Legislative Joint Auditing

Our first order of business is we've called to order the next is adoption the minutes of the september eighth twenty twenty three meeting do I have a motion I have emotional and I have a second. All in favor in the opposed as have it. Next is adam see adoption the reports of the executive and standing committee I will read the executive committee. The. It was one second. The. You can still do the apparently. Members were having it little problem appear but we're going to go in flour without it. The. The exact committee met yesterday in the committee adopted the meetings of the minute held on the september the seventh twenty twenty three. In new business the committee approved the following three motions for staff. To continue to conduct an expedited review of the purchase of a podium or election from back in advance LLC for the use of the governor's office. Item too. This. Now we get it fixed with you all matters limited to expenditures involving the governor of the governor's office made confidentially by section four a of seven of the first extraordinary session of twenty twenty three third item developed procedures for reporting manners discovered during the stast review of all manners limited to expenditures involving the governor of the governor's office made confidential by section four a of x seven of the first extraordinary session of twenty twenty three in compliance with existing laws and searching file that the aforementioned excellent these procedures are to be submitted to the executive committee for review and approval and it's next meeting schedule for november the eighth twenty twenty three. Yeah. Staff reported to the committee the audit special investigative in the shortest reports scheduled to be presented to the stand committees and the four legislative joint audit committee this month. In other business the committee approved the twenty twenty four l j AC calendar. And with no additional business discussed the mini was adjourned. The next meeting in the committee is scheduled for wednesday november the eighth. Twenty twenty three. And I move for an adoption of this report I have a second. All in favor say i. Any opposed they need. It is passed and with that we moved to the standing committee for counties in this metalities and representative right you may give you report. Chairman the committee adopted the minutes of the meeting hail september seventy thousand twenty three to committee reviewed fourteen deferred reports and eighty nine current rewards officials from five energies were present to address repeat findings eleven of the previously deferred reports for filed and three were deferred to us a second time so that officials can address repeat findings of the eighty nine current reports reviewed eight were referred to prosecution returns. And the attorney general. The committee voted to specifically and bad the dormant mayor to answer questions regarding an order to repay money's owed from the general fine to the street fund and invited a dormant official to answer questions regarding an unidentified court fond balance. The committee also voted to invite the the the goal mayor and the city council member chosen by the council to attend the november and december meetings to provide an update on the service progress toward in proving is financial records the committee found eighty seven current reports and referred to so that officials can provide adequate responses to findings or attend the november meeting to address unresolved findings emotion was passed in about the mayors and city council members of four series obtaining private audits to a ten one at a time the next four committee meetings to explain that the lack of timely our mischief are motor for the adoption thank you reps right I have a motion I have a second all in favor of the I opposed as heaven next up is senator sullivan for educational institutions thank you mister chair the committee made on october twelfth twenty twenty three and reviewed two higher ed reports three school district reports and one charter school report for the fiscal year ending june thirtieth twenty twenty two. The committee filed the six current auto reports they were brought before it mister chairman and move the adoption of this report thank you center so then I have emotion do I have a second I have a second all in favor say I any opposed. As have it next up is our standing committee or state agencies represented form and sir. Thank you twelve reports were on the committee's agenda yesterday two deferred reports and one current report with findings were presented. The department of education had a theft of property student dental loans were given without requirements being met. On documented dispersements in two teacher education programs and receipts not deposited timely. The arkansas pbs had several issues related to procurement bidding and contracts in addition personal time charged to the two grants from the department of education we're not properly reconciled to asis or properly supported. The department of labor and licensing had mileage overpayments numerous statements of financial interest not filed with the secretary of state compensatory time not properly recorded and approved an improper leave payouts. In addition summaries of the end term procedures performed at the treasure of state and the review of the expenses of transition funds from the guff from from governor hutchinson two of your sanders represented. Various agency staff members were present to report on how the agencies intend to address the audit findings and to answer committee questions during the meeting committee filed the twelve reports I moved to adopt this report thank you sir I have a motion to have a second I have a second all in. Okay. I'm sorry ripped in more low and a lot of you sender is fine before we adopt his report yet some further questions for the agency for pbs if they're in the room. Yes sir. If they're not in a room I would have a motion to pull this from the report to the deferred to next month to they can be in the room answer questions. Members I have a motion do I have a second I have a second all in favor say I all right in the opposed. In representative warlows a moment has passed. In our members now now I need a motion to adopt. The. Okay I haven't had a motion a second all in favor. All right in the opposed. The as have it. And spin improved. Movie going to add on delta review reports. First