Legislative Joint Auditing-State Agencies

I believe you have your minutes from last time do have a motion to accept those minutes motion from representative that's that's fine. Any any other comments motion from lighting all right we have adoption of the minutes we have reports thank you madame chair today we're presenting two reports that have findings we also have several reports without findings in these are listed on page one of the audit summary without objection less leave the ones with no findings. With that information as stands and go on to the ones with findings any objections. Alright must do the first one with findings okay thank you madame chair again the first report is you metra of office of the courts june thirty two thousand twenty two report. In this report contains one finding. The archaeology constitution states in part that no money should be drawn from the treasury acceptant pursuances specific appropriations made by law. The perpetuation be distinctly stated in the bill also at one thousand eight of two thousand twenty one appropriate funds to reimburse canada's to be payable from the country jury embarrassment fine this act also appropriate funds for professional fees of the division of the pension neglect representation to be transferred from the state metro just fine and payable from the state central services phone. The. Although act one thousand eight or originally allowed for eight hundred and fifty thousand dollars in juror reimbursement. Inadequate transversion and the administrative justice behind resulted in only a little over two hundred seventy three thousand dollars being funded in state field credit or two thousand twenty two. Once that amount was materially expended the acu lazy appropriation and funding afforded to the division of dependency neglect representation for professional fees to make additional jury reimbursement payments. Fifty payments told two hundred and thirty one thousand dollars. We're coated as professional fees for the division of depends on neglect representation but we're actually jury reimbursements. Therefore the fund were appropriate for one purpose but we're used for another purpose in violation of the archaeology constitution. And manager that completes finding thank you if I could yes represent a word long question if anyone's present I am just gone into the table please come down and state your name please for the record. The. Sam carpenter me financial administration division director at the AOC. And i'm broke steam i'm the director of the juvenile division at the asc are thank you and I believe representative world lawyer had a question. So these findings and this question made me for audit these findings were from last physical you are correct that's correct so we've we've knew about these findings during the budget hearings in a session correct. Was there any effort made during a session to raise this appropriation so that you would have enough funds to pay these juries going further forward instead of having to pull it from its professional fun. So we did not know of these phonings until may june of the last fiscal year so but you knew you were sure in you know you pulled from that account correct. Yes sir so was there any effort made to raise that appropriation our special language that allowed you to use that money during the session. So about time we were under the impression that using profession this is easiest is that you have some other question you know your short. You went into a session. Turn off right following did you have an effort to raise that appropriation are apply special language that fund to be able to reimburse these juries at the county level. So we had the appropriation right and we did that the funding just barries here to hear we were unclear how much funding we would wind up having during the last session we did not request an increase in finding however. After this period we did follow legislative audit's recommendations to seek new funding there is a method within the statue within the code rather to request additional funding from the chief fiscal officer of the state we were told that there was no sufficient funding to make that request fulfilled and that is how we learned that there would not be sufficient funding for biscuit you're twenty three county reimbursements can be juror reimbursements. I'm i'm gonna sit in a manager but let the other folks ask questions alright we'll do if I come back to you. Additional questions. And send repayment thank you madame jur i'm just trying to make sure I get this straight in my head you had sufficient appropriations. That was eight hundred and fifty thousand. Yes sir and the total spend ended up being. Ah. Five hundred thousand. The. The. When you add the two seventy three in the two thirty one on that favor and five thousand basically yes sir so there was enough appropriation if the matter of the funding so the phone that goes in the money that goes in administrative of of justice found. Only resulted in two hundred and seventy three thousand where does that money come from. So the administration of justice finders that under the large part by fines fees and costs collected by courts and then that there been a reduction that have we seen. For any any reason. Yes sir in fact that in that that is why we were funded as a percentage of that full appropriation so that lowest buying speeds and cars and their alj fun total has declined. So can you. Educate us on why declined and and we don't need to go down the road in another budget session expecting money to come into that find if it's insufficient. For what we need. Yes