Legislative Joint Auditing
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Representative Robin Lundstrum
Unverified
1:30
Folks, let's go ahead and find your seats. Ladies and gentlemen, go ahead and find your seats.
Legislative joint audit will come to order. I need a motion to
adopt the minutes from February 13th. So moved. I need a
second. Second. Any discussion? All those in favor? Aye. All those opposed? All right. Minutes are passed. Senator Petty, if you
Senator Jim Petty
Unverified
2:28
would read our executive committee minutes. Thank you, Madam Chair. The Executive Committee met Thursday, March 12, 2026, and adopted the minutes from the meeting held February 12, 2026.
Staff reported to the committee the audit and special reports scheduled to be presented to the standing committees and the full legislative joint auditing committee this month. Staff also noted one committee requested report that is outstanding and currently in progress. In new business, staff provided information regarding the current caseload assignments to circuit judges in the Benton County 19th West Judicial District Circuit Court, with a focus on how cases are assigned and the total number of cases assigned to each judge as requested in the February meeting.
The committee voted to have staff review selected cases transferred among divisions and report back to the committee. In other business, Legislative Auditor Kevin White updated the committee regarding the completion of the Arkansas Legislative Audit Financial Statements audits for fiscal years 2024 and 2025. The audits were conducted by a private CPA firm, and the audit reports contained clean opinions on the financial statements and no findings in the reports on internal control. With no additional business, the meeting was adjourned. The next meeting of the committee is scheduled for Thursday, June 4, 2026, or at the call of the chairs.
I move for the adoption of this
Representative Robin Lundstrum
Unverified
3:49
report. I need a second. Second. Thank you. Discussion? I'd like to make a point of personal privilege here. Our audit department is tasked with a very important job of making sure that they audit everything and it's all on the up and up. And when an outside CPA firm comes in and says all is well, that is a great sign for us and it's a great sign for our audit department. And I'd like to especially call out Jana Kaysen, our Chief Financial Auditor.
Is she in the room? She's back over here, smiling, trying to hide. Job well done. Job well done. Thank you. All right. With that, all those in favor of accepting this report, say aye. Aye. Opposed? All right. Report is accepted or passed. Next up on deck, we have cities and counties. Representative Jean, would you give us our report? thank you
Representative Lane Jean
Unverified
4:49
madam chair uh the uh committee on counties municipalities
met yesterday february 12th we approved the minutes the committee also updated the status on the december 31st 2020 22 delinquent private water and sewer audits 21 of these entities turned back funds and were reinstated after all requirements were submitted the committee also updated the status of the december 31st 2023 delinquent private water and sewer audits of the 64 delinquent entities 60 have been filled their respective reports since the last meeting and
that was held on july 10th 2025 the committee also reviewed 20 deferred reports and 91 current reports officials from seven entities were there to present address for repeat findings three were previously deferred reports were filed and 17 were deferred of the 91 current reports reviewed eight were referred to prosecuting attorneys and attorney general and one was certified to the government bonding board the committee filed 84 current reports and deferred seven reports and i'll
answer any questions at this time. If not, I make a motion.
Representative Robin Lundstrum
Unverified
6:09
We adopt the report. Thank you. Any questions? All right. Motion to adopt. Second. All those in favor? Opposed? It's passed. All right. Representative Duke, I believe you have an education
Representative Hope Duke
Unverified
6:23
report. Thank you, Madam Chair. The committee met thursday march 12th 2026 and adopted the minutes from the february meeting 57 education audit
reports were included on the committee's agenda for review there were
52 audit reports with no findings and five audit reports that contained findings the rod the audit reports for camden fairview forest city and edleton school districts contained findings that referred to the applicable prosecuting attorney that were that referred to applicable prosecuting attorney and attorney general the committee moved to defer these three reports the june meeting so officials from each school district can be present to answer questions from the committee related to findings in their respective audit reports the committee filed 54 reports and deferred three reports that were brought
before it i move to adopt this report thank you um senator
Senator Fredrick J. Love
Unverified
7:17
love thank you madam chair i have a - Substitute motion. - I'll
entertain that motion. - I move to amend the chair report to file the report presented on the Nettleton School District of Creighton County and adopt the report is amended. - Discussion. All right, those in favor?