animals are regulatory basis financial statements and other reports regarding the city of pambler for the year in december thirty first twenty twenty two mister saunders of the regular present. Thank you mr chair this presentation covers the financial audit for the city if i'm blood for the year ended december thirty first two thousand and twenty two. Located in jefferson county i'm both as a municipality of the first class with the mayor council form of government according to two thousand twenty united states since this information the city's population is approximately thirty nine thousand. Legislative audit issued three findings during our review of dispersements and debt payments for parks and recreation we noted the following. Proper authorization for two dispersements totalling over fifty six thousand dollars was not obtained and city organs procedures were not followed. A short term lease agreement totalling over eighty seven thousand dollars was entered into without the proper approval of the governing body. A lease agreement for sixty golf carts and gps equipment totalling over five hundred and six thousand dollars was entered into without proper approval of the governing body. In the city entered into a lease agreement for more than sixty months which exceeds legal restrictions. The second findings related to the office of the mayor. The governing body did not review the prior audit reports at the first regularly scheduled meeting falling receipt of that report as required by arkansas code ten four four hundred eighteen. The third finding of all of the urban renewal agency the agency was formed in two thousand and seventeen by city council and is a compose of five commissioners appointed by the mirror. Phoned it through a five eight cent sales tax the agency is responsible for mediating deteriorated areas and acquiring real estate for redevelopment projects. The. In july two thousand and twenty two and urban renewal employee discovered questionable transactions regarding a vendor utilized for asbestos and as baitman services review revealed the city paid the vendor over six hundred sixty seven thousand dollars from may two thousand and nineteen through august two thousand twenty one. The. After an investigation by arkansas state police the former director who held the position from august twenty eighteen until september two thousand twenty one and an individual associated with their vendor or each charged with forty six counts of forgery and thirty eight counts of theft of property. The former director was also charged with one count of abuse of office. The former director is now deceased and the other individual charge is scheduled for a jury trial in march of next year. Mr chair this concludes my presentation city officials are present to respond to committee questions thank you. Members do we have any questions. I'm sure being you recognize her. So did this go through the municipal subcommittee. Or is this just common straight to the street so it hadn't been better in subcommittee at all then no sir now sorry that's on unusual what we do is we pick certain honest present to the full committee and the bar pass the standing communities okay I guess i'd like to bring the officials forward to see what explanation they have and what they've done to resolve the issues going forward is there a representative from pound bluff. The. Central may make a statement for the month as you heard that this is up for criminal charges have been filed so we need to be just kind of cognising some of the questions that we are that may relate to specific facts thank you all for being here if you would please recognize yourself. Set can you hear me near thank you so much i'm sure they washington me of the city of pimeland and I have with me shandered reference that director of ura. Go ahead me let me address first off the. The issue with the failure to. Are present the audit findings for twenty twenty two hundred timely manner we always present those I was never clear that it had to be done the very first meeting after we received them but we have always presented them after receiving them sometimes after the first meeting what happened in twenty twenty two that that did not happen was we had a planned and then we put it off for one meeting and we've quite to do it the next meeting and so many things were taken place at that time the lady in my office was responsible for moving that forward to the agenda like dad overnight and it just do us all of course we were in the meeting in the middle middle of budgeting and it just we just last track of it but we corrected that this year are with that back on and then when are we presented that inch june I believe of twenty twenty. The. Twenty twenty three to correct the twenty twenty two error and then we we received our findings this year we presented found the first meeting after receiving them and we will make sure that we are consistent in doing that as we move forward. In reference to the art it finding in reference to the hearts findings. We do and we've done and we're doing more training on going training on proper procurement procedures making sure that all of our department he is in those who are responsible for procurement procedures are following those adequately our city I necessarily procedures would be followed as we moved forward proper authorization would be obtained from the mere and from the city council and the governing body prior to any disbursements of finds moving forward for all of those parks regulations. Were there any questions in reference to any of ours. Members are in the questions. You are recognizer thank you mister chair and I appreciate you coming forward to the representative city. I think it's important that the old procedures in laws are followed in the the the city councils given their. Information for their oversight purposes and so you are assuring us and you feel comfortable that whatever's happened in the past is going to come to light but going forward. You've met the recognized the problems. Through the audit findings in and taken steps to correct those most definitely yes thank you thank you mister chair yes sir thank you since repeating members are there any additional questions. Yeah. Sure sure apologies I could not human members we have a motion. To review do I have a second. I have a second all in favor say i. Any opposed. Membership has been reviewed. Now we're moving on to the annual. Planet report that