Legislative Joint Auditing-Counties and Municipalities
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It's um that's here. My name is Matt Stone. I'm the co-chair along with uh Representative Richard, uh, Womack and then um then my vice chair would be Senator Mark Johnson, and then we also have uh representative Cameron Cooper, who was the um vice cochair of the house. Um, with that being said, I just wanted to say
and make a couple of remarks when we get started. I know we cover a lot of ground at every meeting, so we need to be judicious in moving forward so we can get out here at a
reasonable time. I want every legislature to be able to ask every question that they want to ask and and not be throttled back in any way, but with that being said, I'd also ask that everybody be mindful of the other legislatures that may want to ask questions themselves. Also members of the public, when you have an opportunity to come set at the end of the table. It's easy to start chasing rabbits and get long winded if you have something to say, I would encourage you to come on point so we can cover ground, so we have a lot of people that want to speak.
Speaker 14
1:58
With that being said, um, Mr. Archer. Uh, first, uh, I'm
on the agenda is to the minutes. All right, the minute, uh, I think
y'all had an opportunity to look at the minutes. Has anybody have any question? Got a motion, 2nd, 2nd. Any discussion? All the paper say ah. Any opposed say none. The motion passes. me again, uh, Mr. Archer,
Speaker 17
2:25
uh agenda item C is update on uh the city of
Gilmore. I thought I'd, uh, update y'all real quickly because this is a new committee, new year, uh, the December meeting, uh, city Gilmore
Speaker 16
2:39
was in a violation of Act 709 of 21, which is the uh repayment of misused funds to the uh from the street fund, uh, we submitted a letter in January to the state treasurer to withhold their There are phones and currently we have not heard from Gilmore, so that is currently uh the state, their state highway revenues are being withheld till
they pay that debt in full. Uh, item number
Speaker 17
3:06
D would be the update on the delinquent uh reports also in the December meeting we had voted the committee had voted to uh send the city of Dermott, the City of Black Rock in the town of Russell, uh, letters to withhold their turn back because uh they were had not responded to the request of providing their 2022 audit, which was due June 30th
of 24, immediately after the meeting we heard from 3, they provided us with signed engagement letters, so all three are currently uh within the guidelines as set out by this committee. So their turn back is not being withheld. Going on the Agenda E um. City of Old Trough, I mean the town of Old Trough was also uh recommended in December for a substantial non-compliance for municipal accounting code, uh, there are a set of counting
codes set out in uh Arkansas Code annotated 1459 101 through 119 and 117 of that group states that if you're not if you're in substantial non-compliance with those codes, uh, this committee has a process to um To go
Speaker 16
4:20
through that could eventually end up with lack of with withholding of turn back. We visited, we notified uh City of Orop
Speaker 17
4:28
of this, uh, And on December 10th, we paid them a visit as part of the
process on April 14th, and they are in, there's, the records are much improved and they are now back in substantial compliance with the codes, therefore, uh, their record, their turn back will not be withheld. Those are just updates. And Right. The F there recognize me
Speaker 24
5:03
for the report. Mr. Archer, we're going to refer to, uh, Adam F uh review of
Speaker 28
5:08
reports. Thank you, Mr. Chair. If you refer to your
Speaker 17
5:14
synopsis and your list that provided to the members today, uh, we have 12 reports deferred from the December meeting. Uh starting on page 1 through 3. We have a Cercy County. Percy County was deferred. of Because we did not
Speaker 28
5:30
receive a response from the airport commission chairman before the last meeting. We have since received a uh adequate response,
uh, dated March 25th to 25, uh, staff recommends that we file this report
Speaker 24
5:51
with if there are no questions. Um Without objection, we will file this
Speaker 36
5:58
report. Continuing under deferred reports on page 4. We have the Midway Public Water Authority, uh. Uh, we were waiting on a
Speaker 17
6:11
response from them from the prior meeting and we have not received that response so staff recommends that we defer that report, uh, so we can contact them again and see
Speaker 24
6:22
if we can get a response. Without objection, we'll file this we'll defer this
Speaker 28
6:27
report. Thank you, sir. Uh, continuing on, uh, page 3. We have the search of utility water
Speaker 17
6:33
utility for 24. This was a private report. It was also deferred with a lack of proper response, but we have since received a proper response.
Staff recommends that we file this
Speaker 41
6:44
report. Without objection, we'll file this
Speaker 28
6:47
report. Continuing on page 4 under uh previously deferred reports of the town of Banks.
Speaker 17
6:53
Uh, the recorder treasure, uh, Levi, Levi was was uh invited to this for to the meeting today, uh, we were contacted by them and they have some due to healthy reasons, she's unable to attend staff recommends that we defer this, uh, report to give her time to get here in July.
Speaker 28
7:12
Without objection, we'll defer this report. town of Jacksonport. Do we have anybody present from Jacksonport? Uh, town of Jacksonport was also deferred, uh, because, um, we have a repeat finding and um they weren't able to make the December meeting and
Speaker 17
7:33
it doesn't look like anybody's present here today, um, staff recommends we defer this one as well.
Question. OK, yes, ma'am. Yes, yes, Representative Dalby. Yeah
Representative Carol Dalby
Unverified
7:46
What I mean, they, they didn't come in December and they got
Speaker 50
7:51
noticed to be here today. Is that correct? Yes,
Representative Carol Dalby
Unverified
7:54
yes, ma'am. That's correct. What else can we do to make sure that they're here in July because December to now has been a long time to get ready to come. So That we
Speaker 17
8:07
need to subpoena them or? They, I, I talked to uh staff talked to uh Miss uh Miss Dodson, and they confirmed they were coming, so I'm assuming
something has happened. Uh, normally, I mean we can do, you know, there's no real true written protocol, but normally there's about 3 deferrals before we go to the subpoena process for the Friday meeting. OK, thank you. Thank you. This would be number 2. Yes,
Speaker 56
8:35
we're, uh, Senator Caldwell. Thank you chair. uh, for those that don't know it, I've got a 4-inch scar on my throat, my version of the story is my wife cut my throat.
But, uh, I had surgery it it affected my voice for a while. I want to back up on Jack's support because it is in my district and, uh, since December they've had a major tornado up there and the maybe what has caused him not be here, and I would ask y'all to be lenient one more time. Thank you for the update, Senator Caldwell.
Speaker 28
9:11
That's good information. OK. Continuing with the Uh, reports previously deferred
Speaker 28
9:24
2023. under the county judge, circuit clerk, and treasurer. The quote unquote is required to approve by ordinance, our annual budget for all operating funds. County officials are required to operate within and manage the approved budget in accordance to the Arkansas code. Although the annual budget was approved as required, anticipated revenues for the general fund were overstated due to inadequate beginning cash balances,
inflated transfers in and a lack of management oversight which resulted in overspending as of December 31st of 23. General von fun ballots was $124,000. But due to continued overspending had declined to just over $60,000 as of June 25th of 24. Also to defray expenses and supplement revenue in the general fund, the county began transferring the county sales and use tax, which was previously deposited in the road fund to the general fund.
Although these transfers were allowable, they resulted in a decrease of the road fund cash balance from just over 403,000 as of December 31st of 23 to 211,000 as of June 25th of 24. This was a repeat finding from the previous report. I believe we have the county judge, Lawrence Holloway and circuit, uh, County and circuit clerk, Galen
Speaker 60
10:42
Hale here to answer questions. Would you please come down to the table, please.
for the record. Yes. Would y'all please state your name and position for the record, please, before we begin. I'm Gaylin
Speaker 66
11:17
Hill, the parade sering and County clerk. Lawrence Holloway, Prairie County Judge. Thank you.
Speaker 67
11:21
me Do y'all have any open remarks? I don't have any. Not any There
any questions? Uh, are there any questions from
Senator Steve Crowell
Unverified
11:42
the committee, uh, Senator Crow. And other issues it talks about two unauthorized withdrawals totaling $12,054. What were those withdrawals? I had gotten some
Speaker 75
11:51
information from the. Deputy Treasurer, our treasurer resigned in August of this year. Britney Casuri is
Speaker 77
11:57
the Ma'am, can you bring that microphone just
Speaker 78
12:01
a little closer. We're having trouble hearing. Can you hear me now? I'm sorry, um.
Speaker 77
12:10
As I was speaking, uh, Tamara Dabney, which was our presiding treasurer. She resigned in August of 2024, so I got information from Brittany, uh Kasuri. She is the, well, Tabitha Gates is the treasurer, but Britney was her chief deputy while she was in office and I got some information on the checks. Um, that she
Speaker 76
12:32
second. OK. It was too, it looks like
OK, and if, and OK. September of 2023, she said the bank informed us of a
Speaker 77
12:50
suspicious check and I have the check number of 45,270 for $2,216.37. It had been forged with someone else's name and address, and we asked them to return it and the money was put back in the account in our account after speaking with farmers and merchants, they suggested we sign up for positive pay, which allowed them to go and look over the checks that were clear the clear the account and have an
opportunity to return them if needed. Tamara Dabney, the former treasurer, signed up for positive pay on September 21st of 2023 in November of 2023, we had a similar situation and that check number was 46142 for $9,838.37 that was forged to a different name and address on one of our checks and we were able to catch it in positive pay. The bank in Florida, where it had been where it was being deposited also notified us these funds were returned to us as well and she has stated that
they check. to pay each day to help prevent situations like this from happening and that that was a wake up call for their office to be to be more diligent in their bank account
Senator Steve Crowell
Unverified
14:01
practices. Yes, Senator Cole. So did Where the physical checks miss missing or were these checks that were made up and
Speaker 82
14:08
just the physical checks where she included the checks. I have a
Senator Steve Crowell
Unverified
14:11
copy of both checks, so somebody got into the office and grabbed the checks.
