Legislative Joint Auditing

We've called to order so with that we'll move on to item be. This is adoptions the minute of the may twelfth twenty twenty three meeting do I have any questions of the. See no questions do I have a motion I have a motion I have a second all in favor. And we will follow that. Next item is adoption reports of the executive in the standing committee. In the chair recognizes Senator Pitsch. Thank you Mr chair the executives committee met Thursday June first staff reported that to the Committee. To the Committee the audit special investigative in short report scheduled to be presented to the standing committees and the full Legislative Joint audit committee this month in New business staff report to the committee that the city of Augusta mayor and city council were invited to attend yesterday's meeting of the L. J. A. C. standing committee on counties municipalities to answer questions regarding why financial audits of not been obtained since December thirty first of sixteen staff also reported that the director of office of public housing Little Rock field office provide a copy of the most recent audit report for the federal Housing Authority as well as two other reports related to special reviews and other new business staff inform the committee of the approximate number of outstanding audit engagements and the capacity of accepting new projects in the future in other business the committee approved a request for staff to conduct the financial audit of the hope academy of northwest Arkansas for fiscal year twenty twenty three with no additional business to discuss the meeting was adjourned the next meeting of the committee is scheduled for Thursday August tenth twenty twenty three I moved for adoption this report. Members do we have any questions. C. none I have a motion I have a second all in favor. Hi it imposed. Seeing none this is filed. Moving only at night the standing committee on county in municipalities. Recognizing representative right. German. Legislative Joint Arjun Committee on on counties and municipalities met yesterday on June one twenty twenty three the Committee adopted the minutes of the meeting held may eleventh two thousand twenty three officials from the city of Augusta or present to explain to the Committee one other private audit reports have not been conducted and submitted to legislative audit the committee voted to send a request for an Augusta audit to the executive committee. The Committee at the may eleventh twenty twenty three meeting directed staff to suggest guidelines for evaluating request by cities to repay less than ten percent of general revenues from ounce ode to the straight Fund as required by Arkansas code annotated twenty seven seventy two oh seven the committee approved a suggested a suggestion from the staff the city's in this situation be required to complete a questionnaire before the request is considered and current request by the town's of high Haynes in Fulton will be considered after the town's completely completes a new approach questionnaire. The Committee reviewed three reports differs from the may eleventh twenty twenty three meeting officials from one entity will present to address to pay findings from this report all three of the previous deferred reports for file of the committee reviewed ninety six current reports of the story will referred to prosecuting attorneys officials from two entities were present to address repeat findings in their in their current report. The Committee file ninety six and none were deferred Mr chairman I move for adoption this reports or. Thank you senator right members I have a motion to I have a second. On charges up. Senator love I apologize go ahead Sir thank you Mr is this a question soon. Mr rai through the chair. in the in the term backed peace. Do you said that there is going to be a questionnaire that was gonna be filled out staff gave recommendations that a questionnaire to be filled out. Or if we can't as a chair we can get staff so that I can kind of understand because I missed that meeting yesterday. We've got some help coming on okay. This. Senator love we sent a packet to the committee at the end of it there were seven questions for the city to fill out if they're going to make a request to repay less than ten percent of the general revenues to the street fund and I'd be happy to see you that that packet in that document if you would like yes please send it to me it says seventy questions no it says seven questions okay all right I appreciate it thank you thank you Mr thank you senator love. In members I have a motion on the floor what. Okay. Yeah there we have a motion on the floor do I have a second I have a second this is for the Dobson of the minutes. What rather. All in favor say aye. It imposed. None in the members it will not be filed. Moving on to. The Education Committee Senator Solomon. Thank you Mr chair of the committee reviewed a hundred and twenty three audit reports for school districts educational coops charter schools of higher education institutions for the fiscal year ending June thirtieth twenty twenty two representatives from the demott Stachel school district answered questions from the committee related to repeated finding school officials and a representative from the Arkansas department of education answered questions from the committee relating to the findings for the pine bluff school district which is currently classified as being in physical distress the R. report for the Lee County school district which is also currently classified as being in fiscal distress was was presented with no findings they are report for the picket school district was certified by the governmental bonding Board and referred to the applicables prosecuting attorney the audit reports for the Izard county consolidated school district in Little Rock school districts were also referred to applicables prosecuting attorney the audit reports for the Crossett school district and the Arkansas northeastern college for deferred to the next meeting so the representatives could be present to answer committee questions related to the findings and their respective audits the Committee filed a hundred twenty current audit reports and one deferred to our report brought before it Mr chairman I move for adoption of this report. In members are there any