Legislative Joint Auditing & Senate State Agencies & Govt'l Meeting Jointly

Meeting a come to order. Well thank everyone for being here this morning appreciate all members of join audit and state agencies that can be here for this report and first off I want to recognize Chairman Ron call will of joint ordered if he's got any comments the for we begin. No comments members obviously we know what's on the agenda today the first item of business in the only out of the business will be special report on Arkansas state government transformation B. review of the expenses a potential reduction in cost at this time I'd like to recognize Mr ND Babbitt of the audit department to praise president to report. Thank you Mr chairman this report is presented in response to your request for legislative audit to verify the in my house and call savings contained in the report required by acts of sixty five of twenty nineteen. Here after all referred to this act is or the report as ACT five sixty five report. That five sixty five report was issued by the Department transformation shared services or C. T. S. S. regarding alcoholic of the transformation efficiencies Act of twenty nineteen. Legislative audit's report also includes an analysis of amount subsequently presented by the secretary the TSS on November nineteen twenty twenty. Referred to as the November presentation throughout my presentation. Audit review audits review focused on the reporting requirements of ACT five sixty five that specifically concerned overall reductions in general revenues expenditures staff did not evaluate the efficiencies in processes. Improve managerial support or improve delivery of services to citizens as a result of transformation. The objectives of the review were to verify information provided by the ACT five sixty five record in the November presentation. Verify any reduction in expenditures attributable to transformational related to facilities personnel or other areas. And determined the expenses related to debt associated with purchases ylides relocation of agencies and renovation of facilities. The preparation law provides the authority to spend money but do not equate to funding or expenditures funding represents the actual monies available to be spent in expenditures are defined as actual cash paid to a third party for good services or grants. Redirected calls for referred to an existing fund it refers to existing funding used in prior fiscal years for managerial or overhead expenses but you subsequent to transformation for expanded authorized programmatic purposes. As an example of a preparation funding expense process. The same department head fifty million and appropriations forty million in funding ten twenty million in expenses in your one. In your to the Department had appropriations the forty million in funding of thirty million with expenses of twenty five. Although appropriation and funding decreased by ten million each expenses increased by five million. Arment the Department did not have a decrease in expenses from year one to two. In other words a reduction in preparation of funding is not equivalent to a reduction in actual expenditures similarly reallocation reinvestments are not equivalent to reductions in actual expenditures. The ex five sixty five reported in a fight over nine hundred twenty nine thousand dollars and reduced lease expenditures due to reductions in leased square footage with some reductions to be achieved in fiscal year twenty twenty one. The November presentation reflected additional reductions and square footage leased for a total expense reduction of one point four million. As shown in exhibit one on page four of our report. I review will be held at least facilities increased by over thirty four thousand square feet with overall annual lease costs decreasing by over six hundred eighty three thousand average cost per square foot increased slightly in in general the state has leased approximately one percent more space for an overall lower cost. Regarding debt associate with facilities four of forty three point three million of the bonded debt was issued to purchase two buildings in performance actions. The first building was Atomics building purchased in August twenty eighteen and the second building was the Verizon building number four purchased in December of twenty eighteen for economic development purposes. One payments associated with these two buildings will exceed two million annually over the next decade. By utilizing the rise in building number four for state offices the state holds excess space that could be sold or leased is agencies relocated. Number two capital mall which is directly behind the big mac building or in is currently owned and occupied by the division of workforce services which plans to relocate into the Verizon building between April and June of this year. The second building known as the main street mall has been primarily occupied by small boards and commissions prior to transformation. With the consolidation of the various boards and commissions within the fifteen department levels in the cabinet level departments the buildings could be offered for sale after all agency support relocated the Division of building forty has no outstanding debt on the main street mall. As mentioned apartments have three located various agencies boards and commissions to central locations as part of the transformation came into relocation renovation expenses total six point four million as of September thirtieth twenty twenty as shown by the department's. On the slide on the slides in an exhibit two on page five of the report the TSS did not include these expenses and the ACT five sixty five report or the November presentation. If the current annual reduction in lease expenses noted exhibit one on page four and not considering the time value of money the annualized pay back for relocation renovation be approximately nine point three years. As departments continue to re locate additional relocation and renovation expenses may be incurred in leased space and rates may change thus altering pay back period. I funding reduction for the volume of ten million in the performance fund was contained in ACT five sixty five report however this mail the this announcmenet does not represent a reduction in expenses. As shown on the slide in exhibit three on page six of the report actual expenses from the points fund performance fund have increased since fiscal year twenty seventeen. The TSS identify performance related savings of six point two million and twelve point three million in acts of sixty five report in the November presentation respectively these amounts are not reduced expenses or savings by the Department but expenditures for employee performance salary increases from department funds as opposed expenditures paid from the performance fund. A review of personnel reductions in ACT five sixty five report noted a decrease in fill positions by three hundred ten according to the November presentation fourteen hundred individuals left state employment in the positions were not filled. Additionally the TSS indicated Klein both