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Legislative Joint Auditing-Counties and Municipalities

January 8, 2026 ·1:30 PM ·Room 151 ·1:05:34
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Representative Richard Womack Unverified 0:00
We have a motion and a second. All those in favor say aye. Aye. All opposed? No? Thank you, that'll stand adopted. Up next is an update
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Speaker 3 0:12
on private reports. Mr. Archer, you're recognized. Thank you, Mr. Chair. Update on the delinquent water and
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Speaker 6 0:19
sewer, private water and sewer reports for the year ended December 31st, 2022. We received five additional 2024 reports since the December meeting. That brings the total to 17 total that we have released their escrow funds. And that leaves 26 that continue to be escrowed with the deadline of the July meeting of last year that started the year's clock. Mr. Chair, this concludes my report.
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Representative Richard Womack Unverified 0:52
Thank you, sir. Are there any questions from committee? any discussion okay then without objection uh we'll follow this report uh next up is uh update on those same reports delinquent december 31st 2023 thank you mr chair since
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Speaker 10 1:08
the december meeting for the 23 delinquent reports we've received two additional
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Speaker 6 1:14
reports this brings the total of 59 of the original 64 that are in compliance now so we have five outstanding And Mr. Chair, these entities are not having their turn back currently escrowed
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Speaker 12 1:28
because the committee has not requested to do so.
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Representative Richard Womack Unverified 1:33
Mr. Chair, this concludes my report. Okay, thank you. Any question or comment from committee concerning those? All right, without objection, we will file that report. Thank you, committee. Next up is our discussion of Act 709 of 2021, repayment of street turn back for Daisy. Mr. Archer? Do we have someone present
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Speaker 17 1:58
here from the city of Daisy?
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Speaker 10 2:04
Okay, okay. Mr. Chair, since they're present, I wasn't sure there was a question whether or not they could make it today. With your permission, we'd like to go ahead and present that report from page 12. Yes, sir, please. On page 12, the town of Daisy 2023 and 24 under reports referred to the prosecuting attorney in the attorney general's office. Under the mayor and recorder treasurer, the town paid Daisy Community and non-profit corporation $2,000 in both 24 and 23 without a contract for services in non-compliance with article 12 section 5 of the constitution. According to town officials, this was a donation towards the annual fireworks show sponsored by the non-profit. In 2022 and 2021, the town spent street fund monies, which were restricted by Arkansas Code annotated 277207 in the amount of $42,731 for payment relating to the acquisition of a fire truck and the construction of a fire department building. Additionally, the town has not passed an ordinance or resolution to repay the street fund 10% of general revenues until the street fund is repaid and has not obtained the authorization from the legislative joint auditing committee for repayment of less than 10% of general fund revenues annually in noncompliance with Arkansas Code. This is a repeat finding. I believe we have Mayor Lisa Cogburn here to answer questions today. come to the end of the table and uh you know as the
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Speaker 12 3:41
finding states we need to discuss whether or
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Representative Richard Womack Unverified 3:44
not how they're going to repay this money thank you just take a seat there and reach up and turn your microphone on uh and if
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Lisa Cogburn Unverified 3:52
you don't mind just for the record if you'll state your name and affiliation reason you're here please and then we'll hear any statement that you may have sorry thank you yes sir my name is lisa cogburn i'm
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Representative Richard Womack Unverified 4:07
the mayor of daisy Okay, thank you. Do you have a statement you'd like to make? Sir? Do you have a statement you'd like to make regarding these findings?
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Lisa Cogburn Unverified 4:16
As far as repaying the street fund back, I have presented it to my council multiple times, and the council has not passed it. They don't think that the amount
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Speaker 27 4:31
is correct, the total amount. And I would like to, planning on sending a letter over to ask if we could drop that 10% down to
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Speaker 30 4:47
5% if I can get my counsel to finally approve.
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Speaker 32 4:54
Okay. What's the counsel's hold up? They think the
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Speaker 30 4:59
amount is wrong. They think it should be
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Speaker 36 5:11
a lower amount. Okay. Yeah. Okay. Senator Stone's
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Speaker 37 5:15
got a question real quick. You believe, the council believes, you say the council believes that the amount is incorrect,
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Lisa Cogburn Unverified 5:24
but what are they basing that on? They're not, from what they see on, I've even asked the auditor to
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Speaker 27 5:33
send us where they've calculated it all up, and I've presented that to the council members,
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Speaker 30 5:38
but they just think that that amount should be
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Senator Matt Stone Unverified 5:41
lower than the $42,000. But if we lower it to 5%, then they'll agree to pay that amount, even though they think that's wrong and incorrect amount. I'm hoping if I can
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Speaker 30 5:51
submit it to the council that you guys have lowered the amount to pay
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Speaker 27 5:56
the amount to pay back yearly, that they would go ahead and approve it.
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Speaker 41 6:02
Honestly, those two things don't add up. Why would you agree to pay an amount that you don't owe? That just doesn't add
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Speaker 27 6:12
up. Right. I understand. I'm just hoping that I can eventually get the council members to approve it. Like I said, I keep submitting it, but nobody's approving.
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Speaker 30 6:26
I'm open to suggestions of, if anybody can give me some suggestions on how to present it to them
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Speaker 53 6:36
that they might approve. Okay, real
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Representative Richard Womack Unverified 6:39
quick, we'll address a couple of committee members' questions. Senator Gilmore, you're next. Oh, okay,
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Speaker 57 6:47
thank you. Senator Johnson, you're up.
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Senator Mark Johnson Unverified 6:49
Thank you, Mr. Chairman. Mr. Chairman, I just stopped talking off the cuff with Senator Gilmore. I walked in this building today with another colleague, and I mentioned what we do in here, and this is specifically what I mentioned to Senator Clark. He's laughing because he remembers me saying that to him. But, you know, we see this a lot. I'd shudder to think how many times we've seen this exact thing where, you know, they didn't have an appropriation, they used highway funds and the general fund, And then to hear the lady, and I appreciate you, ma'am, your candor. I really do, because you're telling us the truth. That's what we want. That the council said, well, we don't think that number's right. Well, that number came from what our auditors determined. I mean, they didn't pull it out of thin air. And I'm to the point where, you know, and I was discussing the city of Allport, which, you know, we've tried to make them comply. And I don't know where that actually is. But, you know, and I'm not picking on Daisy. It's just that they're the one that this came up again and again. This one's the one today. And I just, is there anything we can do? And this may be a question for Mr. Archer, but it's probably a question for you and leadership. Is there anything we can do to get compliance or at least give them enough incentive to where they really, really don't wanna be out of compliance. -
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Mark Peppel Unverified 8:25
It's my understanding, and please correct me if I'm not clear
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Representative Richard Womack Unverified 8:29
in this, but I think at this juncture, we're to the point where we have to decide as a committee whether we stop their turn back funds until there's compliance or not. I don't know that there's anything, any other tool that we have. Does your counsel understand where we're at in this process, that that's basically where we're at today? I don't think
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Speaker 27 8:53
that they understand that. No, sir. Okay.
