Legislative Joint Auditing

Welcome to everyone. The. First on the agenda we need to adopt the minutes for our August nineteenth meeting. I move to adoption in all in favor say aye. Thank you okay moving on the report from our executive committee I recognize my co chair represent one thank you Mr chair of the executive committee met Thursday September eight two thousand twenty two staff reported to the committee the audit special investigative and shortage report scheduled to be presented to the standing committees and the full legislative joint auditing committee this month in New business the Committee approved requests for staff to conduct special procedures for and review selected transactions of the regional waste tire collection centers in the state as well as review the division of environmental qualities processes for distributing waste tire fees to solid waste management districts. Also staff on the committee a request to provide the annual amounts being collected by district and circuit courts for the drug crime special assessment the authorized by Arkansas Code twelve dash seventeen dash one oh six had been completed in other business the committee approved a motion recommending the appointment of Kevin what is legislative auditor to take office upon Mr Norman's retirement with no additional business to discuss the meeting was adjourned the next meeting of the committee is scheduled for Thursday October thirteenth two thousand twenty two Mr chairman for adoption of this report. With no objection to reporter Dr. All right Mister chair consistent with the executive committee's recommendation I move that the Legislative Joint auditing committee appoint Kevin what to serve as the next legislative auditor to take office upon the retirement of the current legislative auditor Roger Norman. The motion from the the committee does not require a second so do we have questions. Who is this person orders qualifications. Beg pardon who is this person that were you looking to appoint and what are the qualifications are recognised Mr Norman thank you center of Kevin has been with us for around twelve years I think he is a an attorney and CPA he has worked on some of the the most complicated reports that we've had of the he's got a very diverse background and we with within the organization had a committee that met and and came up with some candidates and presented those to the executive committee and he was the one that you guys so that that the the executive committee thank you. No one else in the. All in favor say aye. All opposed thank you very much. Okay standing committee on counties the municipality representative Hillman. Your report. Thank you thank you Mr chairman. The. Subcommittee on counties municipalities met years afternoon of first item on the agenda approved the minutes of the August eighteenth twenty twenty two meeting the Committee reviewed eleven reports differed from the August eighteenth meeting officials from four entities were present to address repeat findings from these reports five previously deferred reports were filed and six were deferred to the October thirteenth meeting the Committee reviewed seventy four current reports of these two were referred to the government of bonding board and five other reports were referred to prosecutors an official from one entity was present to address a repeat finding in their current report the Committee file seven one current reports and deferred three so that officials could attend the October thirteenth meeting to address repeat findings of Mister chairman for adoption this report. No no objection. Reporter Dr. Our state committee on educational institutions represented bear. Thank you Mr chairman standing committee on educational institutions met yesterday September the eight the Committee reviewed a total of eight audit reports which consist of five school district report for one education Corp to report into higher education report for the year in June thirty two of twenty twenty one. The education report of the river education. Skews me the audit report of the river education service Corp was referred to the app will prosecuting attorney the Committee file the eight audit reports that were brought before. At this time Mister chairman S. for adoption of the report. No questions no objection reported off. Committee on state agencies Senator Pitsch thank you Mr chairman general ports are on the committee's agenda yesterday One current report which is for the Arkansas State Highway employees retirement system contained a finding related to the overpayment of retiree benefits various agency staff members are present to report on how the agency intends to address the audit findings and to answer committee questions during the meeting the committee adopted a motion to file the ten current reports I move to adopt this report. Okay no questions the the objection reports Dr. The moving on to item D. number one state of Arkansas annual coverage of financial report recognize the Christian center. Thank you Mr chair. This presentation covers the audit of the state of Arkansas annual financial comprehensive financial report or act for for the year ended June thirty twenty twenty one. The audit was completed by the staff of legislative audit although DFA was granted an extension to January thirty first of the year to file the report it was dated January twenty first an early release on January twenty fifth. We issued two reports for the audit of the state's financial statements the first is the act for which includes all the financial statements and notes to the financial statements for the state as well as our independent auditors report. The second is the report on internal control over financial reporting this report includes any findings related to the state's financial statements and is included within the single audit reports by also included in the single audit report of the findings related to the state's federal financial assistance which may shall cover next. Back first financial statements which were prepared by DFA includes all state agencies retirement systems higher education institutions and three component units which include the Arkansas development