Legislative Joint Auditing
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Unknown speaker
0:00
Thank you.
Thank you.
Thank you.
Thank you.
Representative Robin Lundstrum
Unverified
4:30
all right let's go ahead and get started and call this meeting
to order if everybody could take their seats all right first of all first item on the agenda
is the adoption of the minutes for december 12th do we have any questions motion by representative ladyman do i have a second second by representative beck all those are all in favor
opposed all right motion passes next we have the executive committee minutes and senator petty
let's give those to him okay thank
Senator Jim Petty
Unverified
5:13
you madam chair the executive committee met thursday january 8 2026 and adopted the minutes from the meeting held december 11 2025 staff reported to the committee the audit and special reports scheduled to be presented to the standing committees and the full Legislative Joint Audit Committee this month. Staff also noted one committee requested report that it is outstanding and currently in progress. In new business, the committee directed staff to gather information regarding a request from Representative Eubanks
for a special report to be considered in the February meeting. In other business, the request for a study of fiscal impact statements was withdrawn. With no additional business discussed, the meeting was adjourned. The next meeting of the committee is scheduled for Thursday, February 12, 2026. We're at the call of the chairs. I move for
Representative Robin Lundstrum
Unverified
6:00
adoption of this report. Thank you. Do we need a second? All right. Representative McElroy. All those in favor? Aye. Opposed? Report passes.
All right. Next we have from Representative Womack, a report from City County Local.
Representative Richard Womack
Unverified
6:22
Thank you, Madam Chair. The committee adopted the minutes of the meeting held December 11, 2025. The committee was updated on the status of the December 31, 2022 delinquent private water and sewer audits. 17 entities' turn-back funds have been reinstated after all required reports were submitted. The committee was also updated on the status of the December 31, 2023 delinquent private water and sewer audits.
Of the 64 delinquent entities, 59 have filed their reports since the LJAC meeting held on July 10, 2025. officials for the town of daisy were present to address questions regarding the town's failure to meet the requirements of act 709 of 2021 for repaying the misused street funds the committee approved a motion for the town to repay 10 percent of general fund revenue to the street fund annually until the balance is paid in full the committee reviewed 12 deferred reports and 85 current
reports officials from nine entities were present to address repeat findings five previously deferred reports were filed and seven were deferred. Of the 85 current reports reviewed, eight were referred to prosecuting attorneys and the Attorney General, and one was certified to the Governmental Bonding Board. The committee filed 82 current reports and deferred three reports to allow officials to answer questions or provide further information at a future meeting. Madam Chair, I move for adoption of this report thank
Representative Robin Lundstrum
Unverified
7:48
you representative moment do we have a second second
representative ladyman any discussion all those in favor all those opposed motion adopted next we have a education
standing committee on education I believe representative Duke you're giving that report thank you madam chair
Representative Hope Duke
Unverified
8:09
the committee met Thursday January
8th 2026 and adopted minutes from the meeting held December 11th, 2025. Four higher education audit reports were included on the committee's agenda. University of Arkansas system officials were present to answer
questions from the committee related to findings in their audit report. The report contained findings resulting from the system's internal audit division performing reviews at three member institutions after being notified by management of potential issues. The audit report was certified to the governmental bonding board and referred to the prosecuting attorney and Attorney General. The audit report for Northwest Arkansas Community College was deferred to the February meeting so that officials from the college can be present to answer questions from the committee related to a repeat finding in the report.
The committee filed three audit reports and deferred one audit report that were brought before it. I
Representative Robin Lundstrum
Unverified
9:04
move to adopt this report. Thank you Representative Duke. We have a second. All right, that's Representative Rye. Any discussion? Those in favor? Those opposed? Motion adopted. Next we have state agencies, Representative
Representative Steve Unger
Unverified
9:23
Unger. Six reports were on the committee's agenda yesterday. Two reports with the following findings were presented.
the Department of Human Services reported instances of improper benefit payments to employees from the Disaster Supplement Nutrition Assistance Program and the Medicaid Program, and had a payee of $610,000 warrant that was cashed by someone other than the attended payee, and had several issues regarding capital assets. The Department of Parks, Heritage, and Tourism reported a loss of receipts at one of its museums and had an error in a couple of its change funds.
Various agency staff members were present to report how the agencies intended to address the audit findings and to answer the committee's questions. During the meeting, the committee filed four of the reports. The committee deferred the Department of Human Services and the Department of Parks, Heritage, and Tourism reports to the February meeting so that the agency could obtain additional details on the corrective action to the findings. Madam Chair, I move that we adopt this report.
Representative Robin Lundstrum
Unverified
10:37
Thank you, Representative Unger. I need a second.
Second. Representative Blademan. Any discussion? Those in favor, say aye. Aye. Those opposed? Motion is adopted. All right, next, ladies
and gentlemen, we have some guests here for a special report to review the scholarships. If you could come forward. Oh, excuse me. Let's see. Charlie Camp, if you could do the presentation first. Thank you.
If you'll pull this presentation up in your packet, they went through quite a bit of effort to make sure we understood all this, and it's in your packet, and
Speaker 47
11:34
it has the front PowerPoint on there. Thank you, Madam Chair. This report is issued in response to a request for legislative audit to conduct a review of scholarships awarded, expenditures made and grants received by the Charles W. Donaldson Scholars Academy at the
University of Arkansas Little Rock. The Donaldson Academy is referred to as the program in the report and in this presentation. The program had three components which are discussed on page two of the report and listed on the slide. Program goals included providing application assistance for the ACT, increasing student confidence regarding college attendance and graduation, building community and relationships and providing financial support through scholarships. The program was funded by the Pulaski County
Special School District using $10 million in state desegregation funding and functioned as a collaborative effort among UALR, Philander Smith College and Pulaski Technical College with approval from the state and federal court. Total revenues and expenditures for the life of the program are shown on exhibit one on page three. The majority of funds were spent for salaries, wages, and fringe benefits, scholarships, and administrative and other expenditures as shown on the slide. The first objective of this review was to document requirements and
eligibility for students receiving scholarships. One of the program's goals was to provide a $2,500 scholarship that was renewable up to four years to be eligible for the scholarships students had to remain in the program through graduation from Pulaski Special School District or Jacksonville North Pulaski, excuse me, Jacksonville North Pulaski School District, successfully complete three-week Summer Bridge Academy after their senior year, and enroll as a full-time student at UALR, Flandersmith, or UA Pulaski Tech. To renew the
scholarship annually, students were required to maintain full-time enrollment, maintain a cumulative GPA of at least 2.5, and complete at least 27 hours in the first academic year and 30 hours each year thereafter. During the review period, the program awarded 1.87 million in scholarships to a total of 379 students, and 116 of these students graduated from college. The total number of students receiving scholarships, amount of scholarships awarded, and number of students graduated are provided in Exhibit 2 on the slide and page 4 of the report.
It should be noted that scholarship awards documented in student files as shown in this exhibit did not agree with the expenditures recorded in the general ledger due in part to misclassification of expenditures. legislative audit tested 10 of students who participated in the program for scholarship eligibility and noted exceptions for 32 of the 39 students tested as shown on the slide these exceptions include scholarships awarded in excess of the maximum award of ten thousand dollars
as well scholarships awarded to students who did not complete the required number of enrollment hours did not meet gpa requirements were enrolled longer than four years and were not enrolled full time. Of the $350,000 in scholarship awards tested, nearly 32% were awarded to ineligible students. Further information is provided in Exhibit 3 on page 5 of the report. The second objective was to assess whether expenditures were properly authorized and
documented as well as in agreement with the general ledger. A disbursements test was conducted for the review period excluding payroll expenditures of 147 disbursements tested totaling 1.9 million dollars we noted 124 exceptions as shown on the slide these exceptions include lack of proper authorization for payment lack of proper documentation and clerical inaccuracies additionally we cannot determine disposition of two capital assets after the program's closure disbursements tested were
properly posted to the general ledgers. The third objective was to identify funding and grants obtained by the program and determine if funds were expended for allowable purposes. The program received a $50,000 grant from the Central Arkansas Planning and Development District which was used to fund travel for students and faculty to Spain and Morocco in 2015. This trip was to fulfill the study abroad and global leadership component of the program and
the itinerary is provided in Appendix A. Trip related costs totaled over $89,000 and funds were properly expended for the purposes outlined in the grant. A portion of the funding provided to UALR by ADE was used to purchase supplies, books, ACT testing programs, curriculum, and UALR catering services for the program Saturday Academy. Grant funds were awarded to UALR, therefore
compliance with grant guidelines was the responsibility of UALR. The fourth and final objective was to determine expenditure categories, types, and amounts, as well as examine documentation for cultural and social activities and events funded by the program appendix b provides a list of total expenditures by general ledger account for the life of the program and illustrates the decline in activity beginning in fiscal year 2020 due to the covet 19 pandemic students participating in the program attended cultural
and social activities and events that were funded by the 10 million dollars from kalaski special School District and the $50,000 grant from CAPDD. Examples of activities are listed on the slide and provided in Appendices C and D of the report. This concludes my presentation. Management response from UALR is provided in Appendix E. Philander Smith and UA Pulaski Tech were provided an opportunity to respond to the report and did not provide a response to ALA. Representatives
Speaker 48
18:08
from UALR are present to respond to committee questions thank you and thank
Representative Robin Lundstrum
Unverified
18:14
you for that overview it looks like there was a lot of work done on that and I appreciate that I also want
to thank representative Springer for asking the question that brought this information to light let's first bring folks down from
UALR that have come and are they're here to answer some questions if you could come forward and I would ask you to stand okay if you would we're to
swear you in if you would state your name employer and position okay thank you good
Speaker 62
19:04
morning Charles Leifert associate general counsel for UA Little Rock all right we're gonna ask the witnesses to stand you've
Representative Robin Lundstrum
Unverified
19:12
stated your name if you would raise your right hand I do solemnly swear affirm that the testimony I'm about to give will be the truth the whole truth and nothing but
the truth thank you and thank you for coming I want to remind the committee members these folks were not in charge of the program but they are here to give information about the program so I will let you
Representative Howard M. Beaty, Jr.