questions. C. none I have a motion of floor do I have a second I have a second. Members all in favor say aye. Any opposed say nay. Seeing none the support has been about. Moving on to the next I don't. This is for state agencies in the center Bryant thank you Mr. Committee met yesterday June first one deferred reporting for current reports all of which contain findings were on the committee's agenda The department inspector general's report was deferred from the may meeting so that the agency could obtain additional details about checks are not deposited timely by the fair housing commission the department of finance administration and shortages at various local revenue offices and issue driver's license without proper documentation in addition the racing commission did not deposit all checks timely. Public employees retirement system may benefit overpayments totaling over four hundred seventy thousand to these overpayments totaled over two hundred thousand or not discovered for several years. The department of public safety reported three instances of theft of property the department of transportation to duplicate payments over seven million all of which were recovered did not deposit all receipts timely. There is agency staff members are present to report on how the agency intended to address the audit findings and answer all committee questions during the committee the committee adopted a motion to file all my records Mr Murdoch this report. In members do we have any questions. Seeing no questions I have a motion on the floor to have a second I have a second all in favor say aye. Any opposed say nay. Hearing none this report has been adopted. Before moving on members allied to compliment you all and complement the chairs I thought that all three committees did a great job yesterday asked some really. Good questions and you are taking a. A really really good job of Martine the people's money the state of Arkansas thank you for doing all that with that moving on to item D. review of reports. And we have the state of Arkansas annual copy since comprehensive financial report. Matt Welch. Thank you Mr this presentation will cover the audit of the annual comprehensive financial report for the state of Arkansas for the year that ended June thirty two thousand twenty two. The audit was completed by the staff of legislative audit's after an extension was granted to the department of finance and administration the deadline for the filing of the act for was January thirty first twenty twenty three however the report was dated January twenty fifth and early released on January twenty sixth. We issued two reports for the audit of the state's financial statements. The first is the annual conference of finance report which includes all the financial statements and notes to the financial statements for the state of Arkansas as well as our independent auditors report. The second is a report on internal control over financial reporting this report includes any finance related to the state's financial statements and the Federal. And the federal financial assistance. Which Millie does you will cover the next presentation. Thank you comprehensive finance reports financial statements which were prepared by the department of finance and administration include the following entities. All the states all the state agencies across the state five retirement system's higher education institutions and the three component units. Which include Arkansas development finance authority the University of Arkansas foundation the University of Arkansas level campus foundation. Weslia order issued on modified or clean opinions on the state's twenty twenty two and a comprehensive finance report. We all all the financial statements included within the act for except for the following entities which were altered by private accounting firms. The three component units which I mentioned on the previous slide the University of Arkansas for medical sciences are Jamis and the revolving loan funds. For the year ended June thirtieth twenty twenty two we're pleased to pronounce that there were no report of findings related to the report. The next six laws will show some financial highlights of the primary government for the state of Arkansas. The financial information on the state retirement systems will not be included here that will information include later in the presentation. As shown on page twenty of the report the state had total assets of June thirty twenty twenty two approximately thirty five and a half billion. The two major categories include cash investments and just under thirteen million. And capital S. isn't just on a nineteen billion. The state's total liabilities we're just under ten and a half billion as shown on page twenty one of the report. The major categories of the liabilities include Bonds notes installment agreements total three and a half billion. Other post employment benefits also known as opium. What significantly from the previous year to just over one half billion and due to other governments amount to over one billion. This chart shows trends regarding the state's assets and liabilities for the past five fiscal years. The majority of the increase in assets from fiscal years. Twenty nineteen to twenty twenty two. Was in cash investments due to the cold coronavirus a relief economic security act also known as cares and American rescue plan act also known as our. Overall liabilities fluctuate in previous years due to various liabilities however in fiscal year twenty twenty two the decrease was cynically related to the decrease in both the net pension and OPEB liabilities. The decrease in the net pension liability was pretty much a result of prior years increasing the fair market value of the retirement investments. As mentioned previously the. OPEB drop almost one half billion to the employee benefits division enroll in Medicare retirees into the Medicare part C. plan. The state total revenues of almost thirty billion as shown on page twenty four and twenty five of the report. The major categories our grants and contributions. Such as federal grants were thirteen billion taxes such as income on sales or just under eleven billion and charges for services were almost five billion. The state's expenses for the primary government were almost twenty six billion major functions or