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Speaker 66 8:55
Senator Gilmore. Just to follow up quickly. Sure. Sure, go ahead. I just want, and
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Senator Mark Johnson Unverified 9:01
again, ma'am, I'm not picking on you nor this town of Daisy. We've got a lot of others that have done this, but this is not a negotiation. This is something that's found by auditors, and we expect it to be fixed. And we're not going to sit and negotiate. We can bring the hammer down, and that includes withholding turn back funds. And I hope they don't want that just for their own
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Speaker 10 9:27
citizens. Thank you, Mr. Chair. Thank you, good point. Mr. Chair. Please go ahead. Kansas
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Speaker 6 9:32
provided me with the work papers. They spent $25,731 on a fire truck and $17,000 on the construction of the fire building. It's what the records show. And if they've repaid some of that,
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Speaker 12 9:42
those receipts were not provided to audit. So that's where we got the number. They were
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Speaker 64 9:49
hoping that when the general fund took over paying for the
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Speaker 27 9:53
mowing, that that would take care of some of that that they owed. And the audit, of course, I'm sure you all have seen, has
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Speaker 30 10:00
said that that would not be sufficient. We've got to have proper documentation that that was
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Speaker 12 10:07
actually mowing that was required to be paid for from the street fund to start with. So if it's documented that it's a ride away on the street, then that would be acceptable. if it's the park or some other non-street related funds that 277207 are allowed to be used for, then it can't give you credit for that. So the documentation we've been provided stands at that balance. Okay. And if you do, we recommend straight payments to the fund so it can be easily tracked and you all get credit for everything that you've done, switching services around, And you need to make sure you document that in very detail for audit
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Representative Jack Ladyman Unverified 10:53
purposes. Okay. Representative Ladyman, you had a question? Thank you, Mr. Chairman. First of all, I think I've got a question for staff. This 10%, is that annual or is that monthly? It's 10%
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Speaker 76 11:06
of the, excuse me, it's 10% of the annual unrestricted general fund revenues or 10% of the monthly general fund. So they're going to pay 10% back, but
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Representative Jack Ladyman Unverified 11:15
are they going to pay that 10% monthly or per year?
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Speaker 12 11:20
Well, the law says monthly, but this committee, they can approve any. In the past, we've approved alternative payments like every other month, different amounts, as long as at the end of the year it equals 10%, but that'd be
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Speaker 73 11:32
up to the committee's will. Okay, so the city would be required to pay $4,273 back per year. That's what this says. No,
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Speaker 12 11:42
it's not 10% of the amount due, it's 10% of unrestricted general fund revenues for that year. 10% of their general. So it would be the, 10% is $228 a month. So it would be $2,283 a year is what they'd pay. Almost $2,300 a year is what 10% would be.
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Representative Jack Ladyman Unverified 12:02
Of their general. Yes. So Mayor, thank you for being here. When you talk to the council about passing this, can you pay $2,300 out of your general fund to the street fund annually? Does your budget allow that? Yes, sir. And you presented that to them, that you have the funds to do that?
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Representative Carol Dalby Unverified 12:27
Yes, sir. Okay. Thank you, ma'am. Thank you, Mr. Chair. I think this is for Mr. Archer. It's my understanding, and correct me if I'm wrong, that this committee has within its purview the ability to pass a motion that says this is what you're going to do. despite what the city council is doing? Because they've not provided us any information that disputes your $42,000 figure, correct? Yes, ma'am. That's our number, and we've audited the
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Speaker 76 13:21
financial statements, and that's what we're standing on, yes. Okay. And so
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Representative Carol Dalby Unverified 13:25
we have that ability in this committee just to go ahead and move on and say, here's what the committee's going to do, make that recommendation, and they'll let audit vote on it tomorrow. Am I correct?
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Speaker 12 13:38
That is correct. Okay, thank you. And then, just to follow up, if that will is a percentage less than 10%, if they fail to ever make that payment, it automatically defaults in. It's 100% balance is due within 12 months. That will, at that point, y'all have the authority to then hold out the complete street fund revenues from the state until it's paid in full, as long as it's done within one year, and then that money will be gone, be redistributed to other cities. Sure, I understand that. It's my
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Representative Carol Dalby Unverified 14:06
understanding that the mayor said that they're, in response to Representative Ladyman's question, I believe it was your question, that they have the money to be able to do it. So, you know, I see others in the queue, so I'm not making a motion, but it is my personal thought that we need to move forward and do just that, to assess it and move on. Thank you. Senator Gilmore?
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Senator Ben Gilmore Unverified 14:31
Thank you, Mr. Chair. My question is very simple. I didn't know if there was anybody with the city or the council, rather, that would be here to speak to their action or inaction on that. I'm the only one here. You're the only one here? Okay. Okay. I
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Representative Richard Womack Unverified 14:50
guess I answered my question. All right. Are there any more questions from
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Representative Johnny Rye Unverified 14:56
the committee? Representative Rye? Yes, sir. Thank you, Mr. Chairman. Ma'am, you know, in the beginning of a conversation, notice that you said that the reason that they didn't want to pay this was because they didn't think the figures were right. Yes, sir. But there's no documentation from you guys saying anything other than what we have in front of us. So you would think that we would be right unless it was proven wrong. And I don't think that we would have anything to gain by not charging the right amount of money.
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Lisa Cogburn Unverified 15:27
I agree with you, sir. I just, like I said, I've presented it to them many times, and I get told
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Speaker 27 15:34
the same thing. And the auditor's given me what he's figured out, and I've presented that to them. I've even tried figuring it out myself and come up to that amount. But for some reason, they will not
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Speaker 107 15:50
approve it. Well, thank you, and thank
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Speaker 27 15:52
you, Mr. Chairman. I apologize on my city for being so hard-headed and not wanting to approve. I do
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Speaker 30 15:59
apologize. Thank you. Is there any
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Representative Richard Womack Unverified 16:05
other discussion from the committee? Real quick. Or question.
