Legislative Joint Auditing-Counties and Municipalities
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Committee, come to order, please. Gentlemen, please sit down. Also, you
too, Senator Flippo. Okay. Okay, welcome to the Committee on Counties and Municipalities of Legislative Joint Auditing Committee.
I'm going to ask my co-chair, Representative Rye, if he would
give us a very brief word of prayer. Johnny?
Senator Scott Flippo
Unverified
2:09
want you to pray. Thank you, Mr. Co-Chair.
Has anyone read the minutes for the October 12th meeting or have any questions about it? If not, Senator Filippo, you are recognized for that motion. to adopt the minutes. Is there a second? Second by Representative Dalby. Any discussion? All in favor say aye. Opposed? Thank you. They're adopted. Okay. We need to now move to discussion of repayment of highway turnback funds. We have the town of Jericho on first. And before
I call them up here, I want to speak about something. I brought this up. Committee, have y'all gotten a copy of the comparison chart that Mr. Jones created for us? It should be in your packet. Also, I want to thank him for doing that. This is information we need. And those of you that were at the Executive Committee meeting earlier today, I pointed out that we're not going to make any decision today on a policy like this, but I mentioned to the members of the
Executive Committee, and I want to mention it to everyone on this committee, we need to come up with a way to deal with these situations like this, and they are numerous. I think they are too numerous, but we need to have something that's consistent because I don't want us to ever be in a position of being accused of, we treated one municipality differently than we did another one. And I know there are different situations in each case, but
we're going to come up with something consistent. I talked to Chairman Wallace about the possibility of it being a something that might even require legislation, but certainly a policy thing. And I will have that same discussion with Chairman Gassaway. I appreciate that he's here today since you were not there this morning, but this is what we did, Jimmy.
But the idea, we're not going to do anything, chisel anything in stone today, but we need to have a policy to be consistent on how we deal with these. We've had one request, and I don't even remember which one it was, Tim, but that it would take 70 years to repay the money and I just don't think that's acceptable. I mean, you know, I guess it's the old thing my mother used to say. You give them an inch, they take a mile. We've got to be fair, but we've also got to be reasonable about how this works out.
Senator Scott Flippo
Unverified
4:55
So with nothing else on that, then is there anyone here from Jericho? Do we need to have them come to
Speaker 14
5:02
the table? They weren't invited. This is just the application. Do we need to
do that? Because I had mentioned you have them. Mr. Jones and I discussed earlier the possibility of these two towns being invited to come back. I don't want to take any action without them being here to respond. So let me request, if I could at
this point, I'm sorry, Senator Love.
Thank you, Mr. Chair. Now, did we invite Jericho and they didn't show up? That's not
the case. They haven't been invited yet. That would be the next thing out of my mouth. I'd love
for you to make a motion that we invite Jericho and Dias to attend the
Senator Fredrick J. Love
Unverified
5:44
next meeting. Well, I will say I'm going to, since I'm not an official member of the committee, I'm a member of Audit, but not
of this committee, I would say that. Okay, well, I would request them. Representative Gene made that motion, seconded by Representative Dalby, to invite Jericho and Dias to attend the next meeting.
any discussion if not all in favor say aye opposed motion passed so we will do that so let's go down do we need to do this Google before we do it'll be the second one okay we'll move to the review of reports if you have that sheet we will start with City of Dermott. All right, we have
Speaker 25
6:35
the City of Dermott for the year 2021.
This is the first of the reports that have been deferred, and it was deferred for two specific findings, and the first finding is on page two. In the middle of the page, restricted street fund moneys were improperly used for non-street related utility payments totaling $13,515 in non-compliance with code and the next is on page three under the district court clerk the
balance in the district court city bank account was not identified with receipts for cases not yet adjudicated and the payments made on all unpaid individual time accounts in the amount of $15,000 in noncompliance with the code. A similar finding was noted in the previous 18 reports dating back to 2003. Mayor Walter Jordan was invited. I'm not sure if he's here. Okay, all right. And District Court Judge Melinda French is in court,
and so is the District Court Clerk, Megan Charlton. But we also have Kristen Clark from the Administrative Office of the Court. She's the legal services director, and so they are here to answer questions about Ms. Clark, about the court, and the mayor about repaying the street funds. Mayor, if you'd like to come to the end of the
Senator Fredrick J. Love
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8:05
table. Senator Love. Can I just get a clarification? Did I hear Mr. Jones say that it
was a finding from the previous 18?
2018. 2018. Oh, from 2018. Okay. All right. I thought you said the previous 18. He meant the year 18. Okay. All right. Yeah. Thank you. Yes, Senator. Yes,
Speaker 25
8:31
it's been a finding for a long time, and that's why Ms. Clark is here and the judge was invited as well.
Speaker 31
8:37
So they'll answer when they come to the end. They'll talk about
that. Okay. Thank you. Okay. Mayor, if you could identify yourself by name and title
Walter Jordan
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8:51
for the record? My name is Walter Jordan. I am the new elected mayor
for Dermott 2023. Okay and you were
elected in the last general election so you were sworn in in January? Yes sir. Okay thank you sir. So these problems didn't happen on your watch
is what you're telling us. It happened right about the time I'm getting ready
to go. Mayor, thank you for that. Do you have any comments about what Mr. Jones has told us about you need to add or that
I will allow the committee to also
Walter Jordan
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9:30
ask any questions if you have me. Okay, the findings on the audit from the street funds. I found out since I've been in office the previous administrations were just taking money, just putting in general funds, not putting it where the Pacific places that it needed to go. They were doing everything out of general funds. If the dog catcher got a
check, if the fire department got a check, it all went to general funds. And they distributed moneys that were not supposed to be distributed out of general funds paying all bills. That was their source in paying. Since I've taken office, I've corrected several entities concerning the farmers' pension funds, which was
$11,000 and some dollars misappropriated. I got one now, I think, concerning the street bond, which is $29,900 and some odd dollars. I'm looking to omit that debt before Christmas, or right before 12, 31, 23. So a lot of these things, which I found out on record,
with overdrafts of monies, just double up the monies where the monies was coming from to eliminate those overdraft fees. It's been a struggle. It's been hard, because some of this stuff has, God, I just cannot see how it's gone so far, so
long. Mayor, on page three of our report, it
says that there is an ordinance that designates the district court clerk
is responsible for the district court fines, and however they were being collected by the police department. That one particularly disturbs me. Has that been, I'm going to say,
Walter Jordan
Unverified
11:55
straightened out? We're working on straightening that out right at this very moment. Ms. French and the court clerk is rather busy, and you have to just catch them periodically. So we're working on that right now with them
to make sure that these monies get taken up by one individual. And Ms. Joanne Bush has kind of talked with us on that and directed it. Who is Ms. Bush? What is her position, Mayor
Ms. Bush? She is a representative
Walter Jordan
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12:33
for the Municipal League. Oh, okay. I understand.
Walter Jordan
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12:40
city. Right, right. And I've talked to her quite frequently on some of these things, and she's giving me information on how to get them corrected.
But that money, which you're talking about now, about a district court taking the money, it's the police department taking the money. I can see how that can be a mishmack there, two different entities collecting a fine. So it's either one or the other. And that's what we're working on to correct at this time. Okay. Representative Gene,
you have a question. Thank you, Mr.
Representative Lane Jean
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13:18
Chairman. And Ms. Bush was also former mayor a long time of Lake Village.
Yes, sir. Which is down in y'all's neck of the woods. Oh, yes. Anyway, I've got a question. The Nursing Home Capital Improvement Fund that you owe $110,000 to, is that nursing home city-owned? It's city-owned. Okay. That's okay. That's a rarity, but y'all own the
Walter Jordan
Unverified
13:45
nursing home there. Right. The city owns the nursing home, but that was something happened during a time with one of the previous mayors,
and the city has brought that amount down to like $85,000. Okay. Down for the $110,000? Right. Okay. That
Speaker 53
14:03
$110,000 is just the old number. Okay. But that bill is being paid on every month. Okay. Thank you. Thank you, Mayor. Uh-huh. Thank you, Mayor. Other questions for Mayor Jordan? Okay. Can
we approve the bill? Oh, Ms. Clark. I'm sorry.
Can you come and be recognized? Identify yourself by name and position for the record.
Speaker 60
14:38
i'm kristin clark i'm the director of legal services at the administrative office of the courts
okay thank you miss clark mr jones has a comment
Speaker 25
14:47
i just wanted the the committee to know that district court clerk megan charlton uh has a sick child today she was invited but she couldn't be here and district court judge melinda french is in
Speaker 31
14:58
court today so uh just wanted you to know
that. They were invited, but they had good reasons to not be
Speaker 60
15:12
here. Okay. Ms. Clark, you have anything to tell us? It's
my understanding that Representative Dalby may have some questions for me. Well, I'll certainly recognize her, so let me let her do that,
Representative Carol Dalby
Unverified
15:23
and then she can fire away. Representative Dalby, you're recognized. Thank you, Mr. Chairman. I did.
