Legislative Joint Auditing-Counties and Municipalities
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shot him on the agenda is an adoption of the minutes from the February 12 meeting to have a motion second all in favor say aye in ute s are approved Move on to item C on the agenda.
we'll get an update on the private reports from the water and sewer systems Thank you
Speaker 5
0:34
Mr Chair quick update on the delinquent December31st,2022. Water and sewer reports we started out with43 back in July and we received
full compliance of 21 of those43 and reinstatement letters have been sent to the treasurer of state and they turnback has been reinstated that is up3 from the prior meeting we picked up beard and new door and Plumberville from the last meeting that completes my report Mr Chair. any questions from the committee on this report that was just an update so we don't need
any votes on that so we'll go ahead
and move to item items E and F on the
Speaker 5
1:23
agenda we'll get the 23 I'm sorry I'm sorry missed that go ahead adamd report update on the delinquent December31st,2023. water and sewer reports back in July we started out with64 cities that were delinquent with their water and sewer reports for over 18 months we're now down you're your handout says5 but we actually received marvels 2023 report
yesterday so we're down to4. so60 of the64 is in good standing now. that completes my report, Mr Chair. This committee you have any questions on this report? seeing
none we will move on to item E. we
Speaker 5
2:08
were scheduled to have a discussion on noncompliance with missal accounting code for the city of Fargo which with the chair's permission would go ahead and present their report
on pages one and two but the mayor called and he would request that we defer that report. he had a medical issue for showing up today Staff recommends we defer have a motion in the second to
defer this to the June4th meeting all in favor say aye all opposed motion
carries the report will be deferred to June4th. itemteam F discussion on
Speaker 5
2:50
noncompliance with 277207 which is misuse of street funds city of Jericho was granted a a payment agreement less than 10% allowed by the law back in February of 24. we did the 24 engagement and they've only paid67% of the required amount. Jericho also called and said the court treasury is a school teacher and she requested that we defer this till June to allow
her to be here to discuss this staff recommends we defer motion
to second all in favor say aye any opposed motion approved this will be deferred to a June4th meeting. OK, let's move on to
adam G review of the reports thank you Mr Chair We had 20 reports deferred from the previous meeting.
Speaker 5
3:45
we're gonna go a tad bit out of order. we're going to jump to number two on the list the town of
Biggers on page one the the mayor of called and he's a paramedic and his work schedule is going didn't allow him to be here today so he requested that we defer staff we'd like to make one note that there are one finding is that they're on the delinquent 2022 water and sewer list and he has requested to defer to August of 26, which is this summer that will push him
past the deadline to be able to recoup his turn back that's beenn escrowed so but staff does at his request staff recommends we defer purposes of vitamin has a motion have a question ma'am yes you're
Representative Carol Dalby
Unverified
4:42
recognize did y'all explain to him what that's going to do to his turn back and he's still good with that and understands the ramifications thank you you said august
Speaker 5
4:53
but we'll bring we'll do it again in June just like that was just his request er vi ce ladyman's
made a motion to defer this raju 2 OK all in favor sayy aye any opposed motion carries we'll defer this to the June
Speaker 5
5:16
meeting continuing on page two and three with deferred reports of the city of Hollygrove 2024. treasurer Ruthie Foster was
requested to be here today. She also requested that we defer to the June meeting staff recommends we defer
motion all in favor sayy aye any opposed motion carries. this will be
Speaker 5
5:39
referred to the June meeting. excuse me pages3 and5 we have the city ofrong 2023 and22 we presented this report in the February meeting and the mayor Howe was present but he was requested to come back to give
an update so we'll go ahead and present this report again and then allow him to get his update on page three under the mayor receipts primarily from the sale of garbage bags s totaling almost $12,000 were not deposited from January1 of22 through December31st to 25. due to multiple employees having access to the funds and a lack of proper control so we were unable to determine the custodial custodian of undeposited funds the city utilizes solid waste
funds to pay monthly dumpster rental fees on behalf of five private businesses in apparent conflict Arkansas constitution article twel. Additionally, the city bills these businesses through the water department. However, it does not appear the water department transferred the payments received to the solid waste fund. This is a repeat finding the city made the following payments totaling over $2600 in apparent conflict Arkansas constitution.2,100 dollars for food related purchases that did not have a business
purpose500 dollars to the gardener alumni association this is a repeat finding on page four the city was in noncompliance accounting procedures for municipality set forth in state law and other county procedures as follows Bank reconciliations contained errors or not approved by someone other than the preparer free number receipts were not issued for all funds received cash receipts were not always properly posted or classified adequate sporting documentation
was not maintained for all disbursements fixed asset list was established however it did not include all editions and deletions and control totals contained errors. This is a repeat finding payroll taxes will not always paid to the IRS by the due date. This results in penalties and interest of over500 dollars to the IRS in addition $2700 in penalties and interest related to 2020 and 19 payroll tax deposits were paid to the IRS in22. This is a repeat finding
ar restricted funds were deposited in the wrong accounts althoughthoughchedule 1 and3 show cash balances of 158,000 and over65,000 in the general fund for 23 and22 respectively the general fund owed the solid waste fund 168, and57 1000 as of december31st of the same year. It shown in note5 ofchedule5 when the outstanding amounts were considered, the general fund had a deficit fund balance
of over $10,000 and over $92,000 as of De ce m ber 31 s t of 23 and22 respectively. Additionally,3,600 dollars due to the street fund from the solid waste fund as of december31st,2022. excuse me 23 subsequently subsequent to the report date, the amount due the street fund has been completely repaid. This was a repeat finding as well on page five street funk expenditures exceeded appropriations
in 2022 by50,000 dollars or71% in noncompliance with code. This is a repeat finding. The governing body did not review the prior report and accompany comments at the first regularly scheduled meeting following the receipt of the report in noncompliance the code. This is a repeat finding We have mayor Howe here today to answer questions mayoralfield approached the end of
the table recognizecognise yourself for the record and you're welcome to present your response
Speaker 39
9:36
Darrell Howe mayor city of Strong just starting with those initial can y'all hear me on the on the garbage bags we have with those undeposited funds we have created internal control forms that states were those persons receiving those payments and then once they receive those payments then the form and they transfer sign off on those receipts or payments to the person who will actually be
making a deposits and then they'll actually sign that over to the third person to verify the amount to be deposited and then we have implement a person to actually place those in lock bags and then to be deposited at the bank so we we feel with those internal control forms we have been doing that for the last couple of months and we're monitoring that and then we're also following up with the bank deposits to make sure that those sheets match the
actual bank deposits so we feel as though we we've actually corrected corrected that we're noting on the deposit slips the what this garbage bags or fitness center or community center which those underposited funds came from so we do have the documentation to make sure we're able to track that from the receipt all the way to the bank on that on the garbage bags and then on the solid waste building we have reached out to the county regarding those
five businesses the county has discontinued the building to the city of Strong and they're gonna be those businesses commercial businesses directly for the building and then we've reached out to RBS which is our billing system and we've removed those billing from our water bills so they will no longer be actually billed out of the the solid waste so with that we have actually corrected that as well and then on the the non business purpose spending
we did have the majority of that was for town hall meetings and we had the back to school functions that we would actually supporting the school district we did on that town hall meeting which was I think over $2000 totaling food in other things we we didn't supply or or miss misplace that signing roster but that was primarily for a town hall meeting where we had the community come in on some things that we were doing in the community