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Representative Jack Ladyman Unverified 16:12
Okay, let's hear that motion. Well, you know, I believe the mayor, if the mayor says they have the money and the mayor has tried to convince the council and they don't have good reason, then I would make a motion that we give the mayor the authority to do that transfer. This committee gives the mayor authority to transfer that money, that 10%. Is that a valid motion?
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Representative Richard Womack Unverified 16:50
So we're going to just put that on hold for just a second for a little more discussion. Okay. And I'm sure Representative
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Representative Carol Dalby Unverified 16:59
Dalby, you can make it around that motion while we're talking. Well, no, and I agree. I think that's exactly what we need to do. But I would offer a substitute motion if Representative Leidyman would like to hear. My motion would be that we require the 10% repayment as per the statute and failure to do that, then we withhold their turn-back funds. And I don't think, that would be my motion. My explanation of that motion would be, I don't believe that we could authorize, we don't need to authorize the mayor to do something. I think that just by doing this, that takes care of it, and we don't have to give, because I don't think we have that power to authorize, but that would be my substitute motion, which does the same thing that you're wanting to do, I think.
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Representative Richard Womack Unverified 17:50
Okay, thank you. I accept that. Would you just withdraw your motion? Thank you. Representative Dalby, would you like to make
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Representative Carol Dalby Unverified 17:57
that motion for the record? Yes, for the record, I move that we require the 10% repayment of the turnback funds as pursuant to statute and upon failure to pay the 10% that we withhold the turnback funds, the street fund. Thank you. I'll second that
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Speaker 32 18:12
motion, Mr. Chairman, but I do have a question
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Speaker 122 18:15
for Representative Dalby. Okay, we have
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Representative Richard Womack Unverified 18:18
a second on that motion, but before you ask a specific question, can we, yeah, let me open it up to discussion around the motion and go ahead in that vein.
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Senator Mark Johnson Unverified 18:31
Representative Dalby, do you think we could put a specific timeline on when that repayment must start next month? Mr. Archer may
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Speaker 66 18:39
have. Well, yeah, I mean, it would
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Speaker 12 18:43
be monthly starting at the month following this meeting. She said per
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Speaker 70 18:47
the code, so the code would be every month starting. Starting in February. That answers my question. Thank you, Mr. Chairman.
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Senator Mark Johnson Unverified 18:53
That's my understanding of how the, once you
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Speaker 70 18:56
worded it per the code, and that would be how the code would be interpreted.
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Representative Richard Womack Unverified 19:01
Yes. Okay, thank you. That was very helpful. Any other discussion or question on this motion? Representative Rye? Thank
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Representative Johnny Rye Unverified 19:17
you, Mr. Chairman. Mr. Chairman, let me ask you this, sir. Would this be 10% a year or would it be 10%
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Speaker 132 19:24
each month? Mr. Archer just broke that down and is prepared to do it again, I think. If you can
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Speaker 134 19:35
give him just a second. Make sure I get the wording just right.
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Speaker 136 19:40
Give me a minute. Committed to pay a percent of less
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Speaker 139 20:04
than 10% of the city's and by incorporated towns general
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Speaker 10 20:09
revenue from the street fund. So it's just 10%, so it would be annually,
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Speaker 12 20:14
I mean, we break it down by month. But we would test it, we do an annual audit, so we would test it by annual. Unless the committee specifies something differently in the motion. Any other
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Speaker 140 20:27
question on this motion or discussion? All right,
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Representative Richard Womack Unverified 20:31
all those in favor say aye. Aye. All opposed, no. All right, thank you, the motion is passed. Ms. Mayor, thank you for being here today. I'm sorry you're in the hot seat alone. Feel free to contact staff to figure out exactly how this is going to work moving forward and do your best to explain to council where we're at. Thank you. But we appreciate you being here today. Thank you very much. Thank
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Speaker 3 20:57
you. Thank you. Could we, Mr. Chair, could we get a motion to file the report as well? Working on it. Thank you. I'm sorry. I apologize.
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Speaker 146 21:05
No, no, no. Thank you for that. So, without objection, we will file this report. All right, thank you. We will file that report. Thank you, Mr. Archer.
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Representative Richard Womack Unverified 21:21
So, now we're just going to move to the next item on the agenda, the review of reports that you have in front of you there on your desk.
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Speaker 10 21:37
Mr. Archer, you're addressed again. Thank you, Mr. Chair. Starting on page one, we have 12 reports that were deferred from the previous meeting. Starting with the city of Harrison 2024 under the district court clerk. Bank reconciliations were not properly prepared for all accounts and balances remaining in the bank account were not identified with receipts issued for cases not yet adjudicated and payments made on all unpaid individual time accounts as required by Arkansas code.
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Speaker 6 22:04
This is a repeat finding from the previous two reports dating back to 2022. I believe we have district
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Speaker 10 22:09
court clerk Sandy Wright here to answer questions. Thank you, Mr. Archer. Mr.
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Mark Peppel Unverified 22:15
Wright, if you wouldn't mind, just state your name and affiliation for the record and then we'll listen to
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Speaker 152 22:22
your statement. Hi, I'm Sandra Wright, the court clerk from Harrison, the chief court clerk. And I'm happy to report that I worked hard in 2025. And one account has been completely reconciled and is ready to be closed. And I just have my general fund account, and it has been reconciled as well. Okay, thank you. So I'm hoping at the end of this year, 2024, that it will show that. It will reflect those payments. Thank you, ma'am. Okay.