I requested that Ms. Clark come today because I felt like that the committee might need to hear some of what is offered to district courts
around the state, because this is a
finding that, talking with Mr. Jones, comes up quite often, and this is a finding that says a similar finding was noted in previous 18 reports. Is
Representative Jon S. Eubanks
Unverified
15:53
that 18 years? That's 18 years. Mr. Jones is
Representative Carol Dalby
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15:56
not 18 years. So this has been going on for the city of Dermott for 18 years, and I think I made a point last meeting that we can get to a number.
And I'm going to ask Ms. Clark if she would kind of explain to the court this fund and what happens, because this is something that happens district courts throughout the state, but if you'll kind of give some background, if you would. she and I have talked about this, and I wanted to give some background, talk about what the court does to try to help these courts, and that there is a solution to this, but that our district courts, particularly our clerks, may not be
Speaker 60
16:38
taking advantage of. Sure. Thank you, Representative Dalby. So when you have district courts, they receive tickets from law enforcement. Those tickets
are used to basically create cases. Then cities and counties designate some agency to be a designated collector for the district court. In this particular instance, the designated collector is the police department. So district court accounting law says that the police department is the designated collector. Ms. Clark, could you
either move the microphone closer to you? Is that better? Yeah, that's better. Thank you, ma'am.
Speaker 60
17:10
Okay. In this instance, the designated collector is the police department. So they will receipt in all of the payments for funds that they
receive. District court accounting law requires that they include certain information on those receipts. Seven business days before a court date, the police department is required to then give an arrest report, is what it's called, although it's not like an incident report, along with a check to the district court clerk. That is what the court clerk then uses to match up funds that have been paid with court cases that they currently have. You have a situation where unidentified funds come into play when you have a fund that's been taken, money taken
by a police department, and there's not a corresponding case. So that might happen in a situation where, let's say Senator Wallace receives a speeding ticket, but I go in and pay the speeding ticket for him. If law enforcement receipts that speeding ticket in my name because I'm the one who's made the payment on it, then when it goes to the court clerk, there's not going to be a payment for Senator Wallace. So likewise, there's not going to be a case for Kristen Clark. So we have a situation where you have unidentified funds. That's how that happens is it's just not
getting all of the information on receipts on both sides of the whoever's the designated collector and then also on the side
Representative Carol Dalby
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18:43
of the court clerk. May I ask some questions? You just go right ahead. Thank you. Ms. Clark, when this happens, is there a way to trace back? Is there a way to actually eventually
get these funds to the right person accounted for? And is that something that the court, and when I say the court, the AOC, the Administrative Office of Courts, ever works
with district courts? Can you kind of take the committee through? Because it sounds like, well,
maybe there's not a solution to it but as I understand there is a way to get to a number and then what
Speaker 79
19:18
do we do when we get to that number? Sure so the first thing
Speaker 60
19:23
that you have to do is be able to get to a static number with regard to these unidentified funds and you do that by first looking at what amount of funds do we have receipts for? What amount of funds do we have that we're
actually going to represent adjudicated cases, which means people have paid, they've showed up in court, their cases have been resolved, and we're going to disperse that money at the end of the month. Then you're going to identify how much money do we have here for a case that has not yet been adjudicated. And that's a case where it's been paid, it's on the docket, we just haven't had a court date yet for someone to have entered a plea. Once you can identify those three numbers and subtract that from whatever the balance is that is in their checking account, that tells you
how much is your amount of unidentified funds, okay? So once you have that dollar amount at a static amount, and what I mean by static is the number is consistent from month to month to month, then the court can then enter an order dispersing those funds. Part of it would go to the general Fund. Part of it would go to the state, to the Administration of Justice Fund. And we have an order that we have worked on over the years with Leg Audit that specifically addresses that kind
Representative Carol Dalby
Unverified
20:43
of issue. And in regard to the City of Dermott, have you or has the Administrative Office of Courts reached out to the City of Dermott on various occasions? I mean, you see these reports from these different cities. You know when somebody's getting tagged on this. And do you reach out not only the city of Dermott but whatever city it might be or county because it could be a county district court and what services do you offer and have you done that in this case
Speaker 60
21:14
because this is going back 18 years. So yes we do see the the court findings Mr. Jones forwards those
to our director Marty Sullivan and then he shares those with me. We have four different trainings each year with our district court clerks. And one of the things that we regularly tell them is please do not be embarrassed when you have these types of findings. Please call us so that we can help you. There are solutions and we can help you work through this. When you have a court that is on context, which is actually the state's case management system, it's a little bit easier to work through those issues with. We have not only the staff attorneys, including myself, who
can help with that, but in our court information systems division, we've also got personnel there who can help isolate those numbers and work through those. When you have a court like Dermott, which is on a third-party vendor software, it's called Virtual Justice, then we're a little bit more limited as to what we can do. But in this particular situation, I have visited with the court clerk on several different occasions, trying to help her with her next steps, beginning with how does she calculate and begin to identify those unidentified funds,
helping her work with virtual justice, which is the vendor that she's using as her case management system. And as recently as Monday or Tuesday of this week, I visited with her. And what it appears to be happening in this case is she's using virtual justice for her case management and her disbursements. Virtual justice doesn't have the ability to actually issue checks in it. So she's using Quicken software for her checkbook. One of the things that's happened in this particular case is the balance that's in her checkbook in Quicken does not match the balance that's in, it shows to
be in the checkbook in virtual justice. Until that's corrected, then this is going to continue to be an ongoing problem, and that's what I think has probably happened for the last 18 years. But yes, we absolutely offer assistance with that. I pulled trainings over just the last five years that are specifically related to educating clerks on leg audit issues and how do you resolve those, as well as proper district court accounting. And over the last five years, we've offered 13 different trainings to the clerks.
Some of those have been provided actually by personnel from leg audit. Some of those I have done. Some of them have been provided by city finance directors. And then we also have brought in clerks who have worked through these issues as well. Just a couple more follow-ups. Ms. Clark, is it... You keep asking
Representative Carol Dalby
Unverified
23:53
questions to your three, Representative Dalby. Thank you, Mr. Chair, because this is important. Yes, ma'am. And you've done
your homework and you're asking the right questions. Please
Representative Carol Dalby
Unverified
24:00
proceed. You know, my point being is we can get to a number and that money can get dispersed out
and basically we can get to a zero, but we've got to have people that are taking advantage of what's being offered by the state
to get to those numbers. Let me add one thing here. If you're going off on a walk in a certain direction and you're one degree off from the other, 18 years later, you're pretty far apart. And what I'm hearing Ms. Clark say is that to reconcile these two accounts, the Quicken and whatever the other account measurement is, we've got to bring those lines back parallel.
So I'm going to let you please continue as long as you need to so we can plot the
Representative Carol Dalby
Unverified
24:43
course on this. I won't be much longer, but I'm trying to think
what my train of thought was when you brought something up. But your training, in this regard, the court, my understanding, is moving to a new system soon, hopefully one that the whole state's going to be
Speaker 60
25:03
on. Is that correct? So that is correct. The Administrative Office of the Courts is currently developing a new statewide case management system.
It will replace what many of you all have heard us refer to before as context and then also court connect. And once that is developed, it will be deployed in all of the district courts throughout the state and then through the circuit courts. We are focusing initially on the district court related cases, the traffic and criminal. Those are where you have the most complex set of accounting rules, I'll say, and also the most complex set of disbursement rules as far as how are these funds supposed to be used,
who's supposed to receive those, and for what purposes can they be used. So I do not have a timeline for when that will first be deployed, but it is well
Representative Carol Dalby
Unverified
25:54
underway. And with that being said, even though there are basically two systems that are utilized in the court,
you can help courts get to a number a static number is that correct absolutely and in the and in this particular case because it really bothers me we're 18 years down the road over these 18 years has the court tried
to help the district court of dermont to get here to get to
Speaker 60
26:22
a number yes aoc absolutely has and again we reach out to all the courts and always offer our services but i can you can lead a horse to water but you can't make them drink and i'm not saying that's what's happened here with dermot but there are many of the cities and counties who have leg audit issues who are just embarrassed and don't want to talk to us about them but yes if somebody wants to visit with us and wants to accept our help we can normally walk them through that process and get them back to a
Representative Carol Dalby
Unverified
26:50
zero balance is there anything that this committee needs to know that maybe i've forgotten to ask you but it's
important to how we get these district courts reporting correctly and doing what they're supposed
to do. Is there anything else that I've failed to ask you that you need to let this
Speaker 60
27:09
committee know? I don't think you failed to ask me this, but I do think it's important for you all to understand just how complex district court accounting can be and also those disbursement rules and why it is so critical that if we want these funds to be identified
and we don't want to have leg audit issues, that getting all of the courts onto the state's new case management system is going to be crucial. It's the only way that we can ensure that everything is configured properly and that also that we can assist them with completely resolving any kind of leg audit issues. But hopefully it will help us avoid those leg audit issues to begin with. When you've got a court that's using one of the third-party softwares like VJ or JustWare or Velocort,
we're a little more limited in what we can do because we don't actually have access to those systems to dig into the accounting side of it and kind of look at the forensic side of things.
Speaker 96
28:07
That's all the questions I have at this time. Thank you, Mr. Chair. Thank you, Representative Dalby.
