Legislative Joint Auditing-State Agencies

Let's see let's go ahead and pull out the motion The device looked over there minutes from the last meeting I have a motion and a second to accept the maintenance. Motion and a second motion from Mary Bentley representive Bentley and representative Payton. All in favor. All right adoption of the minutes. All right let's do Mr Burlington. Thank you madam chair today we've got five reports with findings but we also have several ports that don't have findings in the listed on page one of the audit some of that you have in front of you. Let's have a motion on the ones that don't have any findings. Senator Hickey. All right. And thank you Mr pence Senator Pitsch. All in favor. Thank. I thank you madam chair so before we go go through the fines in your synopsis at the meeting back in October and you don't have this in your packet necessarily but back in October the you don't want to hear an update we had a finding on DHS regarding the community out reach program and members of the committee voted to get a follow up on that today what you should have gotten back in October they sent me a follow up to that I email that out to to the Committee she'd have gotten that but they've also provided a second update. this week and both of those should be in your packets Yes you should have you should be too should be two letters I have their own DHS letter head in your packet. And they basically provided us follow for all six findings I think the one that was of interest was finding number six which is on the set bottom of the second page that you have there. So there there are a representative from DHS if you'll have any additional questions about that. For those of you that are looking as a community outreach program. So specifically on of the H. S. hand out this this is the finding number six. Just to be clear this is the four hundred fifty thousand dollars in funds distributed to the urban league. And there was no findings. There were finding this is their fault this is their follow up. Okay if there are any questions. For DHS we need to come into the table does anybody have any questions. Senator Hickey so this is at the US attorney's office right now is that correct so that's correct okay. I don't know what to what is further action we could take right thank you. Do you want to bring it back. What is the what is the well the body want to bring it back for follow up here report on and after. I make a motion we file it to make a motion with violent set with the body wishes. I have a second. Second Senterfitt. All in favor. Okay. Okay so the first current report that we have with findings is the Attorney General June thirty two thousand twenty one report and this report has one finding. Twenty nine employees were paid in excess of the line item salary appropriation by a total of almost sixty five thousand dollars in conflict with the Arkansas constitution. Which states in part that the General Assembly shall fix the salaries and fees of all officers in the state and no greater salary or fee than that fixed by law shall be paid any officer employee or other person madam chair that clues finding with the turning general's office. I believe we have members of Attorney General's office here. Chief of staff Mr van. He's here if you could come to the in the table. Thank you madam chair hi my name is Brian bell and I'm the chief of staff for the Arkansas attorney general's office. Can any questions from the committee. I do I see a map to tell disagreed with the legislative audit you mind delving into that a little bit. Yes Mister senator. our assessment of of the audit findings we do disagree with. as I've testified twice before in other committees that is our position that we have the constitutional authority and the statutory authority to issue bonuses and raises to the employees of the Arkansas attorney general's office Furthermore we are exempt from the class and compensation act. Okay so. This this was over and above what we appropriated though is that correct. At at no service on my understanding that it's over and above we actually had to turn back about I believe one point six million dollars in salary savings this year so we were well within our budget. Okay I guess we staff to do I not understand this right was this does not say that these are paid above the appropriate line item this is for each individual position line item we look at that but if I remember correct their appropriation act has dollar amounts in those feet in those fields not rain not a great if you will and that's what we're not talking about the overall appropriation for first set for payroll we're talking about each individual position. And what we're saying for those each individual positions if one of them was that a hundred thousand I that that particular one was paid under the hundred thousand that's correct which in your opinion that shouldn't be done that way that's correct there are some exceptions Senator Hickey to those as you well know lump sum payments careers there's some things that are exception we could not find an exception in this case. Where they actually salaries or were they bonuses. The buyer saying for twenty one there were two to raise given during that year and the people that were at the Max got a lump sum payment for that instead of the rays some people did get a raise if they were not above at that line item Max. Okay I remember this this is this is the situation we had for the the ones that were already already at the Max we thought that they should build shouldn't receive the maximum that they would have to do that in one one six three one one twelve correct whatever was based upon and and now the one that does that's where the that's where this came up originally this is going back a year before that. So we looked at the age a little bit farther because that came over there so this is actually the year before what the report you're talking about. Okay. I remember this I don't know that I did. Hard to disagree with the AG's office I guess but I think I'm not for sure I've always thought that the legislature of course would have to do the full appropriation on that and the. I mean I don't know is this something we want to file or system or is this something that we need to get some more clarification on because if you know we're talking about any constitutional office I mean it's not just going to be limited to them is that correct. It it very well could not be we've not noticed any that were there were exceeded allowed a Max. Okay I thank you. Any other questions. Senator Hammer. Thank you measure what was the justification for giving them the bonus was it because of performance or retain age so as not to lose or what was the justification for classifying them as a bonus. For from memory we had some of both at the time five and I will go back and clarify that and get back to you on individuals who receive merit bonuses and also retention bonuses we had some that fell within a retention bonus at the time but I don't recall how many off the top of my head. Okay so the so the intent of giving them. The bonuses based on what you just answer is either one performance which means what they would have been working on certain cases that the AG was successful in winning other criteria and