Legislative Joint Auditing-State Agencies
Video
Transcript
1 document
Machine transcript
May contain errors. Verify important quotations against the official video.
About transcript accuracy
- Source
- SliQ live captions
- Model
- SliQ live ASR
- Processing date
- October 2, 2026
Representative Steve Unger
Unverified
0:11
Please pray with mealmighty God. you are the Lord of both justice and mercy help us as we administer the taxpayers' money that go to the state agencies and help us all be honest stewards of the things you've put in front of us we are very grateful to live in this blessed state and in this blessed nation please be with us in these proceedings. Amen. thank youpresentative all right. I need a motion to
adopt the minutes from January senator Boyd is there a second Representative meeks in discussion all those in favor say aye pose same sign those m myths are adopted. Misterulllington, would you please get us going? Yes thank you, Mr Chair. today we're presenting two reports
Speaker 5
1:01
two deferred reports with findings two current reports with findings and one special report we also
Speaker 6
1:05
have five reports without findings and these are listed on page one of the audit summary
without objection those reports will be filed seeing none OK,
Speaker 6
1:27
the first report we have today with findings is the department of humanman Services Fy24 report and this report contains three findings and it was deferred from the January meeting the first finding the a she notified us of the apparent theft of almost $8000 from the disaster supplemental nutritions assistance programme by providing false or incomplete information to the agency 13 employees received disaster temporary food assistance benefits related to the
March31st,2023 tornadoes that impacted Pullaasy County the employment of these individuals was terminated and the AC referred all cases to the Plage County prosecutor's office the agency also notified us of the apparent theft of5,800 dollars from the medicaid program also by providing false information to the AC one employee received Medicaid benefits to which they were not entitled this individual was also terminated and referred the case to the lastic County prosecutor's office we also referred this to the prosecuting attorney and the attorney general and it was also certified to the bond board
the second finding on July31st,2024, the AC received an email notification from the treasurer state's office stating that a state warrant issued on behalf of DHS payable to the University of Arkansas at LittleRock had been altered and cashed and that DHS would need to begin the affidavit process to get a new warrant issued to ULr however it was not until August 21st,2024, 15 business days later that the AC notified us of the theft of the almost610,000 dollars warrant the pay line on the redeemed
warrant was altered and replaced with the name of a private business but the warrant amount and number remain unaltered the deputy director in state comptroller at the department of finance Administration became aware of the issue and notified the FBI on August 20,2024. ULR completed the affidavit of ford's warnt form on August 22nd and the bank was notified of the altar warrant on the next day the state's forgery claim was honored by the bank and the funds were deposited into the treasury state's account on November 13,2024.
this finding was referred to the prosecut attorney and the attorney general and the third finding while performing an observation of assets from a current capital asset listing dated April16,2025. we noted five of the 50 equipment items sampled with a total purchase cost of almost59,000 dollars could not be physically located for observation and or properly identified for audit verification as follows three of the items could not be physically located and none of these have been documented as lost stolen or obsolete prior to our testing. One item presented
for observation had no identifying tag number and or serial number documented on the aces fixed asset listing and one item was discovered havingn't been transferred to marketing redistribution however the item remained on the fixed asset listing as current. Additionally 10 of the50 items tested had documented dates ACEs being last inventored two or more years ago during our review of asset acquisitions deletions and observation we also noted the following two items were not capitalized at the correct amount one item was still on hand
one item that was still on hand was removed from aces in air and one items side during observation did not match the description that was listed in aces Furthermore we noted that that the acC paid over $17,000 in air for sales tax levied on four vehicle birds that were that were tax exempt Mr chair that concludes the
Speaker 10
4:48
findings for the DHS members do you have any questions Representative
meeks can we get somebody from the department come on down
Speaker 13
5:02
introduced herself ir if you would introduce yourself
for the record we'll represent recognize Representative meeks so he can ask his question. Thank you Mr Chairman. So
Speaker 19
5:16
my question hold on Mr. Representative let this feller
Speaker 20
5:19
introduce himself brett hayes, chief deputy counsel of DHS
Representative Stephen Meeks
Unverified
5:23
now you're recognized thank you. right Mr thank you for being here my question relates to the600,000 dollars warrant that was fraudulently cashed looks like buy buy a business I'm