Ms. Clark, I want a brief follow-up on this. the system you were referring to that would basically be able for your office to access and all that we we don't mandate that at this moment for district courts to use that do we
Speaker 60
28:29
so it is not currently mandated for district courts to use that what we have done is we've rolled it out and it's implemented in many of the states larger district courts and we did that primarily to ensure that we continue to get highway, federal highway dollars for the state of Arkansas. It's important to make sure that those dispositions get reported and reported timely. So that's one of the things that we've done. So we're in a lot of the courts, but not all of the courts, and it is not mandated at this point.
I'm not going to pin you down to a date,
but is this something that perhaps we should consider making mandatory at some point in the future? I see a lot of nods in the audience, but I'm not going to say let's do it immediately because there may be some reasons to transition into this, but is this something that we should seriously look at making mandatory for all district courts? It
Speaker 60
29:23
is certainly our hope that it will be mandatory for all the courts going forward, district courts and circuit courts, and it's also our hope
Speaker 81
29:31
that we can build a system that everyone wants to use. Okay that's that's even
better. It's we'll make them want it rather than tell them they
have to do it so but it'll make it easier anyway. All right any other questions for Ms. Clark? Chairman
Speaker 105
29:53
Wallace? Members I would just like to say that this past spring I had a really good bill that I was having a hard time getting passed and getting an agency to step up and work with me, and it was on sexual predators. And Mrs. Clark came in and rode shotgun with me and helped me get a really good bill through
that's now the law, State of Arkansas, and I appreciate that, and thank you for what you
did. Well, you're very welcome. She's a real superstar. Thank you very much for those kind words. Thank you,
Representative Carol Dalby
Unverified
30:28
Senator Wallace, and thank you for that, too, Ms. Clark. Representative Dalby. Just one other thing, Mr. Chair, that I'd like the committee to think about and other members of the legislature. Maybe at some point in time we need to do a review of all the district courts within the state of Arkansas. Now, we're doing one as far as fines and fees. Senator Stubbefield and I are chairing a task force, but there may come a time that we may need to look at some of these district courts
that either aren't or won't follow what the law is that we dissolve those courts and let another court take them in. And so instead of having so many individual courts, because you're going to have the same judge out in the county as you have out in the city, you just make it one court and do that type of thing, and that will save money for the state, I think, and make this a situation that may not be so cumbersome, but that's something to come down the road. And that's my last comment. I appreciate
your work on that, and I know there will be a
lot of fingers wanting to poke into that pie.
Senator Scott Flippo
Unverified
31:24
But certainly I'm always a believer in consolidating those types of services, and as you mentioned, there's probably some savings to be had for the taxpayers, so we can do
that. I didn't know if you were scratching your nose, Senator Lover, if you
Senator Fredrick J. Love
Unverified
31:43
just needed to be recognized, but you are recognized. I want to go back to
the issue of the clerk of this court. Now, you said you offered training.
Was the clerk capable? I mean, kind of talk about that in that aspect because so many times we find that some of the personnel are just not equipped to actually make the jump. So talk to me about that. Yeah, I believe that she's
Speaker 89
32:17
absolutely capable. When I visited with her, she inherited this problem. Again, it's 18
Speaker 60
32:23
years dating back to, I think, 2003 was maybe the first time that there was a finding.
So she inherited the problem. She is working on it. And I think that now that she understands that these numbers will never match, she's never going to get to that static number until she can have a quicken checkbook balance that's going to match what's in VJ. and she's reached out
Speaker 65
32:46
to Vijay to get assistance from them in helping her, I think that you'll see a
Senator Fredrick J. Love
Unverified
32:51
resolution. Okay, and then before we go to the new system that you all are rolling out or have rolled out, that number has to actually be reconciled.
Speaker 60
33:00
Is that correct? Yes. Do they have a CPA?
Senator Fredrick J. Love
Unverified
33:16
As far as the city of Dermott or the district court? The district court? Not to my knowledge. so does the cpa not review those
Speaker 60
33:23
numbers or i mean do you know or i mean can you speak to that yes so in most cities and most counties who have district court clerks you have to understand that we ask a great deal of this personnel if you ever take a look at um the statutory requirements and
job responsibilities for these folks, and then also how complicated disbursement rules are and also district court accounting law, you're asking a lot. A good district court clerk is worth her weight in gold or his weight in gold. But also keep in mind that when you have cities that have very limited resources, sometimes it's difficult for them to find someone who is probably able to meet all the requirements that are set out in state statute.
So there's always going to be that challenge, but district court clerks aren't state employees. They're hired by cities and counties, and so they're making those determinations about who the most qualified applicant is. And there's some challenges there, particularly for rural areas. Okay.
Senator Fredrick J. Love
Unverified
34:29
I hear what you said about that, But are they subject, and I guess, Mayor, are they subject to the audit? Do they fall under your audit as the county?
Do they fall under the county audit? Because I guess I'm trying to figure out if there is a CPA involved, how are these numbers not reconciled? And I might just be missing something, but I would think that the
Speaker 89
35:01
numbers would be reconciled. So, I'll say this, if you comply with district court
Speaker 60
35:06
accounting law, you are supposed to make your deposits intact daily. You are also supposed to be reconciling not only your bank statements at the end of the
month, but also your citations are supposed to be reconciled when you have a completed citation book, although now that we're on e-citation, it's a little different. You are also supposed to be reconciling those arrest reports that are provided by the designated collector with the cases and those dispositions. And when you have a smaller city who has maybe one or two clerks, or in some instances you'll have a city who doesn't even have a full-time employee, it might be a water clerk that's been designated to basically take these duties.
This can be really challenging because they're not going to have the resources to be able to do what is required. And in this situation, you've got 18 years of this building, and it's going to take some time to get it worked through. But this is why, I mean, education about what district court accounting law requires, not only for district court clerks, but also for law enforcement, because they're an integral part of that. I mean, there's a whole section there on what their duties are, and ensuring that those duties remain segregated is what fixes this.
Senator Fredrick J. Love
Unverified
36:23
Okay. I think I hear what you're saying. Mr. Trier, I yield. If you
want to finish, I'd be happy to let you do so. You seem to have another question there, Senator. If you want to go ahead, I'll
Senator Fredrick J. Love
Unverified
36:41
allow you to complete your thought. No, I understand the complexity that you just laid out. I'm just trying to figure out if there's a CPA involved, why these numbers are still not reconciled.
And maybe that's just a question that I could take up with leg audit. It's just kind of, I'm kind of missing something. Let's ask Mr.
Speaker 123
37:07
Jones. Can you kind of answer the senator's question on that?
Speaker 25
37:13
It's probably pretty rare for a district court clerk to be a CPA. No,
Senator Fredrick J. Love
Unverified
37:19
no, no. I'm not saying that
a district court clerk is a CPA. I'm asking if they have a CPA.
Speaker 31
37:28
That may depend on the city. Most of the time, if a city has a CPA, they're not involved in the court process. process. Okay. That's all right. That's what I
Speaker 125
37:38
guess more like a bookkeeper, Mr. Jones. Well, the court clerk
is the bookkeeper for the clerk. Right. Okay. I guess that's probably a good answer. We're going to be able to find out today, Senator. Thank you for your good question. Thank you. Other questions for Ms. Clark? Representative Dalvin. Not a question. I just want to thank Ms.
Representative Carol Dalby
Unverified
37:59
Clark for her time and for answering all my questions this
last month and also just for the committee, you know, we're not talking about small dollars. Some of these district courts are bringing in millions of dollars. Yes, ma'am. And so, you know, we're charged with doing the right thing by the taxpayers, and I appreciate the administrative office of courts providing as much training as possible because, you know, we're talking about people's hard-earned money that we're taking, and we need to be able to account for it, especially when you have courts
that are bringing in from, you know, $100,000 to a couple of million dollars every year. So it's not little money. So I appreciate what the court has done in trying to get it straightened out.
Absolutely. Thank you, Representative Dalby. Ms. Clark, we all appreciate what you've done to try to make a complicated system work. So on behalf of this committee and the entire legislature, thank you for what you do. Are there any other questions for Ms. Clark?
Any questions? Thank you, Ms. Clark. Any questions from Mayor Jordan? I think we're headed in the right direction. Mr. Jones has told me we can file this report, so if anyone would like to consider making that motion, we would, Senator Filippo moves to file the report. Is there a second? Representative Underwood, any discussion? All in favor say aye. Aye. Opposed? Thank you. Okay, we move to, thank you, Mayor, for coming.
Speaker 6
39:34
We'll move to City of Falk. Yes, we will move. Oh, and there's a
Senator Scott Flippo
Unverified
39:39
little change of how we're doing things. Go ahead and explain that. Well, today
Speaker 25
39:47
we're going to move through the list in order. We're not going to go back and forth. So, City of Falk, the years 2022, 21, and 20, Mayor Terry Purvis was invited to be here to answer questions about not obtaining an audit for the water and sewer department.
We spoke on the phone yesterday, and he's been very ill. He's had surgery. He's receiving a treatment. He is in the process of trying to hire an auditor. So staff would recommend deferring this audit, pending receiving an engagement letter from the city that they have with an accountant to
do their audit. Okay. Is there a motion to defer, Senator
Filippo? Second by Senator Gilmore. Any questions or comments? If not, all in favor say aye. Opposed?
