Legislative Joint Auditing-Counties and Municipalities
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Speaker 4
0:12
but what he doing now to be so thankful for the lives that you give us to live we ask you to look into every move that we make that the holy Spirit is take its course and and lead us in the right direction and we asked
Representative Johnny Rye
Unverified
0:29
all these things and Jesus' blessed name amen amen thank you OK the chair will entertain
a motion to adopt the minutes of
the January8th meeting. Senator Krowell is a second Representative beck a discussion all in favor say aye posed OK minutes are adopted update on private reports item C
Speaker 7
0:54
you want to go ahead cover that. Yes sir. thank you Mr Chair. Our update on
Speaker 10
1:02
the delinquent private water and sewer reports for the year ending 2022 since the January meeting we have had two cities
file reports through 2024 and we have submitted letters to the treasurer of state to request their turnback be reinstated as of now 19 of the43 original entities have had their turnback released and reinstated which leaves 24 that are continuing to have funds held in escrow. Mr Chair, this concludes my report. Can we does everyone have
do we have something in here that tells who they are on this one does anyone want to hear that
Speaker 16
1:44
list Mr Archer if you want to share that with the committee go ahead and take a microphone there. read I just want you to give
a and we'll have it for everybody to get if they need copies of all yeah ok yeah just if you'll just read it you read
the list so everyone will kind of know and then if if any members have any
Speaker 10
2:19
glad to entertain those OK I can read those yes sir this is the 19 that are still having their funds escrowed Clarendon eveningshade Hardy Hartford, Plumberville, Valley Springs, Wilmar, Casa Duma Norman, Buckner, Eudora, Lakevillage, Norfolk, Wabasea, Wilmot Biggers carthage, Bou, Grady,
Lehill, Latona, Menafie and Ula any
Speaker 11
2:51
questions about any of that OK, I assume we'll should we ask unanimous consent to file the report?
Speaker 7
2:57
No there's we don't need to OK. do we need to do the same thing on item D which is the same thing for 23 go right ahead
Speaker 10
3:08
the update for the reports ending in 2023 there's been no change since the last meeting and we still have fi9 of
the64 entities that did file their reports which leaves5 entities that have not filed reports these are not currently having their turn back escrowed at this time. Mr Chair
Speaker 30
3:29
that concludes my report. Do you want me to
Speaker 13
3:33
read you these five would like to hear who the five are
Speaker 28
3:38
go ahead and read it blackrock bull shoals garland marvel and Omaha. any
Speaker 7
3:44
questions OK well we can move on. guess
we go to item E noncompliance with counting law adona thank youtaff
Speaker 10
3:55
visited the city of adona on January21st of 26 and reported that progress has been made to bring the accounting records into substantial compliance with the municipal accounting laws and therefore staff recommends discontinuing the process and withholding turn back as outlined in code 1459117. that concludes my report. OK any questions
OK. without objection we'll file the report think we need a motion we need a motion to file the is there a motion to file the report Representative Rice2presentative Beck on paper say aye posed ok we're
Speaker 7
4:34
done right next item gum springs. OKgum springs this one wait gum springs that's the next one on the list what about denning have
Speaker 41
4:40
a different one you have a different list
Speaker 10
4:52
OK. Yours is different from mine OK gum springs ok so this one we are going to ask this committee to recommend the the city of Gum Springs for substantial noncompliance with municipal accounting law under 1459117 and with your permission Mr Chair we should go ahead and read the report proceed
Speaker 10
5:23
the town of Gum Springs this one has a repeat findings and it is as a year ending December31st,2024. finding under the mayor the budget was not adopted by ordinance or resolution as required by Arkansas code this is a repeat finding The governing body did not review the prior year's report and accompanying comments at the first regularly scheduled meeting following receipt of the reports as required by code. Also a repeat finding Findings under the recorder
treasurer accounting procedures for municipalities are set forth in the municipal accounting law Arkansas codes 1459101 through 119. The town was in noncompliance with these codes as noted below. Ba accounts were not reconciled monthly.cash receipts and disbursements journals were not established for all funds prenumbered receipts were not issued for all revenues received and some receipts were not deposited timely. A detailed fixed asset listing was not established while performing the
disbursement procedures we noted the following issues adequate supporting documentation was not maintained for6 checks totaling $1,418 and authorization for payment was not indicated for 12 disbursements annual financial statements were not prepared and published and the treasurer did not submit a monthly financial report to the council to include receipts, disbursements and balance on hand together with liabilities of the town. These are all repeat findings continuing on page 20
we noted the following issues during our review of payroll records payroll ledgers were not prepared details of salaries were not documented payroll totals were provided to a CPA to prepare tax reports and net of tax no taxes were withheld from payroll checks approved salaries were net of tax and the payroll clerk and mayor's salaries were not properly authorized. These are all repeat findings as well In2022 the insurance premium tax
fun Act833 was incorrectly deposited into the fire department account after including approved actor Act833 expenditures paid from the fire department account6,304 dollars should be deposited and expended from the town established Act833und for the purpose of training, ur and improvement of firefighting equipment initial capital construction or improvements of a fire department, insurance for
buildings and utility costs this is also a repeat finding We have the mayor and the recorder treasurer here today. OK, would y'all please come to the
end of the table and if you you were both sit down and hit your mic and and identify yourself for the record I'm Tony beard the quarter treasurer ofunm Springs yes
Gumspring. thank you both. I will allow y'all to respond to what our staff has just said about your audit and
Speaker 61
8:49
sorry that it wasn't done but I have since established the journals reconciled the bank's statements. I do have resolutions for the salary. I
have numbered receipts and I have the financial statements and if you would like to see them I have them right here. I'll take your word
for it but I would like to know and this was done for the all the years that were in question correct or are just the most recent ones it's the most recent because there was not really
Speaker 61
9:21
any records or anything to look at how long have you been recorder treasurer? I started in 24 so it goes
back to before you were in this office OK. Mayor do
you have anything to add to what she
Speaker 60
9:38
said? You might pull your mic downull your mic down may they had something on about 2015 and we're we're having a little problem finding those records and I was mayor I started in 2019. but we're not gonna what you call just because I started in 19 we we will still work to find those the
stuff that's discrepancies that were in 2015 so we're gonna work toward that end to try to get that established and get that fixed also any questions by members
Speaker 69
10:19
the court of treasurerpresentative Dalby. thank you Mr
Representative Carol Dalby
Unverified
10:21
Chair. Mr Mayor, I'm just curious you've been in office for5 years what did you do
prior to now trying to correct these things because these have been repeat findings at well going all the way back
to 2003 but let's just look at 2019 on and so it kind of concerns me that nobody's addressed these and we're five years down the road and this is taxpayer money that's being misappropriated or squandered can you address that please? I'll try the biggest thing what
Speaker 60
10:56
we was having problems with we weren't put some of the stuff in the minutes but now we are now making sure
everything is in the minutes Miss Davis is making sure that we're doing this stuff when I took over the mayor's job, the guy had resigned I didn't know I didn't know anything I was I was I was trying to learn on the fly I guess you call it but I'm not making excuses OK so we're we're trying to do a whole lot better she come on 2024
and we had we had a lot of problems when we got there but like I said I'm not gonna make excuses we're just gonna try to
Representative Carol Dalby
Unverified
11:49
do better Follow up Mr Chair far is not really a question but a suggestion have you worked
with these people they're sitting over here to your left from the municipal league they're here to help you and they can help y'all make sure you're doing the right thing have you been going to the training or have you sought out training from the municipal
Speaker 78
12:10
league? No ma', not at this time I will though guarantee you
Representative Carol Dalby
Unverified
12:15
they're here to help you appreciate it thank you for
that advicepresentativealby. any other committee members with questions yes sir so we need to determine the will of the committee if
Speaker 10
12:30
we want to start the60 day clock on the town this is to withhold their turn back sir does everyone understand that
we're hitting the stopwat thing is there any discussion about that or even a motion
Representative Carol Dalby
Unverified
12:50
about that do you need a motion for to start the
clock or is that just a recommendation do need a motion so move so moved by Representativealbyby seconded by Representative McIlroy any any discussion on the motion not all in favor say aye opposed I presume we guess away that means it starts
today sir wec just clicked the stopwatch and it's how many days6060 days and
Speaker 13
13:16
you understand where yes sir ok right so now we can determine if we want to file the report
Speaker 10
13:22
which we can still file with the 60 day clock starting or if you all always to defer what is the will of the
committee second by motion by Representative dalby second by Representative Beck any discussion on that not all in favor say aye oppose no ok thank you
folks thank you for comingsalby gave you excellent advice. talked to the people at the municipal league and they are that's what they're there for and they can help thank you
Speaker 100
13:57
what's next townwn of Bargo is that right sir OK.ext we have noncompliance from Fargo
Speaker 105
14:15
we've seen one from Fargo here no sir no
Speaker 10
14:22
sir so what do we need to do if may yes sir we were planning to discuss the substantial noncompliance and starting the 60 day clock as well for the town of Fargo we can still discuss and we can act on the 60 day clock or we can defer depending on the will of the committee but the mayor is not here is this
Speaker 7
14:39
the first time he was invited on this particular he called in sick we can relate that
we can't say that it was ok for Senator Stone to call in sick and then the mayor can't call in sick so we're going to be evenhanded on that but is any objection to deferring this to next month
Speaker 7
15:00
if not we'll defer it to next month without objection. OK and now we go to dennning so the town
Speaker 10
15:09
of Denning thank you Mr Chair is also for consideration of substantial noncompliance with the municipal accounting law and with your permission we'd like to go ahead
and read the findings for the town of
Speaker 44
15:22
Denning. please proceed guess what it's
Speaker 10
15:32
going to be on page 11. and the town of Denning is also being referred to the prosecuted attorney and attorney general. This report is for December31st,202423 and22 and under the mayor the town made payments totalling4,32170
and3858 and2423 and22 respectively without an authorizing ordinance as required by code 4365 was paid to a council member for mowing services3700 and400 pay to council member for cleaning services and mowing services respectively.1319 was paid to the mayor for various services and544 was paid to the recorder treasurer for various services. Budgets were not adopted by ordinance or resolution as
required by Arkansas code. This is a repeat finding continuing on to page tel these findings are under the recorder treasurer and bookkeeper a review of disbursements revealed the supporting documentation was not maintained for the following disbursements and noncompliance with code approximately32230 and2000 were dispersed in 24,23 and22 respectively. The majority of these disbursements were to the mayor who was unable to provide
an explanation or documentation therefore the validity and propriety of these disbursements could not be determined Also approximately 17,417,420 and75,000 dispersed in 24,23 and22 respectively to vendors that appear to be for a legitimate business purpose, however supporting documentation was not available. This is a repeat finding Accounting procedures for municipalities are set forth in
Arkansas code 1459101 through 119. the town was in noncompliance with these code sections and proper accounting procedures as noted below. Prenumbered checks were not issued for all disbursements. This is a repeat lectronic disbursements were made without proper approval of the town council by ordinance and without establishing written policies and procedures to ensure that EFT payment systems provide for internal accounting controls and documentation for audit and
accounting purposes. Chex did not always contain the signature of two authorized dispersing officers a fixed asset listing was not established this is a repeat finding annual financial statements were not prepared and posted bank accounts were not reconciled for 23 and22 bank reconciliations prepared for 24 were not accurate and were not approved by someone other than the preparer of repeat finding prenumbered receipts were not issued for all funds
received a repeat finding cash receipts journals were not prepared for 23 and22 cash receipts journals for 24 did not include all receipts and were not reconciled to total deposits per the bank, a repeat finding cash disbursements journals were not prepared for 23 and24 Cash disbursement journals for 24 did not include all disbursements and were not reconciled the total disbursements per bank. also repeat finding the following issues were noted during the review of payroll
records IRS quarterly 941 reports W2 forms W3 forms and DFfaARW3 forms were not provided for inspection for 23 and22 a repeat finding an authorized salaries could not be determined for the mayor and recorder treasurer. a repeat finding we have the mayor and recorder treasurer here today. you both come up to the end
Speaker 52
19:14
of the table and make yourself comfortable and introduce yourself
turn your mic on I'm Paul Lee,
Speaker 116
19:33
Mayor Denning candace Harmon recording treasure
mayyor would you like to respond to the
Speaker 116
19:42
items that mis Gashiite mentioned in the in the 23 we lost our recorder treasure
Speaker 121
19:48
to COVId lost her husband in the same house their daughter in the same house over COVID.
