ALC-JBC Budget Hearings

Thank. Many call this meeting to order. First up we have department of commerce has modern findings so we'll start with that he. You're recognized begin the audit findings. Thank you Mr chairman my name is David Webb I'm an audit supervisor with Arkansas legislative audit. Recent audit findings for the department of commerce are included in the material such the. There were three findings for the departmental audit for the year ended June thirtieth twenty twenty. These dealt with financial misstatements due to inaccurate journal entries. Undisclosed related party transactions and improper payments to a vendor for services which were not performed. Multiple findings involving the Department were noted during the statewide financial and federal audits for the year ended June thirtieth twenty twenty one. These included financial misstatements due to inaccurate journal entries improper or unsupported benefit payments to recipients of both the regular unemployment insurance program as well as pandemic related programs noncompliance with federal reporting and special program requirements and duplicate inaccurate or unsupported expenditures for sub recipients of various coronavirus relief fund programs. Thank you Mr chairman that concludes the findings for this agency. Thank you we looks like we have a few questions representive Wooten you're recognized again thank you the only of the first page. On the operating revenues were there was a fifty two million dollar. The problem news. What what who who corrected it once and it and then made another mistake was that was that done by the all the people or was it done by the the agency. We detected the error while we were performing or audit we're a. What happened was. Funds that have been received for one type of for example federal revenues. It was recorded as operating revenue but it should have been recorded as non operating revenue because of standards of how the financial statements are supposed to appear it should have been record recorded or classified in a certain way that was detected or audit work. We made the recommendation to the agency that they correct the financial statements and the agency along with the department of finance and administration did make the correction before the financial statements were issued so that the report would be accurate at the time of release with the agency did correct those misstatements with the if I'm reading it correctly the entry to make the correction was raw. They were well who made who made that it would so in other words you found that you found the misplacement of of of of the funds I understand that part. When you call the correction to their attention to Jo all make the correction or DFA make the correction or the agency who made the second correction it was wrong that led to the seventy two million dollar. Thank you those were. Well this is the there was that you all or was it the agency. I don't know if it was I don't recall that that was the agency or DFA who made the improper river correction interest overhead but if in a and the agency will work in conjunction in making the journal entries okay and so in the process of recording transactions for the agency. Yes there was an improper. Classification originally originally eight an attempt at correcting the improper classification was made but the attempt was incorrect well. When we were doing our audit work we noticed that the attempt to correct it was was wrong. So we advised and recommended that they would make. Correcting correcting entry. So to where we can get the financial statements be accurate at the time of release okay follow up information of go ahead it is there's so many findings all half of if I'm looking at it correctly half of it involves workforce services is that is it just an wielding down there I mean because of the federal involvement and all the transferring of funds what what can be done down there to correct the problems I mean it's just you know there's just millions of dollars that are changing hands between us between their customers and between the federal government so what is the can and I'll be managed. I mean you all represent written up I'm not sure that legislative audit can answer those that what I'm asking you like to hear agency agency German what was wrong with that and well well this is he's not the agency I am with legislative audit with the answer that we can get somebody up here from the agency if you are asked that question thank you think they're here. If someone from the agency could come and speak to that question. Might be. You would. State your name for the record representative again and. And Mike Preston secretary of commerce. David L. secretary or a CFO Department converse. Surest children stricter the Division of workforce services thank you did you hear representative with questions there. We did and and all the Sir I think represent within your you know your. Analysis is good it yes we have literally billions of dollars especially through the pandemic the course the pandemic that was transfer between federal government entity WS and then out to those who are in need of assistance and funding and I let the doctor children's dive into a little bit more but if you recall when we went through the transformation and and do WSP came a part of the department of commerce who is about six months then when we got hit with a pandemic so we're in the process of learning and I'm covering a lot of information and setting up new checks and balances when the pandemic kit and we kind of shifted to an all hands on deck of getting unemployment compensation out the door setting up several new federal programs or passed by Congress to get money out so a lot of it was you know as we go and the federal government was doing new new guidelines and recommendations that is literally daily as we went through it but now we're past that the workload is somewhat alleviated we're down to about I think three thousand people per week still receiving some type of unemployment benefits so those numbers are coming undone or a lot better position in Dr children's and her team have really worked diligently over the last couple of years to get these checks and balances better in place ala doctor children students will get more specifics of some of the budgeting items that they've set up or last couple months Senator president thank you that is correct representative Wooten as you know during the pandemic and the funding per individual and the funds that were coming out to pay those individuals from the federal government was unlike anything we've seen before obviously we didn't have system set up for that we did set up a new system for a pandemic unemployment assistance program that was set up in approximately thirty days to distribute benefits to individuals that it never received unemployment benefits in the past so as secretary Preston said we had rules of incoming and guidance coming at us and changes At on almost a daily basis so we would put something in place it would be very broad then the next week then we would get more guidance from the U. from US DO well we would then implement that guidance amended nationally anyone that filled out an application receive benefits. And we were encouraged to pay those benefits as quickly as possible and we did And so then what happens is then you pay benefits to people who are who are not eligible and so then we have to go back we have audit findings because of that and we have to go back and try to collect those benefits to a lot of times people who don't even exist of because it was fraudulent a or they filed on someone else like many of us in this room were victims of that including myself so that's what was happening things were were changing so rapidly and we were doing our best with what we had in going from normal or actually less than normal benefits about where we are today when finish in filings for unemployment to an astronomical amount of individuals which was evident by the number of people. Just standing in line at our offices so as secretary Preston said we have done a lot since since this time last year when the all the benefits stop the federal benefits of the a summer of of twenty one and we were able to to start trying to get everything pulled back together report all that information and further assess what we needed to do within our operations as we were doing prior to the pandemic. Thank you a representative speaks you're recognized for a question thank you Mr chair I'm over here. Good morning up Vaught I understand what on you have gone through but bottom line how much did we actually lose. Moneywise during all of this. Well we are still collecting on on the individuals that we know that we can that we can identify I did not bring those numbers up here with me but I will have that later in our budget hearing if if that's acceptable thank you thank you for each thank you Mr chair. Thank you representative Cavenaugh you're recognized I thank you Mr chair mine's not going to be dealing with the W. S. mine's gonna be dealing with a the Secretary. So is this in related to the audit yes Sir itself okay so my mind is going to be dealing with a finding a number two on and where you secretary had failed to report on your report about your directorship of a nonprofit. Can you tell me what the name of that nonprofit was S. the. Thank you Mr chair a reserve count as the Arkansas center for data sciences okay. And how long have you served on that board. The. I don't twenty nineteen twenty twenty whatever it was created somewhere thereabouts okay prior to this audit finding did you. Report any of that on your report your financial report. Prior to that found this and twenty twenty did you in nineteen eighteen had you reported that it wasn't it wasn't existence back then you said nineteen nineteen twice however exactly what years yeah I think was nineteen or David my road it was it was very early with the nineteen it was it was a group that was created with or board members and it only existed probably two years up until that point of the finding. Okay so did you reported nineteen then. Okay did you go back and amend that report in nineteen. Honestly I don't remember I know we updated the current disclosure but I don't know I would instantly we did but I don't actually know what should you not go back and amend that since now you know that it should have been reported yes okay I was involved in the process but I would say would probably done that way I can't personally say what is. Okay secretary can you tell whether or not that you actually reported that in nineteen I can double check I think we went back after it was if it was it was found on there okay we think that the way that we were instructed to correct okay and you reported it the year stance that's correct okay that nine hundred eighty six thousand that was paid to them what is it paid to them for it's for their apprenticeship program. They do for that it's an IT apprenticeship program that they find I. I. T. apprentices and place them in apprentice programs of companies around the state okay are there any other nonprofits that counted members of that not been reported. Okay the reason I ask is because I know I'm stunned prior financial reporting you reported where you actually sat on the board that actually pays you the fifty thousand dollar bonus that you actually sit on that board for sometime you reported that so I don't understand why you didn't know that you had to report this. This was a group that had been set up rather quickly which is the four board members there was no compensation to any board members it was merely a group that went through the process of giving out grants they were compensated they didn't receive any. Payment for any of the services it was an oversight in terms of. Yes my member of this board that was essentially what the finding ways we just forgot to do that disclosure. Okay thank you Mr thank you senator Hammer you're recognized thank you share this committee for our children the could please. Go ahead and if the. Appropriate time a hold to their budget but it is this related to the audit findings were we haven't started the budget yet now household to leave a hole to the budget portion of it then all right Let you get back in the queue for that then As has been the case during these findings are or these hearing so far we've asked the department to come to the table wall we're presenting the budget so without objection will consider this audit filing finding reviewed. Thank you Mr auditor and if we can have thank you Mr. Miss Hamilton. Are you. Billable to begin the re. He's. there. If you if you guys want to move down you can stay at the table for for a of this presentation. Miss Hamilton your. Recognized to begin whenever you're ready. Good morning members on Mildred Hamilton I work in the fiscal division of the bureau I apologize for my absence I had a sidebar. We'll be going over the department of commerce's budget today all the items on the agenda will be presented by me. We are going to be in volume two of your manual. And the first item is department of commerce. A Mister chair if it's alright I'm just going to go over the appropriations that have changed levels if there are any questions of appropriations without change levels I can go over those also. We're going to start on page fifty. This is the administration and Cher Services Division. On page one fifty one you will see their department appropriation summary there are seven appropriations within this division four of which have changes in their line items. There are forty eight positions that were authorized in the twenty twenty three bill moving forward the agency and the executive recommendation is a decrease of one position so we forty seven total positions and over all there is an increase from the authorized level of seventy eight thousand in year one as twenty twenty four and thirty three thousand in here too as twenty twenty five most of the changes are for salary and matching rate adjustments that occurred in the previous biennium. First appropriation with patient with changes is on page one fifty two this is the office of skills development apprenticeship expansion program this is a relatively new appropriation was established in twenty twenty one and it provides for the personal services operating expenses of that division and it is designed to expand opportunities relating to apprenticeship programs in the state it is funded by federal revenue. With the exception of personal services matching which is going to be a slight change in their budget they're requesting continuation of their twenty twenty three authorized appropriations on page one fifty three you'll see there appropriation summary. As I mentioned before both the agency request and the executive recommendation is for an increase in personal services matching only you'll notice that the regular salaries line item is the same from the authorized in twenty twenty three going through twenty four and twenty five so the increase is about fifty four hundred dollars in year one and then six hundred and sixty dollars in here too again this is an matching only. The next appropriation with changes is on page one fifty four. This is the office of skills development this is our operating appropriation it is used to award grants to private and public organizations for the development and implementation of workforce training programs. They're also responsible for reviewing the criteria for these awarding of the grants. And before October one of each year they are required to submit a report to the governor and the cochairs of Legislative Council to report the activities and expenditures of the previous calendar year. Funding is from general revenue. A two point five million dollar transfer from division workforce services. And if needed a transfer from the workforce two thousand Development Fund you'll see that funding on the next page. With changes in regular salaries personal services managing in capital outlay skews me the agency's requesting. General revenue funding of five one million in twenty four and in twenty five the executive recommendation does allow for the agency's request so on page one fifty five. You will see the changes. There were requested by the agency being implemented on this page I do want to note though I had had a conversation with the agency there is an error in the operating expenses line item you'll see there's a thirteen hundred dollar increase that was not meant to be there. So the request that they are having for their appropriation totals for twenty four and twenty five are going to change. So for twenty four instead of the twenty three million five oh four four sixty one they will actually be requesting twenty three million five oh three one sixty one that's also the executive recommendation. And in the year twenty five with the reduction of that thirteen hundred. Your request will be twenty three million five oh five one forty one. One fifty six. Is there next appropriation were still in volume two this is often other appropriation for the offices skills development it provides for the personal services and operating expenses for the administration of the program and apprenticed ship programs. All the funding is general revenue they are asking for changes and personal services managing. And general revenue about two point five million going in fiscal year twenty four and twenty five the executive recommendation does allow for the agency's request someone page one fifty seven. Once again in the regular salaries line item you'll see there are no changes the only change is an increase in personal services matching about ninety three hundred dollars in year one and fifty two hundred dollars in year two. The last appropriations changes is on page one sixty four. This is their shared services paying appropriation that provides for the personal services and operating expenses for the cabinet level staff so this includes their human resources there IT there fiscal and their communications teams. The appropriation funding consists of a mix of revenue sources and they're transferred from divisions that utilize the shared services which includes general revenues and cash revenues the agency in addition to requesting. Regular salaries and personal services increases due to