the office of the attorney general for the year ending june thirtieth twenty twenty two michael. You'll recognize me thank you mister chair. This presentation covers the annual financial report for the office of attorney general for the year ended june thirtieth twenty twenty two. The. The ag's office was created as part of the executive department of the state by the adoption of the state constitution in eighteen seventy four arkansas code provides that the age our maintain and defend the interest of the state and matters before the US supreme court in all other federal courts additionally the ag shall be the legal representative of all state officers boards and commissions in all litigations where the interest at the state is involved. Arkansas code also provides for the consumer protection division within the ages office to represent and protect the state businesses and consumers. The. As shown and exhibit a on page six of the report and on this slide assets total seventeen point one million while liabilities were one point five million and found balance amounted to fifteen point seven million for the year ended june thirtieth twenty twenty two. For the same period as shown an exhibit b on page seven revenues total ten point four million expenditures for thirty one million and other financial sources totaled nineteen point five million. The. Our report contained two findings. First twenty six employees were paid in excess of the line item salary appropriation by approximately sixty nine thousand dollars in conflict with the arkansas constitution which states. Except as provided in article nineteen section thirty one the general assembly shall fix the salaries and fees of all officers in the state and no greater salary or fee than that fixed by law shall be paid to any officer employee or other person. In the example shown on the slide the position for attorney general one was appropriate at a line item maximum of a hundred and sixty seven thousand dollars. After a lump sum payment for a colour this position exceeded the appropriate amount by six thousand eight hundred and forty two dollars. A similar issue was reported in the prior your audit report for fiscal year twenty twenty one and in two special reports issued in twenty twenty two. Our second finding is regarding the settlement bands which are primarily received by the consumer protection division for various claims in lawsuits arkansas code states the general assembly shall budget approve and appropriate expenditures of cash bands by the enactment of separate appropriation bills setting board the purpose for which the monies are to be expended and the dollar amount to be expended for that purpose it should be noted that this code section was amended by act five twenty six of the twenty three regular session act fifty four of twenty twenty two established a spending limit of twenty five million for the settlement funds. On january thirteenth twenty twenty three subsequent to the fiscal area three checks totalling twenty seven point five million were dispersed from the settlement fund in transferred to the state causing the ag's office to exceed the appropriation spending limit and non compliance with act fifty four an internal investigation conducted by the current attorney general resulted in a request to return a portion of the dispersed funds as well as a one time appropriation request of seventeen point five million. This increase the total appropriation for fiscal year twenty three to forty two point five million. The department of finance and administration returned seventeen point five million to the settlement and as a result for the year ended june thirtieth twenty twenty three expenditures of settlement bands were less than the forty two point five million adjusted appropriation. The. Mr chair this concludes my presentation management responses to the finance can be found on page five of the report and officials from the ag's office are present to answer committee questions thank you. Members do I have any questions. Yeah. Representative makes you recognize my mister i've just been interested in hearing from the ages office the you know these expenditures over what we appropriate as the general assembly is somewhat concerning and I just be interested in hearing from them about what safeguards are going to put in place to make sure that they don't overstep the limits that we set form. Yes sir she'll come on up. Yeah. The. What. Yeah. In please identify yourself yes around sydrosemochy fiscal officer for the attorney journal's office you're recognized and i'm zach mayo general counsel turn general. I'm sorry you'll recognize speak thank you sir I think the question was from the representative what process of have been put in place to not exceed the authority that the legislature is given us on expenditures that corrected understanding the question right correct or what we're here to your far far right i'm sorry okay yes sir. And so we we have a numerous number of procedures not to exceed the authority that the legislature is given us on expenditures I do want to make a statement that this uh was done before uh twenty general griffin was elected this was done by the previous administration and so we have changed our policies and procedures completely but we certainly recognize the legislatures and forty two appropriate phones for us and we do understand and recognize the maximum amounts of phones and so we do it here and and and I appreciate that because they you know the the chief law enforcement organization of the state it's hard to excite other people for not following it if you all who were responsible the one setting the example are not following it so I appreciate your your answer on that thank you german. The. Can I also just emphasise that this I think is an example of how seriously we take this that this was a self reported item attorney general griffin order to full internal review of the finances we did a rigorous area of the appropriation in the expenditure is determined that this was an overriding reported legislative audit. Members are there any additional questions. See then. We consider this filed. Jumper thank you all you're in disneyland. Members we are now moving on the other me other business. The next meeting of the legislative joint audit committee will be held wednesday november the eighth and thursday nor remember the nath twenty twenty three. Is there any new business. See none we are journed.