Legislative Joint Auditing-Counties and Municipalities
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Representative Carol Dalby
Unverified
0:16
she here because you let us pray Father in the quietness at this moment please
turn our hearts to the remembrance of this day 24 years ago and the devastation of the hijackers that they put upon our country and help us to remember all of those who lost their life help us to always remember that help us and guide us as we recognize those who ran to the
disaster and gave up their lives and help us to always hold in our prayers and our thoughts the first responders who stand between us and those who would like to do evil. Father, I pray for our country in this time of turmoil and from the events from yesterday as each person no matter the political spectrum their ideology their side of an issue they have a right in our country and a sacred right to be able to speak their words
and to express their views and let us to always remember that each person has that right and we hold we hold each person that was affected by the tragedy from yesterday in our hearts and in our prayers help us to resolve to turn down the rhetoric and help us to resolve to listen to others. Father, I pray for this committee as we do the people's work help us to be discerning in our thoughts help us to be probing in our questions
and help us to always help folks to come to a resolution that will help the citizens of their cities and counties be with us now as we go throughout the day and on this solemn day let us also remember Senator Gary Stubbefield a true example of a statesman in our state and one that we need to always remember that senator Stubbefield believed what he believed
but he always had a smile on his face and a willingness to listen to others help us to adopt that be with us now as we go throughout this meeting in
your name I pray amen amen first item on the agenda is the approval of the prior minutes I need a motion and
second to approve motion second, all in favor say aye any opposed all eyes have it thank you
next we will recognize staff for the
Speaker 11
2:53
following agenda items thank you Mr chairir . itemam see on our list is to update on
Speaker 13
3:00
the private reports for delinquent December31st,2022 water and sewer reports in your packet
Speaker 14
3:06
you had two lists the first one being the 22 list in the July meeting43 entities were placed
Speaker 11
3:15
on escrow for their turn back for lack of providing a
December31st 2022 water and sewer
Speaker 14
3:25
audit report. Since that meeting we've received 1622 reports additional 1123 reports and we've had 224 reports being filed with us. Additionally we had one entity the city of town of Pollard. they provided us with adequate documentation to certify that they had less than 100 connections in all three years. So three entities delight
Speaker 11
3:55
Horseshoe Lake and Pollard. their turn back was reinstated and earlier today an executive committee they authorized that to be done retroactively to the date the letters were delivered to the treasurer so they're receiving their turn back as of today and that leaves us with40 still on the list of being escrowed until we receive per 14,234,120 all current reports which would be reports through December31st to 2024.
with that objection, I move that we file this report seeing
none all in favor say
Speaker 13
4:41
aye those opposed say none the motion passes moving to agenda itemd the update on private reports for delinquent water and sewer
Speaker 11
4:50
reports for December31st,2023. ta f f was notified I mean staff notified
Speaker 14
4:55
the committee in the July meeting that there were64
entities that were now 18 months beyond delinquent for the 23 report Since the July meeting we have received45 of those reports so we're down to 19 lacking the 223 reports no action was taken on on these other than to send them a letter and we've had great response to that letter in the July meeting. So these
Speaker 11
5:21
entities all are continu are currently receiving their turn back. that is our report Mr Chair. without objection we will file this report
Speaker 18
5:33
tain none all in the paper say ayell oppose none
Speaker 13
5:41
motion passes agenda item number update on private reports for delinquent 20 December31st,2023
Speaker 14
5:47
municipal report in the July meetings staff reported there were four cities that had yet to file their 2 December31st,2023 report the committee asked staff to send them a letter no notifying
Speaker 11
6:04
them that those were now over 18 months due. we received all four of those reports or all the cities that have elected to receive proper reports or in compliance now that's our report without objection we will file this
report saying none all in favor say aye those opposed say none the motion passes
Speaker 13
6:41
item remember F is to discuss the noncompliance with the municipal county
Speaker 11
6:46
law for the city ofRockport. Is there a representative from the city ofRockport here today some of the officials had notified me that they weren't coming on page 17 and 18 with the pleasure of
Speaker 13
7:00
the committee will go ahead and and present this report city ofRockport 2023 and2022 under the mayor the accounting procedures for
Speaker 11
7:11
municipalities are set forth in Arkansas code 1459101 through 119. The city was in noncompliance with these codes and other accounting procedures as noted below. s prenumber receipts were not issued for all funds received. This is a repeat finding. Cash receipts journals were not properly maintained to include all receipts and will not reconcile the total deposits for the bank. This is a repeat finding cash disbursements journals were not properly maintained to include all disbursements and
will not reconcile the total disbursements for the bank. This is a repeat finding bank accounts were not reconciled. This is a repeat finding adequate supporting documentation was not maintained for tested disbursements of over $16,000 which represents 17% of the test for 23 and over $26,000 which represents58% of the test for 22 respectively without adequate supporting documentation so the validity of these purchases cannot be determined
That finding was turned over to the prosecuting attorney as well continuing on page 17 under the mayor city is not obtained an audit or agreed upon procedures and copulation report for the city's sewer system since 2018. this is noncompliance with Arkansas code. This is a repeat find in the previous two reports. You will note on your 2022liftRockport is among those so they are currently not receiving their turn back page 18 under the district court clerk
the district court clerk was in noncompliance with the Arkansas code and proper counter procedures is noted below. Bank reconciliations were not properly prepared. This is a repeat finding from the previous report. Cash disbursements journals were not properly maintained to include all disbursements and will not reconcile the total disbursements for the bank. This is a repeat finding underder 1459117 when noncompliance a substantial noncompliance is recommended
Speaker 14
9:19
that code allows for this committee to notify the city and put them on a a 60 day clock to get in compliance when that 60 day clock expires then they're without being in compliance50% of their turn back will then be escrowed until they become in in compliance so that's that's what we need to either discuss today or defer it till a member of the representative from the
Speaker 31
9:43
cities is here that would be the will of the committee
Speaker 36
9:58
Right, that's correct yes Senator Johnson thank you sir Has the staff received any communication fromRockport indicating a that
Senator Mark Johnson
Unverified
10:10
they could be here another time
Speaker 39
10:13
orb why they weren't able to be here. I've talked to the district court
Speaker 41
10:18
clerks and both of those had medical issues today appointments
Speaker 14
10:25
mayor at that time they didn't know for sure
so I didn't have anything for sure there they are we are there doing the 24 now the current report this motion or this discussion would be about their 25 records so we'll be there periodically we don't do that that engagement on site but
Speaker 31
10:43
we'll be there you know periodically when you say you're there you're currently doing the report we've got their
Speaker 14
10:53
records for 24 when all yes sir so so during this 60 dayy period if that's the will of the
Speaker 31
11:00
committee we will be in constant contact with them but they did not the the district court clerk to answer your question yes she reached out to
Senator Mark Johnson
Unverified
11:08
me Miss Shockley did. again my memory can fail me sometimes Mr Chairman but I believe
thatRockport is one of those municipalities that has been shall we say perilously close to violating the the speed trap provisions in the law. I just want to make sure that we're keeping a close eye on that
Speaker 45
11:30
and senatoreyton thank you thank you Mr Chair. just to be clearRockportt
Senator John Payton
Unverified
11:36
turnback is already on hold because of the other situation correct correct OK thank
Senator Ben Gilmore
Unverified
11:44
you Senator Gilmore well Senatoreyton asked 11 of my questions the other question just for clarification you said that tell me who all you'd talked to about being here would you go through
Speaker 14
11:54
that again? Both Darlenehoy and the other
Speaker 11
11:57
court clerk district court clerk M Orre I think's how she
pronounces that did not hear from the mayor and
Speaker 14
12:06
you did not hear from the mayor not directly no sir not not directly you said she didn't know what his plans were when I talked to and she who Misshockley district
Speaker 31
12:15
court clerk ok but we attempted to reach the mayor sir he was sent an invitation letter which ris created Miss Shati to
Speaker 14
12:21
call me so I know they received it so the city had the letters in hand. yes sir. OK, OK. Was