Unverified
19:44
up the board is lighting up representative Beatty thank you madam chair I guess my question goes back it may be a question for staff or for the folks at the table on page two i i see and understand that it states all employees materially involved in this program including the director no longer
employed by ualr and we're unavailable for interview my question is who are these individuals and where are they in state government now are they still involved somewhere are they in charge of state funds and some other entity or organization in the state and if so we need to be looking at what these
folks are doing so can you give me names and who
Speaker 68
20:28
the responsible people were thank you sir charles lyford associate general counsel um vice chancellor alan stanley may may
fill in some information here my understanding to your question are the individuals referenced in this report uh still employed in state government my understanding is no um there was an individual and alan correct me if i'm wrong uh amber smith um who was a ua little rock employee i believe that's correct um assigned to the program she is a former employee she no longer works for ualr i'm not sure alan if you know the names of the other individuals but the the program staff are
no longer employed a ULR as stated in
Speaker 72
21:09
the report. Yeah, Laverne was the other employee, but she is deceased. Sir, if you
Representative Robin Lundstrum
Unverified
21:15
could pull into the microphone so we can hear you. I apologize. And give
Speaker 77
21:22
us first and last names. Owens, yes, Laverne Owens, forgive me. Laverne Owens, but she's no longer, I mean, she's deceased. So it was the other party, and Mia Phillips, and she's no longer employed with the state.
Representative Howard M. Beaty, Jr.
Unverified
21:41
So when you say no longer employed with the state, are you specifically referring to your institution? No. She's
Speaker 77
21:46
no longer, as my understanding, she's no longer in the state of Arkansas, even. It's my last knowledge that I'm aware
Representative Howard M. Beaty, Jr.
Unverified
21:55
of. Well, you know, with some leniency, I guess my deal is after looking at this report, I think any member that looks at this report would be outraged. I think any of our constituents and members in the state that see the waste of money that was supposed to go and encourage students to attend college and be successful students, if anything, I mean,
this is just an embarrassment and a total waste of money. I mean, out of $10 million, what, $1.8 million actually went to students, and the rest were field trips and nice hotel stays and trips abroad. what a joke the other thing I would say is this a lot of information for us to digest and review so I would hope that this committee and voting members the committee would hold this report and give members time to dissect this and to break it down and look and see what the failures were so I would request that
member of the committee would take that action at such time that that that motion would be proper. Thank you, Madam Chair. Thank
Representative Robin Lundstrum
Unverified
22:57
you. And yes, we will, I will entertain that motion at the proper time. Representative Burks. I would
Speaker 81
23:06
like some more time to review this. I do have a question while we have the witnesses here. Over the period of time, this is 10 years that the funds are being administered. And I understand that these staff members, Amber Smith, Owens and Phillips are no longer here. Was there anybody else within the organization though, overseeing
the expenditure of these funds
Speaker 82
23:23
and at any time during the 10 years did anybody look at this and
Speaker 84
23:33
say wait this might not be right well I can speak to some of that ma'am
Speaker 68
23:40
and I would start by saying that the program initiated in 2014 by order of the federal court that's presiding over the desegregation case still pending in the eastern district federal court the court as well received regular progress reports and approved the wind down and ultimate end of the program in 2024.
So there was that continual oversight. The program was treated, and correct me if I'm wrong, VC Stanley, as a sponsored research program, a sponsored program meaning external funding, these funds that were approved to pass to UALR by the federal court. And so there was oversight institutionally through the sponsored research division so I guess it quick follow-up I
Speaker 85
24:25
saw the the management response there were two items that there
was not a response to do you have a response today to those two items and specifically that was that's on the
Speaker 81
24:43
exhibit II objective three and four objective three other funding grants obtained and whether these funds were expended
Speaker 84
24:50
for allowable purposes? The institution had no additional information to provide with respect to those objectives.
Representative Robin Lundstrum
Unverified
24:57
All right, thank you. Senator Petty, you
Senator Jim Petty
Unverified
25:00
had a follow-up question? Yes, thank you, Madam Chair. So going back to your statement regarding the federal
court, was there periodic accounting to the federal court? And if so, what was the nature of that the details etc of that reporting to the court thank
Speaker 84
25:18
you sir and there was I would say while the program was active
Speaker 68
25:24
that is when cohorts of students were being admitted from 2014 through 2020 I believe with the 2020 and 2021 COVID year being the last year the incoming students were admitted the federal court I think I'd have to consult the report here received status reports
It's, I think, totaling seven filed on approximately an annual basis by the intervenors in that case. I have a
Representative Robin Lundstrum
Unverified
25:52
follow-up question to that. You mentioned sponsored research. Is there some follow-up on that?
Where is the research, the paper, the documentation? I'm thinking research like we did in graduate school or post-grad.
Speaker 94
26:08
Yeah, so for this particular program, there wouldn't have been any research documentation along with it
because the objectives of the program and the documentation that that office had available to them did not provide any guidelines to provide metrics or data. Those reports were provided by the intervenors based on guidelines that were not housed at the university or in that office.
Representative Robin Lundstrum
Unverified
26:33
So the only thing we know for sure is 379 students participated
and at the conclusion only after 10 years in this amount of money, only 116 actually graduated college, either from UALR or Pulaski Tech or Philander-Smith.
Yes. All right. Representative Richardson. Thank
Speaker 101
27:01
you, Madam Chair. I appreciate you guys being here. I know this was outside of your oversight necessarily, but I did want to speak to the oversight and go back to Representative Burke's question and make sure I have a clear understanding of how something like this could be missed. So we're saying that the funding was approved through or oversaw by an external source, the judge,
the court's judicial system. And so there's no spending authority requirements for these types of programs within the U of A's purview? There's no review. The U of A isn't looking at that money at
Speaker 84
27:41
all? Is that accurate? No, sir, I don't think that's accurate. This program,
Speaker 68
27:47
again, was treated internally as a sponsored program with the external funds from Pulaski County Special School District. The Office of Research and Sponsored Programs at UALR
reviewed the expenditures per program guidelines. as funds were issued also the office of financial aid would have been packaging any scholarships issuing them to students making sure those students you know had met eligibility requirements be it admission requirements enrollment requirements program requirements and and there were also program staff employed by ulr the individuals we mentioned earlier who were in regular contact with with program participants
Speaker 101
28:31
so follow-up so if I
understand you then whoever was responsible for overseeing the expenditures of the specific they were looking at the specific program guidelines and from that they felt like that the expenditures were within the guidelines I can't speak to that personally but that's
Speaker 84
28:49
my understanding Yes, I mean, the program staff were administering the program per the guidelines that had
Speaker 68
28:55
been approved by the federal court, and that the legislative audit staff reviewed for this report. Okay, so I just want to get to
Speaker 101
29:03
the bottom of that and make sure I understand what you're saying.
So the guidelines were presented to someone that's currently employed with ASU or was at least at that time. They reviewed those guidelines and determined that these expenditures were okay and within those guidelines. That's my understanding, but again, none of the
Speaker 84
29:25
people at the table here were in these roles at the time. I
Speaker 68
29:30
do know that there were program staff reviewing the expenditures. Were the program staff that
Speaker 101
29:38
were there at that time, the individuals that were reviewing the expenses,
Are those individuals still with the U of A, or excuse me, ASU? U of A Little
Speaker 110
29:48
Rock. I'm sorry, U of A Little Rock. No, sir, they're not. So they're not here either? Correct. Correct. Okay. Thank you. Thank you, Representative
Representative Robin Lundstrum
Unverified
30:00
Richardson. Representative Long? Thank you, Madam Chairman.