I finally got some folks hired up to suit up and get in there and get what she had the papers were distorted. they'd been gone through we got everything disinfected it and tried to dig out as much as we could of it and then we hired another lady that was taking care of our our recorded area and she got Alzheimer's and she
run me down a rabbit hole was not her fault as she's very capable of doing her job when we hired her but she she ran me down a rabbit hole and this this hole just kept getting deeper then we hired another young lady that was in the the city and the way I got the box bag was with the stuff that she had was with urine all over it so anyways
to this young lady and hopefully she'll be taking my seat someday because I'm ready to get out of this after 30 something years of it it's it's beginning to get the best of me so anyways I'd like to you know tell the council that it's been a very rough go tell the council that it's been a very rough go as far as some of those checks that were written to me
was for material paid back to me that I paid out of my own pocket those receipts I found one the other one I didn't and it was on a new provisionion that we had built in the city of Denning got to Lowe's. Lowe's wouldn't take a city check and so I paid for it out of my pocket and anyways if you got any questions I'll try my best to answer them
Speaker 116
21:58
so it's been a rough ride. Well, I'm sorry to hear especially about the loss of your your
thank colleagues mayor any questions of the committee members Representativedalby thank you Mr Chair. I'd
Representative Carol Dalby
Unverified
22:12
welcome any members of this committee to ask questions besides me but that's why we have smart
Speaker 123
22:17
lawyers that are in the legislature and you're you're probably the smartest it's not saying much some days but
Representative Carol Dalby
Unverified
22:24
thank you Mr Chair ma'am I'm sorry
I missed your name and when and you're the recorder
is that correct? yes ma'am Candaceharmon I'm sorry Missharmon I just missed your
Speaker 126
22:35
note when did you come on board I believe it was May or June 2023 I I was the recorder. I started in I believe January2022 and that's when Donna I believe she had already passed away but I didn't take the treasury position until towards the end of
Representative Carol Dalby
Unverified
22:57
2023 mid to the end and my questions are similar to my previous questions because
you know we're dealing with taxpayer money and
being good fiduciaries of that money and they're obviously are a lot of issues and a lot of repeat issues so my question is have you worked with the municipal league and have you gone to any of their trainings to learn what to do and how to do
Speaker 126
23:25
this and to get it back in shape and I will say that I have not been with the municipal league I actually wanted to ask this council for advice I've put in
I'm resigning we're currently going to put someone on the on the board my last day was supposed to have been yesterday but we found out that we were going to do this 60 dayy probation and I wanted to ask the council their advice do I need to stay on another60 days to ensure that this probation's done correctly or do we need to go ahead and appoint the new treasurer and as far as the repeats I really would like to point out I believe
the first audit I was involved in was for Paminho's work and that was up to 222,020 to221 191 maybe I had to sign for the that audit that would explain some of the repeats not all of them same for the others we were we discussed with our auditor future budgets will be adopted by ordinances or resolutions we actually last night hired an attorney to sit
in on our meetings to make sure that all of our resolutions ordinances are being done correctly and future findings will be addressing them to the council as far as this audit I believe we have to wait till the next month to discuss it with them that was one of our findings payroll records are going to be retained I've been in touch with our CSA officer the 941s are caught up and he's shown me how to do that quarterly.
I've enrolled us for an EsTPS account I'll say a lot of this is as a training issue when I came on it was a mess had no idea how to do it I just know that we have300ome citizens it has to be someone from town we needed help and I I offered to help I'd like to
Speaker 121
25:40
address that oncece Candace got on board with us on this
we visited with a small city Knoxville and uhjoyson was telling me about the CA package that you could get so Kenice and I got together and got with the city aldermans and we purchased that package and it and that's a software package it really helps I mean it gives you a a platform that you can go by. I mean if you're used to this
stuff yeah you can understand it but I'm just an old country boy and she just come along and and offered to help us and and I really want to say that she took that and spent quite a few days studying with the secretary of Knoxville to learn that package so and we even hired her to come up to our city hall just so we could learn how to do that so anyways once
that program gets it totally established and the person is used to it it is a handy tool from what I've seen of it
Speaker 121
27:00
be helpful yes ma'am because it does all of our checkris now it it helps us to understand the platform that we need to be taking as weller well
Representative Carol Dalby
Unverified
27:09
appreciate y'all's answer. I'm sorry that you're you're leaving but I'm sure that's between you and your council as to how you proceed from this point but I would urge certainly the mayor
and whoever replaces you that you get what these individuals that are right over here they're here to help they want to help they want to see cities do the right thing and so I would encourage you to do that. thank you Mr Chair for
your indulgence ma'ampresentative Beck were you asking to be recognized OK. OK let me
follow up on Representativealubby's comment. we encourage y'all to do whatever you need to do to work this out we're not the ones that
tell you how to do it if y'all you your your your city council members and everyone else wants you to stay for another60 days we're OKok with that and if you want to leave right away and they agree that we're ok with that we just want the things taken care of so it's not our job to to micromanage your city but we would support the efforts that y'all would make to try to work that out in my speaking for the committee very well on that, OK and that
doesn't mean we're we're leaning one way or the other it just simply means that it's not our duty to tell y'all how to operate this thing so any other questions or comments about knitting now can we are we in the same situation on the 60 day clock gaaway ok what's the will of the committee? do we click the stopwatch or do we
there's a second uhpresentative dalby seconded by Representative Jean and discussion all in favor say aye opposed. OKok so you mayor you got60 days and after that you'll start losing turnbacks so I don't again we don't dictate your solution but I encourage you to get with the municipal league or whoever else you need to and maybe even the vendor of your new software and help you get through this. thank you yes sir thank you both for coming
Speaker 7
29:27
and without objection we'll file this report the next is did we do Fargo fargo's not hereargo's not here that's right ok. right so we need to move to the reports right go right ahead thank you ar ting
Speaker 10
29:46
on page one city of green forests for the year ending December31st24. findings under the city clerk and a fixed asset listing was
established but was not properly maintained to include major categories control totals additions and deletions as required by code. This is a repeat finding and we do have the city clerk here I'm sorry
Representative Rick Beck
Unverified
30:14
would y'all please introduce yourself for the record. My name
Morgan Gonzalez
Unverified
30:18
is Morgan gonzalez and I am the city clerk
slash recorder OKir I am appointed mayor of Greenforest Jerryarlton. I took over in
Speaker 141
30:31
December for Don McNely who passed away in November and that's part of the reason why we're here is because because of that death condolences to your city
and your family the former mayor and I mean we understand but let's let's go back to the facts that we're going to help you get straightened out
on yes sir you continue then all we need to do is on that is what
we just need to any any questions for the mayor and the recorder treasurer if not we'll entertain a motion to file the report motion by Representative Jean second by Representative Beck in discussion not all in favor say aye opposed OK thank you all for coming up here. thank you and hope y'all get everything worked out mayyor thank you for your service. I I have a lot of empathy for for small town officials that will come in and
and do this job because you know often it's thankless and so I don't want you to think we're here that this this major tribunal that's looking down at you we we just want you to be in compliance with the
Speaker 141
31:41
law. yes sir it was more bad timing than he he actually passed away the day that she signed for the audit so that's the only reason why she's here because he he couldn't sign for it thelord gives us so
Speaker 146
31:51
many days in this world so we'll just we'll work around it. thank you for coming me we did very reports sir
Speaker 10
32:03
let me keep going yes ma'am keep going thank you Mr Chair. OK and I failed to mention that these 10 including Greenforre these next 10 are all deferred from the prior meeting. So next we have private water sewer reports and on pages 1 through3 I'm gonna skip around just a bit. The outside Kingslandrural Water Association ending December31st23. Quinn Water Association ending March31st of 25 ron g water and sewer fund
December31,23 and Wheelland Spring's waterterystem December31st23. we have received responses from each of these and staff recommends we file these reports
Speaker 10
32:50
reports and then we have5 more Fulton waterter Department December31st,23 Mcarraye municipal Water and sewerystem December31st24 Montrose Water and Sewer apartment December31st24 and Wilmmo Water and sewer department for
December31st,23 and22 we have not received responses and staff recommends we defer these reports any discussion or
questions of staff on this if not we'll defer these and should we right nowms Gaswaite
announced to the committee about our march meeting as y'all know a lot of these committee rooms are being renovated and our march meeting will be in room 149 so don't come in here in a month and say where are y'all because they'll be
construction workers probably in there butd we'll probably send something out to make sure everybody
knows that but I wanted to let y'all know that right now. OK, please
Speaker 10
33:47
proceeds you Mrir. We have two reports that have been certified to the bond board and referred to the prosecuting attorney and attorney general. The first is the city of alane for the year's ending December31st,24 and23 under the mayor the city discovered and we verified that the fire chief purchased questionable items totaling
$1,825 and 1,504 bearing 24 and23 respectively. The fire chief acknowledged to city officials that items totaling418 dollars were personal purchases without supporting documentation it is unclear if a business purpose of the remaining items the fire chief resigned on January28th to 2 5 and the city has not recouped any of these funds in questions. if there are no questions, staff recommends we file.