so we we actually are aware that those was not qualified appropriate spending so we have discontinued that as well we did receive the you know the statues that would help us make sure we don't do that again from legislative audit doing their exitv so we have those statutes to make sure that we are in compliance with that and then on the accounting procedures with the IRS on some of the late payments we have
an action that's been for probably about4 or54 years I think now that we've turned those cir over to the CPpa firm and the CPA firm is handling that so we hadn't had any actually late payments from the IRS or that says probably 23 so that that's been actually corrected and then would actually engage the CPA firm to take care of our receding and hosting to to our actual account there in the in the in the computer so that that'll take that from just doing it there at
the office and then we're actually doing the monthly check register to make sure that those supporting documents I think we had a couple of documents that that were not attached for a couple of payments so we're actually doing that monthly check register that makes sure we're able to verify all those payments and then we have actually went through the the fixed asset list for 24 and25 and we've actually added and deleted those that need to be added and deleted on on the the fixed asset list
and then on the restricted funds of course it was mentioned that we have fully repaid the street fund for those payment that was actually written out of the wrong account and we have done a resolution in actually started the payment back to the to the solid waste from the general fund we passed a resolution that our previous meeting so we have started the payment back for those funds to the solid waste and then on the on the on the budget and dealing with the budget
over expenditures for the street fund we have actually done amendments for 24 and25 to make sure that we don't repeat that overage on the for the budgets and we're actually doing the monthly budget to actual reviews to make sure that we're in line to make sure that we're not going over the budget monthly and we did actually do the review of the of the report from February at our past council meeting so we we'll be in compliance with that
with that review following the with the first scheduled meeting and we have actually met with the in regards to the garbage bag we did reach out to the PA there in El Laredo so we're just waiting to hear back from him so to hear further investigation regarding that we met with the municipal league my MissBush came down for about three hours and went extensively over policy procedures with us that that would help us make sure we we
stay in compliance we we've spoken again with legislative audit and they actually we receive all the statutes on some of the the findings that we repeat findings that we had so we feel that we we we're in good shape to to try to make sure that we don't have these repeat findings thank you mayor we appreciate all
the work that you've done to try to rectify all these these issues do we have any questions from the committee members for the mayor Representative dalby I don't
Representative Carol Dalby
Unverified
15:51
have a question but I do want to commend the municipal league for their work with this city sounds like unless you tell us differently it sounds like you've got them on the right path and we really appreciate you taking the time and and I commend the city and encourage the city continue to work with the municipal league if you have questions reach out to audit and reach out to the municipal league they're there to help you they're not there to do your business but they're there to help you so thank you
any more questions from the committee Representative Rye yes sir thank you
Representative Johnny Rye
Unverified
16:26
Mr Chairman. Once again the income taxes from federal and state that's been corrected thank you sir any more questions Mayor thank you we appreciate you
being here and presenting this report do we have a motion to file this report
motion second, all in favor say aye
Speaker 5
16:58
any opposed report is filed. thank you mayor. thank you Mr Chair. continuing on page 5 we have 15 private water and sewer reports that were deferred from the previous meeting because we lacked proper responses if you'll jump over to page six real quick the Thornton waterworks June 2024 private report. We actually
received a good response for this report. I mean also it's going to be referred to the prosecuting attorney so I'll go ahead and present that finding. The following deposits of over5,100 dollars do not match the total of the corresponding daily receipt report. this report's been referred to the prosecuting attorney and the attorney general's office staff recommends we file this report any questions from the committee without objection we will file
this report The two following it the Van Buren County Public Water
Speaker 5
17:57
Association authority 2024, which is a private report. it's also been referred to the prosecuting attorney but we have not received a proper response on it and the same with the west Saleneline water user association it's also been referred to the prosecuting attorney but the remaining 14 including those two staff recommends that we defer these until which time we receive a proper response. do we have a motion to
to defer these reports Senator Johnson and second all
in favor say aye any opposed motion carries we will defer these reports moving
Speaker 57
18:45
on to page 8, we have one report that's been certified to the bond board
Speaker 5
18:50
and referred to the prosecuting attorney and the attorney general's office Calhoun County 2024. under the county judge, the county disbursed over6,500
dollars for meals, gifts and door prizes for appreciation backward for first responders, volunteers and families althoughthough the county collected donations of over3600 dollars for the banquet. additional almost4,000 in county funds were dispersed and apparent conflict Arkansas constitution Article 12 Section5 as interpreted by attorney General91410. under the sheriff and tax collector the collector's office discovered and we verified undeposited receipts totaling
over4,100 dollars that had been altered during the period april 10th through April August 11th,2025. Lee frost the employee responsible for receding and depositing the funds resigned August 27,2025 and was charged with theft of property on February 9,2026. this report's being referred to the prosecuting attorney and the attorney general's office staff recommends we file this report if there are no questions. coach here Johnson you have a question
Senator Mark Johnson
Unverified
20:06
more of a comment really and I just I'm not picking on you Mr. Archer. I just you're the one up here so
you get to answer the question here for on the top of that page the paragraph mentions constitution Article 12 Section5. This is basically where public entity uses public funds to pay some private bill even if it's something good like an appreciation banquet for first responders, volunteers and
families. if they enter into a contract with someone and have a public purpose for example and I'm gonna
get one of my favorites was the Dolly Parton
Speaker 67
20:48
library we taught them we didn't have a
Speaker 2
20:51
contract everybody agrees positive thing and public purpose it's got to have a contract how often do we see this happen come in
Senator Mark Johnson
Unverified
21:15
local entities that just because it's a good thing doesn't mean it's a constitution oh
I think we need to wait a minute we got some mic problems we're not on
Speaker 78
21:29
the record here if the micro take a brief recess until we is that better
Senator Mark Johnson
Unverified
21:41
ok thank you and apologize for
that. I maybe rang in too fast Mr. Chairman. I'm sorry Mr. Archer please go ahead for your
Speaker 5
21:52
answer Article 12 Section5 also covers the part where you can't benefit a certain group. it's got to be for the public at large. Well since this was just for those individuals and there wasn't a business purpose is why it was in violation of Article 12 section5 and that's per the attorney general's interpretation in 91,410. but as far as educating you know
Speaker 25
22:17
we usually women as you mentioned we write this finding quite a bit and in in that thread is itself it's it's educational as we
Speaker 5
22:27
explain it to them you know if we run across it I guess
for the county side I guess we could work with association of Arkansas Counties to
Senator Mark Johnson
Unverified
22:39
somehow get the word out If I could quickly follow up Mr Chairman. and I appreciate you saying that. I see Senator richer out there want
the same thing from municipal league I know Jaie probably done this whole thing a lot but this is an educational thing and who could be against helping the first responders etc. but we need to maybe be a little more proactive and you guys with the association as well as association of counties are kind of in the vanguard ard of trying to get the word out to people you know there's a way you can do these things and there's a way you can't and appreciate everything y'all do to kind of help get folks back
in line but when we just see the same violation over and over again I just feel like maybe we need to do something to reach out and and say hey guys you can't do it this way you got to do it a different way so thank you Senatorritcher for everything y'all do and anyone from the association of counties here thank you for that too but maybe we need to think up new ways to emphasize
that so thank you Mr. Chairman. thank you Mr. Arch. Representativeladyman thank you Mr Chairman. Mr.