I mean this has been. A. A problem for a little while in the AC has been very cognisant of that in terms of the parts that affect our funding and. So yes I mean II think we can expect uh the past couple years of in any indication that we would continue to be funded at a percentage of the total appropriations just do they decrease well just being being on the budget committee myself I would like for the agency when they come before us. For budget hearings to be sure and point out. The if we're expecting money coming into that phone to cover an expense and it's going. Be dropping or in in sufficient we need to know that as as a representative or law pointed out during the budget process. Yes there and that's why in our in our agency respites that we envision a solution that involves some special language and we we look forward to working with like just like about it BLR in obvious technology committee and senators are representatives to find a workable solution thank you thank you manager center hickey yes ma'am staff first if you don't matter chair I hear what we're saying with the money in the course and we all understand the jurors have to be paid but but my worry is more on this on how it was coded so jury reimbursements. Whenever that normally comes through another count did we work in c was it is it coated on the check or is it just a line around the way it's entered or both or it's worth coated in the generator this this is different general educate that they use for that. In the appropriation for jury embarrassment so is a different land adam code then what it is for professional services that have my understanding right that the other appropriation did not have that line out of her jury reimbursement. Now for them if you don't mind and that's that's where i'm going to go so from from last day and point of course yes we you know if you run into the issue like that you come for alc uh. Soon arrest representing what our chairs of that you know we try to figure this out. So just red flag for me this looks like this could have been purple purposefully down. Or you know some type of misrepresentation so how do you prove to use that that was not the case and who told who to do it that way. So who always involved in and how did we get to this part as far as the this coding cause that's in mark in that the way I look at it that's the most serious thing in this report. Yes sir I and I appreciate that you know what we looked at was you know the professional fees and services component of it and our view jury service is a professional fee and service of a kind and. And frankly this was about getting the money to the counties this was not something that in any way benefited our agency this was trying to fulfil our. The statutory envision our vision of. Reimbursing the counties for jury service and so what we looked at was that professional fees and services as sort of the operating peace are obviously we have sent learned from legislative art in this finding. Not the right way to do it what you won't do that and again and in fact a similar issue with curtain the end of fiscal year twenty three is recently concluded fiscal year and the county's word not reimbursed at the full amount requested because we wanted to make sure that we had here to what legislative author was telling us then this is only a little more help it says that they were coded as professional fees. For the division of dependency neglect representation. Ok representation I mean is that sounds like to me that that would normally be a line item that we would use for some type of attorney is that correct. So. It sound so have we ever paid in this approach jury fees out of that prior to this fit to this fifty transactions that we know about. Not to my knowledge because. It just seems like to me that there's a big lift as far as that land adam goes I mean I heard what you said in respectfully you know it sounds like it's a little different because like I say it says for the division of dependence in neglect representation so I don't know who who told who to do that I know the challenges we all had to look at that. Who would then you also department told whatever clerk for whoever it was to do that or did the clark do that on their own. As he was an agency leadership decision yesterday what do you mean one person or a group of people or what. Well i. Go ahead and the director of the juvenile division so our hour was asked and you know to approve this and so i'm seeing him in absolutely we're both involved in I mean i'll be honest now knowing it's wrong it does simply silly that we've made this decision I can promise when we made this decision we were thinking professional fees and services we were thinking about getting these countries paid there was no intent of wrong doing whatsoever I mean it was clearly a mistake that we we now know and obviously did not do again and twenty three which heard a bench of counties i'm not seeing that would go up with obviously go back and not do it but I the intent again was professional facing services that should be ok and in in the money was there and we wanted to get it to the counties again now looking back II completely agree and we know we were in the wrong and we should not done this I appreciate you saying that just just want one other thing so within the statute and i'm sure you are professional fees I mean I just never look at professional fees. For that met even for that manner because even if it didn't say for the division of dependency negligent representation which is one step further I mean professional fees. I would never look I mean it just is