Representative Wayne Long
Unverified
30:04
Y'all mentioned earlier that several of the people that were involved in this were no longer employed by the state. I was wondering, were they fired or did they resign?
I'm not sure of the answer to that. Okay. Yeah, I heard that one person passed away, but I was wondering about the others. If you could find out and let us know, I'd appreciate that because that kind of makes a difference to me. The second thing was you mentioned this program had wound down, or is there any other program
Representative Matt Brown
Unverified
30:44
similar to this that's ongoing? No. Okay. Thank you. Representative Brown. um thank you madam chair um i'm reading here uh under the portion results of review objective one
it says um one of the goals of the program was to provide 25 a 2500 scholarship that was renewable up to four years therefore eligible students could receive a maximum amount of ten thousand dollars to be eligible they had to remain in the program through graduation from Pulaski County Special School District or Jacksonville North Pulaski, and just to be perfectly open about all this, I represent both districts, not the whole district but portions,
successfully complete the three-week SBA after their senior year and enroll as full-time students at ULA. So when it says remain in the program through graduation from the high school, does that mean they receive the $2,500 while in high school or when they enrolled full-time at one of these colleges?
Speaker 68
31:46
Thank you, ma'am. To my knowledge, the $2,500 was a scholarship awarded only after the students matriculated to one of these institutions.
Representative Matt Brown
Unverified
31:55
And I assume as serious as this desegregation program is and as
long as it has gone on, $10 million from these school districts was a sacrifice, and the goal was to enhance the students' academics. And I know those people are no longer with you, but I'm just wondering why they thought trips to New York City and Madrid,
of course we had to pay the faculty to go
with them, So none of those faculty are still with UALR? I'm
Representative Matt Brown
Unverified
32:49
Huh. Well, it said that the report says that the people involved in the program are no longer
Speaker 68
32:55
employed. I think that referred to program staff, not necessarily faculty, some of whom may still be at UALR.
Representative Matt Brown
Unverified
33:02
It looks like everybody had
a good time. But I just wonder how enhanced the academic abilities of the students, you know, how much they were enhanced. This is a sad report. And I guess I want to follow up with a couple other of my colleagues. Do we have better controls on existing programs right now?
I would really like to be assured that this kind
Speaker 84
33:40
of foolishness is not continuing. As stated in the management response, I believe
Speaker 68
33:46
there are two answers there. The sponsored program review process has been strengthened. and I think there is no longer, Alan, correct me if I'm wrong, no longer a dollar threshold above which the expenditures would be reviewed. I believe Sponsored Research now reviews all such expenditures for eligibility.
Also, scholarship awarding is now centralized in the Office of Financial Aid. Thank you. No further questions at
Speaker 128
34:12
this time. Thank you, Representative Brown. Representative Matt Brown?
Representative Robin Lundstrum
Unverified
34:17
Thank you, Madam Chair. When did Euler first have
Speaker 133
34:21
an inkling that there was some problem in this thing? Did y'all catch this before or was it when the audit
Speaker 136
34:32
happened? the process to turn back the funds so
Speaker 77
34:39
we we um as we were after when we got to getting close to the covet period yes we we were um looking at the expenditures then but we get there was a decision to turn back the unspent funds um so we didn't spend the full 10 million was not spent um and we returned back was a 1.1.6 million back to pulaski special county school district if i'm not mistaken on that um
and so we we had we did um start to strengthen our internal controls around um just expenses all around but this particular program we were relying on those program administrators to for the allowability of those
Speaker 94
35:37
expenses based on the information they had regarding the objectives of that program and so
Speaker 77
35:46
you know that was their determination that these expenditures were allowable under
the under the terms of that of the program to provide cultural experiences and things of that nature for those students who are participating in this program. Follow-up,
Speaker 133
36:06
Madam Chair. Yes. Okay, I'm sorry. I'm pretty stupid, so I didn't really quite understand the question. So is it the institution's position that even though
Speaker 134
36:15
it turned money back, that everything that happened was okay because it was allowable under the terms of the program? I mean, kind of what are we arguing about?
Because I got to tell you, taking people to Magic Springs don't seem allowable under any program to me or like this airfare to Spain, you know, coming out to like $1,600 a pop. I mean, are we flying these people, you know, premium economy? I mean, what's the – none of
Speaker 84
36:41
this smells right, but is the institution's position that it was all okay? Saren, I appreciate the question. The program rules, and
Speaker 68
36:48
I believe this is reflected in the legislative audit report, allowed for such student experience activities. The study abroad, I think, was actually paid for through an external grant that the program pulled down.
The turn back of funds, as well, was by motion to the federal court. UA Lederach did not file that motion. The involved school districts did. So a request was made to the federal court that originally authorized the program to wind it down and allow the disbursement of funds back to the school districts, which that court approved. So
Speaker 134
37:19
it wasn't that UALR turned this money over willingly. it was that it was forced to
Speaker 84
37:24
turn it back over there was a joint motion by the school district's plassey county special in jacksonville north
Speaker 68
37:30
pelaski to the federal court requesting that the
Speaker 117
37:33
that the funds be returned to the school districts thank you
Speaker 147
37:38
madam chair thank you representative dalby thank you madam chair this question is for staff my question is has this report been turned over to the attorney general's office and our federal prosecutor's office to look at or is it or is it you waiting action from this committee to get that turned over to the proper authorities to investigate under their fraud units no ma'am that has not been done that is
Representative Robin Lundstrum
Unverified
38:07
something we can suggest in this committee okay i would suggest that thank you i'll take that as a motion it's at the proper time um next up we have representative beck then senator stone representative brown
Representative Rick Beck
Unverified
38:23
and representative rye representative beck thank you madam chair i was just playing with some numbers here a little bit it seems like a lot of the problem with the program was basically i did a percentage in other words from each institution the percentage of students that actually completed versus uh it didn't complete and it although it's not a direct
correlation, it is a very close correlation to the next page number over there, which is the amount of ineligible scholarships that were awarded. So it almost looks like the biggest problem with your program was that there were people in there that shouldn't have been in there, and those people didn't complete. So, I mean, I'm just, I guess I'll ask for any comments that you have on that, but it actually looks like that that's where the problem was if we ever going to do
this again that would be a great place to look I don't know if you
Speaker 84
39:22
have any comments about that just sir and thank you for your comments that the
Speaker 68
39:28
the program overall especially with regard to scholarships I think was designed as a student achievement initiative to help encourage students who might have been struggling academically and otherwise not interested in applying or graduating from college to secure their attendance and increase the likelihood that they
Speaker 84
39:47
graduated. I think what we've seen in some of the the audit reporting is
Speaker 68
39:53
that students who were initially eligible for the scholarships dropped below the minimum GPA or dropped below the minimum credit hour requirements and were awarded scholarships I suspect in an attempt to retain them as students and to ensure that they did not drop out
Representative Rick Beck
Unverified
40:14
just a quick follow up so you're
saying that what happened was you might need to correct me I might be wrong about this if I didn't understand but what you're saying is that in the program the ineligible students or the eligible students were basically not, I guess the credentials or whatever were dropped just to keep them in the program.
Speaker 84
40:47
Is that what you're saying? No, sir, that's not what I intended to say. Okay, I'm sorry. I suspect, I do not know this for a fact, but as some of the students who were initially eligible in the sense that they met the GPA and the credit hour requirements, Those students might, over the course of their attendance at college, have dropped below the
Speaker 68
41:09
minimum GPA. And we've seen from this report that they receive that next scholarship likely in an attempt to keep them as students and ensure that they did not drop out in order for them to graduate, which was the ultimate goal.
Speaker 112
41:22
Thank you. There aren't words. Representative
Speaker 158
41:31
Brown. I'm sorry, that's me. Thank you, Madam Chair.
Representative Matt Brown
Unverified
41:42
I have one other request. I would really like to hear from
the faculty members who designed the program. I understand the administrators are gone, but faculty designed the program.
And I believe we need some accountability from those faculty members. I would like to hear from them next
Representative Johnny Rye
Unverified
42:13
time. Thank you. Thank you. Representative DeVry. Yes, thank you, Madam Chairman. On page four, I saw something that threw up a red flag to me, and at the bottom it says, during the review period, the program awarded $101.87 million
in scholarships to 379 students, of whom 116 graduated from college. Does that not seem like a mighty low
figure? We do not contest those numbers.
Speaker 84
42:47
I mean, I think those are accurate figures. But that would only
Representative Johnny Rye
Unverified
42:53
be about 30%. That sounds correct, sir.