Speaker 105
34:41
no one's from the yes ma'am it's already been turned over to the process it will
be yes yeah yeah when yeah this one's this one's kind of a no brainer the unre represented allby ok any other questions or comments on it if not will file
Speaker 10
34:57
that and move on to on to page ive also certified to the bond board and referred to the prosecuting attorney and attorney general the city of Strong for the years' ending December31st,23 and22 this finding is under the mayor receipts primarily from the sale
of garbage bags totaling over $11,000 were not deposited from January1 of22 through October31st of 25 due to multiple employees having access to the funds and lack of proper controls we were unable to determine the custodian of the undeposited funds ur ning to page six the city utilized solid waste funds to pay monthly dumpster rental fees on behalf of five private businesses in apparent conflict with Arkansas
constitution which states in part no county, city, town or other municipal corporation shall loan its credit to any corporation association institution or individual. Additionally, the city bills these businesses through the water department. However, it does not appear that the water department transfers the payments received to the solid waste fund. This is a repeat finding The city made the following payments totaling over $2600 in a parent conflict with Arkansas constitution as interpreted by
the attorney general's opinion over $2000 in food and related purchases that did not have a business purpose and a500 dollars donation to the garnerner alumni association. This is a repeat finding the city was in noncompliance with the accounting procedures for municipalities set forth in state laws Arkansas codes 1459101 through 119 and other proper accounting procedures as follows Bank reconciliations contained errors and were not approved by someone other than
the preparer prenumbered receipts were not issued for all funds received issued sequentially or timely properly completed or indicated on the deposit slip. cash receipts were not always properly posted and classified in the journal. adequate supporting documentation was not maintained for all disbursements eliciting a fixed assets was established however it did not include additions and deletions or controlled toters totals contained errors. This is also a repeat finding moving on to page se
payroll taxes were not always paid to the IRS by the due date this resulted in penalties and interests of508 dollars paid to the IRS in addition over $2700 in penalties and interest related to 2020 and2019 payroll tax deposits were paid to the IRS in22. This is a repeat finding ar restricted funds were deposited into the wrong bank accounts. All those schedules one and three show cash balances
of approximately 158,065,000 for the general fund for 23 and22 respectively the general fund owed the solid waste fund over 1,680,157,000 as of December31st of the same years. yes sir that's each of those is for a
Speaker 163
38:08
different year. Yes sir. OK, which that's 23 and22 correct sir OK please proceed OK, sure. as shown
Speaker 10
38:18
on note5 on schedulele5 when these outstanding amounts
were considered, the general fund had a deficit fund balance of over $10,000 and 92,000 as of December 23 and22 respectively. Additionally,3,600 dollars was due to the street fund from the solid waste fund as of December31st23. Subsequent to the report date that amount was repaid. This is a repeat finding tra fine expenditures exceeded appropriations in 22 by50,000 or71% in noncompliance with
code. This is a repeat finding and the governing body did not review the prior report and accompanying comments at the first regularly scheduled meeting following the receipt of the report in noncompliance with code. also a repeat finding and we have the mayor here today Mayor, would
us please sit down and turn your mic on and identify yourself for the record. Darryl Howell, mayor of Ciarong
Speaker 168
39:27
thank you Mayorhoe. would you like to respond to the things that Miss Gasaway just outlined yes sir on the
Representative Rick Beck
Unverified
39:35
on the initial on on number one with the garbage bag receipts we have implemented the internal controls on that we have currently had a process of the water clerk and the city clerk collects all those pavements and makes all those deposits and so we've corrected that to make sure that we we have a garbage sale ledger that
we've created and unfortunately I was not able to to monitor those but those all those receipts those payments or were received by the the water clerk and the city clerk and so we're we've implemented because of in internal control to make sure that we're monitoring and making sure those deposits are being made go right ahead you recognize her I think you
Speaker 105
40:21
may be asking the same one I'm gonna you go ahead first simply because we have so
Representative Carol Dalby
Unverified
40:29
much I hate to interrupt number one Mr Mayor what happened to the eleventhth where's the $11,878 and that that
Speaker 174
40:37
that you know after we actually met with our with our auditor and then they those
Representative Rick Beck
Unverified
40:43
was basically what was said by those the clerk and the and the city city clerk and the water clerk apparently those those funds were supposedly deposited we we you know tried to track it with with the auditors and they were not able to come up
with those it go into somebody's pocket of course now that I'm not I'm not certain of course you know the the water clerk city clerk makes out receive those payments and makes all those deposits I understand but my
Representative Carol Dalby
Unverified
41:16
question is if you making those deposits if if they were being made they were going into some account and you couldn't find that money anywhere because they they were supposed to have been deposited into the general fund
OK Mayor I have a question about the garbage bags I assume that this means the city is providing residents with a garbage bag rather than one of these roller type dumpster things. Am I just
Speaker 180
41:45
assuming these are actually bags comes in a box of fi0 where where
Representative Rick Beck
Unverified
41:50
we actually purchased those from the county and then individuals come in and purchase a box of those bags and that they're sold like at $9 a box anybody ever heard of something
Chair
Unverified
42:03
like this? I mean I'm not former mayorpresentative Jean you're recognized my name was chairman mayor of how long have you been mayor this this is
Speaker 186
42:15
year 2424 the clerk's at the water office they are taking this money are they still there yes and and I actually you know brought that to the attention of
Representative Rick Beck
Unverified
42:28
the auditor and they said that you know basically don't take any action
until we get through with this report and this presented
Speaker 185
42:37
to the council and and so they've been there the the four or five years that
Representative Lane Jean
Unverified
42:44
y'all been selling these garbage bags and we can't find the money yet the employees are still there I think the the city the citizens are strong deserve better than this this is shameful. it really is and
I just when when people are taking money it had to be taken somewhere it just I mean it's not in an account somebodydy pocketed this money what it looks like consequences need to happen because I'm I'm very familiar with strong used to be in the logging business and years ago we went to cross it whenross it was booming in the paper thing so I've stopped there at the convenience store and a lot
of good people and strong but anyway they deserve better than this and and we'll just we'll get on to the to the other stuff but I think we need to take this more seriously than what it seems the city ofrong is doing on on the financial part for their
citizens thank you Representative G Representative beck you recognized thank
Representative Rick Beck
Unverified
43:59
you my question is related to these the dumpster rentals that were paid on behalf of
five private businesses so explain to me exact it says that the payments were not made on behalf of the and it says that we'll implement a plan to transfer the past fees collected by the city water fund to the solid waste fund so it seems like a that may be not understanding it but it's it seems like it's a private business that received
free rental and and the city is making up for it by transferring between what appears to be two city accounts where are the private businesses
paying those private businesses they they actually have you know on on the water bills and they're they're they were currently you know just past practice they were build on their water bill for the dumpsters that the county actually picks up and and and some doing the land those payments you know
comes out of the on their water bill instead of actually being billed directly from the county we we have correct contact the county and got that corrected alright so now understand.
Speaker 193
45:21
thank you. OK. other questions Mayor, I'm still
back on this sale garbage bags if it were
you know5600 dollars and they say ok when you come out over 11 almost $12,000
for sale of garbage bags. I I mean I'm sorry that just didn't pass the smell test with me. can you elaborate
Speaker 168
45:47
a little bit more about that that's a lot of garbage bags
Representative Rick Beck
Unverified
45:52
for a small town. we'll if if you look at it it goes back from the report from January2022. through throughoctober 2025. and apparently those those payments for those bags were being received and of course I I you know periodically I check the actual
deposit books and of course those deposit books you know they're they're putting the they were putting the receipts in the books but the actual deposits were were not
Speaker 170
46:21
being made and so it was just just an oversight so they were counting for the
Speaker 168
46:26
deposits they just weren't making the deposit is that what you're telling me that's a major red flag I
would think. and other committee members have a question
Speaker 196
46:41
oh come onpresentativealubby you can help me on this we're
Speaker 168
46:47
calculating over here that is what we're calculating that's that's but again and then mayor please do not take offense of what I'm saying
that's an awful lot of garbage bags for a small town and I, you know if they're you can see what we're concerned about is that the money went somewhere and it went somewhere it wasn't supposed to and of course it's been re referred to the prosecutor
and the attorney general so they've got a lot more resources to to look at that than we do but but I'm I'm concerned for you and your
Representative Rick Beck
Unverified
47:20
town over that and it certainly you know I am as well because those you know those those those funds of course that you know with with with myself not being there every day or during this period because of traveling back and forth to LittleRock to to school that that was just an oversight of internal control not monitoring cause of course I I you know
did check you know the the actual payments I mean the receipts and it appeared that that that you know they were receiving the money but it but the the clerk was not apparently depositing it OK Representative Rye
Speaker 202
47:54
thank you Mr Chairman.ir let me ask you
Representative Johnny Rye
Unverified
47:59
this just a question that's not quite in line with what we were just speaking about what how much do those bags cost they're they're $9 per box and that comes in
it's it sounds you can buy 200 of those for $19 but these are
Speaker 170
48:21
really you know commercial really you know strong heavy duty bags yes ok thank you. OK. did
Speaker 204
48:27
you have another question Representative Doby I do Mrir excuse me Mr
Representative Carol Dalby
Unverified
48:34
Mayor on page se on the finding it talks about funds deposited into the wrong bank accounts and then when you read
all the way through that particular deal you're running a deficit fund balance one year of $10,465 and then and another deficit fund balance of nearly $95,000 is 92,226 and I mean I'm just at a loss of words how this doesn't start raising a red flag to you and the other city council members that you're
running deficits can you explain to me why you can't get your house in order on this I mean that's a lot of money I know where strong is. I've been through strong that's a this is a lot of money for a small town and can you explain to me why the accounting was so poor that y'all are running deficits it looks like you're robbing Peter to pay Paul. can you please explain something to me because I'm at a loss at how any town can run
Representative Rick Beck
Unverified
49:48
like that yes though now those balances now I would think those balances had to come from back in maybe 2015 or 16 we had a change of city clerk and then for maybe a year and a half those those deposits from the solid waste weren't transferred to general fund or vice versa from general fund to solid waste and those have just carried because you know those those when they come from the state at
list it doesn't it doesn't specify that those are are from the go to solid waste and so they were left in general fund and therefore that that's that's not been transferred just that the city from that point just did not have the resources in that general fund to put those back but that that's not a recent t those funds were were back
Representative Carol Dalby
Unverified
50:45
in probably516 or 17 they understand
and appreciate your response but these are
findings that have been previously reported and so it appears to me that these were reported this has happened before and nothing was done now it's happened again and so is it going to happen again next year and the next year I mean at some point in time this would have I can't imagine I guess my question is why didn't it catch your attention the first time and now we are at repeat findings of the very same issue
can you explain to me why you're letting it ride? you think
it'll just go away with I mean we're not going to go away in this committee right at this time
Representative Rick Beck
Unverified
51:32
I mean the the the issue has been that there were just not resources in the after that those were not transferred those was just not resources in the general fund to actually to to to transfer those funds back so we would have a plan to at at our next meeting to to go ahead and address that at least start a process of trying to get a certain amount of those funds
transferred monthly back to the solidwas OKprepresentative
Speaker 204
52:00
Bryan you have a question again sir thank you Mr Chairman yes sir on poach
Representative Johnny Rye
Unverified
52:06
page se internal revenue looks like you got behind in paying them what was actually being pulled out of people's checks have you
Representative Rick Beck
Unverified
52:16
got that straightened out? yes sir in 2024 we we hired a CPA firm immigrants roger and so they're they're
doing that and we haven't had any of those penalties or late payments since then. thank you
Speaker 221
52:30
sir thank you Mr Chairman any other questions I'm not quite sure
what to do other than I guess we filed the report and mayyor y'all y'all got to straighten this up. I mean you know it's what make a one time mistake for a relatively small amount of money you know we're ok we know you can work it out but but you got to straighten
this out and if you need to get help from our friends over there with the municipal league they maybe can help you get that
Representative Rick Beck
Unverified
53:02
done yes sir and and we we'll and we're certain that we worked with the municipal league we tend the municipal league meetings and also we we have reached out to our attorney we did have a city attorney and of course they they moved he moved to
Speaker 170
53:16
tobinton but we're in the process of getting or retaining another city attorney. I think that'd be a great idea Representative genean
Representative Lane Jean
Unverified
53:26
this is not in the same vein as what we've done before with the 60 day clock they haven't got that far yet or
what that's a staff question we're not there yet we're not there yet. Well was should we defer this
report then would say defer it because this hold on just a secondpresentative I understand that the 24 and25 will be done soon. So I think it would be in order without
objection we will defer these reports because mayor
Representative Lane Jean
Unverified
53:59
we've got to get somebody's attention this this is this is the city ofrong's taxpayer money yes sir that that's that's missing and and they deserve better than that thank you without objection this will be
deferred to to the March meeting which means you might want to come back and give us a progress report mayor
all right thank you. where are we now Missaso excuse me ok moving on to page 8
Speaker 10
54:30
there are 13 reports that are being referred to the prosecuting attorney and the attorney general first as an investigative report on the Faulner County Fair association a review of selected transactions for the period January123 through December31 of24 and we have Micchelee Aley here. thank you it's ashley you
Speaker 105
54:49
recognized be careful that's my hometowny you know this report is issued in response to
Representative Nicole Clowney
Unverified
54:56
requests from the 20th judicial district prosecuting attorney for audit
to review selected transactions of the Faulkner County Fair and livestock exposition. Our review covered the period January 1 of 23 through December31st of 24. the objectives of the review were to determine if revenue was properly deposited determine the selected disbursements for proper purposes and assess internal controls for adequacy. Faultner County Fair and livestock is a nonprofit corporation that sponsors the annual Faulkner County Fair. is governed by a fourmember executive board of directors and
funding consists primarily of fair proceeds and some funding from the state and the county results of our review is that staff confirmed that the revenues obtained from the state and the county were properly deposited into bank accounts revenue from the sale of carnival ride tickets, arm bands and parking fees were not deposited daily and deposits made exceeded total revenues reflected on their records. However, records for proceeds from Boothreynolds ad sales,
food vendors, livestock entry fees, camping fees etc. were not provided. thereforere audit staff was unable to determine the total amount of revenue that should have been deposited. Review of selected disbursements revealed questionable disbursements totalling 21,741.8, a little over $8100 in undocumented or inadequately documented cash withdrawals and 2300 in undocumented payments to individuals and vendors there was also $10,650 for
donations and668 dollars for flowers at the fair and livestock is a nonprofit corporation however, since public and private funds were commingled, these disbursements appear to be in conflict with Arkansas constitution as interpreted by the attorney general. In addition, fair and the fair and livestock paid carnival vendor paid the carnival vendor excuse me $100,000 in2023 and $150,000 in2024 in cash and didn't adequately document those
payments. However, our staff was able to confirm with the carnival vendor that all cash payments were received. our review identified internal control deficiencies that we addressed with the board president who indicated these matters would be corrected and that the board will provide better fiscal oversight in the future. This report has been forwarded to the 20th Judicial District prosecuting attorney and
the attorney general. yous ashley. any questions Representative rye
Representative Johnny Rye
Unverified
57:47
these little fairs across our our state they they're barely making it and and that's a it's a pretty good
Speaker 238
57:54
size this is conway this isway big fail well it's
Representative Johnny Rye
Unverified
57:57
important it's it's important and and you know when you mess up this kind of money this can this can have an impact on that fire and a lot and I'll tell y'all our little our fires are are having a hard time as it is
so I believe that we need to be
serious about this thank y'all thank you Representativeright. let me let me comment full disclosure I spoke with the chairman of their board and he explained some of the accounting mistakes that they made the commingling of the of the the the private funds and generally that's donations that are made for prizes correct me if I'm wrong on any of this Micchelle. but I don't think the net result was anything going where we're
concerned that it shouldn't have gone but one of the things he mentioned is they were cited for daily deposit wasn't made every day of the farewell the they made the deposit on Saturday but it wasn't posted till Monday so that shows up as you were late but I don't hopefully we can recognize that that kind of thing is not the same as not posting in a timely manner but Representative Wright, your point is very well taken and
we've got to to stay on top of
Representative Rick Beck
Unverified
59:19
this p re s ent ative genean and I don't guess anybody with affairs here is it I don't believe so is Mr. Jones here well
Speaker 244
59:32
this is this is you Mr Chairer staff isn't it unusual to
Representative Lane Jean
Unverified
59:38
pay these carnival rides in cash 100,000 and $150,000 in cash not a not a check that that's a good
question that's maybe is that ashley is that a
violation by hang that normal practice for fairs explanation we were given is that
Speaker 247
59:55
the carnival closes up on a Saturday night and they are wanting their payment on Sunday and then get out of dodge and they get out and
Speaker 244
1:00:06
they make deposits all week and they could
Representative Lane Jean
Unverified
1:00:09
they could have the money I don't know that's that don't pass the smell test very good point sir Any anyway
Speaker 204
1:00:19
p re s ent ative Bry you're recognized you know y'all one thing that really worries me
Representative Johnny Rye
Unverified
1:00:26
about this we have a lot of children you know teenagers that are involved with you know judgedging cows judging hawks things it's agriculture and boy you know when you go messing with something like this right here
this is affecting our young folks so I don't know that this worries me this is why we refer things to
the local prosecutor and the attorney general. any other questions or comments about theartner County fair and livestock exposition we filed can we file this one? OK.