programs or health and Human Services at twelve billion college universities had over four happy in education was or for half billion. The law justice and public safety as well as transportation or both one one billion. This chart shows the trend of the state's revenues and expenses over the past five fiscal years. The increase in revenues for twenty twenty twenty twenty twenty two was a result of the increasing grants and contributions related to the pandemic the federal funding received for both the cares and our backs. We also experienced an uptick in tax collections are properly to billion over the same time frame. Increasing in expenditures in fiscal year twenty twenty twenty twenty one will result of increased unemployment related expenditures as well as. Shares distributions again associated with the pending. There are also small increases in expenses relate to both health and Human Services and transportation. The decrease in fiscal year twenty twenty two was primarily due to a decline in the dispersants of federal funds specifically a reduction in unemployment claims. The next five slides or some financial information regarding the state's retirement system's. Page thirty seven of the report the state retirement systems and assets and June thirty twenty twenty two totaling thirty three billion. The major categories were cash. At nine twenty five million in investments were over thirty and a half billion in collateral received from securities lending transactions was just on one at. Your term assistance to liability stone one and a half billion shown on page thirty seven. The majority of this announcmenet. Was obligations and securities lending. For both public employee into his retirement system's. This chart shows the trend of the retirement system's assets and liabilities over the past five fiscal years. The variation assets from twenty eighteen through twenty twenty was due to normal changes in the financial markets for stocks and other investments however for the year twenty twenty one to twenty twenty two there were huge fluctuations in ray returns with an increase of seven point three billion occurring twenty twenty one a decrease of three point six billion twenty twenty two. Liabilities for the retirement system's had only slight fluctuations. Over the past five years the decrease in twenty twenty was a result of a decrease in security lending transactions which in turn decreased obligations from those types of transactions. Due to a two point eight billion loss in the fair value of investments total additions were negative one point four billion as shown on page thirty eight. Contributions from employees increased slightly to one point two billion however with the net investment loss of two point five billion total additions were negative. Total deductions total two billion with benefits paid in the main component there. This last chart shows the trend a retirement system's additions and deductions over the past five fiscal years the primary reason for the variation in additions or revenues. Over this period was a fluctuation the market value of investments from year to year. In twenty twenty one thousand eight billion increase in fair value however twenty twenty two is mentioned the previous slide the fair value decreased by almost three billion. The deductions for the retirement system for study of this period and we're primarily. Benefit payments. Mr this includes my presentation agency officials are here to answer any questions. Thank you in the chair recognizes representive makes. Thank you I just a quick question for staff are early on in the report under the general government you had if I recall the written the number correctly about a one billion dollars in liabilities to other governments can you define what other governments is that cities counties federal state what what what's other governments. That is correct. It's it's it's cities counties. throughout the state. Next up follow up with. Go ahead Sir so so on that is that is that where or we've borrowed money from them or what what's that liability why we have that liability will funds okay we receive that now those are due to to decision constructs okay so that's a pass through okay yes. In the chair well does recognize him and now. members of the House of any additional questions. Mr will so that was a really good report in good chart upset through enough bad briefings in charge to recognize your really good when he did a good job on that Sir. Members we have heard the report do I have a motion to for I have a motion do I have a second I see a second all in favor say aye. All in favor say nay. And with that we have reviewed this report. Members moving on to item two of delta. State of Arkansas single audit report. Mrs those you will be given that reporters. Ma'am you're recognized. Thank you Mr chair this presentation will cover the state of Arkansas single audit report for the year ended June thirty twenty twenty two. This state wide federal project was finalized and submitted to the federal audit clearinghouse on March twenty ninth twenty twenty three. The single audit act requires that the audit the state be conducted to determine for objectives first are the financial statements of the state fairly presented Mr Welch addressed this objective during his presentation. Second is the schedule of expenditures of federal awards for the seat that fairly presented. We determine that the twenty twenty to say that is fairly presented and it is discussed on pages one nineteen through one sixty of the report. Third has estate comply with laws regulations contracts and grant agreements that may have a direct a material effect on federal awards in fourth does the state have adequate internal controls in place to ensure compliance with the requirements of various federal awards. State agencies and state supported institutions of higher education this first federal funds totaling thirteen point eight billion dollars from four hundred and twenty five federal award programs during the twenty twenty two fiscal year. This was a decrease of approximately one hundred eighty two million from twenty twenty one largely due to a decrease in the funding related to COVID nineteen. Based on criteria established by federal regulations nineteen major programs are reviewed for twenty twenty. These programs