Legislative Joint Auditing-State Agencies
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Representative Steve Unger
Unverified
0:00
Prior meetings minutes that you should have received via email. Do I have a motion on accepting the minutes? Second. All in favor, please say
aye. Aye. Thank you. Next on the agenda is
a review of reports, and I'm going to recognize Mr. Bullington at this time. Okay. Thank you, Mr.
Speaker 9
0:23
Chair. Today we're presenting two reports that have findings, and we also have four reports without findings that are listed on page one of the audit summary.
Representative Steve Unger
Unverified
0:36
Without objection, we will file the
Speaker 10
0:44
reports without findings. Okay, the first report we have today with findings is the Department of Human Services FY24 report,
Speaker 9
0:51
and this report contains three findings. The first finding, the agency notified us of the apparent theft of almost $8,000 from the Disaster Supplemental Nutrition Assistance Program. By providing false or incomplete information to the agency, 13 employees received disaster temporary food assistance benefits related to the March 31, 2023 tornadoes that impacted
Pulaski County. The employment of the individuals was terminated, and the agency referred all cases to the Pulaski County Prosecutant Attorney's Office. The improper payments have not been recovered. The AAC also notified us of the apparent theft of $5,800 from the Medicaid program. Also, by providing false information to the AAC, one employee received Medicaid benefits to which they were not entitled. The employment of this individual was also terminated, and they also referred this to the Plaston County Prosecutor's Office. The improper payments of this one have not been recovered as well.
As I said, this finding was referred to the Prosecutor's Attorney, and we've also referred it to the Attorney General, and it was also certified to the Bond Board. The second finding, on July 31st, 2024, DHC received an email notification from the Treasurer's Office stating that a state warrant issued on behalf of DHS payable to the University of Arkansas Little Rock had been altered and cashed and that DHS would need to begin the affidavit process to get a new warrant issued to ULR. However, it was not until August 21st, 2024, 15 business days later, that DHC notified us of the theft of the almost $610,000 warrant.
The pay line on the redeem warrant was altered and replaced with the name of a private business, but the warrant amount and number remain unaltered. The Deputy Director and State Comptroller at DF&A became aware of the issue and notified the FBI on August 20, 2024. ULR completed the Affidavit of Forged Warrant form on August 22, 2024, and the bank was notified of the altered warrant the following day. The state's forgery claim was honored and the funds were deposited into the Treasurer's account on November 13, 2024. This finding was also referred to the
Prosecutant Attorney and the Attorney General. And the third finding, while performing an observation of assets from a current capital asset listing dated April 16, 2025, we noted five of the 50 equipment items sampled with a total purchase cost of almost $59,000 could not be physically located for observation and or properly identified for audit verification as follows. Three of the items could not be physically located, and none of these had been documented as lost, stolen, or obsolete prior to our sample testing. One item presented for observation had
Speaker 10
3:30
no identifying tag number or serial number listed in ACES, and one item was discovered
Speaker 9
3:35
as having been transferred to marketing and redistribution. However, the item remained on the fixed asset listing as a current active item. Additionally, 10 of the 50 items tested had documented dates in ACES as being last inventoried two or more years ago. During our review of asset acquisitions, deletions, and observations, we also noted the following. Two items were not capitalized at the correct amount. One item that was still on hand was removed from the ACES fixed asset listing in
error, and one item cited during observation did not match the description that was listed in ACES. Furthermore, we noted that the agency paid over $17,000 in error for
Speaker 10
4:13
sales tax levied on four vehicles purchased that were tax exempt. Mr. Chair, that concludes the
Representative Steve Unger
Unverified
4:21
findings for DHS. Thank you. Are there any agency representatives here? And if so, please come to the table and introduce yourself and make any statements if you choose to.
Speaker 20
4:45
Good afternoon, Renee Eichert, Chief Fiscal Officer, DHS.
Speaker 21
4:55
Brett Hayes, Chief Deputy Counsel, DHS. I would like to provide a
Speaker 22
4:59
quick update on the first finding related to the disaster snap fraud cases. We do have an update from the time that we initially responded to DF&A on these findings related to the status of those cases that were referred to the prosecuting attorney.
So there was 13 cases that were referred to the prosecuting attorney. Seven of those have been closed with restitution ordered. Some of those are convictions. Some of those are agreed to settlements. The restitution totaled $4,165, and we have collected $3,408 of that and have active claims on all those cases. We have four cases that are still pending with the Pulaski County Prosecutor's Office, and we have two that were dismissed.