Representative Robin Lundstrum
Unverified
7:40
- Aye. - Those opposed? All right,
motion passes. did we have a second on that motion all right thank you senator hammer seconded all right the motion passes thank you the motion passes Adam Pat report passes as amended thank you all right next up we have representative Unger state agencies
Representative Steve Unger
Unverified
8:13
two reports with the following findings were presented the Department of Public Public Safety had a duplicate payment to a vendor and insufficient collateral on hand for one of its bank accounts. The Department of Transportation and Shared Services made a career service payment in error, had several record-keeping issues for equipment, double-counted cash holdings, failed to record EBD payable property, and did not maintain state vehicle logs.
Various agency staff members were present to report how the agencies intend to address the audit findings and to answer committee questions. During the meeting, the committee filed five reports. I move to adopt
Representative Robin Lundstrum
Unverified
9:06
this report. Thank you, Representative Unger. I need a motion. Okay, we have a second. Second from Representative Ladeyman. Discussion? Those in favor? Aye. Those opposed? All right. Report passes. Next, we have a review of reports from the City of Pine Bluff.
Michelle Acri, actually, sorry, if you could give us that report. Thank
Representative Nicole Clowney
Unverified
9:31
you, Madam Chair. This presentation covers the financial audit for the City of Pine Bluff for the year ending December 31st of 2024. Located in Jefferson County, Pine Bluff is a municipality of the first class with a mayor council form of government. Pine Bluff's population is approximately 39,000. Pine Bluff had $79 million in total assets and $74 million in fund balances at the end of December 31st of 2024.
The city had almost $61 million in revenues and over $68 million in expenditures for 2024. The city received an unmodified or clean audit opinion for all three opinion units, which include the general fund, street fund, and other funds in the aggregate. No deficiencies in internal control were identified in the report on internal control. However, there were findings related to the offices of mayor, parks and rec director,
and the finance director disclosed in the management letter. The City Parks and Recreation Department oversees and maintains the more than 30 parks within the city, as well as recreational facilities such as golf courses and RV parks. The department also hosts sporting and community events, as well as musical festivals, farmer's markets, and other activities. The department has approximately 37 employees, and the director reports to the mayor.
The city had $478,000 in parks and recreation fees and almost $3.5 million in expenditures. As previously stated, Legislative Audit issued two management letter findings. The first finding relates to the mayor and the parks director. This finding has been referred to the prosecuting attorney and the attorney general, as well as certified to the governmental bond board. City officials brought to audit's attention that they had identified discrepancies in a deposit from the City Parks and Recreation Department.
Subsequently, our review of transactions from the parks for the period January 1 of 2023 through May 21st of 2025 identified 179,629 in manual receipts that could not be traced to the City collector's receipts and deposits. In addition, we noted missing receipts from the Parks Department's main office, the JC Golf Course, and RV Parks, and no receipts were issued for revenues received from Harbor Oaks Golf Course.
Therefore, the actual amount of unaccounted-for funds could be higher. Also, there was $48,415 in unallowable purchases that consisted of holiday decor, kitchen items, personal hygiene items, fashion accessories, gift cards, and various electronic devices. There were 13,000 in questionable purchases that consisted of snacks and office-related decor, and a comparison of original invoices obtained from vendors to invoices submitted to the clerk's office
revealed numerous invoices were altered to conceal the type of items purchased and the shipping address of the unallowable and questionable items, which were shipped to addresses not related to the city. We were unable to obtain the original invoices from two vendors. Therefore, we were unable to confirm if all items purchased from these vendors were for legitimate city business. In addition, five vendors that were utilized to purchase questionable and unallowable items were not approved by the City Council.
Furthermore, three lawnmowers were not available for audit inspection. Therefore, we were unable to determine if the equipment is currently in the possession of the city. The parks and office manager and the assistant director who were employed when these transactions occurred were terminated in May of last year. These matters are currently under investigation by Arkansas State Police. The second finding relates to the finance director.