finance authority or at the the University of Arkansas foundation and the you of a flight bill campus foundation. We issued under modified or clean opinions of the state's twenty twenty one ACT for we audited all the financial statements included within the act for except for the following entities which were audited by private accounting firms the three component units previously mentioned the University of Arkansas for medical sciences and the revolving loan funds the two largest revolving loan funds are the construction assistance revolving loan fund and this state safe drinking water revolving loan fund both of which are administered by access. There were two reportable findings considered to be significant deficiencies related to the actor these findings are included in the single audit reporting package as financial statement findings in the schedule findings and questions costs. The first finding noted that the state did not have the policies and procedures in place to appropriately record the financial effects of the unemployment insurance pandemic programs. As a result operating revenues were overstated by one hundred fifty one point three million when a portion of the federal grant receipts were aronie Asli coated. The state also attempted unrelated corrections to non operating revenues totaling eight point seven million but but used an incorrect general ledger account. The net effect of these coding errors caused non operating revenues to be understated by hundred forty two point six million in operating expenses to be overstated by eight point seven million. Lack of appropriate controls over financial reporting could cause the financial statements to be misstated upon receiving notification of the penitential misstatements the FAA office of the county made a correcting injury in aces. We recommend the state work to improve its controls over financial reporting creating policies and procedures that encourage more accurate reporting of its programs. The second finding noted that the Arkansas department of transportation fail to maintain complete record of right of way property owned in noncompliance with Arkansas Code which could lead to the misuse or misappropriation of assets. We recommend the agency develop and maintain a record of all right away property owned with costs that support the balance reported in a sense. I wanna touch on some of the financial highlights of the state's twenty twenty one ACT for the next six lines relate to the primary government and do not include the state's retirement systems which are discussed later in the presentation. As shown on page twenty of the report this state had total assets at June thirty twenty twenty one approximately thirty three point two billion dollars. The major categories of the state's assets include capital assets cash investments and other assets as shown on the slide. Receivables and do from other governments make at most of other assets. The state's total liabilities were thirteen point nine billion dollars as shown on page twenty one of the report. A major categories include Bonds notes and leases payable net pension liability other post employment benefit obligations and other liabilities. This chart shows trends regarding the state's assets and liabilities over the past five fiscal years the general increase in assets from two thousand seventeen to two thousand nineteen was primarily due to an increase in capital assets mainly infrastructure and construction in progress from two thousand nineteen to twenty one the majority of the increase was in cash and investments due to the cares Act funding received from the federal government. Overall liabilities have fluctuated in previous years the increase in fiscal year twenty twenty was due to an increase in post employment benefits pay bills as well as payables related to unemployed unemployment insurance programs due to the pandemic and cares Act funding in fiscal year twenty twenty one the increase in liabilities was significantly related to an accounting entry that has to be recorded the American rescue plan act or arpa funds received in fiscal year twenty twenty one but not yet spent eight year and. The state had total revenues of twenty nine point one billion dollars as shown on pages twenty four twenty five of the report the major categories of the state's revenues include grants and contributions taxes charges for services and other income. The state's expenses totaled twenty seven point one billion dollars the major functions or programs making up these expenses were health and Human Services colleges and universities education general government division of workforce services transportation and other expenses. This chart shows the trend of the state's revenues and expenses over the past five fiscal years between two thousand seventeen in two thousand nineteen revenues increased primarily due to increases in Medicaid funding and personal corporate income tax the increase in revenues in twenty and twenty one was due to grants and contributions related to the pandemic and federal funding received through the cares Act as well as arpa. The increase in expenditures in fiscal year twenty two one twenty was significantly associated with unemployment related expenditures at the division of workforce services due to the pandemic. There also were smaller increases in expenses related to health and Human Services and Transportation the increase in fiscal year twenty one was the result in greater expenditures in general government education and health and Human Services. I will now show some summary financial information for the state's retirement system's. As shown on page thirty seven of the report the state's retirement system's had assets aging thirty twenty twenty one totaling thirty six point seven billion dollars the major categories of these assets were cash investments securities lending collateral and other assets. The retirement system's had liabilities totaling one point five billion dollars as shown on page thirty seven of the report the major categories of these liabilities were as follows obligations under securities lending investment principal payable and other liabilities. This chart