It just seems awful low. Thank you, Madam Chairman. Thank you, Representative
Representative Robin Lundstrum
Unverified
43:07
Rye. I think your point's well taken. Senator Stone? I have
Senator Matt Stone
Unverified
43:13
two questions. Do we have a total amount that may have been said and overlooked it or didn't hear it, but what was the total amount of money that was spent outside of the parameters of the program? I
Representative Robin Lundstrum
Unverified
43:26
think the whole program was $8.5 million, the total allotted was $10 million, and the courts, they returned $1.5 million back to the courts in general figures.
Senator Matt Stone
Unverified
43:35
I know they turned back $1.6 million in $1.6 million. Some of the money that was spent was spent properly on scholarships, but what money was spent improperly? Do we have a total on that? No, sir. The reason why I'm asking, I'm just sitting there thinking, you know, in county and municipalities, it's just week after, month after month, we have counties and cities receive money to their road fund that's dedicated to that account.
Then they improperly spend it, and when they do, they have to take revenue from their general account to replace it. I'm sitting here thinking I almost see the same, uh, scenario here. Cause really what I'm hearing right now, something happened, money was misspent. Oops. Everybody's gone and students have been denied scholarship money. I'm almost thinking we need to even, um,
to pursue the criminal prosecution that was, um, Mentioned a while ago, but we need to determine how much was spent under the purview of UALR and let them make that program, let that money be made up out of their budget and put it back in there so the students who were denied their scholarships and could have gone to school didn't. We'll take that
Representative Robin Lundstrum
Unverified
45:01
under advisement. I think that's one reason Representative Beatty wanted this report held so we could digest it a little bit better and dig
into the numbers a little bit better
before moving forward thank you i also
want it noted that ualr sent representatives to try to answer these questions whereas philander smith college and pulaski county technical did not so i appreciate we have a hand in the
audience you're from philander smith all right would you join us at the table please and state your name
Speaker 175
45:41
i'm latonya hayes and i'm the interim cfo at philander all right
Speaker 176
45:55
would you please raise your right hand do you solemnly swear or affirm that
Representative Robin Lundstrum
Unverified
45:59
the testimony you are about to give will be the truth the whole truth and nothing but the truth i do thank you ma'am thank you for joining us all right we'll
continue with the questions any any other additional questions ma'am since you
Speaker 21
46:20
uh senator petty thank you madam jerry i would
Senator Jim Petty
Unverified
46:25
just give you the uh the opportunity to see if there's anything in addition you've heard their testimony if there's anything new or different or in addition uh that occurred at your institution just uh maybe uh get ahead of any of the questions that might be
Speaker 175
46:43
there okay i'll press this button okay okay yes so the only thing i can add is that at philandra smith that we did not do eligibility for the program that we confirmed enrollment and
then did an invoice based on the students that were given to us as participants in the program so we did not do eligibility thank you
Speaker 101
47:09
for that clarification representative richardson thank you madam chair just want to ask the same question who was responsible for review
Speaker 175
47:17
of the expenditures at the your school so that would have been the business office and so for this program we treated it as an outside scholarship and so we received the funds
we did a request to receive the funds but the only thing we did was verify enrollment so those eligibility requirements i went back and looked at all the documentation we had on file for the program and we didn't have any of that so all we
Representative Steve Unger
Unverified
47:48
did was verify enrollment okay thank you you're welcome representative unger i'm chair within this program was there any single person that was in charge of review and accountability.
Speaker 84
48:07
I'm not sure the answer to that. I believe the answer is no as far as a single person but but But I'm not sure.
Representative Steve Unger
Unverified
48:20
Well, just to make a comment, the old joke is a horse designed by a committee is a camel. And so this is good intentions met a pot of money and came out with bad results. And I think there just needs to be a better way going forward. It's had one person who's a point of contact who owns this and could put their name on the blame line.
Representative Robin Lundstrum
Unverified
48:38
Thank you. Thank you, Representative Unger. any other questions?
Senator Jim Petty
Unverified
48:50
Senator Petty? Thank you, Madam Chair. I'm not making any excuses for anything that has been said or done. This obviously, if you follow the federal lawsuit and desegregation, is very complicated. And I think I heard both representatives that were here
indicate that this was treated as an outside scholarship as opposed to internal or state funding and so what I'd like to see since it sounds like we may table it I'd like to see staff pull together the the federal the the judge's order or or and see if we can garner anything from from that it just by way of summary since we're going to have a little time to review that Because as, just quite frankly, wasteful as this might seem, if it was intended to comply with a judge's order to encourage or recruit or entice students that might not otherwise come, and this is what they decided to do was best,
then in reality nobody has done and and even even our audit report here says that that most of these components were were generally complied with and so i'd like to see a little bit more i don't want to i don't want to get too deep in the weeds on the the federal judge uh order but i think it might be helpful to know what they were told to do uh and and whether we can determine whether or not that was the highest and best use of that order.
Obviously, a judge felt like for a period of time, at least, that it was complying with his order. I don't know what kind of details in the report, and maybe that's a follow-up. We could get a copy of the report to the court or something, if you don't mind, staff, to try to get a sample of one of those reports to the court. But I just, I think that there's a lot of information here. Some doesn't, at least in the public view, doesn't sound very helpful, doesn't sound very like it was the highest and best use of these dollars.
But I think if we're going to pursue this further, I think we need to hear what the man or woman that ordered this to be established said and how he required reporting periodically for us. So if you could do that, staff, that would be great. Thank you, Senator Petty. We have a couple
Representative Robin Lundstrum
Unverified
51:23
more questions in the queue. Representative Leidyman, then Senator English. Representative Leidyman. Thank you, Madam Chair.
Representative Jack Ladyman
Unverified
51:34
I was just looking on page four and five. So there's three institutions involved here, UALR, Philander-Smith, and Pulaski Tech. When you look at the number of students that graduated, out of that small number, Pulaski graduated 56% of the students that were in the program, which is not really a very bad number, really.
And Philander-Smith, 39%. UALR only graduated 27%. And then also, when you look at students awarded over the maximum amount, Pulaski Tech had none. Lander-Smith only had two. UALR had 20. So I think it would be interesting to know this money that was maybe fraudulently spent. We don't know for sure unless the court weighs in.
But is there any way we know how much of the money was spent by which institution? Is that something we could see, or is it in the report? We can get back
Speaker 194
52:51
to you on that, but I believe we could get that for sure.
Representative Jack Ladyman
Unverified
52:54
I think that would be something that the committee would be interested in. You could send that in
Speaker 24
53:00
to the chairman. Thank you, sir. That would
Senator Jane English
Unverified
53:02
be very helpful. Senator English. Thank you. As I go back and think about this, and my friends over here to the right of me probably could help me along a little bit,
It seems to me that this was a negotiated settlement as part of the state no longer paying the $70 million in desegregation funds and that this was a requirement on the part of, I can't remember the name of the group, but to be able to move out of that $70 million settlement So this was just a program, $10 million set up that the Pulaski County Special School District had to put up in order to be able to help students move along.
But as I remember it, and I certainly don't remember anybody ever talking about all of these kinds of expenditures, the idea was to help kids move from high school or stay in high school and move on to college. And I think most everybody concerned thought that that was exactly what we were going to be doing, was helping kids move from high school, stay in high school, and move on to college. Certainly not all the rest of these things.
But I honestly believe it was a pot of money if federal government, federal judge agreed to it, everybody agreed to it, and then they had to plop it someplace, and the place they plopped it ended up being at UALR. And obviously, there wasn't a whole lot of control over what was going on with those
Representative Robin Lundstrum
Unverified
54:49
dollars. Senator, I think you're exactly correct. And I'm a little concerned when I see things like hotels in New Orleans, Marriott and Little Rock.
We're in Little Rock. I don't know why we're staying at a hotel there. Capital Hotel, Hotel Tybee Island, Omni, LeMason, Airbnbs. And there's just, and then you look at the restaurants, plus we paid for catering. So there's a lot of questions that I'm sure you're wanting to ask, but we'd like to have some answers to it too. So thank you for pointing that out. Representative Burks. Thank you. At this time, I would make a motion that
Speaker 80
55:26
we table this until our next meeting. So we all have a chance to get the answers to these questions.
Representative Robin Lundstrum
Unverified
55:33
Thank you. That is a proper motion. All in favor? Or excuse me, discussion? All right. All in favor? Aye. Representative Ladyman, second? Opposed? Okay, thank you. We will table this
and do some more homework. Thank you. I'd like to thank you all for being here today and taking that time, and we look forward to seeing you again. All right, next on the agenda, we have
a special report. I'm sorry, Senator Hammer, you popped up.
Senator Kim Hammer
Unverified
56:04
Thank you, Madam Chair. Would the chair instruct staff to send a strong letter
of encouragement to the third institution that was not here that they are expected at the next meeting, please? Thank
Representative Robin Lundstrum
Unverified
56:19
you. That's duly noted. All right. Next up, we have a special report, and I believe we have some folks here. Would you please come to the table? Okay. First, we need to recognize Michelle Ashley to give her the report, and then we'll have folks come to the table.