then the second one is retention because if you had not given them the bonus they were gonna be hired away out of the office or can you kind of go a little deeper but not too deep on the. The yes Sir in fact you actually summarize it very well we we he. What we try and reward ours not not just our attorneys but also our staff who work very hard to do the business of the state so we have we have some that would have fallen in the merit bonuses during that time frame which my recollection is this is around February we were starting to lose some people and we're offering bonuses to try and retain based on the forms that we have to compete with and it's not just private firms it's also other state agencies. One more manager yes okay thank you the and your argument is and without me looking it up on the Arkansas constitution article nineteen give me the give me the brief just defend yourself on the basis of your interpretation within the constitutional of siding that you feel gives you justification to do what you did without having to come back to us. Our our position is that we stay within our salary budget and have the flexibility because class and compensation is not applied to our office as well as other constitutional offices and legislative body. Do you know of any other constitutional office that uses that or have you let me let me back up has this been done before within the office of the Attorney General or you plow new ground with this what we have done this repeatedly under the current administration we've done bonuses America merit raises and bonuses as well throughout the tenure of our administration what about previous administrations that you know of did you site something that you said a previous administration had done this or is this again just on the current administration. To my knowledge it is the current administration but I can have our finance people pull previous administrations as well. All right thank you maybe staff could see if there's been previous The experience of findings on this issue this came up kind of that special report that we should Senator he was talking about this when this came as we start looking a bit further we went back to two thousand twenty one we can go back any farther than that so I can't I can't say before that if they exceeded the Max's or not before that time R. R. thank you. Senator Dismang. And I guess the question really for my staff or for our staff rather And then probably budget to some degree does it so I mean are we doing it wrong we riding the appropriations wrong then in some ways be or willing counting these recommendations and then I mean because the way that I would understand it you know we written preparations going to total threshold amount that they can spend to their argument is they can stay as long as they stay underneath the total preparation it doesn't matter how to move around even though it's. It's delineated inside the preparation and I'm missing something right so I mean there needs to be a discussion at some point I think with audit and bill are and we need to get to enter in I guess the AG's office and every other constitutional officer about we're gonna go with writing these appropriation bills moving forward because right now we're. I don't I don't understand what we're doing is we're putting in you know where to go she dating or having conversations with saying this is the Max within it really doesn't matter what we put in there as long as you stay underneath the entire preparation a law so am I missing something. No I think I think you're right on track and in Mr areas here if you like to get the legal director for the A. I. web because of its decision require action one was something wrong somewhere. Thank you for legislative audit senator based on the law I don't think you need to change anything there's a case out there from the fifties Gibson versus crawfish a state board decided to eliminate a couple positions and create their own position pay on their own salary without legislative blessing in the Supreme Court said no. The number and the salary of state employees is a legislative matter that cannot be delegated to anybody else and in that particular case the two employees involved had to repay what they had been paid without legislative authority to receive that money so I don't think based on the law that you need to do anything different in the in the ages appropriation you have a position named and you have a specific dollar amount it could not be more clear that they cannot exceed that amount and you know there's a question of well does not include bonuses or salaries or whatever there's a code section nineteen four six oh one that says no state employee can receive any greater compensation compensation is a term that includes everything there's no point in distinguishing it's the vehicle argument and. That we had yes so with prior constitutional office so I think the issue isn't changing the law so much it is holding the agency accountable. I mean because my fear is going to be if we set precedent here we set for our constitutional offices I mean which. I mean I'm assuming everyone has sufficient appropriation authority to spend it in well above anything they're ever going to spend and we can call it you know we're you know well underneath our budget whatever but we give you access preparations what about I'm not you any agency really excess appropriation if we're going to use it in such a way that. It allows me to move around freely regardless what's in the actual preparation how it's supposed to be spent. That I'm at I guess we will have to change that practice for our constitutional officers would we will no longer either either the Attorney General's correct. And we need to really focus in on the appropriation levels. For the third inter generals incorrect and in a and we continue on with what we've been doing you can have a little Lexus preparation as needed I mean that would be my opinion. Maybe if not we lose control of the process and I mean you could have a constitutional officer run away then at that point with salaries and very little oversight and I don't think that would be a good situation for any of this. Please enter my mind that senator when OPM and our officers came to test upon us both OPM and our office said there needs to be clarification the statute and both eight PM and our office volunteered to address some of the issues that we think need clarification we're happy to offer that assistance if you all by. But can we provide clear images a constitutional issue I think according to the argument back in so how are we going to provide statute that's going to provide clarity to the constitution for this I I think so during our original audit it was really more of a focus on the statutory authority to do so as opposed to the constitution and it turned and. into a. Constitutional debate I think with our office and audit. Okay not but I mean if we pass a statute that's outlined in the constitution then it doesn't matter who pass that statue not at the point that someone wants to contested which is essentially what they're turning general's office down here. We pass a statute an appropriation the center yeah you know that set a limit on what each person can make a no limit and you also know that a lot