Legislative Joint Auditing

Are referred to the our first order of business is morning will be the adoption of minutes of the September tenth two thousand twenty one meeting. I think everybody's saying that in their email if there are no objections the email have any objections to adopt in those minutes. All right then we will consider those adopted next order of business is the adoption reports of the executive in standing committees of the first one will be the report on the executive committee center call well you're recognized. Exec beauty mentors in November night the staff reported to be the audit special investigative and shortage reports good you'll to be presented to the standing committees and to the full Legislative Joint audit committee of this month. It's new business community for requested to audit the Little Rock preparatory academy Tuesday December twenty twenty one meeting of the committee approved a request for staff to obtain and provide updated information contained in the report staff issued in two thousand three four fire departments in Arkansas in other businesses Mr Norman reported the results of legislative audit's external peer review as a pass the highest result obtainable for the fiscal year of June thirty twenty twenty one the committee approved the twenty twenty to the Legislative Joint audit committee calendar staff updated the status of a motion that was filed in September second of twenty twenty one to intervene in the class in the circuit court case that the Attorney General in the town of all court jointly filed in June of twenty twenty one regarding the town of all ports charter revocation with no additional business to discuss the meeting was adjourned the next meeting of the committee is scheduled for Thursday December nine twenty twenty one I move to adopt this report. Thank you of do we have a second to adopt report I have a second is there any got a comment or question. Seeing none all those in favor of adopting this reports say aye All opposed no thank you that'll stand adopted next on the agenda is a report for the standing committee on counties municipalities senator garner you're recognized present that report thank you chairman committee adopted a Minnesota September nineteen thousand twenty one meeting the committee discussed the town of Gilmore substantial noncompliance municipal accounting law staff report that the town has may stuff if improvements and corrections most their findings Senate committee on counties municipalities were Becker recommends to the Legislative Joint Auden Committee at the state treasurer be notified to resume the town of Gilmore term back payments as well as restoring to the town any term backed funds held escrow speak on is just a little bit more so far this rule we passed the law would pass was that if a city was out of compliance that they would have to turn back funds held what are staffing was said they actually may substitute movements as for reporting the audience make sure moves forward and so was the recommendation of our committee that those turnback funds be returned to them and they continue on with the normal course of action which I think was a good outcome of the law that we passed the committee reviewed several ports differed from the September ninth two thousand twenty one meeting officials and three entities were present to address repeat findings from those reports six previous to for reports were filed in one was deferred to December ninth two thousand twenty one meeting Committee reviewed a hundred five current reports of these one was certified to the bond board and three were for to the prosecuting attorney officials from six and these were present to address repeat findings in the current reports committee five one hundred one current reports deferred for for so that the officials could attend the December ninth two thousand twenty one meeting to address repeat and other findings I moved for adoption of this report thank you senator I have a second. I have a second on the motion is there any questions or comments. Yes ma'am you're recognized. Treadmill. All right I I just didn't did did senator garner say Gilmore what was the place that. The name of the town that you were talking about at the very beginning in Gilmore Gilmore court where it where is Gilmore president Clinton County. Okay all right. Thank you that's all I needed Mr. Any other questions comments. All rights and none all those in favor of adopting this reports say aye All opposed no all right of center Dr thank you. next up is the report of the standing committee on educational institutions of representative very you're recognized center report. Thank you Mr chairman the standing committee on educationalist two friends met yesterday November the ninth the Committee reviewed a total of twelve audit reports which consist of nine school district reports to higher education report from one education Corp to report for the year in June thirty twenty twenty the audit reports of the buffalo island central and dress for school districts were referred to the respective prosecuting attorneys the Committee filed the twelve audit reports that were brought before it Mr chairman this time uh moved for adoption of this report thank you to have a second on the motion. I have a second all those in favor of adopting this reports say aye. All opposed no all right thank you senator opted next is the report of standing committee on state agencies are representative Richardson. Thank you Mr chair recognized. Ninety reports of one committee's agenda yesterday five current reports on in one deferred report with findings were presented the report for the department of commerce was deferred from the September twenty twenty one meeting due to a finding for Arkansas rehabilitation services which paid a vendor for services not rendered an update in additional detail related to this finding were provided. The department of corrections have findings related to misappropriation of property in the salary overpayment both the department of corrections and the department of inspector general had findings related to cast receding. The art of State made a salary overpayment and a corresponding underpayment with salary changes were not properly made various agency staff members were present to report on how the agencies intended to address the audit findings and to answer committee questions during the meeting the committee adopted a motion to file the eighteen current reports the department of commerce report