The physical checks. It was physical checks, but I don't know. So they weren't counterfeit checks.
Speaker 82
14:25
They were checks that came out of y'all's office because there were
Speaker 87
14:28
checks. I have copies of the checks. Can I add a little. background here, uh, we have staff here, but, um, our
Speaker 16
14:34
understanding is that they were intercepted in the mail and altered just, which is, as y'all know, is a very common practice, unfortunately. Are there any other questions?
Representative Carol Dalby
Unverified
14:49
Representative Dalby. Thank you, Mr. Chair. Judge, how long have you been the
Speaker 92
14:56
county judge for Prairie County? 2.5 years 2.5 years because it it
Representative Carol Dalby
Unverified
15:00
if I understood what Mr. Archer said that this is the 2nd
time this has been found. That the re the revenues, the expenditures were exceeding their revenues and have y'all, what have y'all done to make sure that that doesn't happen. I mean, I, I read what it what
you're taking money out of uh road fund, the general fund, and those kinds of things, but what else are you doing to keep those expenses in line so that you're not over expending the tax the people's
Speaker 76
15:32
tax dollars. Can I speak on that, OK, we have tremendously. Cut down On all expenses and the um the
Speaker 77
15:39
sheriff was able to cut his budget by a million dollars. So we're in a lot better standing than we were before and you know
I could have, I had to have a salary cut from my office and just, just anything. I mean, we're just working on bare minimum of what exactly what we need. Are there any other questions?
Saying none without objection we'll file this report. And y'all are excused. Thank you. Yes, ma'am. Mr. Archer continuing on page 6
Speaker 17
16:21
we have uh 6 water and sewer private audits that were uh uh deferred from the previous report for lack of responses. We have received responses on all 6 of these, so staff recommends that
we, we file these reports. Without objection, we will file
Speaker 28
16:42
these reports. Sat none. OK. on page 7. We have 4 reports that were certified to the bond board and the PA and referred to
the PA and the AG's office. Beginning on page 7, we have the city of Fairfield Bay. Under the mayor and recorder recorder treasure on October 7th of 23, the conference center director collected and receipted $12,210 in cash from a private organization holding an event at the conference center. The cash was stored in a money box and placed in the desk drawer at the conference center. On the afternoon of October 10th of 23,
the mayor retrieved the box and delivered it to the recorder treasurer at City Hall, who counted $11,210. The deposit, uh, the recorded treasure then took the cash home and deposited it the next morning. The cash was neither uh deposited timely nor properly secured while in the custody of various city employees because detailed documentation of the original cash count was not maintained. We are unable to determine if a $1000 discrepancy was the result of an error or theft.
The city filed a police report on October 18, 2023, and as of the report date, no charges have been filed. Continuing under the mayor and recorder treasure. The city paid $4800 to employee for six weeks, 240 hours of wages while the employee was out of the country. According to the city city's vacation policy, the employee was not eligible for vacation leave at the time of the absences. Time sheets submitted for payment were approved by the mayor with notations indicating
that the employee was working from home, a total of 163 hours. Normal working hours for this, this time period total 240. According to the mayor and the and the city's personnel policy, however, no deductions were made. hours not worked. Furthermore, the number of hours reported on time sheets did not appear to be reasonable under the circumstances should be noted that the city does not have I work from home policy, the recorder treasurer did not sign
two of the 3 payroll checks in question and the time sheets contained notes indicating that these payments were not in accordance with city policy. Uh Staff recommends that we file these reports if
Speaker 24
19:09
there are no questions. With that objection,
Speaker 28
19:15
we'll file these reports. Continuing under reports filed to the certified to the bond board and and referred to the PA and AG on page 8 through 14.
We had the city of Helena, West Helena for the year 2023. Under the mayor, treasurer, and city clerk. 9. Unauthorized disbursements totaling over $7300 were made from the city's bank accounts between May and July of 23. The bank discovered 5 of these withdrawals and returned $3300 to the city in June of 23 and over $1500 in July of 23. The city did not dispute the
remaining full withdrawals and therefore were unable to recover the 2477. Continuing under the Mayor, treasurer and city clerk. A review of of credit card transactions selected. For testing and identified below reveal that supporting documentation was not provided for the following at the time of payment. In noncompliance with the Arkansas code. 22 of the 80 transactions totaling over $9500 for the city clerk and 10 of 10
transactions totaling $4600 for the mayor. Uh, made during the 4 month, uh Peer reviewed in 23. 5 of 48 transactions totaling $3600 for the city clerk and 8 of 8 transactions totaling over $1000 for the mayor. Made during the two-month period reviewed in 24. So it's going to field work, the city provided some documentation not provided not previously available. However, some transactions remain undocumented. Therefore, the
Speaker 17
20:59
validity of these transactions could not be
Speaker 28
21:02
determined. you on page 9. During disbursement testing, we noted the following issues. The city received a donation of $50,000 from a nonprofit organization to assist with purchasing animal shelter building. The building was subsequently repossessed due to the city not paying the remainder balance owed. The city paid over $7500 to 2 vendors before work was complete in
conflict of Arkansas constitution Article 12, Section 5, which prohibits city from loaning credit to any individual. Continuing under the the mayor, treasure and clerk, the city failed to make payments totaling over $91,000 as specified in 5 financed purchase agreements. The annual payment of over $32,500 was not made for police body cameras. 3 of 12 payments totaling over $24,500 were not made for
articulated truck, 3 of 12 payments totaling over $12,000 was not made on a used dozer. 2 of 12 payments totaling over $12,200 was not made on a dozer, and 5 of 12 payments totaling 99 over $9900 was not made on an excavator. Similar finding was noted in the previous report. According to city officials, both dozers have been repossessed, the articulated truck and the excavator will be repossessed. And you're on page 10.
Article 12, uh, I mean, excuse me, Arkansas code, um, requires the city council to approve an annual budget, which is, is appropriation of funds for operations. City management is to function within this appropriation. However, the city failed to expend funds within the appropriation due to a lack of management oversight, resulting in street fun and landfill fund expenditures exceeding appropriations by over $424,000 and over $524,000 respectively.
Also, general fund and street fund budgeted revenues exceeded actual revenues by over 388,000 and over $205,000 respectively. The fact that these, this overspending constitutes a control efficiency in the process of maintaining city expenditures within appropriations and it and a threat to efficiency stable threats threat to efficiency, stable operations of the city. As a result of overspending, the general fund, street fund, and
Ladenfill fund had a deficit fund balance of 173, 192,000,238,000 respectively at December. 31st, 2023. Another factor contributing to the deficit was various accounts payable in the general fund totaling over a million dollars, including the following. Over $633,000. Payroll taxes $140,000. For housing of city prisoners at the uh county jail.
263,000 to various vendors. In addition to the general fund, uh, deficit fund balance, failure to pay retirement system payments in 24, resulting in a loss of city general government turnback received from the state. Also, as of the report date, remittance of the IR remittance of the RRS have not occurred since August of 23. Furthermore, the city's ability to pay its debts may lead to uh late payment fees, overdraft, uh,
bank overdraft charges, utility shut off notices, repossessions, and some vendors requiring cash payments. Uh, on delivery. Continuing on page 11. We noted the following issues related to the city landfill. The supervisor The supervisor prepared and approved his own time sheet and was paid over $26,500 for overtime. The supervisor and scale operator who are spouses, occupied an RV connected to City utilities.
Compensation related to these personal use of city services was neither calculated nor reported on the um W-24. And you on page 12 under the mayor and A&P director. The city made The following payments totaling $3950 for a Lady Party transactions without authorizing ordinances. In the parent conflict with Arkansas code $250 to a business
owned by AMP commission member for Catering Services, $1700 to a spouse of an employee. For um Christmas parade decorations and services. A similar finding was noted in the prior. To reports. Continuing on page 12. Under the mayor and treasurer. Arkansa code requires city management to maintain an adequate accounting system to ensure proper safeguarding of assets. We noted a lack of adequate controls over journal entries.
were not reviewed or approved by the employee other than the, the preparer. These deficiencies were due to a lack of management oversight and could lead to misappropriation of city assets. Similar finding was issued in the prior report. Continuing on page 13. Street fund expenditures exceeded appropriations by over $424,000 in noncompliance with Arkansas Code. Similar finding was issued in the prior report. I believe treasure Derek Turner is here today to answer questions.
Speaker 112
26:52
Mr. Turner, will you state your name and position for the record, please. Uh, my name is Derek Turner, and I'm a city treasurer. Do you have an opening
statement? No, sir. Are there any questions? on the committee. Um, yeah. Representative Cooper, you recognized.
Thank you, sir, for being here, um.
Representative Cameron Cooper
Unverified
27:16
You don't have a copy of this in front of you, do you?
Of the what? You don't have a copy of this report in front of you, is that correct? Yes, I have the OK. I'm looking at the The withdrawals from the bank. Um The bank discovered 5 of these withdrawals and returned $3,304 to the city in June 2023. And $1,551 in July 23. The city did not dispute the remaining 4 withdrawals and therefore was unable to recover
$2,477. So my question is, why did the city not dispute those
Speaker 112
28:00
remaining 4 withdrawals? Uh, Mr. Cooper, to, to my recollection. All of the the charges were reported by me. I was doing the bank reconciliations at the time and I noticed that, uh, these chicks can be cleared at, uh, most, all of these chicks were counterfeit chicks. And so I ended up notifying the bank that we had an issue with some counterfeit checks. They said that they would take care
of it and so it's my assumption that once we verify that the checks were counterfeit checks that they did not belong to the city of Hell in West Harlema that they would, uh, correct the issue, but so, but I I didn't follow up on it. I just assumed that all other that everything had been corrected and we did have a uh member of ICID, uh. Police department did begin an investigation. In this matter we had. A couple of former employees
that were involved with this issue and so there there was an investigation, but like I said, I I just thought that all everything had been taken
Representative Cameron Cooper
Unverified
29:09
care of. You said to former employees were involved with this was further action taken on
Speaker 112
29:15
that we had an investigation and I don't know what happened, uh. Subsequent to that, I got some information that Um That the prosecuting attorney didn't want to.