Speaker 81
1:01:03
without objection we'll file this report and we'll
see what the Ag and the prosecutors sir I have both of them on speed dial if we have any more questions. right, please proceed Masstle thank you Mrir.
Speaker 10
1:01:20
So we're still in reports that are referred to the prosecuting attorney and attorney general. We are on page 11 the city of Brooklyn for the year ending December31st,2024. His finding is under the mayor the city discovered that an employee's payroll direct deposit totaling782 dollars had been fraudulently diverted to another bank account after the employee contacted the city about not receiving their direct deposit. It was determined that the city made the direct deposit change after receiving an email
request from what appeared to be the employee's email account without properly verifying the authenticity of the change request. The financial institution was notified however the city was unable to recover the funds there are no questions we recommend we file this report in a case like that does the the bank have
some kind of culpability or or you mean you you usually in a
case like that banks make it good and then they've got an insurance policy
to cover that does anybody have any knowledge or or comment about that but you could see how I mean this is a fraud thing someoneone got that person's name and and said hey I'm John Doe and I want you to transfer
Speaker 168
1:02:38
my my direct deposit from from that bank to this bank and it that was obviously fraudulent so this appears to be this was
Representative Carol Dalby
Unverified
1:02:45
a city issue the city city era the city did it it wasn't directed to the bank it was the
somebody that someone at the city perhaps thought that was really that person asking for it that's right so it was a city era the city was defrauded not the bank. OK. and I understandresumealby I just if if y'all have had a a bank fraud thing I mean like I had my debit card hacked and all that I mean you you see how there's the crooks are coming up with more and more better ways to cheat you so I just umm I guess I'm a little sympathetic but that doesn't mean we don't
need to follow up on it any questions if not we'll file this report right here yes
Speaker 10
1:03:35
sir thank you Mr Cha. if we can skip to page 13 we have the city of mineral Springs December31st,24 and23 finding is under the mayor and recorder treasurer as of report date Arkansas legislative audit and law enforcement agency are investigating certain financial transactions of the city that
will be included in a subsequent report in noncompliance with Arkansas constitution, the city transferred the balance of the cemetery fund trolling over 92,000 to the mineral springs cemetery a nonprofit organization without a contract for services. The city made loans to employees totalling3950 and 1250 in2024 and23 respectively and allowed employees to repay the city through subsequent payroll deductions at December31st24
and23 unpaid loans to the employee's totaled $241,000 respectively of these loans 1850 and250 were paid from water and sewer funds in 24 and23 respectively. the remaining portions were paid from the city accounts for the year ended December31st,24 we noted overpayments to the mayor totaling $1200 and a city council members totalling $1800
or300 dollars each due to an extra payroll check being issued in 2024. a review of travel disbursements revealed that supporting documentation was not maintained for disbursements of720 dollars and 1013 in24 and23dditionally meal reimbursements of $280 were paid for daily nonovernight travel in 2024. if there are no questions, staff recommends we file. any questions
Speaker 81
1:05:28
without objection file the report come on folks
Speaker 196
1:05:39
if you want a question I'll let you talk. we're
Representative Carol Dalby
Unverified
1:05:44
just talking amongst ourselves we just shake our heads Mr Chair that that cities we we see this all we see this a lot we see the same thing
Speaker 166
1:05:52
over and over again you're right yes
Representative Carol Dalby
Unverified
1:05:55
ma'am and it's just frustrating it is frustrating so I think
that's whatpresentative Stewa and I were frustrated understand and someone asked what do
we do in this committee and that so we tell mayors and county judges that you can't take your road turn back and stick it in your
general fund and spend it I mean I know that's a a a silly thing to say but that's we do an awful lot of that as you will know and
you can't loan money you're not a bank that's right and and some of this is as you pointed out it's not just a good idea it's in the constitution
they're not supposed to do that so well anyone that's watching on the live stream just know
that we're we're just trying to enforce those constitutional provisions.
Speaker 10
1:06:40
OK, please proceeds you continuing on page 14, the town of rondo for the year ended December31st,2024. the findings are under the mayor and the treasurer adequate supporting documentation was not provided for tested disbursements of $2,169 in noncompliance with Arkansas
code716 were fuel purchases that according to the mayor and recorder treasurer were partially placed in their personal vehicles without a documented business purpose.1453 dollars in undocumented reimbursements were to the recorder treasurer without supporting documentation, a business purpose of these expenditures could not be determined. This is a repeat finding while citing fixed assets we were unable to locate three of the four computers on their fixed asset listing Additionally we were unable to
match the one computer the town had in its custody to the listing due to inadequate serial numbers on the listing in noncompliance with code Town officials were unable to provide an explanation for the missing computers we have with us the recorder treasure today. how the mayor was unable to attend due to illness with the quarter treasure come forward thank you ma'am. come to
the end of the table and make sure your microphone's on and identify yourself for the
Robin Moppet-Bowen
Unverified
1:08:02
record. my name is obinoffettowen. I'm from I'm a CRT there at Rondo can you respond
Speaker 166
1:08:19
to all this Mboer? Yes, we'll start with
Speaker 268
1:08:23
the last thing that she had mentioned we are located the obsolete computer. it was in a storage
that had been in there since I guess 23 it was my error that I didn't take it off the inventory list. I didn't know I was supposed to but that had already been obsolated but they didn't tell anybody where it was did you secure the hard
Speaker 271
1:08:48
drive or any data it was the monitor is all
Speaker 266
1:08:55
that was there that's fine right go ahead
Speaker 268
1:08:57
I'm sorry and the other two were laptops and the serial numbers are printed and that was in a box
that and all the I'm just shaking I'm sorry and all the information that would have been a repeat was it a box for our receipts and I got all those done for this finding I believe the auditor became ill and they were in the trunk of her car but anyway I got all those done up and matched them up so I think we're pretty much back up to par on everything
so you found the computer it was just it was obsolete and it
Speaker 268
1:09:42
was like in a closet it was in a storage building didn't know where it was when one of the auditors came of course on our sightings and she asked me about it because it was supposed to be in the fire department. Well we have a a gentleman that's been there for umpteen years. he knows everything but he couldn't remember he didn't remember anything about the computer and they had moved it into a storage because it was obsolete any questions let me know
Representative Johnny Rye
Unverified
1:10:10
Representative Ry yes sir thank you Mr Chairman. ma'am this716 dollars for fuel purposes for personal vehicles can you explain that one? Yes when I came on
Speaker 268
1:10:22
in 2 well the end of 23 I suppose the car there was a charge card they're at the same place that they got for the city diesel and for their gasoline for the tractors and the mowers
to maintain you know the the the grounds and so we had used the charge card. The mayor used the charge card, I used the charge card for our fuel. We didn't know we had come on no one told us there was no policy. I didn't know that was not the way they had done it. The committee didn't change it so that's something that I was I mean I had been in the process of getting done as a policy where that fuel would not be used there we had the receipts for them but it was in that's how it was used
Representative Johnny Rye
Unverified
1:11:11
follow up and go right ahead yes ma'am but it says for personal vehicles
Speaker 268
1:11:16
that's what I'm talking about we don't have personal vehicles that we can drive. we have to use our own vehicles yes ma'am but I mean where are we talking about driving to? have to go to Stuttgart two times a month is where our bank is and we're in Rondo that's where it's always been established and it hasn't been moved and I haven't changed that and or it's not up to me to
Speaker 276
1:11:42
change that committee to change it thank
Speaker 277
1:11:46
you ma'am thank you Mr Chairman. OK. other questions OK if everyone agrees we
can file this one or we can defer and have the mayor come back if you want that's what's the will of the committee motion by Representativealby their second Representative Beck in discussion all in favor say aye opposed OK we file. thank you ma'am for coming you
Speaker 10
1:12:16
ex Misss Gasops continuing on page 15 the city of Waldo for the year's ending December31st,24 and23. under the mayor and recorder treasurer the city issued salary overpayments of $2000 to the mayor in both 24 and23 in noncompliance with Arkansas code, the approved salary was 24,000 annually. however biweekly payments of $1000 were made resulting in two extra payments each year
Speaker 259
1:12:48
there are no questions staff recommends we file. any
questions I was just thinking if you as many of you know our state has gone from from 26 from 24 payments a year 26 payments a year so if I just'm I guess I'm sympathetic because of that but at least it's easy to know that when we get paid on the same every two weeks on on a Wednesday I get tend to get my check so OKok without objection it'll be filed
Speaker 30
1:13:20
please proceed ma'am. continuing on page 15 Columbia County
Speaker 10
1:13:25
for the year ending December31st,2024. under the county judge the county paid $9600 to an employee for floodplain management services using a contract for services however, an authorizing ordinance was not enacted as required by code. if there are no questions, staff recommends we file. any questions Representativeiman you got a question
I guess he doesn't. I I was just giving you the cur if you're gonna insist well it it's your county I just wanted to give you an opportunity to comment nobodybody from
Representative Lane Jean
Unverified
1:13:58
Columbia County I don't see here right? sir I don't believe so. Who was the floodplain manager? Did y'all have any do not have that name in front of me. Well if you can privately get it to me
Speaker 258
1:14:09
I'd like it. sir thank you thank you any other questions OK no more further questions without objection we'll file that one.