shows the trend of the retirement system's assets and liabilities over the past five fiscal years the variation in assets from two thousand seventeen thirty thousand twenty was due to fluctuations in the financial markets for stocks and other investments the increase in twenty twenty one was a result of the high rate of return on investment. Liabilities for the retirement system's had only slight fluctuations over the past five years the decrease in twenty twenty was due to a decrease in assets for the securities lending program. The retirement system's had total additions of nine point six billion dollars as shown on page thirty eight the major categories of the retirement system's additions included contributions net investment income and other additions the retirement system at a directions totalling two point one billion dollars with benefits paid being the main component. Of this last chart shows the trend of the retirement system's additions and deductions over the past five fiscal years. I merry reason for the variation in additions or revenues over this period was the fluctuation in the market value of investments from year to year. The deductions for the retirement systems were study over this period and will primarily benefit payments. This concludes my presentation DFA another agency representatives are here to answer committee questions thank you Mr chair. Okay here represented very you're recognized. The I was trying to turn it off earlier in okay. Thank you. Any questions on this report. Richard Womack. Thank you won't pay the total paid seventeen that last line other assets of two hundred and one million can you give me an example of what some of those other assets might be it's kind of a state of of this short at. I'm just curious what that's of concern for the Vega chunk of money. He per. The two hundred one million for the assignment system yeah your can you give us an example of what. Those type things or that we're talking about for sure I'm not as familiar with the retirement system designs and the other. Securities lending collateral capital assets M. O. sorry no the other assets of without the detail here I mean maybe someone from the retirement systems can answer do you want from a retirement here. With the do you know that and get back to general. Yes the down the work papers we see that answer okay. Senator Phil. Recognized thank you Mr chair I'm noticing on pay sixty six every peak finding what DHS a under the children's health insurance program what was the response of the agency. To repeat fine I miss checked searches feel that will be covered within the single audit report which is next on the fine arts so we're not through okay thank you your. Anyone else. No other questions the rejection we consider report filed. Next on the list to the state of Arkansas single audit report. For the year ended June third twenty twenty one and I will recognize the Tammy shall. Thank you Mr chair. This presentation will cover the state of Arkansas single audit report for the year ended June thirty twenty twenty one a printed copy of the report has been made available today. The staff of legislative audit devoted just under fifteen thousand hours to the statewide federal project which was finalized and submitted to the federal audit clearinghouse on June the twenty first twenty twenty two. The single audit act requires that the audit of the state be conducted to determine for objectives. First are the financial statements of the state shall be presented miss Sanders addressed this objective during her presentation. Second is the schedule of expenditures of federal awards were C. Fite fairly presented the C. Fite is a listing of all federal programs with reported expenditures we determined that the twenty twenty one C. Fite is fairly presented the C. Fite and related notes are located on pages one eleven through one fifty one of the report. Third has estate comply with laws regulations contracts and grant agreements that may have a direct material effects on federal wards. Fourth does the state have adequate internal controls in place to ensure compliance with the requirements of various federal words. State agencies and state supported institutions of higher education disburse federal funds totalling fourteen billion dollars from four hundred and eight federal work programs during the twenty twenty one fiscal year. This was an increase of approximately two point seven billion dollars from twenty twenty. Largely due to funding related COVID nineteen. Based on risk assessment criteria established by federal regulations also known as uniform guidance twenty programs were selected as the major programs reviewed for twenty twenty one. These twenty programs represented seventy two percent of the state's total federal expenditures. The state department shown on this slide expended the federal words received by the state the Department of Human Services at fifty five percent the Division of work for services within the department of commerce at sixteen percent the department of education and the department of transportation at six percent each. The department of health at two percent and other state departments at fifteen percent. The state received federal awards from twenty nine different federal agencies during the twenty twenty one fiscal year the first for federal agencies shown on this slide provided eighty four percent of those awards. It's the responsibility of all federal warning agencies to review and provide resolution for all audit findings. This includes determining if the question cost identified by the order require recruitment as shown in the chart on page seven of the report and summarized on this slide five point three million dollars in question cost remained outstanding as of June the thirtieth twenty twenty one. The older resulted in forty one findings for six of the twenty major programs of these forty one findings twelve were repeat findings which indicates that an agency has not taken adequate measures to correct issues reported in the previous single audit. The audit status for unresolved prior audit findings is located on pages two fifty three to sixty two of the report and gives the results