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Representative Richard Womack Unverified 22:50
Are there any questions or discussion from committee on this report? All right, seeing none. Without objection, we will file this report. Thank you for
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Speaker 139 23:04
being here today. Continuing on page
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Speaker 10 23:07
one, under deferred reports, we have Carroll County 2024. Is the airport manager here today? Okay. You must
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Speaker 76 23:16
have got here earlier. You didn't sign in. Okay, I'm
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Speaker 159 23:21
sorry. I'm just glad you're here. Didn't realize I needed
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Speaker 10 23:25
to sign in, sir. You're good. You're good. Yeah. Carroll County 2024, under the airport manager, bank reconciliations were not prepared for the airport account as required by Arkansas Code. This is a repeat finding. Pre-numbered receipts were not issued for all items of income as required by Code. This is a repeat finding. We have airport manager Mark Pebbles here today to answer questions. Thank you
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Mark Peppel Unverified 23:51
for being here. Please state your name and affiliation for the record, And then we'll gladly listen to your statement. My name
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Speaker 162 23:58
is Mark Peppel. I'm airport manager for Carroll County, Arkansas. As far as the reconciliations, I was not understanding. I took over three years ago. There was some back things I was trying to work out from previous managers. We do use an outside accountant to do our book work at the end of the month. And she and I were trying to figure out exactly what was wanted. She has now switched over to QuickBooks. I do have two examples here where we're reconciling everything by the end of 2020. Well, at the end of the audit of 2025, there should be enough evidence there. It won't be completed in 2025 because it didn't start until the latter part of the year after Mr. Patrick told us what he wanted. But by the end of 2026, it should be all corrected. at that point. We are actively working on putting
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Speaker 163 24:55
in place what the council is asking for. Okay, thank
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Representative Richard Womack Unverified 25:02
you. Any question or comment from committee? All right, thank you. Then without objection, we will file this report. Thank you for being
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Speaker 162 25:10
here today. As far as, do you need to talk about the second finding?
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Speaker 4 25:18
Oh yeah, we have a second. Thank you for that. I mean, I'll step away, sir. I'm
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Representative Richard Womack Unverified 25:23
sorry. Thank you, thank you. Yeah, so explain
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Speaker 162 25:27
that one to us, where we're at on it. Sir, this is totally on me. The funds that they're talking about are fuel funds and the Delphi funds that I draw down from the FAA. Because they're not physical checks that I handle or cash that I handle, it was a brain function on my side that I don't see that, I don't handle that. it goes into the bank accounts it's accounted for i did not realize that i was needed to be making physical receipts for that and there again i'm i'm working on correcting that on my side it was just a not really not realizing it is income that comes into the county that that i need to
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Representative Rick Beck Unverified 26:12
be accounting for okay thank you representative beck did you have a question yes you're great I really do appreciate you coming down here and explaining this to me. The question I often have when we have findings like this is to maybe take one step further. I ask you to take one step further and make sure, because you didn't know, and therefore it got somewhere in a procedural manual or something like that for the next manager to make sure that it's written down that this is taken care of so it doesn't go deficient. the future. I would ask you
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Speaker 162 26:52
to do that. Thank you. Yes sir and I'm working on that. I'm I'm ex-military so I believe in an SOP and there was something like never left something like that so I am working putting those things in place so when I leave there will be adequate things in place where that can be
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Representative Richard Womack Unverified 27:11
taken care of. Thank you. Good thought Mr. Beck. All right any question or comment on that finding while we're here. All right then without objection we will now file this report. Thank you
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Speaker 10 27:27
for being here today. Continuing on page one we have Isard County 2024 under the treasure. Arkansas code requires accounting management to maintain adequate financial records. The financial statements contain omissions and errors that are considered material and specified below. The general fund and financial records contain misstatements of revenue and expenditures of just over $371,000 and $3,200 respectively. Primarily due to posting errors and misclassifications of revenue. I believe we had County Treasurer Warren Sanders here today to answer questions. Thank you,
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Warren Sanders Unverified 28:03
sir. My name is Warren Sanders, this is your County Treasurer. From the auditors, basically I overstated the revenue from County General S. simple transfer and I understated the revenue using I should have used the different revenue code for property taxes treasurer's Commission and collector's Commission I've worked very closely with my auditors in 2023 and 2024 to try to fix that for 2025 our county software had a had templates in them that sets these revenue codes and they stay there and we use this this template once a year. I inadvertently put the wrong revenue codes in there when I set it up and so in 23 whenever they found this finding I fixed it on my spreadsheet that I worked off of. In 2024 I didn't fix it so that it was two years in a row. We have since fixed it. We've worked with our auditors and I've And I've worked with fellow county treasurers to make sure it was correct. And I've also requested that we have a training for final settlements in February for all the county treasurer so that we can figure out how this doesn't happen again. Okay, thank you.
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Representative Richard Womack Unverified 29:27
Were you able to, just out of curiosity, to fix your template? Yes, yes sir. I did. Not just the spreadsheet?
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Lisa Cogburn Unverified 29:38
Yes sir, I did. Yeah. Okay. Alright. Any question from committee? All right, not seeing any. We'll move
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Representative Richard Womack Unverified 29:50
on to the next finding, please. We just
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Speaker 8 29:54
need to file that one, that's that, just file that report. Okay, okay, without objection, we're gonna file that report, thank you.
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Speaker 10 30:01
Continuing on page two, under Deferred Reports, We have the city of Alexander, 2023, under the district court clerk. Ballons remaining in the bank were not identified with receipts issued for cases not yet adjudicated and payments made on all unpaid individual time accounts, as required by Arkansas Code. This is a repeat finding in the previous three reports. I believe we have district court clerk Janet Guest here to answer questions.
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Speaker 178 30:31
Yes, I'm Janet Guess. I'm the
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Speaker 181 30:38
district court clerk at Alexander. Thank you for being here. Thank you. In response to this finding, the auditors believed that the change between the 2022 and 23 in their professional judgment was a change due to deposits increasing from 2022 to 23. The bond and fine deposits were approximately $180,000 in 2022 and $409,000 in 2023. Upon the auditor's recommendation, and I've been working with them, I am going to be instituting a monthly audit on the bonds pending to take the calculation and see where the changes are coming from and to review all the old cases in the criminal bonds pending to see how many have been adjudicated or if there are other problems. Hopefully we will find some resolution to this error and there won't be any further findings. Okay, thank
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Representative Richard Womack Unverified 31:47
you. Any question from- I got a question. You're recognized, Representative? Thank
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Representative Jack Ladyman Unverified 31:53
you, Mr. Chairman. uh thank you for being here i i really have a question on that first if i'm reading this right a council member got a credit card in their name and gave that to the police chief and he spent money like eight thousand dollars on that is that what happened
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Speaker 178 32:14
no that's the city i'm just the
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Speaker 185 32:16
Oh, okay, sorry about that. No problem. Thank you. I
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Speaker 12 32:34
apologize, I was distracted. Oh, the first finding. No, the city was not, we have a new quarter treasurer and committee rules are we give them one year. This wasn't the quarter treasurer that's in office now, correct me if I'm wrong, wasn't in office during the time we audited for 23, so it wouldn't be her mistake. So the normal rule of this committee is we don't invite them until they make that mistake. The elected official in office makes the discrepancy two years in a row. That's the rule. But if
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Speaker 187 33:00
you want to meet them here, we can invite them up here. A follow-up. So do you pay the bills?