of us the total amount applies to us we can move inside that box that we want to so we don't exceed our appropriation fair enough fair enough okay yeah and those two things can mash so all right thank you. I'm Senator Pitsch. Thank you madam chairman this might be for you Mr. Actually the AG's office by your opening line to the response this off as well as other constitutional offices are clearly exempted from this classification and compensation act. Do we know they're the only ones or do we have a system wide. Issue going here Senator Pitsch respectfully in this particular finding that's irrelevant I understand it's it's I guess I'm focusing on future legislation et cetera maybe thank you backing on the two previous senators questions we do feel the authority to make sure we set guidelines for pay that's our role in the constitution but if we've got everybody doing this and we got open positions that are then becoming. Capable of smoothing. Well if we need to know that if it's more than just this will constitutional office let me be clear we we relied on the uniform classification compensation act when we had our findings back in may and June to this particular finding that act is not relevant. What is relevant is article sixteen section for that let's you folks and and in the nineteen four six a one so I. That's kind of a red herring in this particular argument but I guess I'd feel better for dealing with one entity clearly like Senator Hickey said I don't want to challenge the AG's office but if I'm a constitutional officer and I'm seeing this happen I happen to know being involved with budget we've got a lot of open unfilled positions and I don't know that any of them are doing the same thing or not doing the same thing and I would think that be a role in scope for the audit committee to find out and state agencies well I will say this would be the expected for we look at all state employees see if they were over line of Max okay so that the family was here because that is what they're so there were some others that special report today we're talking about just CAG but there were some others did that report this to you that that answers the question future legislation thank you. Senator Hammer. Census report instances special report have you all paid out anymore bonuses or salary retentions. There were eighty. I'll give the exact number for you there about eight employees I believe that we gave braces to to bring them up to parity with other departments within the attorney general's office. Can I ask right questions yes. How was that result back in that case you cited you said the employees had to pay it back who was it made him pay it back was that the agency legislature who who made him pay it back that was an illegal exaction cases taxpayer sued saying the board couldn't do this can create these positions and just award of a salary without your blessing and so the court said yes in this illegal exaction case they're gonna have to pay it back so is the court that made them do it. What I really hate to see happen is we're right here. Caught between the crosshairs and got employees out there that have gotten this money anything like that happen but I don't quite honestly without somebody initiate an action it would. Nothing would. Basically nothing will happen unless somebody initiate actions in order to make it happen my mission. Unless the legislature somehow exercises its power of the purse. Okay thank you. The representative Payton. Thank you madam chair my question is during the budget process when the agency submitted their request for these items with these lines itemized did you submit a request that was just a general. Salary and wages line appropriation. Sorry I was confirmed to make sure that my answer is gonna be correct I believe it was a line item. So the agency's own request for an appropriation bill included specific language itemizing the caps that were exceeded. I I think there is a distinguished met between the caps and whether salaries were exceeded or bonuses were given and again. Focusing on the original audit that audit submitted to us so is based on a statutory authority with with which we disagreed. Well I would concur with the senator that suggested we. Have a much tighter appropriation process going forward if we're gonna be dealing with an agency that would submit it one way and then practice it a different way. Thank you madam chair. I have a follow up question how much did you cut your budget by. We had at least one point six million dollars in salary savings and. And another roughly eight percent overall I will get you an exact number on the overall budget cut. Knowing how much to cut the budget by. We don't allow the latitude to use that money in other ways correct. I think it would. My general answer is it would depend on. Where those monies were cut and our specific budget. Okay. Senator Hammer you have a question. Well first off I may make a statement out think anybody's arguing that the the attorney general's office has done an outstanding job representing the state of Arkansas think that's without debate it's just a question of what the law allows and doesn't allow that seems to be the crossroads in at least in my opinion and the savings is great but the justification I think is maybe week at based on the disagreement between legislative audit and the attorney general's office are there other areas within the agency where you exercise the same latitude of moving money within the appropriated amount that may have been outside of the amounts that were presented in the budget. Not that I'm aware by we will use settlement dollars to. Shift to pay experts recently and donation was given the Arkansas state police as well from settlement dollars so in that area that we do have flexibility to move around money internally to pay for the bills of the office of the Attorney General okay thank you. Accented Womack. Thank you Mr you said that you and legislative audit disagreed on the. statue what what's that you do use that. I'm curious that you believe gives you the authority to exceed those. So during the original audit finding and I'm sorry I have to go back and look I don't have that original and trying to me there were two sections that audit originally came to us and said we have a finding on these two basics the uniform class and compensation act in a subsequent section of that code were the original basis of the finding of audit. So. So what statute do you think gives you the authority to. I'm I'm we are just not understanding we disagreed with the audit as to whether the subsequent session section of the class and compensation act applied to the office of the Attorney General. Okay I understand that but we so what statutory standing on that you believe does give you the authority is just our exemption from the uniform class and compensation act which audit cited as the reason for the finding and egg and I'm happy to follow up with you and give you those citations to white were in the original audit. I don't know if I just don't understand or if. Or if you don't I can't point me to a specific statute if I just can't understand that so that that's it let me try and explain better. When not it came to us they had a finding that they said that we could not give raises or merit