Legislative Joint Auditing-Counties and Municipalities

I ask you want to just kind of human. Have anybody. Places. Will have their seat please. Okay I'm calling the committee counties municipalities to order today is September the tenth. But this time we're going to adoption of minutes for the February twenty seventh twenty twenty meeting. Motion to the. No discussion we have a motion to we have a second for the there were twenty seven leading. The second is a represented Russia. All in favor signify uplifted hands. Those opposed like sign motion carried unanimous. Next up discussion of Arkansas code. Annotated fourteen fifty nine and one seventeen we have two tails up first we're gonna discuss is the town of all port. This still do you have some comments ma'am. A yes Sir The town of all port to this they have completed their second round of non compliance with the Arkansas municipal accounting law. Which that Comes to the point where the committee can make you the recommendation to the full committee. As to whether not they want to proceed with revoking the town's charter. The latest on the and we are there now to doing that nineteen engagement When we were there to do the eighteen engagement we have seen some improvement but nothing had been done for not staying in that was in the middle of two thousand nineteen and nothing had been done and now it appears that when we ask for something it's completed what we have the general fund journal in the general fund bank reconciliation but we don't have anything for any other funds of the fixed asset records are better but there are no receipt books. So as of right now. That that's where we are and I would just leave it to the committee as to decide what you want to do from here. We have and the questions of the comments from any their committee members on the teleport. Bear with me good people this is the first time to do this port. Senator sample featurette see this up. Okay give me your seat number again please Sir. Ever go there we go a a RP progress thank you Sir go ahead make sure I have a motion and time. Go ahead Sir all right I move that we recommend is legislative joint out joint auditing committee that we the committee indicate the chamber of the trouble revoke cation process under section fourteen six to one of two a. A I'm just hang on of all port. A second. Any further discussion. See forty two we raise that will be. Going to Representative. Thank you Mr chair of this all started back because Sir will sessions ago and when I was a chair of the subcommittee. And we had a lot of trouble with them and I how had hoped that they would see the lighting get in the mayor and the city Clerk and apparently they have not they say that no one else is willing to serve and so. Mostly as a result of that I hope co sponsor the this current bill that we have now. And A I don't like the idea of of this incorporating a town. But. That's what this law was written for. And I hope they change their mind and decided on what to but this is what for this is what we need to do I will be in favor of the motion thank you. Thank you Sir C. twenty represent arrive. Read again Sir thank you Mr chairman chairman after hearing center sample and and others that have gathered in on this situation I would just like to pull myself out because I think that that they know what's going on with this. Thank you okay. Vice chair senator Cooper go is a. I thank all of you know that this is been going on a long time and and it's shown very little progress and almost no. A compliance in various ways in the issue that we're dealing with here on non compliance with. State law is just only part of it the good Irish problems and other other issues besides this it's really not a part of what we're dealing with here today. But the I'm certainly in favor of it and uh. You know if we're going to be a. The body in a state to of of laws and rules we need to expect compliance of the people that's. engage in an. And the in these functions so well I'm I'm going to vote for. Thank you senator Cooper may have accidentally cut somebody off on a request This one make sure if you have a opportunity to say something. This is my first time and in this. Okay see fifty five of. Senator mark Johnson. Go ahead Sir. Thank you Mr chair a L. think Senator sample for stepping forward is doing our duty of most people heard of judge Isaac Parker the sometimes call the hanging judge from from Fort Smith he was very just person and he had a saying cities not the threat of punishment that is a deterrent to crime it's a certainty of punishment that's a deterrent to crime I think having been on this committee for about a year and a half now Mr chair rock scene too many things that you know sometimes are honest mistakes but there were a lot of times people trying to do right they just had a problem but I think this is a case where we're forced to act and we have to let those that might blow softened Bloor auditors off and blow the public off to send a message that cannot be tolerated so I will support the motion I appreciate everybody's been working on it thank you three should come it's a senator Johnson. Representative flowers. Red okay Representative levers I apologize. I don't have. I don't know if I did have you seat number all of. Which is a number knowledge of. Okay go ahead. One. No eight. Ninety one. Thank. Thank you a Representative Glover I have a one year old in this steel here I think she'll be able to enlighten you on here go ahead. Yes Sir and at this process started a couple years ago and every step of the way the all the officials of the town get