Senator Ben Gilmore
Unverified
12:26
there any other attempt other than the letter to call the mayor or anything like that we were there
Speaker 11
12:32
during the course of the 24 audit and I instructed the ask one of our staff members to have this
Speaker 31
12:37
discussion so they understood what was going to
Senator Ben Gilmore
Unverified
12:40
be discussed today fair enough so he should have been or or they the mayor should have
losing my mind as a gnat up here does anybody else have any questions on the committee Representative dalby thank you
Representative Carol Dalby
Unverified
12:56
could you have Mr. Archer explain one more time the necessity for this particular
statute and what it is
Speaker 63
13:06
that the audit's asking 1559117 it was put in law
Speaker 14
13:11
to create compliance with the municipalcounty law which is 1459101 through 119. that's the receipts the disbursements all the bare bones necessity to keep a set of books and the legislature at one point put this into effect to hold them accountable so that after so many noncompliance there was
some sort of action that could be taken and it's it's my understanding and then this allows for a 60 day clock they get60 days of grace to get it in in order starting vote of this committee and then at that time we'll reassess if they hadn't contacted them and50% of their escrow their in this case they don't have any but if whenever they if they were to get their audit and they're still not in compliance50% of their turnback would be escrowed for
Speaker 31
14:07
another60 days to get them in compliance and at that point they would lose their turn back and it'd be
redistributed to the to the other cities and state
Speaker 69
14:23
what is the will of the committee Senator Johnson not sure you request a motion as chairman would if you'll let me know what your if you were here I would be happy Sure go ahead does the chair have a recommended me just to accept
it. well I well I'm you know I'm I'm in favor of just moving forward and filing the report unless anybody has an objection I guess is what I'm trying to say because people have asked questions and there's been some discussion so instead of just running off I just want to hear what people have to say so with that being
Senator Mark Johnson
Unverified
14:54
said Mr Chairman I'll respond by saying this if a staff recommends it's ok to go ahead and do iter I make that motion on the other hand they're in the middle of it and I'm just don't want to be putting the cart ahead of the
horse so if you if you request I'll make that motion
right and then Senator Gilmore think he had something he wanted to
Senator Ben Gilmore
Unverified
15:15
see and I think it's just again another point of clarification so the motion would be to file the report OK because they turnback is already being held
at this point due to the other circumstances a bunch of discussions just want to make sure I'mirping into the committee right'm with the chairman thank you Mr Chairman if if I'm yes
Senator Mark Johnson
Unverified
15:32
senator and you feel free to jump in and and
fill in the committee as you see fit but as
you know an executive committee today there was a discussion of of what the law says versus what the discretion of the committee is and it appears from what Miss White told us that our hands if we follow the law are tied on giving them another bit of discretion to be in compliance with the law there are certain things we must allow to go forward and not in other words we can't wait we can waive our own previous motions but we can't waive anything that's in
Speaker 84
16:09
the statute now is that basically Miss White can make a note this
Speaker 14
16:15
and you correct me this particular law allows staff to bring the situation and say this is in our in our our view professional judgment were in there substantial noncompliance and then it's y'all's discretion at that point whether or not y'all move forward or not. The law does not require y'all to take put them on the six a day clock it does not require that gives you the option you know once you once you make that motion and then other things take the place oncece you
take a motion to make a vote then that's what we were talking about earlier but right now he's fully discretion of this committee y'all can either start the clock, wait, defer it whatever this
Senator Mark Johnson
Unverified
16:49
committee wishes to do. I'm not so sure I'm thinking Joe that maybe we're talking a little apples and oranges here that's not the exact situation I was referring to and maybe Mr Chairman you might want to ask Miss White to clarify so we're we're all on the same page
here well'm'm gonna give Misss why just a brief moment to say something and then I'm going to move forward
Speaker 92
17:25
thank you senator Johnson. Emily White legislative audit. I do think that we might be talking about two different
Speaker 93
17:31
statutes with two different requirements of
Speaker 94
17:34
this governing body under the circumstances what we talked about at the executive committee was with regard to the mandate on this committee once that decision is made to notify treasurer what Mr Archer's communicating to you here in this particular
Speaker 93
17:48
section of code is you have the discretion because their turnback is already being withheld
to file the report and move forward or you could decide right now to put them on notice pursuant to 1459117 and start that clock that he spoke about that's that's completely
Speaker 95
18:05
separate issue from what we did in July with the water sewer audits sorry about that senatorgilmore
Senator Ben Gilmore
Unverified
18:15
and when you say start that clock 60 day clock is is action then required on us once that clock starts ticking
Speaker 93
18:23
not necessarily Senatorgilmore it's on legislative audit to
follow up with the auditeee and make sure whether or not they're in compliance and then come back and
Speaker 77
18:36
report to you that's perfect thank you sir p
Representative Carol Dalby
Unverified
18:39
re s ent ative dalby thank you Mr Chair I think that helped clear up what I was trying to figure out the 60 day clock and I appreciate Senator Gilmore's question because I think that cleared it up for me but I guess my question to the chair and maybe to audit would be in these situations when someone doesn't show up and they've been invited and
they haven't come we usually say show up this next time and explain to us and I'm just I'm I'm not quite sure that I'm ready just to file the report without having them to come before us but I so I don't know how that would play into the the statute of the 60 daysy I mean mean y'all don't have to take any action
Speaker 14
19:18
on the60 days if y'all s assume that we're there doing the 24 y'all two just defer the report waitits the results of that before you take
action on that that is perfectly within the rights of this committee. It's one of the three options so staff would have no problem with
Speaker 41
19:34
deferring waiting on that and bringing them here inoctober that's that's a viable option ok
Representative Carol Dalby
Unverified
19:39
well that may I and I guess that's my point we're we're having other people come in and requiring them which I think is a good thing so that people aren't just thumbing their nose at the committee and and I personally would like to have them at the end of the table so we can ask these hard questions of them and find out but if the
committee wants to do otherwise I'm good with that that's
just my thought. thank you believe
Senator John Payton
Unverified
20:05
Senatoreyton has a question. Thank you Mr Chair and so I guess my question is what are we expecting them to do in the60 days other than just show up to to state their position because this says it's been referred to the prosecuting attorney and we know from experience that once it's under investigation they probably are not going to be very forthcoming with any testimony
and we already have their turn back held in the other situation . I'm I'm just trying to figure out what is it we expect to accomplish in the60 days other than them being here to testify Senatoreyton with regard to
Speaker 93
20:43
the technical components of that question I'm going to defer to Mr Archer but speaking generally just about when you say it's been referred to the prosecutor the prosecutor may or may not look at it within the next60 days to to get a good idea of what of what he or she wants to
do with it so that's that's something that I couldn't answer cust om and practice with this committee particularly has been in the last two years since I've been with you has been to subpoena someone who doesn't appear if they fail to appear so many times you all have directed the legislative auditor many times to subpoena a a person to come in and talk either to this committee or to the
Speaker 94
21:21
full committee later so you you most certainly have that discretion at your capability also maybe it can
Speaker 14
21:27
help a little bit on the first finding the one that
the noncompliance the fifth bullet that adequate supporting in adequate supporting documentation was not maintained on page top of page 17. that's the finding that was referred to the prosecuting attorney just that one because those expenditures there that we couldn't determine whether or not they were for good purposes of the city. The other that finding and the other four bullets on that that triggers the possibility of 1459117 substantial noncompliance as a whole
two different issues so the what would if if the committee so chooses to to start the six day clock what they would be required to do we'd send them a letter and say you've got60 days to correct those5 bullets to start issuing receipts start keeping adequate journals and to reconcile to the bank that's what 1459117 governs there so that that's kind of the objective of of that code I hope I maybe that
Speaker 31
22:33
cleared things up a little bit hopefully. thank you appreciate
