Legislative Joint Auditing-Counties and Municipalities
Video
Transcript
1 document
Machine transcript
May contain errors. Verify important quotations against the official video.
About transcript accuracy
- Source
- Whisper
- Model
- ggml-large-v3-turbo.bin RTX5060
- Processing date
- October 6, 2026
Speaker 1
0:00
Audit committee meeting, and we will take care of business as it comes before us. Y'all, come on, get in your chairs now. Okay, the first item on the agenda is approval of the minutes of the last meeting. What's the pleasure of the committee? Motion and second do pass. All in favor say aye. Aye. Opposed, no. This is the first meeting of this subcommittee after the legislative session, and I
David Hillman
Unverified
0:28
would, first of all, let me introduce myself.
My name is David Hillman. I'm a state representative from District 13. Our co-chair from the Senate is Senator Trent Garner, and I will
Representative David Hillman
Unverified
0:39
now recognize him for any comments he might have. Look forward to working with you. Let's get some work done. Boy, I like that. Looking around the table, most of you have been on this committee before, But for those that haven't, a little bit of
David Hillman
Unverified
1:04
I want everybody here to have an opportunity to ask every question that they have on their
Speaker 1
1:11
mind. I don't want to rush through things, but I do want to conduct this business in an orderly and efficient fashion. So with that, unless there's objections, instead of having a motion and a second to file these reports as they come in, I'll just say without objection. Now, if you have an objection, you raise your hand and we'll talk about it or we'll have a motion or whatever you want to do.
And on things that might be controversy, I will call for a motion. So with that, let me recognize our fine staff over here. Marty Steele is the guru behind all this, and she's the one that actually runs a meeting. We just pretend that we do. So, Marty, you got any comments? No, sir. Okay. She didn't even turn her mic on
Representative David Hillman
Unverified
1:59
when she said no, sir. So, with that, the first item on the agenda, Marty?
Speaker 11
2:10
The first item on the agenda under Item C is discussion of noncompliance with the Municipal Accounting Law. The Municipal Accounting Law consists of Arkansas Code 1459-101 to 118 and 1459-117 lays out a process that if a city or town is not in substantial compliance with the Municipal Accounting Law, there's a process to begin with holding their term back.
And I know this is a new committee. The ones who have been on here before are very familiar with this. But there are two towns that we want to start this process, which the first step is to notify the town. And that's what we'll do if the committee approves is just send the town letters. And they'll have 60 days to get their records in order. And they can call us at any time during that 60 days, and we'll come look and see if things have improved. And if we don't hear from them before we have the next meeting or after 60 days, we'll call them and go out and make sure and see what state their records are in,
and then we'll proceed. So the two towns that we're talking about are the town of Twin Groves and the town of Gilmore. Twin Groves is on page 58 of your synopsis. And you'll see all the findings that start with 1459. there's a 1459 108 109 110 111 104 105 and this has gone on for a good while so staff would recommend
Speaker 12
3:51
that that we start this process on the town of twin groves
Representative David Hillman
Unverified
3:56
any any questions of the staff any questions about this
Speaker 1
4:05
a little bit of background on this. The last thing that we want to do is take money away from these small towns that have refused to comply with this. But that's about the only tool that we have as a legislative body. We can't go out there and file charges or anything like that. So this is a tool that we use to kind
of get their attention, and it is a last resort. Okay, on these I am going to request that
Senator Trent Garner
Unverified
4:38
I'll make a motion. Motion and second. I'll make a motion that we send a written notification to the mayor and city council or town council of the town of Twin Groves in accordance with 1459
Representative David Hillman
Unverified
4:50
and 117. And there's a second, Johnny. Any discussion?
Those in favor say aye. Aye. Opposed, no.
Speaker 11
4:58
Motion carried. The other town is the town of Gilmore and you'll find those findings on pages 35 to
Speaker 24
5:23
37 of your synopsis. Any questions? Same situation. uh seeing no questions or discussion is there a motion
Speaker 1
5:36
i'll make a motion motion and a second motion and a second uh to send
Senator Trent Garner
Unverified
5:45
this letter correct to the city to the mayor city yes town
Speaker 26
5:50
of gilmore all right all those in favor say aye Opposed,
Speaker 11
5:59
no. Motion carried. While you're on Gilmore on page 35 to 37, the recorded treasurer was invited to be here. I don't see that she's here today, just since we're already there.
Staff would recommend we defer this report until the June 3rd meeting, where we can invite the recorded treasurer to
Speaker 1
6:21
be here again. without objection we will defer this until the
Speaker 11
6:32
next meeting okay the next thing we'll do is uh start the review of the reports and we'd like to take uh the ones who are here uh first
and the first one on our list would be independence county which you'll find on the first page of your synopsis the the county sheriff was invited to be here for the repeat finding which is in bold at the bottom commissary bank account balance of 17,905 was not identified a similar finding was noted in the previous report. I'm showing that Sheriff Stevens is here.
Speaker 38
7:15
Okay, if you would, Sheriff Stevens, come to the end of the table. Have a seat. Turn on your mic and identify yourself. Sheriff
David Hillman
Unverified
7:20
Sean Stevens. Is your green light on? Yes, sir, it is. Okay.
Representative David Hillman
Unverified
7:32
All right, pull the mic a little bit closer, please. Okay. You
Speaker 46
7:48
got more to say? No, normally the committee just likes to hear what
the official is doing to correct your findings, the repeat findings. If I could, I
Speaker 47
7:55
would like to ask the lady that works at the jail, Skylar, to come up also because she has some documentation to explain what we're, what we've done to correct this. Okay. Will
Representative David Hillman
Unverified
8:11
you please state your name for the record?
Speaker 51
8:14
My name's Skyla Durham. I work at the county
David Hillman
Unverified
8:17
jail. You're just an employee there? You're not a supervisor or anything like that?
No, sir. I'm the secretary. Okay. All right. Thank you. So y'all are recognized now
Speaker 47
8:38
to explain your answer to the findings. during during the process of doing the commissary for inmates we changed commissary companies and during that time we had some inmates that were no longer in our facility and had no way
to find them so that money was moved over to our new commissary account and the names didn't get transferred with it our new commissary company that we went with changed bank accounts isn't that right they changed bank accounts and they have went through and we have some printouts if y'all would like to see those of what the commissary company done to correct the unidentified money all right uh
Speaker 58
9:22
committee the uh audit uh staff has made another visit down to
Speaker 1
9:28
uh this uh independence county i was trying to share if i'd forgotten your name i'm sorry sean steve sean steve sheriff steve and uh they say that things are greatly improved down there they're doing a good job to get it fixed
Senator Trent Garner
Unverified
9:50
any questions from the committee Yes, sir. Yes, sir. So the reason this bank commissary account wasn't
identified is because you switched companies. Is that correct? Yes, sir.
It is correct. What happened in the previous findings? This is a repeat refining. Was it a similar situation or was it another issue? It was a continuation of
Speaker 47
10:07
the original finding. We were trying to find a way to correct it. So you all have been playing catch up, trying to catch
Senator Trent Garner
Unverified
10:13
up with the accounting parts since then? Yes, sir. Okay. Thank you.
Representative David Hillman
Unverified
10:19
Yes, sir. That is it. You think, given a little bit of
Speaker 42
10:23
time, you're going to get this all cleared up? It's cleared up. We had a meeting with our commissary company last week,
Speaker 47
10:29
and it looks like everything has been corrected. And the auditors that are there now currently asked for our first three months of this year as well, and we've sent that to them, and we haven't heard anything back
Representative David Hillman
Unverified
10:43
yet. Okay. Any questions from the committee, other questions? Seeing
Speaker 1
10:46
none, you're excused, and thank you all for coming. Thank you. The next
Speaker 31
10:57
report will be... Wait a minute. Without objection, this report will be filed.
Senator Trent Garner
Unverified
11:01
Question? Yes, sir. Are we filing the whole Independence County report, or just the sheriff's part of it? All of it. All of it. Okay, can I ask a brief question before... Yes, you certainly may. On the first finding, it appears the county judge opposed the finding of audit. Can you
Speaker 11
11:19
explain that in a little bit more detail? Yes. From what I understand from the supervisor, the county judge opposed this because he felt he was doing a good thing using public funds, as his response says, to do public works. And we explained to him that we agreed that it was not a bad thing. He just needed to go through the right processes to do it.
Speaker 72
11:37
And what was his response to that? We did not hear back from him. It was an email we sent to him explaining that,
Speaker 11
11:57
and she said she had not heard back from him. Okay, thank you. Thank y'all. Okay, so the next report we'll review is the city of Chittister. On page two of your synopsis, the mayor has repeat findings. An annual audit or agreed upon procedures report for the city's water and sewer system
has not been completed since 2011, as required by code, and general fund expenditures in 18 exceeded budgeted amounts by $37,000, which is 35% in noncompliance with code. I do have a note to myself here that we have received a 2013 water audit
Speaker 12
12:33
now, but I understand that the mayor of Chittister is here, Mayor Box. In addition, though, since you're here, on page 41 of your synopsis,
Speaker 11
12:45
We have the water audit for 2013. There were some findings, and we got a response from Mr. Box on these findings that a lot of information was lost in QuickBooks from March to December, and he had requested some information from their private auditor. So we might as well look at both of those at the same time if
David Hillman
Unverified
13:11
the committee is agreeable. Okay. Mayor Box, if you will, identify yourself, and you are recognized to explain what went wrong and how you're going to fix it.
Representative David Hillman
Unverified
13:25
Is your mic on, sir? Can you hear me now?
Bobby Box
Unverified
13:32
Yes, sir. Now, would you please identify yourself? My name is Bobby Box. I'm the mayor of Chittlestar, Arkansas. and I guess which one of them she took up first was the finding on our, which one you asked the response on first. About not having a water audit. Oh, yeah, on our water audit.
And what happened during those years, in the years of 2000, when they was consolidating the school, half of our population left and went with the school and that caused us to have a lack of financial situation and we couldn't pay all the bills and everything else to go along with that and we lost a lot of water customers and at that time it was costing us $6,000 a year
to get the audit done. By the time we collect it from 185 water customer numbers left, there wasn't enough revenue left to get the audits done. So we had to take a choice to pay the bills or whatever. So at this point, where we are right now trying to cut it all short, that we have done our 14 audit. We were able to do the 14 audit, and now we've got the, I meant the 13 audit.
Now we've got the 14, the 15, and the 16, the 17, and the 18, and the 19 at the audit. Again, those audits were very associated with the one that did our 13, but we changed audits since then with one in Philadelphia, and they got all of our boxes. So at this point, all of that is at the audit station trying to get it all caught up from a lack of funds to get it all done.
But that's where we are right now on our audits for the water. And the wall for the 20th, it's not completed yet. But as soon as that one gets completed, they're going to come pick that one up too. So that's where we're at. And that's the situation why we hadn't been able to get caught up. We just strictly didn't have the funds to pay for it. But right now things are doing a little bit better, so we're doing a little bit better with our artists.
Representative David Hillman
Unverified
16:13
Any questions from the committee on this
Speaker 81
16:23
particular issue? All right, what about the next one? Well, on that one, at our 2020
Bobby Box
Unverified
16:30
meeting, after we got the findings, we went in our 2020 November to the second meeting, and we passed a resolution to amend the budget and account for the general fund and the street fund for those findings.
Speaker 88
16:48
And we are already taking care of that one.
Speaker 1
16:57
so uh does that take care of the previous three findings that you had on
Speaker 81
17:04
that also well see uh uh on all those findings i've been back here on all those findings uh when every time uh and
Bobby Box
Unverified
17:12
and i don't have we we've nothing no no complaints against our our our cpas who common auditors, but on the 18, when we get a new one every year, they'll go back to the
same one, and I've got to come back up and put the same one and do it all over again.
Speaker 81
17:34
So all of those have really been accountable for. We have already been through them. My son replied a
Bobby Box
Unverified
17:40
letter in stating that we have already answered for those and did what we have to do to make a, to straighten it up in our minutes and our resolution. So they have already been taken care of. So they will come back
and they will go back to that same year of 18. I'll probably be back again and announce for the same thing. And they will bring that one back up. And we have to go back into the minutes and do it again. So I guess we'll keep on doing it until it all get caught up somewhere down the line so everything is caught
Speaker 81
18:18
up so we have already answered for those findings okay uh senator garner thank you so
Senator Trent Garner
Unverified
18:26
this might be a question for marty or the mayor
what this finding is reporting is that their expenditures from 14 to 18 exceeded the budgetary amount they had through their ordinances is that correct correct and so when you're saying you fixed it, are you saying you went back and readjusted your budget after the fact or is it still a problem where you're
overspending what you're allowed to in that manner? Which is the way it's being handled?