Representative Jack Ladyman
Unverified
23:51
Crtcher, if you don't mind, would you come down I'd like to ask a question about your training. The programs I know you guys have a lot of training. is there anyone here from the county I don't see anybody out there. and uhjack I don't want to put you on the spot here but I know you guys do a lot of training and you have certifications for the mayor and for the recorder and all those things is there anything in that training about this you know, spending money
for parties or support or whatever it is is that part
Speaker 87
24:29
of that training already or not? Well yeah yes sir. thank you Mr Chairman. Jack Ccrutcher with the Arkansas Municipal League. we have we have two major events each year are our summer convention our winter conference we have workshops at each of those and several going on at the same time6,8,10 whatever but generally the topics are whatever's you know
the topic of the day and actually what's being discussed in audit dictates what those topics are going to be whether it's street fun, whether it's you know, counting code 1459 repeat findings whatever it is but as Chairman Johnson mentioned this particular one dealing with the constitution is probably less familiar to city officials than a lot of
them so I think appreciate you mentioning that and I I think we need to see about maybe emphasizing that topic. So
Representative Jack Ladyman
Unverified
25:35
do you still have the certification like a clerk and a
retreasurer which is in more depth in step and they
Speaker 91
25:42
get certified. Is there anything in that training think thank you for mentioning that we have
Speaker 87
25:48
a what we call a certified city official and it's probably I guess was introduced about six or eight years ago and that requires intense training
you have I don't know how many hours it is but it's MayorBush would probably know probably406080 hours you know given over the course of a year when you complete that you become a certified municipal official and it covers you know a wide range of topics of course what happens you know we have such turnover among our city officials because we have thousands
statewide and they retire and get beat and decide they don't want it anymore so it's a it's a constant
Speaker 91
26:35
that's a that's a voluntary program people don't have to take
Speaker 87
26:38
that's that's true no nothingth mandated at all so all right thank you thank youpresentative Ladyman are there any more questions on Calhoun
County? if not then without objection we will file this report
Speaker 5
27:00
we have7 reports that are being referred to the prostitute and turning AG's office starting on pages 9 through 11. we've got6 regional solid waste management districts review of selected policies, procedures and transactions July 1st22 through December 31st to 23. we have staff memberber Charlie Kemp here to present this report. Thank you Mr Chair Arkansas code requires legislative audit to review
Speaker 96
27:33
selected procedures and policies and transactions of Arkansas's regional solid waste Manage districts for this report AA randomly selected six districts for review. The locations of the state's 19 districts are shown in exhibit one on page two of the report Arkansas code annotated 86704 requires the districts to obtain an annual audit of their financial statements from a private CPpa firm. The2023 audit reports for the craighead countunty southwest central
Faulkner County southwest Arkansas and Pulaski districts contain no findings The2023 audit report for the Benton County district contained one finding relating to segregation of duties Benton County district responded that certain procedures were changed and compensating procedures were implemented for the pulaski County districtbiing number one the following payroll items were not properly approved by the pulaski County District's boardard
of $1690 increase in the waist hire coordinator's contracted salary for the period July 1st,2022 through December31st,2022. a contract for services with the former chief financial officer at a rate of $150 per hour for a total of7,298 dollars and bonuses paid to employees in December 2022 and2023 in the amounts of $2,599 and3,682 dollars respectively
finding one was referred to the sixth judicial prosecuting attorney and the attorney general. Finding number two a review of credit card disbursements totaling43,294 dollars revealed purchases of $17,213 or approximately40% did not have proper supporting documentation at the time the payment was made Most of these purchases appear to be business related based on the vendor or review of other related documentation for the district
it is their practice to not remit or maintain receipts such as gas meals office supplies etc. AA recommends the pulaski County district obtain and maintain supporting documentation for auditing and accounting purposes for all credit card purchases. Additionally, personal expenditures towing $129 on the district credit card were refunded by the executive director on August 19,2025. finding number three
all contracts for services were not properly approved by the Pulasaski County Board in noncompliance with Arrkansas code 86704. ALA recommends that all contracts for services be approved by the board and approval will be noted in the meeting minutes. finding four ALA noted the following issues related to car allowances, personal use of Pulaski County District vehicles and cellphones adequate documentation in the form of a mileage log was not maintained to support the waste hire coordinator's car allowance
totaling3,270 dollars d d ition ally the car allowance was not included on the employees Is form W2. the district provided4 employees including the executive director with vehicles that are used for personal and business purposes including fuel the executive director and one other employee noted on the district's employee representation regarding use of company vehicle form that they did not have another vehicle available for personal use.
although amounts were added to the employee's IRS Form W2 adequate documentation in the form of mileage logs was not maintained to support business and personal use of the vehicles in addition the district paid for Sirius xm services in the vehicles though approved by the district's board, payments on the executive director's personal cellphone bill by the district were not included on the employee'sirs For W2. ALA recommends the district contact the IRS for guidance
regarding documentation of car allowances vehicles provided for business and personal use and cell phones finding ive competitive bids were not listed for the cost of billboard advertising CFfo services, public radio advertisements and hazardous waste recycling and the amounts of71,28048,029 37357 and48,861 dollars respectively in noncompliance
with Arkansas code 86704 and 1422104. finding6 la s k y County district did not establish an electronic funds payment system with written policies and procedures for internal accounting controls and documentation for audit and accounting purposes Other issues the Pullaaski County district expended312,977 dollars in public monies for advertising which appears to be excessive in comparison with amounts expensed
by the other districts in this report exhibit three on page five provides total advertising expenses as well as advertising costs per person based on the population for each district as noted in the 2020 federal census Additionally as noted in a prior report, the Pulasaski County district had a contract with a with a vendor that required the vendor to repair and maintain district owned equipment located at the vendor's facility and used by the vendor. However, the
district paid for maintenance of the equipment from the district's maintenance and repair capital fund included in the districtowned equipment used by the vendor were4624foot tandem axle trailers purchased by the district in fiscal years 2010 through 2016 at a total cost of $248,295 subsequent to the issuance of the prior report the district closed the maintenance and repair capital fund and sold the46 trailers to the
vendor for total sales price of4,600 dollars. a separate sale to a separate to a second vendor included a box truck forklift, ramps and a shrink wrap turntable for total sales price of $2500. detailed descriptions and purchase prices were not available for the items in this sale. for the Faulkner County district finding number one our review revealed the following payroll items that were not properly approved by the Faulkner County District
board payments totaling31,541 dollars made to an employee's family member bonuses totaling3,682 dollars paid to the director office manager, administrative assistant and recycling route drivers and sour in wage rates a similar finding was issued in the prior report finding number one was referred to the 20th judicial district prosecuting attorney and the attorney general Finding number two for the Faulkner County district accepted accounting practices
provide that all income be formally receded by use of receipts prenumbered by a printer or an electronic receiving system that accomplishes the same purposes as prenumbered receipts The Faulkner County district did not issue prenumbered receipts or retained documentation for revenue received a similar finding was issued in a prior report accepted accounting practices provided adequate supporting documentation and approval be maintained for all disbursements Faulkner County district did not maintain supporting
documentation and indication of management approval for all disbursementsdditionally time sheets were not maintained for all payroll disbursements a similar finding was noted in a prior report The Faulkner County district did not establish an electronic funds payment system with written policies and procedures for internal accounting controls and documentation for audit and accounting purposes. a similar finding was noted in a prior report. for the Benton County district finding number one the Benton County district did not
establish an electronic funds payment system with written policies and procedures for internal accounting controls and document it for documentation for audit and accounting purposes finding number two bid documentation was not maintained for waste higher disposal services towing64,850 dollars in noncompliance with Arkansas code annotated 86704 and 1422112. Management responses to the findings are contained in the body of the report pulaski
County District response is included in its entirety in Appendix A. ALA issued no findings for the southwest central southwest Arkansas and Creighead County districts. Mr. Chair, this concludes my report. right committee do we have any questions on this report
Senator Johnson thank you Mr Chairman. these are troubling but the one
Senator Mark Johnson
Unverified
36:57
for pulaski County is especially troubling for two reasons one is the dollar amounts we're looking at and second and living in Pulaski County, I just expect larger counties with full-time staffs to be a little bit more attentive than I do small counties with part-time staffs or someone that's essentially a volunteer doing this is there anyone here from pulaski County solid waste Management District that can answer questions if if
not then I'm going to ask we defer until we can get someone here to answer that, Mr Chairman, but ended up saying that these other things are the other counties yes we we want to take a look at this. I did ask the Faulkner County judge regarding an issue the issue infaulkner County and he explained to me that it seemed to be a documentation problem if they felt they could correct and I'll give them love to have them have the opportunity to do that but the
Pulaski County district especially the issues related to advertising and when you have 248,000 and some changed dollars of equipment that sells for4,600 dollars. I've that really got my eyebrows up. I know you probably couldn't couldn't buy a forkliftge a box
truck and all that you couldn't even buy a forklift for $2500 that runs so I'm
again we need to get some answers on
this. they may be perfectly adequate answers but if there's no one here from pulaski County regional solid waste Management District. I you know at the right time we have a motion to to defer you have any
Speaker 109
38:43
any further questions from the committee? I got one
Representative Rye yes sir thank you Mr. Chairman. Bo just like a senator
Representative Johnny Rye
Unverified
38:55
mark is saying this is it doesn't look good at all because these folks
actually know that they have messed up this ban
Speaker 112
39:08
that's why we want him here thank you sir So I believe Senator Johnson has
a motion to defer this until the june had a question I'm sorry I didn't see you Representativeladyman,
Representative Jack Ladyman
Unverified
39:23
go ahead. thank you Mr Chairman. I had a question for you just on finding two for this is for pulaski where it talks about the
credit card the receipts for gas meals office supplies I think this was on the p card but so the credit card bill that shows purchases is not adequate for that those are the code requires that they have
Speaker 96
39:50
documentation which would be the individual receipt that they received when they made the purchase the just the plain credit card statement's not adequate. Is that because there's not
Representative Jack Ladyman
Unverified
40:01
adequate information on the credit card statement.