it they wouldn't so Senator Johnson were you going to make a motion a while ago
Speaker 118
22:44
Mr Chairman, I did make a motion you it so it got me we would
Speaker 120
22:51
file the report right do I have a second guess so then we'll just file the report without objection and move forward
Senator John Payton
Unverified
22:58
I think I have a second on that I'd like to object I wouldn't give a s second but apologize wasn't trying to conversation
move towards not filing it and putting them under the 60 day clock to recognize
Senator Mark Johnson
Unverified
23:12
me yes Senator Johnson think there's enough questions about this especially appreciate Representativealby's comments and so at this point I would withdraw that motion and have a substitute motion that we hold this over to the next month's meeting all in favor say aye all opposed I have it
Speaker 13
23:44
my agenda here it's the city of lakeview on page 3 and5 if the
Speaker 14
23:59
permission I'd like to go ahead and and present this report proceed on page
Speaker 13
24:06
3 and5 we have the city of Lakeview which is Phillips
Speaker 11
24:10
County 2023 under the mayor and recorder treasurer county procedures from municipalalities are set forth in a municipal county law the city is not in compliance with these codes during the fiscal year 23 as noted below. bank reconciliations were not properly prepared for reconciliations did not include all outstanding checks and contain other errors Additionally, they were not they were not approved by a municipal official or employee other than the person preparing
the bank reconciliation. This is a repeat finding a listing of all fixed assets owned by the city was not maintained. This is a repeat finding from the previous seven reports re n ber receipts were not issued for all sources of income. This is a prenumber this is a repeat finding from the previous six reports cash receipts journalists did not indicate the receipt numbers . Supporting documentation or invoices were not provided for 24 of the26 disbursements examined. this is a repeat
Speaker 14
25:13
finding from previous seven reports. General F fund and street fund disbursements were not always posted to the journal in the proper period. page four restricted street funds were improperly dispersed for water clerk's
Speaker 11
25:29
salaries totaling over $8200 for 2023 in noncompliance with the Arkansas code The city transferred2,000 dollars from the general fund to the street fund during 23 as partial repayment for these restricted revenues combining the aforementioned
amounts with $29,982 due from the street fund from prior years resulting in a total of over36,000 dollars due to the street fund at December31st,2023. On September 19,2023, the city passed the ordinance to repay the street fund 10% of general fund revenues until repaid. However, only7% of ofoctober through December's revenuees were paid to the street fund in 2023. Restricted court funds were improperly dispersed for
fuel totaling500 dollars in2023. combining the aforementioned amounts with over $21,100 due the court fund from prior years resulted a total of over $2600 due to the court fund at the end of 23. Restricted fire department funds improperly dispersed in the prior year resulting in a578 dollars due the fire department fund at the end of 23. This is a repeat finding continuing on page four under the mayor. althoughthoughchedule
one of this report reflects a cash balance of over $11,000 in the general fund for 2023. Review of records reveal that as of December31st,23 the city owed significant amounts to the IRS Arkansas Department of Public Safety, the street fund and the court fun. as shown in note6 ofchedule3 of this report when these outstanding amounts are considered, the general fund would have a deficit balance of over $116,000 . This is a repeat finding from the previous three reports. The
governing body did not review the prior report and accompanying comments and recommendations at the first regularly scheduled meeting follow and receipt of the report as required barkansas code this is a repeat find in the previous two reports continuing on page five under the record of treasure authorizations for salaries and wages were not reflected in the council minutes. repeatat finding from the previous five reports Federal taxes were not always remitted by the city. the total
amount due to the IRs from 2017 to2023. it's 105,000 dollars. a repeat finding from the previous seven reports The city received grant funds of $22,627 from the department Arkansas Department of Public Safety in era the
Speaker 14
28:05
city failed to return or contact the department to determine proper disposition quarter treasurer Cheryl Carroll is here today from the city
Miss Carroll would you state your name and position for the record
Speaker 141
28:40
please Can you turn your mic on please Cherylarroll treasurer thank you may proceed as for the bank reconciliations I was an air I was reconciling just from the bank statements but we I have
fixed that we fixed that and I did give a list of the fixedxxets all that I I'm aware that we have and the prenumber receipts and and invoices we have gone in and fixed that and and the supporting documents the reason for the 24 out of 26 we had a flood in January of 24 and
the everything in my office was destroyed the general found we are paying street back and the general fine and think 23 we did do 2024 we paid 20 and the general fine and think 23 we did do 2024 we paid 20,000 and this year we've paid through August I believe over 8000
the court fines we paid back the fire department we paid back we did pay back the money from public safety. We sent that $22,000 back and authorization for the wages and salaries were included in the 24 minutes Federal taxes that should not include well when I came in 20 February 20 I stopped paying the federal taxes and have not missed a month
so they are paid up through March of 23 and we have started paying back we got a letter for 132013 where we owe 13,000 I believe and we made arrangements for 2000 a month and we got a letter for fi5 which was 100 and something and we paid that in full that's that's the
Senator Stephanie Flowers
Unverified
30:54
only letters that we've gotten so far
does anybody have any questions M Carroll, Senatoreyton? thank
Senator John Payton
Unverified
31:07
you Mr. Chair . So one of the findings that that you
didn't necessarily address is it says the governing body did not review the prior report and accompanying comments and recommendations does the city council know what's going on? I mean obviously the mayor and you do but it says that this is a similar finding was noted in
previous two reports so at least3 times they've had reports that they did not review at their regular meetings
so we do we do review so how do we know the city
Speaker 150
31:43
council knows what's going on if if they're not discussing it in their meeting well they are they are we are discussing that in the meetings do we have any representatives here from the city council member right here Evaammy if we could recognize her would
Speaker 45
32:03
you state your name and position for the record please turn your
Senator John Payton
Unverified
32:17
mic on you evenva Gammon so if if you would just tell us what the discussion has been at this at the council level what we're seeing says that they did not review
Speaker 155
32:29
the prior report yes sir we we actually we talk about it every meeting
Speaker 153
32:35
so we have been re reviewing it so there's just no action taken as of now we have put it we have tabled it for right now we trying to come up with some type of plan that we can come up with
Senator John Payton
Unverified
33:05
one more question how many meetings have y'all kicked the can down the road? How many meetings have you had where you intend to come up with a plan
Speaker 155
33:15
but you haven't yet come up with a plan maybe3 to4. thank you thank
Speaker 45
33:21
you Mr Chair. any other questions Mr. Archer we need to address the
Speaker 14
33:29
the September ordinance that they passed to pay back 10%
Speaker 11
33:37
they failed to do that in 23. They only paid7% and according to the court of treasury's account they're about at5% because my calculations show that they need to pay about $14,000 back each year based on the 23 figures. So 277207 gives the committee a
Speaker 14
33:55
couple choices one would be to withhold the street street revenues which we did in December on a city similar to this or
except a d alternative proposal to the 10% which
Josie Vasquez
Unverified
34:10
the law allows so tho those are choices en ator g il mo re question just so I
Senator Ben Gilmore
Unverified
34:19
understand sorry I'm asking a lot of that's clarifying questionsok so you said they did go back through that one more time because what I heard was they had discussions but they didn't actually come up with a plantember th
Speaker 14
34:35
they passed a ordinance saying they would pay
Senator Stephanie Flowers
Unverified
34:39
back 10% of unrestricted revenues that was in 23
Speaker 11
34:45
when we passed thattember so we're starting from that pointoctober through the rest of that year
Speaker 14
34:50
they were supposed to pay back 10%. They paid back7% so they violated that ordinance which
Speaker 31
34:56
puts them into violation of 277207 got it so question to the to the
Senator Ben Gilmore
Unverified
35:03
witnesses please go ahead thank you Mr chairirs is there an explanation of why there was you only paid
Speaker 141
35:11
back7% and not 10 and well I guess I read the ordinance I looked at the ordinance of thought I was thinking we
Speaker 117
35:26
were paying back $1000 every month. for that month thank you Senator Johnson
Senator Mark Johnson
Unverified
35:43
I'm not sure who this is for it might be to clerk
or it might be to Mr. Archer but the percentage we're referring to whether it's 10 or7
is of their available uncommitted general revenues so that varies from month to month. OK so ma'am when you say $1000 1000 dollars one month might be 1011% next month it might be7% but the commitment was to pay back 10%