letters the mayor their treasure all the council members and this so they've been kept aware of this the the whole time that this process has been going on. Does that answer your question. Questions and comments on the town of all port. We had a motion and we did have a circuit. All in favor of the stated action against the town of all port signify uplifted hand. Those opposed like sign. Motion carries. The the town of Jericho town Jericho misty go ahead. I have better noted on the town of Jericho they have made great strides and we are recommending that they come out of this process that they start receiving their turn back again would be staff's recommendation. Committee members are the status of the town of Jericho AT comments or questions on the town of Jericho. All in favor to. Remove the tele Jericho. From the scope of les got it all in favor signify uplifted hand. Those opposed like sign. Motion carried unanimous. Review reports would be referring to the synopsis of go ahead Mr. Thank you I'm first can I just remind everyone to sign in in the back room back here there's no one as you normally there's someone standing there with the pad to to let you sign in button with all the covered in all we don't have that so if you could just member sign in back here. and obviously we have a lot of reports today. And a lot of findings I have discussed with the chairs and. And we are the pain that maybe we don't have any invited guests A that maybe we could just go down the list in order today and if you have any questions about that particular entity you could let us know and if not we can decide whether to file it or different we have a number of gas that would have been invited. To this meeting like thirty. And if we the fire all of the ones that we normally would who weren't here by the time we get have yes there might be like a hundred. and I'm not exaggerating that that's probably true number. Most of these we're either have started the next round of audits and so we would be there to see if they had corrected their findings are not which is the purpose of having the officials com. if the committee is okay a. With May just going down the list in asking if you have questions about that entity. And that's that's what we'll do. Any questions or comments on or the the mythology that we're gonna be going a Representative Hillman just a second the. The requested. Okay I'll have to ask you again you are seat the forty two okay. I believe I have you Sir okay my only question was if we do this so there's gonna be considered reviewed in that a they are final determination on. On these particular reports yes but again we're they're doing the next round on most of them already anyway so if I haven't corrected that they'd be back anyway. Okay at this one the reason I asked was one of one of my county judges on this list and he's been bugging A. academy and if we finish this I'm telling not to thank you. Understood good. Good point. Okay that go ahead Mr the first report is the first seven are deferred from the prior meeting which was all the way back in February. And we have started the city of Laval again even though they had repeat findings does anyone have any questions about them. Okay is Representative rye. Go ahead. Your seat number Sir. Okay. Okay tried again okay thank you Mr chairman of could you please explain. About Syria rival what they were it not for a I don't think I got to see what went on there. This is on the first page of your synopsis. The very first report the very first finding about the advertising promotion commission paid a total of thirty four thousand five hundred to some organizations without a contract. That that was what they were written up for. Yes ma'am a follow up please was not supposed to spend any money on on a black glasses a bill to. They just need a contract in place of a lot as set out what the consideration would be that the city would receive in return for what they were paying Mr Marty thank you for that appreciate you yes Sir. So if there are no questions would we consider that when filed. Your questions. Represents a well. Demo here and I'm to get you see number on the chart here. Okay go ahead Sir yes procedure question here being that the next meeting is October eighth will these be able to be reviewed at that time with the audit to be completed. To him Mr. I don't think I understand your question being that the next meeting is October eighth you said that. These findings there being audited again and my question will wear those out of audit to be finished by this by the next meeting. No Sir was sent some will be but not all of these in particular have but we do already have over two hundred reports on the list for October we still a few weeks to go so that'll be another full agenda what I was saying was that that we have already started some of these audits again and so with that were there and will determine that time whether or not these findings have been corrected A with those reports are presented again then those people. Could be asked to calmer are not as to come based on what we find okay thank you. The clear it up Representative yes okay. Okay the second one is Ouachita county this is on pages one and two of your synopsis this is another one that was departed from the prior meeting and we have started to not at two thousand nineteen engagement on it as well staff would recommend we filed it is well. Representative bill you have a question and and I like still line okay. Okay. As. The third one is prairie county this is on page two. As they get this one was referred differed from the last meeting if