Legislative Joint Auditing-State Agencies
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Senator Matt McKee
Unverified
0:00
The minutes from last month's meeting to add me as an attendee who was present. Motion by Representative Brown, second by Representative Brown. Any discussion? All those in favor of the motion say aye. Aye. Opposed, same sign. Thank you very much. Now we need a motion to adopt the minutes. Need a motion to adopt the minutes. Senator Caldwell, Representative Brown. All those in favor of the motion say aye. Opposed, same sign. Motion is adopted.
Okay. Mrs. Sanders is going to give us a readout of
Speaker 3
0:38
some reports. Thank you, Mr. Chair. Today we are presenting two reports with findings. However, we
Speaker 5
0:43
also have six reports without findings, and these are listed on page one of the audit summary. Included in these is the Rural Services Block Grant Disbursement Report for fiscal year 25 that was provided by the Department of Commerce in accordance with special language in their Appropriation Act.
Senator Matt McKee
Unverified
1:04
If there's no discussion on those reports, we'll consider them reviewed. Hearing none, we'll
Speaker 5
1:16
move on to the reports with findings. The first report with findings is the Department of Inspector General, the Fiscal Year 24 report, which contains one finding. DFA's Financial Management Guide states that agencies may not employ contract labor for a period longer than six consecutive weeks or 240 hours per calendar quarter.
If help is needed more often, the agency must request additional positions and employ full-time or extra help personnel to be paid in accordance with Arkansas Code. We determined the Tax Appeals Commission, a division of the Department of Inspector General, used contract labor from March 23 to October 23 to assist in processing income tax appeals. All payments to the vendor were made in fiscal year 2024. identified two individuals
who exceeded the maximum hours for the quarter ending June 30, 23 and two individuals who exceeded the maximum hours for the quarter ending June 30, 23 or September 30, 23. Total payments of almost $19,000 were made for 851 hours over the maximum allowed per quarter. This concludes the finding and agency representatives are here. Are there
Senator Matt McKee
Unverified
2:30
any questions from the committee for the agency representatives? Seeing none.
The staffing. Correct. Okay, can we get
Senator Jimmy Hickey, Jr
Unverified
2:45
some members from the agency? Well, staff make an answer to this. Okay. So I just want to make sure I understand this totally. So whenever we say, are we talking about, like, total for the agency, that they can't exceed 240 or they just can't exceed 240 per employee? per employee yes it's per employee so they could have actually or per contract labor i guess so
they could have actually the way the law is written could have taken on additional people and then not been in that have been in compliance in other words okay fair enough okay well and the thing is is i just i guess i'm doing this maybe for for legislation in the future if it's that way, you know, it may be, I don't know. But then it also looks like, according on page two,
that they could ask DF&A for special permission to use those hours. The only thing I would say there, and again, maybe for the next legislative session, I don't know if we need to look at that. I don't know if that would be a conflict of interest or whatever, too, because most of the appeals that are going to go through those commissions are going to be something that DFA has done. So I don't know if that's just something that we need to look at for the next session. I know that you all sometimes bring legislation or have in the past years. That might be something that we could look at just to make sure that we don't need to shine that up on both sides of that,
maybe the total number. And then also, again, I don't know if DF&A is the right person to request permission for on to use stuff like that or not, since more than likely they're going to be on the other side of the
case like that. So just more of a comment, Mr. Chair. That's fine. Thank you,
Senator Matt McKee
Unverified
4:39
Senator. All right. Thanks, sir. Okay. If there's no other discussion on that report, no objection, that report will be reviewed.
Speaker 7
4:49
The last report with findings is the Military Department's Fiscal Year 24 report, which contains one finding. The military department
Speaker 5
4:58
reported to us that during calendar year 2024, the department discovered that payroll disbursements for soldiers on state active duty were deposited into the wrong accounts, which resulted in overpayments and underpayments for May and June missions. Further review revealed that a spreadsheet detailing soldiers' time, which was submitted by the department to the Arkansas Department of Transformation and Shared Services
Office of Personnel Management for entry into ACES was not electronically locked for editing and was inadvertently changed. As a result, payroll deposits were made to the wrong accounts and correcting the error resulted in about $22,000 in overpayments. The department has recovered almost $8,000 through repayment options and about $13,000 was sent for tax set-off, of which soldiers were notified in December of 24. The remaining little less than $1,000 could not be recovered through tax set-off
due to the soldier living in another state. According to the department officials, this amount will not be recovered. This concludes the finding. Agency representatives are here. Representative Brown, you have
Senator Matt McKee
Unverified
6:03
a question for the agency or for staff? Staff. Okay. You're recognized. What is set-off? It's
Speaker 5
6:16
where their tax returns, like if they were to get a refund of a certain amount, then it will be said that a tax refund will be reduced by the amount that they owe for the overpayment.