of our follow up procedures regarding the uncorrected prior audit findings. Additionally question costs are identified by the auditor because of a violation of a regulation a lack of adequate supporting documentation or costs that appear and reasonable. Question cost for twenty twenty one total approximately forty two point eight million dollars. As the auditors our responsibility is to express an opinion on compliance for each major program based on the results of the audit. Although several findings were reported we issued an unmodified or clean opinion on most of the major programs. A qualified opinion is issued if an audit finding results in an instance of non compliance that is determined to be material either individually or when aggregated with other non compliance findings in relation to the major program as a whole. For the twenty twenty one fiscal year a qualified opinion was issued for findings representing the following programs. Unemployment insurance the children's health insurance program commonly referred to as chip. Medicaid. COVID nineteen presidential declared disaster assistance to individuals and households and the research and development cluster. These findings are identified on pages twenty one through one tenth of the report and will be discussed on the slides that follow. For the unemployment insurance program administered by the division of workforce services. Which was expanded due to the COVID nineteen pandemic we issued a findings two of which were repeat findings one of the repeat findings number twenty twenty one dash oh oh four on page twenty three contributed to the qualified opinion. Specifically our review of climate data revealed numerous overpayments of benefits to claimants deemed an eligible. And claimants who could not provide identification to validate their claims as well as claims paid on behalf of deceased individuals. Question cost for the unemployment insurance program totaled over twenty eight point seven million dollars. Twelve finding for agencies were issued regarding the coronavirus relief fund these agencies were the department of finance and administration with three findings the Department of Human Services with six findings the Arkansas Economic Development Commission with four findings and the Department of Parks heritage and tourism with one finding. Question cost for the C. R. F. program totaled ten point five million dollars. Six findings affected both the chip and Medicaid programs with three being repeat findings the most significant of these deficiencies was finding twenty twenty one dash oh two four on page sixty nine which noted that sufficient appropriate documentation could not be provided to auditors and as a result we were unable to perform testing to determine if the statement the required match in accordance with federal regulations this finding contributed to the qualified opinion. Question cost for the six findings totaled one point nine million dollars. Two additional findings were issued for chip with both being repeat findings question costs totaled eleven thousand eight hundred and twenty four dollars. An additional four findings apply only to the Medicaid program and all for a review findings question cost for the Medicaid program total just under nine hundred and fifty thousand dollars it should be noted that question cost were not calculated for selected findings due to regulations related to the COVID nineteen pandemic. There were six findings at the division of workforce services related to the COVID nineteen presidential declared disaster assistance to individuals and households program which provided supplemental payments for lost wages two of these findings contributed to the qualified opinion. Finding twenty twenty one dash oh thirty five on page ninety seven was issued due to benefit payments being issued to claimants who were later deemed ineligible. Finding twenty twenty one dash oh thirty nine on page one oh five was issued because the state did not meet the twenty five percent match required for the lost wages program which occurred because the methodologies used to calculate the match. Contained in error and the agency did not have controls in place to properly review the methodologies. Question cost for this program totaled over six hundred and eighty four thousand dollars. Mister chair this concludes my presentation and agency representatives are present to answer committee questions thank you thank you Michelle. Okay. Questions. Twenty one Senator Chesterfield yes you're recognized thank you Mr I would just like to hear the response of the agencies concerning the repeat findings. Who would you like to hear from for well let's start with the biggest one Department of Human Services why. You and your crew please. What for you lease a building I'd like to speak to you in private today. You know would please the attorney Michael introduce yourself and the for the record. Hey Brett Hayes deputy chief counsel of record for regulatory security in compliance with DHS. Cindy Gillespie secretary of DHS. Mark white chief staffer DHS. Dawn Staley deputy director Medicaid director DHS. Should you have specific questions you want answered in general best repeat findings. The this section you will. This section should do that again we didn't get turned I would like for them to answer in general because when we continue to have repeat findings there is great concern so if you would just speak to those because I did not find your response. well I haven't had a chance to find Jeffrey sponsorship you may want if you would deal specifically with repeat findings I would appreciate it. Yes ma'am I'll start and then obviously others can chime in the repeat findings that you see in here at the chip ones that you reference for example or around provider enrollment if I'm correct in that one yes and. In in general let me state with us the repeat findings are areas where it has taken us several years to put in place the changes so you have in these years part of the year where there's repeat findings and then the change going into effect so if you'll remember we came before you for several years with the issues were having with provider enrollment