for what that is a professional fees for. For a professional and you know it's that would even be a jury so. It seems like a big stretch to me it really does. The. Thank you agree representative word law thank you. Ununder your agency response it says the department of finance administration providing funding from the budget stabilization trust fine would require a proportional increase to all twenty one unities involving a o j i'd like to understand that in ACD f and as in the room but they're saying if they did done it in a in in done it to those twenty one unities it would have exceeded the four million dollars limitation I guess at two part question uhm in peer we transfer money so you were saying you were good on preparation you just didn't have the fines but you had the funding in this professional development so you could came to peer and transferred that over because you have the appropriations my understanding there's long you have the appropriation you can transfer funds within the agency through a peer request so you could have done that that would have been first thing and then everyone here would have known you were out of money and that you were transferred. Or you've got a received it through the letter and law through this through the stabilization trust fine but I won't understand why all twenty one in these what I had to draw just to cover you so I don't know if if miss madam chair of death may income table and explain that that would be great I believe they're here. Yeah. Okay and about it with dfa so. So i'm a purposes but saying as you know another turning so about in a total sixteen sixteen ten three t and. As we read through there talks about the total funds remaining in the state and administration of justice fine after some distributions that have to be at a hundred percent. Uh shall be disposed to state programs that listed. In an mail equal to the proportional share of the state administration and justice fund what's left. So the interpretation that definitely is higher. Is that if we would have transferred for me and we would have to distribute it equally amongst all twenty one of those programs in accordance with this code section would that naughty even if you'd have done that it wouldn't have been enough money to cover the two hundred thirty thousand is that the way i'm reading that it's correct they see what it would have been. It would have been i'm reading this route a hundred and forty two thousand now then I think your party requestion was available transferring funds at peer. I do believe that if a request would have been made timely with peer appear could have funded individually there's. Madam chair I think that's my point and appoint that probably made to the full committee tomorrow. Is that these agencies are making these decisions willing nearly and they're not correct and we've established that. If if they would think these things through and be proactive and come to either budget and increase their funding that way our come to the proper channels on a monthly basis they wouldn't be set in here before us with it and proper payment of a jury reimbursement we want our county's pay those are first people they're going to call us when they don't get paid so I just want it done right and there was just a lot of things that could have been done here we've already heard multiple options it could have been taken place that would have been right but none were it don't even sound like it explored says I used blood the four million but that was as far as you were. The. I think that's a legitimate comment and needs to be added are there any other comments concerns. Anything from the agency that you would like to add. The. Yeah. You know just it is broke shared earlier you know time we understand far better what the. Limitations are and what possible solutions we have going forward and we think we know how to do this in a way that's not going to cost the state any additional money and get the countries the county juror need jury reimbursement they are requesting so we think going forward we are in a much better position to avoid this kind of situation again you know and I think. For us it had it certainly what's the a learning opportunity but more importantly. You know it we again we were motivated by the idea it's the end of the fiscal year. We need to get these county jury these counties there are during reimbursement as before we knew before the fighting we did not know the professional fees and services was off limits in this way we now know that and you know it was the decision was made. To ensure that counties got the money that the legislature intended them to have. Again I think we know what to do going forward and they are telling tend to see just one procedure or question that was a big part of money to move from one line out to another so now we're going to be in this situation with that other line item professional face and services is that now depleted and we need to be concerned about that too. No we're we will not be in particularly with in our again the special language vision that we have for how to deal with this in the next in this current fiscal year in the next fiscal year we we should be more than fine in that professional fees and services commitment item. Okay any additional questions. Okay thank you offer being here. Without objection this will be filed. I believe we have one more finding. Yes ma'am we have one more report in this report as the archaeology education television commission june thirty two thousand twenty two report as well in this report contains two findings. Uh the first finding we