Prosecute him out for for whatever reason, I don't know, but that's. All that I know about that situation, but like I said, every check was reported to the bank. And it was just my assumption that everything had been. taken care of.
Senator Crow, you recognized for a
Senator Steve Crowell
Unverified
29:50
question, Mr. Archer wasn't this referred to the Attorney general, so this will be looked at in this has been
Speaker 16
29:56
certified as the bond board for the, the
whole reports are when if there's one finding, the whole report goes, but it's certified to the bond board referred to the local prosecuting attorney and
Representative Carol Dalby
Unverified
30:10
the attorney general. right. Representalber, did you have a question? I did for Mr. Archer. When were these referred and have you
Speaker 124
30:16
heard anything back from the bond board or from the attorney general's office.
Speaker 16
30:20
They were referred, I believe this week is how that works, so you know you'll get, I think either this. Tomorrow at the Friday meeting or the July meeting the previous prosecuting attorney disposition
report will be presented, so this one will be in the next one. So we look forward next summer as for if unless we hear back there were actual action taken and a year from now that's normally it's they do it a year at a time for the prosecutors statewide to refer to um answer the distribution report. Yes, ma'am. OK. Uh
Representative Carol Dalby
Unverified
30:51
I think that's correct, Michelle, that's fine. I have lots of questions because it, but I'm not sure the right people are at the end of
the table. It appears from my reading of all of this that the
treasurer appears to me, sir, that you're trying to comply with the law
and you're trying to answer as honestly as possible, but you, it appears that you've got. I felt a couple of folks who might be just
Speaker 123
31:13
denying any of this and so it's not our, not my fault, not my problem. Is that what's going
Speaker 112
31:19
on in Helena West Helena? I can't attest to. Their feelings and their opinions, but I would say you, you were accurate in saying that I'm trying to be truthful and give you guys information uh
regarding what's going on in the city as
Representative Carol Dalby
Unverified
31:37
far as finances are concerned. Follow up. Also, on, on the finding
that talking about the annual budget and failed to expend the funds within the appropriation and it talks about the 424,000 and the 524,000 and and all of those kinds of things and how it's going on and on about that and it talks about. That, uh
Other things contributing to to uh The deficit payroll taxes, housing for city prisoners
at the county jail and 263,000 to other vendors and I noticed in one of the responses it says we're considering some other funding operate options that are not fully developed, but we can't list those here. And my question is why can't
they be listed and what are those? because this is pretty serious and it looks like at
Speaker 112
32:36
Excuse me. Well, the, the, the mayor. Um, came up with a plan to correct these actions, um, and I'm not sure what the additional revenues that they're talking about. I'm not sure of those, but what I can say is that recently, uh, the mayor has presented the city council with a plan to um
implement increases in sanitation fees to help increase the revenue on that side, uh, the city council has. Approved rate increases in our water and sewer rates, so Hopefully at some future point they can uh begin to contribute to the city again. They used to give the city uh payments, contributions in lieu of taxes because they don't pay property
taxes, so they would make contributions to the city of Helena and um When they started having financial problems, they weren't able to do so, but now hopefully these uh increase in rates will help them rectify those financial issues and they will begin to um make contributions to the city again, so I'm expecting hopefully maybe the uh sanitation rate increases and the contributions from the water
Speaker 121
34:09
department to help us with our uh revenue
shortfalls. One more. But, um, but ask, ask your follow up,
but let me make a comment too, please. I was going to ask you if you'd like to maybe make a motion to uh bring this to the full committee on July 11th, 2025, and we'll have the mayor, the treasurer, the city clerk, and the A&P director will have everybody there that way you
Representative Carol Dalby
Unverified
34:32
read my mind, Mr. Chair. That was gonna be my next thing after my last question to make that
motion, please. I make the motion that we bring them before we. If we have to subpoena them, I don't know that that's the right way, Mr. Archer, but we need to get them all here because we can't get our questions answered and this is pretty serious, uh, the people of Helena West Helena deserve to
have a government that works for them and they can't work for them if, if the money's missing and there's nothing
Speaker 16
35:01
there. We'll do the will of the committee. We, we certainly do not mind bringing the July 11th Friday meeting, um, do they need to be subpoenaed, we'll have to ask
Ms. White about that, but I normally uh invitation would Would uh would be the first step in that step, but um we can. If you word your motion correctly, we can check on whether or not subpoenas would be necessary I guess if the will of committee, uh, we can go ahead and skip to that and invite him with the subpoena or just invite them. It'd be whatever the committee wishes to do. I I'm gonna
Representative Carol Dalby
Unverified
35:35
make a motion that we subpoena them there to be the full committee because this is serious for the people of Helena
West Helena, and I don't want us to get there in July and then it becomes August and then it becomes September and uh I, I think our citizens deserve some answers in the legislature deserves some answers. We've, we've given a lot of money over there to help with their water issues. I'm not hearing anything and my next question was gonna be, you know, what kind of staff cuts have you made or anything like? I'm not hearing any of that. I'm hearing a lot of hopes and dreams, which is great that doesn't pay the bills, so I would, I would move that we
subpoena those individuals to that Friday July 12 the mayor. Treasure city
Speaker 144
36:18
clerk and the A&P director, 4 people that are listed in this report and that would be my motion. I think
Representative Carol Dalby
Unverified
36:26
that's the best way to get to the bottom of this. Do we have a second? We got a second, Representative
Rye, all in favor say aye. Any opposed? Can
Speaker 16
36:38
we, can we back up just one minute, Miss White, just can we amend that? Would you consider
amending that to have uh the legislative auditors subpoena it it makes the process so much quicker because he can do it this meeting, otherwise we've got to go.
Representative Carol Dalby
Unverified
36:55
tomorrow and then it would be September. I would certainly, I, I would make that, I would amend that, I would amend that and make a substitute motion that we, uh, subpoena those those four individuals and that we uh permit the auditor to issue
those. I have a second Representative Rye, all in favor say aye, and you opposed, saying none, uh, your motion passes.
Speaker 112
37:20
Thank you. Uh, can I ask something regarding the cuts to payroll, I think she mentioned something about cutting payroll. Turner, we moved on from this item right
now we still have a full agenda to get to, so just get your questions together and be prepared to answer on July
Representative Carol Dalby
Unverified
37:38
11th. Yes, representative, Mr. Chair, would it be permissible that we have a motion to hold this. This audit, hold this over
Speaker 16
37:45
to the next time we won't, we won't discuss it in
the Thursday meeting, but it will be on the agenda for I just want
Speaker 154
37:54
to make sure we were in the right from scratch, yes ma'am.
Speaker 28
37:59
OK, thank you. Oh, thank you. Thank you, Mr. Turner. OK, continuing to uh under reports certified to the bond board and referred to the prosecuting attorney and attorney general. We have the city of Dermont on page 15 through 17 for 2023 and 22. Under the mayor, the city paid a
total of $5,007 and 1382 and 23 and 22 respectively for overdraft fees, late fees in conflict with the public public purpose doctrine. discussed and attorney General's opinion 91,410. This is a repeat finding. Accounting procedures for municipalities are set forth in municipal accounting law in Arkansas Code. The city was not in compliance with these codes and other proper accounting procedures as noted below. The bank accounts were not properly reconciled and
reconciliations were not approved by the municipal official or employee other than the preparer. This is a repeat finding the previous two reports. uh, free number receipts were not issued for all funds received. This is a repeat finding. Adequate supporting documentation was not provided for protested disbursements of over $26,000. That was 11 of the 50 tested disbursements and pre-number receipt, pre-numbered checks were not always issued in sequential order. This was a repeat finding the previous two
reports. Cash receipts and disbursement journals were not prepared. For all funds. This is a repeat finding. Significant amounts of receipts, disbursements and transfers were not posted, improperly posted, or improperly deleted, resulting in an unidentified amounts, changes in prior years fund ballots, books being out of balance. And misstatements of revenues and expenditure. This is a repeat finding. An annual financial statement
was not prepared or published. This is a repeat finding for the previous 4 reports dating back to 2018. Financial statements were not provided. The city council members on a monthly basis. This is a repeat find in the previous two reports. Continuing on page 16. Restricted street fund monies or improper use for non-street related utility payments and accounting services during 23 and 22 tolling uh over almost
4050 $300 and just over $5900 respectively in non-compliance to the Arkansas Code. The city owes The following funds. Uh, for transfers of restricted cash for which documentation was not provided for the year 2023, the general fundows the nursing home Camprovement Fund, the street fund, farmers' pension trusts, McDermott Cemetery. recovery, police bond and fined the working capital payroll fund.