authorized and funded positions. Audit was able to verify the reduction of fourteen hundred employees as well as an additional thirteen employees. Exhibit four on page seven of the report provides the number field budgeted and authorized personnel positions from June thirtieth twenty sixteen September thirtieth twenty twenty. During this period fill positions decreased by two thousand nineteen with the majority of those reductions occurring between July one twenty nineteen September thirtieth twenty twenty. Between June thirtieth twenty sixteen and June thirtieth twenty twenty the number of authorized budgeted positions decreased by one thousand ninety one one thousand sixty nine respectively. With the implementation of transformation such secretaries were appointed to lead each of the fifteen cabinet level departments. As of September twentieth sixteen senior executive level positions within the newly formed apartments were vacant. If these positions are filled they will represent additional managerial positions at the department's costing the state between two point seven and three point four million annually. As of January fourth twenty twenty one these positions remained in the fiscal year twenty twenty to draft appropriations for the department's until these positions are eliminated or feel their impact on the cost of transformation cannot be determined. The November presentation included a hundred sixty six positions and six departments that were identified as surrendered positions that that the that the departments are not planning to feel creating potential savings of six point six million. Audit identified four divisional surrender positions and documentation provided by the department's bringing the total to a hundred and seventy. In regards to these positions audit determined that a hundred seven positions were associated with the closing of hot springs relief rehabilitation hospital which occurred before transformation. Sixty three positions remain in the department appropriation acts for fiscal year twenty twenty two and therefore should not be considered surrender positions one of these positions is currently field. From year to year actual salary increases changed at rates ranging from a negative three point four percent to a positive four point seven percent. Prior to the revision of the classification compensation law for fiscal year twenty eighteen salary expenses declined by three point four percent fiscal year twenty nineteen saw an increase of two point one percent followed by eight point nine percent growth in actual salaries in fiscal year twenty twenty. Although fourteen hundred positions were unfilled salary expenses increased by thirteen million dollars. When considering exhibit five in relation to exhibit three on page six a correlation can be made between the actual salary expense and performance fund expenditures. Specifically as actual salary expenses approach budgeted salaries increased demand will be made on the performance fund the ratio of actual salaries to budgeted or funded salaries increased from ninety three point nine percent in twenty sixteen to ninety four point one percent and twenty twenty the ratio of actual salaries to budget sellers with highest in twenty nineteen and ninety five point three. And lowest in twenty seventeen ninety two percent. This lack of excess salary savings will necessitate increased expenses for the formats Fund. Exhibit five on page nine of the report provides actual salary expenses perforated salaries and budget is salaries for the fifteen departments with constitutional officers and other independent agencies excluded over the five year period shall actual salary expenses increase from one point four three billion to one point four eight billion despite declining and pro employment. In two instances the TSS identified savings and loan program that was spent in another area these amounts do not represent reduced expenses but redirected cost which are expenditures on new or expanded programs or items. First they ACT five sixty five report in the November presentation list reallocation of general revenue or reinvestment of general revenue savings of six point three one million and eighteen point seven eight million respectively. Staff determined that approximately two point four million represents reallocation of the funds from administrative or overhead expenses to programmatic. Semele the department she's the term transformation transfers or efficiencies to capture redirecting calls for new initiatives the Department undertaken without additional funding. Back five sixty five report in November presentation list savings of three point two eight million eight point five three million respectively again these amounts do not risk represent reduced expenses by the department. Audit staff determined that approximately two hundred eight thousand represents actual transformation related redirected calls to utilize for programmatic expenses. At five sixty five requires the fifteen cabinet level departments to report the information listed on page ten of the report to the General Assembly none of the parliament's report submitted to DTS as could be verified could be used to verify any announcmenet identified in the savings and ACT five sixty five report summary at the front of the report. In the morning in a majority of the departments did not submit documentation to audit for these amounts or other numbers contained in the five sixty five report. Additionally during interviews with staff some department personnel expressed differing definitions of efficiency and effectiveness improvements resulting in different responses on reports submitted to DTS ES and difficulty in identifying actual transformation related X. expense reductions. Departments intermingled existing expenditure reductions are improvements undertaking prior to and after transformation in addition to the anticipated alterations to staffing procurement and citizen services in determining their announcmenet. As discussed on page eleven of the report departments identified as savings train savings changes in telephone and sailor Services lease in utility call state vehicle used to its employees staff and internal controls and transfers of land is efficiencies. However many of these changes could have been undertaken without transformation. Finally other matters of note include the department of finance administration began collecting delinquent taxes totaling over forty million and the number was presented in November presentation. These efforts predate transformation and therefore should not be considered a transformational related efficiency. After transformation fourteen agency boards or commissions remain in need of a service bureau assistance of the fifteen apartments eight apartments did not have an allocation methodology for shared services provided to the smaller boards with the remainder anticipating using a variety of allocation methodologies to yield different calls to shared services for each agency board or commission. A lack of specific accounting related to the cost issue of of the service bureau within