selected tin vendors used by the activity with transactions both above and below the twenty thousand dollar threshold for obtaining bids. Our review revealed that on multiple occasions the eighty energy agreements to procure goods and services from two companies owned by the same person. If the good services had been obtained from the same company bid would have had been required. They she also regularly informed vendors how much they would pay for goods and services. All this practice does not appear to valid a specific purchasing law it raises a question of whether vendor would have charged less have the ac not provided the information. Also the eighty minute numerous purchases just below the twenty thousand our threshold. And they regularly paid for a portion of good and searched before they were obtained the last issue was the actually often often excused an internet generate scope of work agreement with vendors instead of a purchase or. Therefore good and services may have been procured before purchaser for created. The second finding. The oc completes time at their for sheets. And this is separate from the regular time keeping function needed used to buy a certain age supposed to track the number of hours worked on specific projects. The eighty use inaccurate tnaches to support payroll calls reimbursed from grants awarded by the arts all department of education. Of a hundred and fifty nine tna sheets that were used to support for the residentshine two thousand twenty two grant from may through september two thousand and twenty two we selected thirty time sheets for thirteen employees for review. Our review revealed that the hours eighty reimbursed for that grant exceeded the number of hours on the selected teenagers by hundred and nineteen hours told approximately twenty two hundred dollars. Initially the total number of hours on the selected t and c succeeded the number of hours and asus for which employees were paid by eighty seven and a half hours. Told him approx me seventeen hundred dollars. The asia did not reconcile tna sheets to asus timely or insure the number of hours for specific grant programs which would be reimbursed by the grant or were correct. Madam chair that completes the banning for atm. And I believe we have some folks from atm here that can come down to the end of the table. If you could state your name for the record please. Yeah. Courtney pledge director of atm. Karen watkins cfo and can thank you do you all have anything you want to say before we ask questions. Yes I do if if that's appropriate I would love to give up an overview of some if we could make it a brief when the s k you know and usual times arguing some pds is a lean organization and we have a very complex. Uh and wide ranging operation and uh. You know if we've transformed since two thousand seventeen to the point where everyone in the building has more than a full time job um we uh then on top of that we received an influx of federal funds over the past several years that gave us opportunities to do things that were over and above are usual work load. And the size and scope of these projects you know were were really extremely short. Timelines and uhm you know the additional work definitely put a strain. On our capacity and we were unable to supplement our full time staff because it was one time money so all the additional work came in and uh needed to be addressed um you know with with the existing staff. That we that we had. I just want to say that uh. You know we have eighty three full time employees twenty four of those are dedicated full time almost full time decade to twelve education and professional development and that. And that we had no audit findings the network twenty or twenty one but I want to say that nothing has changed a commitment to compliance and that we we recognize these uh it findings and or you know finding ways to address karen is our new cfo we've had four out of six positions uhm. Uh in in our finance department uh that we've needed to fill and we have we have a solid plan moving forward. Thank you i'd like to open it up for a questions senator rice. Thank you for your opening could you address. Multiple things here where it says. About goods and terrorists person from two companies owned by the same person also number purchases just below the twenty thousand three show was there. Intent to make sure that we stayed below twenty thousand and blocked the things and also what was the reason or what type goods and services were paid for in advance there there was no intent to circumvent I mean you're entering a short time we had. Three hundred and twenty seven individual video projects that that needed to be done within a you know a three month window they were all separate vendors and none of them were done with the intent of of avoiding procurement uhm I know that car and having come in has has we've been we've been through all this I was not privy to a lot of the conversations that took place during rise and shine and and that particular finding that you that you refer to but our rcfo prior cfo was with us for five years he was very very familiar with state law and with the network operations and but but I will say that no matter what. Uh if we had questions on those france we should have gone straight to osp and ask for insights or guidance. Sender I don't think there was three questions in there that all three get covered. No would you go into the goods and services that were. Uh paid far before they were obtained. Yeah. I didn't join the agency until the last day of january so I was not there at all during fiscal year twenty two and