A total of 135 over $135,000. The street fundow the special sales tax, street and water. General and ARPA funds a total of $209,000. District court automation fund over the fire equipment, uh, and training Act 833 and the fireman's Pension Trust Fund. $1,319 and over $11,000 respectively. Police, uh, I mean, fireman's pension Trust Fund owes the
general fund over $11,000 and the Act 833 Fund over the district court automation, $1,319. For the amounts due from previous years, the general fund made payments to the nursing home fund of $6000 to the street fund for $9900 to the farmer's Pension Trust Fund for $100. McDermott Cemetery phone is $700 and the ARPA recovery fund for $6,542. Farmers Pension Trust Fund made payments in the street fund of
over $1000. There were additional attempts to make payments due from previous years, but the payments were made to the incorrect fund resulting in additional interfund uh payables. We had the same finding for 2022,
Speaker 17
42:13
since this is a two-year report, they're just those numbers I just gave you are the most updated numbers. So Uh, but I will staff would like to note that after the um. Report date We have verification that all the street funds have been
repaid to the street funds been made whole for their funds. So as far
Speaker 28
42:35
as uh Arkansas Code 277207, um, the city is in good standing currently. Continuing on page 17 under the district court clerk. The balance in the 23 and 22 district court city bank account was not identified with receipts for cases not yet adjudicated and the payments made on all unpaid individual time accounts
Speaker 17
43:01
in the amount of over $3200 and over $4800 respectively in noncompliance with Arkansas code. This is a repeat find in
Speaker 28
43:09
the previous 19 reports dating back to 2003. Unto the police chief. Police Department cash receipts exceeded cash deposits by $4,036 during the period January 1 of 22 through June 12th of 24 unreceeded checks and online payments were included in bank deposits, which concealed a
portion of the deposited cash. On
Speaker 17
43:35
June 12th to 24, police department secretary Laso Hayes. Resigned from employment and acknowledged misappropriating his police department funds. Believe we've got district court clerk Megan Charlton here
Speaker 28
43:44
to answer questions. Would you state your name and position for the
record, please Megan Charlton. I'm the court
Speaker 159
43:56
clerk in Dermont. Do you have an opening
statement? No, sir. Are there any questions of the committee? Representative Dobby, you recognize the
Representative Carol Dalby
Unverified
44:09
question. Thank you, Mr. Chair. I'm sorry, I'm the only one asking questions today, um, thank you, ma'am, for being
here. I appreciate it. I'm really concerned that we're, we're talking about this goes back
Speaker 163
44:22
to 2003. Yes ma'am. When did you become the district court clerk end of 2018, December of 2018. And have you
Representative Carol Dalby
Unverified
44:29
gone to the training that is provided by the
AOC or by the municipal league on how to account for these funds and how
Speaker 159
44:40
to properly document them ma'am, but this has been something going on, like you said for 19 years, um, and. has been a former employee that stole money and that is still continuing to pay back and then now we have another employee that allegedly has taken money from the same fine account in y'all's, I'm
Representative Carol Dalby
Unverified
45:00
sorry, may I just have some latitude to ask some questions.
OK, thank you. Uh, in the city of Dermont in that district court, it appears that this is under those one of those situations where the police chief takes in the
Speaker 159
45:18
money. Yes, ma'am, the police department collects the bond and find money and then they disburse it to me at
Representative Carol Dalby
Unverified
45:25
the beginning of every month. And then is there that problem of the reconciliation because sometimes you have those defendants who may have paid months in advance. and then there's a lag time.
Speaker 159
45:37
Have you tried to account for all of that ma'am, we've been keeping track of our bonds pending report and deducting that from the leftover balance, um, in our account to try to identify it, but with all the issues that we've had going on, the amounts have been fluctuating, and we can't in good faith disperse it and then run the risk of the
Speaker 148
45:59
account being negative. Can you give me
Speaker 159
46:02
a money amount? We're working around like 7 and
5000 unidentified. But then the report says 3000 like over $3000.
OK, thank you. Representative Dalby. I was just sitting there thinking we may want to defer
this until our next meeting scheduled meeting on July 10th and maybe get the mayor here and get better answers
Representative Carol Dalby
Unverified
46:28
to your questions if you understand the problem district courts have, that's a, that's a problem throughout the state and we dealt with it last term in this committee, uh, and
I've yet to figure out how we can alleviate that problem and I understand this disbursement of the lag time of that. I am concerned about all this. mother, but she doesn't have any answers in that regard
as to what's going on, uh, it just. a lot of money. I understand, um, would
you be, would you be willing to put that in the form of a motion just to defer to July 10th
Representative Carol Dalby
Unverified
47:02
and we'll get the mayor here. I move that we defer this until July 10th and request that the mayor
and Mr. Archer, should there be the Treasurer, I can't remember who else was contracts with
Speaker 108
47:14
the, the, uh, what a CPA to do part of their books,
Speaker 13
47:18
so, uh, they don't have a treasure, do they have to see a clerk is a city clerk. Well, and it, and it
Representative Carol Dalby
Unverified
47:29
I'm, I'm kind of speaking on the motion but I don't mean to be, my motion would be, yeah, we defer and get these the right people here.
But I'm also curious as to they sign an engagement letter. And still haven't gotten any report from the CPA firm.
That that's it's not fair. I mean, that's not right for a city to sign an engagement and then not get the
Speaker 28
47:56
work back. Do we have any information on that, Mr. Archer? They are not alone
Speaker 16
48:01
in that process with the ARPA funds and the the federal uh requirements for those audits and with the passing of the um Uh, amendment amended to the law
for 2022 reports to be on an 18-month deadline. There's been a great response to that by the local CPAs out there, but there is a huge backlog and uh to speak to that in the next meeting. June 23rd, I mean, uh, June 30th of, of um 25 is gonna roll around and that's gonna make the 18 month period for the 23 reports be due as well. So that will be an issue that it probably in the July meeting that this committee is going to have to to act on.
Representative Carol Dalby
Unverified
48:43
And, and I apologize, Mr. Archer has Dermat been on our list in the past of the CPAs not giving their reports. I just can't remember from the last term whether they have been or not, you know, we used to get, we'd get a list. Uh, do we have that
updated list, you know, of the cities and counties that are on
Speaker 14
49:01
the city the city is in in compliance because
Speaker 16
49:03
we do that one and I don't believe we provide a we don't provide a list of the
Speaker 60
49:08
water parks because the law didn't ever give a deadline until last June, so
that's relatively new. OK, thank you. Thank you for the latitude, Mr. Chair. Yes, ma'am. Do we have a second on that motion? Representative Ryan, all in favor say aye. All pose a
Speaker 28
49:27
none. The motion passes. Ms. Continuing on page 18 with the report certified as the bond board and referred to the prosecuting attorney and the attorney general of the city of Portland in 2023. Uh, under the mayor, the city determined an employee used a
city fuel card to make unauthorized purchases totaling $778. The employee Cordell Brown pleaded guilty to one count of theft of property and was ordered to pay restitution of $770 under the recorder treasure. During review of disbursements, it came to our attention that the city paid 5 council members and 11 volunteer firemen, a total of $2700 and almost $6000 respectively. As contract laborers instead of
employees in accordance with IRS guidelines. This is a repeat finding in the prior two reports. I believe we have quarter treasure Amber Spaulding here to answer questions. Mrs. Pauling. Would you state
your name and position for the record please Amber Spalding, recorder treasurer for
Speaker 184
50:30
the city of Portland. Thank you. Do you have an
opening statement? No, sir. Are there any questions about the committee? Senator Crow, so
Senator Steve Crowell
Unverified
50:40
you have this the way you pay the firefighters
Speaker 184
50:44
and city council's fix this year. Yes sir, we got everything entered into, uh, CSA under employees to
Speaker 186
50:50
be paid. OK. And you have a new procedure to make sure that when they're using the
Speaker 187
50:56
fuel card. Yes. OK. They have to now sign their fuel cards in and out and bring
Speaker 188
51:00
receipts to file I'm gonna file this one.
Uh, are there any other questions? Saying none, I'd make a motion to without objection I'd make a motion to file.
Speaker 28
51:16
her, um, Ms Pauling, you're excused. Thank you. You're welcome. Uh Starting on page 19, we have 20 reports that would be referred to the prosecuting attorney in the AG. Started on page 19 and 20. We have a special report of the bauxite District Court review of transactions from July 31st of 24 through November 12th of 24.
Speaker 17
51:40
We have staff member Michelle Ashley here today to present this report.
Speaker 194
51:50
Thank you. This report is issued in response from the 22nd Judicial District prosecuting attorney for legislative audit to look at allegations that a um Check from the district court was returned due to insufficient funds and just a little background on boxite, this is our, um, Third follow-up, we had issued a special report, um, in August of last year after reviewing court transactions and determining
that they had moved $38,000 from the court front fund into an improper account. And so while looking at this, we determined that the check um Was insufficient because they accidentally paid a uh a bill out of that account. They just paid the wrong account. So, um, We followed up with that with them and then we also during this, we went ahead and followed up with them on our recommendations from our prior report and so I just want to let
the committee know that bauxite is um following through with their reimbursement agreement, and they have made those payments and they are steadily reducing the amount that they owe to the court fund and they previously owed some money to Bryant District Court for administering the court account and District court has Confirmed that that balance has been paid in full. And that concludes this report. Thank you. Are there any questions on the report?
Speaker 28
53:31
no that objection will file this report. Thank you. No Continuing on page 21 through 23. We are under reports refer to the prosecuting attorney. We had a special report on the 6 regional solid waste Management Districts, a review of selected policies, procedures, and transactions, uh, July 1 of 21 through December 31st of 22 in conjunction with this report, the Mississippi County judge was invited to, uh, be here today,
Speaker 17
54:04
uh, he called and requested this this report be deferred to
Speaker 16
54:08
the July meeting so he could be here. He had a conflict of And scheduling,
Speaker 201
54:15
so staff recommends that we defer this report. Without objection,
Speaker 28
54:22
we'll we'll defer this report. no Continuing with reports referred to the prosecuting attorney and attorney General on page 24 of the city of Camden 2023 under the treasure.