there are no questions about this when the staff would recommend we file it as well. Better consider deferred thank you. Filed I'm sorry file go ahead for the next one. parking is on page three. Again this whose differed from the last meeting at their no questions staff would recommend we file. Matter considered filed thank you have a question here. No. Okay just go over to the next on the. Okay the prosecuting attorney for the second judicial district is also on page three it was department last meeting at their no question staff would recommend we file that one as well. Matter considered file thank you. On page four we have two different reports for the brand the water and sewer system of the committee deferred that one last the last meeting because there are some questions about some of the invoices that were not provided. Since then our staff has gone to the engineer in charge of this project and gotten those invoices that you see in Astrid beside the number. At the bigger ones and so staff recommend we filed this one as well. Consider filed. Okay these starting on page five these are referred a certified to the bond board. We have Eureka springs. And again I'll go over any of these findings if anyone has any questions about but if no one has any questions staff would recommend that we file. No questions matter considered phone. At the bottom of that page and the top of the next page we have Searcy county. And this was also certified to the bond board. If there are no questions staff would recommend we file. Okay Mister Johnson fifty five of. Go ahead Sir thank you Mr chair of steel. When there's an auction involved. Is it a requirement that the entity the city or the county or put it use or any of the use of a licensed auctioneer or I see there are some discrepancies related to how the auction was conducted and I I'm just wondering is that a. Do they have to use someone that's a license auctioneer that's under the law where they do their recordkeeping in a particular manner or is it something where the someone with the city can to stand up there and auctioned off the haven't be no I don't know the answer that question I can get an answer and get back to you later not any her the next meeting will be fine I'm just Mister chairman I just wanna make sure that we have we we regulate auctioneers we require them to do certain things and I'm not necessarily saying that a city official couldn't have the auction but if in the they're using alas is auctioneer and then we still find these discrepancies in the bookkeeping and I think we need to know about that there could be a need for future legislation to to kind of clean that up and to avoid this problem in the future that was the only reason I want to ask about that and and next meeting will be fine to steal thank you very much thank you Mr. Good good good question senator thank you a matter considered filed. Go ahead. On page six through eight and we have the city of baby. This was also certified to the bond board. I'll be happy to answer any questions. What what is the term certified to the bond board referred to the governmental bond board this is if money is missing if they're unaccounted for funds the they take our findings and determine whether to the bond board will reimburse the city for their loss okay the deductible thank you. No other questions. Better consider filed on this one. Go ahead. Home pages eight through ten we have the city of Turrell. This is also certified to the bone board. At the first finding was certified is the one that was certified to the bomb board. The home page ten there are some repeat findings I'll be happy to answer any questions otherwise staff recommend we file. No questions matter considered filed. At the bottom of page tennis St Francis county. Others a finding on the share from tax collector that was certified to the bond board. Of their any questions we have the answer them if not staff recommend we file. No questions matter considered filed. Page eleven is the city of strong we have a couple of findings that were certified to the bond board and repeat finding. If there are no questions about the staff would recommend that we file. No questions matter considered filed. On page twelve we have a prosecuting attorney the twenty first you to judicial district this is referred to the Attorney General. Which is the equivalent of a city or county being referred to the prosecuting attorney. If there any questions about this I'll be happy to answer if not staff would recommend we file. Third explanation on this one no questions matter considered filed. Starting on page thirteen these reports are referred to the prosecuting attorney. I the first one is the town of Arkansas city. Are there any questions and no questions matter considered filed. Just below that we have the city of Eldorado. And their findings go. Three page fifteen. Are there any questions about any of those. No questions matter considered filed. On page fifteen we have the city of Fairfield bay. Does anyone have any questions about those findings. Better consider filed. On page sixteen. I we have the city of Greenwood. With the. One fine referred to the prosecuting attorney C. one have any questions about that. Matter considered filed. On page seventeen we have the city of lone oak. This was in at the expanding regard to the prosecuting attorney does anyone have any questions. Matter considered filed. Just below that we have the city of Portland. And this is also at the expanding referred to the prosecutor. Any questions. Matter considered filed. At the city rest of all. And the city water just