the salary and rate matching adjustments they are asking for the transfer one position to the Arkansas Economic Development Commission state operations appropriation this is a general revenue corporation. This is just so they can budget the position and the correct division during the biennium the executive recommendation provides for the request and you'll see the changes on page one sixty five. So there's a net increase of about eighty four thousand in fiscal year. One which is over the twenty three authorized and then twenty five thousand in year two. There's a the only changes requested Mr chairman that's the conclusion of our presentation for this division. Thank you On page one fifty five. In the industry training program and the work force improvement grants line items both of those appropriation request that you have in the executive has recommended are significantly more than what you spent the last year are you anticipating a lot of additional funds in in those two line items. That are is not reflected here. Why we've got somebody here from skills development again at that specific question I think it may be related to the this project they were getting ready to start but. director Terry Waite answer that question. Thirty ways director also skills development representative could you would you mind repeating the question so on Page one fifty five if you're following along the industry training program it shows that you spent two point two million last year but you're requesting fifteen million and then workforce improvement grants one point six million last year but you're requesting three and a half million which are you anticipating a lot of additional revenue coming in in the the next two two years that you'll be spending each of those years so just a lot of the spending happens in arrears so last year we actually awarded closer to about seventeen eighteen million right so but as we expended danced at its build against it so it's not that we this is what we actually expanded last year versus what we awarded okay so I mean we're going to continue to award grants be awarded somewhere around three hundred fifty grants last year for workforce development training some of that obviously has been awarded to has been extended yet excellent thank you Sir senator Chesterfield you're recognized for a question thank you thank you Mr chairman secretary I've asked I that this is a part of the budget the ops of skills development be held. I ordinarily once hail someone gets with the senator or the representative and visit with you about concerns that has not happened I ask Mister Anderson sometime ago to put a hold on and I have yet to have a response from your director so if you could speed that up I would certainly appreciate it. You so much. That we absolutely Senator. Right Not sure who's in representative. I'm guessing Ladyman. Yes I'm in the wrong seat here. On page one fifty three had a question yes my understanding here but. the line there for operating expenses shows that you spent three hundred twenty thousand. And your were over budget five hundred five thousand and then you have zero for the upcoming years can you explain what what that is yes so when we first right thank you representative will be referred for awarded this grant we actually drew down the full amount of funds from the department of labor which was not what we were supposed to do so we had to do was we had to come back here and ask for additional appropriation above and beyond we're actually going to expand so we can send the funds back to the well and then begin expended against that so that's why you see that significant increase their and not throughout the remainder of the grant opportunity thank you Sir. Right representative Cavenaugh thank you I have a request if you could provide some information to the staff to get out to the whole committee and this is going to be for every division inside the department of commerce if you can just do this so I ask it just once is there one time I would like to see if you can provide us for report that shows each and every fund balance you have. Where that fine balance originates from is a special revenue is that cash is one time money is it federal money where it comes from if there's any restrictions upon that balance of where it might be used so if it can only be used for certain project because they've got ties to to the feds or whatever if we can get that report. I appreciate that thank you representative right to senator Hammer. You're recognized thank you Mister Moore Cody just would you talk about the vision of the apprenticeship program for the next year with the budget that you're asking for. Sure so thank you senator Hammer appreciate expansion is obviously one of our big focal points we had about a hundred twenty eight percent increase in apprenticeships since two thousand fifteen so it's something that's been beneficial obviously the state to employers to apprentices themselves what we do with that funding is essentially we award grants to appreciate schools that are either for profit not for profit to your community college four year universities kind of all across the board and so we award funds to help benefiting keep the cost down a tuition for apprentices in the State of Arkansas typically that's either paid by an employer of an apprentice or printed some selves and so the funds that we award those schools help keep that tuition down it goes towards things like purchasing code books for a lecture shins and plumbers equipment grants that they have state of the art equipment utilize when they're in their training programs in the evenings it also goes the fund curriculum and it also goes to help offset instructor cost that schools incurring hiring these individuals most of the time when you're talking about in a furnace instructor it's someone who's a journeyman or master plumber electricians especially in the construction trades and so they're working all day and they're taking time to give back in the evenings and so we award funds for that as well. And may not be appropriate to this portion of your budget but and and if I'm in the wrong area just say so but there was there's a question of funding in the past that's going out to like to city centers for you know just for the general funding or for the you know quite a purchases and such as that is that in this portion of your budget is I gonna be covered somewhere else if you're referring to the vocational of the secondary career centers that is actually department of ed funds through public okay funds we opened minister that in a demo you in a relationship to the Department of it but that's not our budget budget ministry yes I okay all right thank you. And thank you senator representative speaks. Thank you Mr chair. On page two a one fifty one. And are what the. The Arkansas line center expenses can you. Enlighten me on that. So in this budget there's a couple of different subdivisions one of them is the Arkansas wine producers council which is in the process of trying to build a wine tourism center so that appropriation was set up with the idea of a wine tourism center operating in running using special revenue that's generated for Why producers council it just the it just hasn't been built so there's not been expenses to. So. To find this for is this coming from the general fund or right now there they get a very small amount about five thousand dollars appropriation it comes from. HM revenue the rest of it is all special revenue that comes from an excise tax on grocery stores that are selling wine. So it's special revenue to them okay thank you thank you Mr chair thank you representative berry you're recognized thank you Mr chairman and I'm kind of following up on not represent of speak Sir but or where are we in the process of this wine center of Franklin counties in my district and haven't seen any movement on it can you tell me so. Referencing the previous question the way the preparation was originally set up it was only for operating expenses so in fiscal session you guys allow us to put appropriation and actually do a capital Trying to set up a doing a bid for a design professional engineering professional to kind of because they have a site but it's all very preliminary and I think because we're kind of working with the wind council For that right now it's kind of teed up to start hiring an architect in the design professional kind of come up with the drawing an idea for the for the wine tourism center but we've made some progress but it's a capital projects pretty involved process that's been going pretty slow but you if you would keep me involved in that process I'd appreciate it thank you Sir thank you Mr. Thank you senator Elliots you're recognized. I thank you Mr chair Mr weights I was trying to find out and out from the website and I can't do it how much. Money if you could tell me how much money that's been spent on the career centers thus far do you have any idea how much that's been contributed from office of skills development so the office of skill that thank you senator only also skills all of this this certainly directly in and spend a skills development funds in the secondary career centers around the state we we use public school funds which is a twenty point four million dollar appropriation that we administer with in coordination with the department of education and so that goes out to cover a lot of their expenses in terms of program you know direct program expenses in terms of faculty salaries things that nature as well as a criminal grades and things like that at the end of the fiscal year towards the end of the fiscal year we know if we have a budget surplus or if we're not have any money to spend will open a project where will award grants with the remaining balance to those career centers and they can apply for that for any type of equipment funds and there's a process by which they do that and we were those funds towards the end of your but they're not tied to our budget specifically how. Is there some kind of process where people or the schools the areas of some of them work together our own notified that there is a surplus in their in their X. money had what's that process yes so we we run enrollment reports twice a year once in the fall once in the spring with eighty polls October one and then it sometime in the first of November or February once we have gone through and made the payments out to the career centers we do that directly to the prisoners now we change that formula a couple years ago once we know what that delta is we will obviously notify all the districts all the careers and a service will districts will notify all the presenters of what that balance looks like and what the application time frame is to submit and so they can obviously submit grants to that and we award them sometime late March early April so they can expend those funds before the school year and are there any areas of where from your standpoint that you see we have a deficit of career centers and some are something else we might call it where students have the opportunity or young people or whoever is going to be trained have those opportunities do we have I guess the big question is do we have any geo graphical deficits where we need this opportunity NO center thank you for the question you know back in two thousand fifteen we actually had fifty plus school districts who lack access to a career center which is defined as outside of twenty five miles or thirty minutes of driving time since that time frame we've been very strategic and where we've awarded pilot satellite locations and things that nature both under the department of Christian prior to transformation and post transformation within the office skills development and so now we're able to say that we probably serve all school districts in the state of Arkansas now saying that we serve everybody is one thing I think we do know that we need to make some additional investments there and make some high quality CTE program everywhere because it's not the same but I think that's that's our next phase of this project is down served everybody now we look at the program itself and figure out where investments need to be made and lastly I I I was trying to of fine. And the board of directors so I could know who's on the on the board now Who is that on your website somewhere education workforce so ESPN is on the website we can send that to you it should be easily accessible it's not okay not to take away for me to go back in the no I I can find out if is there I'll find it you don't need to send anything to me say if not then I'll call you back okay all right thank you thank you senator I mean representative would. Thank you Mr chairman of. I notice all your hello this is question of plans to all your agencies but centers shared services. Where do you show your interest income on all your fund balances hello C. is shown as a funding source anywhere on any of the budgets. So insured services we don't receive any sort of investment income from the treasure we do have some of our divisions to have larger fund balances for different various reasons and if that money is invested with treasure in some sort of investment instrument than they are receiving some income from that and and we got that information but at least with this one we don't there is no investment income. Mr another could be some for as the no I'm not I have to double check on their anywhere that you see at what they call a trust fund it's over with the treasure treasure has a a group of investment officers that goes out and invest that money usually in a like a certificate of deposit with local banks it's overseen by the state board of finance so it's it's pretty safe well I understand that but I'm talking about. The interest income on investments and agencies that you all over city under your umbrella you're you're telling me you don't know how much interest there receiving that's totally controlled by who ever the CFO or controller for that division is I don't I don't see a roll up for the entire department but I know that it's there at the division level we've got our CFOS controllers there watching that. FOR the issue they do and they do do investment Mr chairman I'd like to request for from the agency The that they give us a report going along with the request of representative Cavenaugh the bill and on that report if it's permissible by of representative Cavenaugh that we include interest earned. And any investment the child like okay whether it's under your umbrella was department of finance I just wanna number and not actually that I've got that report somewhere I probably while that with information we've got that. Is a note. Custody is in all of. A good amount of money on some of the media some of it is how come you don't treat it is of funding so. Where does that money were you using it money is well spent back in them Fund bounded typically rolls back into the trust if you want to spend it you typically have to come here and ask for temporary appropriation depending on what you want to do I I'm familiar with that but it is a it is a substantial amount of money that comes into the agency that can be used even if you have to go through the process of coming back to peer is that correct yes the show that recently because the interest rates been so low it it means you have to have a pretty big fund balance to get a significant but is it I would call significant is is that request permissible Mr chairman. Can you state that again was request that the others wanted to have a report. along with representative Cavenaugh is request that would show the interest on each account that they show fund balances of all that they would show up and show the interest income I know we have the same ago wasn't half as noted if you but this this is the individual agency or individual fund balances that sensible yeah we get. Yeah I get that staff noted and that they're they're good with that Senator Chesterfield senator. Your thank you message here missed I I did I did find the whips on the website where the board the board members and so I just had a question about that It's because I don't want to send by looking at people I know who and what they are that six men two women and is anybody in that group a person of color. To my knowledge no ma'am. Do you is that a concern or should be a concern for us that we don't have representation here for across the board yes Sir I mean I think one of the things that we're trying to do right now and and identifying board members to serve on the board we do have some vacancies and so we're trying to be you know cognizant of the fact that diversity is something that we're focused on and so I think as we you know obviously work with the governor's office and try to fill those open slots of that's something we're going to be intentional about what we not intentionally for sure we were but we never I don't think we had a vacancy on that board and. Six years but we and in six years at what point where we've been intentional. we've been intentional you know since I've taken you know and since we've been here senator And while this may not seem like a budgetary matter it is because we know that it matters people's experiences when it comes to deciding what priorities are so. In the six years we've had six years where there's not been a person of color is there and but we're trying. Is there something in the criteria that's causing a problem and having representation spending these millions and millions of dollars Senator we don't make the you know obviously we don't make the appointments to those boards or commissions we actually have had diversity on the board out of the real yes was a member of that board for no I remember I remember that and we're just come back for his term expired so you know And again that's something we're cognizant of it we're working to address but you know obviously will make this point have we ever had of an African American on the board at all I would not be able to answer that not not since I've been. Involved in the agency okay Mr out just one more question could you describe to me what that the intention hourly it is that your plying to the process of getting people on the board how are you be an intentional I don't mean you whoever's whoever's making recommendations to the governor