Legislative Joint Auditing

Thank you for your attendance today are of first order of business of the adoption amendments of the November tenth two thousand twenty one meeting I think everybody has had a chance to review those. Our. Without objection we're going to consider those adopted does anyone have an objection to or comment on the minutes. All right we'll consider those adopted thank you. Next on the agenda is adoption of reports of the executive and standing committees there was no meeting of the executive committee yesterday so we'll move straight to the Committee on counties municipalities are representive Hillman you're recognized. Thank you Mr chairman the committee adopted amendments of the November 9 meeting the Committee discussed the city of cotton plants non compliance with the municipal council law staff report at the city's records were in substantial noncompliance with the municipal canon law and recommended that the city be notified that their records are in substantial noncompliance to begin the process to withhold turnback funds are Arkansas Code 1459117 the standing committee on counties municipalities recommended to the Legislative Joint Orting Committee it's a city of Khan a Cotton Plant be notified that their record drenched stance on non compliance with the municipal council law and order to begin the process of withholding of turn back. The Committee reviewed 5 reports differed from the November ninth twenty twenty one meeting officials from 3 entities will present to address repeat findings from these reports to previously deferred reports were filed and 3 were deferred to the February tenth twenty twenty two meeting of the committee reviewed 100 41 a current reports of these 1 was certified to the bond board and 6 or referred to the prosecuting attorney's officials from 7 entities were present to address repeat findings in their current reports the Committee filed a 100 36 current reports and deferred 5 so the facials could attend the February tenth twenty twenty two meeting to address these findings Mr chairman I move for adoption of these this report thank you representative are there any questions comments on this report. If all right CNN may have a second. We have a second of all those in favor of adopting this reports say aye All opposed no. All right thank you to stand up to the next will be the report and standing committee on educational institutions a representative Barry you're recognized. Any minute yesterday January six two thousand twenty two the committee reviewed the total of 19 all reports which consist of 3 higher education report 11 school district reports in for open enrollment charter school report for the year in June thirty twenty twenty one and 1 school district report for the year in June thirty twenty twenty Representatives from the University of Arkansas state university system in Arkansas to. University were present and answer questions from the committee related to findings in their respective all that school officials a representative from the Arkansas Department of Education Division of elementary and secondary education were present and answer questions from the committee related to the findings in marble school district audit report which was classified by the Division as being of physical and physical distress marble and Pablo school districts. The audit findings which were repeat findings of the audit report of university of Arkansas system was certified to the governmental bond book bonding board as well as referred to the up pulled prosecuting attorney. The all reports to the Arkansas State University Arkansas tech university and moral school district referred to the up will prosecuting attorney. The Committee filed the 19 current. Audit reports that were brought before it and just Mr chairman a move or adoption of this report. Thank you representive are there any questions or comments on the report. Represented the. Hello you're recognized. Thank you Mr chairman I guess I'm going to need staff to answer this because I just need a clarification representative very and I do believe he said that Honble Love. Did have repeat audit findings is pine bluff under state supervision currently. Yes Sir this. In there there under there on that I guess in the department of education I guess we need to have somebody from department of education I'm trying to I'm going to try to figure out what the these findings repeat findings are and and why. What we have a P. findings when this under state control. I think the repeat finding has to do with some bank reconciliation issues but we we have noticed some improvement on that but issue care we can have somebody the next meeting from the department of ed to go over that is strictly up to you. I guess I'm. Well now we don't I guess if if is it a $0.4 improvement I guess I'm I'm just kind of perplexed well informed the state control in. Well it's we will continue to have repeat fine and well it's something that we're again our audit report summing we're a post audit agency okay and and so I think they are under the state control but. As we have are going out and doing the audit's now which we're in the process of we have seen that there particularly on on that on the bank reconciliation that there has been some improvement on on that particular item. Okay do do we anticipate. Okay all right thank you Mr. I thank you any other questions or comments on a report. Senator Hammer you're recognized. Thank you Mr the repeat findings. Are they consecutive year to year or they findings in different categories like you had you had a finding of this in one year and when you're coming back and doing the follow up under state control it's a finding in the same category or is it different it's it's the same binding it's it's not necessarily it would be a new finding if it was a different category just because they have findings from year to year doesn't mean it's subsequent finding it would be in the same category and how many total findings that were repeat were there. In. There was only one repeat finding in that particular report okay thank you. Senate Chesterfield you're recognized for a question thank you having been on a lot at the same time. It is perplexing as to how. State control can still lead to findings however there has been marked improvement because we had a plethora findings before. And they have improved to some extent. But as I asked last year. And that and I did not bother to ask issue because it gets to be redundant if the state is in control why are there repeat fine. I don't understand it but I do know that there has been marked improvement in pine bluff and in. Was the marble and all of the others they have and they have markedly improved so I would I would just add that to what Mister Norman is that already. Thank you Mr chair thank you for that any other questions or comment on this report. All right C. N. 9 may I have a second to approve. Are we have a second all those in favor of adoption this reports say aye All opposed no. All right thank you understand adopted next up is the report standing committee on state agencies are representative Richardson you're recognized. Thank you Mr chair 6 reports were on the committee's agenda yesterday to current reports and 1 deferred report with findings were presented the report for the department of commerce was deferred from September and October twenty twenty one meetings due to a funding for the Arkansas rehabilitation services that involve payments to a vendor for services not rendered an update in additional detail related to this finding were provided. The Department of Human Services have findings related to bank accounts. Receding and fraudulent activity. Human Services as well as the department of energy and environment at findings related to equipment. Various agency staff members were present to report on how the agencies intend to address the audit findings and to answer committee questions during the meeting the committee adopted a motion to file the one deferred report as well as the 5 current reports I moved to adopt this report. Current thank you Sir are any questions or comments. All right we have a second for adoption all those in favor say aye opposed no thank you understand about the of next members on the agenda is the summary of inter collegiate athletic revenues and expenditures for 2000 2021. All. I know that it's in everybody's packet and made available are there any questions. On that because we do have. Senator Hammer you're recognized. Thank you Mr who okay area well we've got yeah that we okay we have a Nick fuller here with Arkansas department of ed Division of higher ed of. Do I assume you have a question for him I'll start there and if he can't okay you're recognized go ahead thank you on the student fees. Do we know or is there any way to track the percentage of students that actually attend sporting events that are being charged student fees as part of their. Cost. At that we do not collect that currently 8 that may be something we could look at the picture I'm not sure if there is a way to to track that for all of the sporting events though. Okay all of them have to get collection for the students are not. And that student fee that's part of the fee that they have to pay when they and role of this part of the enrollment fee long with all the other ones where the one of the managers more than likely it's mostly mandatory fee that all of the students on the campus Hey would you do a little