the last five years staff estimate the cost of salary benefits as shown in exhibit six in a report. Exhibit seven on page thirteen report shows the five highest agencies if the service beer expenses had been allocated in fiscal year twenty eighteen. Departments are beginning to develop and implement shared services allocation methodologies universal reasonable methodology that does not supplant general revenue expenses with special revenues should be developed. In summary audit were audits review revealed the following is listed on page thirteen and fourteen of the report annual calls for leased facilities decreased by over six hundred eighty three thousand dollars future reductions or additional expenditures with areas leases are renewed. The state incurred long term debt of forty three point three million with bond payments exceeding two million annually over the next decade. Transformation related reallocation renovation expenses of six point four million were not included and the ACT five sixty five report or the November presentation. Performance fund funding we're reductions do not represent an actual expenditure decreased performance fund expenditures have increased each year since twenty seventeen. Although the number of individuals employed declined in the department a direct correlation between this reduction and transformation could not be made. Senior executive level positions have not been eliminated and remain in the department's preparation acts filling these positions would cost the state between two point seven three point four million in early. Sixty three positions identified as rendered remaining department appropriation acts lemonade eliminating these positions could potentially reduce expenses by two point five to three point seven million annually. Most departments were unable to document savings identified in the information they submitted to the TSS for inclusion and ACT five sixty five report further analysis will be required to determine if actual savings are achieved by three allocation of general revenue. For reinvestment in general revenue savings and transformation transfers or efficiencies do not represent reduced expenditures by the Department but rather redirected cost. Increase delinquent tax collections by the department of finance ministration predate transformation and should not be considered as a transformation related efficiency. Exhibit eight on page fifteen of the report provides a summary of savings the TSS included in the ACT five sixty five a report in November presentation as well as additional expenses identified by all of it. Is departments proceed in implementing transformation continue legislative oversight is recommended. Mr chairman I conclude my presentation management is here to risk skews me management responses are contained in appendix sitar report agency personnel here responding committee questions. Right thank you Mr rabbit For the legislative members that are here just to there's quite a few people that are here available today I've got a very long list of those of the major leadership leadership I will tell you that Secretary feature with department transformation shared services is here secretary Johnny key secretary Jamie cook secretary Stacy Hurst secretary les wall for Secretary Daryl Bassett budget director Jake bleed and director and Laidlaw Division Building Authority in the Department transformation shared services I have two people listed here that said that we're not here yet if they're present not ask that they at least advised me that we have come in late secretary Solomon graves. Or secretary Mike Christian. And areas okay or make sure recognized it is Secretary celebration okay. Sullivan thank you very much I want to make sure that we may know that you were here president members this time if you have any questions on this report that you would like to ask you can prepare those begin to chime in I see those coming why don't we start with secretary venture would you mind to to come in if there is anyone within your staff that you would like to have present with you what think we should start with you and and then we can move on I'm going to I see some questions that are already there and so I'm going to go ahead and take these questions secretary furniture so if you'll pause there may be questions but I'm going to give you an opportunity to respond to the report but first of all and members you gonna have to help me I don't have anything that's assisting me on your name sure at this point so someone in in sixty. Are you there Senator Hammer. Okay it ringing again they're Senator because it whatever it took you off for some reason or another. Are you recognized are now. I pressed approved but it's about somebody staff can help me on this I think thank you there we go all right. Sure did you want to give miss Fletcher chance to make any opening comments before well I didn't know if there was a question for the department staff that's what I was reason I went ahead and said take a question. Okay if I mean if you if you have questions you like to hold and would later respond that would be appropriate but I just didn't know if you had a specific for the staff immediately and now if not for our staff and all hold till after the response Mr okay Who is in seventy three. May all right do you have a question like to ask a staffer would you like to wait on sector fridge staff Senator Rapert you're recognized Sir thank you senator record of if you look at the report this is forty three point three million was bonded debt issue to purchase two buildings can you tell me of what was the date those buildings were purchased. let me look at it was two thousand eighteen I can find the exact. That's good enough that's exactly what I had to when was transmission past July one twenty nineteen. Thank you so these bills are purchased and occurred before transformation took place yes Sir thank you thank you Mr all right thank you very much. Secretary feature or what should go ahead and proceed and will be glad to take your comments and I've state your name few times but for the record I guess state your name and who you represent any federal Department of transformation and shared services I didn't really have a presentation for today I was just going to take questions but since you're giving me the opportunity I'll answer the bullet points that. Legislative audit put it in the full report at the beginning and the end and went over this morning. So they say that there's a difference in leases in square footage by their calculations that is correct however we noted that on the department of commerce there July one twenty nineteen date only included the departments of commerce that are in central Arkansas and their number on September thirtieth included the statewide offices DWS has statewide offices so it changed by over two hundred fifty thousand. And I say that are square footage one at thirty four thousand so that's a net reduction of over two hundred thousand by our calculation. On the second bullet it talks about the Verizon and Time makes building which at representative Wardlaw