I think it's just taking stakeholder input from parties involved in the business and industry sector around the state you know obviously membership of that board is industry driven in nature so it's representative of you know eleven different industry so to speak right and so I just think that as recommendations comment we pass those along and and that's address. And that is that last part that I think is it may be something we should take a look at and I might even ask your opinion about it. Of because we set up this board it's and so industry driven which can involve a lot of I I I guess personal Self interest. Do you think or I think Mister chair we need to think about if we keep ending up with boards that are that are in charge of the millions of dollars that we are appropriating and spending. Do we need to look at the criteria for who can be on this board because if you if we understand the way things work six systemically we're gonna for ever most likely end up with this kind of situation so if we keep this if if we set up the same criteria that we always have unless we have had our heads in the sand we know who's likely going to end up on this board. And whether you want to do better not there he there may be no way you can because of what we've done so that's something we ought to look at and really think seriously about changing the criteria because then and owner I should not be the only. Reason other prevailing reason that you got a chance to serve on this board because we don't keep getting what we've got. And as as somebody who is working working with this program I think that would be important for you to support should somebody bring that forward of changing that that criteria and I if if we if we don't do that you know we just keep slipping backward and saying we're working intentionally go forward when and we're not and I don't want people to miss on this is not just something that's up a bit of sociology sociology this is about this budget who makes decisions about how this money is spent matters a great deal. So I will I will talk with the fellas who by need to offline about this but thank you senator thank you Mr chair Senator Hammer is recognized thank you Mr just couple quick follow up questions the names for the individuals that are on the boards are referred from the industry themself is that correct. I mean yes it or it can be a mean individuals have the opportunity to apply for or you know my understanding is any board or commission they have there's an application process online the go apply for so I know it's not necessarily that they're referred to from a specific injury but not people have a tendency to talk amongst themselves and speak about whether or not they'd be a good fit serve on a board or commission okay and then those are referred up to the governor's office for final point is that correct. That's my understanding yes Sir okay but it already nature at the source of whatever industry whatever area it is the board needs to have somebody appointed to yes Sir okay thanks. All right sing no further questions we're gonna move this section to the end of the agenda today if you could get with senator Chesterfield we'll just hold this until the end and hopefully can. Talk by time we get to you to you miss Hamilton you are recognized for their your presentation on number two Economic Development Commission. Members the appropriation summary for this department starts on page one sixty seven. It skews me they have twenty one appropriations there are nine was changes. Over all there is an increase of one position being requested by the agency also recommended by the executive in an increase in both fiscal years twenty four and twenty five the first appropriation that we have with changes starts on page one seventy one. This is our state operations appropriation and provides for the personal services and operating expenses for the agency your three groups within the agency that are funded by this proprioception finance division or global business division and the marketing communications division this is a hundred percent general revenue fund appropriation the agency's requesting increased appropriation and general revenue about twelve point three million impose fiscal years twenty four and twenty five they are also requesting the transfer of the one position that we mentioned before from share services to this appropriation. They're asking for position reclassification with no change in appropriation and that a restoration of a hundred thousand cap for at least so they can make some purchases the executive recommendation does allow for the agency's request with the exception of the position reclassification is and you can see those changes on page one seventy two. Skews me. So overall as I mentioned there's going to be an increase in your one of about two hundred and fifty two thousand dollars but the agency requesting secretary recommendation is for that amount and then year to an increase in about forty thousand dollars in this you'll see in your regular salaries in your personal services matching line items the general revenue request is going to be about seven hundred fifty thousand over the budget announcmenet that you see in the budget. Thanks appropriations changes on page one seventy three. This is their community assistance federal appropriation is used to operate their community on the block grant program is funded by the US department housing urban development and through payments of previous loans they are asking for slight increases our regular salaries and personal services matching to would account for those adjustments reinsurance for an agencies requesting that this continue into next biennium which is the executive recommendation on page one seventy four you'll see the changes both the agency request and the executive recommendations for an increase in one position and then increasing regular salary and match only of eighty thousand. First year over twenty three authorized in the year two it'll be an increase of forty five hundred. Over here twenty four. Moving on to page one seventy five you'll see their disaster recovery appropriation which is also a federal appropriation. Skews me. This department was chosen to administer the state Arkansas action plan for community development block grants and recovery efforts for the disasters. Agencies requesting restoration of about eight point nine million in those block grant funds in disaster recovery and this was originally approved by legislative counsel in February twenty two this was a transfer on the same as federal grant holding account the executor recommendation allows for the agency's request and you'll see that. Appropriation on page one seventy six. The twenty three authorized zero but you'll see that the eight point nine million has been added each year of the upcoming biennium in fiscal years twenty four and twenty five. Next appropriation which changes is the rule service Division State operations is on page one seventy nine. This provides for the personal services and operating expenses of the division is a hundred percent general revenue fund it and they provide will grant programs and information sharing is an educational opportunities through regional forms through their conferences. There are slight increases asking of personal services matching. And to continue their appropriation and general revenue funding of eight hundred thirty nine thousand dollars each year of the biennium which you will see on page one eighty. So overall. You'll see that the agency request and the executive recommendation is for an increase of about ninety one hundred dollars and you're one that's over the twenty three authorized appropriate level and personal services matching and in year two you'll see an increase of about thirteen hundred dollars. Next appropriation was changes is going to be on page one eighty five this is the science and technology division this is our state operations appropriation. The uses appropriation to encourage the use of advanced technology and states businesses and agricultural communities they emphasized three areas project financing company financing and technology extension development. It also provides for the personal services and operating expenses of the Division. The agency's requesting appropriation of about thirteen point seven million in each fiscal year and general revenue funding about seven point eight million the executive recommendation does provide for this request and you'll see those changes on page one eighty six. Once again looking at the personal services line item you'll see a slight increase of about twenty three thousand in the year one that's over the twenty three authorized about thirty three hundred in year two there's no change the regular salaries line item. Next appropriation was changes is on page one ninety one this is for their manufacturing extension that right this is a federal appropriation. The utilize this to provide. Skews me. Skews me third party reimbursements for field services and technical support for manufacturers that are supported under the grant. Funding comes from a grant from the National Institute of standards and technology's national program so it's a hundred percent federally funded they are asking for slight increases in regular service and personal services matching and an increase of about a hundred twenty thousand dollars and operating expenses each year of the upcoming a biennium to allow for increase in federal grant funding executive recommendation does provide for the agency's request you'll see on page one ninety two that in addition to these increases they're also asking for one position. Next appropriation members with changes we're gonna go to their school or program it's on page two or one. This is an appropriation that's funded by the National Science Foundation and they use it to strengthen their research and education and science and engineering programs in the State. Hundred percent federally funded they're asking to re allocate appropriation of about five million both in fiscal year twenty four and twenty five to a new appropriation you'll see it on page two oh nine. This also includes the re allocation of three position and their associate appropriation. And personal services matching and regular salaries. There is a hundred twenty thousand and operating expenses they would also like to re allocate as well as in their grants and a nine AM and their external evaluators line items the executive recommendation provides for this request on page two oh two you'll note that authorized appropriation is about five million but then in fiscal years twenty four and twenty five you'll see that those items have been zeroed out. Moving to page two oh nine. This will be our last appropriation was changes. This is the new F. score procreation is also a federal appropriation. And this provides twenty percent match this is an eighty percent probably for over a federally funded program the agency as I mentioned before has the sessions at the bike to be reallocated and their associated corporation as well as the changes in those line items that were mentioned before they did get a transfer from the miscellaneous federal grant holding account back in twenty twenty one for this program it was approximately twenty twenty million to start the program and so they would just like to continue their appropriation into the next fiscal years Page two ten you'll see the changes that are being requested so there's nothing in the authorized calling for twenty twenty three but you'll see. The additions that are being requested in fiscal years twenty four and twenty five. As a note there's a restoration of eleven million in both fiscal year twenty four twenty five that was also originally or approved by legislative counsel so even though the appropriation we saw our previous pages was five million you'll see that the total appropriation moving forward is going to be about sixteen million that concludes my presentation for this division Mr. Thank you looks like we've got some questions representative Cavenaugh you're recognized the stars of thank you Mr my first question going to be on page one seventy two. I'm going to be looking nature line item on grants and aids this is our state operations. you're requesting appropriation of a million dollars the last time any money was given out of that line item was two thousand eighteen and nineteen and that was for three hundred thirty thousand are prior to that the first the next time it was given was in two thousand fourteen two thousand fifteen for two hundred fifteen thousand why do we need a million dollars there. A let me get our division CFO of your kind of dress some of the more specific questions like that thank you. Please identify yourself for the record and you're recognized tell me Williams Arkansas Economic Development Commission. Yes I'm over here. Good morning could you please reset your question on one seventy two under state operations you have a line item for grant in aids you're asking for a million dollar appropriation the last time that you spend anything under that line item was two thousand eighteen nineteen and that was for three hundred thirty thousand dollars prior to that the next time you spend any money in there was two thousand fourteen two thousand fifteen for just two hundred fifteen thousand dollars so why are you needed a million dollars in that line item yes ma'am thank you for the question this supports economic infrastructure grants and that appropriation will be utilized in the event that there are sufficient balances available to fund projects. Well according to this there were sufficient funds to to do projects in twenty one twenty two but it shows zero were funded. So as you will note during the pandemic a lot of things kind of just ground to a halt and so in terms of economic development a lot of our projects just kind of stop and so we were not able to expend funds or or initiate projects or complete projects during that time so I think what this is is a request to restore the preparation and anticipation being able to use existing funds for projects there's no expenditures something because there were no projects that were done unfortunately okay but your history shows that you don't need a million that you don't find a million. So to do not reduce that to five hundred thousand that's closer to what you're actually been given out historically actually more than what you give out historically. We're hoping for a big year. That that's not an appropriate answer I made I mean I'm looking back at a ten year history. If the projects are there would certainly love the ability to to do them in and work with them but if they don't then you know that's you know certainly someone we could reduce I just hate to miss out an opportunity well your your projection is your revenue was twelve general revenue was twelve point three million but you're shy showing that you want to appropriations for thirteen point five so you're asking for appropriation over what you think you G. R. is going to be so why can we not put these into a better perspective what we really think we're going to get and what we're going to use. I think for a bill soft standpoint it's more of a in anticipation. Well I mean I think I know from a business perspective I would tend to agree with you I mean from a economic development perspective because it tends to be it's not a linear process it tends to be pretty lumpy you have good years you have bad years I think that's in there in anticipation be able to do a project that were to come along that's well since twenty. Since two thousand and fifteen if only awarded to awards so Mr chairman I have a motion at the proper time but I'd also like to ask you about Page two TN. Which is going to be your **** car Scotton technology in the federal. You're asking for a new year grants in that line item you're asking for fourteen point two million dollars. But we're only showing that we're not even projecting the federal revenue that we're only going to be using I guess a fine balance of six point eight million so why we need that much in that appropriation of we don't see anywhere near getting that money. And so with federal funding you can do one of two ways and again maybe someone a philosophical discussion you can bake it into your ongoing budget which is kind of what this is doing saying you know if the if we get a grant if we get incoming federal funds for a project or something the appropriation is there the other option would be to come in and cover peer and ask for a temporary one time appropriation for federal funds and so either either mechanism would work thank you can come to peer you can Dale Sabin asked I'm also going to have a motion at the proper time for that one Mister chair and I'll get back in the queue thank you senator Hammer. Thank you Mr. What are you anticipating coming down from the feds in the next year that would justify you needing to keep your procreation or do you have any insight right now with the discussion knowing that elections may change things here in a little bit. As it relates to the escort grant the committee that are any of your appropriation balances going back to the previous conversation before the court our station we don't have any reason to believe that it'll be any different than what it is most of them usually end up in a continuing resolution through their congresses where they get passed okay and then the on the on the F. score in the science and technology help help me understand how that ties in like with what higher it does or you know any of the other efforts to increase science technology is there a is there a blended approach to where this money is being used to help what's going on in other areas or what's the difference. It is a blended approach approach our apps fourteen more expiry closely with higher education and looking at the grants and where a research grants and dollars are most needed in the state and perhaps or non availability through our normal funding sources to higher education to receive a grant so will coordinate with higher education and look at those areas that are in need of additional research funding. Okay our thank you thank Mr. Thank you representative Tosh you're recognized you thank you Mr let me direct your attention to page two oh