Speaker 81
18:56
We go back with the resolution and we amend the budget
Bobby Box
Unverified
19:01
and for those findings by resolution of the 20% over whatever it is in general or the street and then we we closed it, closed the budget back up. Okay. Well,
Senator Trent Garner
Unverified
19:16
it sounds like the issue should be probably better budgeting initially to kind of meet your expenditures so that way the public in the town of Chichester knows what they're budgeted for and you're not spending excess of that amount,
the 20%, which is on the compliance.
Speaker 81
19:36
Would you agree with that? Well, I will agree with
Bobby Box
Unverified
19:40
that. But what happened on these, when we purchased something, You can make a budget, but it's not guaranteed that it's going to work out the way you make it. Because what that come from is we purchased a police car and a trash truck with a grant and a loan. Now, some of this happened when I wasn't mayor. Then that came in, at the end of the year, we forgot to put this in the proper place.
And at the end of the year, it was showing up that it wasn't accountable for us, so we didn't amend the budget to put that in there. So that was in 2014. So at 2018 and 2019, all that was cleared up because we were coming back up and answering for that. Thank you. So all that was cleared up. So you think you're
Representative David Hillman
Unverified
20:36
going to finally get this all resolved? I'm
Bobby Box
Unverified
20:38
working on it. I'm working hard.
You've been working on it for five years
Representative David Hillman
Unverified
20:45
now. Beg your pardon? I said you've been working on it for five years. Five years. You are probably
Speaker 1
20:52
the most prominent person that's been invited to appear before this committee, or most consistent anyway. Let's put it that way. Five. All right. Well, okay. Senator Beckham? Yeah, Mayor, have y'all started using any other
Senator Charles Beckham
Unverified
21:05
program, the QuickBooks, or figured out a way of keeping QuickBooks from losing your data?
Speaker 81
21:14
They're working on that now, trying to find a better solution for that. My secretary, she's looking for
Bobby Box
Unverified
21:20
some other way to keep up. QuickBooks lost a lot of our data in the past, But she's working on that, now trying to find a better way of keeping up with that. You got any
Senator Charles Beckham
Unverified
21:35
suggestions? Excel would probably be my suggestion or a piece of paper. Because that's troubling when we continuously lose
data. It looks like it's an ongoing problem.
How long has the problem been going on that you lose the data
Speaker 81
21:50
and can't do an audit? Well, as far as I know, it's been happening about a year that's been going on. But I
Bobby Box
Unverified
22:00
think she's got it all under control. I'm trying to find another
Representative David Hillman
Unverified
22:11
you. Okay. Any other questions for the mayor? Johnny?
Representative Johnny Rye
Unverified
22:16
Excuse me. Representative Johnny. Yes, sir, Representative Hillman. I would just wonder, Ms. Marty, if they've got the years 14, 15, 16, 17, 18, how will they, can they not come in here and straighten all five of those years up at one time to get that straightened out? It won't work. Senator Trent, that won't work, do you think?
Speaker 11
22:43
Representative Rye, the issue is that they've had the same findings since 2014.
It's not the same issue. I mean, it's every year they haven't gone back to amend their budget to do a cleanup budget at the end. So like in 2018, it was for different reasons than 2014. I mean, it's not the same overage that's carried forward. It's just the same finding five different times. Does that make sense? Yes, ma'am. And so basically what they need to do is just remember to go in toward the end of the
Speaker 116
23:15
year to do a cleanup ordinance to make sure their budget is amended to what it should be.
Representative Johnny Rye
Unverified
23:21
Yeah, that's what we're doing now. Okay, one more question. Ms. Marty, if they can do that next year, do you think we can clear that situation up? If they do a
Speaker 11
23:33
cleanup ordinance at the end to where they don't overspend their budget,
Representative Johnny Rye
Unverified
23:37
we can. Okay. Thank you, Ms. Marty. Thank you,
Speaker 1
23:40
sir. Thank you. Representative Ryle, in your question, were you asking about the water and sewer or the city budget really
Representative Johnny Rye
Unverified
23:47
it was the city budget okay mr hillman what i was looking at because
how long can you keep doing that see what it's throwing me if you're doing 13 then they come back here next year and do 14 well then we're in year 2022 we're always going to be four five six years behind if we don't straighten that stuff up aren't we right but you have to catch
Speaker 15
24:09
up before you can you can't just go in there and do uh the one for 19 without doing the ones before that yes sir
Representative Johnny Rye
Unverified
24:15
well let me ask you this mr hillman i've never went through one this far going back uh will they have to do this for five years after this even if they get it straightened out
or can they do it all in one year to fix they can do it all in one year they can yeah thank you
Speaker 126
24:44
mr a lot of work okay okay any other questions for mayor box yes sir This is for staff. We had legislation that passed for small water facilities. Will it apply when it goes into effect? Will it apply to this
Speaker 128
24:55
situation here? I have not looked at that bill really closely.
Speaker 130
24:58
Tim has. If they have less than 500 connections, that will be in July 1 or 24, I believe. He said it's
Speaker 11
25:08
his understanding that they have less than 500 connections that that bill will be effective in 2024.
Speaker 133
25:14
Okay, okay, so they couldn't go back and run retroactive on these? Not that I'm aware of,
Speaker 30
25:22
but again, I have not studied that bill very closely. Okay, thank you.
Representative David Hillman
Unverified
25:29
Other questions? Mayor Box, thank you for coming. Thank you. And I hope you get
Speaker 120
25:40
things straightened out. Working on. Without objection, we will file the
Speaker 11
25:46
report on Chidester. The next report we'll look at is on page 5. It's the city of Sulphur Springs. The mayor has repeat findings. Although Schedule 1 of this report shows a balance of $14,400 in the general fund, the city owes significant amounts to the Internal Revenue Service
and had interfund payables and receivables. as shown on note 6 of schedule 3 of this report when the outstanding amounts were considered the general fund had a deficit balance of $227,000 also shown on note 6 the water and sewer fund, although not included in this report would have a deficit balance of $58,000 based on information provided by the city and then the other finding was general fund and street fund expenditures exceeded budget appropriations by $92,000 and $15,000 respectively
and i believe mayor weber is here to address these findings just a little further explanation on that first one on the financial and compliance reports that we do the really small reports we just started trying to give a better picture of the city's finances if they have significant payables or interfund payables like the general fund owes the street a whole lot of money we just try to show that and there's a schedule on the last page of the actual report
And if anyone is interested in that, we can get
Speaker 46
27:05
you a copy, or it's on the website. Again, I think the mayor is here to
Speaker 1
27:13
address this. Okay. If you would have a seat, and be sure your microphones are on, and Mayor Weber, if you
Speaker 139
27:19
would identify yourself for the record. Yes, sir. Mayor
Speaker 141
27:28
Shane Weber, City of Sulphur Springs. And you, ma'am?
Speaker 144
27:35
I'm Aubrey Doss with Sulphur Springs. I'm recorder treasurer. Okay. recorder treasurer in reference to uh the first uh findings uh we i inherited a mess in 2017
um it was compounded uh we didn't know it until 2019 when we had the audit um the former office administrator had helped herself to close to two hundred thousand dollars and I'm not disputing some or any of these things that are in here however we have made quite a few changes as far as the the IRS portion of that goes again thought we had an offer in compromise it was of $7,500 that was over and done with we found out in 19 that even
though I had signed the checks, the former employee took them and made them hers. So we actually only made one payment, I think it was, even though it showed that in the computer and everything that it was all paid. We have since done a payment arrangement with the IRS so we're on top of that portion of it as far as the expenditures exceeding budgets we've
gone back and amended budgets as far as the inner fund balances being you know different departments owning different departments those have actually all been paid back now to each department we received approximately $182,000 in a bond money from that employee which we took and paid departments back. So we've come a long ways and again like I said
all the funds have been paid back to each other. As far as the second one and that's the funding issue. As far as we know, we've got it all squared away and good to go. And we are current on our taxes, payroll taxes. That's what the IRS thing was. It was all 941s or the payroll taxes not being paid. And it actually went back all the way to 2011. So it was a big deal. We have sold a piece of property that the city owned.
approximately $100,000 went towards the IRS debt right off the bat and that piece of property actually holds a dollar general now so we'll be getting some tax revenue from that. We're making steps in the right direction and that's all I have on that. All right so in your opinion
Speaker 1
30:14
you're making great progress in getting the mess straightened up that you inherited. Absolutely It's been a battle, but we're getting there.
Senator Trent Garner
Unverified
30:23
Okay. Questions from the committee? Representative Garner. Was the prior person who stole the funds arrested and prosecuted in any way? She was. She's actually in Minnesota federal
Senator Charles Beckham
Unverified
30:38
pen now. Good. Thank you. Senator Beckham. Is the person that was arrested, are there any restitution payments being made yet, or will those start after
Speaker 144
30:49
they get out? Well, I'm sure she'll make some money making license plates or whatever they do up there that she'll have to pay restitution.
She has been ordered to pay restitution once she gets out her almost three-year sentence. But it won't be made to us. It'll be made to the bonding company because they're the ones that, like I said, she had a bond. It was a bonded position. So we got what they pled down to. We got that. And she'll have to pay them
Representative David Hillman
Unverified
31:14
back for that. And that was $182,000? Correct, sir. Okay. It was actually
Speaker 144
31:18
$184,000 and some change, but after our deductible, we got about $182,000. Other questions?
Senator Charles Beckham
Unverified
31:26
Yes, sir. So the money that the previous employee took that was to be used to pay the IRS, you were made whole by the
bonding company, correct? Well, I'll let you have a second. Mostly, I mean, you
put it down and you had a deductible, but... Yes, and I
Speaker 160
31:50
mean, all that money was transferred into the accounts that the money was missing from that was originally pretty much stolen from the different accounts.
So when it all went through, it was transferred to the different accounts, and then those accounts paid the other accounts back
Speaker 156
32:10
that they owed money to. Okay, I guess
Senator Charles Beckham
Unverified
32:13
what I'm missing here is that if you had $100,000, I'm using round numbers here, $100,000 that you owed person A, but this employee took it, you still owe this money, but the bonding company paid most of it back.
Yes. so why isn't this money that the bonding company paid used to pay your debt
Speaker 163
32:36
that she stole the money from? I can answer that or she can but I may
Speaker 139
32:43
be missing something. No I understand your question now sorry. So the money wasn't stolen from the IRS other
Speaker 144
32:49
than we had a $7,500 offer in compromise so the IRS won't accept an offer in compromise anymore so we had to make a payment plan. Where she stole the money, most of it was out of the water account. And we also had FEMA
monies that were from the disaster April of 17 from the flooding. So the money that we got back from the bonding stuff went back to the departments that she was stealing out of and moving money around out of. So we've paid those departments back. And then we've also put the money back in FEMA. I would have gladly paid the IRS $7,500 to have almost $300,000 worth of debt to them paid back, but they weren't about to take it.
Speaker 138
33:36
Did that answer your question, sir? So was
Representative David Hillman
Unverified
33:40
there other money missing besides what was reimbursed by the bond company? There was. A
Speaker 144
33:47
lot of it was cash, so it's hard to determine. I can tell you that our water deposits are up 40 percent each month and so we know a lot of it was there but they she pled down to the hundred and eighty four thousand dollars and some change that's what they could without a doubt prove so that's what they
David Hillman
Unverified
34:04
went with and so that's the reason you have this other deficit
Speaker 1
34:08
that you can't get paid back like to the IRS and things like that I guess my question was maybe a statement there is other money the town is still short money because of what this lady did yes partially as far as the
Speaker 167
34:23
irs goes yeah i mean it was even before her um i mean she started in 17
Speaker 144
34:29
as well um but like i said we i inherited a mess um she came a few months after i was on but um and we didn't even really know it went back that far and i would assume that it actually
went back even further, but they can only go 10 years as far as the IRS payments go. Other
Speaker 1
34:51
questions? Well, thank you all for coming today, and you are excused. Thank you. And I hope you get this mess
Speaker 11
35:06
cleared up. So do I. Without objection, we'll file the report. The next report we'll look at starts on page 7. It's Lincoln County. The actual repeat finding on the county clerk is on page 8. The county clerk's office employees reported and
we confirmed gross salary overpayments totaling $18.50 made from September 4th, 19 through April 16th of 20 by direct deposit into the bank accounts of two individuals who left county employment. As of our report date, one individual had repaid the county $895, and the county clerk uh miss james is here to address this okay miss
Speaker 175
35:44
james if you would identify yourself for the
Representative David Hillman
Unverified
35:50
clerk thank you miss james and you are recognized now
Speaker 176
35:56
to explain uh why you're here okay we had um one employee who left employment in 2020 that um When we did payroll, we failed to check the terminate button on him. And so when we done payroll, it pulled him into that payroll.