Speaker 96
40:05
there's not adequate detail as to what was purchased on the
Representative Jack Ladyman
Unverified
40:09
credit card statement. What kind of detail is not on the
Speaker 96
40:12
statement you know the statement just gives the dollar amount and the vendor. it doesn't tell what they purchased at all is
Representative Jack Ladyman
Unverified
40:19
the date that ok thank you. Yes
Senator Mark Johnson
Unverified
40:28
ma'am Senator Johnson you're you're recognized thank you Mr. Chairman. Mr. Kemp under finding two on page 9, it it says per
the district it is their practice not to remit or maintain receipts such as gas meals office supplies etc. Is that in compliance with the law no sir it's not. OK well again that's why we need to get them
up here to answer some of these questions. Thank you sir. thank you Mr Chair. any more questions from the committee OK I believe
Senator Johnson you have a motion Mr Chairman we defer this to
Senator Mark Johnson
Unverified
41:06
June and we also ask our or whatever the next appropriate meeting that staff would tell us it'd be June according to Mr. R we also want to invite them to come answer some of these questions of a motion in
the second to defer this report and request pulaski County to come speak OK everybodydy understand the motion all
in favor say aye and he opposed motion carries
Speaker 5
41:41
thank you Mr chairir on pages 12 and 13 moving on to continuing with reports filed with prosecute in turn in AG's office we have Nevada County 2024 under the treasure with five unauthorized withdrawals totaling almost $12,000 were made from the county treasurer's account in May of 2024. the bank discovered a little over $1000 of the unauthorized withdrawals and the funds were recovered from the bank. County
personnel discovered a little over $1200 of the unauthorized transactions upon completing the bank reconciliations. However, it was not reported to the bank in a timely manner and the funds were not recovered under the county judge Nevada County entered into an interlocal cooperative agreement on November 15,1993 with the city of Prescott in accordance with the Arkansas code for the operation of a compact station andlasso landfill. Following terms of the agreement were not properly executed. The agreement was not formally
renewed on an annual basis The board did not hold meetings or provide the county with monthly financial statements the chairman of the board did not properly supervise operations invoices and time sheets were not properly approved prior to payment the board did not submit detailed written statements to the county where its respective share of tipping fees. Instead the board requested50% of total amounts owed from both the county and the city a letter detailing the percentage allocation of
expenditures for capital outlay and operational costs were not provided We were also unable to determine the fixed asset purchases and operational costs will proportionately shared between the city and the county. Payroll expendures totaling almost75,000 dollars were disbursed to six employees without a contract or other documentation authorizing their hourly rates based asset records were not properly maintained this is a repeat finding I believe we have the county
judgeike Orwell here today excuse me judge if you'll identify
yourself then you're welcome to you're welcome to present your response
Speaker 125
44:02
I'm new guess I need to turn this thing on. I new and this stuff got brought to me the treasure that we had he passed away when they hacked the account that's all I got out of that. They hacked the
account to the bank supposedly got all this rectified. as far as the think there's one on there you you asked me about on the when we buy a piece of equipment and you trade something in according to my auditor my state auditor she said they need to put on their trade in on the invoice so that's being done now
and as far as the landfill situation I've got it already passed we've already voted it it's in place and the committee's no longer there they had a they had a seven panel that never met and anyway the quorum court and the judge and now we've redone a interlocal agreement with the city. they signed off on it.
they passed it or voted to approve it. We voted to approve it and it's done up now and filed I don't
Speaker 32
45:32
know what else to tell you got any questions senator crow so it kind of sounds like you've
Speaker 129
45:36
got the interlocal agreement and you're working on getting everything done for the landfill and then the treasure thing you've you've from what my discussions with you you're kind of taking care of that right
Speaker 119
45:51
and have a copy of the interlocal agreement with me if you wish to look at it any more questions from the
committee? saying no judge we appreciate you coming working on these issues and and presenting this report to us thank you for being here without objection we will file this report thank you judge you're good yes sir on page 13
for the city of Salem 2024. This is
Speaker 5
46:24
a private report it's also been referred to the prosecuting attorney and AG's office during our audit we we were notified by the city that certain bank transfers and invoice payments were not approved by city officials there are no questions staff recommends we file this report without objection we will file this
report pages 14 through 16 of the city of Briarcliff 2024
Speaker 5
46:53
and23 under the recorder under the mayor and the recorder treasurer on March 15,2023, the city disbursed $200,000 to theriarcliff Water and Recreation Improvement District bid it a suburban improvement district to board having uninsured funds in the account due to exceeding FDIC limits On February 10th at 25, city council approved loaning over $97,000 of the $200,000 to the
bid to purchase escal excavator in noncompliance with Article 12 section5. subsequent subsequently on June 26th at 25 the the $22,000 in remaining funds were returned to the city on page 15 on the recorder treasure of the over4,700 dollars and over $15,000 in credit card payments tested supporting documentation was not available
for over $1100 and almost $900 in24 and23 respectively noncompliance with the Arkansas code without adequate sporting documentation, the validity of these purchases could not be determined. there are no questions staff recommends we file this report does the committee have any questions? Without objection we will file this report
page 18 we have the Compton Water Association 2024 which is a private CPA report the association did not provide reports on customer adjustments and there were no supporting documentation for debit card transactions selected for testing. this report's been filed with the prosecuting attorney in the AG's office.taff recommends we file this report. there are no questions Committee you have any questions that objection
we'll file this report continuing on page 18
Speaker 57
48:58
Montgomery County Regional Public Water Authority2024 another
Speaker 5
49:01
private report while engaged in test and disbursements other than payroll expenses. it was noted that the bookkeeper was paying themselves extra paychecks over the agreed upon amount approved by the board. A review of all 21 payroll checks paid to the bookkeeper resulted in f in finding 9 extra payroll checks totaling approximately $9500 for extra salary expense being paid
to the bookkeeper during the year. this finding has been referred to the prosecuting attorney in AG's office are no questions stafff recommend we file this report do we
know if this bookkeeper still has their job or not this is a this
Speaker 5
49:47
is a private report so we did not do this for this report so I I could check on that but I'm not at this time I can't answer the question Any more questions from the committee
Speaker 142
50:04
we is this relative to a couple of months ago it is that we turned it over to the prosecuting attorney was is this is a have to do with that case? Well the one you're
Speaker 25
50:19
referring to is the city of Mount Ida and this is not the recorder treasure or the mayor that was referencing those findings but this individual also works in the office at Mount Ida. it's my understanding so it's all
Speaker 142
50:35
kind of related to what we've already heard with the you
Speaker 25
50:38
can draw that conclusion yes sir just a different different pool of money keeps getting buer
Speaker 105
50:44
and beer thank you this has been referred to the
prosecuting attorney and the AG so it will be investigated and action's taken. So if there are no more questions then we'll just go ahead and
and file this report. starting on page 19 we have5
Speaker 5
51:06
reports with repeat findings. We have the city ofcamden 2024 under the mayor compensated absent records were not maintained in accordance with the city's policy making. This is a repeat finding from previous full reports dating back to 2019. believe we have mayor Charlotte Young here today to answer questions Mayor if you will approach the end of the table
and identify yourself and you'll be welcome to present your response
Speaker 147
51:49
Charlotte Young mayor City ofcamden this
Speaker 149
51:54
is my first term and she said that did date back and I understood when coming in that there was an issue with this so we we did purchase easy time clock and some software that we understood was supposed to rectify the problem however when the auditors came back it
that did not do what they were looking for it to do so we are looking into different software because we won't we want to fix this we don't want to be out of compliance and we are open to any suggestions that would help us get it done as quickly as possible thank you mayor and thank
you for for working on this and and trying to get it rectified and the municipal league of
course is available for assistance with any issues that you may have do we have any questions from the committee for the mayor? seeing no questions we will go ahead and file this report and mayyor we appreciate you coming and and talking to us about this. thank you thank you very much
Speaker 5
53:18
on page and 20 we have Johnson County 2024.