eight. For rule services for law enforcement grants and I just need you to help me understand it us see or you've been authorized five five million dollars but when looking at the total number that was spent for law enforcement in the the rules are version neutral areas I'm just not understanding the essential one five hundred ninety five dollars out of five million dollars is all that was disbursed to rule law enforcement is what am I missing here. A this is one representative that it's actually never been funded it was amended by the legislature couple years ago. Okay it's. What is this never been funded that's correct. Not our operating budget. Say that again please not in our operating budget. Okay. A. All right I'll get back with the it kind of caught me off guard not being funded because that's not the way this region's showing that the thank you to question executive recommendation I thought it had five million dollars and it to be used for law enforcement across the state especially in the rural areas and so I guess I need a further explanation from someone as to What's even in here in the capital outlays basically if it had been funded in the what what are we looking at in the future as for trying to fund this and the what's your plan. So to some extent we we Kerry appropriation for projects that are. Created but are not necessarily funded and this is probably a great example that we've got several like this like parole broadband we have a pretty hefty appropriation is never in funded because has to come from state general revenue and that's kind of what you're seeing here is is. Ideas and projects put together but not necessarily binding following later so you see appropriation but you don't see the funding. David this this section shows it's a cash. Yes funds where where the five hundred ninety six dollars can I I don't know okay interest. Yeah generally I mean it would have to come from. Okay Mister I don't know the answer to this but it obviously you're looking at it as well and I think probably other colleges really can it's really confusing to try to understand what you're doing here with this and I I'm not sure what we need to go to get an answer I would need to preserve it but you know it's before this committee to review it in here we're finding out now that of five hundred ninety five dollars augment stand out of a five million dollar request for law enforcement because state now been told that it was never fund. You all know the history on it on why it was originally was added by the Attorney General of the project that was anticipated that actually never happened so the cash funds would come from the AG's office but they were never awarded. Okay. That. Cleared up representative well I wouldn't say cleared up but it was it was a step in the right direction so I'll visit with you further about this and I'll look into it further thank you Mr all right. Representative. Beatty you're recognized for a question thank you Mr chair first I would like to thank the Department Mr secretary and and in the job that you do and in the state of Arkansas for job creation especially in the rule areas of the state one thing I would want to point out to my colleagues back in nineteen ninety two when I was a younger banker and I got involved in economic development the hardest thing for me to wrap my head around was looking at economic development the same way I look at making a loan our prudent banking two different worlds of of looking at some sometimes it's a little difficult to look at the add an out at a project the same way as the if someone is coming and that you're going to be loaning money to make every payment it is an investment and there is risk involved but I think the department does a great job of that so a couple things what we're looking at this budget I would encourage this body to provide all the resources that department commerce and and economic development would need to take care of what's coming through the state a lot of times it's feast or famine I know we work on projects in south Arkansas that sometimes eighteen months two years on that project and we anticipate that closing immediately everything looks good and it and it goes away and then two months later buying it's back on the table and usually when you've got two or three other projects going so I would encourage this body not to I don't want to use the word nickel and dime but to cut any resources that are in these budgets that may need to be utilized for for economic development in the state it's very vital that they have these resources without having to come back this body for extra money an extra point they do a good job they're very prudent and what they do and so I would encourage this body to take that into consideration. when we look at these budgets and and be proud of the work that we've accomplished in the state I want to thank you again Mr secretary thank representive Preciado appreciate you represent self Arkansas go to a good products on there all right thank you. Members we've got a very long agenda and special language has long agenda this afternoon so we can't meet this afternoon so we're going to. We're gonna press through on this as quickly as possible so please keep in mind is you're asking your questions or. As we're going forward representative Wooten. Thank you Mr chairman one of the. Follow up on Tosh is representive Taschen Dotson comment no more than six billion dollars we're talking about five hundred ninety five dollars but I'd like to know you use the word interest. What what would how did you are an interest to go in that account when you didn't have five million of this. Well I think in this particular account it was set up with the anticipation of the Attorney General possibly sending funding over from one of their accounts so we much like what we were discussing we have appropriation from a they could be funded from different sources outside of our division or even outside of Congress to come through rainy day could come through Attorney General he come through federal grants a number of different things or even potentially through you know dividend income or excuse me interest income from a treasury account or something but in the case of this this is specific to the Attorney General would provide the funding if they felt like that was something that they could do or support. So you Coleman money then. Without appropriate even. I don't see I don't care how much of our civilization you've got if you don't have any money in there there's no funding why does this just because I could that could be five million with what you just described instead of five hundred ninety five. So the by ninety five is expenditure and this is just the appropriation. Thank you representative wouldn't win this appropriation was initially added to the act it was for five million dollars with anticipation that there would be a transfer of funds from the attorney general's office to to help the five hundred ninety five dollars yes it was that transfer made for fifty thousand and expense in fiscal year twenty twenty it you don't see that in this budget manual and those interests funds for that was the interest earned off of that cache cashing treasury balance. Mister one more question of go and you've got a hundred and sixty six they can position and for two years. Workforce services has eighty six the courage Commission has forty two do you all know that each of those positions. Three years four years five years. I'm sure we have that somewhere we do I mean of that report comes from that he's legislation that that you ran it all I see is just to be given the. How you relinquished. I don't know okay could you give me a report yes aging those present yes in their eyes on the individual just wanna go for this for years two years and then like a list of those that you've given to personnel given the back and we got that thank you Mr chairman right. Representative Cavenaugh do you have a motion force I have a question. Question okay so this is going to be dealing with on number two all four. Which is going to be. Thanks to all for. Yes which is the quick action closing and I just have a question this is where we give money to projects to an incentive to actually help bring the project the Arkansas correct what happens when we give money to someone to bring a project to Arkansas and that person fails or a court company says I fails to live up to their obligations how do we get that money back if they file bankruptcy. Their their claw backs that we set up in the contract that we do with that the company before execution a lot of times it's performance based so companies and come in and actually make the investment create the jobs and then they'll get paid or a reimbursement on you know if it was for a rail spur to extend the the rail to the project or road whatever the case might be but if funds are not if excuse me if the project parameters are not met in cap for certain amount of a period of specified in the contract then there are typically call backs set up in place. When a company files bankruptcy it's practically impossible to get that money back from them do we have in our claw back that we go back after the directors that might have been the ones running those companies. I may Mr chairman if you would state your name for the record Mister jim Hudson the chief staff proper commerce also general counsel for ADC represent Cavenaugh it depends on the deal structure the size of the amount of money one of the things that we try to do first and foremost is taken first position lien on any real property may be there any equipment they may be there so if we can do that then we can you know I was look what I don't property as the bank would do in in bankruptcy proceedings if we are not secure creditor there will be an unsecured creditor bankruptcy proceedings years taking your your place in line there is you as you as you will know we will ask for personal guarantees from time to time depend upon the size of the company I'll see if it's a small company that is closely held then you know it's conventional to ask for personal guarantees on things like that we have done that fast the reason I ask is we did give some money to a company called carve ana in West Memphis Kharbanda now is experiencing financial difficulties throughout the whole country many states to pull their license because of their business practices and we gave tax dollars to carve ana and if we're reading the tea leaves on what's happening to Kharbanda that may be one that we may if you gave money to in my understanding is they had to meet some guidelines to meet those that some goals that we're going to have to look at there's a way to get that money back and with the history of the people that started this company from their last operation that they did nobody got their money back and so are we keep an eye on things like this and watching what's progressing with other companies so they don't come back with a hand out to us saying I'm going to do this but throughout the country they're getting their license pulled in their stocks tanking and it looks like it's gonna be bankrupt. Yes ma'am we do keep a close eye on that and and they're required to report to us and yeah we we keep an eye and that so we are doing you know deals and new deals or someone's coming back we're we're looking at those practices and what they're doing not only in our state across the country okay and Mister I have a motion of property were ready for okay I make a motion that we accept executive director with the exception on page one seventy two and the line item grants and aids that reduce that to five hundred thousand and page two ten on the line item for grants and aid that we reduce that to seven point five million dollars. That's a proper motion. The second. Yes second. Any discussion on favor by any opposed. I must say the nose haven't. I got a. One hand three C. three hands for a roll call. Yes just a second we'll be general call. Okay Mister chairman representative Bragg. That's a representative Bragg resulted representative Warren. The second alternate representative Gonzalez. K.. Senator hill. Representive Cozart. First second alternate representing the Clerk. Senator Arvon. First alternate Senator Sturch. Representive fielding. First alternate representative Bentley. Second alternate representative Dalby. Senator Blake Johnson. First alternate Senator Solomon. Representative Holcomb. First alternate representative Barker. Senator Wallace. President Vaught. First alternate representative Beatty. No. Senator Chesterfield. Sperber Senator Deborah Ferguson. First alternate representative Davis. Second alternate representative Nicks. Senator Elliot. Yes. Representative gray. First alternate representative Smith. Senator English. These are the. For. It. I'm gonna we're gonna check on that I'll get you recorded is yes all the giants. Yes Sir. Senator English. First alternate representar Kerr. Represent Hillman. First alternate representative Lynch. Senator Mark Johnson. Represent Gazaway. Second alternate represent a let. Senator Ballinger. Representative Hodges. Senator Davis. Representative Jett. Senator Hester. Yeah yes. Represent Payton. Senator Leding. Representar Sturch. Yes. Senator Garner. Representative Ladyman. Yes. Senator flowers. Representative Murdock. Not seeing represent Murdock first alternate representative hollow well. Second alternate representative McElroy. Senator sample. No. Representative back. Yeah yes. Senator Bledsoe. Representative Lanny Fite. Yes. Senator Caldwell. Representative Lowery. First alternate representative Alan. The second alternate representative brown. Senator Dismang. Representative makes. First alternate representative Hudson. Second outfit representative Burke's Brooks. Senator Flippo. Senator Flippo was and. Representive McGee. First alternate represent Collins. Second off sent represented a net. You saying. Yes. Senator Hammer. No. Representive love. Senator Hendren. Representative Scott. Yes. Senator Hickey. Represent Springer. No Senator Ingram. President will. Yes. Senator Pitsch. President Boyd. Persulfate represent McCollum. Second alternate represent cloud. Senator Rapert. President Coleman. Senator Stubblefield. Represent Penzo. Senator Teague. Representan Fortner. Represent Garner. No. President Johnson. Represent Deffenbaugh. Yes. Representative Charlene Fite. First alternate represent Haak. Representative big near. Yes. President Whitaker. First alternate represent Crawford. Yes. President Miller. Assaulting a representative ****. Representive Shepherd. Second alternate representative mark Perry. Yes. President Cavenaugh. Yes. Represent Vives. Representive Eubanks. Reserve eleven. Yes. Representive Kenneth Ferguson. Representive flowers. Representative gene. Represent the call. No. Represent Milligan. Representive Richmond. President speaks. Yes. Resent Womack. Okay and one of. That motion fails. Robert E. R. by rules. looks like Senator sample motion for executive Rick. Got a motion a second any discussion. None all in favor aye. Any opposed. Hi. I'd say the ayes have that. All right moving on Senator just feel did you get your. So I've got a motion for executive record on item one which was off the skills. And got a second any discussion. Sing none all in favor aye. Any opposed motion passes. Samson you're recognized for item three. Thank you Mr chairman members we are still in volume for moving to the department of insurance on page two sixteen you'll see their department appropriation summary they have several appropriations there are twenty four of them eleven was changes so please bear with me. I do want to know before we get started this division does not have any general revenue so you are not going to find that in the funding sources it's important point overall there's going to be a request for six positions to be increased over the biennium this is both the agency request and the executive recommendation. There is going to be a reallocation of one position throughout this budget. The agency rack or request I should say for your one over the twenty three authorized is an increase of twenty one point two million dollars in year one and then a hundred forty thousand in your to and that's going to address the salary matching issues. The executive recommendation is an increase of twenty point seven million in year one over the twenty three authorized with in the year to an increase of about a hundred and thirty six thousand dollars. Bottom of the page you'll see the positions increased from one eighty nine in the agency requested one ninety five but in the executive recommendation the number of positions stays the same. So first appropriation which changes is on page two a team this is their operations for their Arkansas multi agency insurance trust fund. The user to reduce the cost of insurance coverage for state agencies by combining the premium dollars and purchasing broader coverage for property vehicle insurance with higher deductibles funding comes from nexus sources premiums any insured loss or loss expenses paid by insurance or reinsurance companies in any interest income they're asking for a continuing level of appropriation of forty million they also have a new requests to increase this appropriation twenty million to offset the increases in the property premiums that are being added by the university Arkansas on this is going to be for each year the biennium you'll see the changes on page two nineteen so for the twenty twenty three authorized to see the twenty million but then in years twenty four and twenty five you'll see an increase to forty million. The next appropriation with increases is on page two twenty. This is the insurance state operations appropriation. Provides for the state operations of the division and it's funded by special revenues you'll see the list of where those revenues are derived the agency is requesting in addition to some slight increases in salaries and personal services matching six new positions they would like this to assist with the agency in providing risk management services. I also like to have some re classifications and some upgrade so there are some personal changes that are being requested. You're asking for we allocation of fifty thousand for special maintenance to operating expenses Senate special committee as