below that these are both the fraudulent checks that we've discussed before that an outside into. Person or entity Basically use the entities bank. Information to withdraw money that was an authorized. But at both places got their money back from the bank. Letter consider filed. The same thing on Benton county which is at the top of page eighteen. Another fraudulent check. Matter considered vote. Also on page eighteen we have Carroll County. Anyone have any questions on Carroll County. Letter filed. And then below that is drew county. No questions drew county matter filed. On partner county we had another one the fraudulent checks. Any questions. I question Mister Meeks represent a Meeks just a second here. Representative makes go ahead thank you Mr a question I have on on a form or county the finding of the county librarian where they gave out gift cards totaling two thousand dollars since that's. Black I'm assuming that's a repeat finding yes it is that. Something that I'm assuming they're not allowed to do or what what what what's the what's the conflict there and they didn't have adequate supporting documentation of for something like that we would like to see the person who received the gift cards sign that they got it just a more just a paper trail to show that someone in just by gift cards and. Give it out for use them or whatever okay okay so no problem with them giving out give cards it's just your after confirmation that the gift cards actually went to we just met purposes yes we we just need for something like the is that we don't have a problem with the gift card we just would like to have better documentation okay alright thank you thank you Mr thank you. No further questions matter filed. Page twenty we have Madison County at the top that's another one the fraudulent checks. No questions Matt is the matter considered filed. On page twenty and twenty one we have Marion County. With the I. findings under the county judge. No questions matter filed. On pages twenty one and twenty two we have Newton county. Any questions about that one. Matter filed. Selling county is also on page twenty two we have a P. a finding and repeat finding any questions about those. Matter filed. Okay on page twenty three and twenty four we have the town of all court hi this is findings for the two thousand eighteen report we discuss them just a what little while ago does anyone have any questions about any of these. Matter filed. I'm paid the top of page twenty five we have the city of Barling. No questions matter filed. Also on page twenty five we have the city of Black Rock this is another fraudulent check. Better filed. At the bottom of that page and on to page twenty six we have the city of Bradford. Matter filed. At the top of page twenty seven the city of cherry valley had a fraudulent check. Matter filed. Okay technology is a wonderful thing Mr Johnson I just got a text that Neither fourteen sixteen one oh five or one oh six has any requirements to use a licensed auctioneer. Thank you Mr. Okay on page twenty seven we have the city of Cushman. Questions no questions matter filed. On pages twenty eight and twenty nine we have the town of Delaplaine. Questions. Letter filed. On pages thirty through thirty two we have the city of dharma ought. One thing I want to bring to the committee's attention I don't I had noticed it on some prior to the is if you look at the finding in the middle of page thirty. There's one the stars all those schedule one of this report has a cash balance of two hundred seventy four thousand. We have been trying to on some of the small towns it. Could have financial issues. Just put of the paragraph a finding in a paragraph on the on the back page of the report showing that even if they shall I have a positive cash balance because these are presented on the cash basis there by also significant amounts of money to people like that our is or to some restricted fund such as the street fund the if you take all that into account Like on this one the general phone have a deficit fund balance of two hundred twenty seven thousand dollars. Industry fund would have a deficit fund balance of a hundred fifty one thousand dollars so that is really just for information for the cities and towns and FOR the committee in the legislature to just so you it gives a better picture we feel of the condition of the entity. No questions owned Dermott matter filed. Okay on page thirty two the city afford us. Question any questions on Fordyce matter filed. On page thirty three we have the city of grubs. Matter filed. The top of page thirty four is the city of Havana. Matter filed. Also on page thirty four we have the city of Jasper. Matter filed. On page thirty four at the bottom on to page thirty five we have the city of Kaiser. Matter filed. Page thirty five and thirty six we have the town of Magness. Better filed. Page thirty six and thirty seven we have the city of part bail. Letter filed. On the bottom thirty seven is the city of Risan. Matter filed. At the top of page thirty eight we have the city of summit. Matter filed. On page thirty eight through forty we have the town of sunset. filed. At the bottom of page forty is a city of Wilmer. Matter filed. On page forty one we have the city of Winslow. filed. We have the Arkansas county also on page forty one. Matter filed. Page forty one to forty three we have Hempstead county. Letter filed. On page forty three we have Johnson County. Letter filed. I just below that on page forty three is Phillips county. Better filed. Bills can I go through page forty five. And we have Poinsett county. filed. Polk