Accounting procedures for municipalities that are set forth in Arkansas code says the city was in non-compliance with these codes and other proper accounting procedures as noted on the screen. Cash receipts journals were not properly maintained and were not reconciled to total deposits per bank account for all accounts. Monthly bank reconciliations were not performed timely or prepared properly, and receipts were not issued for all funds received nor deposited in a timely manner.
This concludes my presentation. City officials are present to respond to committee questions. Thank you,
Representative Robin Lundstrum
Unverified
14:34
Ms. Ashley. Well put together. All right, if I could have the city officials come forward, please. Mayor Flowers, Ms. Purdy, and Ms. Jevers. If y'all
could remain standing and state your name and employer and position,
and I'll swear you in. Mayor, we'll start with you first, please. If you could state your name and position. And if
you could state your name, please. All right. And could you state your name, please?
Okay, I'll swear you all in. Do you solemnly swear and affirm that this testimony you're about to give will be the truth and the whole truth and nothing but the
truth? Thank you. If you could be seated, we'll
Speaker 32
15:54
start. Mayor, we'll start with you if you have an opening statement. Thank you. I do. I first want
Speaker 33
16:00
to say hello to those of you who I didn't get a chance to hug.
And I miss most of y'all. Some of y'all are new. um secondly i i want to say that um after serving here for almost 10 years um i didn't know that i would ever be or know what it would feel like to be on this side of the table but i can start off by telling you that um in the year um and what two months and 13 days that i have served as mayor
I love it and believe that everything that I did prior to prepared me for this role. And what I would like to say in opening as I introduce Ms. Devers and then Ms. Holman is that as this is covering activity in 2024, before I arrived and was sworn in,
many of these things evolved and were discovered in the very beginning of 2025, particularly with parks. And once I appointed the open position of parks director and appointed Ms. Holman, I think it wasn't even a month or maybe a little over a month that she discovered some irregularities and took quick action. And then we discovered much more even than what you
all have seen and immediately called the authorities and met with the authorities as well as state auditors so that we could make sure that accountability would be implemented. And the main thing that I want to share, and then I will pass the mic, is I remember from my days on the other side of this table that what we wanted to know and needed
to know is that what you all are hearing today won't happen again and that we have taken action to make the appropriate changes and so I'd like you to know that at the very beginning and even prior to being sworn in one of the pledges that I made for calls from the people was to for the city to invest in the services
of an accounting firm for the purposes of a forensic audit and we did do that we secured the services of UHY with offices all over the country based out of Columbia Maryland that forensic audit will cover the 2017 sales tax fund activity as well, and that's for seven years, but it will also cover all of our departments under the mayor's office for two years, for the
years 2023 and 2024. And I mention that because once we discovered these irregularities that what we saw evolve into fraud waste and abuse we will expand the years for the parks and rec to cover as many years as we've seen there to be irregularities and not only did we confer and hand over everything we could to legislative audit but we conducted and and some
internal audits before the firm conducting the forensic audit came on board and so in addition to that we discovered that there were not centralized and documented standard operating procedures across all city departments there obviously would be some for police department and fire but in many other departments those didn't just didn't exist and so we have consulted
um with a professional consultant to help us establish a framework for that work and um and that will include um the finance department even though there are some uh standardized operating procedures that are documented, having a full body and breath across the dynamics for every department is what we're aiming for. We also didn't have a procurement director when I came
on board, and that's something that we put and got approved for in the budget for this year. And once the consultant that we've hired to complete the asset inventory is completed, and of course we have inventories, but not as, I think, complete and certainly not centralized. And it's not an inventory with a threshold that begins at $500, which is where we'll begin, I believe,
the threshold for the existing inventory that the legislative audit has been reported from the various departments starts at $2,000, if I'm not mistaken. And then we passed some legislation in the last year that we're really proud of. We changed it so that the budget amendments, which didn't fall under resolutions now, are required to be filed as a resolution so that they can be public and go through a more rigorous vetting process and a more public process.