research and see if there's any way that we can cross reference the number of students that attend sporting events verses those that don't so we could see what percentage of the students are actually benefiting from the student the yes Sir and follow up Mr yes Sir you're recognized. And and I'm asking because I don't know so forgive my ignorance but with students now being able to collect royalties you know for their name brand and all that is that calculated anywhere in here or is that a private arrangement between the student and the vendor and and there's no way to identify yeah that is that is not directly through the institution so it is not calculated these numbers okay all right thank you they Mr. Thank you for any other questions or comments. Senator Chesterfield you're recognized for a question thank you Sir are the student fees that we see listed here only to support athletics or do they do anything else are there other student fees in addition to this there are fees that that students pay for me to the institutions the ones shown on this reporter only the ones related to athletics so the fees could be much higher than we're seeing here yes because they've got a cover the post office they've got to cover the. Room yes ma'am can be thought technology fees things like that that that each institution charges and each institution has different fees that they charge the students but the only ones in this report are the ones related to athletics is anyway to break it out per student. At which we should be able to eat to get that for you I'd like to know per student what each one is bank as it seems J. norms when we see this figure here yes but it would be interesting to me to know the permit napa and we yes ma'am we we do have the the dollar rate that is charged for those from each institution thank you thank you and what you break it out by athletics and the other as well I would appreciate it so much thank you so much. Thank you. Any other questions. Senator Hammer you're back in thank you I noticed that some of schools across top record nothing for ticket sales. Can do you have an explanation for that. At. Other than a few of these any of the for FY 21 a lot of that was during the the first year of the code word a lot of the don't have okay athletic events okay all right so thank you some of those the the the the bigger sports may not have had once a collected ticket revenue. Thank you any other questions. I don't see any missed for thank you for being here today I'm sorry to tell you about what to see if we had a question but the thank you for being here and provide the information of. I guess that was just a presentation so we don't need to vote on that 1 next we're gonna move to Review reports our first special report is a prosecuting attorneys disposition of matters referred by legislative audit for the period of January one twenty twenty third December 30 first 2020 and is actually going to present it for us. Thank you Mr chair. This report is issued to provide this committee a summary of the disposition of matters referred to the prosecuting attorneys of the state's 28 judicial districts for calendar year 2020. We have been issuing this report for the last 16 years. Arkansas Code which is provided in appendix a requires the legislative auditor to notify the appropriate prosecuting attorney of transactions reflecting an authorized disbursements are unaccounted for funds or property by a public official or employee. These findings the findings related to a prosecuting attorney's office have to be referred to the Attorney General and the prosecuting attorneys are required to submit the disposition of the findings by June 30 of each year. Arkansas Code also requires that the legislative auditor notify the Arkansas governmental bonding board of improper transactions for which a public official officer or employee may be liable the bomb Board determines whether a loss is covered by the Arkansas self insured fidelity bond program in entities must meet at $2500 deductible per occurrence and as of right now the current coverage limit per occurrence is $300000. Some examples of matters that are referred to the prosecuting attorneys are receipts not deposited missing assets an authorizer and documented disbursements an authorized salary payments and authorize bank withdrawals improper use of entity credit or credit cards conflict of interest issues and non compliance with the public purpose doctrine. As shown on the screen using the first additional district as an example each judicial district report page includes a map identifying the county is located in the district in addition matters referred to each prosecuting attorney or detailed individually by the counties in the judicial district the prosecuting attorney during the calendar year of 2020 the governmental entity involved the year the matter was reported to the prosecuting attorney and information relating to the amount and type of matter it also includes the status according to the PA and payments by the bond trust fund when applicable. Presented in exhibit 3 on page 6 and 7 of your report is a summary of the disposition reports organize by judicial district. Shown on the slide is a portion of the exhibit for the first through the fifth judicial districts as well as the total for all districts as you will see this includes the number of matters referred the number of instances in which a charge was filed in case results number of instances in which charges were not filed in the reason why in number of instances in which the matter is still under review. As described on page 2 of the report case results are indicated by each prosecuting attorney and are designated as those with the conviction pending acquitted or dismissed prosecution declined insufficient evidence are those that remain under review. As shown on the slide criminal charges were filed in 25 matters referred to prosecuting attorney 9 cases are pending in court and the remaining 16 cases in which a conviction was obtained in sentence imposed are listed by judicial district in exhibit 4 on page 8 of the report. This slide shows information from exhibit for regard regarding court ordered sentences. This report and this exhibit. Identifies the entity audited the matter referred the amount of the improper transaction the position of employee or elected official against whom charges were filed the plea of the defendant and the court ordered sentence the terms of the defendant's court ordered sentences also presented in this exhibit. Of the 16 cases in which a conviction was obtained defendant's entered pleas of guilty in 15 cases and one defendant entered a plea of nolo contendere of these cases 13 were deposed disposed of in District Court or circuit courts and 3 were disposed of in federal District Court. This concludes my presentation of the disposition of matters referred by this committee to the state's prosecuting attorneys for calendar year 2020 representatives from the office of prosecutor coordinator and the Arkansas association of prosecuting attorneys are here to answer any committee questions. Really thank you ma'am are there any questions or comments from committee regarding this report. Senator Dismang when we're. Garner Senator Garner so do we need to have somebody come up or is this a staff kind of question I guess you can I mean I guess we have prosecute come up it's going to cost the government rate into some of the issue some of the terminology and things like that if that's possible looks like anybody come to the table today thank you looks like we have a. By Martin hands prosecutor coordinator and Teresa hi all present Arkansas prosecuting attorneys association. And of I guess is we're gonna give testimony if you guys don't mind remain standing and we will put you under oath or custom here. Of please both raise your right hand. Of Sturch Mr Bob can you state your name employer position. Thank you Sir. Thank you do you solemnly swear or affirm that the testimony you're about to give will be the truth the whole truth and nothing but the truth so help you god. Thank you. Please be seated if you don't mind it's a microphones. In the center Garner you're recognized thank you so I was kind of looking at the numbers here and it looks like between this time period re referred about 277 total cases the prosecutors with about 25 charges being filed that's about a 9 percent rate of conviction versus the referral is that correct it can you can you can you give us like a ballpark figure of what it is whatever in general when you know police are invited bring something to a prosecutor what that rate would be compatible to this that makes sense in general or do you have any kind of numbers occurred or that just a feeling you'll have. Thank you for the question center and let me ask if I could clarify for just a moment for me when you talked about the 277 being referred in 25 being charged on the question that you have help me to understand in case some misunderstanding are you wanting to know the process by which we determine whether or not criminal charges would be warranted in that position and is that what you're asking. I guess my question is does the rate of charges in an awfully convictions are different match up with kind of the General crime that prosecutors see does that make sense I know man thank you have a D. W. why was adverse to them getting their versus the reality of business within wrecked the normal course of action prosecutors