represented seventy five percent of the state's total federal expenditures. The state department shown on this slide expended the federal award received by the state. The Department of Human Services expended sixty five percent followed by the department of education at ten percent the University of Arkansas System at six percent the department of transportation at five percent the department of commerce at four percent other state departments at ten percent. The state receives federal awards from thirty different federal agencies as shown on this slide the federal department of health and Human Services education agriculture and transportation provide ninety one percent of those awards. It is the responsibility of all federal awarding agencies to review and provide resolution for all audit findings as well as determined if the question cost again five by the auditors require recruitment. As shown on page seven of the report and on this line eleven point five million dollars in question costs remained outstanding as of June thirtieth twenty twenty two. The audit for fiscal year twenty twenty two resulted in forty five findings for ten federal programs twelve findings or twenty seven percent were repeat findings Page three oh two thirty three sixteen of the report provides the results of our follow up procedures regarding the uncorrected prior audit findings question calls total approximately one hundred and six million. As the auditors our responsibility is to express an opinion on compliance for each major program based on the results of the audit. Although several findings were reported we issued an unmodified for clean opinion on most of the major programs a qualified opinion is issued if an audit finding results in an instance of noncompliance that is determined to be material either individually or when aggregated with other non compliance findings in relation to the major program as a whole. For the twenty twenty two fiscal year a qualified opinion was issued right for findings representing unemployment insurance COVID nineteen emergency rental assistance program COVID nineteen corona virus state and local fiscal recovery fun children's health insurance program commonly referred to as chip Medicaid and the research and development cluster. These findings are identified on pages twenty through one eighteen of the report and will be discussed on the slides that follow. The unemployment insurance program administered by the division of workforce services. Was expanded due to COVID nineteen pandemic for this program we issued three findings one of which was a repeat finding in question costs totaled over twenty six point nine million. Eight findings for DHS for issue regarding the COVID nineteen emergency rental assistance program. One of these findings resulting from several reporting errors and contributed to our qualified opinion. Question because for the emergency rental assistance program told over thirty six point nine million. Seven findings that for agencies were issued regarding the corona virus state and local fiscal recovery fine. These agencies for the department of finance and administration the Department of Human Services and the department of health which had one finding each additionally the Arkansas Economic Development Commission had for findings two of these findings contributed to the qualified opinion and no questions calls totaled over two hundred and three thousand. Six findings affected both the chip and Medicaid programs with three being repeat findings the most significant funding noted that sufficient appropriate documentation could not be provided to auditors as a result we are unable to perform testing to determine if the statement the requirements in accordance with federal regulations. This finding contributed to the qualified opinion question because total three hundred and eighty three thousand. For findings were issued for chip with two being repeat findings and to contributing to the qualified opinion question costs totaled over ninety six thousand. An additional seven findings apply only to the Medicaid program and for our repeat findings question costs totaled forty one million dollars. Mister chair this concludes my presentation agency representatives are present to answer committee questions. In the chair recognizes center Chesterfield. Thank you Mister chair may I speak with someone from DHS claims about the findings with chip. And if you will introduce yourself. I you Sir Clark why chief staff to you just. Thank Kristi Putnam secretary DHS more ma'am. Brad Hayes deputy counsel DHS mortgagor. In my recognized was just ma'am I'm concerned about the repeat findings on the on the chip program could you address that please. Thank you all for being here. Thank you senator Chesterfield's I believe you're referring to findings twenty seven through thirty so findings of twenty nine and thirty those related to our provider eligibility operation so this is a finding that we discuss your before that has been a repeat finding for a few years there's there's a few issues here that that we've resolved in the past but continue to be repeat findings due to an issue with how an audit samples port so for example. We made a lot of changes to our provider eligibility operation back in twenty nine is a lot of changes to your what eligibility provider eligible okay back in twenty nineteen. we've we've since made those improvements but when legislative audit goes back and pulls there sample there will be times when there is a claim that was adjusted that was originally built prior to twenty nineteen so. When that happens that claim because it was prior to that twenty nineteen date we made those changes it will show up as a question cost and they're finding. There are other issues in this order that were related to provider certification and licensure so what happened in those circumstances when we provided the documentation to the auditors. We do not have the updated certification and licensure information for those providers. Since they made their findings with dental we've been able to obtain that certification and licensure that supports that they are eligible to be in Medicaid provider we just did not have it at the time of the audit and we're making changes now to automate that documentation and poured into our in in my system so that will