The city paid employer contributions totaling 3600 3656 on behalf of a firefighter in deferred compensation plan from June 24th of 21 through April 30th of 24. These contributions were not in accordance with the city's policy manual, which states all regular full-time city employees except for police and fire personnel have the option of participating under the city's deferred compensation plan. The city personnel discovered
this unallowable contribution and a repayment plan was established at a rate of $15 per pay period for 244 pay periods. It appears that the repayment plan conflicts, Arkansas Constitution, Article 12, Section 5, which prohibits the city from loaning its credit to an individual. If there are any questions, staff recommends that we
Speaker 17
55:21
file this report. That objection we'll file the report. Continuing under referred to the
Speaker 28
55:39
24. On page 23, it was 24 on page 25 through 27. I'm sorry. City of Carlisle, uh, for the year ended 23 and 22. Under the mayor on page 27. The city paid $3,972 to
Speaker 17
56:00
a fireman for fire truck repairs in 2022 without authorizing ordinance and apparent conflict
with Arkansas code. Staff recommends if there are any
Speaker 28
56:15
With that of rejection, we will file this report. Continuing on page 27 under referred to the PA and the AG. City of El Dorada, 23 and 22 under the mayor. February of 2019, excuse me, the city purchased the Place Gate property from the Edorata festival and events. Uh, EDFE, a nonprofit
organization for $3.45 million and entered into agreement to lease the playscape to EDFE for $10 annually with the EDFE having exclusive control to operate Playscape and pay all expenses for activities conducted on the premises. The city paid EDFE $200,000 and $300,000 in 23 and 22 respectively to operate placesgate without a er a contract for services. On June 18th to 24, the city entered into a contract for
services in which it agreed to pay pay uh pay EDFE $200,000 in the calendar year 24 without apparent additional consideration beyond the that contained in the 2019 Lisa lease agreement. As of the report date, the city paid EDFE $150,000 in 24. This arrangement is in noncompliance with Article 12, Section 5 of the Arkansas Arkansas Constitution. This is a repeat finding. Continuing under the mayor.
From February 15th of 23, the city paid 242,638 for ambulance with the estimated delivery date of 700 days. after payment. Although it appears the city saved 14,814 about preparing for prepaying for the ambullets, the prepayment conflicts with Arkansas Constitution Article 12, Section 5. Continuing under the mayor. An employee was paid 31 hours of vacation before the leave was earned. The employee was
subsequently terminated, resulting in an overpayment of $540554. This arrangement appears to be in conflict with Article 12, Section 5, Constitution, which prohibits cities from loaning credit to an individual. Continuing under the mayor, a review of disbursements revealed the supporting documentation was not maintained for disbursements of almost $8000 and over $29,000 in 23 and 22 respectively. Non-compliance to the Arkansas Code.
Due to the lack of documentation, the validity of these disbursements could not be determined. Additionally, we noted the overpayment of $1100 to a vendor. Are any questions
Speaker 17
59:01
staff recommends that we file this report. Without
any rejections, we'll file this report. saying none of his torture.
Speaker 28
59:09
Continuing under reports referred to the PA and the AG on page 29. We have the city of Mina.
Under the mayor and city clerk in 2022, the city negotiated with a vendor to supply lockers for the police department at a cost of over $8400 and subsequently paid the vendor over $4200 in advance for half the total cost. The vendor failed to fulfill this obligation and agreed to repay the city at a rate of $500 per month. The vendor made payments totaling $3500. Leaving a balance of $703. The last payment the city
received was on June 12th of 23. And based on the documentation provided by the city, the city attorney is attempting to resolve this matter. The advance payment and balance due conflicts with Arkansas Constitution, Article 12, Section 5, which states in part no city shall appropriate money for or loan it credit to any corporation, association, institution, or individual. Without if there's
Speaker 17
1:00:16
any questions, if, if there are, excuse me, if there are no
Speaker 28
1:00:21
questions, staff recommends we file this report. Without objection, we'll file this report. Continuing on page 29 under referred to the prosecuting attorney and attorney General's office. City of Salem, 2023. This is, this report was prepared by a private CPA. During our audit, we were notified by the city of Salem that certain bank transfers and invoice payments were not approved by city officials due to the lack of oversight in the
Speaker 17
1:00:53
baseball and softball enterprise fund bank statement, 7 transfers out of the bank account were incorrect and in error. In addition, management approved in addition, management approval for payments of invoice was not obtained. If there are no questions, our staff recommends we file this report. Without
Speaker 28
1:01:18
report. Continuing under the Reports filed to the PA and AG,
uh, on page 30, we have Clark County. On the sheriff and collector. On April 14th of 23, counting narcotics officer utilized the county-owned vehicle for personal out of town trip without permission. According to the county officials during the trip, the officer wrecked the county vehicle, causing the county to incur towing and storage fees totaling over $2600. Subsequently, the vehicle was determined to be a total loss, and the county received insurance proceeds of just under $17,000 for the loss of the
vehicle and and was reimbursed over $2600 for the towing and storage fees. The officer was placed on administration administrative leave without pay for 5 days and retired in July of 23. In addition, the officer's time sheet reflected that he was, he worked 8 hours on the day of the accident. However, the information contained in the accident report indicated the officer was not working that day. Furthermore, the sheriff's drug buy fund issued checks stolen
$1400 to the officer during 23. The sheriff's office was able to provide supporting documentation for $500
Speaker 17
1:02:35
leaving $900. And drug and drug buy funds unaccounted for. There are no questions staff recommends we
Speaker 201
1:02:44
file. Without objection, we will file
Speaker 28
1:02:49
this report. Continuing under uh. Referred to the prosecuting attorney in the AG on page 31. We have Sebastian County 2023.
Under the county judge. The county discovered and we verified that a former employee received a salary payment of $993 in 2023. The month after the employee resigned due to payroll personnel failing to verify hours worked. As of the report date, the county had not recouped any of the amount from the former employee. Also under the county judge on April, I mean August 31st of 23, the county discovered that a
vendor payment of 59,0692 have been fraudulently diverted to another bank account after the vendor uh contacted the county about not receiving payment. The county had set up an ETF payment request on July 24th of 23 after receiving an email that appeared to be from the vendor. Without verifying the authenticity of the request. Law enforcement and the financial institution were notified. However, the county was unable to recover the funds. If there aren't any questions,
Speaker 41
1:04:01
staff recommends we file. Without rejection, we
Speaker 28
1:04:06
will file this report. Continuing on, uh, page 31 under referred to the PA and AG. We have the Beaver Water District of Washington and Benton Counties. This is as of September 30th of 2024. This report was prepared by a private CPA. For the year ended September 30th of 24, the district had a fail failure of controls over the expense section for fraudulent vendor
communications. The controls in place were followed and confirmed with the real vendor. Which had confirmed the invoices had needed to be paid. The impersonator and intercepted communication inside the entity imposed. As a known vendor, the fraudulent vendor communicated communication led to ACH payment. When legal counsel and insurance company was contacted, no claim
Speaker 17
1:04:55
could be submitted due to the limited coverage. The funds could not be tracked. Therefore, the full amount was expensed.
Speaker 17
1:05:12
this report. Without objection, we will file this report. Continuing on pages 32 to 33
Speaker 28
1:05:17
under reports filed the prosecuting attorney and the attorney general's office, where the city of uh cotton plant 2023. Under the mayor. The following issues were noted during payroll testing. We were unable to substantiate salaries paid to payroll preparer prepare because time sheets lack sufficient
details, such as the date, time, and hours worked. Did not always contain the employee's signature certifying the hours worked. Did not always contain supervisor approval. Additionally, some time sheets were stamped with the mayor's signature stamp. Which which according to the mayor was not kept in a secure location. We're not always provided for review. We were unable to validate the following payments, $1200 to the mayor for unused leave.
The mayor did not maintain time sheets or leave records documenting leave time used. The city did not have a policy regarding payments for unusual leave. After the question, after we questioned the payment, the council on October 8th of 24, approved two weeks of vacation for 23 for the mayor. However, the meeting minutes provided, provided like clarity regarding the the details of the approval. Subsequently, the mayor reimbursed the city on November 25th of 2024.
I are ready to prove by the for the amount paid to the payroll preparer for the period October 24th of 23 through December 31st. Of 23. Continuing under the mayor, a fixed asset listing was established. However, it was not properly maintained to include additions and deletions. It isn't. It, it did not contain certain values I was, uh, did not contain values, acquisition dates, and identification numbers for equipment. In
addition to fixed asset policy was not adopted by the governing body as required by code. A similar finding was noted in the previous 9 reports dating back
Speaker 17
1:07:22
to 2011. Continuing under the mayor. Elected, I mean, electronic fund transfers and debit card transactions were noted without
Speaker 28
1:07:28
authorizing ordinance with written policies and procedures approved by the governing body as required by code. This is a repeat finding. Per review of payroll records, the city has unpaid federal and
state taxes totaling over $2,080,000. Uh, for the following items, $2400 owed to the DFNA for current year state withholdings over $48,000 owed to the IRS for current year federal tax withholdings and over $158,000 for taxes, penalties, and interest. For prior periods dating from between 2015 and 2022. Si finding has been noted in the
previous 6 reports dating back to 2014. On page 33, continuing. Although Schedule one of this report shows a balance of 11,000 over $11,000. It was brought to our attention as of December 31st of 23, the gentle fund owed a significant amount of balances due to the IRS and DFNA. It's shown on notes 6 of Schedule 3. When these outstanding amounts are considered, the general fund has a deficit fund balance of
over $197,000. This is a repeat finding from the previous report. I believe
Speaker 60
1:08:46
Mayor Clara Brown is here today to answer questions. Ms. Brown, are you here? Oh, maybe she. I guess
so. OK, let me see. Yep, she signed in.
Speaker 201
1:09:06
Ms. Brown, are you here today? She just stepped down.