And we checked, but we just didn't catch it before it went to direct deposit. So what have you done to correct it? Now we have one person that puts the payroll into the computer. I check behind them. And then we have the judge's secretary who checks behind me to make sure. So we have triple checks now to make sure that this doesn't happen again.
Speaker 1
36:52
So you've got elastic, a belt, and suspenders all at the free. Yes, sir. All right. Thank you. Questions
Representative David Hillman
Unverified
37:01
from the committee? Yes, Senator Beckham. Can you
Speaker 181
37:09
answer questions on the previous page? Are we going to discuss that at all? Yes. On page 7 for Lincoln County as well? I'm curious what's... We're on page 8, right, Lincoln County?
Senator Charles Beckham
Unverified
37:23
If you go back to page 4, Lincoln County is
Speaker 11
37:27
also on there. Yes, sir. She was the only official that was invited to attend because she had repeat findings, but we can answer questions. If you have questions, we'll try to answer
Senator Charles Beckham
Unverified
37:34
them on the other funds. I was wondering what gym, they were
Speaker 29
37:43
paying $11,000 a year, too? Yes. They were paying for gym memberships for all county employees. Yes. What's the name of
Speaker 185
37:49
the gym? Oh. I believe it was All Time Fitness.
Speaker 1
37:55
Okay. Thank you. let's stay on the finding that we have right now and we'll deal with that and if you want to come back to those other questions we'll be glad to see what we can do about it so other questions on this repeat finding see none thank you for coming without objection we will file that and then Senator Beckham if you want to back up
Speaker 189
38:25
But to the county judge, we'll be glad to – you're okay? Okay.
Speaker 11
38:36
All right. Thank you. The next report we'll look at is on page 14, the city of Eureka Springs. There was a repeat finding on the Park Commission. On October 3, 2019, Parks and Recreation discovered that a bank account linked to a point-of-sale software had been altered and funds were being diverted to another bank account.
resulting in a $6,000 loss to the city. This matter is currently under investigation by the state police. And I believe there's
Speaker 12
39:04
a New Park commissioner and I'm sorry, I
Speaker 1
39:15
Rooley. Mr. Rooley is here. Okay. Mr. Rooley, if you will, identify yourself and your position.
David Hillman
Unverified
39:20
Yes. And then you'll be recognized to explain the
Speaker 193
39:24
problem. Okay. Okay, Kevin Rulli, chair of the Eureka Springs Parks and Recreation Commission.
Speaker 196
39:33
What was the problem, how did it occur, and what
Speaker 193
39:37
have you done to fix it? So the problem appears to have been a lack of control around
Speaker 198
39:43
the iPad and square devices that are used out at Lake Leatherwood City Park for transactions that take place at the park. um we have since instituted a series of financial controls on the way the parks operates only the parks manager has access to or has the the login code for the device uh and they are
required to lock it up in the safe anytime that either the office is closed or there's nobody in the office attending it. Previously, there was fairly lax policies around how it was handled. People would leave the office, leave the device logged in. So it's quite possible that anybody could have accessed it at those times. All right. And you've turned
David Hillman
Unverified
40:34
this over. The state police is investigating now, is that
Speaker 198
40:38
right yes that's right uh and the last time the city attorney checked there was no uh update on the on the case that could be shared with us all right uh questions from
Speaker 201
40:48
the committee yes sir was it an employee
Senator Trent Garner
Unverified
40:58
that used this to put funds into their own bank account was this a
hacker third party from someplace else who got the money and who was who's responsible for setting an iPad up to do the point of sale to the separate bank account?
Speaker 198
41:10
At this point, we don't know. It wasn't a bank account that was linked back to any city employees. So, like, we turned it over to the state police to investigate it. We've not heard anything. Any idea where that bank account was at? Is it in
Senator Trent Garner
Unverified
41:21
the ether? Not to my knowledge. Okay. All right. Thank you. Mr. Garner, we've got
Speaker 11
41:32
someone looking for the work paper on that to see if we can answer that question. Questions from the committee?
Speaker 205
41:44
Mr. Love. Thank you, Mr. Chair. So as you were walking through your controls, you said now there's only just one person that has access to
Speaker 198
41:55
it? One person out of the park. The director also has a login to
Speaker 209
42:06
it. one person that has access to this so i guess how do
Representative Fredrick J. Love
Unverified
42:10
you i guess how do you check that one person then i mean because that one person could do the same
Speaker 208
42:18
thing could they not uh well theoretically they could
Speaker 198
42:24
um we are there there's a more rigorous process around checking receipts and validating deposits. Okay. All right. So you have
Representative Fredrick J. Love
Unverified
42:34
more controls than that. When you said, you know, well, now there's just one person has, you know, access, I get really scared because then that one
Speaker 214
42:44
person could do the same thing. To the actual device itself.
Speaker 198
42:49
Okay. So because we use Square, Square deposits it directly into the bank accounts, both the clerk and the interim director that we have check on a regular basis. We reconcile the bank statements on a monthly basis. Okay. All right. That sounds good. Thank you, Mr. Chair.
Representative Fredrick J. Love
Unverified
43:04
Yes, sir. Thank you. Yes, sir. Any other questions? Mr. Rye?
Representative Johnny Rye
Unverified
43:15
Thank you, Chairman Hillman. Sir, is there a chance that since there's only one person that's actually handling that
money that they could have an account that you could actually oversee maybe to make sure that everything is turned in properly and balanced properly sir so
Speaker 193
43:30
we we reconcile the square account can be accessed through the parks office they can log into it
Speaker 198
43:35
and check the receipts on that i'm talking about the actual device that they use in the park where the trans the credit transactions are made. Other questions? Well, thank you for
Representative David Hillman
Unverified
43:49
coming, and I hope you get this
Speaker 1
43:56
problem straightened out, and good luck. We're working on it. Thank
Speaker 15
44:02
you. Thank you. Without objection, this report will be filed.
Speaker 20
44:09
Our work paper, Mr. Garner, says that we don't know if it was an employee or not, but the bank account was in Utah. All
Speaker 11
44:24
right. Next one. The next report we'll review is on page 16, the City of Gravett.
There were repeat findings on the mayor and clerk treasurer. The first one, the city disbursed funds selling $1,200 to the Greater Gravit Chamber of Commerce without a contract. And then under the mayor, an audit or agreed upon procedures report and compilation was not obtained for the city's Water and Sewer Department. I do have a note here that we did get 2016 and 2017 and 2018-19 water audits emailed to me on May 4th.
So that has been partially corrected. And I believe in place of the mayor and clerk treasurer, Carl Raby is here
Speaker 46
45:07
to address these findings. Mr. Raby, if you will, identify yourself for the
Speaker 1
45:12
record, and then you're recognized to explain the problem and how you have corrected it. Sure. Carl? Turn your mic on, please. Oh, okay. Thank you. Carl Raby,
Speaker 224
45:28
I'm the finance director for the city of Gravette.
So to explain this, number one, first off, we now do have a contract starting in 2020. We have a contract with the Chamber of Commerce for services rendered to cover that item. And we have also finished all the water audits through 2020. So you understand how we got to here. In November of 2016, I became the finance director in the city of Gravitt.
First thing that I found out was that we had bank accounts on the books that didn't exist at the bank and bank accounts at the bank that didn't exist on the books and funds that didn't balance. So I had to kind of piecemeal take an approach to how I was going to solve this whole problem. So I started on the general side, because I knew legislative audit was going to show up, whether I asked them to or not. So we worked on the general side first, and that's where the finding came, because we did not have the water audits done.
The water audits, the 2015 audit was done, and then the company that did the 2015 audit had some internal issues and decided they didn't want to do any more water audits. So we had another company come in, Landmark CPAs, out of Rogers, and they did the 16, 17, 18, and 19 audit. And I also have in my possession right here the 2020 draft,
so they will finalize that audit as soon as we send a signed letter back to them. When I first started the first year, we had between reportable and non-reportable findings, I believe we had somewhere in the neighborhood of 50 findings, and we're down to two now. So I feel pretty good about where we've come in three years, and I think we've restored integrity to the operation.
Representative David Hillman
Unverified
47:39
Questions from the committee? How much longer
Speaker 224
47:47
do you think it's going to take to get this all straightened up? Those were the last two that we're straightened to straighten out. On the water side, our findings are, the only finding we have is an internal control issue, and that's because there's only two of us. So trying to spread that out is almost impossible at some point. We don't intend to have any more findings.
I can't promise you, you guys will never find anything. But we just try to do what's right. I mean, that's my whole thing is I'm there to represent the taxpayers and do what's right for them. All right. Any other questions
Speaker 201
48:25
for Mr. Raby? Thank you for coming, and you are excused. You're welcome. And
Speaker 1
48:31
good luck. Thank you. Without objection, this report will
Speaker 11
48:41
be filed. Just to go back to the first finding,
it was referred to the prosecuting attorney as well as being a repeat finding. I have neglected going through these first ones to let you know the ones that were also referred to the PA, but we will going forward. The next one we'll review is on page 19. It's y'all counting. There's a repeat finding on the county judge. An analysis of the Sanitation Fund Accounts Receivable Subsidiary Ledger revealed that two trash collection businesses owed sanitation fees of $68,000 and $21,000 respectively
at December 31 of 19. At June 30 of 20, the balances due for these same two businesses were $58,000 and $21,000, respectively. These balances conflict with Article 12, Section 5, which states, in part, no county shall appropriate money for or loan its credit to any corporation, association, institution, or individual. Additionally, the county does not have a policy in place regarding collection of amounts due for sanitation fees. A similar finding was
Speaker 46
49:42
issued in the previous report, and County Judge Thone is here to address this.
Speaker 231
49:47
Yes. Thank you, Mr. Chair, for having me. Mark Thone, Yale County Judge. The larger figure there now is down to around $40. They have been able to pay some after things have kind of got a little better. I've had several conversations with the prosecuting attorney about this, and this past year he and I both felt the same way, that this wasn't a year to instigate legal action against family businesses in our community that were struggling, and so we didn't do it.