have it when the orders request center find out things worth noting for we did disapprove a couple of those findings because the findings were made because we're following the special rules that CMS's has in place due to a public health emergency and so if we're in normal operations and the PhD was not an issue that only those financial of happened. And welcomes patent. We're delighted to have you here Secretary I think this is your first audit meeting. Welcome to paradise lost and it can't seem to get my Michael there it's on. It is my first audit meeting and I appreciate the celebration of my birthday accordingly of course. And happy birthday to you this year that includes my questions thank you so much thank you ma'am thank you all for being here in the chair recognizes representive lane Ladyman thank you Mr chair of I'd like to I have a question for workforce services that they could somebody could. Come up with their. In the has it coming up now. Thank you so. Good morning how you all today good morning you McDonald secretary of commerce go ahead. Good morning should raise Childress director the Division of workforce services. Good morning excuse me court a trailer deputy director division of workforce services thank you ma'am go ahead I'm over here to your right of I just wanted to have a little more information about the the findings repeat clients I know what you all went through and twenty twenty one twenty twenty two with COVID and the the challenges that you had but my question is where these repeat findings related to COVID issues and that we put in things that will prevent these kind of findings from happening in the future. Let me take a for shot them all a love allow my colleagues to. fill in the blanks but yeah I'm I'm I believe that even though I was not here for covered but they're COVID related. if if I could go through each one of them I don't know if you want me to do that the you know the the first one item number one The U. United fraud claims obviously the high priority from the governor's perspective with the evidence of her executive order on the first day but there were significant impacts as of of causes from COVID from the unprecedented amount of claims that were filed and won the relaxation of some of the typical risk mitigation measures to we normally do that are have been put back in place caused unemployment of fraudulent claims to increase significantly so there's been a lot of work done I can give you some statistics for example the deal well key performance measure on improper payment rates for example on unemployment insurance. in two thousand twenty one hi the pandemic we're at twenty three point four percent. At the end of last year we were down at seven point four six percent so significant decrease in the end of last year were seventh in the nation in terms of lowest lowering unemployment claims so making good improvements the team is focused on. What we need to be doing in terms of insuring unemployment insurance mitigation measures are in place. We're going through a United modernization plan which will take a couple years to do very important but yeah I think the team the team is focused on the right things and the mitigation measures are in place. We should have one vote yes Sir of well let me just say aye I think that you all did a great job during the pandemic was a big challenge but and I know during that time we had to stand up a new system with duplicate systems switching over back and forth and and I mean it was a tremendous challenge and I believe we did much better than some other states but I I guess my other question is the systems are we in good shape our system I mean is that all done and we have a system going forward is operating and functioning well I will. There's lots of different systems you I. modernization system is in process so it'll be a couple years before that's done but you know there was a cost allocation system that failed at the height of the pandemic that cost allocation system now has been formally approved by the D. H. H. S. so a lot of the the accounting was actually estimated during that period of time so now we're actually accounting for costs on actual basis with the approval of the the new of. Cost allocation system. Thank you. In the chair recognizes senator Hammer. Thank you Mr good morning of picking up the conversation about the upgrade on the system the funding of that is going in to pay for that can you give us an update on that against the cost of what the system actually is going to end up costing us. I may refer to courtroom. So we have thirty five million set aside for that project that was part of what was past I believe in twenty twenty two four twenty twenty one for a carve out of what goes into our it's stabilization. So we've we've got to thirty five million there we haven't spent but probably two million of that so far at the most and we don't anticipate spending all of the thirty five million this year or probably through the end of next we're hoping that will come in under budget on our current plan but that plan is still in process of being finalized okay and refresh my memory I think that was a cap and then engine suspension would occur once that announcmenet was met so that that difference is not being collected that's being returned to the employers or refresh my memory how that's being accounted for it would go into the trust fund okay it what is the balance on the trust fund today as of today I'm not sure it's been running right at eight point nine four eight hundred ninety nine sorry eight hundred ninety nine million what is it. About nine hundred million it's been hanging. The past couple of months okay do you believe that sufficient of basic projections House sufficient is that to meet our needs going out in the future I know y'all just are in the process of shutting down some local offices which I think that's great news that there under utilized it means we're where we need to be but as far as what you think is going to be anyone if you all think that's going to be a healthy balance what we can revisit maybe a cut in the future do you have any opinion about that you could share. During the pandemic most of the most of the payments were federal payments Senator Hammer is your member so there was the trust fund state healthy a during that period of time