Well, I guess she didn't want to speak. Well she had signed in to
Speaker 210
1:09:19
speak, she got it. OK, she went to get
her. I'm, I'm with you. I misunderstood. I thought you said the woman that stepped out was Miss Brown, Mayor Brown. I got you. The wishes, we can
Speaker 212
1:09:37
come back to that one when she's present. So OK,
we don't, until we find it we'll just wait on this and we'll move forward and we'll
Speaker 28
1:09:53
come back to it if she shows up. Continued on page 34. Under reports referred to the prosecuting attorney and attorney general's office. We have the town of Emerson, 23 and 22 under the mayor and recorder treasurer. And in testing 22 payroll records, the county, I mean, the following items were not provided for payroll prepared. Documentation.
Of the unauthorized excuse me, documentation to authorize hourly rate for pay. Time sheets and other documentation to support the hour hours worked. Without adequate supporting documentation, we were unable to verify if the
Speaker 17
1:10:30
amounts paid, uh, were correct. There are no questions, Staff recommends we file this report.
Without objection, we'll file this report. done, Miss Torture.
Speaker 36
1:10:41
Yep, we'll keep going here. Uh, on page 35
Speaker 28
1:10:47
to 38 under the uh for the prosecuting attorney and attorney general's office with the city of Eora 2023 and 22. Under the mayor. Review of debit card charges for the period January 1 or 22 through December 31st of 23, reveal the following improper or questionable purchases. Totaling $14,179. Over $9500 for undocumented disbursements, the validity of which could not be determined.
Over $1600 for lodging and meals without a business purpose indicated. Over $1180 for decorations, $824 for 144 candles. $736 for food-related items. 13 I mean $103 for personal books, $65 for hotel late checkout fees and $50 for a donation. The city made payments totaling $2,644 in over $11,000 paid in
Speaker 17
1:11:49
23 and 22, respectively. For Lady party transactions to city employee and the employee's business without authorizing ordinance in apparent
Speaker 28
1:12:02
conflict with Arkansas code. Review of selected travel reimbursements and fuel purchases for the period January 1 or 22 through December 31st of 23 revealed the mayor purchased uh fuel totaling over $3700 without vehicle information indicated. Received reimbur uh mileage
reimbursement totaling 22 $2,222 without a business purpose indicated or approval by the city council as required by Udoor Ordinance 201901. We received reimbursement for a fuel purchase. Uh, without invoice. And purchased $31 in fuel on the same day she received reimbursement for mileage. During the same period, the district court clerk received travel reimbursements totaling over $2000 without specific dates of travel indicated or
approval by the city council is required by Udoor ordinance number 201901. Including, included in this amount is one reimbursement of $907 which covered a five-year period of 2017 to 2021. Should be noted that invoices totaling $8,7979 were not provided for January through May of 22 and January of 23 without supporting documentation, we were unable to determine the validity of these purchases.
Continuing under the mayor of property tax is restricted for street purposes of $683 for a deposited in the general fund in air. And not transfer to the street fund and non-compliance with the Arkansas Code. This is a repeat finding. Continuing on page 36. An audit or agreed upon procedure and compilation report was not obtained for the water and sewer system funds for 22 and 21 as required of Arkansas code. I said finding was issued in the prior report.
Under the mayor and district court clerk, District court clerk used all of her accrued sick leave in May of 2023. The city allowed her to receive payments for unearned sick leave, resulting in salary overpayment totaling $10,417. Subsequently, the city subsequently the district court clerk retired in July of 24. Continuing on page 37. Under the mayor and clerk treasurer.
Accounting procedures for municipalities are set forth in municipal accounting code, Arkansas code annotated 1450 1459 101 through 119. The city was in noncompliance with these codes and other proper accounting procedures as noted below. Cash receipts and disbursement journals were not properly maintained. Municipal, uh, multiple transactions were posted to improper assets and liability accounts in the general, general ledger resulting in numerous posting errors, similar finding
was issued in the prior report. Also journal entries were not established. Journal, excuse me, also journalists were not established for the street vehicle grant fund and the emergency shelter renovation grant fund. Pre number receipts were not issued for all funds received. I also receipt numbers were not always recorded in the general ledger. This is a repeat find in the previous two reports. Beck accounts are not always properly reconciled and approved by someone other than a preparer. This is a repeat finding.
Electronic disbursements were made without proper approval of the city council by ordinance or with or without establishing written policies and procedures to ensure that the electronic fund payment system provided for internal controls and documentation for audit and accounting purposes. This is a repeat finding. A lack of management oversight permits the permitted these instances of noncompliance with municipal county law and proper accounting procedures. The effect of not following municipal county law and proper
county procedures precludes management for making appropriate and informed decisions on behalf of the city. Beli, uh, Mayor Tameka Butler
Speaker 17
1:16:09
is here to answer questions. Is Mayor Butler here. Would you state your name
and title for the record, please.
Tamika Butler
Unverified
1:16:29
My name is Tamika Butler. I'm the mayor of the city of Eudora, Arkansas. Mayor
Speaker 223
1:16:36
Butler, do you have an opening statement? I do not, but um if it's OK, I have my CPA here with me as well. Would he, is he allowed to come up?
Clark Terrell
Unverified
1:16:51
Sure, that would be fine. Thank you. If you will, will you state your name and your relationship to the city. Clark Terrell. I'm a CPA in practice in the city of Crossett, Arkansas, and I
provide outside accounting services for the general fund Street fund parks and recreation, sewer and water on a selective basis. Thank
you. Does, does anybody have any questions? Representative Laderman.
Representative Jack Ladyman
Unverified
1:17:18
Thank you, Mr. Chairman. I'm, I'm down here at the end, uh, under one of these findings, there's like 3 or 4 repeat findings, uh, what are you
doing, uh, to stop those repeats? What are you doing to fix those issues? And I'm looking at the on page 37, if you've got a copy of that. Is there anything being done to fix were there repeats? I mean, what
Speaker 223
1:17:45
are you doing to fix the issues? Can you stay with
Representative Jack Ladyman
Unverified
1:17:49
me, can you restate what those final I'll read one of them pre-numbered receipts were not issued for all funds received, also receipt numbers were not always recorded in the general ledger, similar finding was issued in previous two reports.
So use that as an example. What are you doing to fix that problem? Did you find it? I'm looking for
Speaker 223
1:18:16
it right now. I'm on page 37. If you've got the same report I do. No, I don't have that report, but what we have done though I can um kind of give a statement what we have done in in reference to the receipts not being issued in sequential order, um. I have been um.
Paying closer attention to that because a lot of the receipts that are issued are issued at the front counter where our water clerk does that and so now I'm being more mindful of checking behind her to make sure that those receipts are issued in a sequential order because at first she wasn't going in sequential order, she was just writing the receipts from left to right instead of right and then going to the left column based on how I receipt books are ordered, how
Representative Jack Ladyman
Unverified
1:19:00
they're numbered. Have you had any employee changes. new employees or these
Speaker 223
1:19:06
Yes sir, that particular uh person is no
Representative Jack Ladyman
Unverified
1:19:10
longer employed with the city. OK, so you got other procedures
to fix the other 3 items. All
Representative Cameron Cooper
Unverified
1:19:21
right, thank you. Representative Cooper, you're for a question. Mayor, thank you for being here. At the beginning of the report, there's an accounting of 14,000, over $14,000 in Questionable debit card charges that were made, um. $824 for candles, money for snacks, candy, drinks, money for
personal books, um. Who is making these purchases? Why? What were they for? And what are you doing to have
better oversight over how that debit cards are being used. Well, in regards to the um
Speaker 223
1:19:50
I think you mentioned something about 9000 in undocumented disbursements. I'm not sure what that is because we do have some records that are still at the Attorney General's office, so I haven't seen them to be able to provide a detailed explanation of those, but I'm pretty sure
when I look at them I can't um as far as the lodging and the meals without proper uh business purposes being indicated, we started enforcing that you must attend, you must attach to your reimbursement. Um, the agenda for the meeting or training that you attended, if you can get a copy of the sign in sheet, things of that nature to validate where you were and why you were there, um, for decorations at the time I made those purchases, and that wasn't all at one time it was
over the course of the 2 years, um, we are in a very old building um next year to be 90 years old and um it's very. They looking I must, uh, and that's probably not the right word but um our building is 90 years old, we need a new roof and that even goes for the candles. There's a lot of mold and mildew in the building, and this is where we work out of every day to do the day to day operations, so in order to be able to stay in the building because the, the scent is so
strong. We burn candles while we're there, um. Since then, also, uh, we haven't had purchased any candles, if so, I'll buy some myself or the water clerk or buy some herself, but we have to burn them so that we're able to stand, stay in the building and when it rains a lot of times we have to take periodic breaks and go and sit in our vehicle outside because the scent is just that excruciating and we have to let it die down in order to go back
in in order to finish working, um, since then we've reached out to the prehistoric uh Um, um. Society to help us because it is it listed uh it is listed on the uh prehistoric registry to come down and do an assessment to hopefully get us a new roof soon because that's where a lot of the mold and mildew is coming. It's a two-story building and it runs down the stair wheels, the floors in the bathrooms, we're not able to use the staff restroom and hadn't been for
about 2 years because the mold and mildew has just completely taken over the entire restroom, um, the Food related items we were hosting events for our youth, like for Easter, um, we have a Christmas parade every year and we are responsible for feeding the youth that participate, that are part of the band that participate in our Christmas parade. We're responsible for feeding them, um, that's part of the agreement that the superintendent and the band director made with us, um.