We also passed legislation requiring resolutions and ordinances that include any funding to, in the resolution or ordinance, disclose the funding source so that we are not passing legislation where we don't know where the funding would come from. And then we also passed ordinances that would allow our city to pay our bills and vendors electronically, and we passed legislation that would allow the city collector's office to deposit checks electronically.
The other thing that I would like to note is that we are in what I would say is going to be a pretty long and protracted process, but it will be worth it. The previous administration invested in the transition of our software system, which really undergirds everything we do financially and with regard to HR. And we had to do that.
That's something that we discussed during transition. And the current company we are with, which is New World, was bought out by Tyler Technologies. So we're undergoing that process as well. We completed our first year and will go live for our finances and anticipate that there will at least be another year to year and a half before the three phases will be complete.
With that, I would like to introduce Finance Director Gina Devers to speak to the issues that pertain to her department, and then you'll hear from Prudy Holman, and then we'd be open for any questions that you might have. Ms. Devers, if you could keep your comments
Representative Robin Lundstrum
Unverified
24:31
not short but just clear. Thank you. Okay.
Speaker 36
24:40
In reference to the finance department, I think the mayor pretty much covered most of it when she spoke. We are working on the standard operating procedures, which we did have some in the finance department. but since everything in other departments involving money flows up to the finance department, those procedures are being implemented and documented across all the departments.
So in the event that someone leaves unexpectedly in another department, it won't end up affecting the finance department. There will be a book that the new people can refer to and just keep things going. as for the receding and the depositing timely we are have implemented a three day rule and if I receive a check on Monday I have until Thursday to get it deposited and
Speaker 39
25:51
Purdy yes good morning so
So for Parks and Recreation, as Mayor mentioned, as soon as I took on this position is when I discovered the irregularities. And so I immediately started to just. If you could lean into your microphone. I immediately just started to kind of investigate and see what was happening and what we could do to make it better, actually. So just for the receipting, we are utilizing our New World system, eliminating any manual receipts.
This receipts the customer immediately, and once we enter that information into the system, then it's there. I can't do anything to change it. They're receipted, and so those funds have to be taken over to the collector's office. I also, when I established the pay.gov for Parks and Recreation, so now we have the QR codes in the windows. We eliminated cash at the RV park, so there is a posting of where they can, you know,
scan the QR code and make the payment, or they can come to the office and immediately get a receipt. What else? The SOP is in place for the receding, so the office manager and the admin, they have been trained on how to utilize New World. And if they forget, then I have the standard operating procedures posted there that they can always refer back to.
And as far as the equipment, only designated individuals are in charge of the equipment, So they're responsible for inventorying that at the end of the day, making sure everything is returned to the park in the maintenance shops at the end of the day. And I think that covers just about everything. Thank you, Ms. Holman. Thank you. Questions
Representative Robin Lundstrum
Unverified
27:56
from the audience? Representative Leidyman.
Representative Jack Ladyman
Unverified
28:06
Thank you, Madam Chair. Well, thank you all for being here. And, Mayor Flares, you and I had a
mayor-to-mayors meeting about four months after you were in office. And, you know, I know you had a lot of challenges and you were working on those then. And you and I didn't always agree here on bills. We had a few discussions. We agreed on a few, though. But, you know, I always knew that your heart was in the right place and you were doing what you thought was best for your people. And I think you still do that. And some of the stuff that you presented is really good.
I mean, it sounds really good. But, Mike, well, really a question for Ms. Holman. Do y'all have any other cities have their challenges in parks, including my city? Do you have any nonprofits that work hand-in-hand with your parks and primarily your wrecks where there's cash flow? You know, if you have any of those, are you monitoring how they handle money?
Because that can be a big issue because they're not keeping good receipts and maybe they just send the money to you. If you don't have any, then you don't have that issue. But do
Speaker 34
29:23
you have any nonprofits that work with your parks recreation? No, sir. Nothing
Speaker 48
29:28
that is like a formal partnership where we're. I mean, besides, so Boys and Girls
Representative Jack Ladyman
Unverified
29:34
Club and, yeah, 8, but they don't handle money. Okay. Well, that's just something that, you know, you need to be aware of. There's issues related to that. But I think some of the things y'all put in place, your system that you have, Mayor, your tracking system, your software, is that what the Municipal League uses or is it a different type? A lot of times the Municipal League can help you with those systems.