Those cases were sent back to us, and we're in the
Speaker 23
5:53
process of issuing notices of overpayment so that we can collect those funds that were improperly paid.
Representative Steve Unger
Unverified
6:01
Thank you. Committee, do you have any questions? Mr. Meeks. Thank
Representative Stephen Meeks
Unverified
6:06
you, Mr. Chairman. My question is on the finding three, the five items that were missing. can
Senator Bart Hester
Unverified
6:11
you give us an update um i'm curious have those items been been found and we know what those items are i mean if you're missing like a stapler that's one thing but if we're missing a
car that's obviously a whole different category so
Speaker 27
6:26
i'm just curious what those items are so three of
Speaker 22
6:31
those items were uh server it server equipment that hasn't been used in quite some time um It's likely that those were disposed of when they were no longer being used. So we don't currently have those items on hand. One item was a piece of sewage treatment equipment that wasn't tagged. It's since been tagged and documented in ACES.
And the final item was a vehicle. It had been transferred previously to M&R. It just had not been updated in our fixed asset listing. Okay, so everything's been accounted
Speaker 28
7:06
for, then it sounds like that. That's correct. Excellent.
Representative R. Scott Richardson
Unverified
7:12
Thank you. Representative Richardson. Thank you, Mr. Chair. Going back to number one, I was curious, out of the 13 employees on finding one that received a disaster food assistance and Medicaid, were any
of those the same employee or same people receiving both?
Speaker 22
7:27
So on the 13 cases, I don't know specifically if any of those people were receiving Medicaid. But I can tell you that because of these reviews that we did, we made the decision as an agency to review all of our employees that are receiving any type of benefit that we administer.
Speaker 23
7:49
But, no, I don't know specifically if any of those 13 are receiving other services.
Representative Steve Unger
Unverified
8:03
Well, I do have a question on finding number two with the 15 days lag time. Who dropped
Speaker 22
8:13
the ball on that? So that was a misunderstanding on the part of our finance department. There was one of our staff members was notified by the treasurer's office of the fraud and that the treasurer was going to handle the affidavit of forgery. The misunderstanding on our part was that that included the notification to legislative audit.
It would have been about 15 days after that that our agency CFO, Ms. Eichard, was made aware of the forgery. At that point, we knew that we needed to notify legislative audit,
Representative Steve Unger
Unverified
8:55
and at that time we did so. Thank you. What
Speaker 20
9:02
corrective actions has been taken in this oversight? Yes, sir. We've instructed our, it's our accounts payable team that was notified initially. So they've been instructed to any sort of event like this that occurs from now on,
their first call will be to the chief fiscal officer.
Speaker 25
9:32
Thank you. committee do you have any other questions oh
Speaker 44
9:36
mr gonzales thank you mr chair why are you paying ualr
Speaker 46
9:44
six hundred thousand dollars that's a dcfs contract and i don't off the top of my head remember what that is brett
Speaker 22
9:53
do you i believe it's for training of our caseworkers uh i'm not sure on
the specifics, but if you'd like that information, we
Speaker 44
10:02
can get it to you. It doesn't have to be specific. I was
Representative Steve Unger
Unverified
10:14
just wondering what that was generally for. Thanks. On finding number three with the sales tax for the vehicles that were purchased, that kind of seems like a big deal that whoever was authorized
Speaker 38
10:26
to make that purchase should know that. So when it's my understanding from our DDS finance
Speaker 22
10:31
staff, when, uh, we went purchase the
vehicles and we have a, a card essentially that is a tax that shows that you're a tax exempt organization. When we were purchasing those vehicles, we presented that card, uh, to the revenue office, uh, we were, we were denied, um, uh, and required to pay the sales tax. It's my understanding that since then we've purchased vehicles and we have not had to pay sales tax going forward. Um, and currently we're working with
Speaker 23
11:03
DFL, DFNA to resolve that situation to get
the refund that we paid on that sales
Representative Steve Unger
Unverified
11:17
tax. Thank you. Are there any other questions?
Representative Dwight Tosh
Unverified
11:24
Oh, Representative Tosh. Thank you. Thank you, Mr. Chair. I just want to follow up. I think you said a while ago that, or maybe you said it, that the employees had been notified that in the future that they would also make someone aware.
I'm just curious. I kind of took that to mean that I guess my question is, has that been documented or have you come up with a new policy and procedure or did you just verbally tell them, hey, in the future this is what we're going to do or did you make it where it's part of your policies where they know there's no flexibility there that they have to follow those policies and guidelines or rules and regulations, however you refer to them. How did you handle that?