assuming y'all know what business that was has have they been put on a list so that we can make sure we don't do business with them at any point in the future? Have we notified other state agencies to make sure that they don't fall victim to the same or the office of procurement it's a it was an
Speaker 20
5:56
autobo shop out of California it looks like that was the first red flag right there yes and
Speaker 24
6:04
this was this was this was a this was a you know a warrant that was intercepted in the mail so and mean to my knowledge you know we wouldn't do any business with with you know a body shop in California I doubt anybody else in the state would I mean we we we referred it to prosecutor and also the FBI was investigating. So I mean your answer is the answer is no but I think it's highly unlikely that anybody could do business with so since it was inor have
Representative Stephen Meeks
Unverified
6:34
we notified any state officials over in California to just as a you know courtesy to let them know hey they did this to us make make sure they don't do it to you to to my knowledge we did not OK right just curious right thank you thank you Representative meeks any other questions very good OK without objection
we'll file that report. thank you sir and we'll move on the next report with findings is
Speaker 6
7:05
the Department of Parks Heritage and tourism Fy24 report and this report contains two findings and it was also deferred from the January meeting the first finding the Arkansas Department of Parks, Heriage and tourism notified us in april 2024 the loss receipts totaling almost3,500 dollars from one of its museums an employee was terminated and as of our report date no criminal charges had been brought against the former employee this finding was referred to the prosecuting attorney, the attorney general and was also certified to the bond board
and the second finding De during our review of the AC's various changed fund cash accounts the following exceptions were noted at Daisy State Park the $100 in camping drawer funds could not be located by park staff at the time of our audit and at warremoore Stadium it was it was discovered at the time of our audit that the change fund had an $80 overage one more stadiums change fund is unique because it has both a cash portion and a balance that's held in a commercial bank account which and this amount could be ingested throughout the year based on the size of events and the need for additional change funds
the overage had not been previously discovered because the AC did not have procedures in place that would consider both cash and bank
Speaker 10
8:13
bounces together when verifying the change fund Mr true that concludes our findings forark heritage and tourism. very good
members do you have any questions for the
department seeing ohpresentativeuner can we get somebody from Parks Heritage and tourism to come forward please
and if you will all introduce yourselves for the record we'll let Representative Unger ask his question. Good
Speaker 33
8:50
afternoon Shay Lewis secretary of the Arkansas Department of Parks Heritage and tourism. good afternoon
Speaker 35
8:57
I'mangerri Medlin with Arkansas State Parks. thank you gentlemen. I I'm
Representative Steve Unger
Unverified
9:02
repeating a question that I think Representative Richardson
asked a couple of months ago can you guys go to get just be cashless and start using credit and debit cards so we don't have to worry about money floating around in a drawer it's
Shea Lewis
Unverified
9:22
something that we have looked into specifically we we still have a percentage of customers that do prefer using cash we have been looking at and considering testing at war memorial Stadium specifically because other locations such as Reynolds Stadium at the University of Arkansas has recently gone cashless as well
and something we're considering we do have the infrastructure now within the stadium that and the credit card machines as well as the data lines that can manage that volume of credit card transactions now so it's under review and consideration but we still have to be mindful of our guests that want to pay with cash and and and have taken that in consideration as we kind of look forward to the future there not giving our guest that have games at War Memorials and
putting a notice for that would be a key part of
Representative Mindy McAlindon
Unverified
10:19
that thank you Representativemclinon thank you chairman. did you say was the were the
Shea Lewis
Unverified
10:24
funds recovered from the employee that was terminated? so since our last meeting when we were here last month we have I do have an update associated that since that time a new prosecuting attorney has been assigned to the investigation through the Pulaski County prosecutor's office we were able to
confirm that the statute of limitations for any misdemeanor charges has expired since the investigation has taken so long but since that time we have the investigation does is continuing is ongoing a subpoena has been dissu has been issued for additional evidence and we hope that that will lead to to a prosecution. thank you thank you chairman very good. any other questions? hold on let me
go to senator Boyd next. thank you miss
Senator Justin Boyd
Unverified
11:12