Speaker 25
40:36
Thank you. Okay, the next is the City of Gould. And what we'd like to do at this time is we're going to simultaneously handle the report and item E on the agenda. So the Gould has been deferred. A couple of times, the mayor and one city council member at the choosing of the council has been invited to answer questions about the progress in improving the financial records at Gould.
The particular finding that they're dealing with and answering questions about is on page four. And the summary of it is they've missed on a lot of the issues of the municipal accounting law in Arkansas Code 1459-101 through 119. Everything from journals not being correct and bank accounts not reconciled and invoices and supporting documentation not being provided
and not posting in annual financial statements. And these reports, these findings have dated back to 2017. But the mayor and a city council member are here to answer questions. Could you all
Senator Scott Flippo
Unverified
41:56
please introduce yourself, your name, and your position for the record? My name is Hazel Pruitt.
Hazel Pruitt
Unverified
42:05
I'm the mayor of Gould, Arkansas. Thank you, Mayor.
Speaker 137
42:11
I'm Dubbs Byers. I'm city council for the city of Gould.
Okay, thank you both for coming. Mayor Pruitt, do you have any opening comments?
Hazel Pruitt
Unverified
42:30
Well, I apologize to you all for us being in this position, but a lot of it is mistakes that was made, and we have hired a CPA to help us get out of this situation.
Speaker 143
42:45
and we hope it's satisfactory to you all the steps that we are taking to try to correct this problem. And like the court clerk said here, Gould has been having this problem for a while, too. But now that we are all together and working together, we're going to look back on what Gould has been done, and we're going to correct this, if you would allow us.
Thank you, ma'am. Mr. Byers, would you like to speak on
Speaker 136
43:22
this? Thank you, Mr. Chair and members of the committee. First of
Speaker 144
43:26
all, if it's permissible with the chair, I'd like to recognize that we do have all of our council members here if they'll kind of nod or wave or whatever. They're all here in support, as well as our recorder treasurer and even a couple of citizens from Gould are
Speaker 147
43:43
here, So that shows you the interest and support that this has.
I want to thank all of them for coming. All of you, welcome. We're glad to have you. And thank you for the effort you're making to kind of help straighten
Speaker 136
43:59
all this out. So please continue. And also have Representative Ferguson here. He is our state rep. And we always welcome him,
Speaker 144
44:05
of course. If I may, I know that it says that you have questions. If I may, I have an outline that I'd kind of like to quickly go down, and I think it may answer some of the questions, and then if there are others, we'll try to...
And that might save some time, so you proceed, Mr. Byer. The steps that are being taken to get the city finances back into compliance with the accepted practices, first of all, two main things. Number one, we have contracted with CSA Software Solutions out of Maumelle. This is the company that has the software that most cities use, the financial software. We approved the city council approved contract on 9-15 to provide four hours of training to the recorder treasurer.
We also have a commitment to get the software data in line with actual practices. I do have an email from Dominique Green, software specialist, dated October 31st, 2023, indicating the bank reconciliations. That was one of the things on the list. Bank reconciliations have been done on the city's general fund, checking bank statements going back to January 2020 through August of 2023. And she is working with the secretary, huh, 23.
She is working with the recorder treasurer on getting her up to speed on being able to do those on a month-to-month basis. Secondly, after the last meeting with you, we met with Senator Love, and he gave us counsel that we might reach out to the Black Mayor's Association to see if they had any recommendations on a CPA firm with whom we could contract with in order to help us with the audit exceptions.
And the association was contacted, a CPA firm of Denman, Hamilton, and Associates out of Little Rock was recommended. And we did contact them. We sent them all the information that we had from the Legislative Audit Committee. And they sent an engagement letter listing the procedures to be performed by their firm. And it included two parts. And by the way, they are here today, Mr. Denman and Mr. Hamilton. I don't know if you'd like to hear from them or not, but they're over here.
I appreciate them being here, gentlemen. They were engaged, though. Yes, sir. Yes, sir. We'll see if questions
Representative Jon S. Eubanks
Unverified
46:34
come up where we'll need to have a comment, but you can go ahead. We won't
Speaker 144
46:41
bring them up right now. Okay. It basically included two parts, planning and evaluation. I believe the way that I read the contract, it's going to be over about a six-month time period with them coming down and doing an exhaustive effort to see what needs to be done
and then working with us to see that it is done, okay? On November 3rd, we did have a call city council meeting, and we voted unanimously. And I want to tell the committee that the council is unanimous in this. We're probably blessed we have no division on our city council. So we're all dedicated and committed to do this. And the cost of these services, $15,000 plus travel and copy expenses,
it's going to cost about $16,500, but we're committed to do it. The council is unified. There's no dissension. We want these problems to be resolved, and I believe that we have the commitment and resolve to bring about a resolution. That concludes my statement. I'll take any questions.
Thank you, Mr. Byers. And to the other members of the council, thank you for your willingness to serve. I always make special effort to thank school board members and city council members because you're true public servants, not politicians.
So any questions for either Mr. Byers or the mayor or even any other members of the city in any capacity that we need to represent ferguson
do you have any question or comment i might not
hear that motion right away but you i will recognize you soon to do that
uh any any questions uh senator gilmore mr byers i
Senator Ben Gilmore
Unverified
48:34
heard you state that the city council and all in agreement
How was the relationship between the city council and the mayor's office? Are you all working together? I'd like to hear from you, and then I'm going to ask the
Speaker 157
48:50
mayor the same thing. Yes, sir. We're working together.
Speaker 143
48:55
They're working with me, and I'm working with them. We're working together. Thank you, Mayor.
Speaker 158
48:59
Now, Mr. Byers, I'd like to hear from you. Yes, sir. I
Speaker 144
49:04
agree with that. I want you to know that this lady sitting here beside me is my friend, and I love her and we have a good working relationship and these people sitting over
here are my friends and we have a good working relationship and Ms. Sheila, the recorder treasurer, I love her. And I'm telling you that to say that we do have differences. I want you to know that. And sometimes those differences get quite heated and I'm sure that never happens in the
Speaker 147
49:33
legislature. Well aware, well aware, sir. But at the end of the day, at the end of the day, we're all for Gould, Arkansas. Okay.
And that's, thank you for that, and we always welcome that. I don't always agree with Senator Gilmore either, but I still love him. So let's, I know that Representative Eubanks has a motion, but I wanted to mention that I was not here last month's meeting, but I understood from Mr. Jones that there was a motion asking you folks to give us a report in December as well and I don't want to we're not taking that away but we we wanted to thank you for the progress made but my understanding is
that the committee did ask that you come back in December and give us a probably be close to a year-end progress report is it would that be acceptable mayor and and uh Councilman Byers yes sir yes sir okay great well with that understood then uh Representative Eubanks you are recognized for your motion. Now, I discussed this with Mr. Jones. We can file it, but we could also wait until after the December meeting to file it.
I would prefer if you could modify that motion to do that again in December, if that's okay. All right, so that's second by Senator Gilmore. Any other questions or comments for Gould? If not, all in favor say aye. Opposed? Great. Thank you. Thank you
Representative Jon S. Eubanks
Unverified
51:04
both for coming and all the folks that get along so well in Gould. And I'm so thrilled
to hear that. So when I drive down Highway 65, I will try to stay under the speed limit.
I know you all want me to go faster so I can help you pay this off faster, but I'm going to try to keep
it under whatever the limit is. Thank you all for coming. Okay.
Okay. Now we have City of Grady, which is obviously not very far away from
Speaker 25
51:37
that. Do we have anyone here from Grady? We do. Mayor Charles Nye and Police Chief Kenny Hunter are going to be here. Just wanted to back up one second. I just wanted the committee to know that the staff is currently completing the 2022 engagement for Gould.
We're going to exit as early as next week, and that report should be in the December meeting. And we plan to turn around and do Gould early in 2023, so we'll have a good idea where they are currently. But, all right, moving along with Grady for the year 2022 on page 6 of your synopsis. An audit agreed upon procedures report has not been obtained for the Grady water and sewer system as required by code. A similar finding was issued in the previous reports dating back to 2018.
Fines and cost revenue of $282,000 exceeded 30% of the city's total expenditures in the preceding year by $30,000 in noncompliance of code. This revenue was generated from traffic offense citations written or arrests made by the city's law enforcement personnel or from ancillary actions related to the enforcement of traffic offenses. and that finding was in the 2021 report as well. Mayor Charles Knight and Police Chief Kenny Hunter are here to answer questions.
Okay. I assume you're Mayor Knight. I am. Would you please introduce yourself for the record, Mayor, and your position? Charles Knight, Mayor, City of Grady. Okay, and is the chief here as well? No, he's not. Okay. Well, then you'll get to speak for him too then. I'll speak for him. Would you like to respond
Speaker 165
53:23
to the issue that Mr. Jones pointed out? Yeah, sure. As you notice, my audits were about four months apart.