And we've had conversations with them here recently, and we're going to set up a payment schedule to let them get back these two companies do a lot of business with us and they're still doing business with us and paying cash so uh we're we're trying to struggle to keep everybody going and not uh not put somebody out of business and still collect the funds and as far as the uh uh you said they didn't have a uh what'd you call it a a policy we do now we have a policy anybody over 60 days is cut off
they have to pay cash. But we don't have anybody, so just these two local family-owned businesses. Any questions? Now, I told you
Speaker 38
51:10
this committee was going to be hard on you, and I was going to be
Speaker 234
51:14
easy on you. Well, I don't know. You're a pretty
Speaker 235
51:17
good guy. I don't know about that. Okay, Senator Beckham, I knew if I'd procrastinated long enough, somebody would think of a question. Somebody would, yes, sir. so the second the 21
Senator Charles Beckham
Unverified
51:26
000 they haven't started paying at all they're paying some but not not a
Speaker 231
51:31
lot no sir just a few hundred here and there uh but we're like to say that's that's going to be uh you know things have got better in the community and uh they they have said people and i understand you know what what they said was people's not paying them and and i get that but you know at some point that there has to be a uh a judgment day i guess and we're about to that point because everything's
Speaker 233
51:54
kind of opening back up and all the restaurants are going back in business and all
Senator Charles Beckham
Unverified
52:02
that so this was initially found uh december 2019 which was yes three months before
Speaker 238
52:08
any of the covet stuff really yes and uh you know we were i was working with them then trying to get and then all this broke loose and
Speaker 231
52:17
and uh i went to the prosecutor you know what do we do uh what you know what do you think we ought to do and he he kind of had the same opinion as me is start legal action now wouldn't be appropriate so we didn't do that and maybe that's wrong i don't
Speaker 233
52:33
know but you know there's there's more variables than just you know black and white
Representative Johnny Rye
Unverified
52:41
so especially with this past year representative bryant thank you thank you chairman hillman sir it says here that
the trash collection businesses owed the 68 000 and the 21 does that mean that the folks that are actually picking up the trash refuse to pay the bill uh yes sir the the company uh now
Speaker 231
52:59
it's down to right at 40. so uh but they have been trying to pay along as they can and of course their uh their excuse to me was always uh well they're not you know the people out in the county's not paying us which you know i don't know if that's true or not but that you know that was what i was but it
Speaker 230
53:20
has been reducing they have been coming in and paying
Representative Johnny Rye
Unverified
53:24
yes follow up please yes sir um well judge let me ask you this though sir the the folks here the businesses uh the tech the trash collection businesses do they owe that to the county yes is that the way it is yes uh these two
Speaker 231
53:40
companies together would do before pandemic would do around maybe 20 000 a month with us they were our two biggest customers and uh and now and i hate to get into stuff that really don't matter but one of the
owners passed and then after he died they had a driver get killed and uh it's just uh we you know we just didn't
Speaker 233
54:01
want to pressure and start legal action Okay, other questions from the committee?
Representative David Hillman
Unverified
54:08
Seeing none, Judge, thank you for coming and good to see you again. Thank you, Mr. Chair. I
Speaker 189
54:19
appreciate the committee's time. And without objection, this report will be filed.
Speaker 11
54:27
The next report that we'll look at is on page 23. it's the city of Luxora this is still under report to refer to the prosecuting attorney and this is a repeat finding on the mayor and treasurer the city paid
Speaker 29
54:45
credit card charges of $65.91 for meals lodging etc. without supporting documentation or indication of a business purpose this is repeat on the reporter treasurer the mayor I think was a new mayor
is that correct? Correct Yes. And the recorded treasurer, Ms. Johnson, is
Speaker 1
55:05
here to address this. Okay, Ms. Johnson, if you would, identify yourself and then you're recognized to
Speaker 249
55:12
explain how you're going to get out of this problem. I am Joanna Johnson, city treasurer for Luxor. And with the issue, we got the finding for 2019 in, I want to say it was the fall of 2020.
So everything that had been charged to the credit card up until that point, we didn't have the receipts for. After that point, everything has since been properly receipted and documented, so we won't be having that issue going forward. So you think
Representative David Hillman
Unverified
55:45
you've got this problem solved? Absolutely. Okay,
Senator Charles Beckham
Unverified
55:57
questions from the committee? Senator? There's no
way of getting documentation from the hotels, the restaurants, or anything for what's missing?
Because you're saying going forward you have it fixed, but you're
not giving us any answers for the thousands of dollars
Speaker 249
56:15
that's undocumented. Right, and some or the majority of those charges came from, like I said, early in 2019. We got new mayor, lots of new city council members. They went to a lot of the Municipal League conferences, so there were hotel stays, gas mileage, things of that nature.
And what we tried to get back in last year because of COVID, it was, okay, yeah, we'll get you those records soon. Okay, yeah, we'll get you those records soon, and we haven't been able to get anything yet.
Senator Charles Beckham
Unverified
56:52
so in businesses that i've ran i've managed we provided employees cards credit cards and the way it's always worked and i'm thinking a lot of people here could agree with this if the employee can't produce the documentation to prove it the employee pays it so are you
actually going out and trying to get documentation for these charges or the employees required to get these documentation? The employees, since
Speaker 249
57:19
we got the funding, the employees are always obligated to bring receipts. We actually don't, the employees have never had access to the credit card. Only the mayor has always had access to that. But the charges were paid by him with the credit card. But now we do have paperwork that has to be submitted. So the employees pay first
Senator Charles Beckham
Unverified
57:46
and then they just get reimbursed. Okay, go ahead. So this is
Speaker 31
58:02
all the mayor's made all these charges? Yes. Okay. And the mayor's gone now and he's not working with you
Speaker 249
58:13
trying to document all these? No, I'm talking about the previous mayor. The previous mayor from 2019, those charges, the new mayor, like I said, the ones from 2019,
the majority of those were with the new mayor and the new council. So the previous finding that we got with the previous mayor, that is over and done with, kind of, in a sense. But for the one from 2019, he is still there, and he was the one who, when they registered online, paid the things online. When they got there, paid whatever lodging they paid at that point. But it was him with the credit card making those charges at that time.
Speaker 124
58:58
Okay. Senator Beckham, did you have another question? Okay. Representative Love. Thank you,
Speaker 205
59:05
Mr. Chair. So I guess I'm trying to figure out the charges in question. You're saying they were to, like, a municipal league conference and different things like that? Correct. Restaurants, hotels in the area, things of that nature. Okay. So, all right. I'm just trying to figure out if they were legitimate expenses or if they were just, you know, people just using the credit cards.
So I guess the Municipal League is a legitimate conference. I think Jack would agree. I guess he would agree. All right, so I just wanted to know if they were just legitimate charges or people just using a credit card and going
Speaker 253
59:49
out and doing. Right, and they were, like
Speaker 249
59:52
I said, the only person who had access to the credit card period is the mayor. So when he would ask who all wants to go to the conference, the city will pay for it so you guys can get knowledge, yada, yada, yada.
They would tell them where they were going or when they wanted to go, which conference they wanted to go to. They would do everything online usually, sign it, get the card. Once they got here to go to the conference, they would go to the hotel, swipe the card to do that. So it was him handling all that with the
Speaker 205
1:00:32
other elected officials. Okay, so now it's on a reimbursement. You're doing a reimbursement instead of doing up front, the city paying up front.
Speaker 249
1:00:41
Correct. So for meals, lodging, gas mileage, things of that nature, the elected officials have to submit a report of what they had, what they spent with receipts, what they went for. and they do get reimbursed once the mayor approves those for the conferences. They're virtual. We don't have to worry about that at the moment, but once they go back to being in person, everything will still be receded the same way, and the conferences will be paid for prior to with the city credit card,
David Hillman
Unverified
1:01:14
but everything will be fully documented. All right. Thank you. All right. Other questions from the committee? Seeing none, Ms. Johnson, thank you for coming today, and I hope you get your problems straightened out. Thank you so much. Without objection,
Speaker 11
1:01:41
the audit will be filed. The next report I will review is on page 28.
This is still under reports referred to the prosecuting attorney, and this is repeat findings. We had one on the county judge and one on the sheriff. The sheriff is here. Balances remaining in the circuit and commissary bank accounts of $68,000 and $68,000 respectively were not identified. A similar finding was issued in the four prior reports dating back to $15,000. On the county judge's finding, a review of the Union County Sheriff's Reserve account maintained by the auxiliary, revealed the following improper disbursements totaling $1,200, $1,100 for a Christmas party, and $153 for trophies.
These disbursements appear to conflict with Article 12, Section 5. Basically, I talked to the county judge, and they have separated the reserve account, so now that it's separate from the county, and since this is no longer an issue, I told him he didn't
Speaker 46
1:02:44
have to come. But the sheriff is here to address
Speaker 1
1:02:50
his finding. Okay. Okay, Sheriff Roberts, if you were to introduce yourself, you'll be recognized.
Speaker 264
1:02:55
Yes, sir. I'm Ricky Roberts, Union County Sheriff. And if I may, can I start with a circuit court account? You can start wherever you would like. All right, sir. After this goes back to 2015, I took office in 2017. What I've been told is documentation prior to 2015 has been destroyed. So we went back to 2015 with a circuit court account,
tried to identify all the monies that we could in that account. And as of January the 20th of this year, We wrote a check to our county treasurer for a sum of $72,067.55 of unclaimed, unidentified monies. Beings it was a circuit court account that was people that paid on their fines or paid bonds, we felt like that's where this money needs to be.
We tried to identify the monies that was left there, and we could not. As far as the commissary account, basically the same thing. We did, as Independence County did, we changed vendors in about midstream. I think it was 2018, maybe early 2019. We were able to go back and identify some of those monies to get that account down. And prior to me coming here, I went to the unclaimed office of the auditor of the state
and presented them a check with $47,132.72. In our commissary account, it has several revolving pieces. It's not just your regular account. We have monies that the inmates come in. They have monies on their person. It's put in their commissary. We have people that send money through the mail, which would be cashier check, check, whatever, the stimulus check that they got. We put that in their commissary.
We have over the web, you can send monies to them on the website. So we have a number of pieces that we work with. In working with our new vendors and all that, we came up with this number, and we feel comfortable that we have identified all the monies in the account as all the inmates that are currently in our jail. And this is the $47,000 that we wrote. Representative Love.
Speaker 205
1:05:38
Thank you. So I'm not familiar with a commissary account, but let me just ask you. So I guess when you're holding someone and I guess people are sending them money or whatever money that they have, just say Frederick Love was in your jail and he had $1,500, and Frederick Love is now getting out. Right. Do you give me that $1,500, or how does
Speaker 264
1:06:06
that work? What we have is prior to 17, 18, 19, they write you a check.
Some of those checks wouldn't cash. They wouldn't cash it or whatever. Now we've gone to a card system where it's like a debit card. We hand you that card on your way out, and that way we've identified all of those folks since we started with our new commissary. Okay. All right. Thank you. I was just curious. Is that
Representative David Hillman
Unverified
1:06:27
working better? Yes, sir. It's working a whole lot better. Yes, sir. He said he wrote it to the auditor.
Speaker 1
1:06:41
Okay, the question that we're discussing up here, you wrote a check to the state auditor and one to the county treasurer? Yes, sir. Okay. And the one to the county treasurer was $72,000 and some? Yes, sir. And the auditor was $47,000 plus? Yes,
Senator Charles Beckham
Unverified
1:07:07
sir. Okay, all right. Thank you. Senator Beckham? I've got the $47,000 check to the state auditor.
You said that was the same amount as the commissary fund that you identified everyone's accounts? Right.
Speaker 264
1:07:23
What we have is we identified that account and compared it with the monies that we have in that account. Okay? So we identified everybody who's in our jail. and all the commissary monies they have. We went to the bank statement. This is how much money we have in there. We subtracted that money in the outstanding balance,
and that's what we came up with, the $47,000.
Speaker 270
1:07:50
Okay, so you still have the difference between those two? Yes, sir. We have $104,000 in our commissary account. The way I understood
Senator Charles Beckham
Unverified
1:07:57
what you said initially was that you took all the money that the people that you currently have in jail, you took their money and gave it to the
Speaker 264
1:08:05
state auditor. No, sir. We still have their monies in the account. We have one gentleman in our jail that has over $15,000 in his commissary. So all the money you have in
Speaker 1
1:08:17
the commissary now, you know who it belongs to?
Yes, sir. We do. And all that excess
Representative David Hillman
Unverified
1:08:22
that you couldn't find out who it belonged to, or they didn't cash your check or
Speaker 264
1:08:28
whatever, that went to the auditor? Yes, sir. The unclaimed property. Yes, sir. Hopefully
Representative David Hillman
Unverified
1:08:32
we'll get some of that back. Okay. Yes. Ms.
Speaker 11
1:08:36
Steele? Sheriff, do you say you have already sent this check to the state treasurer for the unclaimed
Speaker 264
1:08:41
property? I just dropped it off about 1230. Yes, ma'am. Okay. And we filled out the report. I wasn't told about a report on the web, so we've done that since I've been sitting here.
Speaker 12
1:08:51
Yes, ma'am. Okay. And on the check that you wrote to the county treasurer, did you consider what amounts might be
Speaker 264
1:08:58
due to the state? No, ma'am. We figured the county treasurer would have taken care of that.
Speaker 29
1:09:04
Okay. So we have auditors there now. We'll look into that. Thank you. Yes,
Speaker 1
1:09:16
ma'am. All right. Other questions? Well, Sheriff, Johnny, you got to, are you just waving? Okay. Sheriff, thank you for coming, and we hope you get this all straightened out,
Speaker 189
1:09:24
and I think you're well on the way from what
Speaker 11
1:09:34
I can tell. Thank you, sir. All right. Without objection, this audit will be filed. The next report is on page 29, the city of Swifton. This has moved on to reports with just repeat findings. There's a repeat finding on the mayor and recorder treasurer. Federal taxes of $25,000 were not remitted timely for the first two quarters and a portion of the fourth quarter for $19,000. They were paid in $20,000.