The $103 for personal books. Those were books that I purchased for staff development training, so it wasn't for personal use, um, it was for all of my staff from the water clerk to our public works crew to our firefighters. We have invited some council members, uh, to the staff development meeting just so they can come and participate with that. Um, with the $65 late checkout fee. I was at a conference at a training, and it ran over so by the time we finished and I
realized what time it was, it was after the checkout time of noon. We didn't finish until about 3 o'clock, um, by that time I'd gone to ask for an extension or get my things and they told me that the $65 had already been processed to the card on file, um, and the $50 donation. Without looking at it, I can probably honestly say that it was for a, a community development institute, uh, membership fee, um, the city is a part of the community
Development Institute, which is housed out of UCA in Conway, Arkansas and that membership fee is $50 a $50 a year. And I I think I was trying to
Representative Cameron Cooper
Unverified
1:24:01
get everything that you were saying. Thank you for that explanation. I appreciate that. Um, what measures will you take to ensure that Your future purchases will be an appropriate use of taxpayer dollars. Legislative audit is calls these questionable purchases, so what will you do
to justify these purchases to ensure that it is
Speaker 223
1:24:21
an appropriate use of tax dollars before I purchase them, I'll make sure that they are allowable before that, and if, if not, then I'll ask for donations to make sure that we still get things
Chair
Unverified
1:24:35
that we need. Mm Are there any other questions, uh, Representative Laman, you're recognized
Representative Jack Ladyman
Unverified
1:24:39
a question. Thank you, Mr. Chairman. Uh, so Mayor, do you have any, uh, procedure when you're buying things on this debit card, you just spend the money. Do you have any
process to to check before or after. Some form to fill out what these expenditures are for and what ordinances they're covered under. Do you have anything like that or is that what you're looking
Speaker 232
1:25:00
to set up? Uh, we have some, we have it set up now. We have it set, we do have it set up now.
Representative Jack Ladyman
Unverified
1:25:06
It's in place now. If you reference your ordinances or go back to the city council and have them approve these things. As long as your attorney approves them. Then that should take care of your problem. Thank you. Thank you.
Chair
Unverified
1:25:21
Any other questions? Uh, Representative Barry, you recognized for. Thank
Representative Stan Berry
Unverified
1:25:27
you. Thank you, Mr. Chair. Out of all this, uh, That has gone on. Is there Or how much money I is, has not been recovered, and I don't know, but I guess, Or is that a fair question or is there an answer for that?
Speaker 244
1:25:52
I didn't hear his question. How much, well, I'm gonna
Speaker 16
1:25:55
you might have to, I mean. It's not necessarily missing money. It's just that uh we question the use of it. I mean, or it was undocumented, like we've covered the, the 14,000, those items there. Um You know, the majority of it is that we just didn't have documentation to tell us what it was. So we didn't know what we, you know, the $9500 the rest of it we questioned, you move on down to the, the fuel payments.
Those were um. We put a fuel purchases by the officials that they could not uh document that they were actually for business purposes. They may have been in, they may not have been. Most of them were not documented or they were in violation of the uh city's orbits.
Representative Stan Berry
Unverified
1:26:43
So I don't, I may not be answering your question. Well, I think so, but all that money in question is $14,000 and that's
And then up at the top basically $14,000 in
Speaker 16
1:26:58
additional 10,000 overpayment of sick leave, um. I don't believe they've recovered any of it. Have they? We're not aware that they have. We haven't been notified that they require, uh, that may be a question for the mayor on
Speaker 223
1:27:14
the we have not recovered any of that and as far as the fuel purchases, the procedure that we've we've had in place but just wasn't enforcing um when
the employees purchase fuel, we require them now to write their name on the receipts as well as the license plate of the vehicle that they're putting the fuel in even if um because we also have gas con trainers, even if they're purchasing fuel to go into the gas containers, we have them to document that on the receipts as well. OK.
Speaker 90
1:27:50
Thank you, Representative. Are there any other questions? seen Mr. file the report. Um,
but that objection we'll file this report. Say no. You're excused from the table. Thank
Speaker 28
1:28:06
you so much. Thank you. So Mayor Brown back in the room. OK. We'll, uh, we'll just start over with the City of cotton plant on um. Page 32 and 33 under reports filed to the referred to the prosecuting attorney and attorney general under the mayor, the city issued the city, the, the following issues were noted during payroll testing. We
were unable to substantiate salaries paid the payroll preparer because time sheets lack sufficient detail such as date, time, and hours of work did not always contain the employees, uh, the employee's signature certifying the hours worked. Do not always contain supervisor approval. Additionally, time sheets were stamped with the mayor's signature stamp, which according to the mayor was not kept in a secure location. We were not always provided they
were not always provided for review. We were unable to validate the following payments, $1200 paid to the mayor for unusually, the mayor did not maintain time sheets or leave records documenting leave time used. The city did not have a policy regarding payment of unusually. After we questioned the payment, the council on October 8th of 24. Approved 2 weeks of vacation for 23 for the mayor. However, the meeting minutes provided lack clarity regarding the details of this approval.
Subsequently, the mayor reimbursed the city for the on November 25th, 2024. I the rates hourly rate approved for the amount paid to the payroll preparer for October 24th to 23 through December 31st of 23. A fixed asset Listing was established, however, it was not properly maintained due to do maintain to include additions and deletions and did not contain values, acquisition dates, and identification numbers for
Speaker 17
1:30:03
equipment. In addition, a fixed asset policy was not approved by the governing body as required by Arkansas code. This fine has been repeated in the previous 9 reports dated back to 2011. Electronic fund transfers and debit card transactions were noted without authorizing ordinance. With written policies and procedures approved by the governing body as required by Arkansas code. This is a repeat finding. review of payroll records, the city has unpaid federal and
Speaker 28
1:30:35
state taxes due tolling over $208,000 as follows. $2400 due to DFNA for current year state withholdings over $48,000 owed to the IRS due for current year federal withholdings and 158,000 for taxes, penalties, and interest for prior periods dating between 2015 and 2022. This is a repeat finding from the 6 prior reports dating back to 2014. Continue on page 33.
Although Schedule one of this report shows a balance of over $11,000. It was brought to our attention that is of December 31st of 23, the general fund owed a significant amount of balances due to the IRS and the Department of Finance Administration has shown in note 6 on Schedule 3. With these outstanding amounts were considered. The general fund had a deficit fund balance of over $197,000. Some re finding was issued in the prior report. I believe Mayor Claire Brown is here
to answer. Mayor Brown, if you would, would you state your name and
Speaker 250
1:31:43
your position for the record, please. Clara Hurston
Brown mayor Cotton Plant, Arkansas, then the other young lady that's with
you today, will you state your name for the record, please? Thank you. Ms. Carol. Mayor Brown, you recognize to
Speaker 254
1:31:59
make a statement, please. Yes, I would like to, I, I would like to make one because all this uh what people still understand that this right back to 2014,
half of them before I even got in office and I've been trying to work with that ever since I've been here, then I have to deal with the 2018 bills that were left on the table also that went along with that. They with my time, uh, I could even meet my own payroll. I couldn't even, I couldn't do anything because I haven't had that many employees because we couldn't pay them because we didn't have anything to pay them with. We didn't have nothing. Then when we start getting the income. And uh
We were doing pretty good, like I said the last time when I was here. We was on the right road. I was getting everything. Everything was already, oh, I had got Miss Pam right to come and help us out with the books and everything to put us back in line with every code that it was then plus I had a lawyer to be at the meeting in order to let us know when where we wasn't doing things right, but during that time, my last uh Mm, I'm not gonna say treasure
bookkeeper that that worked for me and uh this other lady that we hired back in January I went into the hospital and had a hip surgery and I was office for about 3 months, 1 month was at home, the other two was in and out of the office. Then while I was out and when I came back, it was so many discrepancies done we already behind on bills. When I get back in there, we 3 must be had on the bills that we had curry. So between the back
bills that we was already at. And a bill that was coming forth that she haven't paid in those 3 months' time. All of them here that one time. Every bill that the city had hit at one time. And I did the best I could to try to keep the shit afloat. We didn't have any money. I tried to light it up with the state and federal guidelines. So, uh The lady that we were using to help, help us out, she told us
to, when you get ready, uh, Resperse money. Put it all in one account. Well, so every time we get some money, we will put in general funds. Except for the street department Act 83. Also did another thing we got 5 longs that comes out every month, 5 long. But the last path I don't know, 1900 and something
and they were half of more maturity at 2060. Then come the shitty had then was getting with the population, they had enough to pay those bills. Now in my population, I ain't even half that sad. The city do not get nothing to really cover my own business instead of trying to hit those back bills also that I, I acquired. I knew I wasn't gonna pay them all but I had got them substantially where I couldn't handle my I can meet everybody's payment, but with that screpancies in the office where
they took 3 months' worth of pay out of there, uh, that they didn't earn that throw me behind again. So like every time I start trying to go straight, some always throw me back where I live at 9 90% senior citizen down there. 90% And the young folks down there, you don't get too many that won't do anything to help you out. Then you get some that you think that you can trust and work with them for 4 years. I thought I
could trust them. And I knew while I was gone I didn't want to get my hand on no bills anymore, so I gave him my stamper to keep payroll going and keep the bills going. So when I really get back in office to look at what was going on. I think I do, I call it counseling, and they call their stay there. But right now in that case is still in court. Now I don't know how they gonna come out on that deal, but that's what, that's what threw everything out of my plan that I
had going. I don't worked hard for this city. He I gave my all. I allow two hips, a pair of teeth and 100 pounds. I have gave all only thing I'm trying to do now is serve my time out. I don't want the next mayor to come in. To endure what I went through. That's shameful. And with no Lord wasn't telling you what's
going on. You ask all the time. then they say oh everything's good, everything good. They don't tell you anything. When I was in that office, I took people in there with me, supposed to be helping me figure things out. I, I educated peoples. Filling things out to to help me get these bills organized and get them paid. So when I went in office, I took them men with me. We got it all the books, everything we got all the bills. When they get all the bills up them bills hit almost a million
dollars every one of them left and I haven't seen it for that day to this one, but I knew I wasn't going in with no hip. I never would have taken this job, never. So the next person running for I'm gonna tell them exactly what's going on. They're gonna be their choice or not. Do they want to take it on? Now the city has this young lady here as as my bookkeeper treasure to help me straighten some other stuff that Miss Pam right had trained the other girl to do and I had to come in and
start all over again to train her all over again. So it look like I could go forward for going backwards. So that's what, that's what we now we have no money. Everybody look at that uh marijuana factory thing we got money. We're lucky we get $2000 a
Speaker 256
1:38:06
month. We're lucky if we get that. We get 8000 from state. 3000
Speaker 254
1:38:13
for street. And I gotta try to keep the
water water company going. I got to do, uh, doing a rate that on that and now coming up. I knew scriptures in the water meter with water reading there because it kept fluctuating, so I said two more people out there to read the water meter. Come to find out the lady reading the media, all there was wrong. I had to get rid of her. Now I got to find me somebody else to read those meters. I haven't had nothing but one headache to the next but since I've been in I had no peace.