have this raiders is lower or higher I guess is what I'm asking well and the response to that that I would give your or you're not looking at generally speaking you're looking at apples and oranges as far as Legislative referrals and your general crime statistics that we would come across in our communities and our state for legislative audit they're looking for missing funds and the fact that we only had 25 that we looked at for criminal charges to me it is an encouraging thing when we look at what is referred to us from legislative audit we have generally speaking a large number of folks have just made mistakes we've got human beings who are elected to positions in city councils in small towns and school boards and all of those things who've just made mistakes I've made errors in calculations or they've made errors and you know some of these we say that they might advance a salary to someone who is in need and it's really not a crime because it's not something that they've intended to do for a criminal act I've made a mistake they made an ethical violation legislative audit has called it we've looked at it we referred it back and said Hey you can't do this you need to follow this particular statute that prohibits you from doing that but it was not a crime of an it was not an intentional act for a criminal act it was a mistake and so there are ones that have come through and we're looking at about 1210 percent here that we did look at for criminal charges because we did look like Hey there is something that's here we need to look at this for a criminal intent and we've looked at those. And address those. Does that help understood yes ma'am this right question for staff I can since order. A little bit there's of the burden of proof is totally different as far as I have the statutory responsibility to refer things to prosecutor where there's an appearance of criminal activity and and obviously they have to they're the burden of proof that they have to file criminal actions much difference and I think the the statutes were designed that way to where from an audit standpoint if we found something that looks like there may be something we refer to the prosecuting attorney the prosecuting attorney then has the responsibility to investigate more look at it from a criminal matter we're not necessarily looking at it from the things that we referred to a a prosecutor say that these are prosecutable but it's a possibility of being so yeah I understand that I mean it's basically a law kind of yes thank you how to the question I'm asking is one the way this report is written they seem to be a catch all of either call controlled is filed or insufficient evidence when you break down the report that's not actually what's going on within these cases to insufficient evidence isn't necessarily the reasoning why they weren't prosecuted someone like they said they just decided to make a decision not to do that they decided that in some cases I read or people who actually left the state they could be prosecuted so I guess my question is more about was what for the other matters that we could kind of dive into your is a way to suss out what the prosecutors doing of prosecutors or you know using their discretion that they were elected to do not to press criminal charges that's one thing or there's insufficient evidence or there's you know they work out a deal I get all that for being a prosecutor one on one but if it's they're not pushing for because they don't want to deal with certain cases from us which I think there could be cases of that that's why I want sussed out through this report of possible work specifically I mean there's some that said they left the state they can't be prosecuted and there's some incentives under review but it appears that this over. Raw exhibit 3 doesn't national reflect that I guess I'm asking is can we get a more detailed breakdown of what actually is the reason for this not going for it that makes sense. Yes Sir appreciate that we we've tried to break them down into certain buckets or columns that without getting into all the the various rationales on on the the sheet that summarizes if you go back to the individual of the. I districts and you look at the particular audit I think there is more detail there but I guess we can I interrupt you like yes the judicial district to such 18 matter referred one charge filed an insufficient evidence for 15 or you look at it there's multiple ones say their own review so there's a distinction between a prosecutor saying you'll have evidence to prosecute versus San under review which is they could have the evidence do it understand what I guess what I'm saying is I'd like a better snapshot of what actually is going on with the prosecutors not that's not a prosecutor thanks more of our staff given the correct information senator on 8 yes ma'am on your example for and for district 3 just so I can explain. That district is is one where we had a new prosecuting attorney take over now and then COVID it happened. Previously before that in so. He was The New prosecutor was trying to go through all of these cases and he did not when I talk to him he did not want to just say those are insufficient evidence I can't do anything he wanted more time. To look into those cases in so staff decided that those we'd better identified is still under review okay that that that's fine but to me unless I'm reading this wrong that is not under review element it's under the incentive is vision evidence as charges not filed another thing too is I'd like to see besides out if a plea was done and there was actually that an action on that whether there was actually charges filed their convicted I think more information like that be better in future reports I guess what I'm saying senator would you take a look at page 8 and see if maybe that's what you're looking for that is our court ordered sentences and that will list the entity and then. The police if I entered. Those are the only ones that it without a throughout this report that actually have a place where we we were able to put on a chart yes that is that what you're looking for yes ma'am for the second part or just for the. Thank you thank you of. Senator Hammer you're recognized. Thank you of on page 7 of the report. Where it list insufficient evidence. My understand total value of that is a little over 3000000 my reading that right. So when you come up with a position that you have insufficient evidence you go back to the bureau and say we need more evidence or do you assume the responsibility at that point to do the investigation yourself to determine what more evidence you need to convict and the response that would be a is it's individual cases each time I will tell you let me give you an example we will get a referral from legislative audit and say Hey you know this particular city or can't our city or county or or department is missing funds and so what we will look at whenever they present us with the report we're going to look at it and see if it needs further investigation through law enforcement so we might call in state police we've done that and you know I've I've been part of that as well and working with that we will bring in law enforcement take a look at it have them investigated as well when you look down and you see the insufficient evidence generally speaking that's going to be that there is insufficient evidence to show criminal intent of what has happened here again we go back to human beings and make mistakes whether it's calculations whether it's we didn't know we couldn't buy tickets to the chamber banquet whatever it might be those are just mistakes that people made and thank god that's what we've got here for the most part is we've got folks who just made mistakes instead of folks within our ranks who are trying to steal from us and so thankfully we don't have the criminal intent there that we've got rogue folks stealing from us on a general basis so when you look at that insufficient evidence that's either going to be first of all that we're not able to show criminal intent second of all I very well might be that the evidence is just not there to have a person who can be charged with that if you will in the report there were several times that you would see in there the culprit is unknown that's just one of those things that sometimes you just can't figure out who did it especially when we start looking at these hacking incidents and you'll see. In the report that there were some incidents and I think it was I'll speak out term of sing it was Benton County where there were some hacking that went on with emails and payroll direct deposits you may never find that person and that's unfortunately where we are on some of those things for insufficient evidence so that's kind of the process that you're gonna look at is you know do we have enough here for criminal intent do we have enough evidence to even know who it is and then thoroughly even if we know who it is we think that we know who it is do we have the evidence to convict on that so that's kind of the process that we go through whenever we look at each one of these cases like all it does an amazing job getting us the information to show us and that we can track where that money is missing or the funds whatever it may be and then we go from there to determine how strong that cases and what we can do with it. Senator I can add the procedure the trees outline for how she handles this in terms of future referral to law