Senator Jimmy Hickey, Jr
Unverified
6:26
Thank you. Any other questions? Senator Hickey? Maybe just one. So, and again, I appreciate them, you know, trying to correct it and everything, but on the 927, is that soldier not still active? He's living in another state. Uh,
Senator Matt McKee
Unverified
6:42
you guys want to come on up and if you'd identify yourself for the record, uh, and then Senator Hickey can direct his questions towards you. Right. And I don't, I don't want to make a, make a big deal out of this.
Senator Jimmy Hickey, Jr
Unverified
6:58
This is not, but they live in another state or whatever, but he, he's active in receiving Arkansas dollars through us, through the state of
Speaker 33
7:10
Arkansas. No, sir. Okay. So, uh, Brad Cox, chief of staff
Speaker 36
7:15
for the department of the military. And then Brigadier General Jeff
Speaker 33
7:19
Wood, the Deputy Agent General. So when soldiers are in training, they are paid through DFAS, not through the state of Arkansas. So the only way we can direct recoup is to bring them on state active duty again
where they will accrue state income, which we could then take right away from them. I assume you're kind of referencing Uncle Sam always gets theirs. I understand. Okay. On this particular one, I guess there
Senator Jimmy Hickey, Jr
Unverified
7:44
will be a note or something denoted in the file or on the screen somewhere that there may have been some money lost on this particular one. I think the wording on it, Senators, is probably a little
Speaker 39
7:56
bit, needs a little bit more explanation. That just means we can't do a tax set off on him. Sure. His leadership is going to bring him in.
He's already been counseled to pay it. Okay. So we're going to engage it from a chain of command perspective to direct the soldier. Every time he comes in for drill, he's going to get a reminder that he owes that
Senator Jimmy Hickey, Jr
Unverified
8:14
money until we get it. Perfect. I love the way you all operate.
Representative Matt Brown
Unverified
8:22
Thank you, sir. Okay, any other questions? Representative Brown. Thank you. I'm just curious, if they're paid through DFAS, how is that impacting us, or the state of Arkansas?
Speaker 33
8:29
So when we bring soldiers on state active duty in response to a call from the governor,
the state of Arkansas pays them for that duty, not the federal government. But the only time the state of Arkansas pays our soldiers
Speaker 43
8:45
is when we're in an emergency response. But I'm confused. If DFAS paid
Speaker 44
8:51
them, how is that impacting our state? No, DFAS won't collect the state debt. So they get paid for drills and annual training through DFAS, federal funds. But the federal government, DFAS, will not collect a state debt.
Representative Matt Brown
Unverified
9:08
Okay, I'm still confused, and I don't want to belabor the point. But if DFAS is paying them, how does that affect the state of Arkansas?
Speaker 39
9:17
Because Arkansas is not paying them. When they're brought on to state active duty representative, they're basically state employees. They get an ASIS number. They get an EASE number. So they are a state employee. They're paid just like any other state employee. So they were paid through the state of Arkansas. So that's where the debt is, and that's why we can't collect it through their drill checks. They're going to have to pay us directly.
Senator Matt McKee
Unverified
9:39
Does that make sense? They're state employees when they're on active duty. On state active duty, yes. When they're responding to an emergency, they're employees at the state of Arkansas. The rest of the time
Representative Matt Brown
Unverified
9:54
they're paid by DFAS. Yes. Does that make sense? Well, I hear that, but it's not adding up, but I'll talk to you later about it. I mean, my husband was active duty. He got paid through DFAS. These people are guard, so how is their paycheck coming through DFAS?
I mean, I guess they were active, so
they were, what, Section 10 or whatever? Yeah, they were on state active duty, so
Speaker 50
10:20
they were on a state status. You might have to talk about that later.
Representative Matt Brown
Unverified
10:24
I think I can explain it. He'll explain it to
Senator Matt McKee
Unverified
10:28
me. Thank you. Thank you. Okay, thank you. Are there any
Speaker 52
10:32
other questions from committee? Semantics? It says magic. Magic.
Senator Matt McKee
Unverified
10:36
All right, seeing no other questions, if there's no objection, We will consider that report reviewed.
Thank you, gentlemen. Our next business, our next meeting will be held October 9th. Is there any other business before the committee? Seeing none, we are adjourned. Thank you.
Agenda
A. Call to order by Chairman.
B. Adoption of minutes of the July 10, 2025 meeting.
C. Review of reports. (Refer to the Summary)
D. New Business. The next meeting will be held October 9, 2025
E. Adjournment.
Documents
| Title | Type | Pages | Source |
|---|---|---|---|
| Agenda — LEGISLATIVE JOINT AUDITING - STATE AGENCIES, Sep 11, 2025 | Agenda | 2 | Official source ↗ |
Speakers
Senator Matt McKee
Unverified
Speaker 3
Speaker 5
Senator Jimmy Hickey, Jr
Unverified
Speaker 7
Speaker 33
Speaker 36
Speaker 39
Representative Matt Brown
Unverified
Speaker 43
Speaker 44
Speaker 50
Speaker 52