IRS penalties and interest of $15,000 indicated on IRS notices received in 2019 have not been paid, and the city paid late penalties and interest to D, F, and A in the amount of $507. Similar matters were noted in the prior report, and Ms. Johnson, the recorder treasurer, is here to address
Speaker 46
1:10:12
this. Okay. Ms. Johnson, would you please identify yourself, and then you'll be recognized
David Hillman
Unverified
1:10:17
to explain how you got in this mess and how
Tabitha Johnson
Unverified
1:10:19
we're going to get out of it. My name is Tabitha Johnson. I'm recorder treasurer for the city of Swifton,
Speaker 281
1:10:28
And I took office in 2015, and they had a, and it is repeat finding because it goes back that far. They had an old dot matrix accounting program that, when I took office, had 22 different passwords for 22 different accounts. I had no training. The lady just before me left, so I kind of had to physically start doing this by hand. Quickly, they got me a QuickBooks program, and a representative came in and set it up,
and we worked with that for several years before I realized that QuickBooks was not good for interfund payroll. I would pull my payroll reports and file my payroll reports, but I have three different funds. I had the street fund, the water fund, and the city payroll. I wasn't aware that they set it up where I had to pull three separate payroll reports add them together manually and submit one one total so i wasn't doing that i was pulling the city payroll report which i thought included all three accounts and i was paying taxes on that so
we got we fell behind um so obviously then we got penalties and interest and we so we've just gradually worked to get that all caught up as of right now we're caught up we have changed softwares we went with um in june of 19 july of 19 we switched to csa software which does interfund accounting nothing is done manually I have you know I can just pull one report it pulls them all it tells me how much one account owes the other everything is current the street fund
doesn't owe the general fund anything all the payroll taxes are current with the exception of those penalties and interest that it speaks of and I have submitted several letters to the IRS either trying to get them to work a deal with me to lessen that amount or respond no and as soon as I get a response back from that, that will either be paid in full or if they agree to take a lesser amount, but it will be paid in full as soon as I get an answer from the IRS, and everything else is current. Do you
Representative David Hillman
Unverified
1:12:29
have the monies in your account to pay that $15,000? Yes, sir.
Speaker 281
1:12:33
Okay. The general fund stands at, I think,
Representative Johnny Rye
Unverified
1:12:39
$165,000 today. All right, question. Johnny? Yes, sir. Thank you, Chairman Hellman. Ma'am, on that $123,954 that was overspent
for the year, how did you come up with the money to actually pay that? It was just a budgeting
Speaker 281
1:12:55
error. The money was there prior years. Like I said, our general fund doesn't really suffer any – we don't struggle too bad.
And it was there. I think what happened, it was maybe a – he had told me that – and the mayor's one that done that. But I think there was an insurance claim that didn't, the money came in, and then they didn't adjust the budget for the expenses to that, and
Representative Johnny Rye
Unverified
1:13:22
it was overspent, if I'm not mistaken. Well, a follow-up, sir, please. Yes,
sir. Do you have a reserve fund or something that you call this that you can pull from that account to pay actually this type of amount of money that was actually exceeded within the budget?
Speaker 281
1:13:39
The 123? It's all in the general fund. But as I said, like right now, we owe nobody anything except our current bills, and we're carrying about $160,000 to $170,000 in our general fund with no debt. We don't owe for anything. I mean, just our basic
Representative Johnny Rye
Unverified
1:14:03
operating expenses. You know, you would think, though, that you would have some type of reserve fund. Like, if you had, say, $954,000 for a year that you had for the general fund,
you had, say, $580,000 for your road fund, you would think, ma'am, that you would have money that would be left over, but you would have that designated inside of a certain area, you know, especially for the general public to be able to look at to say, you know, they're in excellent shape. They have $500,000 in reserves or something. Right. And this has
Speaker 281
1:14:36
been a progress. When I took over, a little town of 800 has 22 different checking accounts. So it's been a progress. Like I said, when I went in, I was handed a set of keys. I never met the prior treasurer. I had four new council members out of five.
and we've thought and we as a gentleman said earlier I think originally there was about 20 or 30 write-ups in the first audit and we've got it down to to this so we've worked really hard to get things in order and to get our finances and our reporting in order we've went through two accounting systems to try to get things in order and we are working towards you know still it's still a work in progress. Thank you sir. Yes sir. Other questions?
David Hillman
Unverified
1:15:22
Ms. Johnson, I want to commend you for your hard work on what you have done. And
Speaker 1
1:15:27
it seems like you've kind of got a handle on this, and we
Speaker 189
1:15:37
hope we don't see you again. Thank you. With that, you are excused.
Speaker 11
1:15:43
Without objection, this report will be filed. Audit will be filed. The next report is on page 30, Lone Oak County. This is under Reports with Repeat Findings. The county judge has a repeat finding. Fixed asset requirements for counties are set forth in Code 14-25-106.
The county was not in compliance as follows. Purchases totaling $73,000 were not included on the listing. Equipment totaling $38,000 was erroneously deleted. Deletions totaling $31,000 were not properly removed. Deletions totaling $22,000 were not included in beginning balances. Adjustments totaling $22,000 were included in beginning balances. and one asset was incorrectly valued on
Speaker 46
1:16:22
the fixed asset listing. And Judge Irwin is here to address this.
Speaker 1
1:16:28
Judge Irwin, if you will, introduce yourself, and you're recognized to explain
Speaker 295
1:16:37
the reason you're here. Thank you, Mr. Chairman. I'm Doug Irwin. I'm the Loanoke County Judge, and I want to, first of all, thank all the hard work y'all do. I didn't realize how much it was involved until this last session, But I'm here, you know, for those that don't know, the county judge is responsible for all the assets.
And so each year when we go to do our asset update, whether it's deletions or additions, we reach out to each elected official and ask them to send us a copy of the list. Is there any changes in your office? You know, sometimes we get those changes, and sometimes we don't. I'll address some of these in here. The first item on the list is $73,000. It was for three Dodge trucks, and they were purchased in 19.
We didn't receive the titles until 19, and so they should have been put on the list in 19, but we didn't put them on until 20 of June. and the reason being we didn't receive those titles so it was just a the titles hadn't come in and so it didn't send up a red flag to add them to the list so that's the item number one uh item number two uh is two chargers that's removed what happens is it's like the sheriff's
got some old war out uh uh deputy cars or whatever they'll come and they'll request the titles we hold the titles in our office and they'll say, okay, we're going to sell two cars. They may sell those cars and they may not, but they had been, they should have been left on the list, but they had came to get those and they didn't sell them. So that was just a miscommunication there between that. The third item on the list is eight computers in the county clerk's office. And like I said,
when we requested it, they just didn't send them. They had replaced some computers in there, but they left the old ones on. And so they should have been removed from the list. That has been taken care of and updated. The fourth and the fifth items are just strictly clerical errors where they listed something or didn't list something in the wrong column. There's nothing missing.
But there's, you know, as far as monies or assets, either one, it was a clerical error. And then on number six, the asset value, I don't recall the exact figure, but I noticed when I seen the deal, they had added zeros on there, and it made it look like a $73,000 item was $730,000.
So that's what happened there, and I'll be happy to answer any questions. Anybody have
Senator Charles Beckham
Unverified
1:19:59
any questions? Senator Beckham. Thank you. Judge, when you were talking about the chargers, the two chargers, the sheriff
came or someone from the sheriff's department came, walked me through this here, someone from the sheriff's department came, said hey we want to sell these and you gave them the titles right they didn't sell them
there was no checks no money exchange hands you still have the vehicles and that's correct just what's your procedure going forward for this most people require even if you're a bank for example and you're holding the title to my vehicle and i come to you and ask you and say I tell you I want to sell it, you don't give me the title. I have to pay you for it before you get the title, right? Do you allow the Sheriff's Department to just sell for whatever value they want with no oversight?
Speaker 295
1:20:53
Well, we do, but they use, I don't know, the company, it's a government agency that they list this stuff out on, and they put a value on it. Uh, and, but if they, if they don't sell it, uh, those titles should make their way back to our office. And so there's, there's probably a breakdown there between the sheriff's department. I mean, they're very busy and that's probably the last thing they're worried about is getting the title back over to us.
Speaker 255
1:21:23
My concern would be that there would be
Senator Charles Beckham
Unverified
1:21:33
a little delay getting the check over to you, too, when they get paid for it. I'm not accusing your sheriff for anything, but that's the problem with the procedure that I can see. Just a suggestion. Your suggestion is it may be beneficial going forward to receive payment before you give up ownership.
Speaker 302
1:21:54
Would you agree with that? Well, that's
Speaker 295
1:21:59
true. That's true. I mean, the Sheriff's Department, we're entrusting those. They're not handing out the title before they receive the money for the deal. But that title's at the Sheriff's Department instead of us. I agree, it's not the best plan in the world.
Senator Charles Beckham
Unverified
1:22:19
It's simply protection for you, is what it is, because you're responsible ultimately.
Yes. If those titles go missing, if those cars go missing, the sheriff's coming
Speaker 303
1:22:30
to see you. Well, y'all are. Other questions? Okay, seeing
Speaker 1
1:22:40
none, Judge, you are excused, and thank you for coming and sitting all this time. All right, thank you.
Speaker 295
1:22:46
Once again, I want to thank all of y'all, the committee and everybody and Ms. Steele and all, but especially the committees of senators and representatives for the work y'all do down here.
The general public do not realize how much y'all go through and how much effort y'all put into this, and I witnessed it this last session because I was down here on behalf of the county judges a lot, and I want to thank y'all again.
Speaker 189
1:23:12
Thank you. With that objection, this audit will be filed. The
Speaker 11
1:23:20
next report we have is on page 31. It's Searcy County. This is still under reports for the repeat findings. There's a repeat finding for the county judge, circuit clerk, and treasurer.
County expenditures for six funds selling $2 million were not paid through the county claims process as required by code. And let's see. The county treasurer
Speaker 306
1:23:54
is here to address this. Okay, if you would, identify yourselves. Searcy County Judge Jim Harness.
Representative David Hillman
Unverified
1:24:01
Searcy County Treasurer Linda Watts. Watts? Watts. Okay,
Speaker 307
1:24:15
thank you. Yes. You're recognized to give us your explanation of this. Okay. I went into office in 2019, and the former treasurer retired, and I just picked up where he left off. I had worked for him, and he was doing it the way that I had been doing it,
And I didn't realize that it had changed until we wrote up for it, and then I called an auditor, and she told me how to do it, and that's the way I've been doing it ever since. I didn't realize I had to go through the claim procedure to do
Representative David Hillman
Unverified
1:25:00
from one other time right yes from a different treasurer yeah the
other oh okay yeah all right that's what i missed i'm sorry uh
Speaker 312
1:25:19
questions from a committee Representative Sleip You know I had to thank you Mr. Chair since I had my judge at the end of the table I had to say something. He's been claiming I've been asleep over here the whole time. But Treasurer Watts the prior Treasurer, this grant
or $2 million funds, this was in his time, you paid it straight out of
Speaker 313
1:25:44
the count of the grants and not ran it through the general
Speaker 307
1:25:49
claims? Yes, when we first started getting the grants, we had to put them in a different bank account. And we just, and he done this I wouldn't own the account or anything, so Jim done the ex-treasurer done this. And that's the way we were told to do it. And we just
Because when we got a payment request, we just wrote it out of that check account that it was supposed to come out. And then we made copies of the information and gave it to the clerk's office. But then when he left, we didn't discuss it or anything. And then when we was rolled up, I called one of our auditors, and she said it has to go through the claim process now.
So that's, you know, I didn't know it was supposed to. And then when I found out that I needed to do that, I've done it ever since. Follow-up, Mr. Chair? Yes,
Speaker 312
1:26:55
sir. Judge Harness. Yes, sir. We'll get this took care of, which you said it's being corrected. I guess you're ready for some more grants? Yes. Okay, thank you, sir. And about a million and
Speaker 314
1:27:12
a half dollars. You've got it with you today.