enforcement or referred back to staff for additional discussion that is consistent with the rest of the state as well that is that me that maybe her policy but that is what others do as well in terms of referring to law enforcement referring back to staff for but it's that prosecutor discretion of for additional investigation before making that charge but that is can a consistent practice throughout the state our thank you. Thank you of representative Meeks you're recognized for a question thank you Mr so the the the question I have is kind of a follow up to what senator garner had asked one of my concerns is a lot of times in these situations or we're talking about elected officials city government officials and it's not uncommon for the prosecutors to have a strong familiar relationship with these people because I work with them on a regular basis. Do you or can you give confidence to awesome the people of Arkansas. That either through your for or through other methods that. That doesn't affect and influence are correct conflicts of interest. That would preclude them from prosecuting someone that probably should otherwise be prosecuted I think you it sounds like you kind of get the gist of where I'm going with this. Thank you for that question and I can actually answer that directly okay if you one of the things that was brought up in your report is that and and certain circumstances there are special prosecutors who were appointed through that for particular referrals in district 7 which is my district I actually had referred to the PCO to ask for a special prosecutor because one of the referrals that came was a small city within my county had firefighters who did a great job in their volunteer fire department and in response to that they were being honored and our small town in our county all tickets to the chamber banquet were of their fire departments were being recognized in their fireman and firefighters and I had to recuse from that and I did recuse from that because my husband is the chamber director and so when you come across those things and even though I have no doubt that I can take a look at that and make the right decision on that you have to step back and say I can't even have the appearance of impropriety or I can't have anyone question whether or not what I decided in this case should be coming into question because of that conflict there and what we do when that happens we contact that we file with the judge and say this is their we have a conflict we ask for a special prosecutor to be appointed we contact PCO a special prosecutor is appointed and in that prosecutor takes care of that case I'm removed from it and that is the process that we do throughout the state of Arkansas and so to be able to answer that I can answer that directly because in my report for the district 7 you will see that that occurred but I'm in that circumstance so that's something that you're voluntarily doing is that correct but the so there's not anybody. Per se doing oversight to make sure that. When you should that you do it is that question makes sense or is it you know is because my you know my you know representative McCollum might be my best friend here she's got in trouble and I want to make sure she stays out of trouble so I'm gonna take it personally just to make sure. That when otherwise I probably should have recused myself is that this is or somebody looking over to make sure that I'm accusing when I should be recusing there is no direct oversight we are elected officials constitutional and it you pulls it pulls down first of all. Do you have a caliber caliber of people who are elected in these positions as prosecutors who seek justice sure and do the right thing and I would not question anyone who actually said I need to recuse on this because we want cases to go through we want them to go well we want them to be done justly we do not want there to ever be a time when our community or our state questions our integrity and how we go forward with the case you will see a refusals now to follow up and that is to get like that even further if a person does not refuse if there is a criminal case that goes forward or another adult defense attorney on the other side there can also be a refusal filed by defense if they get to the point where they say you know we just don't think that you need to be the one sitting on this case are you need to be the one prosecuting this case the fence can always file that as well but. You for myself and I feel confident speaking for my fellow prosecutors we want it done right we want it done justly and we're going to do everything we can to make that happen I thank you thank you for that thank you. Thank you. Looks like Senator Garner you're back in. Yes Sir so let me kind of. don't know how many transactions it took to come up with 0.$25000000 but this is not going to be recoverable because it says. That the she's an inpatient therapy and remains on fit and is unlikely to ever be restored. Can you share something do you know any more details on this of why this up. This had been over protracted period of time. For specifics on the case I'd have to talk to somebody in Pulaski County you know Mr Jackie's office that was referred to you but I'm assuming in the course of the investigation it would have determined what was lacking in the in the areas that you described you know in terms of oversight or how many people were involved in an impossibly a need for making changes within that particular department to address the situation but as far specifics in regard to the case I I would have any idea but I'll be and I'll be happy to contact Leschi county and and let you know we get back to you if you want specifics of what can and can't share since the pending case I'm curious I mean I've certainly done enough bookkeeping in my life and been responsible to people for you know the bank deposits and paying the bills and stuff like that and I mean there's there's a paper trail and and when things don't add up for match up you know it it I'm not the only one who would know I mean if I have I can't imagine getting the bank deposit and put it in my I can't write can't imagine doing that and not getting calls unfortunately representative that behavior is consistent throughout this report and the reason they're in here's they have been caught probably because of the paper trail but but again I would I would agree with everything you're saying I'm saying that is that is not an uncommon procedure throughout this report that if you read through there you'll see all kinds of situations like that where you wonder how in the world was that not caught for which at least the prosecutor law enforcement audit to investigate that to see who all is involved in that process in the individuals that are are you know have the criminal intent or the ones that are charged. Thank you representative brown if I can add and the governmental bonding board will be able to hear this claim and pay out on this claim even if she's never convicted so the at the council will be able to recoup some funds if that once that claim is able to go on their agenda. Stringent requirements. They M. once the claim goes before the bonding board the members will ask what the county has done to what controls they have put in place to make sure this doesn't happen again and those types of questions will be asked before they approve the payment that's typically how it happens thank you mmhm. Thank you senator Hammer you're recognized for a question thank you thank my share go back to page 7 again on the numbers on the bottom. You start off with the nearly 4.4000000 that's the total amount of the dollars referred to you represented in all these cases correct. That appears to be so according to the report report from legislative audit all right then you deduct a being seeing you get over there to the insufficient evidence. And then you've got the under review I noticed slipping through the report that you know banks have paid back money you know where there were some of those fraudulent claims how's that accounted for in the numbers or where's that accounted for the numbers. And I will actually have to refer that back to essentially let her in okay the numbers Senator hammer on the insufficient evidence and of that $3000000 about $930000 of that is due to hacking and I will say I believe 95 percent of that that's that's an estimate percentage but about 95 percent of that all of the entities were made whole by the bank and that is because the entity caught. The hacking in a timely manner notify the bank and they were reimbursed. Just the way the the law is written we are still required to refer that to the prosecuting attorney but in those instances like I said about 95 percent of those hacking cases the entity was made whole okay and and I'm looking at this from the number cases convicted listening to the testimony which the site first time you also which said these NINETYFIRST questions we've asked you about this whenever this report comes out and I'm just trying to get to the bottom line that if of the 3930000 was made whole by the bank while there were questionable activities the net cost to the taxpayers. 