and our whole process to change that out that actually took place and may of twenty nineteen so we have as you know a year for claims to come in. XRF gone into the other one we have Those processes went into place. And then the findings that occurred happened for issues from prior to the time that those that need process went into place not stating this clearly which is why you guys will have to jump in and help with that. The I need to know if you have them in place now we do have them in place now so when it comes again. I wanted on this that is our hope one can never give a one hundred percent guarantee on something but in the case of provider enrollment part of what they are talking about is that because the public health emergency weekend not a descend roller provider. So we followed our procedures but providers could not be dis enrolled we do have John parks audit unit going behind to now and looking to make sure that what we're doing is working so I I want to be clear about that the other major repeat finding that they we've been working on for several years deals with changing out our general ledger our federal they're not able to document that we have a pride of that we've done the appropriate federal match is the audit findings we had a system of for our general ledger that was still lotus. So we have been going through the installation of a new General Electric that new general ledger is now to it now in and we're going to the next level of operation Leising it but that general ledger when in in this calendar year so when we get to the point that their auditing in this calendar year but they should be able to see what they need to see in this new General Electric. The lord allows me to come back here next year to serve on this committee. I don't want to see this again sandy. I don't understand this last year well the last time we had one in and here we are again and we've got to be. We've got to find a way for not to happen again. We totally agree and that's why we're making a very major ships around both of these programs and have made them so you should not see the findings of the same type at least at least okay within those areas and I can tell that Brett Hayes is dying to say something. That is not at him yes clean up anything I said wrong so one thing I do want to add as it relates to the repeat findings and and obviously for for the specific explanation as to how they pull the audit sampai would be for legislative audit but it's important to point out that we put these changes are related to our provider enrollment controls in place on five thirty one of twenty nineteen there are claims that were identifies as deficiencies in this audit where the original claim was billed and paid prior to five thirty one nineteen but due to an adjustment that happened during the audit period of those claims were identified as deficient I mean it's it's very possible that some of those claims. Those pre five thirty one nineteen claims could show up during future audit cycles but what we've been doing is we've been working with CMS. on the return of questions costs and as long as CMS sees that those claims were related to that date before we implemented that corrective action they're not requiring us to return those questions cost but if it if it's after five thirty one nineteen we would be required to return those questions cost For the last three AUTOCYCLES we have been required to return any questions cost I anticipate that will happen again. Thank you thank you Mr. Got a question a. Only a finding of the one point nine million so that the could never review because the lack of paperwork two million dollars a lot of money after not have paperwork could you elaborate on that please. If you clarify which funding number that is please. Shocked do you you had on your screen name yes that would be the six findings that applied to both chip and Medicaid numbers twenty twenty one dash oh twenty three through twenty twenty one dash oh twenty eight. When you total those questions cost it'll add up to the one point nine million. Although the one point nine million of the one point nine million is related to finding twenty twenty one dash oh two five. And that was for at an overstatement of federal expenditures for the tobacco funded adjustments and what happened there was when we were reporting that adjustment we reported on the incorrect line so where we should have reported on the Medicaid line we reported on the chip line so we made that correction with CMS so essentially it was an adjustment of funds that we didn't have to return any funds for that finding. That still doesn't explain me why audit couldn. What recommendation on the documentation on is a is this the way I understood a thank you for the simple terms lack of paperwork they they couldn't of research the expenditure. As a call off but I think that may be combining a couple the findings so Mister Hayes was addressing the funding related to that or replace the dollar figure on the wrong line CMS report and that which was sent in error in that paperwork but as far as the the missing documentation I think it's more along the lines of the general ledger system which has been an ongoing issue for several years we've been working to get a new journal entries ledger system in place it is now in place and active and so that should resolve that going forward in other words you didn't take the one point nine home with you correct. Representative right you're recognized for a question yes thank you Mister senator you know just by looking at all of this I don't remember in past years of sand that much deviation. And on the reporters you know. Is does this have a lot to do with COVID and all of this extra money coming in from the federal government it's actually making it look like they were maybe all four are figures for review it. Or whatever I will will point level one thing I think is important note some of this is approval to covid we look at the number of findings we have just by comparison to go back to the fiscal year sixteen we have twenty five findings that year for this year we have seventeen but five of those are related to that COVID nineteen funding. In short