Speaker 1
1:27:16
Any other questions? All right, one comment. And Judge Harness, there is no truth to the rumor that Representative Schlape asked for you to be the last county judge that we have before us. of day. He didn't want me to get home before
Speaker 245
1:27:32
he did. All right. Well, thank y'all for coming, and I hope you've
Speaker 1
1:27:36
got your problems all solved, and we don't get to see you here again. All right. Thank you very much. Y'all are excused.
Representative David Hillman
Unverified
1:27:46
Without objection, this audit will be filed. The
Speaker 11
1:27:53
next report is on page 34. Still under reports for the repeat findings. It's the town of Cash. Repeat finding on the recorder treasurer, the general fund cash receipts and disbursements journals were not properly posted and classified, and the traffic ticket account cash disbursements journal was not properly posted in noncompliance with code. And I
Speaker 46
1:28:14
believe the recorder treasurer is here to address this.
Representative David Hillman
Unverified
1:28:19
Ms. Keurton, you're recognized, and you can introduce your guest there with you. I'm Terry Hurton. I'm the recorder,
Speaker 317
1:28:27
treasurer of City of Cache. This is my husband. He's the mayor of the City of Cache. Good to see you, Michael.
David Hillman
Unverified
1:28:37
You're recognized to explain the problem and how you fixed it. I just made an
Speaker 317
1:28:42
error on my receipt books. I just made a mistake. And they explained to me why I'd done wrong,
Speaker 319
1:28:51
and I've corrected that and won't do it
Representative David Hillman
Unverified
1:28:55
again, hopefully. All right. Any questions from the committee? It
Speaker 199
1:29:01
was a long way for you all to come to tell us that you got the problem solved. He took
Speaker 320
1:29:08
me out to eat lunch, though, so it was worth the trip. Okay. That's a good deal. Red
Speaker 278
1:29:14
Lobster. All right. Red Lobster. Any other questions? No. No.
Speaker 324
1:29:21
No. Sandra, I don't know whether we need to ask that question right now or not.
Speaker 1
1:29:30
We paid for it. any other questions seriously all right thank y'all for coming good to see
Speaker 189
1:29:40
you thank you good to see y'all without
Speaker 11
1:29:51
objection this ought to be filed okay i inadvertently skipped over one um on page 33 we have the city of bradford
a repeat finding on the district court clerk. Bank
Speaker 29
1:29:59
reconciliations were not performed, and the balance remaining in the bank account was not identified with receipt numbers for cases
Speaker 11
1:30:07
not yet adjudicated and payments made on all unpaid individual time accounts. A similar finding was noted in the previous two reports. And I believe Ms. Bonner is here. Oh, well, we'll come back to her. Okay, so I'm sure we have one more guest for the City of Madison.
It's Ms. Broadway What page is that on? It's on page 39 and we have repeat findings on the recorder treasurer sales taxes restricted for sanitation of $59,000 for $19 were not deposited to the sanitation fund. Sales taxes for sanitation
Speaker 46
1:30:53
expenditures in previous years of $160,000 owed to the sanitation fund were not transferred during the engagement period.
Speaker 11
1:31:00
So the total is due to the sanitation fund of $219,000. This goes back three reports to 2014. And state aid for highway funds in previous years of $28,000 owed to the street fund was not transferred during the engagement period. It's required by code. The city is making payments of $100 a month toward this balance. A similar finding was noted in the previous eight reports dating
Speaker 46
1:31:24
back to 2009. And again, Ms. Broadway, Ms. Ernestine Broadway, is here to address these findings.
Speaker 289
1:31:31
We are still making payments toward the money that we owe to the student account. Would you identify
Speaker 189
1:31:36
yourself, please, for reference? Oh, sorry. I'm
Speaker 331
1:31:40
Ernestine Broadway. I'm the court clerk, and I assist the recorded
Speaker 91
1:31:44
treasurer, Ms. Hodrick. All right. Thank you. And I am Bobby Hodrick,
Representative David Hillman
Unverified
1:31:55
the mayor of Madison. Thank you. Now, Ms. Broadway, you can
Speaker 331
1:31:59
continue with your explanation. Okay. The sale tax that you're talking about for the
Speaker 330
1:32:04
sanitation department, we are still paying on that every month.
We have not missed a month since we were asked to pay that. On the state aid highway fund, same thing. We're paying $100 per month. We have not missed a month since we started paying. The fixed assets, the mayor will answer that, but I'll go on and do the bank reconciliations. We have a CPA that does our bank reconciliations, and when I answered this, I thought they were saying that I was doing them and someone else should be doing them, but I was not doing the bank reconciliations.
They're done by an accountant that helps us with our taxes. And the bank reconciliations was not provided for the district court clerk. We had the bank. The auditor had all our bank reconciliations. I don't know how she missed the court funds reconciliation, but she had all our reconciliation sheets. The cash receipts journal that was not properly posted, They are being done now, so we've got to have that settled.
And on the fixed assets, the mayor answered that one. They're
Speaker 211
1:33:33
saying that they didn't have proper totals on
Speaker 1
1:33:36
it. Okay. Mayor, apparently she's passing all the hard questions
Speaker 337
1:33:40
off to you. Yes, sir. The mayor's always, we're the last one and the first one. All the fixed assets are equipment on our equipment yard. We was told to, if you have serial numbers on the equipment,
make sure those numbers are put on record. And we have done that. And the equipment that's a little older and the serial numbers that are not on there anymore, she said that we could make up a list of any number and just make sure we put that number on that equipment and also place it on the record. And so we're doing that the last time, doing all this, the pandemic and the cold weather, I don't know how she missed the numbers that we had on our equipment.
She didn't ask us to go out and see the equipment, so I just imagine that the weather is just she didn't ask to go out and see the equipment, so I don't know what happened with that because usually they contact me, and the ladies, the secretaries would contact me and say that the auditors want to look at the equipment, all excess, but somehow she didn't, and I know we had two weeks before the audit was coming, we were making sure that everything would be right, that our equipment would be numbered, serial number, but that didn't happen.
But we know to make sure that there are numbers. I know that she did state that some communities have metal plates that they actually put on their equipment. The auditor before told us just any numbers that you can see to make sure that they remain on there, that we can just purchase them, and that's what we do. If the numbers should fade off or something like that, we just go back and put that same number that we got recorded, we put that same number back on so the auditor can see the number, can make that number out.
Okay. And she said, in addition, adjustments were made by the city for land, building, and equipment without support, documentation, all this. So. I'm not sure. What that meant. We're not sure what she meant by
Speaker 330
1:35:51
that. Anything else? That's all. That's all we got. Okay. anything else that's
Speaker 341
1:35:59
all that's that's all we got senator beckham
Senator Charles Beckham
Unverified
1:36:05
the payment back towards the street fund you've been paying a hundred dollars a month for eight years on that
so far yes sir at what point in time are we going to increase the amount that's being paid towards
Speaker 337
1:36:25
that balance because currently we're looking at about 23 years yes sir that's the same. We understand that we hopefully, we don't know when our funds are going to change. We're hoping something to come up. We can create something that we can increase
that fund. We're very aware that that is a lot of funds. That's a lot of money to owe. And we're trying to do our best. And if anything ever come up, anything ever our funds ever increase we're going to make a point to pay much more but at this time it's just the situation our community is in but we are hoping something happens that we can increase that money that payment the the findings on the
Senator Charles Beckham
Unverified
1:37:11
fixed assets I see where there was mentioned about the proper
controls and additions but what it looks like is the one of the one of the big glaring points is that you have things listed on there that are below the policy amount so i don't know what your what your actual city code is i don't know if it's five hundred dollars
Speaker 345
1:37:36
i think it's five hundred dollars so you have a twenty
Senator Charles Beckham
Unverified
1:37:39
dollar impact listed on there or something like that i think that may be the actual concern. I'm not... No,
Speaker 346
1:37:47
at one time, we had gone through and removed
Speaker 330
1:37:49
all of the equipment that was less than $500. I don't know. Maybe we didn't take something off or what, but I know at one time the auditor told us we had to remove everything that was $500 or less. Okay. So
Speaker 340
1:38:06
you think you've got that problem taken care of? Yes,
Representative Johnny Rye
Unverified
1:38:14
sir. Okay. Okay. representative rye thank you chairman hillman mayor you know about halfway through the first
page it mentions the 28 159 was that like the city's portion
that the state paid you back for maybe going through the city with a state highway or was that just one of the four years that you received money for city streets that all cities you know can get about every
Speaker 330
1:38:43
four years I can answer that. That's okay. That was money that at one time the money was being put into the general fund,
and we was using it. And the last few years, I think they started putting the money directly in the street account. So, you know, we don't use it anymore. But at that time, they were putting the money in the general account. So the general fund has always been a little bold, so we just use the street money. It's a follow-up, please. Yes, sir. But that's why we're having to pay it back. Yes, sir. But we're no longer using it now because it goes directly to the street account.
Speaker 154
1:39:24
That is what got us in this situation because at one time, but we now know and understand the law has
Speaker 350
1:39:30
changed. We're not able to do that again. It's use other money out of other funds to take care of this. And that's what's got us there, why we happen to try to pay this money back. They once was doing it years ago, but like the committee told us before, the law has changed. Now we're learning the hard way. Yes, sir. Follow up, please. Yes, sir. Yes, sir.
Representative Johnny Rye
Unverified
1:39:55
Mayor, was this money on like once
every four years, each city receives a portion of state money to be able to help on city streets. Was that that money, sir? Yes, sir. Yes, sir. Okay. Yes, sir. Thank you,
Speaker 110
1:40:10
sir. Yes, sir. Thank you. Okay, other questions from the committee? Yes, ma'am.
Speaker 29
1:40:26
Mayor, you might want to talk to maybe the Municipal
Speaker 11
1:40:29
League. There's a new law. I don't know if you noticed, went through this past session regarding street fund monies and when cities owe their street fund monies that might require you to start paying more than what you're paying now, and you might want to start just planning for that. Yes, ma'am. Yes, ma'am. Were you aware that that law had passed, had changed?
Speaker 189
1:40:49
No, sir. Okay. I was afraid you hadn't.
Representative David Hillman
Unverified
1:40:57
Senator Beckham. Yes. Yeah. You want to go
Speaker 1
1:41:06
ahead? Okay. the law that was passed was there's a number of cities and towns that had merged in the past their street funds with their general funds, and a lot of them are paying it back. I know one town that it was going to take them 128 years at the rate they were paying it back, and so there was a law passed this time
that will withhold the turn-back funds until that is straightened out with the street funds. So you might be aware
Representative David Hillman
Unverified
1:41:33
of that and plan for that in the future. Yes, sir. Thank you. Any other questions? All right. Thank you all for coming down today, and thank you for your patience. All right. Thank you very much. Without objection, this audit will be filed.
David Hillman
Unverified
1:41:52
I see Jack's going to help you with that.
Speaker 11
1:41:59
The last report that we have a guest for that I'm showing is the City of Bradford. This is on page 33 on the district court clerk. It's at the bottom of
Speaker 29
1:42:11
the page. Bank reconsidations were not performed, and the balance remaining in the bank account was not identified with receipt numbers for cases not yet adjudicated and payments made on all unpaid time accounts. And Ms. Bonner is here now to address this. Ms. Bonner, we're glad to see you.
Speaker 1
1:42:30
Hi. Because you're the last one. You are recognized. Will you please identify yourself and then explain the problem and how you're going to fix it? Yes, sir. Crystal bottom,
Speaker 360
1:42:41
Bryceford District Court. 2019, when I took over, I was doing it the way
Speaker 361
1:42:46
the former lady that had left it back in August. Fortunately for me, February, when we were audited, got to restuff. She said, this is not how you do it. She explained to me how to do it. So it has been corrected.
Now, next year's audit, we're going to get hit for the same thing because it wasn't corrected until this year. So that's where we're sitting at now. So it has been corrected? Yes, sir. The auditor was great. She showed me how to do it. So it's being done now. All right. Any questions from the committee?
Speaker 1
1:43:16
Thank you for coming, and thank you for your patience. Y'all have a great weekend. Without objection, this ought to be filed. Okay,
Speaker 327
1:43:31
so now then we'll go back and catch up all the ones that we skipped.
