ALC-State Insurance Programs Oversight Subcommittee
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Members if you'd find your seat we're going to get started here in about30 seconds right members let's get started. We're calling to order the state insurance programmes
oversight subcommittee of the Arkansas Legislative Council we've got one item on the agenda Mr Wallace if you would approach and introduce yourself as a formality and then you may proceed Good morning Grant Wallace, director
Speaker 22
3:49
of the employee benefits division and officef of property Risk what you have before you is a
item to review a request from the office of property Risk to utilize the request for qualifications procurement process to procure the auditing services for the state captive insurance programme. so kind of backing up a little bit the governing statute that created the captive does require us to get an independent audit we feel that the RFQ process is the best way to go about this
due to the uniqueness of the captive program the uniqueness of a government managing a captive program and we do acknowledge and understand that the accounting principles that would govern this which are a FfaB and forgive me for not knowing the full acronym there is not the expertise of legislative audit so with that I'd be glad to answer any additional questions. thank you Mister Wallace and and Id I had a couple before we
we open it up looks like we've got a few already in there. that's financial accounting standards boardard audit toy and I wouldn't expect you or or anyone to understand that or or or know that there's plenty of acronyms but and I agree qualifications are important the question I guess that that that I had the that was most pressing is and you may not know the answer to this is do we always have to put a projected cost in there because it seems to me that that just
kind of advertises what we are willing to pay and quite frankly as and I've done some research and talked to some that that's pretty significant on a yearly basis. I would, I would if anybody's listening I would expect it to be much less than that but do we do you know if we have to put the anticipated costs with our it is part of the review all the different steps that we have
Speaker 22
5:52
to go through for the approval check off yes you have to put an amount in there and then would also add
as far and I'm good with the RFQ approach, but I would also add
that audits professional auditing standards require the auditor to have the qualifications in order to accept the engagement so even if we didn't do it as an RFQ they would have to have the qualifications. So with that there are a couple here in Que so uhpresentativeladyman you're recognized thank you Mr chairman I'm over here sir well thank you for
Representative Jack Ladyman
Unverified
6:27
being here and going over this but I had a question about were you talk
about we have an idea of what the cost should be based on our market research so I have a question about your market research you know how how do you do that and what's the parameters of that? Do do you look at is that a nationwide or is that just in the state of Arkansas? just wasn't
Speaker 22
7:00
nation yes sir so we looked at auditing firms that had experience working with insurance companies
and with the ffaB standards that was a nationwide search was a nationwide OK
Representative Jack Ladyman
Unverified
7:12
I asked this question yesterday in another committee but do you give any advantage to companies that are located in Arkansas or or is that possible when
Speaker 22
7:27
you're looking at qualifications yes I think you could write it in such a way that yes there would be a preference or an
advantage to a company that was locally operating you could have meeting requirements or you could have physical presence requirements for any potential award E that would that could end up benefiting or giving additional kind of bonuses points for lack of a better phrase to that awardee well you know I wouldn't nobodydy would wanna affect
Representative Jack Ladyman
Unverified
8:09
the quality of the company but you know if there's if everything else being equal or close to equal I think we should give advantageark and saw companies.
thank you for that thank you Representative ladyman and and just again as as recovering CPA myself, I I think the key is going to be compliance with their standards not even on ourQ but but the standards the professional standards that they have to and it is this this captive insurance is a niche it's not
like doing individual income tax returns and so I I am very confident there are those in Arkansas that can probably do this, but just wanted to add that clarification. All right. senator hickey you are recognized so I want I wanna make
Senator Jimmy Hickey, Jr
Unverified
8:55
sure I fully understand this was something that was said so this is a four year contract right? All26,27,28 and29 right we would start with the initial fouryear term. now the this is the total cost for the four year term, not an annual amount
total projected costs would be for the full term for the full term so we're talking about
20,000 a year ok and that's fair enough and in addition to that though once once you do receive this and you get who you're going to use in the end this committee and Alc will
still have to approve that correct correct this what we're doing today is just giving us
Speaker 22
9:33
permission to utilize this process once we have a winner selected it will go to the state board of finance and then it will come to hear this committee
and the full ALc before we are fully executed and engaging with them
Senator Jimmy Hickey, Jr
Unverified
9:47
and as the chairman said I always hate to put these costs out there but I think at the very least that you know they should be notified that yes this is a this may be an RFQ it still has to be approved by this subcommittee full ALc the state board of finance and just because it's that and we put this number out doesn't mean that we're gonna throw cost out the window if it's not something we see in lines so I don't think it would hurt to tell them that unless there's
something that keeps you from doing so right and hopefully you know all things
Speaker 22
10:18
being equal then we we it's not like we're ignoring costs in this process you know we're really striving to get those qualifications and those standards and then make sure we're vetting that and then if we get all things equal absolutely we would make sure we're getting the best deal for the state. thank you sir thank you senator
hickey. I I think my perspective on the number is it's the old, it's bigger than a breadbox. I
know for a fact that we've got a a a very active state agency that does a lot of things in the area of finance and and other areas and they're their annual audit fee is is probably half or less than that annual number so hopefully we can get there. let's see. OK, I had one in in queue p re s ent ative beatty you got yours answered or oh ok well seeing no one else
that's that's good timing. I I hear a motion. Do I hear a second? all those in favor let it be known by a. any opposed motion carries seeing no other business before us we are adjourned
Agenda
A. Call to Order
B. Review of the Office of Property Risk Request for Qualifications for Financial Auditing Services
C. Other Business
D. Adjournment
Documents
| Title | Type | Pages | Source |
|---|---|---|---|
| Agenda — ALC - STATE INSURANCE PROGRAMS OVERSIGHT SUBCOMMITTEE, Jan 14, 2026 | Agenda | 1 | Official source ↗ |
| EXHIBIT B - RFQRequest.OfficeofPropertyRisk.12.9.25.JP.signed | Exhibit | 2 | Official source ↗ |
Speakers
Senator Jim Petty Chair
Unverified
Speaker 22
Representative Jack Ladyman
Unverified
Senator Jimmy Hickey, Jr
Unverified