bonuses within a certain time frame of the year based on the uniformed class and compensation act and a subsequent code section that followed I'm I'm sorry I don't have that citation in front of me I'm happy to get it we took the position that we are exempt solely by the class and compensation act as other constitutional officers are as well as the legislative body and the subsequent section of the code that lets audit cited did not apply to the office of the Attorney General. Okay up. I don't know if I'm just confused but what we're talking about different findings now rise. Respectfully Sir it seems that the focus of the audit has shifted from the statutory authority to the constitutional authority. Members I think it would be wise not to let this marinate hold this over senators DISMANG yeah my my request or you maybe direct staff everyone to do it motion not doesn't matter to me but I mean are staff these communicate with B. L. R. Kevin Anderson and his team and the attorney general's office I think we need a reconciliation where everyone square on what we can and cannot do because you know we're not technically riding appropriate appropriation bills correctly it you know courting to the train General's office this has nothing to do with the AG's office is even this particular issue but it's it's impact that will have across all constitutional offices if we start a precedent here and so that I really do believe that something needs to be reconciled and if we can direct our staff me with bureau and then the AG's office to to make sure we can be on the same page to know where we are in how to how to afford. Yes and we can do that and still filed a report and I want to thank the attorney general's office I know they've had an exceptional burden this year with handling a lot of legislative issues in defending the state of Arkansas and they've done an excellent job. Senator Hickey thank you Sir I would prefer not to file the report because I don't want to give any indication that we agree with this at all and I understand that that is not what that does. But you know the way that even the way this response was written has really put us in a box because you know it starts off it talks about all constitutional offices so the response you know not only is just about the AG's tellement all constitutional offices. And then the last Senate you know says that we're going to comply we will continue to comply so in other words we have. We have complied with all statutes and all in the Arkansas constitution so actually the response itself is actually it's almost ten up teeing it up for a lack of a better word you know that so as Senator Dismang said we're going to figure out some way to get some closure on this too To see which way we need to go go forward. Senator Hickey would you just prefer to hold the report over and yes income to yes if you do not mind I know I do not mind thank you is that it that's that's a motion if at the appropriate time. Senator Solomon the question so do you anticipate any further bonuses this year. And using its its that Senator Hickey said you can continue this so do you anticipate continuing to use this your reasoning to have bonuses going into the end of the year. As far as bonuses I'm not aware of any bonuses that we will issue prior to the end of our administration I'd. I may have a couple of raise requests from our deputies for some of our assistant attorneys will raise request above what's appropriated no Sir no okay just a general question and answer where I'm sorry debating this it's it is going above the appropriation line do you anticipate any. financial adjustments that go above the appropriate level no Sir at the end of the year okay thank you. All right so the conclusion is will hold this report over that's the will of the body all in favor. If any opposed. Thank you thank you madam chair thank you thank you members. All right next up we have state auditor. We have the state auditor Jessica Kate. Chief of staff are you here. Thank you madam chair as you mention next report with findings of the altar St June thirty two thousand twenty one report this report also contains one finding. The AC identified and notified us on October twenty ninth two thousand twenty one of a salary overpayment to deputy prosecuting attorney for four months from July fifteenth through October thirty first two thousand twenty one telling almost four thousand dollars. The servers recorded in the payroll system during a merit increase process this over pay was fully recouped on January twenty first of this year that includes finding. this is Keith. Yes I have checked. Any comments I think the problems probably been solved but it has so would like. Excuse me I would like to speak to the root of the problem and we have an extremely manual payroll system an auditor of state's office we are non asus and it works for these routine. So sorry and agencies that we pay we pay all of your salaries we pay the constitutional officer salaries we pay for our office we pay judges salaries all of these groups have very very routine increases you know the ICC needs and awards an increase to everyone we implement those that's easy for us to handle in our manual payroll system but these deputy prosecuting attorneys the completely different case so in fiscal year twenty two we went back and looked we conducted seven hundred and ninety manual payroll adjustments for them so at the beginning of the year you start with about two hundred and ninety people in your payroll system that's already there no manual inputs required so over the course of the year seven hundred and ninety changes and when you're talking about a manual payroll system that's that's really impactful and so you know I hate that these occurrences happened but due to the volume and then not only the volume these are all individual employees they're not getting a two percent raise across the board they're getting you know this week we have for reasons for someone and they're all all different next week we have ten terminations we have six new hires it's it's a huge variety of the type of transactions that are happening so what with that our offices I'm really recommending that these move to the deputy or sorry to the office of the prosecutor coordinator and they're the ones who are aware of these personal actions and we think that they would be better suited to handle that payroll because they also are an asus and they have a better control environment for that thank you. Thank you any questions. Seeing none of. We need legislation that if you research that that what you're saying yes okay so where is your office going to kind of take the lead to get with a couple late deciders so that we can look into that make sure there's no issues obviously I don't early is term limited so she she has spoke with auditor elect Milligan and advised him of this yes okay thank you you're welcome. Thank you could point. I will accept that report is filed. Thank you. All right next up we have game and fish are no health department I'm sorry. Thank you for findings is the department of health June thirty two thousand twenty one report and this report contains five findings. The first finding as required by the FH financial management guide and state government agencies must have