can you hear me thank you Mr Chair. So if you went to a cashless system is there any way to evade that at all? I mean would you still potentially have some kind of
Shea Lewis
Unverified
11:30
risks somewhere I don't know if I have the expertise to know I'm sure they're there's certainly ways that credit cards can be compromised. I know that our system within Arkansas state parks currently we we have not had many transactions but
even though the case that we're mentioning under investigation involved credit cards but involved personal accounts and use of a credit card in a different way so I assume that there's always an opportunity for fraud it would be our place to put controls in place to ensure that that we protect the state funds as best as possible right and then it sounds to me like you're also
Senator Justin Boyd
Unverified
12:05
keeping in mind that often ourkan Arkansas taxpayers are coming to purchase things and you're keeping them in mind on that front as well and trying to
find a right balance between safety and inevitably somebody's gonna try to game the system somewhere right that's right safety and service that's right Representative unger thank you Mr Chair. I
Representative Steve Unger
Unverified
12:28
believe I asked you last month have you met done any research on can we actually put a lien on an extra employee's taxes to recoup the stuff they stole so one of the questions last month was related to even
Shea Lewis
Unverified
12:45
withholding final paychecks we were able to confirm through the office of personnel Management that that is not the case that that due process must continue through that perhaps anger meddling could help understand in the event that a court order happens and then what is it called when you garnish someone's wages
Speaker 52
13:16
yes so if there's a judgment made by the court for the reparations in that regard for the restitution as it were then they can hold against their taxes that the courts can as an agency we wouldn't do that the actual pulasi County court would make that determination. thank you yes Representative Richmond did you have a
question? I do. thank you. I I think
Representative Marcus E. Richmond
Unverified
13:39
I miss misunderstood you or misheard you. did you say that the statute of limitations has run
out on the misdemeanor during the investigation yes yes the the timing for
Shea Lewis
Unverified
13:55
the statute of limitations has has expired for that while the investigation was going ongoing but for a felony at that time limit extends further right thank you is the is the benchmark there5,000 dollars oncece
it gets over5,000 it becomes a felony. it'd be 1000 anything over 1000 becomes a
Members any other questions seeing none thank you gentlemen without objection this report will be reviewed the next report we have with findings is the department of
Speaker 6
14:32
Corrections y 24 report and this report contains two findings the first finding theya he reported to us unauthorized purchases on the department's fuel credit card after an employee of the division of Community Correction was observed purchasing fuel for personal use with a state-is issued fuel card. this information was forwarded
to the department's internal affairs section which investigated and identified numerous potentially fraudulent purchases between July2022 and August 2024. holding about4,500 dollars the employer who made these purchases was terminated in September 24 and the department's investigation was forwarded to the Arkansas state police This finding was referred to the prosecuting attorney and the attorney general and it was also certified to the bond board and the second finding the ability of the department oforrections to provide essential services to Arkansas
corrections and law enforcement and criminal justice agencies relies heavily on the availability of an IT system partially supported by the Arkansas division of Informationystems any number of events can interrupt the availability of those systems including equipment failures unforeseen natural disasters or malicious cybersecurity attacks when these events happen the department should have reliable backups of its systems and data as well as a comprehensive plan to recover its most critical systems quickly the department conducted a test of its disaster recovery plan in
August of 2022 for its offender management software. however, testing scheduled for the fall of 2024 did not occur due to ongoing DIS projects testing the disaster recovery plan is vital to evaluating whether the plan would be effective in an actual disaster,
Speaker 10
16:05
Mr. Chair, that concludes the findings for the Department of Corrections. Thank you Mr.Bullington memberers
Representative meeks theres some folks from the department of Corrections here you guys come to the table please
Welcome if you would introduce yourself for the committee in the record we'll let Representative meeks start with his question then we'll move to Representative McAlinon you know I'm Wahodge chief of staff
Speaker 60
16:35
for the department of Corrections and depending on which finding you have we want to ask questions about we may have different staff that we need to come to the table all right thank you gentlemen for'm Eddie Powell I'm with the assistant director with the department of
Speaker 61
16:48
Corrections also thank you there for a second I thought you said we would have different
Representative Stephen Meeks