Speaker 11
1:43:38
On Jefferson County, which is on page two, this is under reports previously deferred. The judge was invited to be here, but I did not hear from him. Staff would recommend we defer that and invite him to come
David Hillman
Unverified
1:43:55
next time. Can we, without objection, we've got several of these. Why
Speaker 11
1:44:06
if you, okay, Marty? Okay, so the ones then that we did not hear from was Judge Robinson from Jefferson County,
the town of Franklin, the mayor and recorder treasurer. Let's see, Prairie County, the county judge, Whitaker Village, the recorded treasurer, the Phillips County Sheriff, the Swifton Mayor, his recorded treasurer might have addressed
Speaker 46
1:44:47
Tuesdays, though. We'll look at that. Faulkner County Sheriff.
Speaker 11
1:44:57
The Town of Gilmore, Recorder Treasurer. And the Fulton County District Court
Speaker 1
1:45:08
Clerk. Okay, we're going to defer all of these without objection with the exception of Prairie County. Without objection. Okay.
Now, let's take up Prairie County a little bit. The county judge called me last week. It's on page nine. Okay, excuse me. And he had had a food bank for several years there in the county, and the money
David Hillman
Unverified
1:45:32
was in the county treasurer and without the county treasurer, and finally he just threw his
Speaker 1
1:45:40
hands up and said, look, I'm just going to do away with it. So my suggestion and ask the permission of the committee is to send staff down there to Prairie County.
The judge is quite handicapped and to see if, in fact, the problem has been taken care of so that he wouldn't have to make a trip over here with the permission of the committee. Motion and a second. Those in favor say aye. Opposed, no. Okay, so
Speaker 11
1:46:12
we'll do a staff visit then to Prairie County, and we'll defer these others. Let's see.
So do you want me to just let you know the ones that I did hear
Speaker 29
1:46:28
from as we go down the list? Yes. Okay. So Beattieville called, and
Speaker 11
1:46:34
she requested to defer. Dyer, the mayor, is no longer in office, so that one is – staff would recommend we file that one. Let's see the town of Franklin I mentioned. McNabb, the mayor called and requested to defer.
Hot Spring County on page 7. We determined that the sheriff's repeat finding has been corrected. We were there on site, and our staff looked to see that this had been corrected, and staff would recommend we file that one. Without objection? Did we file Dyer? Without objection, did we file
Speaker 370
1:47:18
Dyer? No. I bet you said we're supposed to file that one, or was it? The City of Dyer, that's a question.
Speaker 11
1:47:30
The mayor is no longer in office. Yes, I recommend that
Speaker 189
1:47:33
we file that one. Okay, all right. So without objection, we'll file Dyer.
Speaker 11
1:47:45
Thank you, I didn't catch that. On page 8 is Miller County. The repeat finding was on the district court clerk, and she has worked with her software company, and we have determined that she has substantially corrected her finding. Staff would recommend we file that one as well. With that objection.
Prairie County, we mentioned we're going to do a staff visit. Van Buren County on page 10. This is past those that we just mentioned were all deferred from the prior meeting. On page 10, this starts reports certified to the bond board. And these people are not necessarily invited to be here, but we normally read aloud the findings that were referred to the bond board
and the prosecuting attorney. Does the committee want us to do that? Please. Okay, so on Van Puren County, the judge and county clerk, a building owned by the county and operated as a nursing home per a lease agreement with a private non-profit corporation had flood damage in 18. The agreement states that routine repairs and maintenance as well as damage to or destruction of the property are the responsibility of the private corporation. County hospital millage funds may be used for maintenance and improvements if approved by the county. The private corporation contracted with a company owned by a member of its board of directors
to act as a construction manager for building repairs. A business owned by a member of the county hospital board of governors was then hired by this company as a subcontractor to perform a substantial amount of the work. Subsequently, the private corporation's insurance company denied a claim for repairs performed by this company, and according to the county judge, the company invoiced construction costs totaling $317,000 directly to the county at the request of the private corporation's board member. We questioned the county's responsibility for these expenses
and noted the following issues regarding the payments made by the county. The county paid $155,019 and $99,020 of the amount invoiced above for the hospital building repairs. Amounts were paid without a contract or bid documentation in noncompliance with code. which requires the county judge to verify that state purchasing and other laws are complied with, and the payment has been incurred in a lawful manner and is owed by the county. Furthermore, the remaining invoice balance of $62,000 was paid by the private corporation in 20
because the county did not have sufficient funds available for the payment. Amounts paid in 19 and 20 were for work performed by a company owned by a member of the county hospital board of governors without an authorizing ordinance as required by 14-14-1202. A similar finding was issued in the previous report. We recommend county officials seek legal guidance regarding these payments. Are there any questions about that? No?
On the next page, the county pays 6206 to the spouse of an employee for maintenance services without authorizing ordinances. and under the sheriff our review of selected commissary account receipts issued in 19 revealed $2,600 in unaccounted for funds. Based on available records we were unable to determine if these funds were not deposited or were not properly voided. All these have been referred to the bond board and the
Speaker 30
1:51:08
prosecuting attorney. Yes sir John. Yes sir. Thank you Mr. Chairman.
Representative Johnny Rye
Unverified
1:51:18
Ms. Marty, this money, this $155,851 and the $99,150, did the county pay that out of their own general fund, ma'am? Yes, sir, the county paid that themselves. And they weren't supposed to do that, were they? Well, as the finding
Speaker 11
1:51:32
says, we question whether they should have. Yes, ma'am. Because their agreement with the private company said that the private company would be responsible for
Speaker 12
1:51:37
that type of thing. Thank you, Ms. Marty. And we recommend, again, they seek legal guidance to resolve that.
Speaker 29
1:51:48
Any other questions? If there are none, staff would recommend we
Speaker 20
1:52:00
file Van Buren County. Without objection. On page 12, we have Whitaker Village. This
Speaker 29
1:52:07
is still under reports for certified to the
Speaker 11
1:52:10
bond board. And actually, the recorded treasurer was supposed to be here, and we decided to defer for the repeat finding. The PA finding, a review of disbursements from January 1 of 15 to December 31 of 18 revealed undocumented disbursements selling $8,000 as follows.
$3,300 paid to the mayor for travel, a health department violation fine, personal credit card charges, and printer ink reimbursement. $3,200 paid to a business owned by the mayor. An invoice provided by the vendor indicated a survey was performed for property owned by the mayor rather than for the city as the invoice on file denoted. Furthermore, according to the recorded treasurer, the co-signature on the check was not hers. $716 was paid to other businesses owned by the mayor, and $1,100 was paid for a tablet and accessories assigned to the mayor.
These items were not returned to the city when the mayor's term ended in 2018. Does anybody have any
Speaker 374
1:53:08
questions about that? The mayor is no longer in
Speaker 11
1:53:12
office. Their court of treasurer will be invited to come to the June 3rd meeting. Is the mayor still making money off
Speaker 376
1:53:19
these properties and stuff like that? I don't know. That's a good question. We
Speaker 11
1:53:26
need to find out. That might be a question for the prosecuting attorney.
Senator Trent Garner
Unverified
1:53:30
We've referred that to him. I'd defer if we defer this and see if we
David Hillman
Unverified
1:53:36
can get somebody here to discuss it. So there's no way that we can
Speaker 380
1:53:44
invite the former mayor. That would be a frank question. The population of this town is 38. Is that accurate? Yes, sir.
Senator Charles Beckham
Unverified
1:53:49
Of course, the census just came out. They might have
Speaker 11
1:53:52
added some. That's not the smallest town. No, there's one with 28.
Gilbert has 28, I think. So we are going to defer this report because the recorded treasurer didn't come, and maybe she'll
Speaker 12
1:54:11
have some more answers. But if the committee would like to invite someone besides her, we'll have to get with someone else to figure out how to do that. It
Speaker 1
1:54:23
would be nice to have the former mayor come if he would. It would be entertaining. Yes, sir. Do
Senator Charles Beckham
Unverified
1:54:31
we know what the health department violation was for?
like if it was
Speaker 11
1:54:39
a mayor's property it's my it's my understanding the
Speaker 132
1:54:57
mayor is involved in the wine industry in Whitaker Village I'm not certain of that but Thank you.
Speaker 12
1:55:15
Okay. So for now, we're just going to defer this? Yes,
Speaker 38
1:55:20
ma'am. Okay. And we would like to have the mayor here also,
Speaker 186
1:55:24
Marty, if we could. Okay. We'll see what I
Speaker 11
1:55:32
can do. Yes. Okay, so that was the last one referred to the bond board, which was also referred to the prosecuting attorney. On page 13, we have the city of Alma.
Fining referred to the prosecuting attorney on the mayor and clerk treasurer. Our review disclosed 1962 in improper charges on the city's two credit card accounts, for which eight cards were issued to various employees, $1,300 for undocumented fuel, $400 for purchases without a documented business purpose, and $215 in undocumented purchases. In addition, we noted $1,626 in personal purchases by the mayor and a street employee in apparent conflict with Article 12, Section 5. These purchases were either returned for full
Speaker 12
1:56:16
credit or paid for with a personal check to the credit card company.
Speaker 57
1:56:21
Staff would recommend we file if there are no
Speaker 11
1:56:38
questions. Reluctantly without objection. It's been referred to the prosecutor as well. We know what happens there, too. On page 14, we have the city of Ashdown. There was
Speaker 12
1:56:45
a PA finding on the mayor. The city paid $17,000 to the park director for construction services without an authorizing ordinance.
Speaker 327
1:56:51
Staff would recommend we file. Without objection.
Speaker 11
1:57:05
On page 15, we have Fairfield Bay. The city refunded $8,400 of advertising and promotion taxes paid by a private entity without a contract in apparent conflict with Article 12, Section 5. Per city officials, the refund is equal to what the entity spent on advertising expenses.
However, the advertising appears to be specifically for the entity itself
Speaker 29
1:57:24
rather than the city in general. Are there any
Speaker 30
1:57:32
questions about that? The mayor's response is below that, if you're
Speaker 102
1:57:39
interested. File it. File it. Okay. Without objection, it will be
Speaker 189
1:57:45
filed. We'll be hearing from them again. I have a sneaky
Speaker 11
1:57:51
feeling. On page 16, the city of Greenwood, this is still referred to the prosecuting attorney,
the city disbursed $10,000 for the following expenses in conflict with Article 12, Section 5, $10,000 paid to the Western District Fort Smith Historical Society without a contract for services, and $500,000 paid to Arkansas Blue Cross Blue Shield for a council member's family plan health insurance
Speaker 12
1:58:13
premium 21 days before receiving payment from the council member. Staff would recommend we file this one as well. Without objection.
Speaker 11
1:58:27
On page 17, the city of Magnolia still referred to the prosecuting attorney. under the mayor and treasurer, the city made an advance payment of $25,000 to a council member for Christmas lighting decoration project without an authorizing ordinance in noncompliance with code. Additionally, the advance payment conflicts with 1459.105 and Article 12, Section 5, which states no city shall obtain or appropriate money for any corporation, association, institutional, individual.
According to city officials, documentation was subsequently provided for materials used on the project. However, based on
Speaker 46
1:59:04
the city inventory, only 11,000 of the documented materials were for the project. Therefore, we were unable to determine if all the materials purchased were utilized for the project. The
Speaker 11
1:59:16
city attorney is investigating this matter. And then the city paid salary of $3,2500 to the mayor and recorded treasurer, respectively, in excess of their individually appropriate amounts.
Speaker 29
1:59:26
If there are no questions, staff would recommend we file.
Speaker 11
1:59:35
Without objection, this will be filed. Still on page 17, we have Pulaski County under the sheriff. Review of the sheriff's office expenditures for a period January 1 of 19 through September 15 of 20, we have the following improper disbursements. $1,271 in possible personal purchases with no documented business purpose, $4,18 in payments to various vendors without adequate documentation, $3,75 for employee graduation party supplies, an alcoholic beverage,
$1,91 in refunds of unaccounted for inmate trust funds, $1,91 for products that were shipped to employees' residences, $58 in early departure hotel charges. Continuing on the next page, The Sheriff's Office did not timely pay some invoices totaling $1,434,614 and dated August of 19 through July of 20 to seven vendors. Of this amount, the county paid a total of $1,200,000 to one vendor for officer body cameras in June of 20.