just made a great point that was preceded transformation and were purchased for other reasons. The third bullet is about retail reallocation of cost We explain that very fully in November that that was not a savings on the bottom line but how we were doing more for the same budget amount that was appropriated and approved by the legislature. The performance find that the best budget questions I'll let them answer that one if you'd like a salary expenses. This is the handout you have before you today that has the boxes on it. One thing that that we found. When looking at salary expense is if I can find my right she. Salary in. I really increased by thirty three million but the bottom line only increased by twelve million twelve point oh one seven they they rounded that up to thirteen million in the report the reason being is just some of those things that were someone out of our control. Your bonus there is a an act passed in twenty nineteen and that I know all state employees appreciated on increasing career bonus payments that amounted to three point eight million that when I've been salaries. There with the direct care payments because of the pandemic that came from here's Act money so that was federal but that was four point three million in payroll for this twenty four seven workers the minimum wage also increased on January first of twenty twenty that because the state over eight hundred thousand dollars. In twenty nineteen you also passed a bill that correctional department could pay out leave to those people that were an able to take it working on the holidays the leaf palpate out was nine hundred thousand so if you add all that up payroll actually increased by thirty three million. But we found efficiencies and use the budget we had to make this happen so the bottom line only increased by twelve million dollars so you have a twenty one million dollar difference there and I just want to point that out to you because I think that's very significant. as we go back through the bullet points. The S. C. positions right now we have nineteen and field and since July one that's pretty significant state government of how how we have done that every department has left one and field almost. Surrendered positions this was one thing they brought out said there could be savings and just wanted to bring it to your attention that last week and this week there's been some governors letters that surrendered fifty nine positions out of those which is a total savings of two point two million on salaries that's were not included in the fall budgets and we will do better the next time on getting this positions that were surrendering out before the budget is is submitted to you all. And then on the point on documentation currently transformation shared services just not not have a mechanism or the means to collect all the data that we get ask about and that's why I have thirteen actually secretaries here with me today because they if you have specific questions about their department I think they're the they're the subject matter experts and they're the best ones to answer when it comes to specific departments and with that I'll take questions Mr. All right members if you have questions and since we don't have a seating chart when I recognize you will be my number and then you could please just identify yourself of secretary for a drop receipt your your presentation I just want to make note of a couple things This stood out to me and and and maybe this will help us people are asking questions to that and now on page five of the presentation that was given by Mr Babbitt just a couple things I want to make mention of it to you and that you or others might be able to respond to. you already talked about the reduced lease expenditures he identified those the report basically it stood out to me that stays leased approximately one percent more space for a roll over costs that's there obviously talked about much of the debt one thing that did stand out to me page eight was that D. T. SS did not include these expenses that were discussed on the in that slide in ACT five sixty five report or the November presentation makes me wonder why that six million six point four million dollars and expenses were omitted completely from that and I'm going to click these off so that you can then come back to them Page nine of the report says that five sixty five report states that the performance fund budget was reduced by ten million for the biennium. However this amount does not represent a reduction in expenses and I noted there it says is shown on the slide and exhibit three on page six report actual expenses from the performance fund of increased since fix fiscal twenty seventeen so it made me wonder why the relation to your reports and the issue went on to state that the performance related savings you identified six point two million twelve point three million ACT five sixty five in November but these amounts are not reduced expenses or savings but the department so you can see some obvious disputes there between what the audit department is finding of what you've claiming you did mention a little bit about some of the senior positions then and I noted that And then one thing that really stood out to me is that almost salaries this is page thirteen although fourteen hundred positions went unfilled salary expense increased by thirteen million. You know that that's that's a that's a standout statistic and specially in light of the assurances of transformation will save money I find it very interesting I wonder who was the recipient of all that. and then fourteen we're talks about the trends that reiterates that over a five year period shown actual salary expense increased from one point four three billion to one point four eight billion despite the declining employment of. Four fifteen I highlighted the fact that the amounts that are stated there do not represent reduced expenses by other departments but redirected costs she had redirected costs that apparently were being claims savings but they that really wasn't according to audit and then paid seventeen most departments did not submit. Supporting documentation requested by a lady. That's a very big deal. That's a very that's a very big deal. I don't know how that you expect audit the legislature to. Frankly even affirm. What's been done. If we have a situation where you would not respond. And I'm not talking about you personally madam secretary but. It's it's disappointing to me on something so important. That we actually have. An internal audit going on so to speak you're with the legislative branch trying to find out. Did the savings that were promised actually occur. I've been here for over ten years and it's really frustrating to us in creates an an element of distrust. When we see things like this to say that the documentation is just not returned. And so it says there in the closing on that page seventeen that none of the department reports submitted to D. TSS could be used to verify any announcmenet identified as savings in ACT five sixty five in a majority of the departments did not submit documentation to