County. Matter filed. Then you need county. S. pages forty five three forty seven. Matter filed. On page forty eight we start with reports with repeat findings that was the last of the reports that were part of the prosecuting attorney. At the top of page forty eight is Lonoke county. Matter filed. On page forty nine is a city of Garfield. Better filed. On pages forty nine and fifty is the town of Haynes. Better filed. On page fifty one the city of free. Matter filed. Also on page fifty one the town of joiner. Matter filed. And on page fifty one. Of. The town of Mount Vernon. Matter filed. On page fifty two the town of raven and springs. Matter filed. Also on page fifty two the town of tupelo. Matter filed. Hi there in the town of western Grove also on page fifty two. Matter filed. On page fifty three the city of Wilmont. Matter filed. At the bottom of page fifty three on three page fifty five is Clark County. Better filed. On page fifty five in the middle of the page we have reports with findings of this is the port on water and sewer fund for two different years. This was done by a private CPA firm and we are just waiting to get adequate responses for these findings A staff recommend we file. filed. Okay so we made it through to on page fifty six start the reports with findings with responses and these go page fifty six through seventy three these are all reports that we got adequate responses to whatever findings they had of their no questions about any of those staff recommend we filed all those. We heard a recommendation no questions matter filed for these items these towns. And then on pages seventy four three seventy eight there are a hundred and eighty seven reports that had no findings several recommend with all those as well. No questions about filed. Senator Cooper go ahead Sir Mister one have question back on page twenty one the ones we just filed. Well the thing is that the. The. Let's see if and where will be here. Of some of these have to do with the. The funds it says post be paid over to the county treasurer but a certain day of the month. or within ten working days thereafter. Are these. Late or missing or do you have any knowledge of the same this maybe one or two times in this. In the report in the no this is been referred to the prosecuting attorney with a just curious. About this particular item okay this would be under Marion County sheriff's office and not pay over the county treasurer on the first of each month that within ten working days this particular finding was not referred to the prosecuting attorney. Of I would say that this is I just did not do it timely yes from the finding Because we're not show and an amount necessary it doesn't look like I didn't paid at all it looks like they did not pay it timely. Well you know what the. Prompted this question is county Clerk situation in cricket county. The vote a lot of money so with. I thank good going forward to. You know my opinion is there's some things need to be done to tighten some these things up so I just. Though to get some comments from you on that yes Sir and fact that we have some staff members it Craighead county today talking to the officials there about some internal controls that might can be put into place to prevent that kind of thing from happening again. And there are some things that. H. office in a courthouse naturally is pretty much autonomous age official has is elected and has their own office but there are some things that might could be put into place that would require more checks and balances ninety between the offices. If for example. There was a law or. That either someone the county judges office of the treasures office had read access only. To all the bank statements all the bank accounts of the county they couldn't do anything that they could see it. That would have prevented this and I'd I'm talking off the top of my head so there may be referred questions that I haven't thought of but just that there should be something in place. That could maybe prevent that from happening again. Well up I think there's some things that can be but the. but it's creating a real problem and Craighead so. Thank you. Thank you senator Cooper. Any questions. Okay and first up the Senate senator Johnson. Go ahead Sir yes Sir just a quick question misty on page fifty nine and a couple after that you had several findings on the parent as Phil water authority of. Part of that is in my district and I'm familiar with the. Situation they either are or have been I'm looking over Representative fighting for a note for better not but they are being acquired absorbed asset purchase I don't know how this works at by central Arkansas water and I wonder where does that leave the disposition of these findings if they. Our. I guess absorb is probably the best word at this point I don't know the actual legal what they're they're doing it but there that that service is being taken over by central Arkansas water and how does that leave this particular these findings. Well as you can see these reports ward done by bearing associates a private CPA firm because we don't do the water and sewers I would just say that probably would be up to central Arkansas water once they're in control to put controls in place to correct these things okay I will be in touch with Mister Rowe hand in and see how that is I know there's some technical issues not financial issues that they were dealing with since our taking over the engineering situation and this could be yet another thing they're having to do but I just want to see where we were and I will find out about that in and hopefully we'll have