So it was from the time that we found out, I guess, that we were really over in, I guess, would be audit year 21. We got that report. I was here, I think, maybe January or so. we went right into my next year's audit. I had about four months in between the two so obviously I hadn't, I really didn't, I can't take credit for this number being significantly lower than the previous
year. That's just kind of how when we talked about it last time the money is collected it was significantly higher the year before that I didn't have time to make those adjustments in that short of a time. That's the reason, you know, I'm obviously still over $30,000 this year. Excuse me, may
I interrupt you for a moment? So you're saying that that 281-932 number might not be indicative of the annual revenue
that was brought in from the traffic citations? No, sir. I'm saying that my audit the previous year was late. The auditor, from what
Speaker 165
54:44
I understand, quit. They had to assign it to somebody else, had to get
that person trained. I understand that part. What I didn't understand is, did that skew that figure and put you over the 30%? Oh, no, sir, not at all. Okay. I was just making the, you
Speaker 165
55:02
know, last time we talked about how it's impossible for me to know who's going to pay a citation
and things of that nature. Usually people wait until January or February when they get income tax, other fees and things have been added to it. And I was just kind of making the point that from the previous year, that number is significantly down, but not because of changes we've made. Now, we've made changes since, but that number is just the number. it came out to be significantly lower simply because we never know who's going to pay.
Yes, sir. And I'm going to bring something up, and I don't know if it would apply in this case. We had a bill, and I'm pretty sure it passed. We had transportation this last session, regular session, and it was calculating. I know that Representative Beck sponsored it. He had a town in his district that people, for the reason you mentioned, they get their income tax back in January and they pay their fine, but they might be paying a late fee.
And he was, I believe, and again, I'm speaking from memory. I don't have it exactly in my mind, but I think the purpose of the bill was not to count the late fee as part of the fine in calculating that 30%. And I know that Representative Hodges is nodding. If you remember that better than I do, I'd be happy to. Okay, anyone that knows or remembers what we did, Representative Dalby, of course, knows everything.
Representative Carol Dalby
Unverified
56:45
She's our genius lawyer. Yeah, I appreciate that. You are recognized, ma'am. And I'll pay you later for that
nice compliment. But Act 520 is the bill that you're referring to from Representative Beck that was passed, and it says that revenue does not include monies received by an effective municipality and remitted to another government agency. So if you're just a pass-through, it doesn't count. And the particular part that you're referring to, I think, Mr. Chair, It says, resulting from ancillary actions related to the enforcement,
so like a failure to appear or those kinds of things, late fees or not, but the rest of it remained intact. So your memory is
correct on that. Okay, so my only point, Mayors, is that
under the new law, we might calculate that number a little bit differently. And I'm not saying it would get you out from under exceeding the 30%, but it might. Theoretically, it could anyway. I wanted everyone to be aware of that. Any other questions for my co-chair, Representative Rye,
has a question for you, Mayor.
Representative Johnny Rye
Unverified
57:56
Thank you, Mr. Chairman. Sir, let me ask you this. This 281, 932 that exceeded the 30%, what year was that for? 22.
Speaker 173
58:07
Okay, sir. Thank you. All right. Thank
you, Representative Rye. Any other questions for the mayor? I wonder when you're going
to speak up, Representative Fyke. You are
Speaker 175
58:21
recognized. Yes, this is the staff, actually.
How many years have they been in violation? Is this
Speaker 25
58:31
the first year? If you're talking about the speed track
Chair
Unverified
58:35
violation, that's the second year. Second year. Yes. Okay, what actions are to be
Speaker 25
58:42
taken when they... Well, that's what triggers them coming to the committee meeting, having a repeat finding. Okay, well, they've
Speaker 181
58:49
been once, and then it happens again. Is there any, they just come back next time?
Speaker 25
58:56
Well, you've got to remember, this goes to the prosecuting attorney for the prosecuting attorney to determine whether they're a
Speaker 126
59:02
speed trap or not. Okay. And so that's what happens. Okay, did the
Speaker 175
59:06
last one go to the prosecuting attorney?
Speaker 31
59:12
Yes. And what was the results of it? Do you know? I
am not sure. We'll find that out because I really want to know, Representative Fied. My main experience with speed trap law was Damascus, which used to be in my district. And they probably caught Senator Flippo a time or two.
A couple. A couple. I only got stopped once there somewhere. But the fact is that what they do is they lose the right to write speeding
tickets on the state highways. And I'm at which, I mean, I'm okay with that. But I don't know the
answer to that, but we'll get that answer, won't we, Mr. Judge? May I do one
course. Go right ahead. Thank you.
Speaker 181
59:54
Representative, you're recognized. Hey, mayor, I gather you have permission from the state police to operate on Highway 65.
That is correct. All right. All right. Thank you very much. All right. Thanks. Highway 65 is
a great place to write speeding tickets, I think. Everyone nods on there. Representative Dalby. Thank you, Mr. Chair. This is for the mayor.
Representative Carol Dalby
Unverified
1:00:14
Mr. Mayor, do you have that authorization in writing? Do you have any document that shows that you are authorized or your city is authorized to write those
tickets on Highway 65? And if so, could you please provide that to the committee? Well, no, I would not have that in writing.
I'm sorry, you do not have that in writing? I do not have that in writing. Thank you. Okay, well, we
probably need to have that documentation if you would request it, and I'm sure that the colonel will be happy to send that if they're approved
of it. So it doesn't hurt to have that little bit of paper in your file, if you know what I mean. Any other questions for
the mayor? Okay. Is there a motion by the committee?
Senator Gilmore moves to file. Senator Flippo seconds. Any other discussion? All in favor say aye. Don't all yell at once, people. All opposed? The chair is unable to determine. We'll try that one more time before we do a roll. All in favor of the motion, say aye. Aye. Opposed? No. The no's have it. We will not file this. Mayor, you
may get to come back, but we're going to gather some more information.
That'll be fine. Thank you, sir,
Speaker 31
1:01:43
for coming. Okay. Okay, next on the list is Monroe County for the year 2021. Sheriff Michael
Speaker 25
1:01:49
Neal was invited. Is he here today? Okay. All right. He's not here. Staff would recommend deferring the Monroe County report. Is there
Senator Scott Flippo
Unverified
1:01:59
a motion to defer? Senator Filippo, do you have a motion to defer Monroe County? Senator Filippo moves to defer this one. Is
there a second? Second. Second by Senator Gilmore.
All in favor say aye. Aye.
Opposed? Thank you. Okay. Okay. Next we'll
Speaker 25
1:02:22
have The one report we have that's been certified to the bond board, it's the city of Duval's Bluff for the year 2022 on page 7. The city discovered that Fire Department Chief Kelly Hutchinson received $4,100 in proceeds from a firework fundraiser and only submitted $689 for deposit, leaving $3,411 unaccounted
for. Subsequently, the fire chief was charged with theft of property regarding the unaccounted fundraiser proceeds. In addition, the fire department sponsored a cornhole tournament as a fundraiser, and the fire chief utilized the city's credit card to purchase food items totaling $652 to be sold at a concession stand during the event. Due to inadequate documentation for both events, we were unable to determine if the fundraising proceeds were accounted for or if the food purchased was utilized properly. Furthermore, the city determined the fire chief
used the department's fuel card to make unauthorized purchases totaling $668. We were unable to substantiate a potential business purpose for $297 of the purchases, leaving $371 as questionable. This report has been certified to the bond board. Mr. Hutchinson was let go from the fire department no was in no one was invited to be here because it was not a repeat finding
staff would recommend filing the report is there a motion to file this report
do i need to recognize you representative jean okay i won't listen senator flippo i believe moved to file a report is there a second Second by Senator Gilmore. All in favor say aye. Aye. Opposed? Thank you. Okay.
Speaker 25
1:04:19
All right. Continuing on the next page, on page 8, these begin the reports referred to the prosecuting attorney and attorney general, the town of Blue Eye for the years 2022, 21, and 20. In 2020, the town paid $1,180 and $800 to the mayor and a council member respectively for mowing without an authorizing ordinance in an apparent conflict with code. No one was invited because this is not a repeat finding. The finding is going to the PA and the Attorney General.
Staff would recommend filing the report. Okay, it says that this is a response from a mayor. He said, I knew nothing of this. I took office after this. I do not pay city council members for any services. If we need something done, we take bids and then choose to gather for the best. Okay. That's obviously good. But is the current mayor, was there a different mayor back in 2020? Does anybody know if not?
I don't think so. You run into, there's a town of 46 people, and sometimes it's hard to find someone. Did you say 46? Yes, that's the population. Okay. Okay, so I guess they could go outside. I could divide
the lawnmower mowing up to the whole population, and we won't have to do
it once a week. I shouldn't have said that. I apologize to the town of Blue Eye,
but okay. Well, any reason that we should not file this, Mr. Jones?
No. Okay. Is there a motion? Second.
Okay. All in favor say aye. Aye. Opposed? Thank you. Okay. Garland. All right. Garland
Speaker 25
1:06:05
for the year 2022-2120 at the bottom of page 8. On October 11, 2021, the city council appointed a member from its own body to be city maintenance supervisor, a newly created position in noncompliance with code. Additionally, the council voted to waive compliance with this section of Arkansas code, which is unallowable.