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Speaker 188 33:09
Are you the treasurer? Me? No. Court clerk. Okay, I'm sorry. I'm just the court clerk. I'm not the treasurer. And I'm not the office manager. I apologize. That's okay.
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Speaker 76 33:20
Oh, that's right. Oh, I apologize. It's been a while. Yes, this finding was, she was here last month and addressed that finding. Okay, that's right. She wasn't here
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Speaker 12 33:30
last month, but it was a PA finding. That finding has been referred to the prosecuting attorney, and we addressed it in the deferred meeting. I apologize for that. But, yes, but, you know, this committee has the discretion to do what, you know, to invite whoever they want to and defer this report if that's what you want to do and discuss it.
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Representative Jack Ladyman Unverified 33:53
Well, I wanted to know how somebody other than the leadership of the city would be able to get a credit card, but a bigger question would be how did the bill get paid?
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Speaker 73 34:04
I mean, but they're not here, so I can't ask them that. Michelle's here, but I'm
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Speaker 12 34:09
going to try, and you correct me if I'm wrong, Michelle. Well, the credit card was taken out in the name of the individual, not the city. And they were submitting these bills as for reimbursement to be paid for that. And that was the documentation they provided. And that's obviously, it's not within compliance. So we wrote the finding and referred it to the prosecuting attorney for them to look into it deeper.
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Speaker 66 34:41
Okay. doing the court work what's what's the question sure sure
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Senator Mark Johnson Unverified 34:47
i'm sorry michelle i'm confused i just have a question mr chairman yeah you're right thanks sir uh michelle the credit card was issued in john doe's name like john doe city of alexander but the bill went to who the city clerk We're looking. That's my
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Speaker 196 35:11
question. Who approved the payment? We
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Speaker 198 35:13
presume that being a city clerk would
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Senator Mark Johnson Unverified 35:23
get that and say, hmm, what am I supposed to do with this? Well, they paid it. As Representative Layman said, this is highly unusual.
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Speaker 153 35:35
Okay, well then we can be patient on that Mr. Chairman.
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Senator Mark Johnson Unverified 35:39
Thank you for letting me ask a question. I apologize
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Speaker 186 35:43
for, shouldn't have tried to file that one in two different meetings. That's my, Representative
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Representative Johnny Rye Unverified 35:56
Rye, did you have a question? Yes, sir. Mr. Chairman, that $8,018 for Purchases made with the card 5521 was examined in 5057 did not have proper documentation to support a business purpose. Just wonder if all of that was used for the county or? I think that's what the prosecutor will figure out. Okay. He's looking at
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Speaker 204 36:22
that. Thank you, Mr. Chairman. You bet. I appreciate you, sir. You
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Representative Richard Womack Unverified 36:27
bet. All right. That was a little confusing. Is there any other question or comment while we have here at the table? All right. Seeing none. Without objection, we're going to go ahead and file this
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Speaker 10 36:49
report. Thank you for being here today. Thank you. Continuing on page three with deferred reports, we have the town of 56, 2024, 23, and 22, under the mayor and recorder treasurer. A fixed asset listing was provided, however, the listing did not include all additions, deletions, or control totals in noncompliance Arkansas code.
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Speaker 6 37:11
This is a repeat finding in the previous two reports dating back to 2017. Under the record of Treasurer, receipts were not issued for all funds received in noncompliance Arkansas code. There's a similar finding has
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Speaker 10 37:24
been noted in the previous six reports dating back to 2009. I believe we have Mayor Ernestine McDaniel and Recorder Treasurer Christina Byrd here today to answer questions. Okay, thank you for being here today.
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Representative Richard Womack Unverified 37:36
Please state your name and affiliations for the record before we begin, and then we'll be happy to hear your first statements.
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Speaker 151 37:43
Ernestine McDaniel, 56. Mayor. Oh, yeah, I'm the mayor. All right, thank
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Speaker 208 37:49
you. I'm Christina Byrd, I'm the Recorder Treasurer. Okay, thank
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Speaker 210 37:54
you. Do either of you have a prepared
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Representative Richard Womack Unverified 37:57
statement or just like to share your thoughts on this finding? On the fixed asset? Yes,
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Speaker 211 38:07
ma'am. I do those. That's all on
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Speaker 208 38:10
me. We're such a little town. We don't buy hardly anything. We're just making it. And I need to be in numbers, maybe even pictures of it. But everything that's on there, that's all we have. The land, everything. But I want to ask you a question. Okay, on some of the buildings that we've got, like the old City Hall or DAV building and the land that's on it,
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Speaker 213 38:47
all I have on them are, I mean, how
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Speaker 211 38:52
much they're worth is how much we pay on the insurance for them. Do I
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Speaker 214 38:59
need to put that on there? Mr.
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Speaker 12 39:02
Archer, is there somebody here? Yeah, well, yes, I can answer that question. As long as you document how you determine the evaluation, either going to the assessor's office and give their evaluation of it or insurance person's, the actual cost is the original cost. It's what we carry items on cash basis accounting is cost basis. If that's not available, we can document a secondary method. And either one of those would be insurance valued or assessed value at the
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Speaker 208 39:31
courthouse would be acceptable. Okay. That's what I'll do. I mean, I have the insurance on the buildings and how much they paid for the trucks. But that is about all I've got. The value of it, I know, it needs VIN numbers, right, on all the vehicles?
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Speaker 12 39:54
Yes, ma'am. We have to have a value of all the assets that the city owns above whatever level y'all set in your
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Speaker 213 40:04
ordinance or resolution. We have a lawnmower that we use to mow all the city property and it's 10 years old and you want me to get a VIN number on that and what was originally we paid for it back in 2019?
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Speaker 219 40:24
I haven't been there that long, but yeah. You
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Speaker 220 40:29
can reach out to your auditor that was
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Speaker 12 40:33
there, and they can give you a little more detail on exactly how maybe we can get some alternative methods to get some stuff that's not available. We can get some alternative values on these things. They can help you with that. Okay.