alay. For these amounts or others contain. You all are going to have to answer that. I will get two more Page eighteen. the information that was there there's a lot on that issue there that to the different definitions of efficiencies and effectiveness it's hard for me to understand on something as significant as government transformation in the claims on what it would save the upending of so many departments that have been shifted around that there would be any miscommunication or even any misunderstanding amongst the different apartments involved of what what is the baseline what is the benchmark what is the definition of what we're doing. And the last thing I will say to you is that at I'm gonna stop by I'll just tell you the the thing that bothers me the most as a legislator or is that. Information was withheld and there wasn't apparently a good working relationship. And so with that I I lay that on the table for you do you want to say anything at all. I'm not sure I can address all of those and I took some notes but I will try and I'm sorry I just wanted to make you aware I guess it leads up to the to the most important one. If departments are going to actually respond. They're not going to work with legislative audit. The nobody should be surprised that you come over here in the report basically undercuts the whole premise of what we've been promised one transformations past. Is that a fair statement. I believe that we work with legislative audit and I know transformation insured services gave them everything we had we gave them copious amounts of documentation they also worked directly with the other fourteen departments and I don't have a list of who responded and who did not with me today but I would just say that those departments would have to answer that I agree we should always share information with the audit will here's where this stands and we get in here we talking have these discussions and I'm about to recognize another person to go ahead get in the questions but. Audit has put in writing. But you your did many of these people did not respond to that. And so responsive would say. We gave them everything we could. That puts us in a position of almost stating that legislative audit is lying or misrepresenting. And I don't think that's the case. And so we need it we're going to have to deal with that so thank you ma'am secretary I will recognize I believe this representative Wardlaw. C. sixty. Thank you Mr Hammer Senator Hammer sorry thank you thank you let me just ask a couple basic questions as far as the organization given the testimony that you've given and the questions that to a senator asked how many of how many meetings have you actually had with all the Secretary. Cabinet positions. I'm in certain I know we've had probably five or six meetings since transformation. I don't know an exact number I'd have to look back on the calendar okay and you'll keep records of those or minutes of those that are accessible or what's the how do you record those meetings. To substantiate that they happened I don't believe there's minutes for cabinet meetings now Sir okay and then one of the could you talk about the philosophy and the usage of the word savings because I can mean different things to different people so of audit has in its report to work savings. The the whole concept of the transformation was on the design or the idea that we would have savings. Defined savings as you approach it or how you look at it please. Well we've said since the beginning the transformation has three pillars and so we're looking for savings and efficiencies and and money in processes that's one also improve managerial support and improve delivery of services to the citizens it savings is a very broad term and can be used for a lot of things that different departments you know it's some departments we've reduced fees at the boards and commissions that citizens are being charged to be part of a certain group in others you know it just is savings where they can do more up more at their department and they would not have been able to do if they hadn't Fund found efficiencies so there's really not one definition. For savings that I can give you other than it's always looking at those three pillars that transformation focuses on. Okay. Thank you Mister allow me Q. but appropriate time I'd like Mr Preston come to the Mike please have missed a. Mislaid law you want to meet the same time or separately sure there's room to table sure if they'd like to come and make themselves available that would be great Have someone at twenty one. Who's it twenty one represent a rise that you Sir. I you're recognized if thank you Sir I have a question yes Sir and thank you of. Senator Rapert. That was the is it really stuck out is is what Senator Rapert was just speaking about Amy agencies general for. All that don't look good at all how do you know where you're headed if you're not getting reports from all these files. Part of what the labor representative rights they meant by that is in November we did a supplemental to the ACT five six five they say they couldn't cooperate it was never they couldn't find a relation between that and the ACT five six five report which there really was never meant to be that it was just a bigger picture of things that departments have done so what legislative audit ask for was documentation on all of that and some of it there was no written documentation if they did something like savings like I was saying on lowering the a fee there might not really be any documentation to give them other than now the now The fees this I again I'd have to let the secretaries respond to that some of the examples we're just way they were they were doing processes better the way they were doing when they structure their staff there was a lot of things that I believe it was not that secretaries and departments did not try to cooperate they just might not have had written documentation that they could provide. Thank. Anything further Mr. Thank you seventy three. Please recognize yourself. Representive Wardlaw thank you Mr. So to you to your statement to represent have. When I look at of. Page fifteen I don't know if you have this report in front of you. It's an exhibit of like exhibit eight. When you made a comment last fall that you had basically fifty seven million dollars in savings what you just told representive I was there was no documentation to back that up so where did that number come from and how did you arrive at that number without documentation from your secondaries because I mean you are. The guru when it comes to transformation so that number came from you and how did you get to that number I mean where's the documentation you used to get to that number. We did hand over all of the documentation we used to lead to legislative audit. Part of that was taking secretary's word for it they they save this much on different categories that the full report that I gave it is at the back of the report I don't think they included that day and it did include things like redirected cost we count that as a win we feel like when you're able Secretary cook