line items no longer utilized by the agency because of the relocation of the insurance department. You're asking for restoration of a hundred fifty thousand capital outlay. And this is so the agency can replace outdated equipment and vehicles and this is going to be for both years of Iranians G. executive does provide for majority this request with the exception of course of the need physician's personal changes in any upgrades so I'm page two twenty one you'll see the changes being requested authorized in twenty twenty three the appropriation over all. Is fourteen point six million the executive recommendation you'll see the increase of five positions an increase of approximately one million in year one and then ninety nine thousand year to to address the salary match. The executive recommendation is only for an increase of five hundred and sixty five thousand in year one over authorized twenty three. In the ninety five thousand in the year two. You see in the funding sources that there is a transfer to stay Central Services of about one point five million this is a statutory statutorily required transfer. Related to their online insurance verification system. Next appropriations changes is on page two twenty two which is the next pages there fraud investigation unit. This is the trust fund. Your special revenues that are collected that are specifically earmarked for the purposes of this division which is to increase I'm sorry investigate the allegations of fraud and the workers compensation cases additional criminal violations that may be related to these investigations in any other insurance fraud matters there are two appropriations in here that say fraud investigation division but this particular unit has a law enforcement criminal investigation peace and they're allowed to apprehend those who commit insurance fraud the appropriation that we're going to talk about next is not have that capability. The request of the agency also includes a position reclassification but there's no change appropriation associated with the request the executive does provide for the agency's request on page two twenty three you'll see that there is an increase in both the agency request and the executive recommendation of seventy two thousand increasing your one that's over the authorized appropriation twenty twenty three and this is just a salary match and then in your to the increase of about eighty four hundred dollars. Thanks appropriation with changes on page two twenty four that's their fraud investigation division this is also funded buyer trust fund and they investigate suspected cases of fraud over a broad range of activities in the insurance industry. Also special revenues derived from annual anti fraud assessment and any penalties for licensed insurers is allocating their money. Salaries personal services matching capital outlay will have increases that you see on the next page agencies also asking for restoration is sixty thousand a capital outlay in this is also to provide. Replacement of outdated equipment and vehicles for both years of the biennium the executive recommendation does provide for the agency's requests on page two twenty five you'll see the changes in the appropriation amounts and regular salaries personal services matching and the restoration of the sixty thousand dollars that was requesting capital outlay. Moving on to page two twenty six this is their prepaid funeral benefits division appropriation which provides for the administration regulations the sale of prepaid funeral benefit plans in the state funding consists of investment income grants refunds gifts annual report fees and all license fees that are paid agencies requesting also or in addition to the regular salaries and personal services matching capital outlay the restoration of thirty thousand to replace outdated equipment also serve for some vehicles for the next biennium and next year's so on page two twenty seven you'll see these changes. And those three line items. The overall increase. Agency request an executive recommendation in year one over the authorized amount twenty twenty three is about twenty seven thousand a year one and then thirty three hundred and year to. Moving on to page two thirty four. You see there public employee claim section this is a miscellaneous agencies fund. It's funded by transfers from the public school fund the County Aid Fund the Municipal Aid Fund and various treasury fund accounts to state agencies and this is for workers compensation claims so the uses of appropriation to administer a public employee workers compensation claims section for the state. Again small increases requests in salaries and personal service matching during rage due to rate adjustments and they're asking for position re classifications but no change an appropriation so the executive recommendation does provide for that is with the exception of the reclassification so on page twenty two thirty five sorry you'll see the slight increase both the executive recommendation agencies request is the same for an increase of a hundred forty four thousand year one over authorized twenty three and then your to increase about sixteen thousand. Moving on to the next appropriation on page two thirty six this is their health information counseling appropriation it is a federally funded one. The program provides consultations for Medicare beneficiaries and caregivers about Medicare Medigap policies Medicare advantage and Medicare part D. long term care insurance. They're requesting slight increases in salaries and match. Anson position upgrades which are not recommended by the executive recommendations on page two thirty seven. You'll see that there are increases their slightly in the regular salaries and operating expenses line item I'm sorry the personal services matching line item. And authorize appropriation you'll see thirty thousand capital outlay but that is not continued into the upcoming mining so you'll see zeros in your twenty four and twenty five. We're gonna jump a few pages to you Page two forty eight. This is the travel and subsistence cash appropriation is cash and treasury. And it provides for reimbursements to individual examiners for their personal expenses that are incurred during any examination process so is a cash revenues that are derived from exam and compliance costs paid by insurance pool advisory organization or residual market mechanisms the agency is requesting to discontinue this appropriation for each fiscal year which is also the executive recommendation. We'll see that on page two forty nine where the authorized appropriation and twenty twenty three is a hundred thousand and then the upcoming biennium and fiscal years twenty four and twenty five or zero. Skipping some more pages we're going to move to page two fifty six. This is there are there it's call that the member three appropriation but it stands for Medicare improvements for patients and providers act this is a program that provides application assistance to people who are likely to be eligible for low income subsidy programs it skews me of Medicare part D. prescription drug programs in the use of for outreach this aimed at preventing disease and promoting run this this is another federal appropriation and the agency is requesting the addition to exceptions for capital outlay. Reallocation of the appropriation with in commitment items and this is just too aligned the budget with their expenditures. And then the like to change the title is appropriation to map it to allow them to be utilized appropriation for on the map but related grants over the years agency has got a number of these different types of grants and they just like to consolidated onto an appropriation so they can use allergies line items that you see on page two fifty seven. So what you see in terms of changes in the budget on the capital outlay outlined. There's in twenty twenty three of thirty thousand dollar preparation but for fiscal years twenty four and twenty five you'll see that that's been reduced to zero. Moving to page two sixty. This is their funeral services for appropriation. Skews me. As a cash in treasury appropriation a prize for the for for personal services and operating expenses of the board. Funding comes from the cash revenues from license and renewal fees an annual permit costs and these are pertain to the burial associations cemetery maintenance bombers and funeral directors that they oversee. They'll be some slight increases again in regular salaries and personal services matching. And they would like to continue the appropriation with the slight increases so on page two sixty one you'll see both the agency recommendation I'm sorry request and the executor recommendation are and the salaries and match line items only for thirty one thousand increase over the twenty three authorized in year one which is fiscal year twenty four but in fiscal year twenty five which is your to your only see an increase in the match and that'll be about thirty nine hundred dollars. The last appropriation was changes is on the next page this is a federal appropriation call the market stabilization grant this was established through it miscellaneous federal grant act and approved by the legislature in two thousand nineteen. Use it to study the cost utilization of market place plans that are derived from the states all. Pay your claims database. They contract with an actuary to determine whether options exist that could lower premiums and further stabilize the health insurance market in the state funding is a hundred percent federal. With the exception of the increases in regular salaries and personal services matching their requesting that that be continued into the next biennium which is the executive recommendation so the agency request and the executive recommendation in year one will be increased about eleven hundred dollars over the twenty three authorized appropriation. That's a salary match and then in year two you'll see an increase in match only of about six hundred and sixty dollars that concludes my presentation for this division Mister chair thank you. On the Page two fifty seven the member item. You have. twenty thousand dollar appropriation request for salaries and an eight thousand dollar request for personal services matching but no employees. No expenses last year no budget items last year but it looks like. You're asking for a preparation for something that. If you would state your name for the record and merry Davis as CFO for the insurance department and that appropriation is in there because they turn in their federal application that way we do have the option to split their salaries per all of the grants and we are looking into making changes to those so it would just be salary. It would necessarily be a position to be a shared position with other eight based on the time that they spend on that particular grant okay and then your promotional items there requesting fifty thousand dollars that seems like a what's one the highest promotional items line items of ever seen it is so Mitha has three priorities the priority three grant is specifically for educational purposes so a lot of their promotional items come out of there and they actually give a promotional items to all of their contracted vendors to hand out to people at to promote the program it is very high but it is approved from the federal grant okay. Representative Ladyman you're recognized thank you Mr in order of on page two twenty one. I have a question about non under the funding sources. It shows and the actual actual. Last year was thirty eight million and then your budgeting sixteen million going forward was at thirty eight million a out wire or why would you budget sixteen million it's the norm is thirty eight million. So that's the collections of license fees and other late fees and the reason that we only budget that sixteen million is because that money is actually swept every biennium to the General Revenue I'm so we only keep one year work of our appropriation everything goes back to general revenue sweet so everything above that goes back to the G. R. correct thank you. All right representative Cavenaugh you're recognized thank you number for direct I'm going to the first question is on page two nineteen your multi agency trust fund how much increase are we expecting on the premiums on the property. I know we're all experiencing it but I'm just curious so just to tell you we are still working on that as cement for the U. of a facility but right now what we are estimating that that just for property is going to go up to twenty two million dollars just for the premium and that could increase based on the value of the property out of the university okay so in twenty one twenty two was twelve point two so we're almost doubling. Yeah and that twelve point two that you're seeing that had a couple of claims but that also is the premiums for cyber and auto insurance also okay so the forty million request and is that going to include that continuing yeah we're currently estimating about twenty eight million in premiums so that a leave us eleven point six million to pay any potential claims that we would get for the year for property cyber or auto insurance claims okay and on two twenty nine this is your continue continuing education program you have a large fund balance and I realize that is given it's taken from in full disclosure I'm a insurance agent but so all the fees that we pay so is there any opportunity to reduce those fees to the people that pay because you've got a large fund balance in comparison to what you're spending as is that something that you are looking at it. We are we always ask everybody that when it's a special revenue yeah I am currently there's nothing in the statute that allows us to waive or suspend those fees but we are looking into that okay because I mean you have enough to last like two years so thank you. Right senator Hammer you're recognized thank you Mr the of anything deal with the PBMs is it reflected in this portion but yours that coverage somewhere else any of the fines penalties accept or deal with PBMs. L. McLean Insurance Commissioner The that's that's the those those fines and penalties are necessarily mean they're they're just included in there not the specially carved out so you do see some of our staffing request in there to to reflect the number so we have and and enforcing PPM statute the we recently program correct me if I'm wrong there Mister chair Kevin we recently appropriates money for you are made it possible for you to hire additional staff in that area or could you just tell me are we staffed up in that yet or where are we in that sure we we recently hired a PPM attorney this state spends all of her time at that. Good helping us you know the deal with all the enforcement of the PBM statutes we have a PPM program manager at a PPO administrative assistant so those three are working thanks done constantly with with that so we really appreciate you getting that support what we think we're pretty lean in it And and right now we're doing DO you kind of have that process lined up pretty well our sister states who are doing this have a lot more of more people doing that work so okay we appreciate your support last question is the ship. Contractor agency representative in any of these Lestat as he or was listed in there is it is it inside any of these that we're debating right now. The ship contract yes Sir the ship a portion of your agency that takes care of like to educate people on Medicare is it within one of these categories all American that out. It's on page two thirty six appropriation for the ship. Mr chairman if possible when it comes time I'd like to have that pulled out for a separate vote if we could please only to obtain from that one thank you. Is that just for page two thirty six. Representative Wooten. You're recognized thank you thank you Mr chairman Mr was can you help me a little bit here direct your attention to page two fifteen Page two six to. Two to fifteen shows a hundred and fifty positions. The in the bottom own totals show a hundred and eighty nine are authorized okay. And. Page two sixteen also shows a hundred and a hundred eighty nine also has a hundred sixty seven. field so. If you went with the one fifty. If you went with the one the one eighty nine number one sixty seven that gives you twenty seven vacancies if you go with the one fifty in the one eighty nine that gives you thirty nine vacancies in the report I got from our personnel analysts to have is you show sixty vacancies so so how many concerts do you have. Yes I am I'm only showing nineteen vacancies that are over the two years well I do not know the total yeah I don't actually team eighteen of the of the I'm sorry eighteen of the forty two so far as to the right of eighteen of the forty two this is the lead over two years I didn't bring other report but I can get it to you okay you've caused because you see there's conflict yes one shows one fifty and then it shows one sixty seven against one eighty nine okay of it out if you would you provide that report would you give me the ages those over two years yes okay in the second one question I'm I'm interested pledge to nineteen. Well intended but you you have interest income there two one three agencies in the totality of state government that I've seen that in there the more Mr. But your show in nineteen thousand what what do you do that. What will you show that interest income and that interest income is the interest that we made off of a twelve million dollar CD for that year okay and the reason that it doesn't show interest going forward is because we don't know what interest rates are going to be so it's hard for us to predict how much we're going to my question is what do you what do you have interest shown nobody else does. So what makes you different are you smarter or special okay you're special thank you for the answer thank you Mr the director okay I will thank you for your efforts so that the the hills the the ravaging our folks in our for Mrs and the need to be dealt with an entity to be dealt with the for my. Thank you very much thank you Mr chairman thank you representative senator Chesterfield you're recognized yes motion to property Mr it is the proper time we do need to. Hold out sample I would sit well remember the page two thirty all right