I don't have any specific insight about those findings but I can share an example with you all i'm not blame you know I want to know what agency pays for things if it if you. Supplier purchase order. It's shows that payment will be made but the state of arkansas hour whoever. What good and services were multiple multiple times then this way yes sir so. This year we have a project. That is creative in nature it's a film series educational film series on total studies and part of this project involves hiring creative people to create sets and things like that and these these people are frequently just their free lancers they don't have a big business and they. Do not have enough. Personal cash blow to fund like the purchase of materials to build a set for example and so they may request in that instance that because they're doing this creative work for the agency and part of it is involved in materials that they be paid in advance for the purchase of those materials so that they can build the set and you know there could be it could be that for the fiscal year twenty two there were some instances similar to that and um you know i'm still this is a new business to me my experience and state government is with other agencies and every agency kind of has its own business. Um. We have the leadership of the agency we have talked about them the need to meet with. Office of state procurement and possibly request special language that will allow us to meet the industry industry standard norms on some of these projects it's my understanding talking into people within the agency that it is industry standard practice to. You know provide funding or provide materials up front for some of these things on creative projects so I don't I hope that sheds a little light on what might have happened explained so I mean it does say what portion of goods are services or paid for a pride and I want to analyst just from. Mabiness experience it is when somebody. Uh has a good portion of their money at front sometimes they don't as much effort is i'd like forum to and that's that's my questioning here or you getting what you pay in far when you put money at through it it realizes there's some contracts have to be that way would you address the. Good to services for the two companies owned by the same person. So it's my understanding that there was a company that was the only company and the region that provides this that has the kind of equipment needed for this project. And. They also provide the labor to operate the equipment because there are certifications required to operate the equipment and. I. I understand that there was a second company registered with the secretariat states office. To shortly before the contract was awarded. And. It looks it looks fishy. It looks fishy to have. To to split services across two contracts. And have one company. Incorporated very shortly before the contract is awarded so I don't know we've had a lot of internal discussions about this it will not be happening in the future I don't you know the. Cfo who was in place is no longer there. So at the procurement coordinator is no longer there the conformer controller is no longer there I don't I don't know why those decisions were made but they were the wrong ones if if the agency influenced that at all and I have an appreciation for you being new on the child in this committee that one thing we hear over and over and over. Uh yeah I haven't been here long previously as I appreciate your commitment part not happen again thank you madame to pay if I could ask a follow up of that and have you done an audit since january of your own agency so you internally know what the problems are. Yes we have we've. You know we've one of the problems is the uh. Just these enormous projects that the agency has been awarded where we we do not have the staff in place I mean four out of six fiscal employees have been replaced in the last six months. Um two started in june so a very lean fiscal staff and a lot of activity within the agency so it's so it's right for issues like this because when you put a lot of volume in the pipeline and you don't have the capacity to manage it it leads to shortcuts in issues and so I appreciate that honesty they are then you know we're we're addressing it we did at a higher grade fiscal position um in june we have two licensed we are actually have three license cba sound staff right now and. Myself and. To a two other physical team members so courtney has committed that. You know we need to have sufficient staff to manage the work load and. We're trying to assess you know what the baseline work load looks like because these projects added twenty day increase the annual work load for last. Three years by twenty five percent for the agency they were learning last funds federal funds for education content uh that you know it's a one time thing that you really we never stop to think oh should we do these I mean they were suffered value to the kids that we left in in the same way that we did in march of twenty twenty when schools closed and we did you know it within ten days we had school on the air you know they're just moments in in service media when you see you have an opportunity and you jump in uh these are the the problems that you. Can I counter you know when that happens I believe we have a few more questions represented by did you have a question thank you madame chair. And I can understand the big projects but you don't have to take those time correct am I correct in there if you don't have a few can't keep from things like this happening. Then should you be taking on those