930000 that was paid by the banks and it in my describing that currently of the 3000000 only about 900000 was result a hacking and then 95 percent of that. Right but that that was money reinstated to the community from which the hacking occurred that is correct shows far as a net loss we could lower that insufficient evidence what may still be insufficient evidence about $2000000 is the price tag attached to that that is correct okay all right an inmate talked just to staff about maybe breaking those numbers down the more because what I'm also interested is what's the net out to the taxpayer you got the criminal or suspected aspect of it but what's the net out to the. All right into that question me ask staff if I may Mister. Historically. If you were to do a look back over the last 23 years of the numbers that are contained on page 7. Is at 4.$3000000 the running average or have we threw all the efforts of leg audit prosecutors have we seen that number declined it seems like years past I've seen that number higher but I don't remember for slower D. all have any immediate recollection. I don't have that number in front of me but I will say there a couple years ago we had 2 significant frauds that were referred both of them close to $1000000 I think we have been county and Farmington so that number would have been significantly higher because we had those 2 in in one particular year that you know you take that out and I I would think this is. About typical but I can certainly get you an average of like 5 years if you would like that I'd like to see that I mean if nothing else if if we as long as we maintain the image to the public and the people that are handling you know the public's money if you screw up we're gonna find your run kitchen if we can prosecute Europe which in jail and make your life miserable if we keep that if we keep that messaging out there and that number I think it's reflective of that I'd like to just see that number to to see the return and then the last question might get entails world a little bit on page 109. In 110. It appears to be a if I'm correct interpreting this. It's involving a prosecuting attorney of. District and. What I what I interpret that say is that there was no documentation to back up the numbers. And the explanation for was that there was no policy and staff just signed a document that said we actually did this my interpreting that correctly. When asked for clarification are you talking about on 109 the the office of the prosecuting attorney audit because that was the 1 you're talking about yes TF vehicles okay. I think that is correct it's it's my understanding center and I and I did ask about this one it's my understanding that that investigation may still be on going I believe the attorney general's office his is made a visit up to that office in an interview to the the parties in the prosecutor's office and I don't think that investigation has been closed yet so I don't think that's a final decision it's it's it's in the report just yet that's that's my understanding I'll be happy to to double check on that for you but I'm I know that the attorney general's office investigators went up there and do the interview as I cried I still think it's gets a final decision has been made on what's gonna happen if there's anything they're not are the policies in place there are R. their policies in place throughout all the offices of because this appears to be in a situation where it's saying that there was not a policy in place. Until December sixteenth two thousand nineteen and that's what you're probably know ill will just we don't know we had to do we didn't have a policy so do all the prosecuting attorney's offices have policies in place now so that if I'm interpreting this right that's well I mean well I I would have to follow up specifically on that but yes Sir I would say that most prosecuting attorney's office I can't say all of them because obviously there's one here they're currently did not have one but have policies in place in terms of spending money that they belong to the office of I would say yes and I will be happy to follow up on that make sure that we all do but I'm not aware of any other office that does not have a policy I wouldn't even be aware of this but I'm I'm conceding that that information is accurate so I you know I can't explain why they did not have a policy but I will certainly follow up with the other 27 elected prosecutors and make sure there's policies in their office with regard to credit card expenditures in you know vehicle reimbursements things of that nature our thank you Mr could we get up could we get a follow up report next month about that to the Committee from Bob on that would you add that I respectfully ask you add that to the agenda to bring that back to us next month and what specifically would you like in the I just like to hear that you got policies and all 27 because it and it I just like to know that they're in all 27. Okay so so I guess this will if you if you would just. After you verify that or find the answer just relate to staff and then we'll. And in center just so I'm clear I mean they're they're individual elected official so I don't I'm not sure there's ever going to be a uniform policy that all 28 you'll fall the exact same thing because as elected officials will set the policy for their own office but I will follow to make sure there is in fact a policy but I I'm just wanna property that's probably not gonna be uniform in terms of how it's done in all 28 judicial districts the same way and I was happy if you want to send that to the staff and staff Senate at all I just like to know they've all got a policy because this is what happens when you don't right and I want to be specific in terms of the to make sure I ask the right questions so I'll I'll get with you in in I want to I want to ask about the specific policy that you want to know about so that I could you accurate information under wraps thank the fact that we don't have that in this report means the rest of them probably do something yes we ought to the prosecuting attorney so I mean if we if we notice a lack of documentation or policies we would note that in the report okay so this is a enters this the only one you found them thank you Sir have a policy yes Sir okay thank you thank you thank you. R. C. no more questions in the queue or any questions or comments from committee. Sir Chesterfield you have something. Okay all right see none and now without objection this report will stand review thank you guys for an honest every should. Our next up the special report on Lotfi a review of the selected financial records and internal control policies and procedures for year ended December thirty first two thousand twenty and Mr Knapp. One is where you're recognized. Questions. Thank you Mr chair of this report is issued pursuant to the to request that legislative audit review selected financial records and internal control policies and procedures of the local police and fire retirement system. The report also presents the results of an information systems review of lofty conducted by a LA staff. The objectives of the financial review were to assess selected financial records for compliance with generally accepted accounting principles internal controls for adequacy it here it's too low fee policies and procedures and membership records for accuracy and completeness. The objectives of the I ask for your to assess the adequacy of life these operating an administrative procedures practices and policies to obtain reasonable assurance that sufficient controls exist to insure the integrity of the computer network operations and accounting administrative applications protect data from unauthorized access provide for the continuation of operation and application processing capabilities and ensure proper segregation of duties. What he was created by state law in 1981 it's general administration operation or vested with the 7 member board appointed by the governor and the board employs an executive director and 7 members support staff to manage daily operations the staff also serving the same rules for the president for the pension review board. What he does receive an annual audit as required by Arkansas code and it's 2020 our report was presented to the Legislative Joint audit committees standing committee on counties and municipalities on Oct on August twelfth twenty twenty one The audit did not disclose non compliance with generally accepted accounting principles or deficiencies in internal control Luffy's complete audit report is available on the legislative audit website. As of December thirty first twenty twenty LaFee had total assets of approximately 2.$8000000000 in almost 30 3000 plan members for comparison purposes exhibit 1 on page 3 of the report provides information for Lotfi as well as 3 other state retirement systems the Arkansas teacher retirement system Arkansas public employees retirement system and the Arkansas State Highway employees retirement system. As shown in exhibit one Arkansas is retirement systems administered different pension plan types Lafayette ministers 2 types of defined benefit plans a cautionary multiple multiple employer plan in an agent multiple employer plans. The cost sharing plan allows the pension obligations to the employees of more than one employer to be pooled and the pension plan assets can be used to pay benefits the employees any employer that provides pensions through the plant. In an age of multiple employer plan assets can be pooled for investment purposes but separate accounts are maintained for each individual employer so that each employer share of the pool of assets is legally available to pay benefits of only its employees. At the inception of lobbies carsharing plan participation was dependent on whether the political subdivision already had a local plan in place as of July one nineteen eighty one After this date no new local plans could be established in all political subdivisions wanting to provide pensions to their fire and police were required to become members of the cost sharing plans. Additionally all employees hired after January first nineteen eighty three who are eligible to participate in an existing local plan were required to become members of the cost sharing plan. The agent plans comprised of existing local plans each maintaining local control they have elected to be administered by Lotfi the number of participating departments in each plan as of December thirty first twenty twenty shown in exhibit 2 on page 4 of the report. The first discussed in the results of financial review involves benefit payments benefit payments for both pension plans managed by lot the totaled 100 54.