that's two thirty six in two thirty seven for separate both thank you Sir that motion motion executive wrecked I have a second. A second all in favor aye aye any posed motion passes moving on to number two thirty seven page two thirty seven Senator hammer you. A question no Sir just wanna make you for public record what stain from voting on this because of the conflict thank god all right so the emotion emotions Act of wrecked second on favor I. Imposed the record reflect that passes with senator Hammer abstaining all right moving on to item number four. Thank you Mr chairman we are still in volume for we are moving to the State Bank department there are appropriation it consists of one operations appropriation on page two sixty seven. They examine regulates state chartered banks bank holding companies trust companies and other entities that are funded entirely by special revenue fees that are assessed and collected on a semi annual basis. The agency's making number of requests in addition to the increases and reconcile RES personal services matching capital outlay. They would like eight new positions there is a paid a high turnover rates in the upcoming years your retirement to the requesting these new positions to train for on boarding to manage future growth agency operations. And some industry evolutions they would like to restore six growth pole positions that were originally approved by council this year now last year. I would also like to increase their regular salaries at three hundred fifty thousand dollars and seventy three thousand dollars in personal services matching to support some salary grid and professional certification differentials each year. I would like some reclassification and some upgrades these are associated with some personnel changes that they intend to make yours one additional extra help position they're requesting to forty five thousand dollars is what they would need for that an extra help appropriation in the personal services matching line item and this is just this is the agency with their operations. An increase of fifty thousand operating expenses to provide for business related travel expenses and equipment for eight of the positions that I mentioned before. As well as an increase of fifty thousand conference travel to provide travel related training also for the eighteen positions. An increase in professional fees and about thirteen thousand dollars to contract with the I. T. external firm to assist in the development of their new and improved I T. programs and this is going to be for each during the biennium. An increase of three hundred fifty thousand capital outlay we're gonna give you decide. A hundred fifty thousand going to be used to enable the agency to replace obsolete data processing equipment. Two hundred thousand which is going to be used to maintain the agency we replacement schedule they get two or three vehicles each fiscal year. The executive recommendation only provides for the restoration of the six groups to positions that were approved by council and then of course the so see you appropriation for new positions reclassification upgrades a center or not limited. You'll see on page two sixty nine. The increases we mention in positions the agency would like fourteen positions and they'll be increase across six line I'd is about three point one million over authorized twenty three and in year two is going to be fifty seven thousand this is going to be a salary match increase only. As well as the extra help position and the associate preparation the executive recommendation is only for one point eight million increase over authorized in your wine increases six positions. Increasing the capital outlay requested in the year to go be a fifty two thousand dollar increase in salary match on. That's the conclusion of this presentation Mr. Thank you. Seeing no questions again a motion executive rack second all in favor aye any posed motion carries. Item five you're recognized. Thank you Mr chairman going to the state. Securities department we're going to start on page two seventy one the department Department appropriation summary system through appropriations is only one was changes it's going to be in their state operations appropriation which is on the next page on page two seventy two. Over all there is just going to be an increase of two positions requested by the agency one position decreased by the executive recommendation. And then any creases in. Regular salaries personal services matching the operation appropriation is used basically for. Implementing rules and regulations regarding investments in securities it's funded with special revenues come from filing fees application fees renewal registration broker dealer agent fees and investment advisor fees. The agency's requesting in addition to those increases I mentioned before three new positions to assist with very areas of departments such as accounting human resources legal and operations. They're asking for increase in regular salaries and match associated with various personnel changes reclassification and upgrades. Increase of twelve thousand extra help. And this is for both years to operate competitive pay rates for their law clerks and they would like increase in twenty thousand capital outlay to procure a document management system the executive recommendation allows for the increase in extra help. An increase in capital outlay but does not allow for the new positions. On page two seventy three you'll see the changes. Net increase requested by the agency is seven hundred sixty eight thousand over the authorized twenty three appropriation. And then in year to an increase of twenty eight thousand. The net for the Executive recommendations two hundred fifty one thousand dollar increase over authorized twenty three and in your to an increase of about twenty six thousand over twenty four the difference between the two recommendations are the request about five hundred seventeen thousand first year five hundred nineteen next and the executive recommendation is for less than what agencies requesting. That's the conclusion of this presentation Mr thank you seeing no questions got a motion Executive wrecked second. All in favor aye any opposed motion carries item number six you're recognized. Members were gonna move to page two seventy nine this is development finance authority's budget they're department appropriation summary consists of six appropriations are three with changes. Over all there is an decrease of eight point six million requested by the agency from the twenty three authorized for your one and then the thirty eight thousand dollar increase in your to win that's what dresses regular salary match. Increase I'm sorry decrease recall work recommended by the executive is eight point seven million in the first year and then Spani increase in salary match in the second. First appropriation changes on page two a yes there are cash operations appropriation this is another agency that does not have general revenue. It provides for all the operational costs of the authority including their federal housing assistance program there had home program other financial programs in the funding is derived primarily from federal funds cash revenues from Ron process proceeds excuse me with the exception of those are. One night and submission that would have a slight increase they also want the following changes. Position requires vacations of course will ask for increases and regular salaries and matching a restoration of twenty three thousand capital outlay and this is just to replace the old vehicle. Executive recommendation provides for the request on page two a one you'll see the increases in the salaries and matching line items. Agency requests is approximately three hundred four thousand increase over twenty three authorized in year one with the thirty five thousand dollar increase in your to and the executor rack is two hundred fifty four thousand increase review authorized twenty three in year one and then thirty five thousand dollar increase in your to. Next appropriation with increases our student loan authority operations appropriation we're going to move to page two eighty four. This appropriation is essentially used to support Arkansas student by giving the financial assistance by purchasing the laws that are made to local lenders to higher education students you'll see a list of where they're getting their cash revenues with the exception of those regular salary matching on items years name change the executive recommendation does allow for the agency's request that you'll see on page two a five in their appropriation summary. Only increases in line items are for regular salaries and match. Last appropriations changes is on page twenty six. This is their D. I. S. I. T. appropriation of provides for equipment purchases on behalf Department transformation share services for their data consolidation center all the funding is cash from bond price proceeds and the agency is requesting a discontinuation of nine million and they're appropriation level and that's just gonna help reflect the cash balances at that each year so on page two eighty seven you'll see this change in the twenty twenty three authorized columns they are reducing appropriation from fifty million to six which is something that the executive recommendation also agrees with and you'll see that and fiscal years twenty four twenty five at the conclusion of the presentation Mr. Thank you Representative Cavenaugh you're recognized for a question thank you Mr chair this is a question for staff on two eighty three we're not asking for any appropriation but they still have a cash balance. On their. Do we need an appropriation because of the cash balance or do we need this appropriation. Of this this doesn't show having cash balance I don't know why they have that over there and the agency request for twenty five that's got to be in the state will check on that and I'll make sure that that is a mistake you know okay because I got authorized in twenty two twenty three the seventy eight twenty five. If the agency can look at page two eighty three is that even they did. Yeah yeah it's it's it's being discontinued as well okay so we it's being discontinued so we don't know what that's for okay yes ma'am my other question is on two eighty five this is the student loan authority that we're purchase. So how many student loans have we purchased. Hi of Marcone I'm president of the Arkansas development finance authority We that is a little bit that language is just a little bit out dated how we use to by back before direct loans is taken over by the federal government we used to make pretty substantial purchases you are from sixty to a hundred million but now it's just originations only. So. All we're doing is originating loans and then the goes to the banks or the the federal to the federal program not not anymore these are these are just a private loans and so they can you can either choose to if you have a gap in funding for higher education or if you choose not to get like a federal plus loan you can take out like a private loan and just for example private loan now is around seven and a half percent with about four point two percent origination fee and the current loan that we have is about a percent and a half to two percent less was zero percent origination fee okay so how many lines do we have outstanding private loans it's about four and a half million dollars currently is this is a fairly new program okay now the old legacy portfolio which was a federal program before it was taken over by the federal government two thousand ten there's about a hundred and thirteen million legacy lives. Okay and I was make sure I understand so there's eighty basis points that kind of helps fund this is that correct yes Sir there is there's a trust that these loans have to you know be put in and then you get a draw out of the stress and the stress help you pay for your loan servicing expense and administrative expenses it's all calculated in the cash flow of the trust okay thank you you're welcome thank you representative love you're recognized thank you Mr chair Mildred I'm going back to page to anyone from. I just missed the comment that you said about the the home program. What were we gonna have any changes in the home of the the home program or. No if you look on page two eighty one you'll see the hud home program line item has not changed from the twenty three authorized is still sixteen point three million going into fiscal years twenty four and twenty five so there's no change in that program I just mention that the appropriation provides for that program in terms of their operational costs okay all right I missed it thank you thank you Mr you representative Cavenaugh or back to you thank you this is on page two ninety one. At which is the grant the federal side of it the in H. T. F. grants. So how many projects do we have looking at doing because we only saw you had a million dollars. We had but this year we have budgeted twelve eight we're asking for fifteen how many of these low and housing projects do we have. Slighted a representative this is one particular of funding bucket national housing trust fund in these dollars or for thirty percent area median income hello so this is kind of the lowest tier that we do they they kind of come in randomly so what you're seeing here as we receive about three point three million dollars per year and so some of these funds have been you know stacked up on top of each other we we typically don't see a lot of requests for these funds when interest rates are low but when interest rates start to rise and the projects get a little tighter and people need funding for say zero or one percent at becomes more attractive to developers and so the past couple years we haven't seen a lot of requests but already just in the past six to nine months we've been saying you know eight to ten million dollars to request it just becomes more attractive to develop in a rising interest rate environment so not many the past couple of years but we're starting to see more okay so you're seeing more these to get this low income housing to go are they going to rule Arkansas that because of that you you think about the party level you think and rule that there's quite a bit of. It just really depends they have to provide a mark a market study that will show that that particular area will take a certain number of units that they can fill the fill the units and that there's a need and so the answer is both they're going in urban areas and they go in real areas okay rehabs and related areas right is for veterans I notice and so you know a lot of times they. They can go anywhere that we've got the and the facility for it so that's why I was curious okay thank you. Thank you representative Wooten you're recognized thank you Mr chairman a direct your attention to page two eighty seven. This is the it is are you a pass through for shared services of this on that T. is that what this is. It's a five million dollar. Budget but it only shows actual expenditures seven sixty two. how's that function of how's that work the DIS had come to us a couple of years ago and they were needing to purchase some equipment software licenses upgrades of various things and so my understanding is they were I guess low on cash funds and so we agreed to offer them a line of credit to purchase these and then they have paid those down and as they made those expenses they've got about it was originally fifteen million I thought it was going to be so they made these and I think it's about six million more so we're asking for a decrease to bring it down to six million and then but they have been paying us back over time the old on the next page two two eighty nine there's a five million dollar authorization. And Is continues for the next biennium but is that the funded one two like the other one in the and and the commerce department or a committee is no those budget expenditures. The that nationals home page two a That's unfunded appropriation are presented. Yes I'm sorry did you hear me that's unfunded appropriate look in the funding sources. Appropriation only for this. Oh I'm sorry yes that's for Arkansas housing trust fund I'm sorry this is wrong lives unfunded yes it is yeah it's part of ours and it comes from if there's an outside source that the funds that then will administer the program okay thank you thank you Mr chairman thank you senator Elliots. I'm at a miss here is one as a question about that Arkansas housing trust fund decided I didn't hear all of what representative was asking and so I just want to point out to this body that we've been trying to get funding for the Arkansas housing trust fund since it was passed in twenty no nine or whatever it was so this is an appropriation we live in hope of we will get it funded we got the money to do it we just aren't doing it at this point so I I don't really have a question I just want people to know about that that's just the main thing Mr thank you it's important we just aren't finding. All right. See no further questions our motion executive director the second on favor are any opposed motion carries item number seven miss Simpson. You're recognized. Thank you Mr chair we are still in volume for. We're going to go to the department of workforce services budget. Before we get started I'm going to point out on page two ninety six that there are some state contracts over fifty thousand dollars that were awarded to minority owned businesses this is a report that statutorily required so you'll see that they've got three contracts there which consists of about three point one of the total of three point four sorry percent of the total contracts awarded by department workforce services on page two ninety seven I have twenty five appropriations eleven of which have changes or try to go through this as quickly as I can total number of positions that were authorized in twenty three is nine hundred twenty four you'll see that there's an increase the sixty seven positions two nine hundred ninety one is also authorized by the executive recommendation these were of positions that came through personnel on or approved by council. Net there is a increase of thirteen point two million a year to I'm sorry your one that was requested by the agency. In year two there