of available revenues and that's a a figure that would change if I understand that correctly thank
you Mr Chairman but it looks like at the end of the year they ended up paying7% of their total revenue. Am I saying that right
Representative Carol Dalby
Unverified
36:32
Mr. OK. p re s ent ative d al by thank you Mr Chair ma'am, I'm curious on page five of our report
where it finds that authorization for salaries and wages not reflected in the council minutes and a similar issue was noted in the previous
five reports dating back to 2016. I missed that if you addressed that a while ago has that been addressed hass the city council taken any action on complying with that listing the salaries reflecting them in the city minutes
Speaker 141
37:03
well that it was I didn't I wasn't aware of that until last year when we got the finding so and
so it it we did it is addressed in
Senator Stephanie Flowers
Unverified
37:19
the 24 minutes we did correct it and address it in the 24 minutes so it it's
Representative Carol Dalby
Unverified
37:25
been it's been done for 24 but no action was taken for this particular audit is that what I'm understanding is that correct? I'm sorry say that again you took
Speaker 185
37:36
the corrective action for the year 2024 but you didn't take any action
Senator Stephanie Flowers
Unverified
37:46
for this audit when you found out about it for y'all just let it go no I
Representative Carol Dalby
Unverified
37:53
didn't do anything for 23. I didn't did and and then when you go on down there if I may
Mr Chair ask a couple more questions thank you there's a lot of money owed to the IRS 2023 there's a $105,000 and similar issues were noted in the previous seven reports dating back to 2014
from 2014 to2022 did all the
Speaker 141
38:25
IRS has all that been paid back to the IRS or and that's actually through 2019 when I came in 20 I started paying the taxes. OK so we've all we've got that letter from ours for 2013 and2015. we paid 20152013 we requested a payment of
Senator Stephanie Flowers
Unverified
38:53
$2000 a month and we pay 20 to $4000 that they were
Representative Carol Dalby
Unverified
38:59
just sent 2 are you still paying that amount yes ma'am ok
Senator Stephanie Flowers
Unverified
39:05
so but there's still owed $105,000 is that correct? are you just take what we paid off that its they send it the amount by the year
Speaker 141
39:13
and as they send send them we're paying can you happen to know off
Representative Carol Dalby
Unverified
39:19
the top of your head what the
what your grocery receipts are each month? I mean are you gonna do you have the money to
Speaker 189
39:29
pay all of this we don't that's what I thought. thank you Mayor
what's your plan to repay back the money because you're currently not doing it now so what's your plan moving forward we are paying that
Speaker 194
39:43
you mean our we are paying that you mean no not the but the other money street fund the street fund the street we're paying we're trying to we're paying their that 10%
Speaker 141
39:54
this year we haven't missed a a payment of 10% but
what about the money that you're laid on that you didn't that you know that you were supposed to pay you're in arrears on some of it so you
Senator Stephanie Flowers
Unverified
40:06
need to get that brought up we haven't made a plan to repay I guess we'll discuss that at the next council meeting
Speaker 13
40:20
that's this the committee either accept that or ask for a different pay
Speaker 11
40:25
plan or would start escrowing their street revenues that's the I mean they're in violation of 2777207 because that's7% so they can do
I'm gonna say in absence of a plan from the city was the
Representative Carol Dalby
Unverified
40:42
will of the committee Representativedalby would would move that we follow the statute of is 277207 that's what I jotted down 277207 second
all in paper or any discussion all in favor say have it just to clarify
Speaker 11
41:05
where it's growing term straight term from back correct
Speaker 31
41:11
s street yes until they until they get until they
Senator Mark Johnson
Unverified
41:21
Johnson mortal words of the yogi Barrett's deja vu all over again we see this happen so many times
and to clarify for people in the audience that don't understand what we mean you get general fund turn back and you get street turn back that's supposed to go
to roads and bridges and fill potholes and whatever but sometimes cities put that money in the wrong account or spend it on things other than the street things so it's their money but when we're withholding it it's they're they're paying themselves back they're not paying it back to the state they're paying it back to their
they're moving it from the account they shouldn't have put it in into the account that fills potholes and things that they should put it in so and we want to clarify
it for anyone that doesn't understand what we're dealing with because this happens so much at as Senator Gilmore and I were talking earlier we don't know how to systemically stop this or slow
it down we're turning off the tap they're not getting more into that account but that doesn't replenish the needs of that and meet the needs of those
citizens so just don't want to make that comment that we've just because we do this in this case it was the appropriate thing and I voted for for Representativealby's motion but we're just I feel like we're chasing our tail sometimes on this I appreciate your
comments Senator Johnson and this is a chronic problem with that being said, I
move we file this report thank you ladies
Representative Carol Dalby
Unverified
43:03
didn't you Yeah sorry I I was I was thinking of other things that possibly could trigger no worries you know my mind sometimes chases rabbits down the hole worries Mr. Archer
Speaker 13
43:21
moving on to the next item agenda we'll go into the reports starting on page one we have 8 deferred reports from the previous previous meeting in July we have the city of Harrison
Speaker 11
43:34
2023 under the district court clerk bank reconciliations were not properly prepared for all accounts and balances remaining in the bank ba in the bank account were not identified with receipts issued for cases not yet adjudicated and payments made on all unpaid individual time accounts it's required the Arkansas code. This is a repeat finding of the
Speaker 28
43:52
previous year. believe we have district court clerk Sandyright here to answer questions
would you state your name and position
Speaker 214
44:10
for the record please? Yes, I'm Sandy rightt and I'm the court
Speaker 216
44:18
clerk for Boone County. you're recognized I have been working diligently to identify the balance and I have it I've made good progress getting it decreased senator Gilmore
Senator Ben Gilmore
Unverified
44:45
thank you Mr. chairir ma'am you said you made good progress would would you
Speaker 216
44:55
mind elaborating on that a little bit? The balance is a result from the hot check fund that had been going on for several years and so I have worked and in 20 this was the binding at the end of 2023 and2024 I've worked really hard. there were two accounts when Judge Campbell
took the bench or when she came in after Judge Cookpad Judge Kirkpatrick she we opened up a new account and so this is our old general fund and so I now have the balance down around $100 from it was it was quite a bit in there and so now in our main account fund I have worked this year and so by the end of this year I should have it identified
Senator Ben Gilmore
Unverified
45:47
and by the end of this calendar year or
Speaker 220
45:49
fiscal year by the end of 2025 thank you are there
any more questions saying none I recommend that we file the report
Speaker 11
46:18
continuing dismiss her you're dismissed. OK thank you continuing on page one
Speaker 14
46:28
with a previously deferred report we have the Yorktown Water association 2024. This is a private report we deferred
Speaker 11
46:35
this from July because we lacked a proper response we have since received a proper response to staff recommends that we file this report
Speaker 228
46:48
with that objection we'll file this report
Speaker 212
46:53
on page two the town of Jacksonport 2023 under
Speaker 11
46:59
were not properly reconciled and were and were properly and were not approved by someone other than the preparer as required Arkansas code This a repeat findings of since 2008 believe we have a quarter
Speaker 28
47:12
treasurer deanna dotson here today to answer questions.
Miss Johntson would you state your name and position for the record
Speaker 75
47:31
please deannason city clerk of Jackson board and that red light needs to be on
Speaker 233
47:42
there you go dotson with the city of Jacksonport right and you may proceed for the bank of my bank account it wouldn't mention it was my well my bank statements weren't matched with my
what we had in our city meeting I guess you'd say like on her funds that we get back and the funds that we give out on our on our state taxes and stuff they wasn't matching up and because I wouldn't showed how to properly reconcile it and I've had Miss Tiffanie Tilllman came down and Ki Kimberly Myers came down last month and they went over it all with me and now we've got it all fixed up and we've got my new books and stuff that I can start working with to get everything straightened out are there any questions
Representative Carol Dalby
Unverified
48:26
p re s ent ative dalby you Mrir. Also says your response was you've got someone else lined up to approve it other than you
Senator Jane English
Unverified
48:32
yes the well the mayor had been signing off on it but she wouldn't even sign off on the reconciliation side of the bas a bit and he'd been signing the other side of it so she just wants him to sign on the opposite side of the bank statement said that he approved it . OK so you've got that all worked out yes ma'am thank you are there
