Legislative Joint Auditing-State Agencies

Okay call to order the adoption of the minutes everyone should have a copy of that machine that. I have a motion to adopt the minutes got one and second. Thank you. Minister the all in favor. How post. At this time will move to item C. review the reports. I thank you Mr chairman today representing one deferred report and to current reports that findings we've also got several ports on the agenda that don't have any findings and these are listed in the audit summary on page one. I'm sorry. Without objection I have a motion to file. Okay our first report with findings as the Arkansas teacher retirement system June thirty twenty twenty report and this report had one finding. This report was deferred from our may meeting and then also from our June meeting and the last time was deferred it was deferred so that the teacher retirement system the board could review their policy regarding direct investments. Since we cover this in detail a finding a lasting means I won't read the whole finding again list some of you like to hear that you have it there in your agenda. The eighty year as board did actually meet on June the seventh two thousand twenty one and discuss a policy related to direct investments we for a copy of this policy to the committee back in June and we have copies available here today I believe the policy was definitely amended to require that any material change to re direct investing be approved by the investment committee and the board after receiving the recommendation of a third party investment consultant I did find out of earlier this week that they've put that out for bids for the investment consultant so that is in the works as well so I believe teacher times isn't here to have any further questions about that. Members anyone have any questions. And saying no questions and we will see this is reviewed and file without objection. They're here if you'd like you have a question. Okay we have one from our vice chair to have someone that can come up and speak please. We wrangled this microphone Clint Rhoden Arkansas teacher retirement system. Yes my and with you in a worse if you will just for the record yes yes thank you Mr rod graves Arkansas teacher retirement system okay and. Representative Lundstrum into question. Yes I'd like to know how the fund is doing I know you all got everything together within a week of the last meeting and I appreciate the quick action how is the fund doing now. As far as the investment returns this this year and yes and funding and all that so it it we're still preliminary I mean that the actuaries will give us actual numbers until you know we won't know that till October so but we have a good estimates right now and I have been able to share the good news with a lot of our retirees so far our preliminary return for this year is a thirty percent return. On our investments that is a record returned for a TRS of the next best return we've ever had was twenty two percent so obviously that is a a very spectacular the event or a TRS that will estimate that my rough estimate of how that'll advance sorry funding percentage is right now we're about eighty percent funded and that will take us up to about eighty three percent funded and the reason for that is we don't get a credit for that whole thirty percent in one year that has to be spread out over four years and when you average that out the four year average return would be somewhere around ten percent so but the good news is for the next three years will have. You know apply for so that thirty percent return to to carry forward and smoothed out our retires but in a nutshell it it did a spectacular job of making up for the last couple of years where we had flap or minor you know returns okay so yes. Thank you. Is there anything else that we need to know or any other issues that are going on with that fund after we've had this review in the audit that we need to be aware of in this committee not that I'm aware of and let somebody know some but I don't some of you know. Eight years is in good shape right now so glad glad to be able to report that. Thank you I'm glad to hear that on the fund yes. Members anybody else have any questions. If not thank you very much thank you thank you see this says reviewed and file. Our next report is a department education June thirty twenty twenty report this report contains one findings. As a result the transformation and northwest technical institute became part of the Department education. The northwest technical institute assigned the vehicle to the president that can be used for commuting purposes between his home and office. Arkansas Code and DFA regulations require reimbursement to the state for all commuting and personal use of state owned vehicles. Additionally DFARS regulations require the value of commuting and other personal mild be reported as taxable fringe benefits to employees in the vehicle. If I regulations also require usage logs for every mile driven in state owned vehicles. Northwest tech did not record or report the community tax will benefit maintain usage logs or say reimbursement for the miles driven between home an official workstation for the sign vehicle Mr that concludes the final for the part of education. Members we have anyone have any questions. And saying we Wallace file this is reviewed thank you. Okay our last report is a department Veterans Affairs June thirty twenty twenty report and this report contains to findings. The first finding DFA's financial management guide requires a pre number seats contain the date amount of the receipt the name of the person or company from whom money received the purpose of the payment the fund or funds to which received to be credited and the center of the employer receiving the moneys it also requires that all cash receipts be balanced day. At a minimum weekly deposit be made. First Bassil Berri phase at the Bardot cemetery we noted in actual information was recorded on the receipts to determine compliance with these regulations we also noted that forces were discarded by cemetery staff and not maintained for review. Also there were three berry or fees for the bird I cemetery that were deposited to the North Little Rock cemetery Fund in air and reconciliations of deposits and receipts were not performed. Additionally we also noted that several receipts described in the bullets and the finding that you can see there were not deposited within one week. The second finding our review of a pharmaceutical contract revealed that payments revealed payments that exceeded the contracted amount by over six hundred thirty two thousand dollars. The Department personnel did not appropriately allocate the excess purchase to the contract with an asus therefore wasn't tracked to make sure didn't exceed the contract. Thanks that completes funds for departments first Mr. Thank you do we have someone from the department to come forward to speak please. If you would introduce yourself for the record yes senator Nate Tosh secretary Arkansas Department of purchase fares. Full of leave fiscal manager the Arkansas department Veterans Affairs. Thank you I'm sure everyone many of us want to talk about the six hundred and. Thirty two thousand dollars that was not tracking with the contracts to do speak to that first please. Yes senator thank Y. simple give the technical. Response and then as the secretary all share with you what we've done to correct it. The error had happened back and FY twenty eighteen during fiscal year twenty eighteen to twenty nineteen our agency had experience in pretty challenging Asian personnel turnover so um in nineteen that's whenever our agency contracting officer had retired so we during that time frame we word we had not hired and someone into that position and we didn't get an agency personal administrator until fiscal year twenty so due to the turnover situation that's what accumulated to be issued with the issue with the pharmacy contract with this would related to spending. And we have sufficient funds to pay that. What we've done is we've increased a cop in the city of our staff miss Lee as a financial manager accountant trained. Working or CPA our procurement specialist who is responsible this we hired a very experienced procurement specialists so we put in the correct management controls and the personnel. To reduce this risk of happening again. And find a standing there's no money missing or misappropriated it was just a matter of tracking the funds correct. Yes Sir that is correct okay. Members anyone have any further questions. Senator Hickey. Last so just just on the one we were just speaking about. You would have had these you would have these calls no matter what is that correct I mean they would have been incurred even if yes senator okay and then one other thing just right here and I know it may seem small but back for their four seats were discarded by the cemetery staff Have we have we looked into that to make sure that you know because sometimes people discard receipts put money in your pocket and as we did and we found goals receives it yes Sir so what happened was when that Senator stuff writing down the receipts they didn't put the carbon copy behind it to the whenever they wrote on to the next page of the receipt that ended up leading through to the second page so the staff member had through that page away however you were ever we were able to reconcile to all the burials and all the receipts did match up it was just that one page a day that he had accidentally threw away because he thought that it sent to have blood through with an illegible anymore that's understand thank you. Yes my understanding members of again there through the different findings there was no money missing misappropriated there are some clerical errors and staffing issues that they got behind on but it caught up with now. Members anyone else have any questions. Signal questions without objection we will file this has reviewed. Thank you. Members we get to my agenda here. New business I'm not aware of any unless anyone has any. And with the Noam new business and members we are adjourned. That number going to get.