Speaker 284
1:14:21
please proceed ma'am. righty on page six the next six reports are private water sewer ports the
Speaker 10
1:14:28
first two antoine Waterystem for the year ending December31st,24 and23 day they received information for 24 and23 was not available. This has been turned over to the PA and prosecuting it or sorry prosecuting attorney attorney general and staff recommends we file these reports that
Speaker 285
1:14:47
objection there file Alllaine municipal Waterworks
Speaker 284
1:14:54
December31st,2023. we found that proper records were not
Speaker 10
1:14:57
kept and there was no cash receipts journal provided to compare to the deposits per the proof of cash. In addition, customer payments were not able to be traced to the accounts receivable ledger and to deposit in billing documents due to lack of proper documentation. we found that proper records were not kept for customer billings and adjustments we've received appropriate responses and staff recommends we file these. without objection that we file
Speaker 284
1:15:26
the next three Thornton Waterorks June30th,2024. the following deposits do not match the total of the corresponding daily receipt
Speaker 10
1:15:34
report is total about5145 we have not received a response but we did reach out to the CPpa firm as we did previously to gather additional information. these have been turned over to the prosecuting attorney and attorney general and we recommend we defer without objection these will be deferred
Van Buren Countyublic Water Authority cash receipts were not prepared for six customer payments but the cash was included in the tin deposits tested the total of cash payments not included in the cash receipts was over619 dollars in the total deposits tested were over 12,000. Public water authority did not have procedures in place for approval of customer adjustments during 2024. we have not received responses and we recommend we defer this report without objection it'll be
deferred Wessela Water Users association for the year ending December31st24. we noted 14 debit card transactions initiated by an employee or not adequately documented we have not received responses and staff recommends we defer this report. without objection it'll be deferred on page 17 we have7 reports with a repeat findings
Speaker 284
1:16:59
versus the city of Carlisle for the year ending December31st,2024. under the mayor and clerk treasurer Arkansas code requires management to maintain financial records. the financial records contained omissions and errors that are considered material
Speaker 10
1:17:15
as specified below. The general Fundinancial records contain misstatements in assets liabilities, fund balance, revenues expenditures and note disclosures and the amounts of
approximately 235,115,020,00298,302, and3 66000 respectively due to posting errors and unrecorded transactions. The other funds in the aggregate financial records contain misstatements in assets revenues expenditures and no disclosures and the amounts of approximately 163,112,00,59, and 172,000 respectively due to posting errors and omissions. This is a repeat finding we have
the clerk treasurer with us here today would you come forward
ma'am or is she the mayor don't you join our mayor? we may have questions for both of you. Please make yourselves comfortable and introduce yourself for the record and you might want to hit the button and turn the microphone
Speaker 291
1:18:20
on later I'missy Ingle. I'm the clerk treasurer at the city
Speaker 293
1:18:24
of Carlos. and I'm John Plafkin. I've been mayor since this January12025.
Speaker 262
1:18:30
thank you mayor you want to go first the
Speaker 293
1:18:37
findings are absolutely repeat from 24 but they actually go back even further to 2018 we've had a previous treasurer clerk treasurer who was there 2018 left for because of a disagreement and and then we hired her
assistant as the treasurer from 2018 through 2022 and then the mayor at that time hired the previous clerk back mistakes continued that's been a problem is s y was hired in May of 23 to assist the the present treasurer at that time and was given no training
that treasurer left in december of 23 or no it was May of 23 just shortly thereafter andissy became the treasurer at that point in time with no trailer so our 2423 audit was negligent of of these same sightings but may I just say they were in the hundreds of thousands closer to millions at that point in time because of previous findings that dated back to 2018
Speaker 105
1:20:05
so mayor you're saying that those concerning numbers I'm looking at have actually reduced drastically 15 times well I mean it's still concerning that's a lot of money getting six figures in a small town on the other hand it beats being in the seven figure that's correct butissy has taken this
Speaker 293
1:20:22
over and has had training with municipal league has gotten a lot of her hours already completed through that. She has gotten with her the CsA software y'all were talking about that was part of our problem prior to that I'd
been on the board and and we were trying to initiate getting new software the software we had was antiquated and I was pretty instrumental in in asking us to get to this new CSA software it just didn't happen until the that that treasurer and the mayor left we have CSH software nowissy has been with the president of the company talking to him getting training she is totally cleaned everything up and these are the only findings we have. there were other
findings prior to this of course it looks like you're making progress we have made significant progress. this is the only finding we had. there were several before that but this is the only finding we had and it is being corrected I assure you and I'm doing my best to to stay on top of it andissy has been on top of it and I want to assure the the committee that our 25 audit will be cleaned up as best as as we can
but I think we'll beat pretty well on on target to get get everything correct I know our auditors that came in and they said we can't believe how awesome this books now compared to what it had been previous years so I think they recognize that we're on track I know I'm going to stay on track andissy is dedicated to to continue doing that as well apologize for us having to be presented and waste your time this today but we are we are
working on it and we're trying to get this all taken
that's about as good a response as we could accept and I want to thank you for seeing these problems that you're willing to step forward and serve in that capacity so both of you thank you for that any other questions for the mayor or the the recorder treasure If not should we go ahead can we
go ahead and file? OK then without objection this will be filed.
thank you for coming thank you please proceed Msasman you
Speaker 10
1:22:46
moving on to the bottom of page 17, the town ofiggers for the year ended December31st,2024. the mayor called he is unable to attend also due to sickness and staff recommends we defer this report
Speaker 1
1:23:02
without objection it'll be deferred let's continue
Speaker 297
1:23:06
OK pages 18 the city of Cato Valley Caddo
Speaker 284
1:23:11
I knew I was gonna get that back room sorry December31st,2024
Speaker 10
1:23:19
under the recorder treasure the following CDs and interests were not receded and recorded in the financial statements and noncompliance with code. The general fund219,000 CDs and46,000 in interest street fine57,000 in CDs and over 10,000 in interest. the fire department fined over63,000 CDs and 18,000 in interest and the advertising and promotion
commission of 250,000 dollarscd this is a repeat finding and we have the recorder treasurer here today. come forward ma'am. I'm a little surprised to
see that Caddo Valley hasn an A and p commission but I know you got thegrey lake right next door we do and we have the Caddo River also a big
Speaker 302
1:24:02
draw for the area we're lucky to have both of them yes ma'am you're recognized please introduce
yourself for the record. I'm Debbie robertson and I'm recorder
Speaker 303
1:24:11
treasurer with the city of Cada Valley so this
was the second finding for us on our CDs we have paid off all of our loans in the last few years and we've been able to put some Cd money away in each account it's a second finding only because of the timing issue. We purchased the CDs inoctober of2022 when we were audited in on those CDs in November of 23 we did not receive that money because we were on a cash accounting system and that does not require us to
rece Cd money until it's obtained by us my when it's cashed yes sir my audit or and I do not agree on that and so I tried to impress upon her that that is not the type of accounting system that we're using we're not using an accrual system because I don't have the authority of the city council which would take either an ordinance or a yearly resolution for us to do that so we stick with what the Arkansasccounty municipal code
says and that that Cd interest is only receded upon maturity. She did write us up for that that report went into effect well she wrote a I'm sorry she wrote us up at the end of the year but a whole year had gone by of that Cd drawn that same interest by the time she caught it so I was not only two months behind for the year that she res that she cited that the next year I also it has already gone by yes sir it had already gone
by so it resulted in two I still to this day feel like she is in error holding us to a standard of a cruel interest that that is not what our city is allowed to do under Arkansas municipal countunting code let's let's talk
Speaker 266
1:26:03
about that a minute we got a lot of smart accountants here including our legislative auditors sitting
in the back row a speech pathologist and just just want y'all somebody I'm I'm looking I don't care
Kevin you pick who you want or come up yourself or whatever but Id I just like I think our lady here has a good question. I just want to hear even if it's not a definitive answer
just some discussion and identify yourself for the
Speaker 123
1:26:34
record obviously Kevin White legislative auditor, I will
Speaker 308
1:26:36
defer on this one to my city county experts of which I
Speaker 309
1:26:39
have in the room Joe Archer is going to be my best man to answer this question he
Speaker 196
1:26:45
is so let's you recognized Mr. Arker Joe Archer's staff
Speaker 310
1:26:51
mayor it appears that the all the ballots is recorded because that's what the finding is the balances
Speaker 303
1:26:57
aren't there. She not only wanted us to the first year she said just receipt the interest and I said I do not have journals to receipt those in she said go go get some dummy receipt books and receipt them and I said and you're telling me that's all I have to do and you will be satisfied with that she said yes this last year she came back and wrote me up and she said you res you didn't recede it but you receipted it but you did not
put it on your financial statement and I said I was not told to put on a financial statement. I would have, I would have argued that account that question even harder because that skews all of my interest that interest is not earned and is not the cities until that Cd matures oncece it matures if we cash it in then I make a receipt for the principal and a receipt for the interest and I put it back into the respective account that it came out of if she wanted me
to place that earned interest on my financial statement each month and it won't reconcile to my bank activity it skews my results and that's not that's not to me correct reporting and I tried to explain that to her if we use no crual system or even a modified accrual system that would be appropriate but we do not have an ordinance nor a resolution nor do my city council members want us to do that they want accurate numbers and we're on a as we
receive cash and as we spend cash system well I think we're we're
Speaker 312
1:28:31
splitting hairs over available funds and funds of the city.vailable funds you are correct. those funds wouldn't be wouldn't be available for y'all to spend because
Speaker 314
1:28:40
they're tied up in a Cd that hadn't matured yet but they are funds of the city that needs to be recognized as
Speaker 315
1:28:47
far as the the fund the fund balance and the assets of the city we would not mind tracking
Speaker 303
1:28:55
them but that's just informational that has no bearing on my financial statement which it renders my accounts wrong and based on Arkansas municipal code it says to I am Im to rece money when it's received that means when
that Cd matures yes ma'am assume received means from an outside source not something that is a
in this case a Cd that you you the city already owns and was reseeded
Speaker 196
1:29:25
when that revenue's there and can we clarify that a little bit yes Mr Chair the the funds
Speaker 314
1:29:32
that I mean for example let's say that it's a yearlongcd that was purchased on Ju June30th which means it wouldn't wouldn't mature till the next June30th so it december31st more than likely the the bank is well more likely the bank is notified you on a quarterly basis that it is accrued two interest payments at the end of September and the end of December. Those two would
be recognizable and recordable but let's say it was that July and then it would be October and January theoctober interest payment would be recordable and and recognizable but the one in February would not because it wouldn't be so those
Speaker 315
1:30:09
two months would not be because they hadn't notified you yet my question to you would
Speaker 303
1:30:15
be if if I cashed that in early and was penalized it skews all the interest at that point that is inaccurate reporting you post
Speaker 314
1:30:26
the expenditure for the penalty it's a re out on a cash basis that penalty would be recognized on the day you cashed it
Speaker 315
1:30:34
in which would be midyear whenever and that would be an expense that would be recognizable for
Speaker 303
1:30:41
that action you took. so so my question to you would be based on a cash journal system it's permissible and based on Arkansas municipal county tocet interest on Cds
that I have not earned yet and
Speaker 234
1:30:58
apply it to my financial statements on each month Once you
Speaker 314
1:31:02
get a notice from the bank that says you've earned it, yes so if it's a quarterly posting to that Cd then yes if it's not been earned yet let's say it's a three month quarter November and December would not be postable because it wouldn't be earned until the end of January for that quarter but the one received for the quarters during the year
Speaker 303
1:31:23
ok then I only have one current
Cd that earn that will report quarterly I had to ask them to figure and send me monthly interest but only one Cd out of 10 is that right? probably have 10 CDs reported quarterly all the rest were annual if if they do not post it or there's not