Speaker 161
48:51
any other questions without objection we'll file this report
Speaker 14
48:56
thank you thank you for your testimony you continuing on page two of the
Speaker 11
49:05
city of Joyner under the recorder treasure the bank statements for the general street Act833 funds were not properly reconcile noncompliance with code. a similar finding was noted in the previous seven reports the cash receipts and disbursement journals for the street for the general street Act833ublic safety funds were not properly posted noncompliance for code. so refi in the previous two
reports . A separate account was maintained for the street fund as required by Arkansas code. However, sanitation revenue and disbursements were commingled within the fund making the activity unclear as to street funds being spent properly we have recorder treasure Josiealquez
Josie Vasquez
Unverified
49:45
get it right. Hi my name is Josie Vasquez and
I brought counsel with meelizabeth McCcullumlizabethccullum y'all are recognized to speak
on the first finding we the city did hire a CPpa at the end of the end of 2023 we are using their software now she actually oversees she does all our 941 she does our pretty much everything I just do payroll I believe on some of the things one of the reasons why the bank were cancellation wasn't following correctly it's because some of the checks were kind of they were never were cashed so they would just lingering there so some of the
checks were still showing on some of the previous on the upcoming months or whatever but other than that she we did hire we're using a new program now I think 2024 they're working on that now and so far she said that one looks good so I think the new program and her helping us is it's gonna help with that are there any questions without objection we'll file the report thank you so much
Speaker 13
51:10
we'll skip down to item number6 on page
Speaker 14
51:12
6 we have the Compton Water association 2023 which is a private report we have not
Speaker 11
51:19
received proper responses on this findings and a staff recommends that we defer this report without objection I'll file this
Speaker 228
51:32
report oh excuse me defer I'm sorry we'll defer this report continuing on page six we have
Speaker 244
51:40
the home note water department 2024 another private report we also have not receivedpri proper
Speaker 11
51:47
responses for this finding staff recommends that we defer this oh we did receive that one OK we have received one this week staff
Speaker 14
51:55
recommends we file this report Thank you Char without objection we will file
Speaker 244
52:10
this report continuing on page six we have the outside kings and rule Water association we have not
Speaker 11
52:20
received proper response for this one staff recommends that we defer this one without objection we'll file
Speaker 228
52:28
this report defer excuse me defer starting on page se and 8 we
Speaker 13
52:34
have one report that has been certified to the bond board and referred to the prosecuting attorney in the AG's office
Speaker 11
52:45
the city of Dumas 2022. finance director the payroll preparer received an extra salary payment of over $1100 in December of 22 after multiple requests for documentation the payroll preparer provided a stipend agreement signed by the mayor authorizing additional payment. However, we were unable to determine if this agreement was approved by the council. on page 8 under the police chief the city failed to establish proper internal control related to bond and fine payments. The
discrepancies included payments being receipted and voided by the same individual who also was responsible for preparing the bank deposits and taking the deposits to the bank it appears that the lack of internal controls resulted in over $2400 in cash receipts not being deposited and order detected in a timely manner This report has been been referred to the prosecuting attorney and the attorney general and file with the bond board. Staff recommends we defer
Speaker 115
53:46
thermal questions without objection we'll defer this report hold file so that you need to file this excuse me file this report that could
Speaker 28
53:59
I'm sorry that's ok we have 11 reports that were referred to the
Speaker 11
54:04
prosecuting attorney in the AG's office on starting on pages 9 through 11 we have the hursy County Fair association review of selected transactions January 1 of 2019 through
Speaker 28
54:16
December31st to 22 we have staff memberber Micchelee Ashley here to
Representative Nicole Clowney
Unverified
54:23
present this report. thank you this report is issued pursuant to a request from the 20thjudicial district prosecuting attorney to review transactions related to facility rental fees at the Cercy County Fair association. The review was conducted primarily for the period January1 of2019 through December31st of 2022. Sercy County Fair Association is a nonprofit corporate corporation
governed by a five-member executive board of directors the association sponsors the annual Sercy County Fair and other events such as pageants and livestock shows. During the review period, funding consisted primarily of facility rental fees, event proceeds, donations and state grants audits comparison of rental dates noted on calendars with bank deposits that indicated rental fees revealed approximately $2,123 in undeposited funds for the years'
2019 through 2021. In addition, due to inadequate records, staff was unable to determine when the facility was rented during 2022. However, deposit slips indicated that $1,132 was deposited during the year for rental fees.everal internal control deficiencies contributed to the unaccounted for funds audit recommended that the association strengthen internal controls regarding the receding, collecting and depositing of funds and that the board adopt written facility rental policies including the amount of rental
fees to be charged as you can see in the appendix of the report the association has developed a plan of correction for obtaining rental payments and tracking at the Cercy County fairgrounds. This report has been forwarded to the 20th Judicial District prosecuting attorney and the attorney general. without objection we'll file this report
Speaker 244
56:23
continuing on page 12 under reports filed to
Speaker 14
56:26
the prosecuting attorney in the AG's office. We have Craighead County
Speaker 11
56:31
2024 under the county judge the county discovered that employee's payroll direct deposit had been fraudulently diverted to another bank account after the employee contacted the county about not receiving her payroll direct deposit. it was determined that on March 10,2025, the county made the direct deposit change after receiving a fraudulent email and authorization form from the county employee's email account.
However, the county did not verify the authenticity of this request. This transaction resulted in a $1,363 loss to the county if there are any questions staff
Speaker 228
57:09
recommends we file without objection we'll
Speaker 212
57:14
file this report continuing on page tel in the Wichita County
Speaker 11
57:20
2023 from the county judge to county dispersed funds totaling55,900 dollars in apparent conflict of
Arkansas constitution Article 12 Section5 as interpreted by attorney general's opinion 199299. 55000 more than the amount stipulated in the executed contract for services with Wachita Partnership for Economic Development Inc. and $900 for sponsorships and advertisement. continuing on page 13 under the sheriff a review of disbursements from the sheriff's communication facilities and equipment fund reveal the following
ix disbursements totaling almost $2400 with respo with no supporting documentation or documented business purpose o disbursements totaling over56,000 dollars that appeared to be more liable to business purposes but did not have adequate supporting documentation under the county
Speaker 14
58:17
judge and the county clerk the sheriff collector received
Speaker 11
58:21
almost3,600 dollars more in salary payments than the amount appropriated by ordinance in noncompliance with Arkansas
code This amount included over $1900 for sheriff duties and over $1600 for tax collector duties due to the lack of court approval we could not verify the validity ofpa pay increases or staff recommends we file this report without re objection we'll file this report page 14 through 15 we have the Shannon Hill water sewer and
Speaker 14
58:55
fire department 2023 ri va te CPA report
Speaker 11
59:01
during the audit it was discovered that the office manager had misappropriated funds by submitting false invoices and writing checks to themselves using a signature stamp found in the office. It was noted that the entity lacked adequate internal controls over cash and check handling processes. specifically there is no segregation of duties between the individual responsible for writing checks recording transactions and reconciling accounts we also note that s stamp for signatures was being misused in
the office and that the bank accounts were not being reconciled in a timely manner nor reviewed by management or governing body. the misappropriations resulted in the overstatement of expenses of almost $8700 as of the report date adjustments have been made to the financial statements to reclassify this misstatement as of June 10,2025. the former employee Rebecca Horn has been charged and arrested for theft and forgery butannnon
Hills police departments investigation is still ongoing. The case is yet to be fully resolved Staff recommends we file this report
Speaker 228
1:00:13
no questions without objection we'll file
Speaker 212
1:00:18
this report and you on page 16 on the town of Fountain Lake 2024-23. mayor
Speaker 11
1:00:25
under the mayor and recorder treasure restricted street fund monies is tolling $86,000 were improperly disbursed for street work in a
private community. noncompliance with Arkansas code. This transaction also appears to be in conflict with Article