projects does extra projects knowing that you do not have the man power to be able to do it all well that's it that's a question you know and when you were asked by the department of education for a specific need you know to take it on also these were things that just like school on the air in march of twenty twenty we had never done that it was pretty covered school closure had never happened before yet now I get there is hard to anticipate now and I understand then I think that's a whole different circumstance and what we're talking about right now i'm sorry that I feel that way that I feel like it's totally different that was we have to do this now. These projects that you're talking about that you don't have the man power to do are they we've got to do these now projects they were from the perspective of department of education yes okay one for all at me i'm so if you go to page six of seven it says in addition the bender was inadvertently paid a portion of their invoice prior to the work being completed and you talk about a scope change what kind of scope change happened that you would pay somebody before they actually finish their work. Because that's a problem I for a black sinner to ras was saying a minute ago how did you know that you're getting. What you pay in for if we're paying them up fright. How are you how do you know that you're going to get your money's worth. I think the. I have a lot of confidence in the. Two people. Who are still who have been with the agency for a long time so do they make this mistake. No what i'm what i'm trying to say is. They would never have paid for goods or services that were not rendered and so there may be some timing issues in the timing of in some communication issues with the production division. But uhm I feel very confident having evaluated the work of. The accountant who processes all the accounts payable and the accounting coordinator who reviews these documents and post them that everything was in alignment. Four vendor to be paid and amount i'm not familiar I apologize i'm not familiar with the item in question here but i'll be happy to go back and look at it one thing that we do now on big contracts is we hold out retainage so that even we hold out ten percent so that a vendor is not paid until we're satisfied that the work has been performed are standards and completely and you know it's not. It's not in a prudent to do our necessary to do that on a smaller contract but you know. We do have highly effective experienced accounting staff there that I have. Utter confidence in to be honest and a lot of works lying in so. It's you know some of it is just the timing of actions. This. I can appreciate that but that's kind of like an excuse I know for something that should have never happened in the first place. Thank you matter senator rice and sender hickey senator just and then you could have taken the words out on my out you can't fish per or they will just go with that word okay I agree with the hundred percent I don't like the way that looks at all so this is my next thing you also listed and named a whole bunch of people that are no longer there has your department have you all went back through to make sure that there was no relationships with additional business dealings or anything with any of those heavy questions it staffed it's there that might have knowledge of their. Have you all looked into that just to make sure that there wasn't anything any further than just making this contract happen. And if you have it. Will you or should you I mean I again there and and I agree with what you called it I mean it just it runs up a red flag like you can't believe you know especially at that one was incorporated. Right prior to the procurement. But again you know I think that we need to do our new diligence to go as far as we can to make sure that they're what in any other external factors there so I would personally i'd like to see us to that personally I would man hold in the report open to we get that bag but I guess if you don't want. Which would you think about what do you think about that. Yeah. I do not suspect fraud is going on at all II really don't I think we have a very hard working team and I think the main issue is that we have bitten off more than we can check as far as work load for a very good reason right we had a broadband expansion project the capital project tower expansion excuse me tower expansion project and three very demanding education projects and it's the right thing to do for. Kids and for the. Emergency broadcast system for arkansas but it really strange the agency and i'm I would be very surprised to find that it was anything other than that sure and you know i've been in those situations before where our work people for twenty years and you know they've done things that I wouldn't felt they ever would so I can appreciate united suspected on but again with the words that we used earlier kind of the way that we see the personally think the most prudent thing would be if if we don't ghost one step forward just make sure the other employees do not know if there was some relationship though or something to that nature that we need to check into so I think personally again so to the committee the chair is just. I think especially with what's been said here that we probably need to pursue it just a little further to make make sure that we've done our due diligence on this. And then just just one more i've been a lot of question of course about paying the the people up front before the goods and services are procured. Per why you were doing it all that stuff understand some of