$2000000 and 2020. Legislative audit testing in this area consisted of selecting 30 individuals from the population of members who retired in 2020 and recalculating their monthly benefit based on the applicable plan provisions. Additionally alay staff verify the procedures for the preliminary and final review of the benefit calculations for properly segregated among staff. No exceptions to the applicable objectives were noted. Second day staff reviewed premium tax received by Lotfi as well as employer and employee contributions in 2020 like the received 50 $3000000 in premium tax with 52.6000000 allocated among various employers as shown in exhibit 4 on page 7 of the report. In addition to these premium taxes employers contributed another 14000000 and employees contributed 27000000. L. A. randomly selected 30 employees for verification I'm sorry 30 employers for verification of their 2020 employer and employee contributions including premium tax allocations through direct confirmations responses were received from all member employers with the cumulative difference between the 2 sources being less than 1 percent L. A. staff verify that the distributions of the insurance premium taxes by the department of finance and administration too low fee recorded in the Journal leisure without exception. LA issued one funding related contributions internal control procedures implemented by lot the required daily verification of the amounts reported as contributions in the pension administration system and general ledger to the deposit in the bank account. Because LAPFI did not maintain supporting documentation to verify that this control procedure was performed LA staff were unable to test compliance. The third your of review was a investments which totaled 2.$7000000000 at December thirty first twenty twenty with 2.4000000000 attributable to the cost sharing plan and the remaining attributable to the agent plan. LaFee board rule number 20 along with Arkansas Code defines the responsibilities of the board and investment consultant objectives and guidelines and the asset allocation yes a location is shown on exhibit 5 on page 8 of the report. The board has a fiduciary responsibility to manage assets for the benefit of members and the board retains an investment consultant to manage investment activity and monitor performance of the funds investment managers responsibilities of the board and the consultant or provided on page 7 and 8 respectively. LA issue to findings related to investments. During testing of investments investment activity A. L. A. staff were unable to document adequate reconciliation procedures between the holdings that activity as reported by the Office investment managers to office custodial bank as such the amounts reported in the journal ledger could be over or understated. During testing of investment sale a staff became aware that in 2003 LaFee purchased the 4 story building and accompanying lot at 620 west third street in little rock 1 floor which serves as office space for administrative staff and the remaining is used to provide where rental income through leases. Governmental accounting standards board statement number 72 requires assets that are considered investments to be measured at fair value according to law fee management to 1.$5000000 recording the Journal edger for the building and company law is the purchase price of these 2 assets and not the fair value which could be significantly different. But not reporting on the estimates of fair value office general ledgers misstated. LS 430 review was cash and cash equivalents which totaled 90 $6000000 at December thirty first twenty twenty as shown on exhibit 6 on the slide and on page 9 of the report. L. A. testing of cash and cash equivalents consisted of tracing the balances reported on the December twenty twenty bank statements for low fees operating account to the reconciliations performed by management and comparing to reconcile totals to the amounts reported a general ledger for reasonableness. For the remaining 11 months in the counter year alay staff observed the completed reconciliations which included management signatures noting their review. The year end cash equivalent showing investment account were traced to the statement balance from the custodial bank. No exceptions to the applicable ject is were noted. Fifth LA staff reviewed expenses related to investments in administration. Money manager fees investment consulting fees monitoring expense and custodial fees constitute some of Lafayette's largest expenses. Money managers typically receive quarterly compensation which is calculated as a percentage of the fair value of managed assets of the specific measurement date as outlined in the individual agreements the investment consultant investment monitor and custodial bank or all compensated an annual fixed amount. LA staff selected 5 money managers along with the investment consultant investment monitor and custodial bank for testing of investment expenses and noted one exception identified in finding number 4. The agreement with the investment consultant did not reflect agreed upon compensation the investment consultants most current addendum was executed on December first two thousand eleven and reflected an annual fee of $300000 in 2020 the investment consultant was compensated 800000. As mentioned previously staff serving the same road for both Lafayette and the pension review board and administrative services committee comprised of 3 members of the lot the board and 2 members of the pension review board govern these shared services each board develops an annual budget of expenditures excluding benefit payments and refunds of contributions. L. A. staff selected 63 administrative type expenses including travel and verify that they were properly approved cooperated by adequate supporting documentation and compliance with the law office board rules and other policies is. And we noted one exception which is defined in funding number 5. Reimbursement for lodging of a board member exceeded the allowable government rate government rate as specified in law the Board rule number 4. The final area of the financial review was membership data which encompasses the demographic service credits and payroll information recorded in a pension administration system. Plan actuary uses this data. To calculate the projection of future benefits and other calculations which are then used to determine employer contribution contribution rates and the total pension liability. LaFee management provided LA with various membership data reports from its pension ministration System. LA staff selected 30 active members from these reports to confirm date of birth gender employee department and contributory or non contributory status LA receive 17 responses confirming the information without exception and no response from 9 of the active members the remaining 4 were returned as undeliverable. As previously mentioned LA also conducted in information systems review to assess the adequacy of law office operating an administrative procedures practices and policies. Purposes of these procedures are listed on page 13 of the report and based on these procedures lot these eyes controls appear to be operating effectively with one exception. LaFee does not require network passwords to be changed periodically and is not maintaining password history. Yeah. The. Mister chair this concludes my presentation management response to the report is provided in appendix D. and representatives from Lafia president to respond to committee questions thank you Sir and we do have looks like a few questions so if those represents one mind go and make your way to the table. And when you get there just remain standing please. All right if you'll hit those microphones maybe to pick it up and the state your names for the record please. I'm David Clarke executive director a throw in your position an employer I'm sorry. Executive director of lobby thank you my name is Jennifer signs account to a floppy thank you. Denise Collins CFO well being all right thank you much if you would mind please raise your right hand. Do you solemnly swear or affirm the testimony about to give will be the truth the whole truth and nothing but the truth so help you god. Thank you please be seated looks like Senator Ballinger Europe first you're recognized for a question. Thank you Mr it in I actually questions for for staff but I don't mind why bother down here to go ahead and an estimate of. But let me just say this is something you guys were