some detail committee in in October so thank you thank you Mr thank you senator a Representative makes give me your C. number one more time Sir. Thirty six okay go ahead Sir thank I I just a quick question for staff I'm just kind of curious how the viruses impacting your ability to get out to the cities and do the audits. It it's very ing as you can probably imagine it depends on The situation at the entity like we have several that there been outbreaks say in a courthouse or city hall. What we've been doing is trying to work with those entities will all the entities really. To pick up as many records as we can and do the work off site to the extent possible both keep our staff safe and the the staff of the counties in the city's safe as well. and it's so far it's worked much better than I would have guessed it would most of the entities are working very well with our our staff and being very cooperative. So so it sounds like for the most part you'll be able to keep up with the the work flow and won't get too far behind because of all this or. Senate some eight. Sam is slowing us down like if I have an outbreak we kind of just stop there and and trying not to make any contact with them until things are are settled and so it may be that we have are waiting on records to finish or even in the middle or in the beginning so it's probably not flowing as fast as it normally does but we're working to the best of our ability and I believe the antis are trying to help us to the best of their ability to keep things moving okay because I I know on a in a normal situation you all are usually yeah B. five over work to the point where any trying to get everything done in time and throw this on top I just wanna make sure that we all feel like you have the resources to meet the the commitments that were. Counting on you bit to be able to reach or if that's something that we're gonna need to look at special again the session to make sure that you all can fulfill the commitment that we've asked to fulfill I appreciate that and there are places that. We're gonna have some additional work due to the nature the cares act to a lot of places getting more federal money. And they'll have to have federal compliance audits which on the city county side we don't do those that they'll have to contract out for that but then it would also call some reports that we would normally to the finish the compliance report on which is somewhat less than an audit we'll have to do an audit on those they're required to have the federal compliance as well. And so into we know how all that it's going to shake out it's it's really just kind of hard to say that all right thank you can and we are so we definitely appreciate the work you're doing during all this thank you very much. Thank you Representative. Any more questions before the committee. Representative rye. Just a second here. See number Sir. Pardon me. Say it again please. Okay. Okay go ahead thank you Mr chairman ms chairman will take us back just a little bit to what senator Cooper was speaking about a few minutes ago of about situation occurring Craighead county and and this could be a big problem of you know across the state should we not be able to to get this straightened out pretty quick and basically will I think senator corporal what is happening here in most cases and you know in a county when people are paying their taxes up owning a home you know with the month of may really is starch in February and goes through October the fifteenth what happens on those particular of pay that's that occur during that time frame that And the man people don't keep a nice senator Cooper on the delinquent taxes like they should that's a that's a big problem and what actually occurred in that I think in Craighead county was. Was the delinquent taxes that will company and especially at after October the fifteenth no one really cap on our own it senator Cooper because it's not near is not the nearest big amount is what comes in during the time that it's legal to pay taxes without a penalty. And we may need to hello Sir you know next time around us Senator Mart we may need to look at this because there's some funds there that can H. K. and I have a view of from year to year because no one really keeps up with a it is a hell of and it may be that we need to have that designated though all. Items that go through the share of and to the collector that not only the current taxes but all. Of taxes that are occurring. From. The County collector. the county treasurer that have to be transferred no later than ten days into the month of of the following month that that report of all those transfers probably should be reported it's a quorum court. I think we get that done. Well. I don't know. Excuse me I don't know. How much of that involve this case because there was a lot of different things going on simultaneously in. Probably the biggest problem that it's. But here's or just within the fires on the money. And double signatures maybe on checks and things like that where one person can. Senate check on of an account to themselves and the no it's in. Courts now so it'll it'll all come out later but to. It's been pretty complex issue thank you. Okay Representative rye appreciate your insights here's a lot of this is through experience say anymore questions for many of our more of our members. The reminded. Next meeting date tentatively scheduled for October eighth. October eighth. If there are any changes you will be notified but let's go with October eighth right now miss Steele anything else. Nothing else come before the board. We are adjourned.