under the treasure's tax collector. We noted the following issues were in noncompliance with Arkansas code and reviewing cash bank reconciliations prepared by the treasure were not accurate. bank activity in indian and bank balances for numerous accounts did not agree with the treasurer's summary of fund activity resulting in a $204,000 in unrecorded revenues and $150,000 in unrecorded withdrawals this is a repeat finding calculations of excess treasury
Commission was not prepared or distributed in a timely manner. This is a repeat finding we have treasurey tax collector Melanie Cowell
here today. re as ur er if you would identify yourself
Speaker 152
54:10
you'll be welcome to present your response Melanie Cowell Johnson County treasure collector on the treasures commission I have done that on the funds there was a grant that I hadn put in
the big bank account that that made the extra money's not showing in the accounts and then was there one about the interest for the collector I have talked to the guy that does our final tax settlement and he is helping me with that and also have somebody helping me with the bank reconciliations
and I'm working hard to try to not have repeat findings and be in compliance treasure there were
there was over $150,000 in unrecorded withdrawals could could you just explain to us what those withdrawals were for and why they were
Speaker 156
55:19
unrecorded I'm not sure about it says withdrawals unrecorded withdrawals
Speaker 152
55:28
that may have to do with the the foreravis grant I'm not sure committee you have any
Speaker 5
55:46
questions committee do you have any questions for the treasurer we have verified that that that was the grant activity that the treasures were referring to. It was the forrest Davis grant that those expenditures and revenues
weren't posted to the uhum account balances thank you any questions from the committee
treasurer do you have anything else to say? just thank you thank you for being here and presenting your response. we appreciate it thank you without objection we will go
Speaker 5
56:21
ahead and file this report continuing on page 2022 with repeat findings of the town of Gilmore. mayor Bruce Delaney was invited here today and he
called and had a conflict in after for this to be deferred till June staff recommends that we defer this to his
request. a motion to defer we have a second all in favor say aye any opposed motion carries will the fer
Speaker 5
56:49
till June? continuing on page 22 City of grubs 2024 under the mayor and recorder treasurer Although althoughchedule one of this report shows a balance of
$16,000 it was brought to our attention as as of 123124 general fund owed a significant amount of balances owed to the IRS. shown in note4 ofchedule3 when these outstanding amounts are considered, the general fund has a deficit fund balance of over30,000 dollars so the report date the city's in negotiation with the IRAS for repayment for repayment plan. This is a repeat finding we have mayor Candda Miller and the quarter treasure's southern here today
Speaker 164
57:35
so if y'all will identify yourselves you'll be welcome to provide your
Speaker 165
57:41
response. we've each wrote out a statement we've also all of our work that we've done we've made a packet for you guys. but would y'all would you identify yourselves so we know hello my name is Candda Miller. I'm the mayor of Grubbs. I would like to start off with an apology to everyone. I am
Speaker 168
58:00
not your typical mayor or politician before taking office, I worked
in the medical field for over 20 years and a bookkeeper for rossly Foods. I have had to educate myself on the proper procedures and I continue to learn. I do welcome all audits. I want to make sure we're doing everything correctly if there's a finding we will do our best to fix it as soon as possible I was urged by the citizens of Grubbs to run for office and fix the town. In2022 we won the election in the entire administration of council and ma
and mayor changed in 23. we knew the town was in a mess and we had prayed and asked for an audit. We didn't realize just how bad it was we soon learned that our town was out of compliance with just about every agency in the state of Arkansas. I quit my full-time job in the security I had to focus on my hometown for the first year I did not take a salary the town had no money so I lived on my personal savings. I gave my word that I
would dig our town out of this horrific and absolute chaos that we were in In January of 23 IRS agent Eugene Chisholm came to our town and and informed us that we owed $97,959.93. This was for nonpayment of taxes in years' 2017 through 2022. He stated that he could seize all property and take the town I explained that we were all new
and pleaded with him to give us time and we would take care of this. Action was taken by the council, our citizens and myself from January to March of 2 3 we paid the IRS71,661 dollars 99 cents This covered the principal. This was done by a lot of hard work fund raising and donations. Everyone came together to save our little town
the remaining $26,338.01 was for interest and penalties our IRS agents suggested we make an offer and compromise. The agent stated that since we had done so much in such a short period of time that this step would be the best way to resolve this. he said it was likely that the IRS would write off the remaining amount or settle for a smaller dollar amount. he told me and the council members that were present that day, the amount that we should offer
the process has been a nightmare The IRS denied the offered denied the appeal and since that notice I have tried to get our town moved back from offer and compromise unit to the collections department. I have been told by two different agents that our town must be moved to collections before we can talk with anyone and make payment arrangements. I have reached out to Congressman Crawford's office in 2023
and2026 in hopes that they could help us as of today they have not had any positive results when I could not get any anyone to answer me from the IRS I drove to the federal building myself. this is how I learned that our agent had retired and not been replaced. I been asked for a supervisor in context information.ri and I both worked wrote a statement and that's what I just told y'all guys and
made copies of everything that will support this statement. it is important that we resolve this and we are doing all we can. During all of the IRs they continue to add interest on top of interest. I recently learned that as of three9 of26 our total has now grown to41,175 dollars. This is out an out r age since we have done all that we was asked to do and we
followed the direction and waited on the IRS. this will continue to grow the a daily interest on31126 I received a call from IRs agent Wisemanidd number 1000855644. he stated that he had gotten my messages and he apologized for not contacting me sooner. He stated that the shutdowns and all that is going on has really got them backlogged
he stated that he had a form that I could sign and we he could release me from the unit back to collections. he stated he could not email this form to me but could fax and drop off a copy in the mail. No form, I worked late last night in no form as of 10 p a pm. was received We did have three other findings during the audit two of those were corrected in 2025 and the last one on the John Deere
tractor was corrected in February of 26. Also we as we have tried to fix these horrible issues that our town had. We I have battled two major floods due to the Cacheriver. thankfully we have overcome the floods for now we are in compliance with the USDA and our water audits wright studies and water rights are as they should be. as soon as the IRS allows us to be placed in the collections department we will make
arrangements to pay this debt. Our town, the council and I will be so thankful to be able to put this nightmare behind us and move forward thank you mayor for that
report it's very detailed and we appreciate that and appreciate all the work it sounds like you've really ran into some brick walls on this issue and you mentioned you you talked to Congressman Crawford you might want to also consider reaching
out to Senator Bozman, Senator Cotton's office and
Speaker 168
1:04:24
try to get them to I did actually before we came down here Wiseman did call me back because I have been a pain a thorn. let me tell you when I went to that federal building, those people were shocked because I told them I ain't leaving till I get a number. and like I said I'm not your typical politician. but Wiseman did tell me that the facts that he tried to send got
kicked back and he is sending me a the form by mail and he said he should we should have it in two or three days and I was really frustra ted because we should have gotten this a long time ago because we had it paid down to 21,000 in all of this doughnut that we've been in it's actually doubled so it's very frustrating because we worked our tail ends off you know to dig our
Speaker 165
1:05:15
town out of years of years of mass you know just my personal opinion I think this highlights kind of
the inefficiencies and incompetency of of the IRS so thank you for sharing this with us yes sir thank you Mr Chairman. Mayor,
Senator Mark Johnson
Unverified
1:05:34
this is another example of why I tell people that if you want to find true public service looked to small town mayors and I'm grateful for you stepping forward and your your new counsel to deal with this I don't think I could do it. I can't think about grubs without thinking about my friendenator Crcher over who is your
Speaker 175
1:05:55
predecessor as mayor. Well, I don't have a staff. I'm out on the tractor. I'm on the law mower. I mean it's just pretty much meri and my
Senator Mark Johnson
Unverified
1:06:05
counsel I guess it's not a surprise may tell you that negotiations with the IRS tend to be quite
one sided and we feel your your we have empathy with you and all that's
Speaker 168
1:06:16
really frustrating because we want to do everything correctly I I've gotjackie on speed dial so I'm all about doing everything
Senator Mark Johnson
Unverified
1:06:25
correctly but let me follow up on on the the other recommendations that we you know to reach out to our two senators' offices sometimes and I having worked on congression al staff a a long long time ago I know that it doesn't hurt to for them to be getting three sets of phone calls rather than
just one you know the s in the federal government the squeaky wheel will get greased a little that's what've been told about this
Speaker 168
1:06:48
cashriver so I've been squeaking a lot and and but I thank
Senator Mark Johnson
Unverified
1:06:51
you for the effort you've put into this
it it someone was said to me says the last person you
want to borrow money from is the IRS. so if you you owe them they can charge interest on interest on interest and penalty and and encourage you to not back
off because someone sometimes you can get a hold of the person that's actually what I call the hot button the person you can talk to that can help maybe waive some of these penalties and all that but but again thank you for coming and telling
us this story and helping us to understand and to the extent that that we can we'll do
everything we can to help you solve those problems. I appreciate it thank you mayor thank you Mr
Representative Johnny Rye
Unverified
1:07:45
more questions? Representative Ry? sure thank you Mr Chairman. but hats off go to you. I mean you started out owing 100 they were going to cut that down to to 90. isn't that right00 when he showed up and said he
Speaker 168
1:07:59
was fixing to take the town 97,000 and something I've got it wrote down for you guys OK but you paid70 we in from January to March we did fundraisers we worked
Speaker 165
1:08:10
our tailings off we paid71,000 dollars in just a few months. Well I hope I
Representative Johnny Rye
Unverified
1:08:15
surely hope that they let you pay that balance that's around 20 or30 $1000 and
still that40 I'm hoping and praying because that's hard
Speaker 175
1:08:23
for a town the size of
1 people so I mean I rely on my farmers and and just good citizens. I mean we have
Speaker 168
1:08:35
banded together to turn this town around and I need to get it fixed so I can go back and make a normal salary. Thank you ma'am thank you
Speaker 47
1:08:43
Mr Chairman. any more questions from the committee
and we appreciate you ladies being here and all the work you put into this and you think you have our support on this. we hope we
get you get these issues rectified and reach out to
Senator cotton Senator Bozman's office and of course municipal leagues will
will back you up as well so without objection we'll go ahead and file this report and we
Speaker 5
1:09:14
thank you ladies for being here today. Thank you thank you Mrir continue on page 23 under reports with repeat findings for the city of Sparkman 2024 under the recorded treasure monthly financial statements were not prepared or presented to the city council in
noncompliance Arkansas code. This is a repeat finding. We have recorder treasurerretaite here today to answer questions. This fire
if you'll identify yourself you'll be welcome to present your response
Rita Feid
Unverified
1:10:03
OK. my name is Retaite and I'm from recorded treasure from the city of Sparkman my finding was on not giving our counsel a financial statement every month We I had managed to get a person to help me do that. Well guess what she's not there anymore
and so I am in the process of getting this all started again and hopefully it's I'm going to follow it through because I'm going to keep my eye on all of it and make sure that it's done right and I'm going to do it right that's the one that's going to keep the eye on it's me because I'm going to I have called our software solutions and they have agreed to help me do this so
Speaker 6
1:11:04
are there any questions from the committee and
we appreciate your attention to this and and ensuring us that that you're going to get it taken care of. We appreciate your work
on it we appreciate you being here today.