Speaker 20
12:09
Right. I believe, as Mr. Hayes says, it was a misunderstanding. Our AP team that received the original call, Treasury told them that they would make notifications, and I believe our AP team thought that they were also notifying legislative audit. When we found out that they had it, um, is when we, we were, we, I verbally talked to them to be, it, it's the head of our managerial,
Speaker 42
12:40
I mean, our accounts payable unit. She got the notification. So we will, we
Representative Dwight Tosh
Unverified
12:48
will do that going forward. Okay. And I guess, Mr. Chairman, my concern, that's a verbal notification. So, you know, somebody takes their, replaces them. And I'm just curious why it was not put into your policies and procedures manual to make it mandatory instead of just a verbal notification. And we'll certainly make that change. You will do that? Yes, absolutely.
Yes, sir. One more follow-up, Mr. Chair. And on the first finding, I think you said a while ago that two of the cases had been dismissed, if I understood you correctly. Why were they dismissed? With lack of evidence or just what was the reason for the dismissal? I'm not sure
Speaker 29
13:29
on the specifics as to why the prosecutor didn't pursue it further. Okay.
Representative Steve Unger
Unverified
13:42
Do you have a standard operating procedure employees who are trusted with purchases have to know? Can you repeat that?
Representative Steve Unger
Unverified
13:57
that question. Well, I'm just an old Navy guy, and so we have a thing called the SOP, Standard Operating Procedures, that you really need to be familiar with, particularly when you're trusted to spend money. Do you guys have something in your office like a three-ring binder that says,
when you get to this level of employment
and you're going to be spending the people's money, you have to know
Speaker 20
14:21
these things? Yes, sir. We do follow procurement law, and, yes, it's all written. okay in binders everybody gets training okay when they reach those
Representative Steve Unger
Unverified
14:35
levels and so i believe you're going to incorporate what representative tosh said about putting it in your training in the future yes sir
without objection i'm going to defer this to the next meeting so you can come back and tell us that it's actually written down? Absolutely. Yes,
sir. Thank you. Sure. You're dismissed. Thank you.
Speaker 9
15:18
Okay, Mr. Chair, the next report we have with findings is the Department of Parks, Heritage, and Terrorism, FY24 report, And this report contains two findings. The first finding, the Arkansas Department of Parks, Heritage, and Tourism notified us in April 2024 of the loss of receipts tolling almost $3,500 from one of its museums. An employee was terminated, and as of the report date, no criminal charges had been brought against the employee. This finding was referred to the prosecuting attorney and the attorney general, and it was also certified to the bond board.
In the second finding, during our review of the agency's various change fund cash accounts, the following exceptions were noted. At Daisy State Park, a $100 in camping drawer funds could not be located by the park staff at the time of our audit. And at War Memorial Stadium, it was discovered at the time of audit that the change fund had an $80 overage. War Memorial's change fund is unique because it has both a cash portion and a balance held in the commercial bank account. And this amount can be adjusted throughout the year based on the size of events that they're holding
and the need for additional change funds. The overage had not been previously discovered because the agency did not have procedures in place that would consider both cash and bank balances together when verifying the change fund. Mr. Chair,
Representative Steve Unger
Unverified
16:37
that concludes the findings for Parks and Tourism. Thank you, sir. If there are agency representatives here, please come to the table and introduce yourself and make any statements
Jami Fisher
Unverified
16:50
as needed. Jamie Fisher, CFO for Parks, Heritage, and Tourism.
Speaker 67
16:55
Shea Lewis, Secretary of the Arkansas Department of Parks, Heritage,
Shea Lewis
Unverified
17:00
and Tourism. Thank you, Chairman Unger. The Arkansas Department of Parks, Heritage, and Tourism takes all audit findings very seriously. And since these findings have come forward, we have implemented action plans and controls have been put in place to address the specific issues. We've also provided our information and responses through a management response
Speaker 70
17:21
letter that's also a part of the packet.
I'd be glad to take whatever questions that you have.
Representative Steve Unger
Unverified
17:29
Committee, do you have any questions? I see Representative Meeks. Thank you,
Representative Stephen Meeks
Unverified
17:34
Mr. Chair. Two questions, one on each. The $3,500 from the museum, do we think that
Senator Bart Hester
Unverified
17:38
was just misappropriated? Was it stolen? Do we know? We believe it to be stolen. Okay, and it says there's no criminal charges have been filed to date. Is that still an ongoing investigating, or are we just writing off our losses and moving on? The
Shea Lewis
Unverified
17:55
statute of limitations have come to a conclusion on that.