Speaker 202
56:38
Michelle, Ms. Ashley. Thank you, Madam Chair. This report is issued to provide this committee a summary of the disposition of matters referred to the prosecuting attorneys and the Attorney General for the calendar year 2024. Arkansas Code provided in Appendix A requires the legislative order to notify the applicable prosecutor and the Attorney General of unauthorized disbursements or unaccounted for funds or property. Report findings related to the Prosecuting Attorney's Office are also referred to the Attorney General.
Prosecutors and the Attorney General are required to submit a disposition report of matters referred and then legislative audit compiles the report that is being presented today. Arkansas Code directs the legislative auditor to notify the Arkansas Governmental Bonding Board of audit reports reflecting improper transactions for which a public official, officer, or an employee may be liable. Entities are required to meet a $2,500 deductible per occurrence before payment is made by the bond board, and the Fidelity Bond Program coverage limit is $300,000
per occurrence. This slide reflects an example of matters referred. Receipts not deposited, missing assets, unauthorized or undocumented disbursements, unauthorized payments, unauthorized bank withdrawals, conflict of interest issues, non-compliance with the public purpose doctrine, and potential violation of the speed trap law. As shown on the screen, using the 15th Judicial District as an example, each Judicial District's
report page includes a map identifying the counties located in the district, in addition, matters referred or detailed individually by the counties in the judicial district, the prosecuting attorney, the governmental entity involved, the year the matter was referred, and the status according to the prosecutor or the attorney general. Payment by the bond trust fund is also indicated when applicable. Presented in Exhibit 3 on pages 6 and 7 of the report is a summary organized by Judicial District.
As reflected in this exhibit, 164 matters were referred. 39 matters are under review. Criminal charges were filed and 28 of the matters referred. Five of those cases are pending in court. Three cases were dismissed, and 20 cases resulted in a conviction and a court-ordered sentence. Exhibit 4 on page 8 lists all the matters referred for which a conviction was obtained.
Four defendants were incarcerated and received probation upon release, 12 defendants received probation only, and four defendants received a suspended imposition of sentence. Also shown in Exhibit 4, all 20 defendants were ordered to pay fines, fees, and court costs totaling over $18,000. 18 defendants were ordered to pay restitution totaling just under $789,000, and five defendants were ordered to pay audit costs totaling over $52,000. Of the 20 matters for which a conviction
was obtained, the bond trust fund paid claims to three entities as shown on the slide and noted on pages 19, 61, and 77 of the report. Additionally, 11 claims were pending with the bond board, four claims were below the deductible or a restitution was paid in full, and two were governmental entities that are not covered by the bond program. This concludes my presentation on the disposition of matters referred. A representative from the Office of Prosecutor Coordinator
and Attorney General's Office is available to answer any committee questions.
Representative Robin Lundstrum
Unverified
1:00:34
Thank you. This represents a lot of work and a lot of money that's been recovered as well as a lot of money lost. We have guests with us today, Bog Mattenhan with the prosecuting coordinator's office, Wayne Buley, or Buley, I'm not
sure how to say that, Dan Shue, and David Etheridge. If y'all could come in today,
I appreciate it. Oh, let me change that. Are these with
the AG's office Jeff Chandler and if you could introduce yourself for the record
Gentlemen, let me swear you in. If you could
Speaker 204
1:01:56
your name. If we could start with you, if you could state your name. Okay. Thank
Representative Robin Lundstrum
Unverified
1:02:02
you, sir. If you would raise your right hand. I do solemnly swear or affirm
that the testimony I'm about to give will be the truth, the whole truth, and nothing but the truth. Thank you, gentlemen. Thank
you for being here. If you, if any of you would like to give an opening statement, this is a lot of information and
Speaker 207
1:02:27
help us understand digest it. Madam chairman Bob McMahon prosecutor coordinator representing the
Speaker 208
1:02:30
Prosecutors Association this report is done every year and I come as a representative of the Prosecutors Association for the new members and usually have with me the our president or past president our policy in the past
has been I will try to answer any general questions that I can I may be familiar with but if there is a specific audit that you have questions about we always you know contact staff and see so that I can have that prosecuting attorney or that deputy prosecuting attorney uh show up to to answer the specific questions audit does a tremendous job of putting this stuff together but one thing you need to understand is it's very different you know their job is to find all the things that michelle outlined in the report and then it's up to the prosecuting attorney or the attorney general's office when we prosecute one of those cases to go much further than that uh we have to determine you know
to have probable cause to make an arrest and then we have to be able to to prosecute somebody and beyond a reasonable doubt so the standards of audit finding money missing and what the prosecutors or the attorney general has to do is very different but with that just general
Speaker 210
1:03:27
statement about how we do things we'll be happy to answer any specific
Representative Robin Lundstrum
Unverified
1:03:31
questions okay I do have one question just to give some background on the bond trust fund it's been used a number of times who pays for that trust fund is that something the cities pay madam chair I
Speaker 207
1:03:44
do not know the answer to that question how that program works
Representative Robin Lundstrum
Unverified
1:03:47
staff does mr. white thank you for the question so the
Speaker 212
1:03:51
bond trust fund it's it's a percentage of turn back in regard to some of the municipalities and counties there's a portion taken off prior to them receiving their funds that money then goes into a pot that's collected at the state level it's the bond trust fund that is a fidelity bond to help ensure if there's theft by employees of those entities that there's coverage for those thefts from that program okay
Representative Hope Duke
Unverified
1:04:17
thank you representative Duke thank you madam chair and this question may be in to staff initially but when you read through the report and the responses that we get from prosecuting attorneys I guess number one is this are those summaries of what they sent or is that literally what they sent in a response to
Speaker 32
1:04:42
what they did if it's a very lengthy response then we will provide a summary of that but if not if it's something you know within a paragraph then we sought
it verbatim what they send in okay but
Representative Hope Duke
Unverified
1:04:54
obviously you're giving the you're gonna grab the highlights and the really important pieces of it so I guess turning to you all one of the things that I found a little bit frustrating as I went through the report is there's such a variance of information that we get from different prosecuting attorneys and when you're sitting on those subcommittees and things get referred or you come in here and they get referred and and you're wondering what happened next and then of course obviously the space of time before we see this report but it is a little I mean I had made
several notes in here well was there any kind of restitution made why did they not choose and and I don't know the answers to that and some but some some of these districts we get a little bit more thorough responses than we get in others and so I would at least find it helpful to have a little bit more thorough response because I have questions on several of them whenever they're not they didn't pursue the charges they didn't I think one of them see why this is one that said that didn't rise to the concern expenditures to the rise to the level of criminal activities and like I get it they're
smaller amounts but smaller amounts of other people's money matter and in school districts and areas that are really small those percentages although may not be very big to Springdale can be very very large to a much smaller district and to the community so it it I get that they can't chase down everything and they have to make choices or maybe there's not stuff involved but like I my question here was was there any effort to get this employee to reimburse the money even if you don't pursue criminal and that we and I don't know if you all don't know the answer to that
I mean I understand that you're not going to the specifics on each of these but that is something I would like to have a little bit more insight on as we read throughs at the end if if if they have that information or even as the school district didn't pursue it or we weren't able to do it just to know was there any effort even though it's a small smaller amount of money and maybe you can't get all the ducks in a row did any of these people because some of these are superintendents and some of these are little mistakes, but goodness gracious, if they made an error,
I would hope they would have the character, especially if they were employed in the state of Arkansas, oh, okay, well, I'm going to pay that back. We're going to work out a plan to pay that back. So that is, I don't want to dig through, and thank you for the leniency here, but I don't want to, I guess, go through all the different ones where
Representative Robin Lundstrum
Unverified
1:07:15
I have questions. I'm happy to share that with staff. Representative Duke, I don't think it's a bad idea. If you have questions on specific issues, if
you can go to the page number and let them ask answer those questions that's why we have this wealth of information here so if you want to take a
moment and put together two or three that you have questions on i think
that's perfectly appropriate now is the time and place okay
Representative Hope Duke
Unverified
1:07:35
well i i've got i will just give the highlight one that i just had pulled up here and then i'll get out of the queue i know there's some other questions but again it was a smaller round but on page 27 um on randolph randolph county and the um maynard school district i'm not sure if i'm saying that right so my apologies um that's where I quoted that part from it did not rise to the level and so then my question just was on that overpaid amount was there any effort to try and get a repayment by the district or by anybody else just because they know what happened but maybe you can't prosecute it I understand you
may not have the answer to that but
Speaker 208
1:08:08
that was one of them. Representative thank you for the question and and and that's that this is a great example of something that we do not have the example you know I would guess that every specific prosecutor or deputy that handled any one of these cases would be able to, by looking at their file, be able
Speaker 210
1:08:23
to answer those good questions that you asked. I am sure that the thorough, you know, study of the case would allow them to answer that, every one of those questions on every particular case. I just don't have that information on, but I'll be happy to get that for you on a specific case
or have the prosecutor or deputy either get the information to me to where I could answer your question or have them come to a future meeting. But I feel fairly comfortable that the prosecutors in the AG's office that handled those cases would be able to answer those cases or those questions on each specific case. I just don't know in specifics to that one what the answer is. I appreciate that,
Representative Hope Duke
Unverified
1:08:56
and I understand that. And I guess maybe just from our perspective, or at least from mine, if they would include in their reports maybe a little bit more of those details so that we would have. Because that closure, I think, is important, especially for members of those committees, but also for the people that we represent to be able to say, okay, this is what ended up happening.