Speaker 212
1:00:43
12 Section5 Arkansas constitution as interpreted by attorney general opinion 20222.
Speaker 11
1:00:51
I will staff would like to note that the city passed resolution012025 authorizing the general fund to pay back street fund so they're in compliance with 277207 now
they're just having dealing with the article 12 section5. Staff recommends we file this report for
Speaker 13
1:01:19
the questions without rejection we'll file this report 10 on page 16 of
Speaker 11
1:01:23
the city of Mayflower 2024 under the mayor a review of funds collected at the community center revealed prenumbered receipts were not issued for all funds received in noncompliance with the Arkansas code. In addition during 2024, the mayor collected three checks
totaling75750 dollars from the community center for rental fees c cor ding to the mayor, these checks were locked in his office and never deposited During a council meeting on February 13,2025, a council member recommended that these checks not be deposited due to the length of time they had been outstanding. The mayor provided a schedule of events held at the at the community center. However, without receipts being issued we were unable to determine the
Speaker 28
1:02:04
amount of rental fees that should have been collected
Speaker 11
1:02:12
Staff recommends we file this report if
Speaker 212
1:02:20
there are no questions but that objection we'll file this report skiping down to number 17 on
Speaker 11
1:02:26
page nine we have a web dire water and sewer department 2024 it's a private report the deposits for the proof of cash could not be did not agree with the deposits for the journal
ive customer adjustments were not properly authorized and disbursements paid to employees other than payroll were not adequately documented. We have not received adequate responses for these findings the staff recommends we defer these. without objection
Speaker 244
1:03:02
we will defer continuing on page 19 with the Reno water department
Speaker 11
1:03:07
2024 also a private report nonpayroll disbursements to employees were not adequately disbursed
we were unable to agree the deposits per the proof of cash for the year with deposits for the journal we were also have not received proper responses for for these findings staff recommends we defer this
Speaker 88
1:03:27
report without objection we will defer this report on
Speaker 244
1:03:33
page 19 the city of summit water and wastewater there are actually two separate reports issued
Speaker 11
1:03:39
by private CPA here for 23 and22 . the findings are real similar so I'll kind of combine
them others five customer adjustments selected in 23, 3 of them had proper approval documented two of them did not for 22 all five of the adjustments were not properly documented a properly approved excuse me in the cash and receipts composition for deposits did not match the receipt information for any of the 10 deposits tested and that was the same for 23 and22. we have not received responses
from either one of these reports staff recommends that we defer to allow proper responses without
Speaker 228
1:04:21
objection we will defer to allow for proper responses we
Speaker 13
1:04:30
have 8 reports with repeat findings starting on page 20 we have the city of Circi district court clerkslinnda Wiseman was
Speaker 11
1:04:38
requested to be here today. She called and said she had a conflict staff recommends we defer this report to allow her
Speaker 228
1:04:47
to be here without objection we'll we'll we
Speaker 212
1:04:52
will defer this report page 20 we have the town
Speaker 11
1:04:57
of Edmondson 2024 on the recorder treasure bank reconciliations were not provided for the general street fire weaver Manor Act833 andarpa funds in noncompliance with the Arkansas code's repeat finding the prior two engagements cash receipts journals for the street and gentle and street
funds were not properly classified and posted. the cash receipts and disbursement journals for the arpa fund were not properly posted and non compliance with code. This is a repeat finding. Court of treasury Heyyward Shaw Junior is here
to answer questions today. Mr. Shaw, would you state
Speaker 256
1:05:36
your name and your position for the record please Heywoodhell Jnior recorded treasurer M Arkansas you may proceed on the bank reconciliations well we're doing on the computer now with a CS
CSA software and on the cash receipts it's being noted what fun they from just like municipal special or vehicle registration stuff like that being written on there and on the ARA bank account it's been closed so that's healed itself are there any questions
Speaker 61
1:06:33
that's ok ney ar there's no questions we will accept this report but that filed this report without
Speaker 178
1:06:40
objection you're excused. thank you thank
Speaker 14
1:06:47
your with your permission we need to
back up to adams 1718,19 and20 that'd be fine the four water departments engagements that we deferred those were actually we do have responses for those I was we received them late but they are being referred to the prosecuting attorney staff
Speaker 11
1:07:11
recommends that we file all four of those reports. I apologize without objection we will file those reports
Speaker 13
1:07:25
back on page 21 we have the town of garner december31st24 and23 on the recorder treasure fixed asset listings
Speaker 11
1:07:35
were established but not updated to include all purchases as required by Arkansas code. In addition the fixed asset
Speaker 14
1:07:43
policy has not been adopted by the governing body. This is a repeat finding do we have someone here from the city of garner uharla clerk treasurerarla
Speaker 11
1:07:57
Johnson was requested to be here she did see now she did call and ask for a deferral. we recommend that we defer this
Speaker 14
1:08:09
report with that of objection we'll defer this report continuing on page 21 with the city of Grady
Speaker 11
1:08:15
under the mayor of 2024 under the mayor an auditorg agreed to pro procedures report has not been obtained for thegrady water and sewer system since 2017 as required barkansas code. The city signed an engagement letter
on September 13,2024. for the years' 23 and22. However, the city has not received the report as a as a report date. a similar finding was issued in the previous four reports we have Mayor Charles Knight here to answer questions. Mayor, would you state
your name and position for the record please Charles Knight mayor city of Grady proceed please
Speaker 265
1:08:52
we uhervicing associates with who we originally hired out of
Monticello and doing a they told us in the beginning that they may or may not get to us it was recommended by our auditor that we contact them at the completion of the audit because they hadn't at that time they sent us a resignation letter and said well we kind of told you in the beginning we've since hired Alan Minor a different CPpa on September3rd and
Speaker 263
1:09:22
so we're looking forward to him getting started. are there any questions senator Johnson
Senator Mark Johnson
Unverified
1:09:30
thank you chairman . Mayor so it's almost a year after you hired them that they said you couldn't do it is
Speaker 269
1:09:41
that am I reading those dates correctly well no no it's not almost a year I'm not really
Speaker 265
1:09:47
sure the date we actually hireder and associates it
Senator Mark Johnson
Unverified
1:09:50
had been months though ok again I realize people bite off more than they chew sometimes but I I've just this puts you know we expect these professionals to to follow
through to the extent possible with their contractual obligations but but you've got it worked out going forward thank you mayor thank you Mr Chair any other questions without objection
we'll file this report you may you were dismissed on page 22
Speaker 13
1:10:24
we have the city of Portland 2024 is anybody here from the city of Portland ? OK
Speaker 11
1:10:34
mayor Thomas Frasier requested to defer this report his family's
Speaker 14
1:10:37
having some medical problems so we recommend we defer this report without objection we'll
Speaker 212
1:10:47
defer this report 10 know page 22 we have the town of Powhattan
Speaker 11
1:10:53
2024 under the mayor general fund dispersed s exceeded the budget by over $17,000 or67% noncompliance Arkansas code. This is a repeat finding
we have mayor Eric Smith here to
answer questions Mayor would you state your state your name
Speaker 274
1:11:11
and position for the record please Eric Eric Smith mayor ofowhattan you may proceed what happened we had a we were remodeling our community building and we got a rural development grant in 23 and this was a carryover when the contractor turned his final payment in and we paid him we just oversight on our
Speaker 276
1:11:30
part and we took measures to take care of this for this year
are there any questions without objection we will file this report. you
Speaker 244
1:11:50
thank you for your testimony on page 22 and23
Speaker 13
1:11:53
and we have two reports for the 11th judicial district East for 23 and22 we have the same
Speaker 11
1:12:00
finding both the circuit court fine collection account had an unidentified bank balance in 23 of over33,000 dollars.
in 22 and21 the the balances were31,000 and over 29,000 respectively this is a repeat finding from the previous six reports believe we
Speaker 14
1:12:17
have prosecuting attorney Tim Blair here to answer questions today. would
Speaker 75
1:12:23
you state your name and position for the
Speaker 279
1:12:26
record please Yes sir Tim Blair prosecuting attorney for 11th East Judicial District. you may proceed what this is is this is an account where we as the prosecuting attorney collect fines and fees and restitution from the circuit
court cases we took on that responsibility roughly in 2007 it was done by a hand ledger and to 2016 when we converted it over to electronic bookkeeping because of that when we re when it was converted over in 2016 there's about $12,000 that we don't know where that money goes because of the ledger
that money is set there since 2016 the rest of this money is restitution that goes to individuals some of this we just haven't been able to find them the people have moved or they have gone out of or the business has gone out of have gone out of business and we haven't been able to track them some of these on going through we've been able to find and we've been able to correct on the first part of this the 1el,000 we are preparing an
order for the circuit court to have that money ran or transferred to county general so that it can be taken off our books the rest of it we're just continuing efforts to find those people are there any questions Senator Johnson? thank
Senator Mark Johnson
Unverified
1:14:04
know it would be the appropriate thing but is this the kind of thing that is ends up going to the auditor for the great Arkansas treasure
hunt. I mean I obviously we want to get it to the people that deserve and are supposed to get it. I'm not sure that either you or the county's responsibility to try to have a general to try to figure that out. I mean it's it's pro in some cases more work than there is money there. Yes
Speaker 279
1:14:33
sir on the first part of that that $12,000 we don't know because there's not records and that's why we're asking that money to go to county general that was there when you first took it over yes sir that's been there
that's been there since 2016 OK the rest of that money we're going to continue to try to find those people but after a period of time we are going to ask that it be moved to the
Senator Mark Johnson
Unverified
1:14:59
treasurer's office the county treasurer's office the state treasure but that that's something that the auditor takes care of is does it not Mr. Archer not the legislative arts the office of the state auditor and that's the Arkansas treasure hunt thing where there's funds teachers in their office to receive that money that is correct more importantly the
mechanism and staff to do it so is it something we can I guess that's just something we believe in your hands Mr. Clare. sir but you've accounted for it and that's an important thing thank you thank you Mr Chair. without rejection we'll file the report May have be excused ? yeah I'm sorry you're excused please
Speaker 13
1:15:51
on page 23 we have two water department
Speaker 14
1:15:54
private reports for the Wilmmo Water and Sewer department one for 2023 and one for 2022
Speaker 11
1:16:02
both of these we have not received proper responses on staff recommends we defer both. without
Speaker 13
1:16:14
starting on pages 24 through38. we have49 engagements that have resolved findings
Speaker 11
1:16:22
staff will give you a few moments to look through those are any questions staff recommends we file them all
Speaker 22
1:16:54
the objection we'll file these reports pages39 through44.