and then in twenty this last session twenty twenty three there were some adjustments made to the the employer costs for unemployment insurance cemex should some cuts were made so employers realize those cuts as they go into effect and yes we expect that they'll be you know less funds deposited into the trust fund that because it is healthy we recognize that we wanted to get that back to the employer I remember correctly the estimate is about thirty. Thirty million of that will be savings to the employer okay and no thing I ask is is removing the future help monitor that if there's room for us to do some more I think would be good well we don't go on you know go the wrong direction if you all could just be watching the appreciated absolutely thank you Sir. In the chair recognizes representative Springer. Good morning thank you Mr chair up I would just like the record to reflect that the gentleman in the center there did not introduce himself I think some of us already know him is to make Donald so I didn't identify yourself and I'm I'm sorry Mike must not of that on human Donald secretary comments thank you Sir and thank you Mr children and all the persons in your department for the work that you've done over the last few years so thank you so very much thank you. In the chair recognizes Senator Solomon. Thank you Mr chairman may have missed the boat here I'm looking at the emergency rental assistance program that appears to come under the Department of Human Services not yell would it be possible when when they're finished here to bring them back I'd like to have a few questions on rental assistance absolutely thank you. In the chair recognizes senator Johnson. Thank you Mr chairman a. Mr secretary at I did hear introduction maybe I don't need hearing aids after all thank you welcome panelists welcome Mr secretary with your permission I will dresses to miss children because she was here then and she and I had many discussions during that time I looked at the numbers for the the pandemic unemployment assistance and I'm. I can't help but remember when I started getting these letters in my at my home mailbox from people who it is applied and used my address and I thought this was some real anomaly until you now have is to realize that this was a. This was an epidemic of its own of of those I believe within thirty six million dollar range and we were looking and all that and I'm sorry trees I saw that a few minutes ago but. Was anyone anyone in the whole state prosecuted for fraud related to that and if so about how many and was there some geographic pattern to it within the state thank you for your answer our Mr secretary either one of you any often can do but I know. Which children have been down this road two three years ago please go ahead I'll be glad to thank you a during the there during the time at which we were at toward the end of the pandemic obviously we have better tools that we could utilize using the tools three NASA law our national association in their integrity hub we're we were matching and and identifying across the country the names of the addresses the techniques that were being used by the fraudsters obviously we had and checks and balances in place as well I toward the end we were recognizing some trans which is you know we were hesitant to release those because we didn't want to go to let them know how we were identifying of those individuals however just is in Arkansas just like in other states a lot of these were large fraud rings so they were not necessarily one individual that was just filing. Fraudulently on someone that they had obtained their name address and social it was through some type of of breach of through multiple systems possibility that of around the country and when it was found that we were paying you know that when the six additional six hundred dollars was being being paid that was a prime opportunity for large fraud rings to take advantage of that data that they had been holding and it was the pay off was tremendous so that's when we saw some of the largest fraud. I cases so at we are still working to recover yes there have been some of a criminal charges filed here in Arkansas and those individuals were found guilty we are continuing to work with the office of inspector general at the federal level also with the FBI and other law enforcement and are continually identifying those cases that are criminal and we can work with our our state officials in order to to file charges or to to file A with those entities and then hopefully get charges filed charged for those individuals is there any hope or any success so far on actually recovering yes funds yes Sir today on the number that was in our audit as a five thirty five point eight million has been repaid in back that bad actors scheme since the beginning of the pandemic so we're continuing to collect those those that we can find that's the problem a lot of these if there were large large fraud schemes there's not you know there's not one individual that that is that can be found because obviously they weren't using their name their address or even a bank account that was traceable so in the up the process obviously going through I. G. three Nassau integrity have and other sources and they've identified some of those frauds fraud schemes that of large fraud of groups that you've seen probably in the in the newspaper at the national level because that's how big it was but as far as I know here in Arkansas there there of not being any indemnified of. Rochester's we have about a hundred open currently I. G. cases right now for about twelve hundred claims. Was there any evidence that found of international criminal involvement. Yes Sir yes and it was early on you saw that floor a California was hit early on and then Several other states were hit. As well I want to finish my previous sentence and a sign that in Arkansas we have an identified that were there any fraudsters we haven't identified any fraudsters that were part of a large scheme but we have identified fraud and individuals that have committed fraud individually. Anybody in jail yet. I think there to what looks Sturch all right thank you so much for children thank you you're right thank you panel thank you Mr chairman. In the chair recognizes senator Chesterfield. Thank you Mr chairman good morning welcome the