And even if it's, unfortunately, couldn't chase it down, couldn't get it reimbursed, but we were able to, I guess, thoroughly exhaust every option that we had. And I will jump back in and let somebody else, and they'll come back. Questions
Representative Robin Lundstrum
Unverified
1:09:30
are the best thing, so don't worry about that. Senator Hammer.
Senator Kim Hammer
Unverified
1:09:34
Thank you. You gentlemen have a copy of the report in front of you. Correct. Draws your attention to page seven and I just want to make sure I'm interpreting the numbers correctly
Number of matters referred 164 you got 20 convictions five pending three that were acquitted and dismissed and then 96 charges not filed the percentage of The matters referred against the matters that charges were not filed That seems to be and this is as long as I've been down here. There's been ongoing discussion but 96 out of 164 is a pretty high number so
Am I misinterpreting the numbers first of all or am I accurate in my interpretation so I don't want to speak for everybody else
Speaker 208
1:10:22
But I think you're you're accurate in your numbers to some extent In the there is 164 and only 96 been prosecuted But when you do the math, I think you also have to take into consideration that there are 39 other cases pending. So those 39 cases may get added to the 28 that were prosecuted or they may not. But your numbers are correct. That's just that we always want to consider
Speaker 219
1:10:44
there are 39 pending so it kind of skews our numbers a little bit
if you're just going to say the ones that have gone to trial now compared to
Senator Kim Hammer
Unverified
1:10:54
the number that were presented to both of our offices. Okay, so potentially the 39, in a perfect world, the 39 may come off of the 96 charges not filed yet. If you determine of those 39 under review that you have the ability to prosecute, they could come off the 96? I think the 39
Speaker 208
1:11:13
would come off the 164 because the 96 or I guess the 39 could be added to either the conviction or the charges not filed.
So the 39 will come off some of the 164, but I don't know specifically what column. Does that
Senator Kim Hammer
Unverified
1:11:30
make sense? Yeah. But the charge is not filed. You have determined that based on what you were given that there was not enough to pursue charging them. Is that a correct answer? Straighten me out.
That is correct. Audit does a
Speaker 224
1:11:47
wonderful job, and we have a great relationship with them. a lot of the matters that are referred to us,
there may be something that audit flags that under Arkansas law we cannot prosecute criminally for a variety of reasons, and that's what we have to filter through once it's given to us.
Senator Kim Hammer
Unverified
1:12:06
Okay, so hearing that response, it's not that audit's doing a bad job. It's not that you're doing a bad job. It's that there's something in the law that does not allow you to prosecute. Is that correct? That's absolutely correct, sir. okay so would it be worth the effort obviously they've done something that and i guess what
i'm trying to understand is they they found something that doesn't necessarily break the law but it has risen to the level that it has resulted in an audit finding so the question is those things that you can't bring convictions on do we need to create the laws that would allow you to bring convictions, or what? Senator, the first
Speaker 208
1:12:50
thing I would think that might be problematic with that is you won't be able to create a law that creates criminal intent.
Speaker 219
1:13:00
So without criminal intent, we would never be able to file charges on something. So I don't think we could fix that in the law. There may be things that don't rise to the level of a crime that you could fix or make a crime, but in terms of criminal intent, that's always going to be something that a prosecutor or an attorney general serving as a prosecutor
Senator Kim Hammer
Unverified
1:13:19
would have to prove. go forward so I don't know if we if we can legislate the creation of intent all right so what you're but then what you're saying is the reason you're not charging files or you're not
Speaker 224
1:13:31
filing charges is because you don't see criminal intent in some cases absolutely and there's a again a lot of examples
we could probably give you that sound a little odd but when we get these cases we have to go through them again I want to give audit credit we have their auditors are great to work with but you start looking at who's the person that committed the crime and sometimes we can't determine who that person is or sometimes it's a it's now a misdemeanor and we're we can't file a misdemeanor charge after a year has passed so we're stuck in those those situations we can't charge someone and sometimes we don't know who the person who committed the act
is and so those are some things that keep us from being able to file charges but to answer your question. Yes, there may be some things y'all could do to help us tighten
Senator Kim Hammer
Unverified
1:14:21
that up, but again, intent is a thing that we can't change. Okay, so last question, and I'll yield. Is it in this report where you show the cases that you couldn't prosecute because it lacked criminal intent?
Is it anywhere in this report? Is it summarized in each one of the individual responses, or what would it take to be able to? Because I think that could paint a clearer picture as far as these numbers. We can't do anything because we couldn't prove criminal intent. I
Speaker 224
1:14:53
can't say that it's summarized in there. I know it's one of the things we look at, and I think those answers that we respond to you all with might identify that better for you to understand what has taken place. Absolutely. Right.
Senator Kim Hammer
Unverified
1:15:05
But how hard would it be to add a summary sheet in here that says these were the ones that we could not find criminal intent?
And then we could identify those and see what, as legislators, we might want to do to help create something. Or am I asking too much? You don't have enough staff? Or be honest with me, is it not going to be worth the effort to put it in to do that?
Speaker 208
1:15:27
Well, no, Senator, I think we probably have that. It's just it's called different things. Some say no specific intent. Some say didn't rise to the level of criminal activity. I think there are various language that's used to say the same thing, but I think we could go back through and probably tally those up. But that's at each individual one that we
Senator Kim Hammer
Unverified
1:15:45
have to look at and see that, correct?
Yes, sir. Okay. All right. Thank
Representative Jack Ladyman
Unverified
1:15:55
you, Madam Chair. Good questions. Representative Ladyman. Thank you, Madam Chair. This may be adding on to what Representative Duke and Senator Hammer just said, If you look at page 18, Representative Duke said that they need a better description, and this is my county, Great Head County, and I'm familiar with this East Arkansas planning issue, but the comment that the prosecutor has there I think is very good, and it also kind of addresses what Senator Hammer was saying.