Although this individual remained on the council, he did not receive his salary as a council member, but was paid $225 weekly for the city maintenance supervisor position. Again, this is a case where it's a first-time finding and no one was invited. The finding is going to the PA and the AG. Obviously, it's an ethics finding. Staff would recommend filing the report. Motion and
second. All in favor say aye. Opposed?
Speaker 25
1:06:55
Thank you. Okay, continuing on page 9 with the town of Sunset for the year 2022. On November 17, 2021, a town employee used personal credit to enter an installment contract for almost $44,000 to purchase a 2019 Ford truck. The town paid the installments from December 2021 through October 2022 in conflict with Article 12, Section 5 of the Arkansas Constitution.
The town subsequently entered into a loan agreement on November 1, 2022 that named the town as the owner of the vehicle. As a result, the net amount paid for the vehicle was $4,500 more than the balance owed for the vehicle when the town entered into the loan agreement. The town is unable to provide documentation justifying the difference. Again, this is a first-time finding. The finding is going to the PA and the AG. staff would recommend filing the report we have a motion and second all in favor
say aye opposed thank you I would like to know how they came up with the of course if we had the all the documents we'd know how they came
Speaker 204
1:08:18
up with the numbers so yes you can representative
Representative Johnny Rye
Unverified
1:08:21
right okay represent representative Blanning? Question for you, sir. On that particular situation dealing with the purchase of that vehicle, it's not against the law to buy a
Speaker 122
1:08:32
vehicle like that, is it, sir? Or is it?
It violates the Constitution if you're using the city. A few years ago, there was a
Speaker 175
1:08:42
large... I think that would be staff. Staff always should
Speaker 122
1:08:47
answer that question. Okay. Mr. Jones, answer your
Representative Johnny Rye
Unverified
1:08:50
question. Tim, let me ask you this, Tim. In a situation like that, sir, can the county or cities,
Speaker 154
1:09:00
can they not buy something on time over a five-year period? Yes, sir. That's
Speaker 25
1:09:05
not the issue here. What happened here was an employee bought a truck for the city.
They used the employee's credit. And then the town made the payments just like the town had entered the loan. and then they and of course that's that truck is technically the the employees if the town's making the payments that violates that's the article 12 section 5 issue and then they they corrected it and when they did correct it they the new loan was more than what the balance on the old loan numbers didn't that that's that was the problem yeah okay all right
Moving on, Calhoun County. Okay, you're welcome. Calhoun County, County
Speaker 25
1:09:49
Clerk Jeannie Smith has a jury trial today and cannot attend. She requested deferral until the December meeting. Staff would recommend deferring the report. Is there a motion to defer? Representative Eubanks, the
Senator Scott Flippo
Unverified
1:10:04
motion moves to defer. Second by Senator Gilmore. Any discussion? All in favor say aye. Opposed? It is deferred. Okay.
Speaker 25
1:10:15
Top of page 10, we have DeShade County for the year 2021. The county paid a business owned by an employee $3,400 for tree removal without an authorizing ordinance and noncompliance with the code. A similar finding was noted in the prior report. County Judge Richard Tindall is here to answer questions. Judge,
Senator Scott Flippo
Unverified
1:10:36
welcome. Please identify yourself by name and your position for the record. Make sure
Richard Tindall
Unverified
1:10:43
that button's on. My name is Richard Tindall, D'Shea County judge.
Okay. Judge, do you want to respond to this? It looked pretty
Speaker 210
1:10:55
straightforward to me. It is, and I'm not
Speaker 211
1:10:57
going to say I didn't do it. I certainly did. This all happened in 2021, and we had a large floor in a building that the county owned, flood, and we had to replace that flooring, And we put it up for bids, and the only person that bids was Lisa's Floor and More,
which is the only flooring company in Deshaies County. We passed an ordinance to use her, and we did accept her bid. I found, later on I found 16 trees, 18 actually at first, pear trees dying on the county lot and I went looking for people to remove them after we checked
several things about why they were dying and couldn't everybody I talked to wanted quite a bit of money I don't know if y'all have hired anybody to cut down trees and haul them off lately but it ain't cheap so uh i came back and i was floored i just said in front of this person that worked for the road department that i didn't dream it would cost that much to move those trees and the next day he showed up and gave me a price and it was half of what everybody else
had quoted and he said he could do it on a saturday and a sunday so i told him to do it so and my full intentions were when i left there to go get uh to go to quorum court and pass an ordinance to have this done did not do it but i i thought that that the ordinance covered the first instance for leases floored more and i don't know why this is a repeat finding
if if we had an ordinance pass why would
this be a repeat uh i think i know the answer Before I recognize Senator Gilmore, I'm going
Speaker 25
1:13:09
to recognize Mr. Jones to answer that. Yeah, Judge, we removed the part of the finding about the collector or the assessor doing the floor work because you did have a general ordinance. So we did remove that part of the finding even though the law says you're supposed to specify the extent.
of that but we did remove that part this is repeat because you had a finding uh in the prior year about not having an authorizing ordinance you you had the same it wasn't the same instance but it was the same type of transaction without an ordinance okay
Senator Ben Gilmore
Unverified
1:13:52
sir gilmore judge pretty simple question. How many
Speaker 211
1:13:56
trees? Started off 18. Two of them fell one night when a thunderstorm came
through. And so we wound up, he cleaned up 16 to $200 a tree. Sounds like you've got
Representative Jon S. Eubanks
Unverified
1:14:09
a good deal. Thank you. And they still had to be removed even though they
Senator Scott Flippo
Unverified
1:14:14
fell on their own. Is that correct, Judge? That's correct. Those two anyway. Yeah. I've had to deal with some of that myself lately. So I agree with Senator Gilmore. It
probably was not a bad price. Please leave that
guy's phone number for some of us. Thank you. Thank you, Judge. Any other questions for Judge Tyndall? If
Senator Scott Flippo
Unverified
1:14:33
not, thank you, Judge. Do we need to do anything on this one? Motion by
Senator Gilmore to file. Second by Senator Flippo. All in favor, say aye. Opposed? Thank you, Judge.
Speaker 25
1:14:48
Thank you, Al. Okay. Continuing on page 11, we have the Town of Garner for years 2022 and 2021. Mayor Dorothy Hanner and Recorder Treasurer Carla Johnson were invited to attend. I don't think they're here today. I don't see them so staff would recommend deferring this report.
Motion to defer by Representative Dalby. Second by Representative Jean. Any discussion? All in favor say aye. Aye. Opposed.
Speaker 25
1:15:18
Thank you. Move on to Lakeview. All right. We have the city of Lakeview for the years 2022, 21, and 20. During payroll testing, we noted the following deficiencies. Restricted street funds were improperly dispersed for administrative salaries, water clerk salaries, extra help, and law enforcement payroll totaling $16,150 for the years 2020 through 2022 in noncompliance with code. After transfers and
prior year amounts owed to the street fund. $29,282 would do street fund at December 31st, 2022. A similar finding was noted in the previous report. Restricted court funds were improperly disbursed for law enforcement payroll, totaling $1,061 and $1,057 in 22 and 21, respectively. Restricted fire department funds were improperly disbursed for administrative salaries and city council payroll for $578 in 2022.
Arkansas accounting procedures for a municipality are set forth in the municipal accounting law. The city was not in compliance with these codes during 2022, 21, and 20, as noted below. Bank reconciliations were not properly or timely prepared, nor approved by a municipal official or employee other than the person preparing the reconciliation. Pre-numbered receipts were not issued for all sources of income. A similar finding dates back to 2015. A listing of all fixed assets owned by the city was not maintained.
A similar finding dates back to 2014. The recorded treasurer did not always submit to the council a monthly financial report. General fund cash disbursements journal for 2020 contained several posting errors. City failed to adopt an electronic funds transfer policy. adequate supporting documentation was not maintained for disbursements a similar issue dates back to 2014 continuing on page 13 street fund expenditures exceeded appropriations
by $16,000 and $9,000 in 2021 and 20 respectively general fund expenditures exceeded budget appropriations in 2021 by $56,000 in non-compliance code with code. Also the budget for 2022 was not adopted by ordinance or resolution. A similar finding was noted in the previous report. The governing body did not review the prior report and accompanying comments as required by code and a
similar finding was noted in the previous report. The city has not obtained an audit or agreed upon procedures report for the city's water and sewer system is required by code similar finding was in the previous two reports schedule one of this report reflects a cash balance of six thousand two hundred seventy two dollars in the general fund for 2022 payroll testing revealed that as of december 31 2022 the city owed significant amounts to the irs street fund fire department fund water and sewer funds and the court fund when these outstanding amounts were considered general
fund would have a deficit balance of 122,000 a similar finding was reported in the previous two reports authorization for salaries and wages were not reflected in the council minutes central a similar finding goes back to 2016 federal taxes were not remitted in the amount of 14,587 dollars in 2020 the total amount due to the irs from 2017 to 2022 was 105,000 Similar findings were issued in the previous reports dating back to 2014.
