. On pages 26 through 34, there are 23 reports that have findings that we got adequate responses for. If anyone
Speaker 216
1:34:49
has any questions, we'll be glad to answer those. If not, staff would recommend we file these reports.
Speaker 2
1:35:03
Are you, everybody good? Without objection, file the reports. Next
Speaker 18
1:35:10
item. Then on pages 35 and 36, there are 52 reports that had no findings. Staff would recommend we file these as
Speaker 100
1:35:19
well. I think that's what we like to see,
Speaker 2
1:35:29
right? Without objection, file it. Okay, committee members, that's the end of our day. And we appreciate you all coming and hanging in here with us today to get through this.
And we'll see you next time. I believe the next meeting is scheduled for June 11th. So thank you all and have a good day. We're adjourned. Thank you.
Agenda
A. Call to Order by Chair
B. Adoption of Minutes of the January 23, 2020 meeting o0
C. Discussion of Ark. Code Ann. § 14-59-117: 1. Town of Allport 2. Town of Jericho
D. Review of Reports (Refer to the Synopsis)
E. The next meeting will be June 11, 2020
F. Adjournment
Documents
| Title | Type | Pages | Source |
|---|---|---|---|
| Agenda — LEGISLATIVE JOINT AUDITING - COUNTIES AND MUNICIPALITIES, Feb 27, 2020 | Agenda | 1 | Official source ↗ |
Speakers
Speaker 1
Speaker 2
Theron Mccammon
Unverified
Speaker 8
Speaker 10
Speaker 11
Chair
Unverified
Speaker 21
Senator Mark Johnson
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Representative Johnny Rye
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Speaker 18
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Representative Lane Jean
Unverified
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Carl Raby
Unverified
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Julie Watkins
Unverified
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James Sutton
Unverified
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Speaker 52
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Speaker 49
Kimberly Grady
Unverified
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