Speaker 314
1:31:44
something that the bank provided you then you are correct. but if they provide you with a notice or a a cruel statement then it needs to be receipted and posted in that year. but if they just
they'd ignore you for the entire year until October of the next year then you're correct that is exactly I have
Speaker 303
1:32:04
one Cd and while that one pays quarterly I have no idea the rest or they they report quarterly I
Speaker 317
1:32:09
can't say they pay quarterly they report quarterly statements that you provided us included the principal at the
Speaker 314
1:32:16
end of the year of all these CDs they were in there as as cash cash on there Ask me that again'm sorry the principal you went and bought a Cd in June for
$250,000. You have a ledger that says we have $250,000 worth of of money in the bank and that's in your financial statements because that's the I think that's part of the problem.ter is the only part of this you you're not reflecting the principle as well as my understanding and the principal has to be under if it's in the in your name in the bank the principal of these CDs need to be included on your financial statements or the reader of your financial statements aren't getting the full picture of what the city of Caddo Valley has an assets and let me introduce you
Speaker 303
1:33:01
this is Jamie henson and she's my administrative assistant so she does the actual paperwork for for us
Representative Julie Mayberry
Unverified
1:33:11
microphone I apologize I just started working for Caddo Valley in September 1 died no one died no one died. I just came to work there and three weeks later I met our auditor so I apologize for that we have I have gone in and I have
entered with I requested the bank to give us monthly amounts of dollar amounts and I have gone in and and it spent a lot of time making sure that every month ' s interest was placed into our accounts and as she said we are when we report that it's saying we have that many actively in we'll we'll just say in our general fund and our general fund we have two CDs we have a savings account and we have a
checking account. when we run our monthly report all that money goes into our general fund report. The Cd money is not in our active bank account that we can access and that's what we're arguing that that's skewing our out now I can run a report that says there's $250,000 in this one. Here's how much receipt how much was receipted in and here's your balance currently. I can run a
Speaker 337
1:34:33
report now that says that prior to that we were just writing them in a receipt book. I
Speaker 323
1:34:38
think the issue is that the the principal the main issue is that the
Speaker 315
1:34:42
principal value of these CDs were not reflected as assets of the city and the financial statements that we've got is that correct that's probably true but I'm not for
Speaker 303
1:34:51
sure how to go about doing that when that money is not in that fund anymore it's sitting in a Cd in another bank you keep a separate
Speaker 312
1:34:59
journal that says investments and then we can combine those together for you on your when we
combine your financial statements but you know that that is
Speaker 314
1:35:07
the the reader of a financial statement for the city of cattle Valley needs to know that you've got 2300 $1000 in reserves or something there because the financial statements we were getting did not reflect that money as being and it's again it's back the difference between available and actually belonging to the city. you're operating on availability from what I understand but it's the it's the actual money that is in the custody of the the city at that thirty1st may not be available
it may be restricted because the bank's got a restriction on it but it still needs to be reflected in your financial statements is that you know you can you can name it Cd with the maturity date so the so for y'all's purposes you know it's not readily available but for any lending institution or someone that's looking at y'all's fund ballots they would know that you had that money and it is an asset of
Speaker 201
1:35:59
the city so the interest the interest you can post
Speaker 314
1:36:02
it at the end of eachCd where I mean when
it matures or when they post it if they post that Cd quarterly or what that's fine but when they do post it to the Cd it needs to be receed if it's after the year end that's fine but the principle on it
Speaker 340
1:36:21
is very important because those numbers are material enough to skew your financial statements
Speaker 328
1:36:26
so the question on that is because we would like to
Representative Julie Mayberry
Unverified
1:36:29
keep a clean book that shows the Cd interest over here in our current actual what we get every
month over here so can we keep a spreadsheet that says here's how much this Cd cost or how much we put in for the Cd Here's how much interest it's accruing here's our
Speaker 337
1:36:49
current balance is that acceptable to add to our city councils financial statement is fine as long as
Speaker 342
1:36:56
the those HCd is designated to which fund it belongs to. so if you've got
Speaker 314
1:37:01
a general fund Cd and a street fund Cd as long as that ledger indicates general fund Cd and we
can combine the two that is we do that all
the time and have already done that if it were cash in a checking account and those funds. OK thank you both. any other
Representative Stan Berry
Unverified
1:37:23
questions Representativeerry thank you Mr She I I've just like to applaud Caro Valley for having those Cds and having this problem that we just discussed that's what you wanted to hear with they sent the
Speaker 348
1:37:35
letter I thought I had bragging rights
Representative Stan Berry
Unverified
1:37:39
not very many situations that we talk about in here or well let's
just say these two ladies are very forthcoming on information that helps us do our job and I appreciate both of you on this you any questions or any other comments on Caddo Valley? without objection we'll file the report. Thank you for coming.
Speaker 297
1:38:09
Go right ahead Masway thank you Mr. continuing on page 21 the city
Speaker 284
1:38:18
of Hollygrove did the re treasurer Miss Ruthie Foster is she here today?
Speaker 39
1:38:23
she did not sign in she had stated she was coming well then
we will defer this to March. without objection thank you Next on page 22 is prairie
Speaker 284
1:38:40
County for the year ending December31st,2024. the findings under
Speaker 10
1:38:45
the county judge and the county circuit clerk during our recap of the county's 24 budget. the following issues were noted. The final general and road fund amended budgets approved by the uorum Court did not agree with the final budget posted to the appropriations Journal in noncompliance with code roadund expenditures exceeded budgeted appropriations by
155,000 or 8% in noncompliance with code. These are repeat findings and the judge and county circuit clerk are both here. would
y'all please introduce yourselves'm Gayenn Hale
Speaker 354
1:39:24
the circuiting county clerk Lawrence Holloway
Ju OKok and and full disclosure Miss Hale is my very dear friend. so I don't want anyone to think I'm being being overly solicitous but she is a wonderful lady and is my friend so
can y'all please explain what went on here
because this has to do with your actual budget in what was posted and you didn't amend it properly. can y'all
Speaker 356
1:39:53
explain that let me start back a ways to to put this in perspective at the beginning of 24 hode had two mack trucks that had that hauled our gravel and we didn't hear from the mack company so I called them got in touch with them and found that they had no trucks available
Speaker 358
1:40:16
to replace our old ones and they wanted us to sign an extension for the rest of the year which is about 1011 months and I said not without a warranty They later offered us a truck in April and one in June excuse me to these leased trucks police
Speaker 360
1:40:33
purchases that's fine go right ahead. I'm sorry I just want to clarify that thank you anyhow that's we we took that option
Speaker 358
1:40:46
in in let me tell this in January of 24 we had a small or a pretty good little snow ice storm and a pretty good freeze later this caused many of our well travelled roads gravel roads they have soft spots and they got pretty bad in places so we had to we our trucks the old trucks we were still using were breaking down pretty regular so I had to hire some ho houling
done and this the rock request was sort of what we needed was this increasing by the day anyhow hired the har the hired the rock haulers to try to keep up with the demand on the yard and this ran up pretty fast so it so I can't remember May June I saw that I was going to run out of money in in the roadRockarn
so I talked with the auditors about the coming problem and we had a Cd I don't know how much interest is in it but we had a $200,000 Cd or have one in the road it's not budgeted the auditor said when I talked to her that the board would have to cash the Cd to cover that one so when I approached the board about this they would not cash the Cd
when the new maxx came in, I stopped the hired hauling and also at that time we had been given county general which had problems half our half what yeah our half of the sales tax money and so at that particular time when this all popped up I took
Speaker 356
1:42:38
back our sales tax money to go back into the county row and we had paid them about $200,000 a little more
in the last year from 23 to24. so that's how we got to this point they wouldn't cash the Cd so I run over and how could I tell a taxpayer that I had to let them stay stuck in the mud hole or I could not I couldn't help them and that's not what I'm there for we had the money in Cd that could cover the $155,000. so mayor the idea was
that you had the money sitting there but you had to have an action by the court of court to take that and move it over is that correct and they didn't
Speaker 356
1:43:32
want to do that and they didn't want to do it which I didn't want
Speaker 266
1:43:35
to cash a Cd either but that well I mean you do what you have to do you know it's it's like
a little savings account for the road fund and it's still there we it's your money which Mr. Archer made clear you know it it's an asset of the county but we got a a a law that says that if they're going to do
something with it they'd have to amend the budget and and recognize that you need to be recognizedpresentative McIlroy you are recognized thank you sir I was
Representative Mark D. McElroy
Unverified
1:44:01
just gonna ask him did y'all try to amend the budget after after the ice storm no well I mean yeah after the ice stole I
Speaker 356
1:44:11
mean after a year you you yeah I'm getting my ears mixed up but the 24 we again I asked them to case the CD if we needed it and so
Representative Mark D. McElroy
Unverified
1:44:26
hit on it Mr Chair that I think if if they amend the budget after they they've exceeded it it would have been
all right I think it just I'm not sure but we can't make JPs do what they they ought to do but you've been a county judges representative McIlroy you know how that all works but I'm that was where I was headed on that is that it it would require that that amendment to the budget and
Speaker 196
1:44:55
maybe we can maybe we can educate them a little bit about how
Speaker 372
1:44:59
that's important also I want to add some of that amount we hadcaliil we have three leases with caterpillar and we had an excavator that had been returned but they were still billing the judge's office for it so yeah I was still getting bills so I don't know who dropped the ball between when the when it was returned to caterpill ar to I don't I don't know so I personally tracked down the head guy of caterpillar which is Allan Gassaway
and I was telling him about the situation and after it was brought to my attention and so he looked into it with his team he said I have to look into it and I was calling him on a daily basis because I couldn't sleep because this is7878,666 dollars 27 cents and I didn't sleep till I recovered all that money so he checked my my story and everything checked out and I received a full refund check for that amount that's when you say
Representative Rick Beck
Unverified
1:45:52
for caterpillar that's is that riggs is that here in littlettleRock and I purchased
Representative Wayne Long
Unverified
1:45:58
its I mean that that was my first purchase of equipment in March of 23 and what yeah I don't but now
Speaker 372
1:46:07
my payroll clerk and myself are watching serial numbers
Speaker 371
1:46:11
before we pay anything so they will not happen again
Speaker 376
1:46:14
because you know you'll do it right any other questions on any other questions for
Speaker 123
1:46:20
the judge and Mshale uhpresentativealby thank you chair and thank y'all for being here
Representative Carol Dalby
Unverified
1:46:30
today. I was doing my best to try to follow mayor what you were saying don't matter
I'm sorry county judge I apologize but I I
kind of got lost and this these findings were noted in two other reports so we're3 years down the road with the same type
of findings. The other was county general and that's been taken care of
Speaker 356
1:47:01
and now we're fine on the road too but this was in the road specifically in road see I was given county general I gave him about half of the of the sales tax and started in 23 and into 24 when my problem here I was running out of money and rolled which was in good shape but it last I gave them over $200,000 so when the my see my money was short in the road I took it back I didn't ask the auditors they might not have liked it but it's just my money
Representative Carol Dalby
Unverified
1:47:32
I took it back Well and I understand but it's not your money and so you have to follow
the rules as set out in the code and you do understand that now is that correct I mean you can't just move things around and there's a reason why it's done and we didn't move anything around well or at least you just said you know you took it from the road fund and that kind of thing so you just have to follow the rules I'm just going by what you just testified to shared sales tax with county
Speaker 356
1:48:05
general out of road for several times several years if they're short we can give them
Representative Carol Dalby
Unverified
1:48:10
money and you understand now that that's not the way
Speaker 356
1:48:15
to do business well that's the way we've done it for years if road if county general needs funds to do to make the year county road has given them sales tax a
Speaker 360
1:48:26
part of it or all of it at times you do understand that
Representative Carol Dalby
Unverified
1:48:30
s a violation of the code aren't I correct?