Speaker 156
1:11:24
you have anything else for us no that's it
Rita Feid
Unverified
1:11:26
we've had a lot of problems this month or this year so I know how it is so but I'm going to work on this right
now as soon as I get back. thank you ma'am Without objection we'll go ahead and file
Speaker 5
1:11:45
this report we appreciate you being here today. thank you thank you thank you Mr Chair. on pages 23 we have four reports that have findings without proper responses. These are all private reports three of them were three separate reports from beard and water and sewer department for 24,23 and22. The other one is the Cushman water department for 25.taff recommends we defer
these until which time we have a proper response. we have
a motion to defer and the second all in favor say aye any opposed we'll defer these to the June meeting. pages 24
Speaker 5
1:12:19
through 28. we have 18 reports with resolved findings ta f f would allow if y'all to look through those a little bit and if there are no questions staff recommends we file these reports.
it te e have any questions on any of these reports ign no question was without
objection we'll go ahead and file these reports pages 29 through30 we had56
Speaker 5
1:13:21
reports with no findings and staff recommends we file these reports
there's no question since there were no findings on these reports without objection we will
Speaker 25
1:13:37
file all of these Mr Chair that brings us to item number h which is therossounty
Speaker 5
1:13:42
rural Waterystem it's back on page one of the synopsis. This report was a private report that had no findings but this
committee requested that we defer it to give the operator Mr. Davidby King opportunity to come and address questions and I believe Mr. King's here today Mr King, if you when you get down there turn your mic on and
identify yourself and if you have if you have a statement you can go ahead and make that. if not then we'll we'll ask for questions from the committee
David King
Unverified
1:14:22
my name my name is David King work for Cross Countyr Water System when when I called down on on when I got this letter for her to come down here I called and tried to find out what this was all about and I was
Speaker 195
1:14:42
told it because we hadn't done a posted or audit since 2004. I'm the fourth manager of
David King
Unverified
1:14:54
this company. I just started in 2019 and I didn't know what I had to do this and we do audit every year here in audit but I didn't know I had to send it to the anywhere to post it or whatever but I did we have sent them all in I think we only have one that we can't find that's
Speaker 195
1:15:18
in 2006 and I'm still looking for it
David King
Unverified
1:15:26
but I don't know I don't know if there's anything else y'all need to know that's what I was told about. I need to be here for all
right thank you sir. do we have questions from the committee Representative Moore thank you
Representative Kendra Moore
Unverified
1:15:48
Mr Chair Mr King, thanks for coming down today. long story short I represent Woodruff County
district61 and the reason you're here today is because since June of or really since June 28th of 2023 I have been getting a multitude of constituents reaching out wondering why their water was brown and they reach out on almost a weekly basis on the poor water conditions that they are having to drink bathe their children and
that they have to do their laundry with and the water at best looks like iced tea and at work looks like motor oil I understand and so going through this and talking with folks at a naturalsources and asking leg audit because since 2023, the state has awarded crosscounty rural water nearly7 million dollars for water projects and the fact that legislative audit has not
received an audit in 23 years when you're receiving state funds is highly concerning Mr Chair, if I may continue in June of 2022 you received a loan of almost $900,000 and
Speaker 202
1:17:15
this is about one day y'all got me down here on the audit stuff
Speaker 204
1:17:20
I wasn't prepared to I didn't bring all
David King
Unverified
1:17:24
my information on all the money stuff but
Speaker 195
1:17:33
to answer your question yes we did receive a loan. Yes, we are in
David King
Unverified
1:17:38
the process of of doing the projects that loan is going to be paid paying on we have till December of 2026 to get that done you
Speaker 195
1:17:49
know they granted the loan in 20 or we applied in 22 think it was we couldn't apply during the
David King
Unverified
1:18:04
cold it was 2021 or 2022 we applied they denied our AarPpa loan we have mainly turned it into a grant to start this project They extended
Speaker 195
1:18:15
it six months before they okayed it so that's put us back another six months before before we could even start the projects and I got that all in time sheets you know dates but I wouldn't prefer to
David King
Unverified
1:18:35
talk about this I was prepared to talk about this that was I was
Representative Kendra Moore
Unverified
1:18:41
told sure and Mr. King I haven't asked a question yet. I was just sitting background for for my line of questioning which the main question is if you didn't know that you were supposed to perform these audits on an annual basis and report them to legislative audit what kind of training do you actively seek out on an annual basis or what kind of oversight
do you have to grant you those guidelines to provide the basic necessities of limited government and making sure that everything is above board you would think that the previous manager for the passing home you know but I
David King
Unverified
1:19:22
had no clue so I was doing what they were doing and evidently you know this the third one he didn't have no clue and he was in it for 10 years or so
Speaker 195
1:19:39
I mean I apologize but but I got everyone I got them sitting in within a week of
David King
Unverified
1:19:51
when y'all requested them but as far as me going to any rolling to to government screenings no I go to go to the conferences the
Speaker 207
1:19:59
water conferences every year to to keep updated on all that
Speaker 209
1:20:12
remember said moreore do you do you have another
Representative Kendra Moore
Unverified
1:20:25
question thank you Mr Chair. as a follow up it was my understanding that Arkansas Rural Water Association has been on the ground helping you these past two weeks have you ever asked out asked for their help and managing the water crisis such as this before I talked to them individually I
David King
Unverified
1:20:42
never had a whole crew like this come in on that well or any of the wells but I talked to them all individually Thank you Mr Chair Senator Wallace, did you
Speaker 93
1:20:58
have a question? Thank you, Mrir Mr.ing, thank you for being here
Speaker 211
1:21:05
today sir. how many members are on your board and how long have you been on the board?