Unverified
16:54
answers to the questions but you never know you never know right exactly this is more of information so on that disaster recovery plan I know DIs was going through a lot of upgrades at that time and it looks like the B team's on their way up here we're gonna call in the
ok with your permission yeah and and
y'all may be my my question was is basically since those well we'll let you guys introduce yourselves. Nnicolas Suwart deputy chief of staff
Speaker 66
17:25
department of Corrections o callsey chiefefformation officeficer Department of
Speaker 67
17:30
Corrections so chief information officeficer you're probably the guy that
Representative Stephen Meeks
Unverified
17:32
that that I need to direct this at dIS I think is pretty much concluded a lot of those upgrades that they were they were going through and so have you been able to do this backup check since then or is it something we're just putting off until the next opportunity? what's kind of the status of it yeah right now we've done one for
Speaker 67
17:52
the training environment just the test out and and all
this new equipment they needed was up in updated son North and Lowell. they've got that now so we actually have a full production DR scheduled for Saturday after next the 21st and we will do our production system on that and at that time we will have a report on how the dr went. OK, perfect. Representativemclinon thank you chairman. I had a question on
Representative Mindy McAlindon
Unverified
18:18
finding one is that y'all is that the credit
Speaker 73
18:22
card we're going to swap sorry about that
and gentlemen let's go ahead and introduce yourself again for the record
Speaker 61
18:40
Wadehodge chief staff for the department Edie Pawes assistant director for the department
Representative Mindy McAlindon
Unverified
18:45
thank you just had a quick question it looked like you had just two or three employees managing over 800 vehicles and it mentions in here you've got a new system in place that will prevent that can you just elaborate on
Speaker 61
18:57
what that is yes ma'am at the time we only had two personnel going over the transactions for 839 cards using
theExx system. after one of our employees actually stumbled on it at about the same time when it all came down but we realized we were a little over work we were too understaffed in that situation so at that time the secretary allowed for us to move another position into that location and now we have a person that's dedic ated that all they work on is just the waxx cards. OK, can it follow up in here it mentions a
Representative Mindy McAlindon
Unverified
19:31
new telematics system is that going to change the way that they're
Speaker 75
19:36
managing that? Yes, it's coming through that new I4homa is that what it's called forhana yes
Speaker 61
19:43
there's a DFA has got a whole new project coming down for all of our vehicles through our fleet man management system that will all be now handled we'll we're we're putting electronic monitors on all of our cars so we'll be able to quickly identify how many miles between fillups when someone uses a card so that we can see if it's you know if you're using too much gas you can start kind of feeling that they're overusing the car. yes ma'am
Speaker 60
20:08
that that'll be a system that'll be in place for all departments not just the department of correction all right thank you very much
thank you chairman members any other questions for the department oforrections? seeing none thank
you gentlemen this without objection this report will be reviewed and we will move on the
Speaker 6
20:30
next report we have a findings is the Department of Veterans affairs FY24 report and this report contains three findings the first finding on June3,2025,
the AC notified us that in May of 24 4 employees of the Fayetteville Veteran's homeme were believed to be checked in but were not actually at work after an investigation by the AC it was determined that the individuals were paid a total of561 dollars for about 26 hours that they were not actually worked following the investigation the four individuals employment was terminated as a report date the improper payments had not been recovered In addition, we reviewed three pay periods for these individuals and determined that these same individuals received unapproved overtime pay totaling
over6,600 dollars during the pay period we reviewed this finding was referred to the prosecuting attorney and the attorney general and was also certified to the bond board the second finding during our review of expenditures we identified a duplicate payment of almost $1000 to a vendor for temporary employment services a refund was received from this vendor and the third finding our review of 24 instances in which employees at theetyetteville Veteran's Home received overtime pay revealed that 2 instances were not properly approved, Mr Chair, that concludes the findings for
the Department of Veterans Affairs thank you members do you have questions for
the department Is there anybody oh is there
anybody from the department here thank you if you all would introduce yourself for
the record and we'll let Representative Brown ask her question. punch your button there go oh wait after they introduced him so I'm
Speaker 79
22:06
Wayne Ruthven chief of staff Arkansas Department of Veterans
Speaker 81
22:12
affairs Stevie Smith, CFfo Arkansas Department of Veterans