We did refer it to the Pulaski County Sheriff's Office as well as the Prosecuting Attorney's Office. During the time period that the statute of limitations expired, We were awaiting approval for a subpoena to Cash App for additional information, and that led to the time period and expiration. How short is that? That seems like this
only happened in 2024. I mean, if you don't know
Representative Stephen Meeks
Unverified
18:21
off the top of your head, I'm just kind of curious.
Senator Bart Hester
Unverified
18:29
It seems like it was a pretty short time period to try to react to that. I don't
Speaker 74
18:35
know it off the exact length of time off the top of my
Senator Bart Hester
Unverified
18:39
head. Okay. My second one is for War Memorial Stadium, and I was never a fan of the state taking over a football stadium. I just didn't think that was a proper role of state government. But obviously I was overruled at the time when we voted on it, and so now you all have this stadium. My question is, it's been in the state's possession now for a couple of years.
Was there no controls on this change account this whole time? And, I mean, I'm glad we found $80 more than we were supposed to have and not the other way around. But it just seems to me that as long as War Memorial Stadium had been operating over the decades that this is not something that was, you know, in place
Jami Fisher
Unverified
19:21
before now. Yes, sir. There have been mechanisms in place. This, as we mentioned, is very unique because there is a combination of the amounts left in the checking account as well as cash that fluctuates depending upon events.
I will say at the time of this counting it was right after the Razorback game, so they had a significant amount more in cash on hand, so that led to the overage. But, yes, now we're reconciling that after every event with
Senator Bart Hester
Unverified
19:47
my staff. Okay, and that's all being done electronically, I'm assuming, correct? Yes. Okay,
Representative Steve Unger
Unverified
19:55
thank you. Mr. Secretary, oh, I'm sorry, representing Ms. Burks, I believe, whose microphone is on. Ms. Brown, sorry, okay. Thank you, Mr. Chair.
Representative Matt Brown
Unverified
20:07
am i on it's red okay um i'm trying to find the language in here i heard uh mentioned that something had been referred to the bond board so um i'm trying to find where that's written but um so are all of these parks are they all protected uh by a bond i mean are the money monies protected by the bond is that what that's referring to i didn't quite follow I'm not sure. Okay. It's up at the top of page four.
Certify to bond board. Refer to prosecuting attorney AG. What is the bond board?
Speaker 10
20:54
Yeah, the bond board insures all state employees, so they provide coverage for state employees. If there's something like this, they'll cover, and I'm looking at Kevin. I can't remember the amounts, but there's an amount that they'll cover it up to and reimburse the state if there's a loss of state funds like that and involve the state employee.
Speaker 80
21:11
So have we been reimbursed or not? At this point,
Representative Steve Unger
Unverified
21:20
the bond board. Okay, thank you. Mr. Secretary, before the meeting, I sort of heard a plain language explanation. This is in finding number one of how this money disappeared. Could you share with the rest of the committee exactly
Shea Lewis
Unverified
21:36
how that happened? It's my understanding. At the museum itself, we have rental space available as a rental facility,
and the employee was taking money for the rent of the facility but never being entered into the cash register for that. And so was using, our understanding, different online payment options for that So the customers would pay that, but never did. Since that time, we have implemented a point-of-sale system and a reservation system that allows for the tracking of this appropriately.
Representative Steve Unger
Unverified
22:13
Thank you. Was this a single point-of-contact employee that was taking all the money for bookings, or were there other employees who handled bookings? i would imagine different employees
Shea Lewis
Unverified
22:27
handled bookings throughout throughout the year over but primarily this person was stationed at the front desk where those reservations would have happened okay one more question
Representative Steve Unger
Unverified
22:37
i'll let miss burks have it uh the question i had is somewhere
you know let's just say we were doing bookings in january and february and march somehow they just disappeared and everybody wondered uh what happened was was there a supervisor there that took note that something was
Shea Lewis
Unverified
22:59
off and and that is an issue at hand that we've made corrections to as well to make sure that there is verification uh versus payments collected versus the reservations or bookings that take place there was there was
Speaker 89
23:14
a there was a failure a service failure there
Okay, that just seems so common sense. Representative Burks. Thank you. Which museum
Speaker 91
23:24
was this? Mosaic Templars Cultural Center. In Little Rock? Yes, ma'am. And do all of the museums have the ability to rent out the facilities, or is that the only one that does that? I believe they all do, yes. Okay, and now at this time, is there a central office that can see or have transparency into that money coming into each of those
Shea Lewis
Unverified
23:44
museums? Yes, through that point-of-sale system that has been implemented,
instead of a manual system, it does allow oversight. Thank
Representative Steve Unger
Unverified
23:59
you. Mr. Secretary, have you had any further contact with the prosecuting attorney
Shea Lewis
Unverified
24:05
on this matter? We have. We have stayed in contact and asked requested updates along the way, and were awaiting approval for that subpoena and did find out at the last update that the statute of invitations had run out.