has a wonderful example of this of how she was able to use a million dollars from from one division to another and not come back to this legislature and ask for more Monday and many more funding so things like that is what we counted and it will not show a total reduction on the the budget you look at and on the bottom line but we we are doing more for the state through that. Okay thank you all right. Secretary Ventura and I won't come back to the seventeen about the statement most departments did not submit supporting documentation requested you know would you would you hit that former U. once again because you know I have I further ask appear staff because it you know. That statement stand alone statement right there. Could be taken as. They weren't you weren't working with them but at the same time I think some of them just should they absolutely didn't have the information that was requested. And can provide it. It's so. Can you elaborate a little bit more on most departments did not submit supporting documentation requested. maybe you've had conversations with the other secretaries in the department so what what what where are we at this point with these kinds of comments in the report could you elaborate. As saying the I believe a lot of it did not have back at paper documentation I cannot answer for those other departments on wine some of the information was not I think they I think they gave everything they had to legislative audit I think we all worked very hard to work with them but as I said sometimes you you might not have paper documentation. But I think you could ask Mr Babbitt most of the department's trying to provide him with a to it. D. R. do you find it troubling that they couldn't document claims savings. We will do a better job going forward on documentation. Okay S. Asa C. you're nodding yes all right of. Sikh ninety. Senator Charles Beckham our secretary at are you personally involved in any cost savings measures or have you if you work to identify any cost savings. And help implement that can you give some details on that one example. One example would be the example I gave ons from from the department of public safety for a million dollars was able to be used by a different division without asking for more money from the state so they had savings in one area so they were able to use it and then not there that's just one of many examples the report I gave in November had had many examples mentioned and then the legislature requested that we submit all of the examples we had collected through the first eighteen months and when we did that as well I don't have those in front of me today but I'd be happy to get this to you my question was you personally of being involved in in any. Yes yes we've done a lot of things in the Department of transformation and shared services we really have got our costs down we have three as the positions that were not feeling and don't intend to feel we surrendered nineteen positions this this week Senate so there's there's many examples from from every department but you you personally don't go look in other departments to help them identify savings no Sir that's not my role I'm I'm in charge of one department and I help the governor with any transformation initiatives that he rolls out for all fifteen departments but that's not really the way it is been set up by the governor. Mr Beckham your finished membership are there any other questions for anyone here this morning on the report Mr unlit mine still the should be it's not if you get hit again. Senator Hammer you're recognized thank you. So let me go back to what I think has been said once or twice and let me get a firm answer based on what you said if you currently don't have the ability to document the savings. And that's something that you're going to have to work on to improve how did you have that the numbers that were presented in the report that now is being questioned by the legislative audit report we requested that information from the other fourteen departments and took them at their word of what they said they had in in several categories that's how we how we got our number all right so that would include Mr Preston and mislaid law shouldn't beside you yes Sir okay so Mr president let me start with you you just heard to comment that was made. Would you respond to it please. Thank you senator I believe we we submitted all documentation on where are savings came from. Okay then. You heard the comment made a while ago about needing to prove in the process is in order to be able to support the appearance of savings. And now with the legislative report being presented. What how did you go about determining savings. That you turned over in the documentation to legislative audit. Well I think for the big one thank you for the department of commerce is what was addressed earlier related to the square footage and us being able to reduce our footprint while it looked like it was in actual increase when the regional report came out it did not include the department of workforce services offices around the state and then the second for the did came out it did however it was actually a net reduction because of reducing our footprint and saving about a million dollars per year. Skews me there's related to our rent so that's really the big savings other cost savings I can just look at real quick I mean these might seem small but in the grand scheme of transformation with the part of aeronautics which is a very small department because we had additional I. T. support we're able to move them from all paper to electronic save about forty thousand dollars a year small in the grand scheme of things but it did help a small department save funds are utilizing the DWS print shop for securities and other places saves you know a couple hundred dollars here and there so eventually that all adds up all that was documented with with what we were able to submit in addition to the bigger savings being that of the lease space that we have available take any legal action issue question when we talk about positions and you're talking about surrendering positions are though while they may be vacant or those funded positions you're talking about run funded positions they are funded positions the fifty nine I'm sorry forty nine and that adds up to two point two million if you have salary in match in in savings. Okay. Mislabelled let me ask you to the comment that was made a while ago about how that use a Secretary supported document or or did not present documentation would you just share your thoughts on those comments please yes Sir Mr chairing committee and Laidlaw director division of building authority for the transformation shared services says center our our division did cooperate of course with our department secretary's office to provide information as needed a lot of the information we were providing what's related to leases and on annual lease costs for for all the departments at their leasing database where we record a leases statewide so we did provide that information. Okay and. Talking about the buildings because I think that those bills