an established system of internal controls that provides reasonable assurance regarding each shipment of objectives and operations reporting and compliance. The purpose of internal controls is to reduce the likelihood of fraud waste and abuse by preventing by preventing detecting or correcting misstatements in noncompliance. For two thousand twenty one management repeatedly over road or north internal controls and this is detailed in the subsequent audit findings more specifically which led noncompliance state laws and regulations. So to get into more specifics the second finding the AC failed to follow procurement guidelines for certain transactions involving the office of health equity. Examples of this failure include competitive bids were not obtain for services valued at five thousand and twenty thousand from two vendors as required by AT H. policies. Services were also provided prior to the execution of a purchase order agreement. There were invoices that were split from one vendor in attempt to not exceed known procurement limits. A three hundred fifty thousand dollar contract was executed with one of the one of the vendors after specific bid details from a third vendor for shared and used to make the winning bid. As of July thirty first two thousand twenty two payments on this contract told over ninety thousand dollars and the AC was unable to provide evidence of any deliverables deliverables from this vendor. Also procurement guidelines require the eighties evaluate a vendor's ability satisfactory provide service at the best value to the state. But on multiple occasions the AC got of the vendor completing forms and even recommended that the vendor increase the budget for the project with no recognizable benefits to the state. And the last one was the input and approval from eighty H. grants management contract section was often bypass intentionally omitted during the procurement process. The third finding human to be doing. Okay the third finding during our testing of P. Carr expenditures we identified to insistently C. H. management split purchase between multiple P. cards in violation of P. Carr policies because the items acquired exceeded the person limit of a P. card. They could have contacted if I to request a temporary increase in a purchase limit of the card. The fourth finding during our testing of capital asset six items belonging to the State Medical Board were selected for review by the age she was unable to locate five The Addams with historical value Ste historical cost of almost twenty five thousand dollars. Additionally the AC did not conduct a year in inventory capital assets held at the state medical board. And the last finding the AC is established internal control requiring program officer receive cash prepare monthly recreation reports to verify that receipts agree with the revenues that are recognized in accounting system and says and submit those reports to the office of finance. Of the six four program locations identified by eighty age fourteen did not submit a total of ninety monthly report during the year and for programs not spin a regulation for at all during the year but I'm sure that concludes findings. Thank you if you could state your name for the committee please. Are you turned on down there their name Mallory interim secretary of health. John Adams deputy director for administration interim chief of staff all right let's take these one by one the start with finding number one. If you could go over that let the Committee asking a few questions to. Yes ma'am thank you sell the finding number one it's my understanding from discussions with the legislative auditor's it really is a reference to finding to which contains numerous issues and I think the the auditors were more than fair because there were multiple issues and finding to and because there are multiple issues they they added finding one in in finding to relates to an office a small office that we have inside our department that receives a grant during the pandemic of a fairly large grant to work with minority and rule communities related to COVID response. And in this office in the process of contracting and some grating this money the circumventing a lot of our rules and controls. Now in our response to that we became aware of that upper management we immediately called for an investigation. We voluntarily notified let got it of these concerns of the the internal audit was complete in December of twenty one we took action based on those results we removed the director of that office from that office And then we also contacted the office of inspector general internal audit department and referred some of these findings to that office to further investigate and that was in February of twenty two and then subsequently we got that report in may of twenty two and we made those moves those reassignments permanent we put this office underneath our chief fiscal officer Joe Thompson all fiscal operations were under her oversight and control we also added some additional administrative support staff with very experienced in subgraphs and contracts. And so we have taken the necessary steps we identified this early when these problems arose and we I think responded appropriately once we became aware that some of these sub grants and contracts were not procured correctly I'll be glad to answer any questions. Representative Richardson. Thank you madam chair of. So and I'm understanding you correctly that this you relieve the Director of their duties but are they still with. The Department no they're not they're not with the department we have a new director in that office okay so they're they're no longer with any any agency. Correct okay thanks and they're not employed state of Arkansas at all correct. What does the office of health equity do and what's their complete budget I see three hundred fifty thousand contract executed but is that the total budget this grant was forty million dollars so this was a very large grant for this office and so that up to that point that had a very small budget so this was a lot of money for that office and there which is a lot of procedural problems and how they executed getting that money out to the community. Forty million wow. Any other questions from the committee. Senator Hammer I may have missed it but who was who are the grants made to that were in question were you referred to us what were the organizations. Cannot pause right quick your. One one contract with with an individual called Marcus McClendon is his company was called the sixteen forty seven group and the other was under Kita Williams and her her company was call Williams consulting I believe. But what they're any liability or responsibility on their part and so has that been. The field. Based on my assessment senator Hammer the errors occurred on our part not on the vendor's part. And of the forty million how much actually went out the door. I have staff here that can answer that question so I can get that for you I'm not sure what the current amount had this been spent versus what our balance is but we can get that here in just a second I think that would be very helpful to know where that forty million went and how that was. Yes ma'am please. Good afternoon I'm Joe Thompson chief financial officer for the department