it says the PA requested an Arkansas State Police investigation it is the PA's understanding that the monies have been paid back and the district has put measures in place to prevent this from happening in the future and then it says at this time the PA declines to prosecute for any criminal offense so that's a very good description I think if you look at the other back on page 17 our prosecutor under the asu system incident is not good it says under review
there's no description of why it's under review that's an old item but you know how how often the first example i made how often is that used and that's kind of what senator hammer hammer asks but are you
asking how often is the under review used or how the other one the other one the other
Speaker 224
1:17:25
one is what we we would like to try to do we can give that amount of information you know we've turned it over the arkansas state police or local law enforcement to let them investigate it further to bring help us bring charges uh and so that's that is well done
the reason and i don't want to over answer your question which i'm quite capable of doing unfortunately is that the under review means they're still looking at it and which is what we want to do with an investigation and not talk about it until we are completed with this. So maybe they can't put that information out. That's what I would suggest from looking at this,
Representative Jack Ladyman
Unverified
1:18:00
yes sir. So in your estimation, or can you estimate, how often is that first example there for East Arkansas planning,
is that used 50% of the time? I mean what's a guideline there? And I don't want to put
Speaker 224
1:18:13
you on the spot, but I can't give you a guess but a lot of times what we see once audit has done what they do. We'll find the money has been determined, it's been paid back, and the parties involved may look at it and say this is not one that needs to be criminally prosecuted, and yet everyone's been made whole, which is what we're trying to get to the majority of the time, is get the money back to the taxpayers who paid the money out. So can I say that would be the best outcome? It would be the best outcome. There are people who need to be prosecuted, people who need to be
incarcerated, but at the end of the day, if this is what we're trying to get to, yes sir. Okay,
Representative Hope Duke
Unverified
1:18:51
thank you. representative dick thank you madam chair and thank you representative lady
for pointing out one that was really well done and information and why sometimes there are misses in them or not all the information is provided and I do understand that one of the ones and I'm trying to go back through these one of the ones that I kind of I just have a question back on page 10 in Monroe County the Department of Agriculture and it has on here about the what what the
what happened why they were referred I guess and then district employee resigned and then there's gonna be no further action taken but again my question is is restitution made at all did they are they paying anything back is anyone following up to make sure that some of these things are paid back or do these people just resign they don't get prosecuted and and they may be paying money back I have no idea but I would love to have some kind of insight if any efforts being made to that or do they just go on to the next entity and work
for them and typically people have no idea and again I realize you're not probably gonna have the answers to that but I don't know if that is something we can find answers to because sometimes at least and I do on the education audit side but I know in school districts it's just sometimes people just move from one to the next to the next to the next and you don't necessarily know there was a problem with one because they just leave and so that was one of the questions I had and then on a similar on page 27 oh that was one I just did sorry
I'm just going in order then there was and I'm not going to try to hit them all page 30 and this was just is in it they are still employed in this school district or not the school district in this goose camp water users Association I guess my question in that area and this is not really the prosecutor attorney but just for I guess that entity is their oversight on that a little bit additional oversight on that area and those are just kind of things I would just like to see so that when we're coming down here and having these
meetings we're asking our questions and now we get the follow-up on them that we know that some of our concerns are being addressed another one I had was on page 35 no kernel charges were filed I'm sorry skip that one I read that one through it's page 37 and this was a DHS one and this one I think we could have a probably a good chance of finding out that information fairly quickly there at the very bottom the funds have not been recovered and it has the answer from the prosecuting attorney and again just the questions I just have sometimes is
how much do we pursue trying to get I agree that not everything needs to end up with people going to jail but I do think restitution has to be made an effort in that part and I there's some of these that I just am curious if that's happening page 43 at the Nevada School District and decide no criminal prostitution would be forthcoming and but for that unused sick leave again and I would think that would be something we could find out fairly easily but is that being paid back and then 44 right on the next page or close that issue
you there with the gun okay did he what did we do with that we get we sent a letter told don't do it that way but with the with the gun that happened there and with how that process was supposed to be taking place did that change or did he keep the gun did he give it back to the city I mean what happened with that other than just the letter being sent and so those are some of the things at least I'm not like I said I'm not going to go through all of these I'm happy to get offline because i have a few more not a lot but that's generally the questions that i have is some of
these there just doesn't seem to be clarity in what happened and it may be because they choose not to prosecute or they whatever but then we don't circle back or maybe we do what happens within the school district what happens with these entities is anyone pursuing getting money or these people taking money inappropriately or items inappropriately get a letter get caution they resign and then they become potentially somebody else's problem has no idea and is that money ever being recruited because eventually you know all these
are other these are the taxpayers dollars and I get that this is kind of tedious and not the most exciting thing in the world but we should be guarding their dollars in my opinion more than I've even guard my own because we've been given the the right and the responsibility to manage this money and these different entities and so it may just look like two thousand dollars here compared to millions of dollars everywhere else but you know faithful in small things you're faithful in big things and if you're not going to be faithful in small things you're not going to be faithful in the big things
either so the small details do matter so again i understand you're not going to have answers to all of these here today but that's just kind of even my feedback and maybe the staff can share with all of these different entities i think taxpayers would like to just kind of have the bow tied up very neatly and nicely when issues like this occur so thank you very much thank you for the latitude I appreciate it and I also I do want to say there were lots of really great descriptions in this and lots of details and lots of them so the
fact that I say that there's some areas but that also makes the ones that are a little sparse they're a little bit more noticeable because there are other ones that are give you I feel like I feel like it's tied up very nicely we know the information and I also understand some are still under investigation and things like that are happening as well but there were some where they're like we're done and it was very minimal in what we had as far as the closing of that that case so
Representative Robin Lundstrum
Unverified
1:24:28
thank you very much i appreciate the leniency again you're welcome and when next we have representative
Representative Rick Beck
Unverified
1:24:35
beck and then representative lightyman thank you madam chair uh just kind of building a little bit on some of the conversation i think
was kind of started with senator hammer but like uh this number that's the charge is not filed it's two 2.7 million right that is a number below there representative lady beck would you give us the
Representative Robin Lundstrum
Unverified
1:24:55
page that you're on oh i'm sorry
Representative Rick Beck
Unverified
1:24:58
that i'm on the exhibit three uh it's page uh seven all right thank you so the is that number my question is about that number is that
the total number of charges that and this might be for staff it's that's a total number of dollars are associated with the with the charges that were not filed I mean it's probably a question for staff but I believe that's
Speaker 243
1:25:27
correct that is correct all right so and that's
Representative Rick Beck
Unverified
1:25:32
kind of what I thought but I think a lot of people you know we tend down here to look kind of look at the bottom line to make sure that the taxpayers are are being taken care of and and what would
help there is if in those cases restitution was made you know in all of those right so that all the charges that were filed and everything was the The taxpayers came out even. I think that would make people feel a lot better about it. My question is, could this report be just a little bit more granular at the top level and say, hey, these are the things that didn't get prosecuted or didn't get filed, no charges were filed, excuse me,
but the taxpayer was made whole on all these or a large percentage of them. I'm going to try to
Speaker 224
1:26:26
answer that question by saying that I know that our policy in my office is that's what we're always seeking is the restitution to make the taxpayer whole. And I know that's how the other 27 elected prosecutors feel the same way. And if we can't have any input in that, we want restitution to be paid. There are some times we don't have any control over that because, again, the action is not criminal. And so we don't have the tools in our toolbox to force them to pay it back.
but i i can say for the 28 we all want the restitution and we will do everything in our ability to make that happen uh and if we need to give some more information about that and what we've done or not done i think we're all
Speaker 150
1:27:08
glad to do that by all means yeah and
Representative Rick Beck
Unverified
1:27:12
follow up okay so the the the i think my question i i i i'm sure that you guys are doing exactly what you're saying but my thing is if we had on the report where it looks like hey and i don't even
know what the number would be 50 or whatever it would be uh then that would be another number that we could top line take a take a look and say hey things look like they're flowing along right here and you know we still could go to the individual reports when we wanted to but i think that would make i know it'd make me feel a lot better and make sure that that uh that's happening and then one other
Representative Robin Lundstrum
Unverified
1:27:49
question. Representative Beck, let me, let me answer that. Uh, represent, uh, excuse me, Mr. White has some information. What
Speaker 212
1:27:55
I wanted to mention representative Beck is, you know,
currently I don't think we're asking for restitution in the non-criminal charges filed section when the prosecuting attorneys are filing. You know, we provide some presentations to the prosecuting attorneys as well as some of these staff. They, you know, they're representing all prosecuting attorneys. We can communicate the message that when charges aren't filed to include the restitution amount and we can try to summarize that for this committee
Representative Rick Beck
Unverified
1:28:20
moving forward that would be great and then one more quick question you mentioned that sometimes with misdemeanor charges you have to be done within a year and and and i can i could easily see how the system down here
which these wheels move a little bit slow sometime we could see a lot of people we could be filing stuff send stuff to you to be filed after there's no way it's gonna and i think that's just that's a waste of a lot of people's time to to do that but also if we knew that we might adjust our systems to get you those quicker so that maybe you you would have time to act on them by the time we got because I know and coming from education I know that education is one that we we really have a
hard time sometimes getting those those people are gone they're in the next school district we pay out one contract and they're in the next school district before we get anything done about it so anything like that i would as a group i would suggest that you feed to us so that we could possibly maybe make our timelines a little bit quicker and get to those a little bit quicker
to get you what you need thank you i think you
Representative Robin Lundstrum
Unverified
1:29:32
have a volunteer if you need something done um representative ladyman and then we'll go to representative baity thank you madam chair and
Representative Jack Ladyman
Unverified
1:29:41
And I thank you all for being here, and
I apologize for asking so many questions. But I think Representative Duke raises a really good question about these summaries. And my question to you all, through the Prosecutors Association, you probably have meetings or communications. I don't want to call it training because you all are lawyers. He's probably been trained enough. But just information on what this body would like to see. You know, maybe a checkoff list, you know, was the money given back?
Why was there not prosecution? Or do you have an answer as to why there's some kind of a guideline that you could give your prosecutors so that they give us the information that we think we need so we can go back to our districts and talk to our prosecutors or, you know, whatever the association is that's involved and have a better communication there. And the Municipal League, which I used to be a part of, does a similar thing to that. Do you all do that, or can you do that? Yes, sir, we do that.
Speaker 227
1:30:44
Not only do we have training, and we do continue to have training, maybe not
Speaker 208
1:30:49
enough sometimes, but we have big conferences at least two a year where all of our prosecutors come, including deputies. And we also, as an association with our leadership, have almost monthly meetings, probably about nine a year. And your staff has attended some of those meetings before, So it's absolutely doable for us to invite y'all to those meetings where we can hash this out or to present whatever you want me to present on our packets of materials to discuss. One of the issues here that might be, I mean, I'm not trying to create work for anybody, but there's not a template that exists on every case that we have to check a box or fill out.