And on page 14, the city used district court funds to make payments for city operations totaling $3,006 in noncompliance with code. The following issues were in noncompliance with Arkansas Code 1610209. Time pays were not maintained for all individuals on payment plans. court dockets were not provided for all the time payments the court clerk did not maintain a list of all unpaid installment payment accounts for which a payment has not been received in the past
30 days warrant documentation was not provided for review a similar finding was issued in the prior two reports the district court transferred forty five hundred dollars in 2021 and twenty $100 in 2020 to the general fund. The distribution report was not provided, therefore we could not determine the portions that should have been distributed to the city, county, and state as required by code. Similar findings were issued in the prior reports dating back to 2015. Mayor Darren
Davis and Recorder Treasurer and District Court Clerk
Speaker 133
1:20:14
Cheryl Carroll are here to answer questions. Are you mayor? She's a recorder. Oh, you're the clerk. Could
you please introduce yourself for the record? Thank
Speaker 219
1:20:33
you. I'm Cheryl Carroll. I'm the court clerk, the recorder, and the treasurer. Okay. Mayor Davis is not here today. He's scheduled to come on the 7th.
And he'll really probably need to answer most of your questions. But I will answer
what I can. Okay. Okay, it's a three-page thing of these findings. Are there any of those you'd like to address before I ask the members of the committee to ask
Speaker 218
1:21:02
you questions? Yes, on the court clerk, I came in 2020. Okay. And we're doing everything manually.
Speaker 219
1:21:15
I have gone to some court clerk classes, but they're talking, when they're in those classes, they're talking about the system that they use that distributes everything to where it's supposed to go. We do not have that, so I'm lost. So I have not had any training. I did get Ms. Clark's card when I got there, the chief of police, and the water clerk pretty much told me what the clerk did.
So you consulted with Ms. Clark? No, I got her card today. Oh, you got her card today.
Speaker 219
1:21:54
Okay, well, that's progress, I think. Yes, and we have submitted, we're in the process of a water sewer audit now. We got a CPA firm out of Wynn, Arkansas, so they're working on that now. I have gone and reconciled all of our bank statements except water, the water accounts,
because when I got there, they had not been reconciled since 2013. I got all of my bank statements and tried to reconcile them, but they did not come. They were not reconcilable. So I did ask the CPA that's doing our water and sewer audit to assist me with that,
and he said he would. What else? Okay. Madam Clerk, one thing that jumps out at me is $105,420 to the IRS.
Have y'all been in discussions with the IRS? Yes, we are in discussion with them now. And what have
Speaker 219
1:22:59
they said so far? Last time I talked, they said since we were current and when I came, that's when we started paying the payroll taxes. They said you were current? We're current. We owe them, but we're current now. You're bidding on schedule at this point. Yes.
Okay. That's not the same as being current, but I wanted to make sure I understood what you were saying.
Speaker 219
1:23:24
We do owe them. Okay. Is there some kind of payment plan been discussed? No, we're waiting to hear from them. They said it would probably be
about 90 days. If I know those folks very well, you will be hearing from them. I'm sure. Yes, ma'am. So I just, again, that worries me because, you know, we don't have control over what they do. Right. And they can seize assets and do all kinds of things. Right. Yes. Okay. Representative Dalby,
you kind of were leaning into the mic like you had a question.
Representative Carol Dalby
Unverified
1:23:55
Did you? Well, with some trepidation, I have a question if it pleases the chair for staff. How
Speaker 31
1:24:06
long has the mayor been the mayor? I'm not sure. Joe is going to
Speaker 219
1:24:10
see if he can find that out. I will tell the committee. I believe since 14 maybe, 14,
Speaker 48
1:24:17
15, somewhere in there. So 9, 10 years, something like that. Okay.
Speaker 31
1:24:22
We do plan to do Lake Village.
I'm sorry, Lakeview. Do the 2023 report
Speaker 25
1:24:29
early in 2024. This is one that went three years because of some staffing issues. Yes, that was my first audit, and it happens to be
Speaker 225
1:24:40
a three-year audit. And so we're going
Speaker 179
1:24:45
do a one-year audit in 2023 pretty early, so that may help a little. Any
other questions for folks from, lady from Lakeview?
Speaker 227
1:25:04
Representative Gene, former Mayor Gene. Thank you, Mr. Chairman. On the federal taxes, do y'all have the money to pay that,
Representative Lane Jean
Unverified
1:25:12
those two amounts, the $105,000 and the $14,000? No, we would have to have any of the arrangements. So y'all have to put
Speaker 227
1:25:20
it on a pavement or some type? Yes, sir. Okay. And you said the mayor will be here next month? He'll be here on the 7th, yes. I think we've got a lot of questions for the mayor.
Representative Jon S. Eubanks
Unverified
1:25:32
I think we will, too, Representative Gene. And, Madam Clerk, thank you for coming.
I just want to say that that money that you didn't remit, much of that belonged to the employee that expected it to be sent to the IRS. So if they got a refund, they'd get it. So this is why this really complicates things, that much money, because when you say you don't have it, well, part of it wasn't yours in the first place. And I can tell you they don't like that. because it's not your money. It's not lady's money.
It's the employee's money, at least in part, except for the match. But we can give you some flexibility here if so desire under the law, but we can't help you on that. You better get somebody to help, maybe a good tax lawyer, somebody
that can help you get that straightened out. Yes, sir. Okay, and thank you.
Representative Jon S. Eubanks
Unverified
1:26:28
Thank you for coming. and we are is there a motion to we need a
motion to defer motion to defer by representative
jean second I think by representative fight he didn't argue with me okay all in favor say aye opposed okay and tell the mayor we look forward to seeing him next month
Speaker 25
1:26:52
I sure will thank you we have Latona for the years 2022 and 2021 the town did not obtain an annual audit or agreed upon procedure and compilation report for the sewer department is required by code a similar item was noted in the previous four reports mayor cheryl bennett is here to answer questions name cheryl bennett
Speaker 229
1:27:13
mayor lee tona you have any initial comments mayor yeah we contracted to have an audit done and they haven't got it done yet we done paid them nearly eight hundred dollars and they've said they're not done with it even y'all's auditor called them and they told her the same thing when we get done with it you'll
have it approximately i don't i don't know what else to do well approximately when was that about a week ago when we called them okay and this is a 21
Speaker 229
1:27:44
yeah we way back there we hired somebody to do
it so we're talking about 21 22 but they haven't done the 21 yet no they're not done with any of it who on our staff contact Do we know? Candace is the
Speaker 234
1:28:03
supervisor. We like to never found anybody to do
it. Could you come to one of the microphones? It doesn't matter which one. I just want you on the record because, as you know, we now record all this stuff.
You can sit right there and just say who you are for the record
Speaker 235
1:28:29
and answer the question. Is it on? Help
her there. Here we go. Candace Gassaway with Legislative Audit. Yes, ma'am.
Speaker 236
1:28:35
Please proceed. Just tell us what you know about this. The only thing that I know is that we contacted the CPA to see about the status of the engagement, and they were not able to get all the records they needed to complete the audit. Okay. Did
Representative Jon S. Eubanks
Unverified
1:28:50
you hear from them about that, Mayor?
Nope. They hadn't requested any more
Speaker 229
1:28:55
paperwork. Okay, well, we'll help you get to the bottom of that
representative fight. That would be appreciated. Thank you, Mr. Chair. Mayor, have you thought about inviting the legislative audit
Speaker 181
1:29:06
back in to do your audit? The legislative audit won't do wastewater. Oh, your wastewater. Okay. Okay. All right, I apologize. Okay. All right.
Speaker 240
1:29:20
Yeah, if you guys had done it, we'd have already been done.
We may have to take a look at that in the future, Mayor, but thank you for pointing that out. Okay. Representative McClure, did you have a question? Okay. You were sitting up straight there. I thought you needed to be recognized. Any other questions for Mayor
Speaker 141
1:29:45
Bennett? I guess if we just defer this. What is the
Senator Scott Flippo
Unverified
1:29:52
desire of the committee? We defer. We can file. If you want to wait and see what
this auditor has to say, motion by Representative Dalby to defer, second by, I didn't see who was seconded, I'll give it to Representative Fy.
All in favor say aye. Opposed? Okay, thank you.
Speaker 25
1:30:13
Who do we have next, Tim? Perla? Yes, the town of Perla for the years 2022 and 2021. We noted in the August 14, 2017 minutes that the town council approved a $110,000 loan of reuse grant funds to the city water and sewer department. We recommend the city seek legal counsel to determine whether this meets reuse grant guidelines. A similar finding was issued in the prior four reports.
in the sense of actually today we received some correspondence the town of perla water department was it's in receivership with central arkansas water and this receivership gives the authority over all the operations and finances and central arkansas water has developed a debt amortization schedule for the utilities loans the 110 000 loan to the water department out of
reuse funds given to the city that is subject to the finding of legislative law is currently scheduled to start repayment in january of 2024 and be completed completely paid back by april 30th of 2026 and that's from the finance director at central arkansas water staff would recommend filing the report. Okay, and C.A.W. has
the capacity to deal with this, so
I'm glad to hear that. So that's the staff recommendation. Is there a motion to file?