of health to date out of the forty million dollar grant we've barely spent one point four million after we realized there were some issues there we halted all expenses and we did a thorough review even resubmit our project plan to the CDC so at this point we haven't spent two million dollars of the. Thanks sounds wise Senator Pitsch well thank you madam chairman that was my question if we spend anymore I don't know what is the right level to advise staff we need to find out where that money went down maybe that's material. If I might add I I don't think there's any question about any theft of bond funds are missing funds it was just the procurement methods in the solicitation methods to secure these vendors and sub grants was not up properly done in the beginning and and I can assure you that all invoices and receipts and this is being very thoroughly looked at in our department right now and it has been since these audit findings or since we discovered these these problems. Senate dismaying. And I and I understand that I mean it but I mean that's a little bit conflict with way that it's written at least as far as the findings because even if we were knowingly attempting to undermine the limits by splitting invoice into or whatever it may be I mean I I don't maybe that's not criminal but I'll be surprised that it's committee for invading our laws or something. Our procurement law and I guess I'll ask because I'm curious man who who are we talking about here Director wise that was over the agency and how many other folks were. You know in that spot this if if I might add Senator Dismang we have an active EEOC complaint on this issue and we have lawyers that have been engaged on this issue and with the potential threat of legal action in the future so I don't know that it would be wise for the state to. Say anything that would be disparaging towards individuals but alternates I'm I'm not I'm not being disparaging we're saying that nothing. Criminal apt or whatever that's fine you don't have to agree or disagree I think it's odd that the findings say that it was knowingly done that you know whoever this individual is that we won't name undermined the criminal all but knowingly which is intentional which leads to a problem I would think but but I'll let it be there. Senator Solomon that wouldn't that if it's the former department director isn't that public information. Yes it is it is public information anybody wants that information I I just I think it would be wise not to the public in a public forum like this to say anything that would okay very good info from those who it is they can find out who it is fairly easily yes right without you disclosing that in this form. Correct yes okay thanks. Senator Hammer and then Senator Hickey thank you I just wanna make sure I'm following right the two groups that you mentioned awhile ago in the individual in question that you're hesitant about going to a deeper with are they all three tied together are we talk about all the same. Now the the vendor and the The subcommittee and the contractor there outside the agency of course right but the individual that we're not naming was working directly with the two groups that you mentioned a minute ago the Williams in the market yes it was part of her job to work with those sub grantees and contractors yes but the course there's some findings in relation to how she interacted with those that was inappropriate right which is part of finding number two am I right on that part fun number two was it was revealing what thirty center was doing and that information is being fed to these other two right correct that was inappropriate right right and those two didn't know that was happening is that your testimony today or is that part of what is being determine whether how much they knew and what they knew when they knew that kind of stuff. Well I don't know that the contractor the sub grantee knew that it was inappropriate wench she was receiving that information no I don't I don't think that should be. Okay all right thank you Senator Hickey. Yes yes and and and I want us out for shade up I heard what you said you all found it you all brought it before they got it also the inspector general I think that's no worries where the however have ended I understand you to say that the inspector general have they have they all have you got a report back from them or they thoroughly investigated this to make sure that there was uh NO relationships of any sort of tie up between the this person that worked for the state and any of the vendors or contractors or subcontractors or whatever was involved. The office of inspector general their of their investigation was limited to two allegations or to. Findings in our internal report that we felt like needed additional investigation and so that wouldn't really a part of their scope of what the investigated but I do believe let god it has and is. mentioned or cited some so concerns about inappropriate relationships in their in their information. As has this been and if I missed it I'm sorry is this been turned over the prosecuting attorney or anything was there. Okay so that the some we didn't do that. The office of inspector general did take one of the two issues that was they deemed it as a problem but it was inconclusive as to who was responsible for the issue they did turn that over to the state police and the state police chose not to further investigate and Senator Hickey for my perspective of we didn't see anything here that that we thought we would this is just noncompliance issues with with the procurement guidelines internal policies we didn't see anything here that we thought need to be goes needed referred to the prosecutor. Right. We'll. The whole thing just that could be a satellite which may advisor to set the way it is I mean what you has had an employee here we've got a three hundred fifty thousand dollars one out without the again I appreciate what you all done but someway somehow we need to make sure that there was no relationships with any sort cap and if the inspector general if they have not investigated that I'm not for sure that we don't need somebody to properly do it because I also understand that there's another lawsuit I guess from what your comment just was with the see that now someone trying to say that it was they were fired because of race or something to that to that nature is that correct there's a complaint filed with that organization I'll let well okay that's I don't want to give me any more information than. If I could speak to that three hundred fifty thousand dollar grant and expand on that just a little bit that was a sub grant given to this sub grantee the internal auditor assigned to the Department pass for invoices we had paid at the time ninety thousand dollars to that subcommittee on that three hundred fifty thousand the auditor requested the invoices in the documentation of the work that was done in our employee unfortunately didn't provided it existed and we subsequently gave the information the deliverables and the receipts the invoices and everything and I don't think there's a dispute about the work that they've done it's just they ask for the information and unfortunately it wasn't giving to them before these audit findings came out but they have been