was deferred to the next meeting in order to get another update on the status of the shortage at Arkansas rehabilitation services Mr chairman I'd moved to adopt this report thank you Sir we have a second on the motion. We have a second are there any questions or comments. Saying none of all those in favor of a doctor's report say aye. All opposed no thank you to stand up and next on the agenda is Review reports. US first report in law enforcement agencies compliance with asset seizure and forfeiture requirements uniform controlled substances act for the calendar year ended December thirty first two thousand twenty just Davis will be present that report you're recognized Sir. Thank you Mr this report reviews law enforcement agencies compliance with the asset seizure and forfeiture requirements of the uniform controlled substance act for the year ended December thirty first twenty twenty. Asset forfeitures been you since nineteen seventy one to help prevent vehicles and other property of drug traffickers from being used in the commission of subsequent offenses during the late nineties legislators became concerned at the lack of uniformity and accountability and forfeiture procedures across the state was undermining confidence in the process during the nineteen ninety nine meeting of the Arkansas General Assembly ACT eleven twenty was enacted to address the concerns through the amendment of the uniform child services act. The forfeiture forfeiture process is shown on the slide exhibit three on page three of the report Arkansas Code provides that within forty eight hours of an asset seizure this season officer shall file an original confiscation report with the seizing law enforcement agency for maintenance in a separate file within thirty days of receiving that report the seizing agency shall forward a copy of the report to the prosecuting attorney for the district in which the property receipt was seized and the Arkansas Drug Director for entry in the asset seizure tracking system. Schedule one on page five of the report provides a summary of seized assets for county or twenty twenty for all judicial districts including the amount of cash automobiles firearms and other items for example as shown on slide in the second judicial district over four hundred sixteen thousand dollars in cash fourteen vehicles forty two firearms and five other assets were seized in twenty twenty for the entire state approximate five point two million dollars three hundred sixty two vehicles five hundred thirteen firearms in forty six other items were seized. Over the past ten years over sixty three million dollars five thousand vehicles forty eight hundred firearms have been seized. The map on the side exhibit one on page two of the report shows the eight you just or district selected for testing to conduct a review to seizure incidence in each district chosen from the asset seizure tracking system. Archer's trace to seize assets recorded in the asset seizure drugs system to the supporting confiscation report verified required procedures had been followed in the disposition of the seized assets additionally one confiscation report was randomly selected from the agency and tries to the asset seizure tracking system to ensure all seized assets have been properly reported. Finally one sees asset was roundly as selected from the agency's evidence room and tries to the ends entities confiscated inventory records. due to the covered nineteen pandemic in guidance issued by the Arkansas department of health offices of to the fourteen agencies selected for testing the twenty nineteen review or limited AZ personnel only as a result LA staff were unable to conduct those testings in the bid county sheriff's office in the bid build police department both the nineteenth west judicial district however testing these two agencies were to fire to and included in this twenty twenty county review has noted in exhibit one in your report. All assets selected for testing in the county or twenty twenty were accounted for however exceptions in recordkeeping were noted at five of the fourteen agencies reviewed. As listed on page three of the report that Helena West Helena and when police departments and Cleburne independence and loan county sheriff's offices did not maintain a file of original confiscation reports. The Cleveland County sheriff's office did not maintain adequate sees property inventory records. Free confiscation file selected for review that is still pending in court during fieldwork LA staff continue to periodically follow up on that seized assets until it's court order disposition is finalized based on a calendar year twenty twenty follow up process LA staff noted the following exception and recordkeeping the fourteenth judicial district prosecuting attorney's office and the new county sheriff's office did not retain transfer property receipts when disposing of seized property. This concludes my presentation in consideration time in presence of agency officials were not requested today I'll be happy to answer any questions thank you thank you Mr Davis. Are there any questions from committee. All right of. Mr rai. Recognized. Share do you actually have me turn on the charm. Thank you try again. This. Yes Sir I was just trying to get a total again of the total amount that was confiscated during that periods are. You want that for the county here for the yes for the whole for the. For the for the whole year the entire. Five point two million dollars okay three hundred and sixty two vehicles okay five hundred and thirteen firearms and forty six other items thank you certain. Our representative makes thank you Mr I think you already answered this but just to verify when they do the audit do they actually go out lay eyes on the seized asset to make sure it's there and then follow up how to they dispose of these items once they've been seized. Yes Sir we we do go out and physically visit these these agencies and business ideas assets that are selected and then as far as disposition depends on the asset type of course but vehicles if they're not returned typically they are are sold at an auction of firearms are also can be sold in an auction but if they're not to be so they're destroyed and then cash obviously. Pending a court orders dispose of two you know the prosecutor's office or drug task force or the agency that seized it all right thank you. Any other questions comments. All right seeing none that will consider that reviewed. Mister Davis you're back up for sure one on