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Speaker 208 40:46
Well, I'll do it. I'll do what I can. All
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Representative Richard Womack Unverified 40:50
right. Thank you. Representative Dalby, you have
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Representative Carol Dalby Unverified 40:52
a question? Yes, sir. Thank you, Mr. Chair. Thank you. Thank you y'all for being here. My suggestion is really more of a suggestion and not a question is was exactly what Mr. Archer said to get with your auditor but also the Municipal League. They're sitting off over here to your left and they can they can give you a lot of guidance and they'll be happy. There's a field representative for your area and if you'll just stop and visit with these three people right here they'll tell you if you don't know your field representative they'll help you with that and they maybe can get you straight and down what you need to do. So I would suggest before you leave here today that you talk with those
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Speaker 129 41:34
individuals. Okay, thank you. All right, thank you. Are there any
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Representative Richard Womack Unverified 41:38
other questions or discussion on that finding? All right, seeing none, we'll move to the next finding, please. Do you have any statement regarding that one?
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Speaker 210 41:51
I went over the receipts and the books, and it said it goes all the way back to 2009. I didn't come in office until 19, so I can't answer for that before me. But as far as me, I've been updating the book work since the audit and have found there are interest payments from the bank, the monthly interest, that I did not have receipts for. And it's been an oversight, and I've been going back and making sure that every month I write down the interest from the bank. Okay, thank you.
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Speaker 132 42:22
Any question or comment from committee on this one?
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Representative Richard Womack Unverified 42:29
All right, seeing none, then without objection, we're going to file this report. Thank you, ladies, for being here today.
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Speaker 10 42:39
Thank you. Appreciate it. Thank you. Continuing with deferred reports on pages 3 and 4, we
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Speaker 6 42:45
have seven private reports for water and sewer reports that we have not yet received proper responses, and staff recommends we defer those seven
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Lisa Cogburn Unverified 42:54
reports. Okay, any discussion on that committee? Then without objection, we'll defer.
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Speaker 3 43:05
We have one report that's being certified to the
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Speaker 10 43:08
bond board and referred to the prosecuting attorney in the Attorney General's office. On pages five through seven, we have the city of Bull Shoals, 2024. And on page six of that report, we have under the recorder treasure. We have of the $10,000 plus in credit card payments tested, the city pay charges totaling almost $2,000 without supporting documentation in non-compliance with Arkansas code. Therefore, the validation of these disbursements cannot be determined. Of this amount, charges totaling $242 were paid from funds included in this engagement. Charges totaling $490 were paid from a water fund that has not been audited as a report date. And we were unable to determine the fund of which the other charges totaling over $1,200 were paid. On page 7, under the district court clerk, We examined district court records for the period January 1st, 2024 through April 30th of 2025 after receiving allegations of missing funds. The district court bank account and accounting records were not maintained in accordance with Arkansas code as follows. The bank balance remaining in the bank was not identified with receipt numbers for cases not yet adjudicated and the payments made for all unpaid individual time accounts. The bank account was not properly reconciled each month. Cash receipts journal was not properly maintained and was not reconciled monthly to the total bank deposits as shown on the bank statement. The cash disbursement journal was not properly maintained and was not reconciled monthly to total bank disbursements as indicated on the bank statement. Pre number receipts were not issued for all funds collected. City officials also provided copies of receipts and other documents obtained from defendants indicating payments made in cash were not credited to the court records. The receipt books of which these payments were recorded could not be located. Based on our comparison of district court bank and accounting records to documentation provided, we identified 13 receipts totaling $2,190 for fines and costs that were not deposited or recorded, and one receipt for $20 a money order that was not recorded but not deposited in the bank account. The United States Post Office Postal Service confirmed that the money order had been cashed. The court clerk who appears to have been responsible for making deposits resigned in March of 2025. This matter is being investigated by the 14th Judicial District Prosecuting Attorney in Arkansas State Police.
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Speaker 6 45:56
This finding has been referred to the prosecuting attorney and certified as a bond board. If there
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Representative Carol Dalby Unverified 46:08
are no questions, staff recommends we file this report. You recognize, Representative Dolby? I have a question for staff. If we could look at page six, about partway down, it says, Finding general fund disbursements exceeded total appropriations by $339,415.
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Speaker 12 46:26
Where'd that money go? It was, the budget just wasn't updated, wasn't amended at the end of the year. It was just, I mean, based on our review, they appeared to be regular city legal expenditures. It just exceeded the budget.
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Representative Carol Dalby Unverified 46:42
Okay, so, but you were able to account for the expenditures? Our test
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Speaker 12 46:46
did not indicate anything that was against code. Okay, because that
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Representative Carol Dalby Unverified 46:50
sure popped out at me. Large number. Thank you.
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Speaker 232 46:56
All right, thank you, any discussion or
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Senator Mark Johnson Unverified 47:00
question? Quick question I should have here. Sure, Mr. Archer, what proportion of their budget is $339,000? 39%. 39%, wow, okay. So let's just say as a budget, they're not being transparent to their citizens on how much city government costs. Okay, all right, thank you, thank you. All right, any other question or discussion?
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Representative Richard Womack Unverified 47:28
Then we will, without objection, we're
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Speaker 10 47:35
going to file that report. We have seven reports that we've referred to the prosecuting attorney in the AG's office. Starting on page eight and nine, we have Lone Oak County 2023. Under the county clerk, a review of payroll records in the county clerk's office for the period of March 13th, 24 through September 12th of 25 revealed over $4,100 in questionable payments. Of this, $1,470 was paid to employee A. Of that, over $1,100 is for overtime hours that did not exceed the 120 hours of comp time that must be accrued before cash payments are made according to policy established by the quorum court. $352 for unallowable leave with pay that was not, with unallowable leave that was not accrued or earned. $2,700 paid to employee B for overtime hours that did not exceed the 120 hours of comp time that must be accrued before cash payments are made and according to policy established by the Quorum Court. Sin refining was reported in the previous report. Under the Sheriff, a review of claims in the Sheriff's Office revealed over $4,300 in questionable credit card transactions, almost $2,400 without documented business purposes, almost $1,500 without adequate supporting documentation, just over $400 for lodging in Little Rock and noncompliance with county policy, which requires the overnight stay to be more than 50 miles from the employee's residence. In addition, over $3,900 in charges were misclassified per the County Financial Management System manual. We have County Clerk Don Porterfield here today to answer questions.