Representative Rick Beck
Unverified
1:48:38
OK Mr Archer you better get up here. Oh let's gazaway have
Speaker 387
1:48:41
I turn your mic off yeah the auditor
Representative Wayne Long
Unverified
1:48:44
is the one that told me you need to give a hang on just a
Speaker 388
1:48:48
second I'm asking the staff the sales tax monies that he's referring to are general sales tax money so they can be moved moved so it's
Representative Carol Dalby
Unverified
1:48:57
not turn back ok that's where I was hearing two different things and so thank you for letting me know that but you don
' t understand I mean it always ri raises the attention of
those of us who are on this committee when the report says there's been two other previous findings and so then it starts we start wondering about what you know it didn't get corrected the first year didn't get corrected the second year now we're in the thirdrd year so my simple question is are you now in the position to make sure that going forward
everything is done by the booking is
done by what the law says you have to do I may not be
Speaker 356
1:49:47
totally sure of what you're talking about but the auditor told me that I needed to give my sales tax all of
Representative Carol Dalby
Unverified
1:49:56
question is do you understand that there are certain rules and regulations that you have to follow and that you cannot ignore repeated findings and there were three years so that next year if we show next next audit audit
whenever 2425 whatever one y'all are on and we're not hearing three or four months with this is the fourth year of reported findings the same findings I mean it's a lot of money we're trying to make sure we don't do that that's that was my question are you got those guardrails in place because you've heardpresentativeen you know say the taxpayers of prairie County deserve a full and fair accounting of their money. it's
their money it's not our money it's not your money it's their money and so that's all we're after is that the things are done correctly and that's and so that people know and I understandhodes I've lived in Arkansas my entire life. I understand that road's get in bad shape and that you know a county judge you know it goes to the local diner and that's what everybody's asking you about. I understand all of that but even with that being
said there are certain rules and procedures and regulations and the reason why is because we don't want taxpayer money being misused so do I have your word that that is now being corrected and will be done properly thank you thank you Mr chairman
Speaker 277
1:51:31
other questions Representative Rye yes sir I
Representative Johnny Rye
Unverified
1:51:34
think Representative Mark knows more about this part than I do but you can take county generalmon and use it for
county roads but you cannot take county road money and use it transfer to general isn't that rightpresentative right we got a we got a we
Speaker 360
1:51:53
got a little variable here.y'all have a local option sales tax with part of
that being dedicated tohodes so if it's their turn back from state which go of course is our is road money then you're absolutely rightpresentativeright. but if they have it in their when they enacted their sales tax that a portion of that would go toward
roads then it's not necessarily so they they can spend that on roads so it's of course when you get that check it comes to you electronically for road fun it can only be
spent on roads but you can general fund stuff that was specifically outlined in your sales tax ordinance that was passed by the voters you can do that and I think that's the distinction we were talking about here. Am I get am I getting that right mayyor and and yeah that's
that's what we're doing our judge rather I'm sorry yeah ok well and it came up a second ago because oftentimes uhpresentativerie as you know that's that's what we deal with a lot of in here where they're taking road money and spending it in general but in this case this was something from their local their taxpayers voted for this for
part of it to go tohodes be the direction
patch that's that's either spelled out in the ordinance that was passed when they passed the tax or something that's amended by the court court. you're welcome sir. Anything else? any other questions for our friends from Prairie County. OK thank you all for coming. thank you you're very welcome. glad to have you and we try not to be ok well now you can come back you can come back Miss Halell but you have to bring me some bread pudding.
Speaker 285
1:53:56
without objection that will be filed ok reports and
Speaker 284
1:54:04
yes sir thank you Mrir. on page 22 we
Speaker 10
1:54:08
have 10 private reports with findings'm gonna kind of skip around so East Arkansas Regional solid waste Management District we received good responses and staff recommends we file this report without
Speaker 56
1:54:21
objection so word Dover municipal water
Speaker 10
1:54:23
and sewer systemstems we received good
responses and staff also recommends we file this
Speaker 11
1:54:31
report. I have a question on that oneselman and the finding it says deposits in excess of the insured amount
totaled approximately494,000 now that means that they had deposits in in financial institution that exceeded the FDIC limit would the response for that or the the proper response would be that they should have spread
that amongst other institutions insurance at that particular bank either
Speaker 15
1:55:02
one of them would be which you could do either one as
I understand everybody understand why I'm asking that because you get FDIC insurance but it has a cap on the amount and we just want to make sure if taxpayers' money is insured whether they basically pay a premium for an excess or it's like again can generally a lot of people just put it in multiple banks do that. OK. that's fine. Any other questions on Dover
Speaker 7
1:55:30
if not we'll file that report Go right ahead Masway
Speaker 10
1:55:37
thank you. North Jackson County rural Water association on page 23 we have also received responses and we recommend this one
Speaker 284
1:55:47
is filed that objection will be filed the remaining seven reports the agreed upon procedures for central city waterter Department December31st24 Fulton Water Department for December31st,24 Mora water and sewer department
for December 24,23 and22 and21 and the western
Speaker 10
1:56:05
grove water department for December31st23 we did not receive responses and staff recommends we defer these without objection they'll be deferred on
Speaker 285
1:56:12
page 24 we have 19 reports with responses
Speaker 10
1:56:18
and we can give you all a moment to look through these and see if you have any questions.
Speaker 131
1:56:44
up next I'll recognize your representative more we do that now does. OK
Y'all look like y'all are seriously perusing this so I'll give you a little bit more time. No
I'm I'm letting y'all do OKok well if y'all are OKok I can we go ahead and we can file this report without objection.presentative Moore, I want to recognize you. I believe you have something
Representative Kendra Moore
Unverified
1:57:52
yes thank you Mr Chair and thank you for the latitude of letting me explain this motion I'm asking Representative Mclroy to make I've had constituents for several years3 to be exact,
complaining about the quality of water from the crosscountyrural Water Association and in my research and trying to get to the bottom of the situation they have been giving substantial amounts of state monies for infrastructure improvement and trying to figure out where those monies went since they were given in 23 and24 and even more recently since it was my understanding thatroscounty rural water is required by state statute to
file audits with legislative audit on an annual basis the last audit that Cross Countyrural Water filed was in the year of 2223 or 20022003
Speaker 414
1:58:45
and this is the 1st 20022003 so 24 and23 years ago that's
correct make sure I heard that
Speaker 414
1:58:53
right. go ahead. I'm sorry it is my request of
Representative Kendra Moore
Unverified
1:58:58
the committee to and I will allow Representative Mcroy to make the motion
to defer this report and not file it and giveroscounty rural water the opportunity to come before the table next month's meeting OK?
Representative Mark D. McElroy
Unverified
1:59:15
Is that your motion Representative McIlroy? I couldn't have said it better myself.ok that's my I move that. OK any is there a second
by Representative Rye any discussion got a question forpresentative Je
Representative Rick Beck
Unverified
1:59:31
recognize had they not done private audits
Speaker 419
1:59:36
that's a good question guess what do you have an answer for page31 forpresentativedalby this one is shown as a report with no
Representative Lane Jean
Unverified
1:59:56
findings Well have have they don't they do private audits and then send the the the audit over to the state so are are they current
Speaker 284
2:00:07
they're current on this particular audit but they are not current on the audits that
Representative Carol Dalby
Unverified
2:00:13
he is referring to what years were
Speaker 202
2:00:17
those I missed that you recognized representative the
Representative Kendra Moore
Unverified
2:00:22
staff of legislative audit was only able to find one previous filing from this entity which was a 20022003 engagement they are possibly could have been ones prior to that but
unless I had not talked to the powers that be meaning legislative audit and the director of the Arkansas Natural Resources Commission they would not have even filed this audit of this year so we have 23 years of unfiled audits with legislative audit. that's pretty serious have a question for staff OK, hold on. I think Representativeerry's in
the queue ahead of you I was just thank you Mr Chair. I was just going to ask you
Representative Stan Berry
Unverified
2:01:09
I probably heard it how much how many dollars are we
Representative Kendra Moore
Unverified
2:01:16
talking about you can respondpresentative Moore thank you Mr Chair the state awarded them a loan in June of 23 for $876,000 and change and then anarA grant in June of 24 for a little over or for a total of 1.534 million so you're talking real money here
Speaker 69
2:01:41
OKpresent dalby I think you had a follow up
Representative Carol Dalby
Unverified
2:01:45
question'm just inquiring of of our audit staff what do they what do they know because there seems to be a gap in there and if if we've received audits or not received audits
or have we requested them I mean what's been the procedure before we take this stepsashi
whoever wants to answer what you recognize
Speaker 430
2:02:12
thank you Mrir so just like our municipalities these rural water associations are also required to file annual audit for legislative audit us as well as other entities you know there's no enforcement provision underneath the law for legislative audit in regard to water associations when those reports come in we present them and bring them forward to this committee this is the first report that has been filed with Arkansas legislative audit by the entity since 20022003, a report that I
have from that period. excuse me that
April30th2025 is the only one that's been filed since 2002. did I
Speaker 309
2:02:57
hear that correctly? it's a 2002003 report so but since that in
that interim nothing correct. OK. that's that's pretty serious Representativealby once again
Representative Carol Dalby
Unverified
2:03:10
question for Mr. White. so is
the statute and and I apologize I didn't know this was coming up. I hadn't looked at the statute but is it mandatory that they file it or is it follow it if you want to I mean I guess what what what does the statute tell us that they're supposed to do and then my second question to that if if and I think I have some feedback but if if there was if there's a mandatory requirement
is there not anything mandatory upon audit or upon this body over the last number of years that we didn't then send a letter to them or something like that have have we dropped the ball was there a man do you see my two part question what what what were they required to do and what were we required to do so
Speaker 308
2:04:07
under the statute they are required to have an annual audit report, an annual audit performed the requirement
Speaker 430
2:04:13
is just like the cities that that
annual report has to be done within 12 months of fiscal year end and then there's a requirement on the you know the accounting firm and the entity that that report be filed with the legislative audit within you know, I think it's30 days of completion. but there's kind of multistep there right? but theres just like in the cities the requirement that is filed with legislative audit legislative audit does not have a listing of all entities all water associations and we've never I guess tracked those or kept up with those those
filings those entities other than we receive them we process them and we send them through the committee as far as underneath the code underneath the law there is a penalty provision it's a few code sections lighter and there's a penalty provision in that they could receive $1000 penalty and some you know permits could be lost and those penalty provisions fall with a naturaltural Resource Commission Department of Health and I'd have to pull the statute maybe to see the third entity on that Another question to staff
Representative Carol Dalby
Unverified
2:05:18
then my my next question is is this a proper motion for this committee or should this go straight to exec because you know sometimes those things are brought directly to exec and so what in the past has what is that procedure and you know I mean I guess I couldn't speak to precedent as far
Speaker 429
2:05:37
as this I don't think it occurs very often. I'm not aware of it occurring previously but
Speaker 430
2:05:42
as you know, I don't have an entire history of all of legislative audit what I know
is that this is a report that has been filed with the legislative audit just the 2025 report. it's a report with no finding and I don't know if there's any ask of legislative audit in this other than inviting management to this committee to discuss that report and why maybe that's the first one that's been filed. Sure one more I'm sorry I have a lot of questions. I just want the procedure to be a lot of a lot of leeway I
Representative Carol Dalby
Unverified
2:06:10
just want to understand to make sure that we're in the right position you
continue I want to hear and so it and and we often ask people to come and I'm not necessarily I'm not opposed to that but we have them before us are questioning then would be limited to the 2025 or wasn't it 25 or 24 audit whichever audit we're talking about that they did file and the head of finding then that is what we are limited to because that's what the motion is correct don't know what do you say