Secretary of morning thank you being back in government. I never was in government but it's you felt like I felt like you were you would you be it's all good thank you it's good we're glad to have you here I am concerned about the debt ceiling compromise that was reached saying that we're clawing back monies that have not been used federal dollars that have not been used is this going to impact you're Division. You know I haven't focused on that but something that limit let us look into that and we'll get back to you I appreciate it because I am concerned because we do have to deal on spending moneys yes and I'm not sure to the to what extent that is going to hit Arkansas because we've gotten so many divisions so I appreciate it thank you thank you and welcome to. The Committee thank you. The chair recognizes senator Hammer thank you share can you tell me how many cases are under investigation right now if you senator while go out here and I'm sorry that I have approximately a hundred that involves the O. I. G. that involves about twelve hundred claims okay but we're continuing to look look for additional fraud claims and and are you seeing as you get into it that the number cases are going down or you find in the trend is holding flat going to. You as you as you go through. S. as secretary Donald said earlier are improper payment rate is down at seven point four four percent so prior to the pandemic that's about where we were so we're back to the normal processing of claims requiring ID verification which we've improve that process and also we reinstated the waiting weeks so we don't we were not victim of fraudulent claims at a large level prior to the pandemic and now we're back to normal operations so we have those measures in place okay and as far as the staff to accommodate those hundred because I'm one token we want to get everybody is guilty but on the other token if people are being accused of something we want them to be able to get handled their cases handled expeditiously so they can get out from underneath this so as far as the staff that you have that are handling those cases how long do you think it's going to take us to clear out those hundred cases. I don't have a Senator Hammer I can provide that information to you I don't have an estimate of an estimated amount of time that will take of the obviously on the cases that involves other agencies outside of of the Division of work for services we don't have control over their you know where their schedule those cases for hearing six cetera or or the time timeliness of those but we are working to get those cases before the proper authorities internally we have worked through our our cases within the agency we still have cases within the the appeal tribunal and court of appeals of. Or for other board of review which now have are at the court of appeals so we're still working through those cases and providing that information in those circumstances as needed could you give an estimate of how long you think it's going to and I realize that's kind of a plus or minus moving target but I'd just like to know how long he's he's going to take care of those hundred I'd appreciate it yes Sir thank you. The chair recognizes Senator love thank you Mr the children smoke over here is is someone now in. As someone who had a fraudulent. Case opened up in my name Walk me through the process of coming what do I have to worry about in the future because I had unemployment as you know I had unemployment. Case opened up in my name and somebody found fraudulently so was there like a big breach of data or was there is that isolate some sort of isolated claim or kind of walk me through that and in the issues that I may or may not have an fusion. We do not have any information that that a compounded multiple claims that led us to believe that it was say that you're in your case or even and nine that was part of the fraud ring or or other of breaching data of a lot of these are one offs and so being able to tie those together unless there was unless the the individual use their their. Mailing address after home you know that might Lee or their bank account number you know that might lead to that person being identified but other than that the steps that you took to prevent that from going any further by per by submitting to us your police report that you filed then we immediately stopped the claim and then that information is held within our agency and then also with the integrity have so it was put in with other individuals information so that we can track any future activity so unless you've received other obviously we we ask individuals to sign up for any type of security protection that is available on your interested in that is a good way to ensure that any information in the future that's released. And it's used to fill out of credit application or for any other a fraudulent application that you'll be alerted of that so we had we notified you of that along with the letter that was sent to you everyone else receive that same information and instruction. So nothing I shouldn't I shouldn't really be concerned in the future of that you know anything I think it's safe to say we all should be concerned about our identity and protecting our our identity and information so unique so it's important to take those steps to make sure that you're alerted any time that your information is used for anything any application within the state of Arkansas or the country so I hope that you've done that idea and that the best step to take to to protect you in the future okay all right thank you thank you. Members are there any other questions. Senator so that you have one you have one for the ages. Yeah I did yes thank you get you all come back up. Thank you Mr secretary thank you. Trees thank you. Back on a fine line. Go ahead senator so thank you Mr chairman I would like to meet after this after we adjourn and schedule follow up because there's a lot of information here I think some of the same questions that were asked of workforce kind of apply here too there were some difficulties there not necessarily the fault of the agency the feds were struggling with that we did have a lot of questions so ask a general question you can just your answer shortly play are quickly so we had a lot of landlords that really struggled and lost a lot of their