thank you keep up with them sure because it's money that property for months at a time you don't have exactly the right answer on which way to go with that type of expenditure on certain things is that what maybe it is I think that is part of it and also it was it was a rushed process no during pandemic we knew the provider for struggling they needed help and so we're rushing to try to address that but it's solution problems that have that came about during that time thank you thank you thank you Mr chairman senator Gilmore. Thank you Mr so just looking through the report and just on pages like forty eight three fifty four it states the. Funds will be recouped it doesn't state how that's going to be done especially when the question Koster quote unknown so. What steps what actions what what measures can you all do to recoup the funds when it's unknown. Certainly so part of what we try to do whatever of finding is brought to our attention or something that we see as we're going through our own analysis is to be able to see first and foremost is there other available documentation that's part of what we've actually seen in this is that as we've gone back out as Mr white said in some cases in some of the providers who receive cares funds or some of the somebody cares funds and said you know it looks like we they're missing documentation or we have duplicate documentation can you provide that in some of those cases we were able to then resolve that and say okay it might payment that was made in other cases it's determined that it was not and so in those cases we do go ahead and recruit from those providers we try to do that in this case as a what we call an off cycle that way it's not enter interfering with their Medicaid revenue but rather is tied back to then the the ark of funds or the cares funds in this case. So the do we anticipate being able recruit most of the fund is. thank you. Your Chesterfield you're recognized yes yes Sir one of the problems that DHS has been employee turnover. What is the current turnover. Ratio. ENDP has that had any impact on your ability to deal with these issues about which we speak today. Our current turnover rate agency wide overall still sets between forty five and fifty percent okay. Continue hello the but this is largely because of the facilities remember that most you know. About half of our staff were actually employed at facilities and so you do end up with very high turnover rates at the H. D. HTC's instill sense it over a hundred percent so um. Within within that large groups of individuals which affects what the entire agencies turnover rate looks like with that set. no I I would not at I would love to take an out but no. I will not do that on this guess we have turned over within our finance department and we have turned over within our Medicaid staff and administrative staff but our findings particularly are repeat findings in this case really are tied to older long term issues we have where we have had to go through not just process changes and trainings but I've actually had to go through putting in place IT systems and bringing in additional contracted consulting help and getting all that up and go away so I can't blame it on the turnover thank you. Okay no other questions for DHS thank you very much. Any questions for any of the other agencies. Workforce services. If you would please Turner micronutrient for the record all. Good morning. Restorers director the Division of work for service. Courtney trailer deputy director work for services. Christine read Assistant director unemployment insurance benefits. church who you're recognized yes Sir thank you so very much there are some key findings which to address those please. Yes ma'am thank you senator Chesterfield and thank you for your support through the years of the pandemic and an understanding our circumstances so yes we do have to have a repeat findings on this report the single audit of pandemic related so I'll ask Courtney trailer to speak to those thank you. The first one finding twenty twenty one dash oh oh four is the result of about two hundred and sixty four claims two point four million that is the result of We relaxed our state controls during the pandemic to require we did not require ID verification and we also waive the waiting we so and the urgency to get payments out that created a lot of these items here we completed the fix on that we created some analytical reports and both are United in our P. U. a system that. Was completed in August of twenty twenty so is that correct twenty twenty okay so That. Will prevent those findings from occurring in the future. The second repeat finding is number six twenty twenty one dash oh oh six which regards about thirty claims an eighty seven thousand and the question cost that had to do those were duplicate payments between the United in the P. U. a system would you mind defining what the line at four OR AS well United is our unemployment insurance I'm sorry we get stuck in acronyms world so thank you for reminding me of that P. U. A. S. R. pandemic and employment assistance and that was the system that was knew that we had to stand up during the pandemic so Which was unprecedented in our. Department or division before so we had to create that system and then also begin to process those payments and and in order to get those payments out you have payments coming out of out of both systems so their worst there was some duplication and we have to fix to integrate those two systems that was in place November of twenty one so we it took a while but. I'm sorry November of twenty years run together sometimes of an. November of twenty that was fixed so that will be a recurring finding again the control is in place there still may be some questions and claims paid out with the controls in place to prevent future payments well let me say thank you so very much for for your service during this unprecedented time. A may I ask how much money have we recuperated that was. Questionably page shall we say. Any meaning I'm not quite sure I can find out for you we're in discussions with the US department of labor as well as FEMA to to come up with a plan for recouping the overpayments