Speaker 33
29:59
They have always been helpful, and yes, they're very sophisticated systems that other cities in Arkansas as well as across the country use. And Tyler Technology actually, and we learned this during the transition, Tyler Technology actually specializes in municipalities and school districts. and um it's it's it is a heavy lift to make this transition but um we hired a project manager
who has experience in change management and software training and she's been amazing in helping us um get ready to go live so well i know you got a lot of work to do and hiring a
Representative Jack Ladyman
Unverified
30:47
consultant outside to help i think it's a great step forward so thank you all for being here Thank you so
Representative Johnny Rye
Unverified
31:00
much. Thank you. Representative Rye. Mr. Chairman, Vivian, it sounds like that, Mayor Vivian,
it's not so much that you have theft here. You don't have a system or you didn't when you came into office that actually you could track things day by day to know where you were financially within that organization. Is that kind of what it was?
Speaker 33
31:27
the tracking system was there. We are just in a, as far as you're talking about it with parks and rec, I mean, honestly, that is just human fallibility and people taking advantage of the position they were in.
And thank God that we had someone who was observant and, you know, held the process accountable and held the people working for the department accountable. And I think in your report you'll see that there are two people who had direct access and were responsible for the activity that was discovered were terminated and the information was handed over to the authorities. And I think for what wasn't being done or what could be done better is what we've tried to do to enhance the system that we have.
But we had a good system in place, just maybe people not operating honestly and above
Speaker 51
32:26
board, unfortunately. Thank you. Thank you, Mayor. That was a great explanation. And I appreciate
Representative Johnny Rye
Unverified
32:32
you. And sure it's good to see you again. Good to see you, too. Yes, ma'am. Mayor, what I appreciate most is you
Representative Robin Lundstrum
Unverified
32:41
didn't try to cover it up or hide it. You dealt with it straight on and called it for what it is. It's plain old theft. People in trusted positions stole from the city of Pine Bluff.
Is prosecution being pursued now? Yes.
Speaker 33
33:00
pursued. We have met with the prosecutor's office as well as state police and our own police department. and I believe that the status is still in investigation under the state police. Okay, thank you. Do we have
Representative Robin Lundstrum
Unverified
33:15
any other questions from members? Okay, seeing
none. All right. Do I have a motion to file this report?
Do I have a second? Second. Thank you. Discussion? All in favor? Aye.
Speaker 57
33:35
Opposed? all right motion passes thank you thank you committee i hope not to see you again next year thank you mayor
Representative Robin Lundstrum
Unverified
33:45
the that's condolences are extended all right the next meeting will be june 4th and
5th of 2026 and seeing no new business we are adjourned
Agenda
A. Call to Order by Chair
B. Adoption of Minutes
C. Reports of Executive and Standing Committees:
1. Executive Committee
2. Counties and Municipalities
3. Educational Institutions
4. State Agencies
D. Review of Report:
City of Pine Bluff – Regulatory Basis Financial Statements and Other Reports – December 31, 2024
E. Other Business:
The next meetings of the Legislative Joint Auditing Committee will be held June 4 and 5, 2026.
F. New Business
G. Adjournment
Documents
| Title | Type | Pages | Source |
|---|---|---|---|
| Agenda — LEGISLATIVE JOINT AUDITING, Mar 13, 2026 | Agenda | 1 | Official source ↗ |
Speakers
Representative Robin Lundstrum
Unverified
Senator Jim Petty
Unverified
Representative Lane Jean
Unverified
Representative Hope Duke
Unverified
Senator Fredrick J. Love
Unverified
Representative Steve Unger
Unverified
Representative Nicole Clowney
Unverified
Speaker 32
Speaker 33
Speaker 36
Speaker 37
Speaker 39
Representative Jack Ladyman
Unverified
Speaker 34
Speaker 48
Representative Johnny Rye
Unverified
Speaker 51
Speaker 57