Speaker 69
2:06:51
Kevin I turn it over to you. you tell here's the
problem I hadpresentedalby we're talking about what 20 something years and you know I mean ok april 2025 they're OKok, no findings but
what about those other 22 or three years or whatever and that's my and that's my question I'm not I'm
Representative Carol Dalby
Unverified
2:07:08
not sure I'm not sure if we're in the right I'm not I'm not disagreeing that they need to be here. I'm just making sure that we're in the proper position for
them to be here no letter has been sent by audit saying you're delinquent show up and explain it or I mean you know where's where's that basis I just don't want us to haul somebody up here because then we can haul any I mean you know just to hauling them let me let me interrupt you for a moment you see what I'm trying to get to and and I want to so that when we have somebody whether it's whether it's this water
group or or ABCtownwn or whatever that we're just yeah that we're applying it evenly across the
Speaker 196
2:08:01
board that's my question do that but the question I have is
you know usually we're dealing with like look back three years or something. well in this case it's over 20 yeah and was the statute say on that exactly and I I don't know how we should
proceed that's why I'm I'm certainly willing to Wersmi White. she was in here earlier
he call Emily get her in here will I I I'm with you but when it says 23 years Representativealby, I'm a little more interested than if it were3
Representative Carol Dalby
Unverified
2:08:34
years and I'm not trying to prolong our mean we all know we went out of this meeting we need to resolve this but we want to make sure that we're on the right path. is there a statute of limitations if so how far back can we go and I think Miss White needs to be here to answer these questions because I want this committee to be
Speaker 168
2:08:57
on solid footing if we're the ones to do it and again here's me practicing
law without a license but if there's anything fraudulent there, there is no statute of limitations because it's fraud so we can Mr.ight do you have a recommendation of
how we move forward on this. I mean I think everyone else to get the same information and I am not wedded to the idea that we have to have this you know today on February 1el but you know maybe you
could tell me the best way or the committee the best way we could proceed
Speaker 429
2:09:27
so I mean again it's a report that's been filed with this committee it's just you know
Speaker 430
2:09:32
I mean it's the first report we've had filed with us in many years. they're not asking legislative audit to do any work and that's typically the purview of executive committee is when there's an ask of legislative audit staff to do some s for us to perform some procedures to perform some work or do some some some action more than invite them you knows I would say it's the prerogative of this committee. absolutely
that's that's the situation is that this committee believes they want to you know invite in this entity to ask the questions that this committee so desires in regard to that auto report. not sure if I'm helping you out too much or not we're doing
Representative Carol Dalby
Unverified
2:10:13
it right Representativeerry well I'm certainly not an
Speaker 47
2:10:16
authority on our audit but in the past I have the same situation has been asked
Representative Stan Berry
Unverified
2:10:29
and go or what I'm familiar with is it has gone through the executive committee prior to coming to this committee I don't know if that's proper procedure or not and and something else we're talking about water funds are we talking about USDA money or are we talking about state of Arkansas money I guess it could be all of the above could it not Mr White? would it make a difference if it
was USDA money how we whether we had the authority to to audit well or not orpresentative Gan if if it's
Representative Rick Beck
Unverified
2:11:10
federal dollars it's it requires an audit do we have to believe that they're not required to have an audit anyway but no but if if they're getting federal dollars there the the feds require them to have one now if this is
Representative Lane Jean
Unverified
2:11:27
state do we have does the state demand if the governor gives some
some money to or do we have a law that requires them to have an audit if we give them state funds So getting a little outside in my wheelhouse
Speaker 429
2:11:47
here I'm way out of mind so we're in there together appreciate that you know my understanding is that there
Speaker 430
2:11:54
are some funds are provided from the naturalsource Commission ANRC and they have different type of loan programs over there
like this saved safe drinking water loan programme and others and I believe most of the time prior to them making loans they require an audit report they would have anot report that's not necessarily that an audit report has been filed with the legislative auditor the copy of that same report has been filed with legislative audit in in the interests of efficiency
missro I'm going to ask if you couldu
she's here to save us folks Miss White would you come to the
table I was what I was about to say was could you get with her before tomorrow morning at 9 and come up with a recommendation
for the full committee so we can move forward with this without having to push it back until March
Speaker 196
2:12:51
but could would Kevin would you please tell Emily what we're doing please and and any members of the committee jump in if if if it's not quite clear so Emily the
Speaker 308
2:13:03
situation we had before so we have cross county rural waters association that has
Speaker 430
2:13:10
filed with us on April30th,2025 audit report motion has been made to defer that report it's a report with no findings deferred until March and invite management to attend to discuss the audit report we have some questions regarding scope of what they can discuss when they get here or whether this is a proper venue or this should go through exxec. and also
if I could Miss White we seem to have about 2122 years
of not having reports so it's not just about this this 225 thing is not the problem but it's like my first reaction is where the hell have you been kind of thing so I think we need to get to the bottom of this and if there's any way we could expedite it by staff making a recommendation tomorrow full committee that we could request them to come in or or whatever we need to do to put this on the path of of getting it straightened out Did I say that you think Kevin
again when that was what came up is that this 2025 audit report it's like what happened to the the 22 or 23 ones that they should have been in there before that that's where we are right
Speaker 448
2:14:26
now andpresentativedalby I heard your question and so I I may have missed a bit
Speaker 449
2:14:31
walking down here so my apologies if I did but as I understand your constitutional authority as a governing body. you have the ability to call them in based on my reading of 14234119 because
they have a reporting requirement to you all so you all could defer and ask them to come sit at the end of the table just based on the fact that you've received a 2025 report that was processed through legislative audit and brought before this body because that's what the statute requires as Mr White said there's no rule enforcement mechanism as far as if they don't provide them to us I think that might be why there was such a gap for 22 or 23 years if I understood
Representative Carol Dalby
Unverified
2:15:14
correctly so OK then and Emily I appreciate that my question is should the motion be amended to include the scope of what the question is what the issue is or are we because we're calling them in over a twenty25 audit and in my mind then we're limited to asking them questions about an audit that has no findings and should that motion be to ask you know to broaden what
what the scope is because I could envision that someone would sit down there and say well we're not prepared to answer those questions because we thought we're only here on the 2025. I'm just trying to get it into the right perspective so that we have we're asking the right question and not wasting our time with someone and so I didn't know that's what we're talking about I think they I do
Speaker 449
2:16:07
Representativedalby I think you all have discretion there. I think it could go one of either ways based on the way that I read your legislative oversight
authority and you know founded in the constitution and some case law since then I think you could decide to ask them. I want I want to know why you haven't submitted a report. I think you have the ability to do that if you so choose so to answer your question simply it's whatever you want to do as the governing body you you could limit the scope if you wanted or you could extend it and ask some some very difficult questions as to where have the reports been for the last 23 years Mr Chair may I ask Representative Mcellroy a question of course he wants to
Representative Carol Dalby
Unverified
2:16:49
respond Riverre represent Mcroy would you be willing to amend your motion that it would extend to previous questions in regard to previous years so that we're not limited just to the 2025 audit. I'm just asking would you be consider that is
that your amendment to your own motion would
Representative Mark D. McElroy
Unverified
2:17:09
like to amend it that we could question the water department why they did not file for over 20 years
OK and you second that I presume Representativealby
it's it's represented right you second ok any other questions or discussions before we vote Representative Jean how I want to this this is forresentative
Representative Lane Jean
Unverified
2:17:32
Moore how much money did you say they had received from the state of Arkansas In June of 23 they received a
Representative Kendra Moore
Unverified
2:17:52
a loan of 87 almost 877,000 and then a grant in June of 24 for657,712 dollars for over 1.5 million and then they have since received more funds since then but I don't have those figures from the state of arkansas yes sir thank you and
you sayingpresentative Moore that's correct right is everybody clear on the motion any discussionpresentativeerry
Representative Stan Berry
Unverified
2:18:23
well it and I know that there's a lot of questions about where that money and we need to get to the bottom of it but I guess it seems like it should be requested in written requests to the executive committee for them to look at it before it comes for our
Speaker 47
2:18:46
decision and Miss White can you respond to Representativeerry's
suggestion because I'm kind of in a two way quandary about that myselfan. So what our rules require
Speaker 449
2:18:59
Representativeerry is that if an audit has not been previously done by legislative audit then yes, a request to audit would have to go through our executive committee but as I understand the conversation of the governing body you all today you're simply just asking questions about a report that's already come through your committee even though the report was done by a private auditor it's still come through your committee so based on the fact that it's been funneled through your committee. I believe your
legislative oversight power would allow you to defer it and bring them to the end of the table. Now if you wish for us to conduct an audit that's a completely separate conversation that would most certainly have to go through the executive committee based on
Speaker 105
2:19:40
your own rules and understand what you're saying Representativeerry. I'm I'm kind of of the mind that is there a way
we can expedite this so we're not back here next month dealing with the same thing again sorry talk over you go right ahead sir I guess the
Representative Stan Berry
Unverified
2:19:58
the fact is that it has already been audited but just for that one year just one year but it was oed by
the state no sir it was Meerron Ward CPAs oh ok private audit and turned that to the state any other comments or questions we do have a motion pending do we need to restate the motion as everyone understand it
ok everybody seems to be ready to go we'll vote on it all in favor of motion say aye opposed
OKok it passes thank you with gasaway thank you so on
Speaker 10
2:20:43
page 31 and32 we have57 remaining reports with no findings and staff recommends we file these. without objection we'll follow
any other questions or items to come before the committee and remind everyone
room 149 next month. probably you'll show up here and it'll all be taped up and everything so you'll stick quick but that's where you need to go look is is 149. if there's nothing else come before we're adjourned
Agenda
A. Call to Order by Chair
B. Adoption of Minutes of the January 8, 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 – Adona
F. Discussion of Noncompliance with Municipal Accounting Law – Gum Springs
G. Discussion of Noncompliance with Municipal Accounting Law – Fargo
H. Discussion of Noncompliance with Municipal Accounting Law – Denning
I. Review of Reports (Refer to the Synopsis)
J. The next meeting of the Legislative Joint Auditing Committee will be held on March 12, 2026.
K. Adjournment
500 WOODLANE STREET, SUITE 172 • LITTLE ROCK, ARKANSAS 72201-1099 • PHONE: (501) 683-8600 • FAX: (501) 683-8605 www.arklegaudit.gov
Documents
| Title | Type | Pages | Source |
|---|---|---|---|
| Agenda — LEGISLATIVE JOINT AUDITING - COUNTIES AND MUNICIPALITIES, Feb 12, 2026 | Agenda | 1 | Official source ↗ |
Speakers
Speaker 4
Representative Johnny Rye
Unverified
Senator Mark Johnson Chair
Unverified
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Representative Carol Dalby
Unverified
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Representative Rick Beck
Unverified
Morgan Gonzalez
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Speaker 141
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Chair
Unverified
Speaker 186
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Representative Lane Jean
Unverified
Speaker 193
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Representative Nicole Clowney
Unverified
Speaker 238
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Robin Moppet-Bowen
Unverified
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Speaker 1
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Representative Julie Mayberry
Unverified
Speaker 337
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Representative Stan Berry
Unverified
Speaker 348
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Representative Mark D. McElroy
Unverified
Speaker 103
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Representative Wayne Long
Unverified
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Representative Kendra Moore
Unverified
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