extremely helpful and working with a lot of staff and I appreciate that that's what I'm saying that wasn't necessarily the case and in years past with this year you guys were able to work with according to all the staff and I appreciate that the the issues they found are you willing to I mean are you saying yeah okay we we see that we see in a need to address this and we're going to we're gonna fix this moving forward absolutely and I think our response that was input put in the report I will be Senate we make sure the staff let of legislative audit's staff if they had follow ups please let us know but certainly how they identify things that we've we responded to that we felt like were appropriate so if there's a couple of items that we felt like they are internal controls are sufficient however we want to make clear that we were are continuing to review our processes on ongoing basis so that we don't have something slip past us okay thank I appreciate that it I wasn't missile you ask it's a after we have this conversation offline but affair going doing it now but we had a conversation the pass on the road between us you're a debate about whether you guys are a state agency or not we know legislative audit feels like you guys are an agency of the state and that's important because you guys don't have an appropriation the legislature doesn't pass an appropriation dealing with with your funds. But you know with with you know 2.$8000000000 that you guys manage do you feel like at a minimum that you should have more of a of a full audit on a regular basis if you're not gonna go through the preparation have the oversight of the of the the body that's supposed to do appropriations legislature would it would be at least a minimum of having more of a full and complete I understand you guys hire an auditor you guys do that and in a apparently it's it's all worked swimmingly that's great but but you know it won't always be necessarily you very upstanding people administering 2.$8000000000 that's a lot of money that the only people that really have oversight of the people you hire to provide oversight I just see the opportunity there for for you know the potential disaster the question is you know ET at a minimum if we're not going to do an appropriation have all that oversight would not be appropriate to have more of a full and complete audit on a regular basis. Okay Sir thank you for the question actually the lobby has a annual audit that is completed by ex external audit firm that reports directly to the board so it's not like staff hires the audit firm and then conduct the audit of Luffy's body of law requires that the ought to be filed with legislative audit and at least 1 time every 3 years legislative audit is supposed review law office audits however we should because we were filed on an annual basis that gives legislative audit the ability if they want you know to look into a deep dive basis every year a law office audits of whatever legislative audit was in last time I believe it was 2012 age of there was a different audit firm and with the offer we have now is we feel providing a for our greater audit as far as the the level of details and in our response to this report we even noted that starting in this calendar year 2022 of the audit firm because are large enough they have an I. T.'s of security section that will now begin to copy of provide a comprehensive review of our IT controls so doesn't mean that we can never add more layers of audits but we still from the board of trustees side the there's certainly plenty of audit activity going on now and with the ability for legislative audit to review on an annual basis but so for instance of there were some findings you agree that you know that the that you probably need to make these changes are correct or whatever it to me it seems like like what would it hurt especially since as it is now we know that you're getting at least 50 $3000000 of the tax revenue that is that's coming in that is you know attacks that your your receiving your administrating all you know the 2.$8000000000 of public funds that shouldn't or at least be at a minimum some sort of go. Ferments audit to just look over and I understand they can review the audit as provided but once again this is the entity that you guys of higher to provide the audit not that I'm not questioning like I probably have done a great job it's demonstrated that you guys have had very the minimum findings in the process but you know if and I'm not necessarily saying that we need to do a deep dive on an annual basis but that there should be this type of of looking into it simply because we're talking about billions of dollars that's in a fund that that creates a temptation for people maybe that's less scrupulous and you guys. And Senators if there was if the legislative audit folks you guys if you feel like that there needs to be more review from legislative audit something we try to make clear that with this review and with different legislators over the recent years is that there's more audit functions that you want clearly life is going to respond so we wanna make sure that we understand the guys understand this is with you this is a partnership is that there's more information that you need to have we're going to provide that information on though what they want to elaborate on is on the $53000000 a premium taxes so everybody understands that money is not to fund lobby that money is deposited directly with LAPFI but it's on behalf of the participating employers to defray a portion of their employer contribution cost of that's different than the pension review border PRB the other for the Legislative ought to talk about that body is funded directly by state insurance premium tax money to fund its operations so there's a clear difference you know as far as how the moneys,nd and and their actual purposes under law yeah the thank you I appreciate your willingness to be flexible yes Sir. Right representative brown you're recognized. Thank you Mr chair. And thank you all for being here one thing in this report that really jumped out at me. Is that the investment consultants. Build you a flat fee when they should have just been billing you a percentage of the assets under management. I'm I'm very concerned about that because they have securities licenses assist people who govern them they don't just answer to y'all. And that's highly irregular had an ethical. And I would like to know if you've changed your investment consultant. Thank you of actually there's nothing ethically and correct with having a flat fee arrangement with the investment consultant but I think you pardon it says here that that was not in compliance with the agreement your written across the the flat fee aspect verses what was it the most recent addendum that is 2 different aspects the money managers are paid on a of floating fee basis if you will depending on the investment style in the manager with the consultant who is the entity that does the overview of the of managers and brings in managers for the board to review would retain terminate is paid on a flat fee basis and although the agreement whenever audit look at the most recent payment wasn't reflective of the current fee structure the fee structure is approved at each annual board meeting in December that looks at the upcoming of budget that if the board approves however our response to audit's finding on this is that we did note that the contract for the investment consultant had been wholly revised and at that time we had anticipated that the board would approve and sign off on December last month and the board did do that. So are they still getting a flat fee the investor consultant is getting a flat fee and ma'am that is perfectly acceptable so that he is a lawyer or this consultant is a liar over and above the actual. Managers. Fund managers yes yes ma'am yes over the fund managers and then we also have a separate investment monitor firm that also reviews the actions of the end of the individual investor manager so that we do have actually 2 different layers of review of the investments. Okay thank you yes ma'am. Senator Garner you're recognized for a question. You may have answered that so we're going to findings there seem to be about a $500 $0 discrepancy between what the contract said you're paying into the investment sold as to what the actual compensation was the annual fee of 300000 to compensate 100000 did you explain that or is that like really you pay over 0.