Speaker 82
22:17
affairs thank you gentlemen misrepresentative Brown you're recognized
thank you gentlemen. oh excuse me my
Representative Matt Brown
Unverified
22:24
shoulder hurts so what has happened
what what have you been able to do to try to help prevent this from happening again Representative Brown which which finding are we speaking about the unauthorized overtime
Speaker 87
22:46
we've changed policies department wide for overtime whether it's contract agency over time or state employee overtime particularly in our veteran's homes the administrators have to approve the overtime ahead of time preapproval the request then has to go through the long term care division director to secretary Aidder Secretary Ayder is the only person in ADA who can preapprove overtime
and he must do that in writing and should there be an emergency or an after hours situation then the homes or the leadership is required to contact through the chain of command him by phone get verbal preapproval and follow up the next workday with a documentation to support that thank you very much let's see that's
Speaker 77
23:40
all thank you members any other questions
seeing none thank you gentlemen without objection that report will be filed as mentioned earlier we also
Speaker 6
23:59
have a special report on today's agenda ready to law enforcement agencies adoption of racial profiling policies to present and
Speaker 5
24:04
I'll now recognize another one of our staff, Charlie Camp to present that report Thank you Mr. Beington. This letter is issued to inform the
Speaker 93
24:20
legislative joint auditing committee that the 2025 reporting period with the due date of November 1st2025 Arkansas legislative audit has received responses from 203 of383 law enforcement agencies regarding adoption of a written policy prohibiting racial profiling under Arkansas code 1212403. ALA forward did the attorney general a copy of each law enforcement agency's response containing an updated policy prohibited prohibiting racial
profiling Furmore, ALA submitted to the attorney general the names of law enforcement agencies we believe failed to comply with the requirements outlined in Arkansas code 1212403. the attorney general has indicated that he has notified the 180 law enforcement agencies that failed to respond if they are not in compliance with the law. Mister Chariots concludes my report. Thank youir Representative meeks you
Speaker 94
25:13
have a question? Yes sir I just noticed that the
date on this letter is December 16 2
Representative Stephen Meeks
Unverified
25:26
months have since passed. Any updates from the attorney general's office on getting these others into compliance or other than that they have contacted all those law
Speaker 93
25:35
enforcement agencies we have had an an uptick in response on this report compared to the last so we hope that trend will continue. OK. all right thank you. p re s ent ative you recognized
thank you Mr Chair. So what's the
Representative R. Scott Richardson
Unverified
25:50
plan do we know what happens if if nobody still responds to to that
Speaker 93
25:59
legislative audit's only responsibility in this is to collect the policies that are remitted to us and then turn any updated policies over to theagG We do not solicit any policies and we do not solicit people that do not turn in policies ol low up do you have a list of the people who are still not responded or
Representative R. Scott Richardson
Unverified
26:18
completed that yes sir we do can we get a copy of that Mr Chair? Yes thank you
we'll get that to the committee. Any other questions? seeing none without objection we will file this report. Thank you sir. right members that's everything on the agenda are there any is there any new business seeing none our next meeting is scheduled for March 12 with the work going on down in the basement there's a good chance that there will be work going on in this room next
month so currently the meeting will be is scheduled to be held in macB on March 12th so y'all get notified up upfront but just want to give you a heads up on that all right any other comments from committee hearing none we're adjourned
Agenda
A. Call to order by Chairman.
B. Adoption of minutes of the January 8, 2026, meeting.
C. Review of reports. (Refer to the Summary)
D. New Business. The next meeting will be held March 12, 2026
E. Adjournment.
500 WOODLANE STREET, SUITE 172 • LITTLE ROCK, ARKANSAS 72201-1099 • PHONE: (501) 683-8600 • FAX: (501) 683-8605 www.arklegaudit.gov
LEGISLATIVE JOINT AUDITING COMMITTEE ARKANSAS LEGISLATIVE AUDIT FEBRUARY 12, 2026 STANDING COMMITTEE ON STATE AGENCIES
Documents
| Title | Type | Pages | Source |
|---|---|---|---|
| Agenda — LEGISLATIVE JOINT AUDITING - STATE AGENCIES, Feb 12, 2026 | Agenda | 2 | Official source ↗ |
Speakers
Representative Steve Unger
Unverified
Senator Matt McKee Chair
Unverified
Speaker 5
Speaker 6
Speaker 10
Speaker 13
Speaker 19
Speaker 20
Representative Stephen Meeks
Unverified
Speaker 24
Speaker 33
Speaker 35
Shea Lewis
Unverified
Representative Mindy McAlindon
Unverified
Senator Justin Boyd
Unverified
Speaker 42
Speaker 52
Representative Marcus E. Richmond
Unverified
Speaker 60
Speaker 61
Speaker 66
Speaker 67
Speaker 73
Speaker 75
Speaker 79
Speaker 81
Speaker 82
Representative Matt Brown
Unverified
Speaker 87
Speaker 77
Speaker 93
Speaker 94
Representative R. Scott Richardson
Unverified