Speaker 11
1:17:13
there are h52 reports with no findings.ta recommends we file these reports I'll give you a moment to review
Speaker 292
1:17:34
without objection we'll file these reports for the water is
Speaker 61
1:17:45
there anything else Senator Wallace , Mr Chair, I I have a motion actually have
Senator Dave Wallace
Unverified
1:17:50
two motions regarding the turn bank money
Speaker 294
1:17:52
for the cities . I mean I think we've already been
on that and voted so I mean what what do we hope to
Senator Dave Wallace
Unverified
1:18:05
accomplish we've already voted on it. Well I thought we voted on reports I didn't realize we were
voting on the well I'm going to say just do legislative courtesy if you have something you want to recommend or say
Senator Dave Wallace
Unverified
1:18:21
that I'm willing to listenir I appreciate it I'd like to make two motions and I'd
like to have open for discussion afterwards if we could. OK OK my first motion is if a city is on the 2022
delinquent list their turnback will be reinstated once the 2022 audit is completed or the city has submitted a letter of engagement with the CPA to compete the 2022 audit by a date before December31st,2025. the city must also complete their 2023 audit by december31st,2025 as well. The second motion would be if a city is only 23 delinquent lists they
Speaker 300
1:19:07
have until December31st,2025 to compete the complete the
Speaker 301
1:19:12
2023 audit yes I recommend that we just need to do the motions
one at a time so we have a motion on the first one that you read. do we have a second? second all right is there any discussion on the first motion have discussion right go ahead
Senator Dave Wallace
Unverified
1:19:38
members one thing I want to ask you to consider is when we do this if when we consider this motion what what harm are we doing to the state by allowing the small cities and especially another 110 days to complete their action. Most of these towns are400 or less with rare exception mayors are making maybe $100 a month
and it's just a lot tougher if you don't have a big staff. Jimmie Gazaway and I sponsored this bill and it's it's a good bill if I had doovers I'd go back and put the date31 December until except what we did but obviously I don't have doovers but what harm do we do by extending them that courtesy of
another31 days I know there's a Tennessee and and we get frustrated sometimes with our small towns because we tell them and we tell them and we tell them but what harm do we do to the state by allowing this motion and with that I stand by for
Senator Mark Johnson
Unverified
1:21:03
your questions thank you Mr Chairman. Senator Wallace I feel your pain any of us that have been on this committee for
any length of time know exactly what you're talking about. The only question I have and this might be one from his white but do we since you and Representative gazaway did a bill and we all passed it and it's now the law and it's in statute do we have this does this ttire hands and allow us to have the discretion to to give an extension like this as your request or you you're
stating in your motion and the the morality and the goodwill of it I don't question at all but if the law says we have to we must do x and we do something we do why then we're technically in violation of our oath. I just want to know specifically what the statute requires of us and more importantly maybe that that does not allow us to do again that might be a question for Miss White right thank Senator Gilmore has a
question and after that Miss White I'd like for you to come to the
table please and speak to it Senatorgilmore yes thank
Senator Ben Gilmore
Unverified
1:22:15
you Mr Chair and and and I agree with my colleague Senator Johnson. I I too want to hear that because that was going to be part of my question because I think it's important that we understand that since we're on discussion I've spoken to Senator Wallace about this and I've spoken to the chairs of audit previously I too have concern about these small cities. I have some in my district I've talked to my mayors they understand how I feel about this. I do think it's
unacceptable that they've allowed this to linger in the way that it has I also am aware that there are circumstances at times beyond people's control and given the issues related to being a mayor of a small community with limited resources and the hardships that exist with that you know I do believe in grace we're all in need of it and so that's not lost on me I will say coming into this meeting I think I was far more
aligned on this issue of of giving that grace because I do think that in in some regard I think there's mayors that are trying I also believe there are some that aren't trying. I think there's some some communities they just do not care and I find that despicable I think if we operated in the same way I think the people of great state of Arkansas would stand up and and and be very angry about it and so I think in some regard we have an obligation to stand up for the right for the for the citizens and the taxpayers of these communities
but again I know cities that are trying to to do what's right and so with those I I would like to see them get some grace but as I have come to understand there may be some things that pre prevent us from doing that so I'm going to sit here and I'm gonna listen to legal counsel. I'm gonna listen to their interpretation of this and maybe I can get some clarity because I do want to support Senator Wallace in this effort and I do want to hold cities accountable for their bad actions so Miss White it's up to
you at this point that's why
Speaker 93
1:24:21
please proceed thank you Mr Chair. thank you Senator Gilmore Emily White legislative audit 1423 4120 gives this governing body discretion but to decide to notify the treasurer of those delinquent reports but once you decide to notify the treasurer that those reports are delinquent. The onus and the burden on the treasurer's office is a mandate. there's no discretion at that point. The way that I read
subsection C of this code section it says that they shall hold their funds in escrow until the most recent fiscal year end reports have been filed. and that's what it says verbatim most recent fiscal year end have been filed now as an attorney I focus on the plain language of the statute without having had opportunity to
Speaker 94
1:25:13
know what Senator Wallace and Representative gazaway's mindset was when this
Speaker 93
1:25:20
legislation was drafted or when you all voted to pass it however I can tell you without any ambiguity that that code section says until the most recent fiscal year reports have been filed in legislative audit's mind that has always been the
Speaker 94
1:25:35
end of 2024. and so we are at a we're at a turning point here I can't stand before you because my obligation is to you and to legislative audit and tell you that I think that it's wise to act in direct conflict with how I interpret
this code section and how you all can read it for yourself. I think that Mr Archer put it
Speaker 93
1:25:57
in your pocket so to go back and undo what you all did in July I cannot advocate for that because in July you made a very clear decision with a motion and a second and pass and that was to defer or to refer all of this to the treasurer's office so now to go back and undo that when that was done I'm not convinced that you
Speaker 94
1:26:16
can do that based on the plain reading of this code section.
has the attorney general weighed in on this in
Speaker 93
1:26:25
any capacity. My understanding, Mr. Chair, is that the attorney general's office has communicated with our co-chair Senator Petty about this issue
Speaker 307
1:26:31
and expressed a similar concern to to Senator Petty. Sengilmore you're recognized for a question I hate to put him
on the spot but you know heavy heavy as
Senator Ben Gilmore
Unverified
1:26:42
the head that wears the crown Mr co-chair of audit could we could he come speak to that uror Petty would you state your
Speaker 309
1:26:53
name and position for the record please Thank you Mr Chair Jim Petty,
Senator Jim Petty
Unverified
1:26:57
state senator district 29 and what Misswatt said is exactly true the attorney general's office has said that they and and we have had conversations with others as well but they had a conversation with Emily and they are on the same page with them in terms of the reading of the law as it is written and the action that you took and what you can and can't do at
this point so they I mean I'm not speaking for them I'm just relaying what they conveyed to me they're not here today but they are on the same page as
Speaker 311
1:27:32
legislative audit in that area Senator Wallace thank you Mr Chair and I've
Senator Dave Wallace
Unverified
1:27:39
always had a lot of respect and always will for Miss White. she's one of my favorite folks . I've always been told that we as lawmakers that if51 of us agree in the house or if 18 of us agree in
the senate we can pretty much do what we want to do when this bill was written and then when asked I carried it had some information and now I have more and you all have more as well and I'm saying that as legislators if the majority of us want to do something we can do it and then we'll let the bureaucracy figure it out all right well my comment would be I've
agreed that 18 senators can do what they do want to do in regards to their senate rules and how they proceed but I don't think 18 senators can override law but I was thinking about a good question you ask what harm does it do? I think everybody here has compassion for everybody that's in trouble. I mean we're we're all human beings and we we want to help humanity but I was thinking what harm does it do? It does two things they've already had a year extension plus an additional two
months. I have no confidence if they get another extension that they're going to be able to perform but I think to harm that it will do is that we're going to override or attempt to override state law and I don't think this committee can override state law but with that being said we have a motion in a second if there's not any other discussion that Senator
Senator Mark Johnson
Unverified
1:29:19
Johnson thank you Mr Chairman. thank you were very succinct then I'm sorry I thinkpresentativealby didn't see you on first I'll be
quick here I agree with my friend Senator Wallace,18 senators and51 House members can do what they want to when we're in session when we're not in session as far as the statutes are concerned we're just citizens living under the law and if the governor calls us in tomorrow for a special session and puts on the call the the change that Senator Wallace put forth I'd be very tempted to vote for it. I probably would seriously consider voting for it. I don't know for sure till I
see it but we don't have an authority we're in an interim and I just don't think it would be unwise to go against both our in-house counsel Misss White of our committee as well as the attorney general's office this is what the law says in 2027 or earlier if the governor calls us in we can fix it but I just think it's would be a bad idea to to do this right now. thank you'realby
go ahead I didn't see you a while ago. no problem
Representative Carol Dalby
Unverified
1:30:31
thank you Mr. Chair. Senator Johnson said what I was going to say and I'm in agreement with him and the law says shall the law doesn't say may and so I just don't believe we have the discretion and I I completely agree with the senator and he said what I was going to say so thank you senator Gilmore could
Senator Ben Gilmore
Unverified
1:30:53
I ask the senator to restate the motion because I I have a question I think to his motion
Senator Dave Wallace
Unverified
1:31:16
restate the first motion because of the first motion fails
Speaker 154
1:31:21
there's no need for the decision proceed if the city is only 22 deliquid list we
Senator Dave Wallace
Unverified
1:31:28
turn back will be reinstated thank you Johnny. Once the 2022 audit is completed or the city has submitted submitted a letter of engagement with a CPpa to complete the 2022 audit by a day before December31,2025. the city
must also complete their 2023 audit by December31,2025. Senator Gilmore and I'm glad
Senator Ben Gilmore
Unverified
1:31:54
Miss White is here so I understood and hear your motion. I know oftentimes we
make expungence expungements on motions previously made would that be more appropriate in this case or not? so the motion that was made in a previous meeting instead of making another motion to basically alter the one that
Speaker 93
1:32:17
was passed previously. I see what you're saying Senatorilmar and I think based on what I had reviewed back in early August to sort of answer a similar question this would be like a motion to rescind or reconsider I don't think it's timely pursuant to the house rules or the senate rules the way that I interpret them there's a timeline on on a motion to rescind or reconsider and that timeline has far lapsed where we are now I think you might have could have reconsidered it in July and I think normally the House
and Senate rules are3 days we've we've first presume
Senator Ben Gilmore
Unverified
1:32:51
the rules of audit don't speak to that sir they do not ok
Speaker 115
1:32:57
thank you are there any other questions senator excuse me Representative beatty thank you
Representative Howard M. Beaty, Jr.