is an increase of six hundred ninety one thousand those are salary and mashed essence I want you to know the executive recommendation however is a decrease in this budget of two point nine billion and you're one and that's going to be less than what's been authorized and twenty three and then there's the increase is six hundred nine one thousand a year to. Funding sources basically consist of general revenue federal revenue you see federal revenues by seventy percent or seventy four percent under budget the stabilization tax and then at the very bottom you'll see that there's a statutorily required transfer that they do to DHS the CEO and this is in support of some of their of ten offend workforce programs. All right so the first appropriation has changes is there operations appropriation which is on page three oh four. Here you see the increase in positions that I mentioned earlier as well as the increase of seven point three million over fiscal year twenty three this is both the agency requested the executive recommendation let's see the changes are in line items regular salaries extra help personal services matching. And your senior to that there's a slight increase of six hundred thirty two thousand dollars and that's to address just a regular salaries in matching line items. We're gonna jump to page three sixteen. The narrative is actually on page three fifteen on this is there tanning flight grant paying new hire registry appropriation this appropriation essentially provides grants to assist needy families with children. So kids can be care for their own homes. They try to promote job preparation work and marriage and to reduce any of the out of wedlock pregnancies that occur in the state and to encourage the formation maintenance of stable two parent families their new hire registry was established development eighteen the State directory more employees can report newly hired and returning employees to any establishment of enforcement child support orders funding is from general revenue and then the block grant that I mention the higher registry contains twenty to authorize extra help positions now when you turn the pages just going to see that one line item so there including that to let you know that there are extra help positions in this probation they are asking for some adjustments and salary in matching. And they're requesting general revenue in both years the biennium of about three point six million I would also like to restore one position and this was approved by council this was in August personnel meeting. And the accompanying salary and match and this is just services to some of the duties of this appropriation the executor recommendation does allow for all of these requests and you'll see the changes on page three sixteen. As I said there's just one line item so you see the increase. Agency request and the executor recommendations about three point eight. Over your twenty three authorized and then in year two you see there's just a thirty thousand increase and that's just to address the salary that I mentioned earlier. We're going to jump to page three twenty. This is the federal. Employee's benefit this is a cash in the bank appropriation that allows for payments unemployment insurance benefits to unemployed federal civilian employees ex servicemen and public service employees. This is money that's deposited into a cash account in a bank but is funded with federal dollars the large change here is agencies requesting to continue their three billion dollar perforation but the executive recommendation if you look on page three twenty one is for a decrease in two billion an appropriation so moving forward your appropriation is going to be one million each fiscal year. Next appropriation changes on the next page is there United benefits taxable employees this is another cash in bank for operation this federally funded. Executive recommendation is also different from the agencies requested like to continue their two billion dollar appropriation each year but the recommendation for the executive branch is to decrease that to one billion dollars each fiscal year that's on page three twenty three. Next appropriation changes in their building improvement land. Reed act funds appropriations on page three twenty six. These are accessed funds that were collected under the future tax basically any of the states that head. Receive loans from three federal programs were to pay these loans back with interest so that they would meet their statutory ceilings. In the event that this happens then the excess funds that were collected were disbursed to states and considered reed act funds. While the funds were not replenished so there have not been read at funds for a number of years if you will look on page three. Twenty six you'll see that the agency is requesting three point one million in each year to continue into the next by any member of the executive recommendation is to decrease it to a dollar. We're going to move to their D. W. S. grants appropriation. Which is on page three thirty this is another federal appropriation use for anticipated federal workforce development grants and this is just if the grants become available these are given by the US department of labor they're going to release the money. Continue appropriation of four point five million is being requested by the agency the executive recommendation on page three thirty one you'll see is different this also has been decreased to zero for each fiscal year. We're going to move to page three thirty eight that's the next appropriation with changes. It is there adult education this is a state operations portion it provides for the administration personal services and operating expenses of the adult education program it is funded from general revenue. Agencies requesting appropriation and general revenue in the amount of about million in both fiscal year twenty four and twenty five and you'll see the request on page three thirty nine. Increase in salaries and match. About a hundred sixty three thousand over year twenty three authorized and then the second year there's an increase in salaries match only about ten thousand you know there is an increase in one position so authorized physicians and twenty threes fourteen and then moving forward as the biennium it's fifteen each fiscal year. Next change is on page three forty this is the adult basic education is also a state funded appropriation that provides for the state match requirement for the adult basic education for appropriation these you'll see on pages three forty two and three forty three as we move forward funding comes from the educational excellence Trust Fund to transfer from department add. With the exception of the changes in regular salaries and match the existing on page three forty one. There are no changes so increase of twelve thousand. Over authorized twenty three and then your to an increase of about forty seven hundred. In fiscal year twenty four twenty five. Moving on next preparation changes is on page three forty two This Is there federal appropriation also for adult basic education US department and provides the funding for this and it requires a twenty five percent state match. Small increases on page three forty three you'll see in regular salaries and match only fifty six thousand is what's being requested and recommended over your twenty three authorized in the new year two forty eight hundred is the increase. All right governor's commission on adult literacy this is a public school funded appropriation these are grants that are awarded to literacy councils in the State of Arkansas I'm on page three forty four. This is a general revenue fund appropriations so they are requesting general revenue about seven hundred seventy one thousand and both fiscal years twenty four twenty five which is the executive recommendation. You'll see those increases on page three forty five. And the last appropriations changes is on page three forty six this is also general revenue fund appropriation from a transfer from the educational excellence fund from department add. And this is used to educate adults with less than a high school equivalency and for those who are retraining that are already in the workforce once again general revenues being requested about seven point three million in both fiscal year twenty four twenty five which is what you'll see on page three forty seven as their request authorizes twenty point nine million and is being increased to twenty two point seven impose fiscal year twenty four twenty five and that is the conclusion of this presentation Mister chair I did forget to mention that they did have an increase of one point eight million and this is just going to provide additional programs at an adult education centers. Now this is the conclusion of my purchase present thank you the representative Cavenaugh. Thank you Mr chair my first question is on three oh eight which is a United trust fund loan interest this shows that were hardly spent anything in twenty one twenty two but we have over a five million dollar fund balance. If we can talk about that fund balance of what it might be able to use the use for. According to S. is the actual expenditures that forty six hundred is just on United loan interest. Is on page three oh eight. Good morning. According trailer deputy director that the division of workforce services that five million was set up back I believe in when we had to take a loan back in the recession of O. nine we to we had to take a loan to cover unemployment benefit trust fund from the federal government and That fund was set up so that when we charged employers on the insurance so that we can pay that back to the federal government that's where that money went so we have left five million in there I believe since twenty fourteen it's had a fund balance of five million so that if we ever have to borrow money again or it is kind of a buffer so that we don't have to borrow money again so that we have a place to receipt that interest payment and that we can pay that back to the federal government if we get into that situation again. Okay so the forty six hundred that we paid in twenty one twenty two. Was that the last payment on that or that was anything over five million we deposit into the United trust fund grants so we just we try to keep it down to five million and then anything in excess of that is transferred out to the United trust fund okay. And then. Four three twelve which is zero unemployment insurance fund We're looking at that in your most extorts Brandis been three point nine on that that was in fourteen fifteen. This Is Your administrative costs at three twelve. But it's showing that we've got a fund balance of forty point eight million dollars why do we keep such a big fund balance in that. I think that's in the I don't think that's the actual fund balance that's what we're budgeting to have to receipt in there if I'm not mistaken this is it's twenty one twenty two actual okay says the fund balance had been twelve point three you got from the stabilization tax two point eight so that made the total funding forty point nine but you only spent fifty four thousand so you're excess in the funding was four point eight forty point eight million. That is a fund that we have set up to it's it's a designated only for you admin expenses so we have a you know an operating account that all of our operating expenses come out of and then we have this fund we're we've designated for you by admin we are allowed to carve outs six million a year and stabilization tax that we put in there for our operations so I know that that's part of it The stabilization shows that you got twenty eight point five and then million we also we have a sub Fund in there as well where we were are allowed to carve out thirty five million from stabilization for United modernization and deposit in there which we've collected twenty four million so far but that's not that's in another appropriation I'm looking at this appropriation it it's it's in this one as well because it specifically for United administrative expenses I thought you had a United modernization one you do have a United modernization one. So that that's why I'm confused. So. I guess if you look at this your phone you got a forty million dollar. Fund balance in you're only spending fifty four you're asking for six million appropriation. And six million would be the stabilization I don't believe we've asked for the United modernization appropriation yet. We will do that. But that is not been requested yet but we do we have been collecting the money for you on modernization four I think since twenty twenty one early twenty twenty one and so that fund has built up we're trying to when we have enough in there then we'll be able to come to you all and requests for appropriations to start that project. Okay. All right thank you thank you. Thank you representative Springer you're recognized. We still morning good morning thank you Mr chair maybe I missed it I'm on page two ninety seven. Of this appropriation and I see where the agency for the twenty two twenty. Three the twenty three twenty four year in the twenty twenty four twenty five year there's a big difference in the amount of the request from the agency compared to in fact three million dollars compared to the executive recommendation the agency request on page two ninety seven indicates that the agency is requesting five billion to observe the two medium so forth and then the executive recommendation is three three million three billion less than that and I guess I miss miss someplace so why is there such a difference I'm I'm not sure if you all can answer that between the agency recommendation for those for the fiscal year is coming up compared to the executive recommendation can I that makes sense of the are you understand my question why there is that I missed it somewhere is not explanation I'm sure I think that those amounts were increased during the pandemic because that's a that's the appropriation if we receive the funds from the US department of labor so that we can pay those benefits out and I believe sense I think even in the height of the pandemic we didn't exceed a billion dollars and so I'm assuming that's why it's been requested to bring down to a billion and we're we're okay with that oh okay all right so I just want to be sure because you your recommendation is three one three million more than what's actually been and that's really just in case you know we have another downturn in the economy and we have to pay out those benefits I would just we would have to come back to this body and ask for additional appropriation okay all right I'm I'm just concerned that that much money's whether not is actually needed rather than what's been approved here thank you. Thank you senator Hammer you're recognized thank you Mr what is I'm sorry I'm a heard and all that discussion will go but will what's the total balance in the Medicaid trust fund right now. And the unemployed. I'm sorry sorry one eight hundred ninety two million dollars. Okay and we had do we have legislation if it hit a certain threshold triggered and we reduced the amount we were collected from them employers are I might have a bad moment there is a calculation is based on several factors one is the total number of employees covered or paid M. and R. and payroll and another one is the balance of the trust fund so as of right now that stabilization rate will remain at point two. And is that because we've hit the threshold in the trust fund or. Because of the individual employers it's the status yes it's the I. number of employees and the balance that we currently have okay and earlier this morning in the audit discussion how many do we have on unemployment right now. Sri's Childers director division of workforce services director thank you senator Hammer I currently last week we paid out benefits to three thousand eight hundred and fifty two individuals. So we. We have three thousand eight hundred fifty two on unemployment yes Sir okay well that receive benefits last year of last week last week we have some that have are eligible but they did do their weekly claim. I'm sure there was we have individuals who are eligible to receive benefits but they did not do their weekly Klein so our number of individuals that receive payments last week was three thousand eight hundred fifty two what would have been the other number had they met the. Continuing claims number. And. See if I have that. Six thousand seven hundred and fifteen. Six thousand seven hundred fifteen yes Sir okay. The we passed legislation last time that we're collecting a percentage to go the upgrade of the system I'm kind of you know framework in that can you tell us where we are as far as the upgrade of the system and the collections that was put out for in our of P. if I remember right and can you just give us an update on where we are and is that stood up and fully operation our where are we on. A senator Hammer we pulled the the R. F. P. back in September we had had that or if P. out began that procurement process in September of twenty twenty one and so we pull that R. F. P. and in that period of time that one year period of time of we analyzed all of our existing resources within eighty W. S. and our ability to work with DIS and that's where we are in the current stage of the United modernization we are going to utilize our current resources those that are being provided by U. S. T. O. L. which were set up and established during that one year period and then. Of and then modernize our tax system first and then the benefit system in the R. P. and in our responses we were it was estimated that that would take three years in order to upgrade our systems and so we're still operating within the funds that were set aside for this modernization and within the time line that was that would have of started with a new are iffy and we plan on plan on starting that of full speed on January one twenty twenty three. How much money has been collected because that was being set aside so how much do we have collected up right now twenty four twenty four million and that had a cap on it didn't thirty five okay so your continued collect up to thirty five and do you anticipate that for what's going to issue the RFP for that that's going to cover it or you gonna have to come back