and if will be liable for those we're not sure we're working on a blanket waiver with USD well but we have recoup some and we have several methods of recouping payments but at this moment I'm not able to identify how much we have a case that I can get thank you Mr. The representative may very. Thank you Mr chair I'm just curious how we compare to other states with this because we obviously weren't the only state to be thrown into all this and and has there been any national look and how Arkansas ranked with other states. Yes so prior to the pandemic we were twelve so we rank twelfth in the country for our improper payments so there were eleven states that were better than us during the pandemic we were thirty nine so we all states incurred the same issues of improper payments in our haste to get payments out and then in twenty one we were nineteen or sixteen so we're making progress. But that's that's how we compare to other states. Thank you. Representative McKenzie. Thank you Mr chair along the same lines on we talk about the recruitment how about actually the status on prosecution or catching. Are we. And how we compared with other states they're all having to besides Rick but they're trying to prosecute individuals. So. We can identify the overpayments for the fraud and then we turn those over so we're not responsible for the prosecution of those we do identify and then turn that information over I'm not sure what the actual statistics are for the prosecution so we don't have a are we gonna have a place where we can follow up and see as a state how we're doing our with the prosecution and report back to us to see. Yes I can I can find that information out thank you very much. If you would get that information to staff and will put up to the whole community. Refused. Thank you Mr chair first of all I want to thank you Krishan quick to help me find my constituents during COVID but when you were where do you take your money to help when you don't recoup the money you know when you've had the double payments and all of that. Where is it coming from to help pay back. Well we have we haven't had to pay that back yet so for example our state match that we had to do for FEMA came from cares Act funding but since we haven't had to pay that back yet I'm not sure if if we do have to pay that back will have to work through those details of where or how we will do that. Thank you and the waivers out once the waivers are determined okay thanks. Okay I've got a series of questions of the election will resume you may address one one comment may not but you know twenty eight million dollars in unemployment. The it is a lot of money for overpayment of my real question is is you know how many claims that involve what to the amount of money per claim would be involved the or some counties more prone to fraud in other counties the I really don't understand I don't understand process how we could pay out twenty eight million dollars in fraudulent claims would to the was any disciplinary action taken against employees and what kind of reforms have you done to prevent this in the future. But you know twenty eight million dollars. Go a long way on teacher pay raises. Senator Caldwell thank you for your questions obviously these were federal funds that were disbursed so those are came from United States department of labor to our agency to be distributed for the federal a pandemic unemployment benefits so obviously it's the United States department of labor that wants to recoup those funds when we have over payments regardless of the amount in the past are are over payment or over payments have been minimal with the unemployment insurance benefits through our trust fund and any federal benefits of that during the pandemic because we were making changes so rapidly had systems that had to be set up as we were actually distributing payments we are making changes to the system so that we could put all these controls in place we are hopeful that will receive waivers in order to from the United States Department of Labor in order to cover these overpayments all states are in the same situation that we are in so the the I don't have the number on the number of claims involved of for the total amount of the overpayments but I can't find that number then your question about what counties were prone to fraud well some of you probably have seen the the fraud rings that have that have been shut down or were were that the FBI investigated and those individuals were then charged but those are few and far between because so much of our fraud was from identity theft so the individual that filed the claim wasn't actually the individual that receives that was the reason I. Name was on the climb and so that's why when we we were we we were saying to report that someone had filed a claim on an individual because most likely they used in address or an old address and that came to that person and they knew they didn't file an unemployment claim that caught our office and reported it to us and then we had them file a police report in order for us to continue to follow up on those and to report those as fraudulent claims I can't say that there was one county that was more fraudulent than others we know some of the fraud rings were exposed there was there actually there were one or two in northwest Arkansas but I can't say that those were Arkansas residents that's just you know that's where it was investigated and reported of those individuals as far as disciplinary action this was no fault of our employees. This was this was all the result of of reducing the the requirements of that we had in place prior to the pandemic and the reason we had such a low fraud rate prior to the pandemic not requiring ID's and our offices were of a removing the waiting week all of those things had been in place prior to the pandemic and our fraud rates for very very low but during the pandemic in an effort to expedite the payments to individuals as this body requested the executive committee in your constituents were asking all of those things were removed also to protect the safety of our are individuals working in the offices every single day during the pandemic which many