given to them. Senator Hickey follow up how. One other Senator hello she the director. He she whatever as well eleven years I believe okay. And my counsel has advised me to to state clearly that no one was fired in this situation that everyone voluntarily left okay was that we're discussing okay thank you. Senator Pitsch I guess mind kind of went. With the the last line of questioning I was gonna ask that we go inspect the actual usage and inspectors wrong on it the actual usage and I also think you did exactly what we needed to do and shutting it down still I believe you said a million two was spent. And I think it might behoove us as a state you know every dollar of taxpayer dollars were in charge of and oversight. I think I've heard that we approved no. Whatever you want to say. The various things done with it but I think we need to make sure that's that's true whether we need to bring a prosecuting attorney whether we can do that as an audit agencies and that is a state agency I'm not sure the legalese of that we've looked we've looked into the expenditures of latest findings and all the in depth and then all she found was the guideline that correct now there will be there will be some more that that got spent in FY twenty two some of this was in FY twenty but there will be additional that will be subject to our next autumn as well follow so we will look at that so you're you're findings and looking at the usage and the process was strictly the process wasn't followed correctly that's correct okay thank you to I have a question is there a way we can get a list of exactly where that money went all one point four million names and addresses of how that money was actually spent in the agency where it went to where the person. To most of persons the on this grant the forty million dollars is a spirit spread among us salaries French multiple sub grants throughout the state and then also we partner with different parts of our center for local public health of some of these funds are actually going to prevent the renovations within our local health unit so yes we can get you a listing of all expenses to date and we're how it's been allocated all right thank you. Any other questions from the body. Thank you members all right moving on to finding number three. This is the P. card issue. I'm sure you want me to make a statement just one question I had okay so in this particular issue what we had was one of our centers that was purchasing some equipment specifically for vaccine clinics during the early stages of and and per backs in clinics and testing events early in the pandemic when we were doing testing we were not bringing those patients into our local health units which could potentially expose our Patients and staff to symptomatic patients so we were conducting vaccine clinics and Testing events in our parking lots our local health unit so we were purchasing some awnings intense that the patients could get under and our staff to get under so the amount of these Awnings that we were purchasing exceeded the limit of this particular centers purchase card and most centers have multiple purchase cards in different centers and different sections and so instead of requesting to raise the self imposed limit on that card they used two cards instead so we would have approved the limit to be raised and we would have ended up purchasing I'm not trying to minimize it we would have ended up purchasing what was necessary but in this instance they made a a and a mistake and splitting it between two cards instead of asking for one card to be raised so that they could purchase. These are awnings intense that are over ten thousand dollars I think collectively we have ninety something local health units real estate. Questions from the body. Hearing none number four. This particular finding relates to one of our boards that we acquired in two thousand nineteen transition and of course keep in mind that this audit is from fiscal year twenty two point twenty one we put a lot of controls in place since then I don't think the medical board had been subject to legislative audit prior to transition so you know this was a a learning curve in growing for all of us but I think we've made significant progress and put controls in place that you know will have much better inventory control and management moving forward so we're we're we're optimistic this was a one time issue and that we've made the appropriate steps to correct this. Members any questions have you been able to find the five items. And questions today. Today no we have not but with the systems that we have in place going for will be able to monitor anything you know any purchases that are assets to make sure that they are on inventory. Okay. Members any questions. Okay. Number five number five. I'm going to defer to my CFO if that's okay madam chair cover the side. The reconciliation. Yes ma'am the I just overall. Each month we have we request that these reckoned revenue reconciliations are submitted and for at least two years this was cited as a supplemental letter is an issue within our agency and so We we are at fault for not being a little more being harder on our programs but as of September twenty one we have been harder on our programs and we no longer have this program this problem at all as of today we are in full compliance with those monthly revenue reconciliations. Thank you any questions from the body. Hearing none all right any questions on the full report. And moving forward there I understand that we're not spending any more of the forty million dollars what's the plan moving forward on that I apologize if I misled you guess we still are spending toward the forty million dollars is the plans now as I explained we have multiple so grants throughout the state as well as we have seven staff salaries and funds that are going to our local health units renovation so each month we we have project officers that monitor every allocation of funds so we're just continuing as intended when we receive the funds okay and and you have the. This the. Rules in place that we're not going to be seeing anymore. Issues with this yes we have internal controls and we have several layers of review and approval before any funds or or Are approved for payment. I would like to hear what this is more or about this I'm sure there members of this committee if you could email Mister Burlington would like to hear more about that. This we could follow up there any more questions from the body. All right what is the what is the month. I move to accept. File a motion filed. Second. Second by representative for Bentley. All in favor say aye all right. Okay. Madam chair in addition to the findings with the health department We had a request from a legislator a while back to look at for us to go get some information on contact tracing the expenditure were the help or might on contact tracing so we gather some information we've we've had this information for a while but we they want to wait till we had Director finding just do it all at once so you should have a copy of that letter in your packet it's on legislative audit letter head. as you can see in that summer they were basically for vendors that that. For use for the contact tracing activities in to the tune from is from inception until the end