I started in 2019 owned the as
Speaker 195
1:21:21
the manager but prior to that I started working 2002 at this company and worked my way
David King
Unverified
1:21:29
up but it never was anything about man you know it was always out there fixing a leak or whatever we have5 members on the board all of them has been through the
the board certification school and I just
David King
Unverified
1:21:57
board now for two months a new guy but the rest of them have been years that they've been on
Speaker 211
1:22:03
board follow up how often do you have elections and
Senator Dave Wallace
Unverified
1:22:08
how do you post those notification of elections we have them every year
Speaker 211
1:22:19
and we put it in the menace and it's open to anybody to look at do you make it public to the knowledge I'm sorry do you make the knowledge of the election time public to your your customers
David King
Unverified
1:22:33
that when two dou in a two in in my opinion you do but
Senator Dave Wallace
Unverified
1:22:41
yeah I mean that's that's just me right now. I went I went to one board meeting before I took over
as manager so I'm I'm green at it thank you sir we have legislation last session to require that the board members of the water authorities they're they're contact information be made public. I carried that bill due to an issue in my district we may need to s explore some legislation Senator Wallace on making sure that the that's a public notice that's posted when there's board elections coming
up for the for the water authorities who else had a question Representative Mcellroy thank
Representative Mark D. McElroy
Unverified
1:23:31
you for being here. I used to run a water company myself and how many customers do you have on your50005000. I got six different
Speaker 79
1:23:39
guys and then do you you do you have laborers that
Representative Mark D. McElroy
Unverified
1:23:44
work with you? Yes are they all licensed? No
Speaker 219
1:23:53
no. I got twos trying that's in the process of getting their license
Representative Mark D. McElroy
Unverified
1:23:59
now. and the the the water discoloration. have you have you checked with the health department on the health department has come
David King
Unverified
1:24:06
out and tested everybody that's complaining well I ain't going to say everybody but most of the people that
Speaker 207
1:24:11
complain about dirty water they come out and they they go to their house and they tested it that's just the only one that cats
David King
Unverified
1:24:19
with they test for is the water safe to drink?
and if it's got chlorine it's safe to drink and they have not sent any bad results back on that but yes there is discoloration to the water and we we've ironed out what well prior to our so water coming in we already had 4 $2 million granted to us and we just now started the paperwork
Speaker 207
1:24:57
it was it was in december of 2025 but we we just got started with the paperwork on it and we have a year there that we got to go back and forth with our son that's resources make sure everything is
Speaker 195
1:25:14
in compliance before we can proceed to bid and move on with the projects
Representative Mark D. McElroy
Unverified
1:25:20
and your you're working with that grant money to try to get the discoloration out of the water that is going to be
Speaker 219
1:25:28
cleaning this plant it's this plant was built in 2007. It's got real high manganese and it's gonna
David King
Unverified
1:25:34
complain clean it completely from the top to the
Speaker 195
1:25:41
bottom it's hadn this acid drip we got approved by the health
David King
Unverified
1:25:47
department that's what this grant we're doing now is and then we're applying for another grant to do a second
clarifier which will give it quick longer fallout time before it goes to the customer. We work where
Speaker 195
1:26:05
we work on one clarifier right now and it's moving too fast it just don't have the time to fall out. it sounds
Representative Mark D. McElroy
Unverified
1:26:13
like you you're working on it and I know the people will be glad when you get it worked on. thank you so much, Mr. Chair.
Speaker 222
1:26:22
Representative y then Representative beatty yes sir
Representative Johnny Rye
Unverified
1:26:29
oh that that looks terrible that is it really is and and here's what we run into. Senator David and I have been complaining for at least6 or7 years because Lepano Arkansas has got the same color and and you know these folks live about30 miles from Truman and they're taking their clothes from Lepanto all the way to ruman to wash their clothes and and I don't know about their heritage money but I'll I'll tell you this one they need to
Speaker 195
1:27:01
help. Yeah we all need help to help every every every water company in our delta needs help. That's
Representative Howard M. Beaty, Jr.
Unverified
1:27:14
right. thank you sir Representative beatty thank you Mr Chair again how long have you been with the with
Speaker 195
1:27:20
the water district I started working there august of 2002. and I I become manager in February of 2019. How how long has the water had
Representative Howard M. Beaty, Jr.
Unverified
1:27:32
had the issues that that you have now forever on hid
David King
Unverified
1:27:36
high vans like and what I'm saying the height of ban is when the when they have a fire and they suck it you know get water out of them our water system it stirs the water up when you have a real cold spell like we just had people run their water in their housesraw it down.rains or tanks and and you know it takes us
Speaker 207
1:28:02
weeks to fill back up after they turn their
Representative Howard M. Beaty, Jr.
Unverified
1:28:06
water off What is and you said you had a5000 users on this water
system? Yes. and is this problem systemide yes it's a systemwide and I go
David King
Unverified
1:28:15
from from cash Arkansas all the way to cotton plant Arkansas but I got three different water plants that take care of all that
Speaker 207
1:28:24
that that's why I ask if this was systemide that you had this
Speaker 235
1:28:33
problem there's maybe 1000 lives or something like that in Woodro
Representative Howard M. Beaty, Jr.
Unverified
1:28:37
County. Yeah. I, I and and and in fairness to you
my my reason for weighing in is not so much directed at at your waters system specifically I got a system in in my district that's having the same issues and my phone's ringing so I know members that they get a lot of call s about water and about a water system or a city or a town that can't take care of the basic needs for their their
constituents and their residents and then we get the call to step in and and take care of that. My question is the the issues and the money that you have now is that going to solve the problem for these5,000 residents yes you've got you've got folks now and experts say this would solve the problem according to an outside chemist
David King
Unverified
1:29:23
and I don't use the I don't use like a company chemist you know what that sells chemical c cor to him if I can get the pH under control
at before he hits my filters these people will not have to worry about dirty
Representative Howard M. Beaty, Jr.
Unverified
1:29:41
water. I mean someone sent me the photos of that water and that almost exactly the same that my folks are dealing with down south. I I guess my question is you you've been there since 2002. do you drink this water? I drink it every day oh lord. I've
been to Iraq. I'll drink it thank you thank you for your service I I know it's safe. I know it's
safe then then the other side is you drink that water how do
Speaker 207
1:30:14
you feel about paying for that water? I
Speaker 195
1:30:18
understand. I understand totally you know I have back in 2023, no take it back 2022 I spent70,000 dollars rebuilding them filters at thatorton plant and it only got me this
David King
Unverified
1:30:29
long because the water has gotten so bad under the ground and I didn't have
Speaker 207
1:30:41
$5 million to do to to clean out everything I just bought me a
Representative Howard M. Beaty, Jr.
Unverified
1:30:45
couple of years When, when do you anticipate this project being
Speaker 207
1:30:49
completed? if we can get the money started you know and they give me the go aheadad.
Speaker 243
1:30:56
we have a year to have it completed.