you and Mr Preston bills you know as far as the buildings and Mr president here's the you know here's the comments I've heard and that is it even though maybe the buildings were purchased in two thousand eighteen but none the less it is now being used as part of the justification for the savings of shared services and and the approach so I think that when they were purchased is one point but the fact that they're being used to justify the saving so to that point. It seems like the building was purchased for original intent that never materialized and now there was a scramble to try to fill it because of the bond debt that had been placed against both it and the other building and we're doing a consolidation out there to that building well maybe leaving some buildings such as number two down here that has no debt incurred against it but yet we're going to move them over or potentially in one of my questions is going to be what's the plan to move them over to a building where now they will begin to have to pay rent and that seems to be a consistent theme around some of the state agency so could you speak to that please. Thank you senator and and yeah I was I will point out as as been stated that it was purchased before in regards to and potential economic development project with the state now owning that building twenty five million dollars was a pretty good lease on it and the bond rating on it was actually very good so no instance one state could actually potentially make money on but because the transformation and and the need for bringing all those nine divisions or departments within commerce together it was one the one building that was large enough to accommodate that so because of the the purchase of that building because of transformation we were then able to move those folks in which did realize about a million dollars per year in rent savings the plan is for you had a not been for the pandemic we've already had the department of workforce services that's the one in a capital to mall moved in there obviously they've had a lot on their plate with the unemployment insurance the plan is to hopefully by the end of this fiscal year so hopefully by June to have them fully moved in there and I don't can't speak beyond the plans what happens after that I know there's a you've got a domino effect that will going to place and differ to a mislabeled to to fill in what happens after that that is the plan is to move them in by June of this year. Mr career mislaid law and into the conversation please yes Sir and if you have anything we do have a couple of people Senator sure whenever you're finished will move on but we come back thank you as a law yes Sir and and secretary Preston's correct there really was the commerce building or the Verizon building when it was purchased there wasn't another intended use for that at the time but as it turned out with the transformation and consolidation for that department there need exceeded one two hundred thousand square feet to be able to consolidate the department of commerce in a single location to accomplish those efficiencies so that the building that has worked out very well for us to be able to collect the co locate their departments together in that facility it does we were able to very quickly read backfield the Niger was capital building where a number of those offices from the Department commerce were re located from that worked well into accommodating the needs for the department of labor and licensing we also need to consolidate their offices with a number of small boards and commissions that were at numerous locations main street mall being one of those that was highly impacted by that so bringing those all together it did work well with our ability to consolidate offices at single locations as well as was planned or the intent for transformation. We will come back to sure thank you all right. ninety one. Please recognize yourself. Thank you Mr Senator Rice in the. I appreciate all the questions I just couldn't pass up opportunity when we have all the sectors in the room I do this case may but I will remind each of us that are in government. The citizens of Arkansas live with what we do. And I would ask thank about putting yourself in their shoes when we we sometimes make them uncomfortable or disrupt their lives with just doing our job. And they have excuses why I didn't couldn't come up with that information or I didn't know. You know that's not acceptable to many agencies. And as I talk to people that that's one thing that they feel there's a standard for them and there's a standard that government gets by with a wine not criticizing any particular agency. I'm here stand up for people that sent me down here and be in the business. As some of us are in in different aspects of life we have things we can offer but I would ask all of us. To understand there's not to stand. And I appreciate all that and while there may be explanations thank about that when you send people out deal with the public. Yeah it may be a rule and it may be a law. But if you're specter if you expect a little difference today. Thank about that in their life. Because not all white black and white thank you. Thank you senator rice in now comment we do have a couple more questions lined up but you know for me I look out across this room and I see a lot of people I respect and know that have. Been working in serving the public for many years and I have tremendous amount of respect it makes me wonder maybe ask this question as it relates to the report the statement that they didn't have information that they needed. This is a great opportunity for you state what do you think actually could have done better. Or what resources might you have had that would allow you all to proceed through this process. And not be at a point were. It was a struggle to even provide the information that was needed. Could you speak to that. I would love to have the resources I would love to understand exactly what numbers and what statistics would best help the legislature understand transformation and how we how we define it how you define it I would love to have that information and have a system where each department could go in and put those metrics monthly and it would be easy and and have it where the citizens of Arkansas could see it as well we developed a quick data dashboard back in November but I still don't think it's fully what you need and what you are asking for so I I would love to work with the legislature J. to get to a point where we could collect that data and could provide it to you okay. The I believe this represent of rye. Thank you Mr chairman you know maybe I'm just wrong in my thinking that. You basically had forty five agencies that went to about fourteen. And you would have budgets for each one of those particular categories. And it looks like to that on a monthly basis that you could do checks and balances to those The ticket or. Categories. And then. Then you know exactly where you stood month by month with. If you don't have that how do you really know where you stand as far from one category to another I. Senate