of June has spent about a hundred million dollars on contact tracing and so you should have a letter there and as you all know health department people here to answer any questions that you have. If the folks in the health department that are here to answer questions could come to the in the table. If you could please identify yourself. Good afternoon I'm Jennifer Delahaye Director of the Arkansas department of health thank you doctor dealer Hey thank you. And I'm Joe Thompson chief financial officer Department health thank you miss Thompson. Right if you Senator Solomon. So after over a hundred million dollars spent that we find out that the contract racing had any positive impact on the transmission. To have any data to show that. Yes Sir there are general studies that show that contact tracing and this is not what I'm asking now so we spent a hundred million dollars and we have data showing that what we spent. Has positive outcomes not what studies do but what we spent we have a data saying that that was affected. Yes Sir so what we can show was that are hospitalizations and deaths as a result of the contact tracing and case investigation were going to work effective in keeping our hospitals from being overwhelmed as well as showing that the deaths that were excess deaths were lower than they would have been can you send that information and I'd like to see that place thank you yes. Any other questions. I have one how many contact tracing actions did we perform. So from the end of June through the end of twenty twenty through the end of February of twenty twenty two we did case investigations and that included four hundred and twenty nine thousand one hundred sixty four case investigations. And that's different from the contact racing into the case investigation first which is an interview for the positive case you the interviewer finds out when they became symptomatic House. Where they might have been exposed and educates them about what to do for isolation and then a follow up with their contacts and those contacts as what we call contact tracing and so there were during that time period there were a total of six hundred and fifty eight thousand two hundred eighty two contacts that were followed up. Okay. This Senate is mine. So the support or ninety one thousand. So over four hundred twenty nine thousand and cases that were and interview the case investigation under the contracts about half the contract was case investigation and about half was contact tracing and we're done with all that at this point yes yes Sir. I guess my my question would be what was bang for the Buck here how how much that cost per case to trace all these folks. One hundred forty dollars. Okay I don't have a a figure on the case to you we didn't pay by that way now we could do the calculations for that but that's not how we issue payments to the vendors her contact tracing episode we didn't. You said unit of measure. Any other questions from the members. Okay saying none. Questions. Who is Stephen is filed. Sent them will the body. So moved thank you Senator Hickey don't know what I'd do without you. No I don't think everybody feels that way. I'll take that as a second all right. Anything else Mister Burlington. So the next report we have with findings game and fish commission in this this report contains one finding. The gamefish commission notified us that on October thirty first two thousand twenty one that a wildlife officer realizes state issued ATV with an estimated value of over five thousand been stolen from the front of his residence a police report was filed with the minimal police department for this and we referred this to the prosecuting attorney thank Kluge finding. So anybody from game and fish here. Good afternoon madam chair members Chris racy chief of staff for the Arkansas game and fish commission. And we she might CFR thank you so I take it we have an ATV missing and nobody's best up that's correct we have not recovered that item again please report was filed we self reported we did an internal report immediately following the incident and and continue to follow up with trying to enhance our protocols visiting with their staff on how best to to take care of the state property and in the future the to make sure that we don't have a follow up incident of this nature to the best of our ability. Thank you any questions and comments. Take this report is received. We have one more yes yes ma'am we have one more report and the last report today is that you judicial discipline to serve building commission which also has one finding during our testing expenditures we noted that the Commission overpaid invoice to record storage vendor and not probably pay the invoice for the year under review. Due to the exceptions that we noted we expanded argued include all invoice for this vendor. For fiscal year two thousand twenty two thank two thousand twenty two and we noted that the commission paid for September nineteen October two thousand twenty and new November two thousand twenty they pay for those months twice resulting in overpayments of four hundred dollars. Also the vendor did not follow the lease agreement and monthly billing specifically they over charged for standard deliveries and they are routed over charge for the lease space in for these items the overpayment resulted. In two hundred dollars of overpayments and lastly the commission is not paid invoices property which resulted in late fees totalling almost one hundred thousand dollars it's my understanding madam chair that the vendor has reimbursed all those calls back to the agency that concludes a finding. David J. Sacher for the judicial discipline and disability commission could you repeat the part about a late fees because I don't think we have a hundred thousand dollars. No if the hundred dollars I'm sorry thank you file I'm sorry calendar we're talking a lot of big. I think it's about a hundred dollars total that got paid back for everything that's been talked about thank you for this is that kind of shocked me it with a seven hundred fifty thousand dollar budget afternoon's gonna get really long. Now that everybody's awake all right. So we're back in zero and this one. Yes ma'am if I could just respond quickly we were alerted to this by the auditor and were able to get full reimbursement from the vendor the I actually explained to the vendor that they could come here explain it to you or they could reimburse us because we had the finding we're able to get all the money back it was clearly just some sort of bill bill English I guess they increase their monthly amount by a small amount matter dollars and while we were still under contract quite frankly I'm concerned if much larger agencies have use them that might be something that audit looks for because we're a small agency with three hundred files a year but I can imagine if they're used for other of state agencies they might they might overcharge them as well I'm glad we were able to recover everything and I appreciate the insight. Any questions. Right thank you so much for your time. Thank you very much have a great Christmas season. All right that concludes today's business any questions or comments for the good of the core body. All right saying nothing else will put everything is filed thank you all.