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Representative Richard Womack Unverified 49:40
Thank you. Thank you. Will both our guests at the end of the table please state
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Dawn Porterfield Unverified 49:47
your name and affiliation for the record? My name is Dawn Porterfield. I'm the Long Oak County Clerk. Thank
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Speaker 239 49:55
you. Jason Owens, Long Oak County Attorney. Okay, thank you. Do either of you have a statement you'd like to share for the committee? Actually, what we had discussed last year when I came has been corrected. The compensation during that time was still kind of an up in the air thing. So that was kind of back in that air back there, but it has been corrected. No one will be paid out unless it's 120 hours, period. A lot of these girls have been, as of this year, have been taking their comp time instead of taking pay.
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Speaker 129 50:34
Okay, thank you. Committee, do you have any question or comment on this one?
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Representative Richard Womack Unverified 50:44
All right, thank you. Okay, without objection then, we will go ahead and file this report. Thank you guys for being
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Speaker 10 51:00
here today. Thank you. Continuing under reports referred to the prosecuting attorney and the attorney general's office on pages 10 and 11, we have the town of Beaver, 24 and 23, under the mayor and the recorder treasurer. The town paid over $6,900 and over $9,200 to the mayor for park attendant services in 24 and 23, respectively. the town council minutes indicated ordinance number 1001 was adopted to authorize these payments however a signed and completed copy of this ordinance was not provided for audit inspection in addition the town paid over seven thousand dollars and over seventy five hundred dollars to the mayor's spouse for bookkeeping and park attendant services in 24 and 23 respectively without an authorizing ordinance in apparent conflict with arkansas code there are no this this fine has been referred to the prosecutor in the ag's office if there are no questions staff recommends we file this report okay
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Representative Richard Womack Unverified 52:02
do we have any question or comment discussion from the committee all right seeing none without objection
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Speaker 10 52:12
we're going to file this report continued on page 12 we have the city of central city 2024 under the recorder treasure A review of selected credit card transactions for the period January 1, 2021 through December 31st of '23 revealed disbursements totaling $985 with no supporting documentation or indication of business purpose and noncompliance with the Arkansas Code. Therefore, the validity of these disbursements could not be determined. In addition, the City incurred $137 in late fees related to credit card transactions. there
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Speaker 6 52:43
are no questions from the committee staff recommends we file this report all right any
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Speaker 146 52:50
discussion from committee or question all right seeing none without objection we're going
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Speaker 10 52:57
to file that report we'll jump over to page 13 since we've already done daisy to the city of gravity 2024 under the mayor the city paid 975 dollars to an employee for heating and cooling equipment without an authorizing ordinance in apparent conflict with
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Speaker 6 53:15
arkansas code this finance been referred to the pa and the ag there are no no questions from the committee staff recommends
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Speaker 146 53:22
we file this report any question or discussion committee all right without
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Speaker 10 53:32
objection we're going to file that report continuing on page 13 we have a private audit report for the ralston water department 2024. the following deposits totaling over 12 000 did not match the total of the corresponding daily receipt report this finding has been referred to the prosecutor and ag's office so no question staff recommends we file this report are there any questions from
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Representative Richard Womack Unverified 53:56
committee or discussion all right seeing none without objection we're going to
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Speaker 10 54:03
file that report page 13 we have the thornton waterworks 2023 and this one's this one of those engagements that's on our was on our 2022 delinquent water report and um the 22 was filed in in the december meeting and the response for that um it's also with the prosecutor and they acknowledge the shortage a shortage in the 22 report this is the 23 report and the finding in it is the following and deposits totaling over $12,000 do not match the total of corresponding daily receipt reports. And it's also been filed with the prosecuting attorney in the AG's office. And just a staff note, we have also
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Speaker 12 54:43
received the 24 audit, so their funds have been released for Thornton. All right, thank you for that.
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Representative Richard Womack Unverified 54:50
Are there any questions from committee or
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Speaker 146 54:53
discussion on that one? All right, and then without objection, we're going to file that report.
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Speaker 228 55:03
Okay, we have three reports
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Speaker 10 55:06
with repeat findings. On page 14, we have the city of Green Forest 2024. The city clerk, Morgan Darby Gonzalez, was invited here today, and I don't believe she's
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Speaker 6 55:22
here. She did contact me and asked to be deferred. So staff
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Speaker 229 55:31
recommends we defer this report.
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Lisa Cogburn Unverified 55:33
Okay, any discussion on that? May I have a motion from somebody? All right, we
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Speaker 146 55:39
have a motion and a second to defer. Without objection, we're gonna go ahead and defer that report. Thank
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Speaker 10 55:48
you. Continuing under findings with repeat, reports with repeat findings. On page 14, we have the town of Ozan, 24 and 23. Under the mayor, the minutes of the governing body did not document the review of the findings and recommendations and actions taken by the governing body for the prior report as required of Arkansas code. A similar finding was noted in the previous three reports dating back to 2016. The town was in non-compliance with Arkansas code as follows. Budgets were not adopted for the general and street funds in '23. A budget was not adopted for ARPA funds in '24. The budget could not be provided for the general fund in '24. This is a repeat finding as well. We have Mayor David Stalsworth Jr. here to answer questions.
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Mark Peppel Unverified 56:42
All right, Mr. Mayor, thank you for coming today. If you wouldn't mind, just state your
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Speaker 245 56:47
name and affiliation for the record, and then we'll gladly take your statement. My name's Dave Stalsworth, Mayor of Ozan, and we are making the corrections that are on this, on all your
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Representative Richard Womack Unverified 57:02
findings, for sure. Okay, any question from the committee or discussion on this? All right, seeing none, without objection, we'll go ahead and file that report.