the other law enforcement agencies compliance with tobacco seizure and forfeiture requirements for the calendar year December thirty first two thousand twenty you're recognized. Thank you Mr this letter reports law enforcement agencies counter twenty twenty compliance with the asset seizure for for forfeiture requirements of Arkansas Code twenty six fifty seven to forty seven Arkansas Code provides forfeiture procedures for tobacco products on which the full amount of excise tax due is not paid or which were possessed or sold by an unlicensed wholesaler or retailer in addition the property and money used to facilitate a criminal violation code for the manufacture distribution of contraband back of products may be seized and forfeited to the state. According to Arkansas tobacco control no tobacco related asset seizures occurred in the county or twenty twenty in addition legislative audit staff followed up on seizures that were outstanding in the prior year two sure agency compliance with code requirements no instances of noncompliance for noted as a result of staff procedures number click includes that report. Thank you Sir are any questions. From committee. I see a number will consider that one review thank you miss Davis Christian. next up. Is review of selected transactions on over wide oak lake volunteer fire department. January first twenty sixteen through December thirty first twenty twenty of Mr lock is going to present the force you're recognized. Thank you Mr. The thirteenth judicial district prosecuting attorney asked us to review selected transactions of the upper white oak lake volunteer fire department after he received some allegations of improper spending by the Department treasure. The department provides fire rescue and emergency medical services for a rural area of washed out county in south Arkansas the department's governed by a six member board funding consist of state aid which is ACT eight thirty three money and membership they use in the financial records are maintained by the treasure. The board dismissed the treasure in January two thousand twenty one after discovering improper spending and when confronted according to the fire chief the treasure and knowledge misappropriating department funds for his personal use. I review of department records revealed fourteen thousand two hundred forty one dollars in improper disbursements is consisted of ninety six and documented ATM withdrawals which total twelve thousand nine fifty five and twelve hundred eighty six dollars and other improper expenses. ATM withdrawals appear to been made by the treasure and according to the fire chief or not for department purposes. While reviewing the two thousand nineteen bank statements located in department files we noted several transactions that were blacked out and copies of an outer bank statements that we get from the bank so that these Baghdad areas contained unauthorized ATM withdrawals. So and then. Example on the screen This state is one of the bank statements that I found in the fire department files and you can see the black that area there at the bottom. And this is a non an altered bank state copy of the bank statement from the bank and as you can see the black that area was concealing for unauthorized ATM withdrawals. I review also revealed several internal control deficiencies receipts were not issued for all items revenue deposit slips does not always indicate K. state composition invoices were not always retain to support disbursements financial duties were not adequately segregated and the board did not provide adequate oversight. It should be noted that usually this is not the first time that this department has had these type of problems we did an investigative report back in two thousand thirteen which revealed ten thousand to forty four in an unauthorized disbursement six thousand seven seventy two and inadequately documented disbursements and seventeen hundred and unaccounted for funds. And these these findings from two thousand thirteen involved a different trade here but some of the board members at that time or still serving on the board now. Our findings from the current report were referred to the prosecuting attorney and on October the first felony theft charges were filed against the former treasurer John Lewis. The current board president couldn't be here today but he provided a pretty detailed response letter listing all the changes that the board has made to address the report findings that a few of the changes are listed there on slide that the complete response letter can be found in appendix a of the report. And if I could just add one more thing I met with the board president leave was back in April to go over the findings and since that time he is called me four five times. Asking if they should do this or if they should do that and I'm asking for my opinion on some of the changes that they were thinking about making so I can't. I don't know about the other board members but I can tell you that the current board president is taking these findings seriously and I really think he's doing everything that he can to make sure that this doesn't happen again. I just want to add that since he couldn't be here today. And with that Mister chair this concludes the presentation. Thank you Mr Clark of looks like we've got a couple questions Person's representative brown. Thank you Mr chair yes Sir process to eliminate some of these board members to I don't know for lack of a better word to sleep at the wheel. Mr Clark. I doubt that I don't know this is a volunteer fire department at. You just dependent on hats sit set up. I mean it's possible maybe the county judge could remove some board members but. I don't know the process for that follows yes ma'am and and what is being done to recover this money. Do you know. I do know but I don't know that I need to say the charges have been filed against an and he is working with the prosecuting attorney on a wrist the. The plan for restitution thank you. Right of center Chesterfield. You're off all right. You bet there any other questions comment. All right stand on the school bus stand reviewed I appreciate the everybody's attendance today next item is our other business which is merely announcing the next committee meeting will be held on Thursday and Friday December ninth and tenth two thousand twenty one do any member seventy new business and these come before the committee today. All right seeing none we will consider this adjourned thank you for your attendance.