right I personally don't have access to other departments budgets I do I do to mine into the divisions within transformation shared services but I do not have access to look at other budgets that might be something that D. F. and H. could do it through their office of budget as well I'll also say that I believe secretaries try to maximize the budget that they were given and that was that was passed by the legislature in twenty nineteen they didn't come ask for more money they they just tried to maximize the budget they had I don't know that everybody was looking monthly to save on the bottom line they were looking to stay within the bottom line and to make sure that they could stay within their budget. VOL one yes Sir and then we'll move on Sir. Where. I'm just work Senator Rapert about this I mean the part that bothers me is you know the general public does not know what we know and. You know it's hard for us to explain things to them when we say we're gonna cut from fifty forty five to fifteen and we're going to save a certain amount of millions of dollars a year. Localization that's putting people in a bad spot when you can't come back and kill progressions of where they're saying is at no wars going on and how much money is actually saving and then yourself seven problem you get in the information age is a from the secretaries is yes. Sancti offering. Thank you Mysteron of last question in the queue sixty I believe that might be Senator Hammer. Yes Sir thank you Mr the I just want clarity on something Amy all the secretary's report down to use that correct no Sir all the secretary's report to the governor. Okay so then let me. S. the two that are at the table do you and the governor ever have a discussion about the savings that each of you are presenting as far as legitimate savings within your respective departments. I can say for months and I can say for myself yes we we do have discussions in any information that we provide the legislature has been provided to him first I would just echo those comments yes we we share those those savings with the governor's well. Mislaid all. Sir I'm not a secretary I'm a division director my apology I'm sorry of. So. How many times have you all met with the governor's cabinet. As a cabinet well or all the all together because that was the whole purpose is to trim it down so many times of the element I can give you the exact number I would say it's a lot more than we we used to meet as a cabinet of forty two as a cabinet of fifteen you know for instance I'll go back to exactly year ago when code first at first it was her first positive case in the governor's able to pulls cabinet together in less than two hours to have us our first initial meeting of here's what's going on here's what I need my department heads or made my secretaries to do and all through COVID we met multiple times I would continue to meet obviously the legislative session obviously some of our meetings of transition to zoom meetings to count for social distancing but I'd certainly say a lot more than we used to and I think that's allowed us to have better communication channels directly to the governor and then still to our respective departments okay. Just say I'm sure I misspoke on five or six because I was thinking in a lot of in person meetings we've had many Sam calls and meetings that way since the pandemic so we can get you a number on that but I really I would not know that without looking back at my calendar and I guess the last question be you mention the reference of a million dollars will go of the example that you cited that million dollars that you said was saved where did it end up getting used or how is it a counterforce forced the savings in the report that you gave. Would you allow me to call Secretary cook up to address that since it was in within her department but at the chair's discretion that we will be fine. And the members we do have a nine thirty meeting that we coming up and so will be bringing this to a close short order first person if you don't mind would you wait just a moment US secretary I do have one question that's come in that I'm going to ask you a. Sixty eight correct thank you feud. A state your name and who you represent the record create that. Good morning I'm Jamie cook secretary for the Arkansas department of public safety US senator Hammer the example that SecretaryTreasurer gave was a million dollars transfer of from general revenue at the Arkansas crime information center over to the Arkansas state crime lab we out we did a analysis on their special revenues that fund continue to grow and we turned back over two million dollars in nineteen a general revenue but what we did we did an analysis and we feel really good that we can move the million dollars over a crime lab to fill the gaps with especially with the medical examiner's. Okay so the so the money was moved within within the agencies that that we're saying yes are from up I see I see the crime lab okay all right thank you Mr thank you. Right of expression the question did to it been posed the chair here in relation relation to the commerce building of were there any unexpected costs associated with that related something about unprotected pipes or something of that nature that was unexpected that we ended up being a cost to you. when the the weather hit couple weeks ago we do have a pipe that was burst down on the first floor of the commerce building luckily we are insured to cover that right so it sounds like I'm not sure that the question came to me with the right information but I guess we would say is there any unexpected costs of of the building and structure that you had to spend that were disclosed to you when you bought it. I mean I think everything was disclosed to us there and we knew that there was gonna be some general maintenance and upkeep that we needed to do and have to see specifically what this this person's talking about I think will that's why I asked them to confirm something that so we'll we'll leave that up forty five please recognize yourself representatives also secure could you mention her special revenues kept going up what were your special revenues come from. Thank you there's a there's a few different all revenue streams going into a C. I. see I've got our CFO yourself I misspeak but that from the criminal background checks as well as the ACRC checks that the department to do and it wasn't that they're they're growing every year we were just not utilizing that special revenue fund we were we were using our general revenue over the special revenues and I'll believe that if we have funds out there that are continuing to build that we should we absolutely are obligated to look at those and make sure that we can either of offset that in general revenue or turn that money back to the citizens of our state. All right. Members you have any other questions at all this morning before we conclude. I don't see any other people in the queue this morning so madam secretary do you have anything that you'd like to add enclosing. No Sir thank you all right we do appreciate you for being here the meeting is adjourned.