and ask for more at this time we don't anticipate putting out another RC a we're going to work within the resources that we have it DWS with DIS and then we will determine if we need additional vendors to assist after we implemented any modules that are developed by U. S. C. O. L. we anticipate that we will be able to do all of that within the thirty five million set aside okay and then the last question would be series would be how many cases are still pending that we have people out there that it's been determined that perhaps there was fraud involved with the money that we got can you give us the update on the number of cases that are under investigation for potential fraud for the unemployment claims during the pandemic. Yes Sir Courtney trailer can give you the number which was asked previously the total dollars benefits paid out and what we've recovered and then what she's doing that I'll look to see if I have a number for the total of individuals that are still being still being up I guess you could say Included in the process of of recovery but I don't think I have that number with me the outlook okay thank you. So the amount that we just first and twenty twenty was seven hundred and or I'm sorry two point five six seven billion. And I've that we've identified twenty five point eight million in overpayments. And twenty twenty one we dispersed two hundred and twenty two million. And I've that we've identified forty three point five and over payments. And then in twenty twenty two. We dispersed thirty eight million and we identified thirteen point three million in overpayments so in total we disbursed three point four billion and about eighty three million have been recognized and overpayments and we have collected thirty one almost thirty two million up that we're continuing to do so. Can just a couple more Mr I've got several make use of yeah well one more thank you lease. I'd like to get a I'd like to get a summary from you all as far as where we stand the number of cases that are outstanding when they're scheduled to be brought up and a just like to give some report surrounding all of that conversation right there if we could help you with your offline to fill in the blanks okay so we know and that money is going back where when it's collected is going into the trust fund or where's that money going back to when we collected thank you. What could you answer that where where's that money going back to is it going into the unemployment trust fund or where's it going when you get to that question goes back to the department of labor and then the state portion goes back into the trust or thank you right representative speaks. Thank you Mr chair over here. I want to talk to you about this I want the budget to three four on page three forty five the letter say is this the only budget that four letter say. Representative speaks just for clarification are you talking about the governor's commission on adult literacy. Yes isn't that all that you have that did it gets dispersed to those are the funds that get disbursed to the literacy councils around the state okay that's the one I'm interested in yes ma'am so this is the only one yes ma'am okay. In in the disbursements to the different groups that's out here in the state I'd like to know what that adult learning alliance in court for his and is for their budget I mean. Like for twenty twenty two that's almost two hundred thousand what is that use for. Representive speaks what page are you referring to it's so just information that I had received it's showing all the different disbursements to the various groups out here in our state with within the literacy council disbursements or to all the adult and providers no this is just adult literacy. So I don't have those that their budget or the disbursements with me I can get that information to you. I'd like to have the you know to know what's the use because in looking down through here at the what's disbursed the what I'm interested in of course is twin lakes literacy council and I have a lot of questions from the different from the board there because the money fluctuates every year and that's to and it all depends upon how much is put into that adult learning alliance and that's one let them know what's causing and what that's going for. Yes ma'am I'll provide that information to you. Thank you thank you Sir thank you Mister Smith. Representable. I like to direct your attention to Page two line for. On that page you show it shown in an employee summary. Total of six hundred and twenty nine positions. And the my question is does that include. Vacancies or is that just others that are filling positions at that point in time. Representive wouldn't that that is total number of individuals because we actually break that down into the of white employees black in the I'm just asking you is that are those bodies that are in those positions okay let me ask you this Sir. So it doesn't include the three sixty eight you have the right. No Sir okay so if you take the six twenty nine number and you had those vacancies to it gives you nine hundred ninety seven positions. And your authorized nine hundred and twenty four the home page two ninety on page two ninety seven your authorized nine twenty four. Your budget for eight hundred fifty if you use the eight hundred and fifty number. And take the three sixty eight off of that the usual four hundred eighty two so and then current it further if you use the twenty three which shows the position to fill. Which is also understand at some point in time. If you use that the twenty three number and then you have then that gives you eleven hundred ninety one so so how many employees do you do you have a with the. Yes Sir of the the numbers are based on the period of time in which the report was created so there is some utility that between of nine ninety seven and eleven ninety one the during the it during that period of time you had three hundred employees of the. No Sir. Provide me the period of time place. I'm just telling you what to report what when the budget was prepared and analyzed report was given to me by the personnel yes Sir we have been reducing staff significantly since we stopped distributing federal benefit impositions of you turned into the personnel committee under the new legislation. Those that are on a report of the total for DWS specifically there are fifty nine positions and out of those positions only sixteen or left with an intensive field the others the room the the difference in that number between fifty nine and sixteen or those that we are not feeling and we've we have of reduced because of at the active in twenty nineteen Mr like to request that they they look at these numbers or get with the staff and look at the numbers to explain why there's such a difference. Of the eleven hundred ninety one of course is nine hundred and twenty four that we have in the budget. And this and that that number eleven ninety one is based on actual of of eight hundred and twenty three and then with three hundred and sixty eight vacancies that adds up to eleven ninety one and yet we show an authorization of positions of nine twenty four so we need you know when when. This is Linda clarification on all where that is coming for a and then and then carrying it one more step further your term is done you say but you're asking of four four nine twenty four you're asking for seventy new employees in the department. Hello and workforce services all right get you got nine hundred ninety one in your budget for next year and you're authorize nine twenty four nine. Can you get with staff after the meeting to so when it tells with representative will reconciliation if you will yes Sir represent what we will provide you with the details and and year by year analysis of our total positions that are currently filled and those that are in our appropriation thank you thank you Mr thank you representive. Representative Cavenaugh. Thank you Mr chair my question is where in your of your budget would I find where there would be attorney fees or in settlements with employees that sued the agency. Representative Cavenaugh ordinarily and they're appropriation summary and their funding would see an expense call claims if you don't see that as a line item then they haven't had any okay and do they have an appropriation for future claims. This would be an appropriation for it it would just be like a a line item do they have a line item no they haven't had any claims so they didn't have the need for the line item okay the reason I ask and you're you're well aware of it Dr children's is we have a real issue in the Jonesborough office we had a real internal issue there and I have several of the employees that work there that are still concerned about the working environment in that particular office. Yeah I get multiple phone calls I'll be honest with you probably every two weeks about employees that are still uncomfortable with the working environment in that location you're aware of the issues that we had there you had to terminate I think for employees from there three or four because of the incidents that we had there between sexual harassment between drinking on the job. and then not only goes into the working environment of the employees but it also goes into the working relationship with employers in that location. You know there's implores it tell me that they will work with that location because they can't get anybody to answer the phone so they go to other locations to try to post their jobs and that's not one what does not want employed it several and you know from. What I hear is that there may be any lawsuits brought against the department because of the department's lack of response to some of these concerns employees to at. Have you got that apart department cleaned up is it fixed is it a working efficiently. Representative Cavenaugh I appreciate your concerns we have made significant progress in that office as far as training of the management within that office and then also of is. Spending significant amount of time in that office in training and then addressing as the that it concerns that of some of which our our our actual concerns that have been expressed by and ploys and and others I have to say are are not Not concerns that we have found any evidence to support so we have done investigation investigations in that office with personnel we have a process for that and we take that very seriously. And so well as I stated we're we are happy to report that there's been a lot of progress in that office but some of the things that you brought to my attention regarding an employer's and then also attentiveness by employees and those answering the phone those are items that I will that that I have not heard and then I will make sure that address okay so you're saying that in throughout your whole investigation there you all didn't terminate an employee because of any misconduct. Representative Cavenaugh can we need to get back to the budget. Specifically if if you can have this discussion. This is more of a policy an administrative type discussion thank you. All right senator Chesterfield executive director. Our motion is second on favor. Imposed motion carries. All right members shares for were at we've got three more. I'm going to Ask that everybody keep your your questions specifically related to the budget and not policy questions as we go through these last three here okay. Samson you're recognized thank you Mr chair gonna go to page three fifty two were going to discuss the rehabilitation services department. Divisions are within the department of commerce you'll see there appropriation summary is on page three fifty two it has nine appropriations or for which changes so I'll just go through those over all there is an increase requested by the agency of eleven positions and three point one in additional preparation over twenty three authorized and then three hundred thirty thousand a year to an adjuster just the salaries and match executive recommendation is just three million increase over authorized twenty three an increase of ten positions so the first appropriations the next page on page three fifty fourths are operations appropriation that they use to increase services to people with disabilities the agency's requesting preparation and general revenue because they to get general revenue in this paying account of eleven point nine million in both fiscal year twenty four twenty five the restoration of ten growth will positions that they got through Legislative Council in January of this year everyone knew we have director position to work with district staff and I'll pull the regional responsibilities as a positionally classifications there's no changing appropriation requested with these reclassification the executor recommendation allows for some of the request you'll see on page three fifty five there is an increase of ten positions I'm sorry the increase of nine positions that is recommended by the Executive versus the ten requested by the agency and that approximately two point five million increase an appropriation of over twenty three authorizing your one and then two hundred sixty three thousand in your to. Next appropriation with pay changes on page three fifty seven. The narrative on three fifty six as for there are I increase is call I can't appropriation increase capabilities access network this is a federal program providing information on new and existing technology to any person who needs assistance with their disabilities there are several state programs and federal programs that they utilize findings hundred percent federal they're requesting seven hundred fourteen thousand in fiscal year twenty four which is over the twenty twelve rise and then in twenty five they're requesting seven hundred seventeen thousand the secretary recommendation does allow for the agency's request you'll see it on page three fifty seven the position number is going to increase just by one but the. Recommendation is the same for both the agency request in the executive recommendation net of seventy nine thousand increase over twenty three authorized and then three three sorry thirty three hundred in your to. Next appropriation of with. Changes on page three fifty eight this is our state wide disability to make up telecommunications equipment fund appropriation as you can see it provides for services skews me for persons were deaf hard of hearing blind or speech impaired. Yes sponsored by special revenues by surcharge on telephone numbers your is slight increase requested in personal services matching on the next page three fifty nine you'll see that that is the only line item that has increases about forty seven hundred. In year one about nineteen hundred in your to when that's over the authorized twenty three appropriation we're going to skip a public pages and go to page three sixty nine that's the next appropriation that has changes this is a blind services operation's appropriation to provide services to people who are visual impairments. They've got feel services vending facilities programs and the DSP director's office these are three independent units that are funded by this appropriation funded with general revenue and federal revenue the agencies requesting. Six point seven million in six fiscal year twenty four and six point eight million figure twenty five in general revenue. About a million in both fiscal years agencies also requesting those slight increases in personal services matching and regular salaries and some position we classifications executive recommendation on page three sixty nine you will note that there is the increase is in line items in regular salaries personal services matching and a decrease of twenty five thousand dollars in the capital outlay on item from twenty five thousand in twenty three authorized to zero throughout the biennium that's the conclusion of the presentation Mr thank you single questions emotions active record. The second. All in favor. Any post motion carries. Moving on item nine seventeen you're recognized thank you members were on page three seventy two this is the Arkansas waterways Commission their appropriation summaries on page three seventy three it's consists of three appropriations there's only one which changes which is on the next page three seventy four this is a miscellaneous agencies funded appropriation as a portion of element of the navigable water rates in Arkansas. The appropriations funded with general revenue and fifty thousand of taxes and penalties is collected for water transportation companies under Arkansas Code twenty six in excess of two point five million with the exception of the regular salaries and match increases they are requesting general revenue funding of two hundred seventy four thousand each year the biennium which you will see on page three seventy five so the line items that you'll see changes in our regular salaries and match. Seventeen thousand increase over twenty three authorized in year one in nineteen hundred. Over your twenty four in your to at the conclusion of the presentation is a chair thank you saying no questions arga motion Executive rack second on favor I any opposed motion carries. Thank you so The Simpsons thank you last item on the agenda is the department of aeronautics appropriation summaries on page three eighty one they've got to appropriations one with changes in their state operations expropriation you'll see it increases from authorized appropriation in twenty three of about fifteen point six million slight increases and twenty four and twenty five just to account for matching and personal services their operations appropriation provides for example reading and licensing airports Leding feels and air navigation facilities. This is funded entirely with special revenues derived from aviation sales and use taxes on page eighty three you'll see the increases in those two line items it's about thirty five thousand in year one which is over authorized and twenty three and then in your two was about thirty five hundred salary match only over your twenty four at the conclusion of this presentation Mister chair thank you single questions. The motion exactly wrecked the second on favor imposed motion carries that wraps this up L. C. special language JB seems special languages at one thirty and mac B. we're adjourned.