their. However according to this it all appears that that's not supposed to be done so in I heard you say that you pass me may get you know try to do something within the session or something to see if we can work out some tapitage lation you know you know whatever that might be however between now and then. Are you telling us that you're just not going to do it because that should not be an option because it's not available to you now. Correct okay so you're not we will comply with the law okay that's what I need absolutely okay thank you ma'am. Sent a rice. They just one more thing is would you agree that it's not best business practice. To regularly inform vendors of how much you're going to pay for goods and service unless it's emergency situation. I can't imagine it in emergency situation that would have you give your bottom line away. Erm I think it was. Honestly I think it's. These projects involve a lot of procurement there are a lot of vendors hired for these projects and the there's one procurement person for the agency and what they do is that they review and approve purchase orders to make sure that if a bid was required it was done now i'm speaking to today okay not fiscal year twenty two but ideally and what is happening today as we review. To make sure that the all the required documentation is attached if a competitive bid was required it happened the associated documentation is in there on the po and they approved the po and. So for these projects we've literally had directors out sending out emails to perspective bidders for competitive bid. And. They create a scope document in a in a attempt to define the exact requirements for the vendor and because their inexperience in fiscal management for state government and maybe they don't have business experience either that they create a line item budget for these projects and I think it literally administrative error and lack of experience that have them put the budget on the scope document I don't think it's any. You know they don't have an ulterior motive to give a bendit vendor a good price or anything like that I really think it's a case of just. Too much more coming in people not enough review by the fiscal division due to lack of capacity and. Fast inferious getting these contracts out the door to meet time project timelines and inexperience by some of the people do in this work and we're trying to address that but it I can tell you that the same things happened in fiscal i've been there since january fast infurious projects lots of bids going out the door we've been catching every issue that we can but again not enough time for a sufficient review. Well do you want a have seen some times. Is it seems to get be a too much of a comfortable working relationship. With. Some people in multiple people some damn it I wondered if that was a. Here so I do so like you to be cognisant of that because it happens and when it's not your money. It's all our money but but it's not your money. It's just easier to do. And they can. Whether it's just something being more socially accepted or whether they they. It helps seem some way here they are not saying nefarious money change it and II think it gets to be acceptable so I appreciate you'd be worth that thank you yes representative richmond and believe you had a question. Yes ma'am thank you very much manager the question you talked about the previous cfo and several other. Optus involved in in the financial portion that they've moved on. Where do they go why did they go seem like a whole lot of people decided. To go to something else. Do you know can you tell me why. Well II not all at the same time I mean our cfo left in september. Of of last year. Um and then the other changes took place. Once once karen arrived. At the end of january beginning of february wearing. After an assessme. On my operation. Yeah. The. I did an assessment when I came in. Of. The responsibilities of each team member. And there performance. And. In. Well this is some of these issues that were talking about today impacted the south turnover that were having. I'd i'd prefer not to say too much we do we have one. Last you filed against the agency. Related to uh termination of an employee and II you know prefer not to say anything more about that okay that's that's fine then but it's okay to say that you are unhappy with the performance of some of these people. Okay understand that thank you very much thank you madame chair I believe representative had a question and then represent representative ladyman thank you ma'am. I have a question to what you just say head. Where does the money come from whenever you're being sued how do you pay for a lawyer to define you where is the manning going to come from. Are we gonna have to allocate that money we have saver an immunity okay. From from suit I thought that too there are but I won't under you know there are some exceptions to which of lower act fairly standards act are exceptions to that. Um. But the attorney general's office defenses okay thank you I made a mature have another question if you have to go through a federal audit do you have to go through federal audits for this money that you're spending for these. Where several cipients. I'm so sorry said that again we are sub recipients we don't directly receive federal dollars for these projects that we mention. So you're a go through we're another state agency receives those federal dollars directly and then they grant them to us. So the other agency so we are indirectly subject to add it right. We had that happen earlier this year related to some careers carries out money but um we