Unverified
1:33:06
Mr chairir. I I guess my question is I understand the clear reading of of the law and and what it states as far as what's what this committee makes
a decision and instructs and and informs the auditor as far as transferring the funds but what language where's the language that would restrict this committee and this body from taking another action and informing them not to do that. I I don't see any restrictive language that prevents that. I understand what you're saying with what the what the law says but I don't see anything that restricts this body from taking that position. they made a decision this committee and instructed them and informed
them that these audits were late and to hold turn back but I don't see anything that prevents this committee from taking that issue up where hands are tied and this committee has nothing to do and and and can't discharge what they think is the best interest of their constituents so I I would challenge I would challenge someone to show me where the hands of this committee and legislators are tied not to address something that's a concern for our constituency and and I'd also say if the
attorney general has opined on this that it should be in written form addressed to this committee and members of this of this committee instead of just a phone call to the chair if they've taken that position so Iu I would encourage this committee to use the authority that we've been given by being elected to hold these offices and take care of these small cities and towns. I'm I too like you compliance with the law they've had plenty of time but I do believe that this is
going to cause adverse harm on our smaller communities and cities and it's going to create more problems for this committee because you're going to see them utilize other funds and other avenues to take care of the necessary obligations that a city has and you're going to deal with further issues and problems in this committee that stem from the holdback of turnback funds so I'd encourage you to look at this and again show grace to these communities because these are some of our smaller communities and they need all the help they can get. but I would I would challenge
you to show me what law or what rule says we
Senator Jim Petty
Unverified
1:35:31
can't take this action Senator Petty and and just to answer your question on the attorney general I tried to get them here today one is out sick and the others that have worked on this issue or out on other issues initially when we had a meeting earlier with municipal league and and others we we were going to get an opinion but an opinion is3 to6 months and so we opted for
just look at it and give us your opinion so I agree with you and writing is better and and so that I just wanted to kind of since you mentioned that
Speaker 322
1:36:07
is there any other discussion senator I almost said it again Representative beatty well
Representative Howard M. Beaty, Jr.
Unverified
1:36:13
I mean could could Miss White reply that if there's any any anything she sees out there in our in law that would prohibit this body from taking this action Representative beatty, I
Speaker 93
1:36:24
think this body of course has its discretion but but as I said in response to senator Gilmore's question earlier I can't advocate that this'm not asking you to advocate
Representative Howard M. Beaty, Jr.
Unverified
1:36:34
I'm asking you to cite code that says we couldn't take this action. No sir right
thank you any other discussion all in favor say aye all opposed
Speaker 84
1:36:55
. Can I get clarification exactly what what we just voted
Speaker 11
1:37:00
on it says if I wrote it down right it says to restore all everybody on the list all40 well40 remaining40
Speaker 14
1:37:08
remaining entities that either provide us with a 2022 report or have provided for the 22 report or an engagement letter that states that they will provide us with a report by December31st of this year and he
said and at 23 report so how are we going so if they don't do both by the end of the year then we revisit right? the now then the what so we got to have both of them. I mean that's
Speaker 84
1:37:40
that's it did not did I misspoke Senator Wallace? Well my my first question is do I need to that that vote I thought was on that we just voted on the first
motion and then we can stop and you can make
Speaker 84
1:37:52
your first that was the first motion and the so by the
end of the year they've got to have both of them in or they're now in by this motion the now in noncompliance right? OK gotta to have
Speaker 328
1:38:10
year do we was a question that we have a quorum yes didn't the people here and
Speaker 28
1:38:28
there's 8 members present and I think there's 14 on the on the list
so we do have we do have a quorum senator Wallace proceed
Senator Dave Wallace
Unverified
1:38:42
with your second motion sir Mr. Chair, my second motion is if the
city is on the 2023 deliment list they have until December31st,2025 to complete the 2023 audit
Chair
Unverified
1:38:54
Is there any discussion you recognized Senator
Senator Mark Johnson
Unverified
1:38:58
Johnson regarding your motion senator Wallace there the previous thing referred to or having a CPA firm in engaged but this this second motion
now requires that that be done that they be the ought to be completed by the end of
this year so it it's tighter than the previous motion is that is that correct this is a different year
yes because it's a different year all right thank you is there any other discussion all in favor say aye aye all opposed eyes have it next meeting isoctober 9th our next meeting isoctober 9th with that we're adjourned
Agenda
A. Call to Order by Chair
B. Adoption of Minutes of the July 10, 2025, meeting
C. Update on Private Reports – Delinquent December 31, 2022, Water and Sewer Reports
D. Update on Private Reports – Delinquent December 31, 2023, Water and sewer Reports
E. Update on Private Reports – Delinquent December 31, 2023, Municipality Reports
F. Discussion of Noncompliance with Municipal Accounting Law - Rockport
G. Discussion of Act 709 of 2021, Repayment of Street Turnback – Lake View – Phillips County
H. Review of Reports (Refer to the Synopsis)
I. The next meeting of the Legislative Joint Auditing Committee will be held on October 9, 2025.
J. Adjournment
Documents
| Title | Type | Pages | Source |
|---|---|---|---|
| Agenda — LEGISLATIVE JOINT AUDITING - COUNTIES AND MUNICIPALITIES, Sep 11, 2025 | Agenda | 6 | Official source ↗ |
Speakers
Representative Carol Dalby
Unverified
Senator Matt Stone Chair
Unverified
Speaker 11
Speaker 13
Speaker 14
Speaker 18
Speaker 31
Speaker 36
Senator Mark Johnson
Unverified
Speaker 39
Speaker 41
Speaker 45
Senator John Payton
Unverified
Senator Ben Gilmore
Unverified
Speaker 56
Speaker 63
Speaker 69
Speaker 84
Speaker 92
Speaker 93
Speaker 94
Speaker 95
Speaker 77
Speaker 118
Speaker 120
Speaker 21
Speaker 40
Speaker 141
Senator Stephanie Flowers
Unverified
Speaker 150
Speaker 155
Speaker 153
Josie Vasquez
Unverified
Speaker 117
Speaker 185
Speaker 189
Speaker 194
Speaker 82
Speaker 209
Speaker 28
Speaker 214
Speaker 216
Speaker 220
Speaker 228
Speaker 212
Speaker 75
Speaker 233
Senator Jane English
Unverified
Speaker 161
Speaker 244
Speaker 115
Speaker 249
Representative Nicole Clowney
Unverified
Speaker 88
Speaker 256
Speaker 258
Speaker 61
Speaker 178
Speaker 253
Speaker 265
Speaker 263
Speaker 269
Speaker 274
Speaker 276
Speaker 279
Speaker 125
Speaker 22
Speaker 292
Senator Dave Wallace
Unverified
Speaker 294
Speaker 300
Speaker 301
Speaker 307
Speaker 309
Senator Jim Petty
Unverified
Speaker 311
Speaker 154
Representative Howard M. Beaty, Jr.
Unverified
Speaker 322
Speaker 326
Speaker 328
Speaker 329
Chair
Unverified