$5000000 of my misunderstanding exactly was going on note your understanding correctly is that the reason that that the most recent and the method time had a comp of $300000 that number had ratcheted up over the years since that last addendum but it was part of the annual budget review process by the board of accepting the higher composition or rolled by however we had that we as staff have been working with a consultant earlier this last calendar year 2021 prior audit coming in because we wanted to overhaul the actual agreement with that entity which also included bringing up the account to the actual amount that's been approved by the board and the board director the board chairman executed agreement at last month's quarterly meeting okay so you all had a agreement that said there paid 300000 but they are paying them. Because the agreement had been updated the $800000 compensation in your weight on the board to approve that in order to make it says with the the law and how this part should have been done as a my my best understanding that no you're not misunderstanding at all your understanding we always after the dynamics what it was is that the addendum to the of investment consultant agreement had not been updated with the revised schedule all the functions we remain the same it's just that the agreement in the say the cop will now be acts so just a paperwork issue that the amend them to not reflect the what you are actually paying for the current comp that's exactly right now what our that has been resolved. Just half $0 difference I just wanna make sure everyone know somebody in pay we're supposed to or something like that are no later you're corrected and needed to be updated them and we get updated okay are not. Thank you single further questions we'll wait list Hammer you're recognized thank you Mr first of all on the building one of things was mentioned on the billing of the fair market value now of the building have you had an appraisal done on it or what's the real real number on the building. G. Hodges is far as a recent appraisal no we did have an appraisal back in 2000. 6 it was right right after the the purchase had been completed and then renovations to the building in the property had been done and that appraisal was very comprehensive and showed that the of purchase price of the renovations were at market value at that time however as far as the the gas B. notation that was within the findings we did have a different position on that as management that are external audit firm of it if we need to provide more details of course we can do that for you do you have all the on Oct page occupied space rented now or unfortunately no there is a ton of vacant space in the downtown area right now As and like several 0 square feet of space and we're at about a 56 percent occupancy rate right now. In your budgeting or did you. Budget in expectation that you would have that fully rented by a certain time or did you just hope to cover the cost what you are a pain previous to purchasing the building. For question it is that you whatever the building was first purchased and renovated it was actually occupied at 100 percent at that time because it's been so many years the purchase occurred in 2004 and then Lafe actually moved in in the summer both 5 of social years have gone by we've had tenants leave new test,nd and because of that a if you will the competition with other buildings is that we haven't been able to locate at this stage the The New property manager has been a locate enough tennis going to fill out the building of but that's an ongoing process they bring bring people in routinely to tour the building and officer desires to get 100 percent capacity to lose any state agencies that were previous occupants of your building and want to another building no Sir there's actually they're not to this point is not any state agencies in the building okay and then on the audit you get a private audit but yet their findings that legislative audit had found and I'm I'm just curious where the finder did your private auditing firm indicate to you anything that now has come out in the legislative audit. The only thing that would have been of. I guess it taking a different position on of from the private owner from the lobby has has to do with the building and how it's reflected in the side of the financial statements for lawfully of because clearly we've discussed with our own auditor you know the findings because it's important you know bring both entities on the same page but as far as anything that of a lot we need to make changes you know the the major changes there's nothing that we have seen and I think the report even shows up legislative audit that we do have the correct you know internal controls are in place and an improper monitoring. Okay the. The question of the investment managers you have how many we're at right now memristors are correctly 34 individual investment managers and several those have multiple mandates that are underlying okay and you review those how often to determine whether or not there or the to continue doing business with well the it's an ongoing process by both the best for consulted and the investment monitor is done on a quarterly basis by the board of trustees because the board is are they receive reports on a quarterly basis from the investment consultant at each March meeting which gives us the previous years results the investment monitor firm comes in and then also provides a separate report a formal report to the board as far as the activity for the preceding year okay real quick last you page 11 of the report. It indicates that they did a sampling of 30 active members are those of a classified as active members they got 17 responses back confirming the information without exception no response from 9 of the active members and 4 were returned as undeliverable the number of members that you show how do you affirm that they are still entitled to the benefits of the of the service plan given the fact that evidently their addresses of their points of contact or not valid anymore. Fair question and I wish that there was a better way to make sure that we had current address information on of knowing the the active members but the retirees as well of the lawyers for the these are the active individuals the ones are still responding to calls for service those members are reported on a monthly basis by each one of the underlying reporting locations and there's roughly 550 employer that reports to the system on a monthly basis. Those employers are the ones are saying this person still in our employment therefore they're still active for reporting to lobby and so here's either the pay or the service credit and then of contributions that are to be remitted to the system. And as far as the address information law provides a member portal and we routinely you know advertise if you will for the members to use the portal access adjusts to the record and then if they need to make updates such as an address you know to please do so okay and then last question I like you okay okay yes age 3 you are the of the for retirement plans it appears you are the best compensated one. Your plan is third in the middle of the pack of 4 and then when I go to the back I notice on page 11. That you are actually over your the salary range of minimum to maximum. Can you explain to me the justification of the overreach given above the maximum salary range certainly and and I appreciate your qualifying come on the front end of it is that you are pay whether it's mine or other staff we use the salary ranges that are set up for the individual positions under the state pay plan and for the director I believe the cap is tool one and some change is is what the operand is however is noted on the footnotes for like my position there was one membership services the amount above has to do with a career service award and longevity pay that's awarded based on length of service and I have coming up on 23 years of service so that's why I receive if I'm if I get a favorable review from the more that is a career service award and then longevity. Okay so back to Senator Ballinger is question what's noted on page 2 according to the court of appeals opinion but if we ever substantiated that in law that's a court opinion but if we ever substantiated in law that you truly are a state agency. I'm sorry the question was an. I'm just trying to clarify something my mind you you you we are using the state salary Rangers ranges in order to establish your salary correct all staff salary that's correct okay and on page 2 it says 2010 Arkansas court of appeals opinion treated you as a state agency for the purpose of plying the procedures axle and so forth so you should be considered as a state agency. Are are you then truly a state agency because this is a court opinion. And and I'm just asking because I don't know how are you a state agency that well aid to Senator Ballinger is point but no appropriation are you a state agency or you're not technically will it would lobby has maintained over the years that is not a state agency this reference to the 2010 of a court of appeals adult with a disability appeal that was lodged over a board of trustees decision for the denial of benefits and so that's where that came from as far as the state agency you may recall that life is not reported on the state's financial statements is it doesn't affect any of the bond ratings of we do not receive an appropriation as has been noted already the the reason why we talk about to the salary aspect is because a section of lobbies body of lost as if the a plan of the employees I'm paraphrasing here shall be consistent with the state pay plan that's the reason why we reference back and we do use the ranges and as I noted you know we are paying within the ranges that are set out in and of the states pay plan and then on an annual basis full floppy the PRB they review at the pace of staff to make sure those pages are consistent our thank you thank Mr yes Sir. Thank you senator are there are no more questions in the queue does anybody have one. Our CNN thank you guys for being here today and present information I appreciate it thank you of that report will stand reviewed. Next meeting of Legislative all audit committee will be held on February 10 and 11 2000 22 is there any new business the need to come before the committee. All right see in on this meeting will stand adjourned thank you for your tenants.