would not. Have federal origins on site related to those grants and without the other agency being involved. So can I ask maybe so essentially though you are audited even though it's being done through another agency yes correct absolutely i'm about his country as they can so you don't got to give me okay policies of the answer. Um what happens if. The federal government comes in and they do and add it and they fan findings like what we're talking about here today. That's on this report. What happened if you have to get back money how is that going to happen if what if they found findings where they are not satisfied with how you did through these groups. How what happens. It depends the you know every every grant has rules associated with it and we have rules too but they're not obviously they weren't followed here that's why i'm asking that question. Yes man. Um. For a federal award there's you know allowable and unallowable expenditures if you spent money on things that were not allowed and you were audited you would. You know be subject to paying penalty you're paying it back thank you mail. A representative ladyman I believe you had a question thank you madame chair this for the agency I mean for the stay up i'm sorry. Um. You need to come now the end of the table again you can answer do we have a way in our accounting procedures to make partial payments on a contractor a scope of work is there there are contracts that exist that have installments that are made throughout the contract that's not unusual based on certain completion of work or whatever what happened in this case they were paid up front before the service has ever started. Okay because of the because of the nature of the projects as they've stated they were they upfronted some money to the vendors before the cop before the project ever started. Okay okay i'd like to ask you on question about that then so these companies and I understand large contracts you you pay the material as it come on site and if you don't but a million dollar contract twenty thousand is not a big contract but for a small company I understand where it might be a problem. So look going forward I mean in that situation could you all. If they and if they bring any invoice to you and so they are bought material for this project. And then you could pay the own right away if it was would they'll have to be in the scope of work or purchase order to be legal. Would there have to be listed in the scope of work or the purchase sorted to be illegal payment up front that'll be a question for state personally I know they've been they've been in conversation at stake purchasing if there's a method that they can approach to do that so I think they're taking the right approach by getting with him there there was a more for me where those rules but hopefully they can work something out there yet typically you can pay ten percent twenty percent or whatever is the materials come in or even the labor is for zangles uh but they would have to produce an invoice. So I mean is that something you could do in the future that for these small companies. We're gonna have to do a comprehensive review of what are the scenarios for the work that we do and. How do we go about getting network performed in compliance with the law I mean if if they can't do ten percent without a payment i'm not sure you should be doing business with somebody that's not that will funded I mean that's you're taking great risk there I don't I don't think that's the case in particular I think it may be relates more to buying materials for a set or props or some design element and needing to go out and purchase those materials materials so they can actually do the worst but that would be one scenario alright but then answered my question thank you I believe representative gonzalez has question I think that object so so the agency made numerous purchases just below the twenty thousand dollars threshold for obtaining bids on the next page it says agency produced two hundred fifty one segments during a three month do we know how many this probably a staff question do we know how many of those. Purchases below that twenty thousand dollars amount were made versus how many uh segments produced. Contractors hardly will obviously from my replacement we didn't look at a hundred percent waiter did some saying the sample and just based on our sample of our memories we had several ten or twelve something like that that we noticed during our sample in the course there could be more but there were there were enough that we thought it was an issue to bring before you today because the agency answer that the only how many that. May give me a percentage if you want to had an ad to be a a number wait fifty percent seventy five percent. II can get that number. For you but I don't have it today. Okay. I'm sure i'd like to make a motion of the properties and move that we hold this over until we can get more answers a lot of of all this men exposed here you know to me this looks like a girl voice system going on a it may may not be and I hope it hope it's not but the article to this or pretty terrible and I make motion we we hold this over till we can get more answers and light of a now pending lawsuit and someone been being terminated that we can't have more information about at this time until we get get some most questions answer that we hold it okay do we have a second. Taken representative but right we'll hold this over and give you a chance to come back next month and and we'll do this again. Thank you. We have no further business with that will have a report tomorrow morning thank you.