Representative Steve Unger
Unverified
24:21
It had run out. It had run out. Do we have the ability as a state to put a lien on
Speaker 97
24:34
this person's taxes? I do not know the answer to that
Representative Steve Unger
Unverified
24:36
for sure. I don't know the answer to that either. Representative Gonzalez. I
Speaker 44
24:43
would just like to say that I'm glad that y'all found the $100 at Daisy State Park, and that State Park is able to stay open and serve the great people of Arkansas.
Representative Robin Lundstrum
Unverified
24:51
So it's a great deal. Representative Lundstrom. On the employee that stole the money from the Mosaic Templar, did they withhold the last paycheck? Not that I'm aware of, no. Could we have something in the rules or in your regs that if you're fired for absconding with funds, your last paycheck should be withheld and those funds were taken from that paycheck? I do not
Shea Lewis
Unverified
25:19
know if we could create a rule like that.
That seems like DF&A or shared administrative services would have to create
something like that through the Office of Personnel Management.
Representative Robin Lundstrum
Unverified
25:31
Okay. I'll follow up. It seems like that should be a Captain Obvious thing regardless of what agency. all right thank you yeah private business would do it so I'm not sure why we you don't have that authority
Representative Steve Unger
Unverified
25:52
to do it I'd like to Mr. Bullington has some updated information on the prosecuting
attorney and I recognize him to speak to
Speaker 10
26:00
us yeah thank you Mr. Chair our office was in contact with the Will
Speaker 9
26:05
Jones office yesterday about this about this shortage of parks and tourism and that incredible investigation still remains open according to him and it's active and according to Mr. Jones as recently as November of 25 his office had requested additional information for parks and tourism and is waiting receipt of that information. Committee do you have any other
Speaker 91
26:29
questions? Representative Burks. I'm sorry, did you just say that they're waiting for information from the agency? That's
Speaker 86
26:35
what we were told from the prosecutor's office yesterday. Yes, ma'am. Are you aware of that?
Representative Steve Unger
Unverified
26:46
Not aware of that. That's news to us, but we can certainly follow up with them. Are there any other questions? Without objection, we will defer this report to the next meeting, because I would like to hear how this crime drama closes out.
Thank you. You are dismissed. New business. Our next meeting will be on the 12th of
February 2026. And we are adjourned. What's that? That's right.
Agenda
A. Call to order by Chairman.
B. Adoption of minutes of the December 11, 2025 meeting.
C. Review of reports. (Refer to the Summary)
D. New Business. The next meeting will be held February 12, 2026
E. Adjournment.
500 WOODLANE STREET, SUITE 172 • LITTLE ROCK, ARKANSAS 72201-1099 • PHONE: (501) 683-8600 • FAX: (501) 683-8605 www.arklegaudit.gov
LEGISLATIVE JOINT AUDITING COMMITTEE ARKANSAS LEGISLATIVE AUDIT JANUARY 8, 2026 STANDING COMMITTEE ON STATE AGENCIES
Documents
| Title | Type | Pages | Source |
|---|---|---|---|
| Agenda — LEGISLATIVE JOINT AUDITING - STATE AGENCIES, Jan 8, 2026 | Agenda | 2 | Official source ↗ |
Speakers
Representative Steve Unger
Unverified
Speaker 9
Speaker 10
Speaker 20
Speaker 21
Speaker 22
Speaker 23
Representative Stephen Meeks
Unverified
Senator Bart Hester
Unverified
Speaker 27
Speaker 28
Representative R. Scott Richardson
Unverified
Speaker 25
Speaker 44
Speaker 46
Speaker 38
Representative Dwight Tosh
Unverified
Speaker 42
Speaker 29
Jami Fisher
Unverified
Speaker 67
Shea Lewis
Unverified
Speaker 70
Speaker 74
Representative Matt Brown
Unverified
Speaker 80
Speaker 89
Speaker 91
Speaker 97
Representative Robin Lundstrum
Unverified
Speaker 86