rent money have we addressed those issues is that an ongoing issue is it something we can follow up on. I will say that we are addressing course the the criminal cases a number those been referred for prosecution I believe there have been prosecutions already and buster Hayes can get a little information on that and so we know that in those situations certainly there are opportunities for restitution and I'll ask for to Mr Heisman we have details on restitution that's been ordered yet but that is an option in those criminal cases okay I'm gonna if you don't mind if you all stages shortly that was my biggest question are we still working on that people been prosecuted sounds like we're still chasing some of that around all right thank you thank you Mr. Question yeah shoals of. Thank you Your being here I have a question all I thought you had a question yesterday I do I do Senate should I was recognized thank you Mr I also want to say thank you there were a number of people who were left homeless. And then you guys did a great job of responding to those of us who we really needed you to help people. And I know some people took advantage of that but there with those people who really really needed your help and you were there for them I don't think we say thank you enough for that but I truly do appreciate an especially appreciate this young lady always responding to me and When I needed help with some constituents I want to say that for the record thank you so much for that we appreciate it those of us who let people who really really needed it so much thank you senator. Thank you all in no well we're not done yet Senator Hammer has a question thank you Mr would you all give us a brief update on where we are on the qualifications the redetermination just a quick snapshot where we are today. One as far as Medicaid redetermination Medicaid terminate yes. So S. and recommend to check meals with the numbers but we've done a we did a round of closures in April we have another round of closures that all happened in may I will be submitting a report to CMS with the main numbers here in about a week I believe and so we'll probably public publicize those as they come out I will continue to work through the through the population to return eligibility and remove those who are not eligible I will I think I would say this bill or not see anything that's unexpected we are seeing closures which I think everyone expected unless the national press is focused on things one thing I do want to put out there there's so the national advocates keep talking about these procedural closures as if that's a bad thing the reality is what we expect is that we've got a good number of people who are not eligible they know they're not eligible and so they're not going to respond to our inquires and so we close them for not responding that's fully expected this process because that's we just think that's what most folks who know who they've gone back to work they have health insurance somewhere else they know they're not eligible we still expect them to respond can we do that and maybe the chair would want this directed to the chairperson would you mind just send a snapshot of the current numbers where we are and do you do you anticipate what's the date out in the future that you you think that the redetermination will be at a point where you all say okay we've gone through everybody and you know we're where we think we're going to land it's the the timeline that the you all set for legislation is six months and we've got our plan is to work through that six months and so we've got everything staged out during that time based on the time we think that each group of beneficiaries is going to take to work for that group and right now we're on schedule I can make it through the six months so you think you'll be able to make what was mandated in legislation. Yes. Okay our thank you. Members are there any other questions of DHS. Seeing none thank you all for being here present a good job. Senator Chesterfield I believe that you had a question for the FNA. I'd like for staff to repeat what the findings were into here from DF DF any as to their response to the fine that's all. If you would reduce yourself Sir. Andy Babbitt DFA's. Indeed you heard what the finding was would you respond to that. Sure we have a response in the report but the short of it is there was a couple of arpa. Proposals that went through the stand committee that we did not take her consultant's prior to them going to stand committee subsequent to audit's finding we did Senator consultants and they have been reviewed and approved for our. What is the status of all of those things that were approved but have not been funded. Currently. They are on poles in accordance with the executive order and we're still waiting guidance as to the progress of that of those proposals in a this is my last question I think. You are familiar with the compromise that was reached its in the Senate it's in the Senate stands now yes ma'am what risk and I'm I've asked before and I ask I think we ask getting counsel and I ask again what are if you have a look at the legislation what are the risks of Arkansas's money being clawed back because we have about fourteen forty million that we haven't used. Can you address that. Hey I'm aware of the bill earlier this week we begin to look at it it's very detailed bill it's somewhere over a hundred sections each of those sections referenced references back to previous legislation add a section level of I've had some staff back and look through that compile it we've got it with the consultants now going through it I can't give you an exact answers to our risk other than our preliminary reading is that it discusses of from a federal obligation point so how that plays out in the ultimate legislation we still we're still reviewing our so thank you thank you Mr. Members are there any other questions. Seeing none this is reviewed. And once again I like to thank story today good good briefing good good charge today. Members we are next moving on to other business. The next meeting we're going to have. Will be the tenth of August in the eleventh of August. So enjoy your your summer. And. When asked by joint chair representative Gazaway you have any comments or. Thank you. Thank you so much and we are adjourned. Thank you so.