Speaker 207
1:30:59
who who is we if they if they cross county rural water and whoever the contractor is arkansas naturalsources when they tell me I get I can go to construction that's after the bids and everything
then they have a year to get it completed. All right thank you you you may have already mentioned this and I missed it. What is what is the source of the water? Is it from wells its groundwater. OK and what is exactlylo causing the the dark color in the water manganese
Speaker 207
1:31:31
and and one of the grants that we just got is a new grant they come out with it's
David King
Unverified
1:31:43
sometime manganese contaminate ground I think is what it's called and that's strictly for
Speaker 167
1:31:52
manganese removal all right thank you. we've got several questions First I saw was Representativeerry we'll
Speaker 142
1:31:59
let him go. with all due respect to the problems with all due respect to the problems that we can you hear that we need somebody to turn this off
with all due respect to the problems that I'm listening to water in the
customers but have we gotten off of audit on to something else do we need, I mean it I know that there's problems and I respect that but I think we've gotten off of audit issues on to something else and thank youpresentative that
we are we are discussing issues on on why the water system has not been fixed with the money that's been granted so I think we can tie that back into audit issues. Next question I
saw was Representative Springer. you still have a question ok Representative y and Representative Leman. Yes real quick let me
Representative Johnny Rye
Unverified
1:33:09
that the piping, how long has it been since y'all had new pipes and when was this est ab li sh ed that you have now this grant that we're working on right now
David King
Unverified
1:33:21
was for acid feed system to lower the p and new piping and what we've done was the the reason for the new piping was because because our pipes go underground over to a clarifier back up you know back and forth we kept clogging up underground we we'd have to aize it to get it out and we'd be shut down for several hours
and we put the piping up up above the ground now so when it leaves a clarifier to the filter it's all above ground we can actually have this access it easier so
Speaker 207
1:34:03
we've done away with that bad piping I would call it well the reason
Representative Johnny Rye
Unverified
1:34:07
I ask him this was the one that I was speaking about has not had no piping since 1903. thank y'all Representative
Speaker 47
1:34:13
ladyman, thank you Mr. Chairman you said your source is
Representative Jack Ladyman
Unverified
1:34:27
is groundwater wells how many whales you got? There's two right there you said you had one clarifier yes so do you just have one plant or you've got different plants have have three different plants
Speaker 207
1:34:38
but they're in different locations this one that's making the dirt the the orange water
David King
Unverified
1:34:44
it only has two wells. OK, so your other two plants you don't have that problem is that
Representative Jack Ladyman
Unverified
1:34:50
correct the one up in amagan I do one of
Speaker 240
1:34:54
them has a problem the other two don't with
Representative Jack Ladyman
Unverified
1:34:59
the coloration is that what I heard
Speaker 235
1:35:02
you say? sir the one we have three plants one in amigan
David King
Unverified
1:35:07
one more oodruff County and one in Cross County the one in Crosstown's got high calcium the one inooter County's got maganese andjackson County's got manganese. OK. you mentioned if you get your
Representative Jack Ladyman
Unverified
1:35:18
ph under control. you you know that certain levels drop out at certain ph and you
have to and it's very important that you maintain that ph within that
range from manganese. I don't know what it is probably pretty high but are you able to maintain the pH that you think you need with the acid
Speaker 208
1:35:40
drip we will you will OK now what what we we
David King
Unverified
1:35:44
were built when they built these plants we've raised the pH with cosic soda to make the stuff drop out in the clairer but just as
Speaker 207
1:35:51
soon as it leaves the claripier it was supposed to be hit with C2. to drop the pH back down
Speaker 195
1:36:03
so it wouldn't drop out but the C2 system never has worked
Representative Jack Ladyman
Unverified
1:36:07
OK. so a lot of these meds won't drop out until like 11 ph of 11. are you able
to get that high with your current system we were and then we
David King
Unverified
1:36:19
had to drop it back because we're dropping too much out clogging the clogging the filters up almost weekly and we're only run
Speaker 219
1:36:28
about 8.5 right now until we get this acid
Representative Jack Ladyman
Unverified
1:36:33
drip going. OK, just one more question Mr. Chairman. so you you're going to get a second clarifier with this current grant. is that right? Is that what you said we're trying to on another another grant when my my point is is the water always dirty or when the flow slows down does it clear up any? It'll clear up so you got a capacity problem and this new cclarifier if you is it on this grant or the one you anticipate you're going to ask for the one we're going to
ask for. OK. well it sounds like you got too high a flow for your system but it sounds like you're working on it the right way. so thank you for
Representative Kendra Moore
Unverified
1:37:18
answering my question versus there more you have a question thank you Mr Chair and kind of getting back to the reason we're here regarding the audits you answered the question that one of my colleagues asked about public elections
do you also publish when the board is meeting and where that will be I have it you know but that will be do
Speaker 204
1:37:47
you know if your board does I mean I post everything for the board and and
Representative Kendra Moore
Unverified
1:37:52
because I want to be clear that some of the irre here may or may not be necessarily supposed to be directed towards you because you have a board that you answer to while you are the boots in the
ground, the buck stops with you as far as day to day operations go the simple fact is Woodruff County is one of the smallest and most rural counties in the state of Arkansas. clocking in at about5,800 people since the year 2000 there has been a33% loss of population and these people of that5800 you have what 1000 m of including families and the reason this is so important is because people in Arkansas should not have to
realize and think that they live in a third world country and have third world water and I know that you're working hard on this but Mr. Kinghom is of the essence and more importantly the placement of public funds is of critical importance and the fact that you don't have public elections of who your board is and the fact that in the past people were not notified these
customers which are captive customers they are not notified when the board meeting is to be held accountable for the nearly7 million dollars that you have received in loans and grants over the past well since 2023 it is paramount that you are held accountable to your consumers would you not agree? agree with you
David King
Unverified
1:39:32
I don't have that money in hand it's sitting in that Arkas Natural Resourcesc account
I submit a pay request when the contractor submit some paper requests they send me the money I put they put it in my account and that's sent within three days I got to get it wrote to that contractor I don't see that money until that contra gets done with his jobs senator lark do you have a question I'd like to address the chair if I may.
Senator Alan Clark
Unverified
1:40:13
the just some information the the law that has forced this gentleman and others to be here y'all were helpful in getting past just a short time ago about4 years senator Love when he was in the house was crucial as was Speaker Evans predecessor in his district
we spent six years working hard on this and you would have a lot more. I get the phone calls too. you would have a lot more if we had not forced and it wasn't to hurt people if we had not forced that you couldn't we we 85% of over700 water districts in this state were upside down financially and most of them didn't know it they weren't didn't they weren't putting the money aside for pops they weren't putting the money aside for pumps etc. they didn't know to and that's why we required
the education on the business side and on the physical side of how to run the plant and now the the question is the money there the money will be there because they're going to be raising the money themselves and we also gave ANRC the teeth to do something if if the locals won't obviouslyviously this man is is working and and trying but but ANRC can come in and consolidate people, close people down if they need to but
you cannot imagine how much worse it was going to get if not for y'all's actions and I should mention the municipal league and jackrytter if without his help we wouldn't have got it done either but I just want to thank all of y'all for for getting it done. you you're probably going to see more people here before the audit committee but it's going to force us to have the water that we that we need to have especially in these poor rural areas and which comes first when we talk about economic development the chicken or the
egg you can't you can't get the factories there if you ain't got the water. and and you can't get the water there if you ain't got somebody to pay for it. So again thank you for your indulgence Mr. Chair but I thought
that would be helpful thank you senator any more questions from the committee? if not then sir we're
we thank you for being here we thank you for your work on this issue and did was this report filed we need to file this report
so if there are no more questions without objection we will go ahead and file this report all right thank you sir for
being here that brings us to the end of our agenda. I thank everybody for their patience and their hard work today and we stand adjourned
Agenda
A. Call to Order by Chair 66666666
B. Adoption of Minutes of February 12, 2026, meeting
C. Update on Private Reports – Delinquent December 31, 2022, Water and Sewer Reports
D. Update on Private Reports – Delinquent December 31, 2023, Water and Sewer Reports
E. Discussion of Noncompliance with Municipal Accounting Law – Fargo
F. Discussion of Noncompliance will A.C.A § 27-70-207 Misuse of Street Funds - Jericho
G. Review of Reports (Refer to the Synopsis)
H. Cross County Rural Water System
I. The next meeting of the Legislative Joint Auditing Committee will be held on June 4, 2026.
J. Adjournment
Documents
| Title | Type | Pages | Source |
|---|---|---|---|
| Agenda — LEGISLATIVE JOINT AUDITING - COUNTIES AND MUNICIPALITIES, Mar 12, 2026 | Agenda | 3 | Official source ↗ |
Speakers
Representative Cameron Cooper Chair
Unverified
Speaker 5
Representative Carol Dalby
Unverified
Speaker 39
Representative Johnny Rye
Unverified
Speaker 57
Senator Mark Johnson
Unverified
Speaker 67
Speaker 2
Speaker 78
Speaker 25
Representative Jack Ladyman
Unverified
Speaker 87
Speaker 91
Speaker 96
Speaker 109
Speaker 112
Speaker 125
Speaker 32
Speaker 129
Speaker 119
Speaker 142
Speaker 105
Speaker 147
Speaker 149
Speaker 152
Speaker 156
Speaker 164
Speaker 165
Speaker 168
Speaker 175
Speaker 54
Speaker 47
Rita Feid
Unverified
Speaker 6
David King
Unverified
Speaker 195
Representative Kendra Moore
Unverified
Speaker 202
Speaker 204
Speaker 207
Speaker 209
Speaker 93
Speaker 211
Senator Dave Wallace
Unverified
Representative Mark D. McElroy
Unverified
Speaker 79
Speaker 219
Speaker 222
Representative Howard M. Beaty, Jr.
Unverified
Speaker 235
Speaker 243
Speaker 167
Speaker 240
Speaker 208
Speaker 198
Senator Alan Clark
Unverified