So that may be something if you want that information in that form. Now, I realize, like I said, some prosecutors will respond with stacks of information. Others will be like this. I know the staff would be able to address that more than I would, but some type of a template where we made sure that we answered your questions is probably something we could get together and work on. That seems like maybe a solution to a lot of what you all are asking. I think that's a very good
Representative Jack Ladyman
Unverified
1:31:47
suggestion. I think we need to provide to you what we want to see. I don't know why we do that, Madam Chair, but I think that's something that we probably need to work on.
And I know you have turnover in the prosecutors, and so, you know, you have new people coming in, as we did with mayors, and you've got to train them up, right, because they're new and they don't know the ropes. But I think if we provide you what we want to
see, you all may be able to provide that better for us. So thank you. Thank you, Representative DeLady. We'll be happy to
Representative Robin Lundstrum
Unverified
1:32:18
do that. I believe it's a combination, and they've been taking notes. Representative Beatty. Thank you, Madam Chair.
Representative Howard M. Beaty, Jr.
Unverified
1:32:26
Gentlemen, I'm over here. I would just say first, it's always a privilege to be sitting and speaking with you guys. I know you came today, and I'll just say this is my favorite way to deal with prosecutors is sitting in a meeting. But what I would ask is, I feel like it's incumbent on me to ask, with you being here today, what can we do to make your jobs easier or better or help you fulfill the duties that are incumbent on you? Is there something that, you know, fiscal session's coming up, everybody wants the green salve, everybody wants a little money,
but is there something that this body can do while we have your attention and you have ours that you could share with us that would assist you in fulfillment of your duties? I very much
Speaker 227
1:33:14
appreciate the opportunity to answer that question. We might not have enough time for me to start to
Speaker 208
1:33:20
answer that question, but we do appreciate that. In terms of the audit issues, I think we've kind of hashed out what we could do. For prosecutors, manpower is always an issue. We present things to you, usually not in a fiscal session when we need additional deputy prosecutors,
but I can say with the opportunity to say so, one of the things we're very much interested in from the legislature is hopefully helping us get our state victim witness coordinators to be state employees. A lot of those, they're very important people. Those people that don't understand, they hold the hand of the victim. from the beginning of the process through the end and they have state statutory mandated duties to do that and unfortunately the funding sources for those employees are very different some are funded out of federal grants and those grants have been cut so we have lost employees in prosecutors
offices for that so that is one thing we as an association are contemplating doing in in the fiscal session we don't usually do that much stuff in a fiscal session but but we're contemplating doing that because we have actually lost employees recently so off the top of my head that's probably the first thing that comes to mind and again I appreciate the opportunity to to say that and we will be reaching out to to everyone as we get a little bit closer to the session and working with the governor's office of course uh to to present that and we have made that that information available to them they know we're working on this we did file a bill last session um but we're
planning on doing it again so I appreciate that that is one thing these guys may have something else but for me that's the most pressing thing financially that that I think we should be
Speaker 246
1:34:50
concerned with doing. I'll just say briefly, and I appreciate Representative Bader you asking that question. Again,
Speaker 224
1:34:55
I say this every time, audit is great for us. We work with them, we have a good relationship, and when they need things we try to get it for them and vice versa. I don't know how many cases right now audit's working on for me that y'all be seeing in the future that they're
doing some really good work, and I'm grateful for that. What y'all asked about a checklist, we think it's a good idea. If y'all get us what you want, we can make that happen. And I want to echo what Bob's saying. Y'all have taken very good care of us in the past, and we're grateful for that. But we are very concerned about victim witness, because everything we do as prosecutors are victims of crimes. And these people do a great job of helping those victims. The most vulnerable people on the planet are those victims sometimes, and those people are critical. And they've got
some very strong state mandated by y'all what you have said is important to do and we need help with
Representative Robin Lundstrum
Unverified
1:35:54
our funding desperately okay thank you um we have one more question and one more question we're going to land this
Representative Matt Brown
Unverified
1:36:04
plane representative brown and then we'll close with senator petty thank you mr shu Thank you. Which one's
you? I'm sorry. Forgive me. One thing that was mentioned to me last year was that the victim advocates in the prosecuting attorney's offices have
to be paid for out of your prosecutor budget.
budget or is that well yes and
Speaker 208
1:36:35
no those positions are funded in different offices different ways that's the very position I was referring to a minute ago the the victim advocates we call victim witness coordinators those are not state employees that's what we're trying to do so right now they're they're either county employees or grant employees even if they're grant employees their county employees but the the pay is either through the county through a voca grant or in some
Representative Matt Brown
Unverified
1:37:01
places a combination well one of the things that was mentioned to me
is that in different counties different you have different budgets so one of them might be paid better in one county than they would in another and that there's a big turnover of those people and it was and maybe you and i are talking about the same thing now that it would be best if those victim advocate coordinators if i got that right if they were paid for out of the state budget rather than out of the county budget is that a possibility or is that reasonable no yes ma'am that's exactly what i'm talking about
Speaker 208
1:37:32
and and then we did we did file a bill to do that last session that would have put a lot more uniformity in the in the payroll um we uh we took existing salaries and put that all together but i'll be happy to get with you to do that but yes it was filed uh representative gasway and senator gilmore uh were the sponsors of that piece of legislation last time but that is the very people we're talking about well i would like to talk with you about that at another time
Representative Matt Brown
Unverified
1:37:53
yes ma'am absolutely thank you thank you representative brown senator petty thank you madam chair the
Senator Jim Petty
Unverified
1:38:03
plane is on approach and i'm gonna let you land it here in just a second but this has been good conversation but one thing that uh as probably the only auditor uh in here and that was uh 30 years ago that might be helpful to this body is to maybe have a brief 30-minute-ish presentation by staff and maybe the prosecutor's office as well on the nature of what we're talking about. Because there are certain things that, and again, I'm not going to speak for staff, but
in Jim Petty words, there are certain things that we turn over to them that may or may not be uh what would be a prosecutorial item but we don't want to make that decision as as auditors we're going to turn that over and so there's there's there's scope and materiality there's law there's there's believe it or not we have gray areas in the law and so i think maybe some training brief training about what happens so this reports for the period this january to december 2024
Some of these reports that were reported on go into 2022, 2023, and so the reports may be are due, as we know from our water reports, they may be 18 months later. Some may be shorter than that, but I think a general understanding of the process of turning it over to the prosecutors and then how the prosecutors respond to those and the timing might help us in creating laws to Representative Beatty or whoever made that comment.
But I think that my observation is there's a little bit at least, if not a significant amount of really not understanding the process from the auditor perspective and from the prosecutor perspective. And so maybe just a brief training on that area by staff one day might be helpful. So with that, I'm going to turn over the autopilot to you and
Representative Robin Lundstrum
Unverified
1:40:14
thank you so much first of all I also want to just reiterate always ask questions they're the anti-venom to bad government so never apologize for that and I love the fact that so many of you stayed and stuck on it so with that I would move that we file this report do I have a second second representative Brown discussion of the motion all in favor opposed all right motion passes gentlemen thank you so much for being here today and answering our questions with that we have no
other business coming before us we will see everybody on february the 12th and 13th plane landed
Agenda
A. Call to Order by Chair
B. Adoption of Minutes
C. Reports of Executive and Standing Committees:
D. Review of Reports:
E. Other Business:
The next meetings of the Legislative Joint Auditing Committee will be held February 12 and 13, 2026.
F. New Business
G. Adjournment
Documents
| Title | Type | Pages | Source |
|---|---|---|---|
| Agenda — LEGISLATIVE JOINT AUDITING, Jan 9, 2026 | Agenda | 1 | Official source ↗ |
Speakers
Speaker 1
Speaker 2
Speaker 6
Representative Robin Lundstrum
Unverified
Senator Jim Petty
Unverified
Representative Richard Womack
Unverified
Representative Hope Duke
Unverified
Representative Steve Unger
Unverified
Speaker 47
Speaker 48
Speaker 62
Representative Howard M. Beaty, Jr.
Unverified
Speaker 68
Speaker 72
Speaker 77
Speaker 81
Speaker 82
Speaker 84
Speaker 85
Speaker 94
Speaker 101
Speaker 110
Representative Wayne Long
Unverified
Representative Matt Brown
Unverified
Speaker 117
Speaker 128
Speaker 133
Speaker 136
Speaker 134
Speaker 147
Representative Rick Beck
Unverified
Speaker 112
Speaker 158
Representative Johnny Rye
Unverified
Senator Matt Stone
Unverified
Speaker 175
Speaker 176
Speaker 21
Representative Jack Ladyman
Unverified
Speaker 194
Speaker 24
Senator Jane English
Unverified
Speaker 80
Senator Kim Hammer
Unverified
Speaker 202
Speaker 204
Speaker 207
Speaker 208
Speaker 210
Speaker 212
Speaker 32
Speaker 219
Speaker 224
Speaker 243
Speaker 150
Speaker 227
Speaker 246
Speaker 259