of you saw the the impact of that on our offices in the news and and elsewhere so no disciplinary disciplinary action was taken because there was no wrong done by an employee they were working as hard as they could to identified any suspect activity and or and sharing that we where do you using all the tools that we had in place in a new system that it that was created in sixty days we were we put out payments and sixty days and receiving guidance almost daily an initially from the panned for the pandemic benefits Moving forward we are making progress we have improved our our process these of we have better of coordination with the programs and and in addition we are also being monitored and audited regularly by the US department of labor on the same issues so we definitely are aware of them we are working to make sure that we recoup as many payment's as possible through an overpayment process that we had in place prior to the pandemic and the repayment process for those individuals that we can identify but then we have all of those that we can identify and and and that's you know those are the number of claims that all provide to you. Thank you very much represent Iraq. Thank you Mr chairman it's crazy help me on this one this little bit okay at one time there was a tremendous amount of federal money that was thrown in our direction I guess never stage direction. That was exceeding the amount of money that people actually withdrawal for unemployment. You remember that and then we switch that over try to cut back on that time situation do you think that that money acquired during that transition of that those figures you know from from a high maybe several hundred dollars so might be making three of four hundred dollars a week you saying during that transition of when we actually changed the amount of money that we remember you know sent to someone that was actually you know unemployed would that account for some of the problems that you could possibly brain injury. Absolutely representative rye prior to the pandemic of our benefits were eighty one to four fifty one a week and and of course with the additional up in the P. U. pandemic employment assistance program the benefits were higher as started at a higher rate and so when you added the additional six hundred dollars which is what you're referring to yes that that encouraged individuals to take advantage of this opportunity where they could get at you know as much as but thousand four hundred fifty one dollars over what they in for each week which was six hundred over what the maximum out they would have been entitled to under regular unemployment insurance so yes that did that is when we saw the increase and of course many fraudsters are taking advantage of that and multiple multiple claims. Thank you Mr chairman. Represent very. You represent voting in Roxy said in the. Really committee chaired over there I want to feel smart like Jean question the twenty eight million I agree with the chairman of that is a lot of money but to put that number in perspective what was the total amount of federal P. U. A. that was paid to to Arkansas. Yes Sir we will give you the total amount for the United and for the way before we get started I'll just say prior to the pandemic in regular unemployment benefits are are benefits paid out or ninety eight point six million and now in perspective in twenty and twenty one. twenty twenty one we paid out seven hundred ninety million and benefits that includes regular United and it includes all the other federal programs for unemployment so roughly that won all three nine four you know just a little under four percent of the total total funds correct all right thank you so it's a little more than that I believe I think the. Yes about four. One question only up for go to the next one. Your mission we may have to pay it back if we pay that back where those funds come from. Yes Sir we will be working with the you're with the executive branch and also with secretary Preston in order to identify sources for that repayment we obviously don't have that within our agency so we expect that we would go back to our of funds to the federal funds in order to to pay that back but we are hopeful that we will receive the waiver from USD LOL. It's private it's very promising at this point. The representative makes. Thank you Mr I just real quick question back when all this was happening one of the big challenges was you all we're trying to set up a new system from scratch the P. U. A. at the same time the old system was very antiquated and I know you are working on trying to combine on and upgrade the whole system which would help prevent these kind of incidences going forward where we add on that just an update on that new system. Thank you representative makes for the question of we M. earlier middle of last month we decided to that was in the best interest of the state to not for proceed with that procurement we had started that procurement approximately a year ago of we have made a lot of progress since then we've identified areas that we can we can do finally and so now we're just reassessing looking at what what we need to do of what we cannot do and will need to possibly put out another RFP in the future but right now we are we're we're operating with our system that we have in place but we've made significant improvements so I'm happy to say it's not where it needs to be and we we still have needs within our system but we've made a lot of progress all right thank you thank you thanks for. Any other questions. Seeing none then the we will follow support. Thank you Mr chairman matters in the image. The next meeting of the Legislative Joint ordering will be held October thirteenth and fourteen Mr so chooses can I have a point approval yes Lewis Mr Allman I would like Marty steel to stand. Marty if you will this is Marty's last committee meeting with the she's going to be retiring Marty's been the deputy over cities and counties so she said not only around five hundred reports municipalities and seventy five counties that U. S. president to to us each year she's done a great job she's going to be missed greatly thank you Marty. We're done. Get your.