By Representative Daube. Second by Representative Fyatt. Any discussion? All in favor say aye. Aye. Opposed? Thank you.
Speaker 25
1:31:55
Okay. Mountain View. Right. We have a report with a finding. That's the city of Mountain View for the year 2021 the city had uninsured and uncollateralized deposits totaling 2.5 million dollars at December 31st 2021 the city has subsequently emailed us documentation that their current
deposits are collateralized so they've corrected the issue staff would recommend filing the report motion
Senator Scott Flippo
Unverified
1:32:23
to file by representative jeans or second by representative eubanks any discussion all in favor say aye. Opposed?
Thank you. Okay. Bella Vista. All right. So we have on pages 15 through 25
Speaker 25
1:32:38
of the report, there are 31 reports that have findings with responses. If you have questions,
staff would be happy to attempt to answer those. If not, staff would recommend filing those reports.
Senator Scott Flippo
Unverified
1:32:54
Motion by Representative Eubanks Second by I think Representative Gene to file Any discussion? All in favor say
aye Opposed? Thank you all Alright, on pages 26 through 29 There are
Speaker 25
1:33:08
88 reports with no findings Staff would recommend filing those reports We'll have a motion and a second
Senator Scott Flippo
Unverified
1:33:18
Any discussion? All in favor say aye
Speaker 133
1:33:24
Opposed? Thank you. Okay. Where are we now?
We're on item F of the agenda. Okay. Adjust your seat, Representative. Next up is the
city of Bauxite. Did I understand Senator Hammer wanted to be here for
Speaker 244
1:33:43
that? I think he's on a missionary trip. I would not dare interfere with his missionary work.
Speaker 25
1:33:55
were five entities at the time that had private audits and we didn't have reports from them. And so his motion was to invite the mayor and the city council from each of those cities one at a time. And so this is the second of those cities. And just a little background. The city of Bauxite went private after the 2018 engagement.
Legislative audit used to do the report, but they went private, and since that time we haven't received any of their private audit reports. Is there anybody
here from Bauxite? I saw you folks sitting over there. I figured
the process of elimination had to be you. If you all would like to go to the end of the table, we'd love to hear from you. and please introduce yourselves by position and name for the record i'm steve
Speaker 246
1:34:53
savage i'm from monticello i'm the cpa doing their audit okay sir and my name is eddie
jones i'm the mayor of bauxite okay mayor jones is there anything you want to tell
Speaker 247
1:35:07
us to start out that might save us some time we're currently under an audit now we're just waiting on all the stuff to get done. COVID hit. The accountant we hired had open heart surgery.
Speaker 249
1:35:19
He's since had open heart surgery again. So we've just
been in a little dilemma. So your CPA is waving a piece of paper. I'm
Speaker 246
1:35:28
going to let him speak. I've been associated with Bauxite probably since 2009 or
10. I've done their water and sewer audits. And anyway, I kind of thought they were going to use legislative audit you know you've you've done it for all these years and i started out as a legislative auditor so i understand some of the concept but anyway i got engaged to do the private audit about september 30th of last year and then about two months later unfortunately i had open heart surgery
Speaker 250
1:35:59
and uh is there something in the water down there really well these folks are all
having heart surgery i'm worried about yeah i
Speaker 246
1:36:09
was worried about me too we uh i picked up the records around april the first and we worked on them and then i had surgery again in august for the same kind of situation anyway i've i've got the audits about 90 complete so i've got 2019 2020 And 2021, which I should have in by, I'll say by the end of the year.
Is there any member of the committee that has a problem with us deferring this? Sir, to when? Is there until January? Can we
Speaker 25
1:36:55
do that, Tim? January. Yeah, this is, you can do what you decide to do, obviously. This is not like the normal reports. This is a situation where we've invited the mayor and the council to explain to the committee why they haven't provided those audits.
And so we just like to make sure we know what the committee's wishes are so we know when to invite them back, that kind of thing.
I hear agreement among January. Do you like that, Representative Fite and Representative Gene? I have a few
questions. Yes, sir. Mr. Chair, before we... Please
Speaker 181
1:37:33
go ahead and ask questions before we go. All right. All right. Mr. Savage, also, the audits for NRCS have not been done since 2018, which they're out
of compliance with state and federal law right now. Will they be done by then
Speaker 246
1:37:51
also? No, sir. They should be in process. I'm not really sure why Mayor Jones become mayor in around 2019. I took office January 1 of 2019.
Speaker 248
1:38:02
So any things prior to that, I didn't know if anything was done or not.
Speaker 250
1:38:09
I don't know why it slipped through. We didn't, it's not normal.
So we will have an engagement letter and be working on it by that time. Well, and my
Speaker 181
1:38:22
understanding was that you had prior done this audit. I have. And so. I don't know
Speaker 246
1:38:28
if it was in the transition when he become mayor and COVID and all that situation, but it's not been
Speaker 181
1:38:35
intentional. But he asked you to do that, but not continue the audits on the water and sewer. We've talked
Speaker 250
1:38:45
about it, but we've not signed an engagement letter yet.
Speaker 181
1:38:48
Okay. Yes. Okay. Also, the last audit done in 2017 on the water department showed that there was a 45% deficiency in what was bought and what was sold. Can you address that issue? I
Speaker 246
1:39:05
cannot without the audit in front of me.
Speaker 181
1:39:08
No, sir. Okay. I would like in that next meeting that to be addressed also. There's 45% unaccounted water from what you bought.
You mean like it leaked out somewhere? Like it leaked out somewhere or just disappeared? Well, I don't think you can have a 45% leak. That's a pretty large amount. May
Speaker 247
1:39:31
I answer that? Yes. When I took over in January of 2019, our school district was not paying the correct amount of their water and sewer bill. We have since then bought all new water meters to make sure everything is paid for, the water and sewer is paid for. There was a big difference in the amount of water that the school was being charged for
and the amount of water they was actually using. So we have since corrected that issue on the amount of 45% difference.
Speaker 181
1:40:02
So we're working on all of that. Okay, my understanding that the health department is going to do an audit on you here very shortly, hopefully by January that that will be done. The other thing is, in 2018, the money from the road department had been misspent in violation of Amendment 3 and Amendment 101 and also the fuel turnback state legislation.
And you should be having a proposal on how to pay that back according to legislation that has been passed recently. We already are. We're
Speaker 247
1:40:36
paying $100 a month back per the legislative body. No, no, you have
Speaker 181
1:40:40
to come before us with a proposal. We have
Speaker 247
1:40:43
a letter from legislative audit that told us to do that, so that's what we're doing from 2018. Okay. So it's been done.
Speaker 181
1:40:51
Okay, and it will include these other years that you're auditing right now? Correct.
Yes. Ms. Savage, is that correct? Okay.
Speaker 259
1:41:02
Yeah, I have a compliance guide with legislative audit to follow. Yes, yes. You
Speaker 181
1:41:07
have a we discussed about it earlier in the meeting.
Agenda
Representative Kendon Underwood, Vice Chair Representative Stephen Magie
A. Call to Order by Chair
B. Adoption of Minutes of the October 12, 2023 meeting
C. Discussion of Act 709 of 2021, Repayment of Highway Turnback Funds 1. Town of Jericho 2. Town of Dyess
D. Review of Reports (Refer to the Synopsis)
E. Discussion with Gould Mayor and City Council Regarding Improvement of Financial Records
F. City of Bauxite – Mayor and City Council – Explanation of Lack of Audit Report Submission
G. The next meetings of the Legislative Joint Auditing Committee will be held on December 7, 2023.
H. Adjournment
Documents
| Title | Type | Pages | Source |
|---|---|---|---|
| Agenda — LEGISLATIVE JOINT AUDITING - COUNTIES AND MUNICIPALITIES, Nov 8, 2023 | Agenda | 1 | Official source ↗ |
Speakers
Senator Mark Johnson Chair
Unverified
Speaker 10
Senator Scott Flippo
Unverified
Speaker 14
Senator Fredrick J. Love
Unverified
Speaker 25
Speaker 31
Walter Jordan
Unverified
Speaker 50
Representative Lane Jean
Unverified
Speaker 53
Speaker 60
Representative Carol Dalby
Unverified
Representative Jon S. Eubanks
Unverified
Speaker 79
Speaker 96
Speaker 81
Speaker 105
Speaker 89
Speaker 65
Speaker 123
Speaker 125
Speaker 6
Hazel Pruitt
Unverified
Speaker 137
Speaker 143
Speaker 136
Speaker 144
Speaker 147
Senator Ben Gilmore
Unverified
Speaker 157
Speaker 158
Speaker 165
Representative Johnny Rye
Unverified
Speaker 173
Speaker 175
Chair
Unverified
Speaker 181
Speaker 126
Speaker 204
Speaker 122
Speaker 154
Richard Tindall
Unverified
Speaker 210
Speaker 211
Speaker 133
Speaker 219
Speaker 218
Speaker 48
Speaker 225
Speaker 179
Speaker 227
Speaker 229
Speaker 234
Speaker 235
Speaker 236
Speaker 240
Speaker 141
Speaker 244
Speaker 246
Speaker 247
Speaker 249
Speaker 250
Speaker 248
Speaker 259