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Speaker 10 57:16
Thank you for being here today. Thank you. Continuing with findings, reports with repeat findings, on page 15, we have Lee County 2024, under the District Court Clerk. The following items were noted in the analysis of the District Court bond and fine bank account and noncompliance to Arkansas code. The bank reconciliations were prepared for the city and county accounts, but were not accurate. Cash receipts journals were not properly prepared for the city and county accounts. Balances remaining at year end for the district court accounts, city, county, circuit, and small claims in the amount of 61,000, 18,000, 44,000, and 21,000 respectively, were not identified with receipt numbers issued for cases not yet adjudicated and payments made on all unpaid individual time accounts. The district court accounts for city and county had negative ending balances due to errors in settlements. This is a repeat finding from the previous year. I believe we have district court clerk Sonja Thorne here today to
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Representative Richard Womack Unverified 58:25
answer questions. Thank you. If both the guests at the end of the table would mind for the record, please state your name and affiliation and we'll be glad
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Speaker 247 58:34
to hear your statements. Sonja Thorne, Lee County
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Speaker 248 58:37
District Court. I'm Jason Carter, I'm the district judge for Lee and Phillips County. Okay, thank you for being here today. I'll just say we've talked with the auditors. When Ms. Thorne started in the middle of 22, I think, there was no training for new district court clerks. And this district court accounting law is fairly complex. I don't know most of it. know enough to get through the audit meetings and that's about it. She has worked, worried herself to death trying to get this stuff together, get it right. It's not been right before she got here. It seems like in trying to get things right, we've kind of made a mess and that kind of seems like what we've got there. But she's been working with the auditors. She knows what she needs to do going forward. We're going to continue to work with the auditors. She's built a pretty pretty good relationship with the auditor we've had most recently. And we're going to do our best to make sure that we get this right and don't
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Mark Peppel Unverified 59:44
have any future findings. Okay, thank you. So sitting here today, Ms. Thorne, you think you've got
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Speaker 249 59:50
a good handle on what? I'm trying my best. To the best of your understanding, you've
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Speaker 247 59:55
got a handle on it? I talked to the auditor this morning and, you know, she's walking me through how to get everything situated, but we're trying our best to
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Speaker 250 1:00:03
get and take on compliance with the way it's supposed to be. And I
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Speaker 248 1:00:08
will say she has reached out to other court clerks, she's reached out to AOC, she has reached out trying to get help from other people and has not really been very successful but it seems this auditor that we're working with now is, she has been extremely helpful and so I'm confident we're going to be better off going forward. Okay, thank you. Thank you
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Representative Richard Womack Unverified 1:00:28
for being here today. Are there any questions, comments from committee? All right, seeing none, we are going to, without objection, we will file this report. Thank you for being here today. All
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Speaker 10 1:00:43
right, thank you all. We have two reports that have findings. They're both private reports. The Quinn Water Association, March 31st to 25, private report, and
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Speaker 6 1:00:52
the Strong Water and Sewer Fund for 23, a private report that we have yet to receive proper responses from. The staff recommends we defer these to which time we get a proper response.
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Representative Richard Womack Unverified 1:01:04
Okay, any question or discussion? All right, may I have a motion? We have a motion and a second to defer these reports. So without objection, seeing none, we're gonna go ahead and
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Speaker 10 1:01:18
file this report. On pages 16 through 21, we have 19 reports with resolve findings. Staff, what?
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Speaker 3 1:01:24
Okay, we need to correct it. I'm sorry? Yeah,
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Speaker 186 1:01:28
we need to defer those two reports. Thank you, Charlie. Those two water departments, he said, you said filed.
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Representative Richard Womack Unverified 1:01:35
I said filed? Yeah. Okay, I made a mistake, committee, I'm sorry. I said to file those reports instead
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Speaker 252 1:01:41
of defer. How do I strain that? Okay, I
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Representative Richard Womack Unverified 1:02:27
made a mistake committee, I'm sorry, I said the wrong word the second time. May we have a motion to defer, and do I see a second? I see that, thank you, without objection we'll defer
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Speaker 3 1:02:42
those reports. Thank you committee for your patience. On page 21 through, I mean 16 through 21 we have 19 reports with
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Speaker 6 1:02:48
resolved findings. Staff would ask that we take a minute to review those for the committee and if you have without any questions, staff would recommend we file these 19 reports.
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Representative Richard Womack Unverified 1:03:01
All right, everybody take a minute to look over that, please.
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Representative Carol Dalby Unverified 1:03:31
I just have a question. quick question for staff. On Washington County, it shows unauthorized withdrawals of $28,109,000 and $31,000 were made, but then they recovered it. Was that a phishing scam or was that somebody taking money from them? I mean, like an employee. It wasn't turned
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Speaker 6 1:04:22
over to the prosecutor, so that would tell me that it was just a check that was stolen and someone did an unauthorized check where they change the
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Speaker 12 1:04:29
payee on it from outside the government entity. Okay, thank you. All right,
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Representative Richard Womack Unverified 1:04:33
everybody's had a chance to look at over, get any other questions? All right, seeing none, without objection, we're gonna
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Speaker 10 1:04:47
go ahead and file that. On pages 22 through 23, we have 53 reports with no findings. Staff
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Speaker 6 1:04:53
recommends that we file these reports. All
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Representative Richard Womack Unverified 1:04:56
right, any question or discussion from committee? All right, without objection, we're going to file those reports. That was the end. Is there anything that the committee needs to discuss before we leave today? All right, seeing nothing. The next meeting of Legislative Joint Auditing Committee will be held on February the 12th, 2026. And this meeting will stand adjourn. Thank you for your attendance. Thank you.
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Agenda

A. Call to Order by Chair

B. Adoption of Minutes of the December 11, 2025, meeting

C. Update on Private Reports – Delinquent December 31, 2022, Water and Sewer Reports

D. Update on Private Reports – Delinquent December 31, 2023, Water and Sewer Reports

E. Discussion of Act 709 of 2021, Repayment of Street Turnback - Daisy

F. Review of Reports (Refer to the Synopsis)

G. The next meeting of the Legislative Joint Auditing Committee will be held on February 12, 2026.

H. Adjournment

500 WOODLANE STREET, SUITE 172 • LITTLE ROCK, ARKANSAS 72201-1099 • PHONE: (501) 683-8600 • FAX: (501) 683-8605 www.arklegaudit.gov

Speakers

Representative Richard Womack Unverified
64 segments
Speaker 3
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Speaker 6
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Speaker 10
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Speaker 12
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Lisa Cogburn Unverified
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Senator Matt Stone Unverified
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Senator Mark Johnson Unverified
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Mark Peppel Unverified
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Representative Jack Ladyman Unverified
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Representative Carol Dalby Unverified
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Senator Ben Gilmore Unverified
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Representative Johnny Rye Unverified
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Representative Rick Beck Unverified
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Warren Sanders Unverified
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Dawn Porterfield Unverified
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