These invoices were between six and nine months delinquent. In addition, $165,000 was paid to the remaining six vendors in August and September of 2020, leaving $68,000 due to vendors as of September 15th of 2020. And then, because the Sheriff's Office was in arrears to seven vendors, officials and management should assess the financial prudence and necessity of expenditures. Review of Sheriff's Office expenditures for the period January 1 of 19 through September 15th of 2020 revealed the following questionable disbursements of $45,000.
Speaker 29
2:01:17
$29,000 for furniture and office decorations, $12,000 for 49 televisions, and $4,000 for wheels and rims installed on the sheriff's vehicle. If there are no questions, staff would recommend we file. All
Speaker 396
2:01:35
right. So why was the final findings sent to the
Speaker 377
2:01:40
PA? Is it thinking that was purchased illegally or they were taken?
Which one? Because the sheriff's office was in arrears to seven vendors. Can you explain that in more detail?
Speaker 11
2:01:55
I think the reason we referred that is just because it was related to the finding before it. And what we questioned here is since they were behind on all these other things, we thought it questionable that they would purchase these items since they couldn't pay the other bills on
Speaker 1
2:02:17
time. Hmm. Ms. Steele, is this the current sheriff or the previous one that left office a couple of years ago?
I think this is the current sheriff. Okay. I can't see how it would help
David Hillman
Unverified
2:02:29
the county for him to have $4,100 worth of wheels and tires. I think we should defer
Senator Trent Garner
Unverified
2:02:35
this one. I think so, too. You want to have him invite the sheriff? Yes. Yes,
Speaker 11
2:02:56
please. Okay, so we already talked about Yale County on page 19.
That was referred to the prosecutor as well. On page 20, we have the town of Allport. The first finding was referred to the prosecutor. The town paid a council member $3,400 to cut grass and pick up trash. Although Council approved a contract for the service and passed an ordinance authorizing officials to work for the town with an approved contract, the ordinance did not prescribe the extent of the authority. A similar finding was noted in the prior report.
And we discussed all four earlier. I don't know what the status of their... Could I recommend
Representative David Hillman
Unverified
2:03:43
we defer that one? until we get more information without objection. Okay. Okay.
Speaker 118
2:03:58
On page 21, there's the town of Beebe, or the city of Beebe.
Speaker 11
2:04:05
The first finding was referred to the prosecutor as well as being repeat. I will say on the city of Beebe all of these findings that we did not have an exit conference until after the end of the year when the city officials would have a chance to correct their findings and we have determined they're substantially corrected and so those are three officials that I did not ask to come the first one was the city paid $7,000 for a fireworks display in
advance of the services being rendered, the fireworks display was canceled, and the city has not gotten their money back. Under the district court clerk, bank reconciliations were not prepared as required by code, and balances remaining in the bank were not identified with receipts issued for cases not adjudicated and unpaid time accounts. Does anybody have any questions about any of those? If not, staff would recommend we file.
Without objection. Without objection. Be filed. On page 22, there's the town of Dell. The finding on the mayor was referred to the prosecutor. On April 11th of 19, the town council approved salary payments to a water department employee whose sick leave and annual leave was exhausted. The employee was paid $6,900 for the period March 25th through May 17th of 19 for time off work, although the employee had no leave hours available.
Does anyone have any questions on that? With that objection, it would be filed. On the City of Horatio, right under that, on page 22, the City improperly disbursed funds totaling $1,600 in apparent conflict with the Public Purpose Doctrine and Article 12, Section 5, $750 to Hometown Connections for volunteer work, $500 for a Christmas parade, and 14 donations to the
Speaker 29
2:06:04
Horatio School District for various programs. Are there any questions about that?
Speaker 11
2:06:11
Without objection, it will be filed. On page 23, we talked to the City of Luxor. That was referred to the prosecutor. On Dallas County, the city dispersed funds tolling $9,300 without a contract, $4,000 to the Dallas County Conservation District $3,500 to Red Cross $1,200 to Morning Meadow and $600 to the Florence Crittenden Home and then the county entered into a contract with the Chamber for Economic Development Services
without documented approval by the quorum court and the contract does not contain criteria to measure fulfillment of a public purpose in non-compliance with code. Any questions on that? Without objection, it will be filed. On page 24 is Lafayette County. The finding referred to the PA is on the Treasurer and Tax Collector about halfway down the page. We noted the following discrepancies during our review of the Office of Treasurer-Collector.
Beginning in June of 19, the Treasurer-Collector issued a total of 13 manual payroll checks to herself. The checks reflected the correct payroll dates but were cashed in advance of those dates. This practice is in noncompliance with county policy and Arkansas Code. The treasurer collector did not pay her 18 real estate taxes collected in 19 and omitted these parcels from the published delinquent tax list. As of report date, the real estate taxes for 19 had not been paid and were not included on the delinquent tax list published on November 27th of 19.
Speaker 29
2:07:49
Subsequent to our exit conference, the treasurer collector resigned. Are there any questions on that? recommendation that be
Speaker 20
2:08:07
filed yes okay without objection this will be filed on phillips county um i'll go ahead
Speaker 11
2:08:11
and read the pa findings because when he comes back we'll probably just talk about the repeat findings the county judge expended seventy eight hundred dollars without an authorizing ordinance uh sixty five hundred to purchase a trailer from quorum
court member and $1,300 paid to an employee to prepare jail requisitions. Also, the county housed and paid $5,900 in utilities for the Humane Society without a contract, and they were dispersed from the road fund, which is noncompliance with code. The county entered into a contract for $1,400 for maintenance services without the county judge's approval. Thank you. And paid the vendor $729 in excess of the contract amount for additional work.
In addition, we were unable to verify the work was performed. Again, we've deferred this one already because the county judge and sheriff were not here. Okay. The county entered a contract
Representative David Hillman
Unverified
2:09:04
without the county judge's approval. Who did the contract? Charlie, can you find that? Do you want me to move on while he's looking
Speaker 11
2:09:23
for it and we'll come back to it?
And of course, they'll be invited to come to the next meeting as well. That was
Speaker 58
2:09:29
mostly a rhetorical question, but I would like to have an answer to it.
Speaker 11
2:09:32
We move on. We can get one. And just in case anyone looked at all those findings on the Treasurer on the next page, we understand the Treasurer resigned on April 30th of this year. Okay, so on Union County, the sheriff was here.
Speaker 12
2:09:58
We talked about the finding on the county judge. We've already filed that
Speaker 29
2:10:05
one, haven't we? Swift and Faulkner County on page 30. The rest
Speaker 11
2:10:12
of these are all repeat findings that we've already agreed to defer. So
Speaker 11
2:10:34
61, there are 63 reports with findings that have adequate responses.
And if anyone has any questions about any of those, we'll be glad to talk about them. Otherwise, staff would recommend we
Speaker 5
2:10:44
file those. I want to pull out 54 of the city of Camden. What page is
Senator Trent Garner
Unverified
2:10:49
that? Page 42. It's 54 on our items list. Oh, excuse me. Page 42. About competitive bids? Yes, ma'am. I
want to explain your position, and more than likely I would like to have them here discuss that in more detail. Okay. So
Speaker 1
2:11:07
we defer that? Okay. The city of Camden, we're going to defer the rest of them.
and we will file without objection. Yes, sir. Okay, take all the time you want to. No, page 42.
Speaker 24
2:11:18
54 is the item number. Which finding did you want? Both
Speaker 412
2:11:23
of them? Everything, just dealing with Camden, pull
Speaker 128
2:11:29
it out. Okay, so when I send the letter, I
Speaker 395
2:11:36
usually put the finding in there. So you want to put both findings on there? Yes, ma'am. Okay.
Speaker 414
2:11:41
okay do we want to are we still looking at
Speaker 378
2:11:53
those okay with the exception of Camden without objection we'll file these
David Hillman
Unverified
2:11:57
and we will invite Camden to come to the next meeting in June which official do you want the mayor and the
Speaker 12
2:12:04
city clerk or just the mayor just the mayor and anybody He
Senator Trent Garner
Unverified
2:12:08
wants to bring with him. Okay. The mayor is using that as his personal vehicle.
Speaker 11
2:12:15
Okay. So on pages 62 to 65, there are 134 reports that had no findings. Staff would recommend we file those as
Speaker 340
2:12:26
well. Without objection. I see thumbs up on that one. Those are
Speaker 327
2:12:34
the ones we like the best. Does anyone have
Speaker 189
2:12:39
any questions about anything? I have some
Speaker 1
2:12:42
questions of the committee. Did we go too fast?
I'm serious. I don't want to rush anybody through things, but we had a long agenda today. We'll probably have a long agenda in June also, but not as long as this one was. But the staff has gone to a lot of work and time to bring this to us. And I think it deserves our attention as much as
Representative David Hillman
Unverified
2:13:07
we need. But we do need to use our time very wisely. Yeah, one thing
Senator Trent Garner
Unverified
2:13:13
I would suggest is maybe looking more at the cases we refer out to
prosecuting attorneys and having people actually hear. I read through them quickly, and there's a few cases I would like answers for as far as the elected officials, who got taken care of, how the money was taken, things like that. Just kind of a quick read of them. I think something next time we could be a little bit more, get some more of those folks here. So do you want to let me know which one do you want to hear? Yes, ma'am. I think I'll just do that
Speaker 29
2:13:42
for the next one. Okay. Yes, ma'am. Because it's not ever been our policy to invite all of those. Okay. Yes, ma'am. Okay.
Representative David Hillman
Unverified
2:13:49
Okay. Is there any other business to
Speaker 1
2:13:52
come before this subcommittee? Seeing none, we are adjourned, and I want to thank the six of you that stayed for the whole thing. Seven. Yes, sir. Thank you.
Agenda
A. Call to Order by Chair
B. Adoption of Minutes of the December 8, 2020 meeting
C. Discussion of Noncompliance with Municipal Accounting Law:
i. Town of Twin Grovesii. Town of Gilmore
D. Review of Reports(Refer to the Synopsis)
E. The next meeting will be June 3, 2021
F. Adjournment
Documents
| Title | Type | Pages | Source |
|---|---|---|---|
| Agenda — LEGISLATIVE JOINT AUDITING - COUNTIES AND MUNICIPALITIES, May 13, 2021 | Agenda | 1 | Official source ↗ |
Speakers
Speaker 1
David Hillman
Unverified
Representative David Hillman
Unverified
Speaker 11
Speaker 12
Speaker 15
Senator Trent Garner
Unverified
Speaker 24
Speaker 26
Speaker 38
Speaker 46
Speaker 47
Speaker 51
Speaker 58
Speaker 42
Speaker 31
Speaker 72
Bobby Box
Unverified
Speaker 81
Speaker 88
Senator Charles Beckham
Unverified
Representative Johnny Rye
Unverified
Speaker 116
Speaker 126
Speaker 128
Speaker 130
Speaker 133
Speaker 30
Speaker 120
Speaker 139
Speaker 141
Speaker 144
Speaker 160
Speaker 156
Speaker 163
Speaker 138
Speaker 167
Speaker 175
Speaker 176
Speaker 181
Speaker 29
Speaker 185
Speaker 189
Speaker 191
Speaker 193
Speaker 196
Speaker 198
Speaker 201
Speaker 205
Speaker 209
Representative Fredrick J. Love
Unverified
Speaker 208
Speaker 214
Speaker 20
Speaker 224
Speaker 231
Speaker 234
Speaker 235
Speaker 233
Speaker 238
Speaker 230
Speaker 249
Speaker 124
Speaker 253
Speaker 264
Speaker 270
Tabitha Johnson
Unverified
Speaker 281
Speaker 295
Speaker 255
Speaker 302
Speaker 303
Speaker 306
Speaker 307
Speaker 308
Speaker 312
Speaker 313
Speaker 314
Speaker 245
Speaker 317
Speaker 319
Speaker 199
Speaker 320
Speaker 278
Speaker 324
Speaker 289
Speaker 331
Speaker 91
Speaker 330
Speaker 211
Speaker 337
Speaker 341
Speaker 345
Speaker 346
Speaker 340
Speaker 154
Speaker 350
Speaker 110
Speaker 360
Speaker 361
Speaker 327
Speaker 370
Speaker 374
Speaker 376
Speaker 380
Speaker 132
Speaker 186
Speaker 57
Speaker 102
Speaker 396
Speaker 377
Speaker 118
Speaker 5
Speaker 412
Speaker 395
Speaker 414
Speaker 378