Then when I thought I was getting 2 weeks vacation, chick, hey and and the state said I couldn't get it, wasn't no problem. I didn't really want it. We didn't have it. I didn't want it. I paid it back. Because I didn't want nothing. I spent enough money up there. I ain't got to take nothing. I've been given. And don't nobody come in and help me. I can't get no cattle fishing no state rep for nobody. I don't somebody ever hoped me since I've been in and I was uh,
Speaker 256
1:39:21
Mr. Christian, he's the only one. I can't get
a hold of Mother state rep. Uh, are there any questions
Representative Carol Dalby
Unverified
1:39:32
of the mayor, Represent Darby you recognize not necessarily of the mayor but of staff possibly, uh,
can you outline and remind me because I've forgotten since the last. Whatever last summer or whatever on this committee, uh, what steps does the legislature need to take to dissolve a town?
You know, we have that we have that power and we have that legislative uh authority and it appears to me that from what the mayor has just testified to they've got. a million dollars in expenses. No,
Speaker 260
1:40:04
no, we did have that. I, I, I had paid most all of those off, and, and worked up
Speaker 254
1:40:11
all the penalty that can player did have on it. I, I have covered a lot of ground since I've been in there. I have paid off a lot of bills. I have paid off some loans.
Representative Carol Dalby
Unverified
1:40:25
From nothing pinching pennies. And uh we really appreciate that, I think, and thank you
for your diligence in doing that, but can you
give us what the procedure is because it appears from the testimony that money's going out there's not enough money, she testified how that, you know, dwindling not only dwindling population but no tax, really no tax base, uh, can you just give me uh just remind me
Speaker 262
1:40:53
what that procedure is some money there
Speaker 16
1:40:57
uh that'd be a better question for. Ms. White, but I will say the ones that the one that I can remember the city the city council votes and submits that I believe, submit that to the governor, then that's one avenue. Now, the other avenue requires uh uh substantial noncompliance with municipal counting code, which takes 2 rounds through 1459, 117, which uh the only. There's only been one instance
of that and that took about 7 to 8 years if I my memory is correct, but I can't get back with you in the next meeting
Representative Carol Dalby
Unverified
1:41:35
with with Miss White. If you could just give us that report just to remind us because
um It just is frustrating when we hear this and know that it's never gonna get better. I'm not gonna say
Speaker 256
1:41:47
it never gonna get better. I would say on a new administration, and a new council, the city might get better. That's the only way that
Speaker 254
1:42:00
that's the only way that city is going to make it. Get another mayor and another council. Ain't nothing wrong with the city. That's what the city needs Did it need another mirror. That's exactly what they need. And and and and more More council people, somebody younger. I'm 75 years old. I'll be 76 this man. I ain't got no business in there and I know it.
Are there any other questions about the committee? What's the will of the committee? Without a without objection we will file
Speaker 28
1:42:49
this report. Mayor Thank you for your time, y'all are excused. continued under reports filed the prosecuting attorney and attorney general on page 39 and 40. the city of Mount Ida for 23, 22, and 21.
Under the mayor and recorder treasure, the quarter treasury received more paychecks than she was entitled during the period January 1 through 21 through December 31st of 23, resulting in a salary overpayment. Total $9,269. In addition, it appears she issued several payroll checks to herself before the end of the applicable pay period and therefore was paid in advance for hours worked. continue on the mayor quarter treasure. The mayor and other
employees and officials were paid a benefit for not participating in a city-provided entrance program for the years 23, 22, and 21. Payroll preparer was paid a benefit for not participating. And the city provided interest program for 23 and 22. This benefit was not reported to the RAS a similar finding was issued in the prior report. I believe Mayor Van
Speaker 60
1:43:58
Morgan and recorder treasurer Amber Weston is here to answer questions.
Speaker 266
1:44:13
Mayor, would you officially recognize that your name and position for
Speaker 268
1:44:19
the record. Sorry, repeat that. I said would you state your name and position for the record, please. Van Morgan, uh, mayor of Mount Ida, Arkansas since January 2023. And ma'am,
Speaker 269
1:44:29
your name? Amber Weston, treasurer recorder. Mayor, do you have an
opening statement? No Are there any
questions about the committee? Uh, Representative Cooper, you're recognized.
Representative Cameron Cooper
Unverified
1:44:45
Mayor, thank you for being here. The report notes that the mayor and other employees and officials were paid a benefit for not participating in the city. Insurance program. So could you just give us an idea of what
Speaker 120
1:44:58
that benefit is and what the purpose of that
Speaker 268
1:45:05
is. It's uh I guess would be the reimbursement of what your insurance, you're out. From another insurance. Uh, that's been going on since,
8 or 9 years now that I know of. Uh, Like if they don't have the insurance coverage that we carry. Through municipal league. They get reimbursed for
Speaker 120
1:45:32
other insurance. OK, thank you for the explanation. I, I understand now. Thank you. Uh, if, if the committee will indulge me just a minute, um.
Speaker 16
1:45:47
Our general counsel Ms. White has, she's been pointed out that uh our 1459 117 is the code that allows for dissolving of
Speaker 17
1:45:57
a municipal charter and uh that one city, uh, But that one is for uh for what I, I. read it again real quickly during the meeting here
Speaker 28
1:46:09
but there is a about a 3-year process of of going through
Speaker 17
1:46:17
municipal, uh, accounting law. Substantial non-compliance. And the other uh option I believe is is just for them to turn it in, but we will do further research on that, um. In case I missed it, but uh 1459 117 is the. The code. They can be starter for that update. OK, did
Speaker 168
1:46:36
we file my Where are we? Are there any other
Speaker 204
1:46:41
questions of the mayor? With not will with that objection, we'll file this report.
Speaker 36
1:46:51
Mayor. Y'all are excused. Continue on page 40 under reports
Speaker 28
1:46:58
referred to the prosecuting attorney and attorney general, who are the city of Perrigo, 2023 under the mayor and treasurer. Between March and April of 23, 8 unauthorized disbursements of almost $15,000 were made from the city's bank account. The city personnel discovered these transactions upon reconciliation of the affected bank account. However, one transaction was,
was not identified within the bank's frame framework. A refund, uh, to refund the the transaction resulting in unrecovered funds $2,798. There
Speaker 17
1:47:31
are no questions we staff recommend we file this report. With that objection, we'll file this report.
Speaker 28
1:47:42
Continuing on page 41 uh reports refer to the prosecuting attorney and the attorney general, the town of Rondo, 2023 under the mayor and recorder treasure.
Adequate supporting documentation was not provided for tested disbursements of over $4000 in non-compliance with coal. Of this $1,485 in fuel purchases that according to the mayor and recorder treasurer partially placed in the personal vehicles without documentation of business purposes. Over $1300 in payments to various other vendors. Over $870 over $400 and over 150 and $48 for undocumented reimbursement to the quarter
treasurer and other city employees and the mayor respectively. Without supporting documentation, a business purpose for
Speaker 17
1:48:28
these expenditures could not be determined. There are no questions staff recommends we file this report. Without objection,
Speaker 28
1:48:40
we'll file this report. Continuing on page 41 and 42, we have the town of Ralston, 23, 22, and 21. On page 42 under the treasure. Numerous, I mean, uh, excuse me, invoices and supporting documentations were not provided
for 11 of the 25 disbursements tested totaling over $3800 in 23. 10 of the 25 disbursements tested totaling over $4600 in 22 and 25 of 25 disbursements total tested, totaling over $73,000 in 21. Due to the lack of uh documentation, the validity of these disbursements could not be determined. There are no questions staff recommends we file this report. That objection we'll file this report.
Continuing on page 43 under referred to the PA and AG. We have Dallas County 2022 under the sheriff. We became aware of and verified a sheriff's office employee who, who was also employed with a neighboring city. Review of this this individual's time sheets from the county and the city revealed 17 days with 20 hours charged per day in 2 days with 24 hours charged in a single day. However, it should be noted that the employee did not
always complete his time sheet at the county or the city. And some of these hours worked may have been applied to incorrect days. The employee maintains that all hours were worked. However, the employee acknowledges that he utilized the county-owned vehicle when performing
Speaker 17
1:50:13
work at the neighboring city. There are no questions staff recommends we file this report. Without
Speaker 32
1:50:20
objection, we'll file this report. Continuing under
Speaker 28
1:50:23
reports filed with the PA and AG on page 44, we have Lee County.
The county judge under the county judge, uh, excuse me, Lee County 2023 under the county judge. The county budgets and pays $8500 to the county judge for a vehicle allowance and includes this amount on his W-2. The kind of judge also charged $4,622 in fuel, which was budgeted in the road fund. To the county for the period February 3rd of 23 through August 1524 and place the fuel in his personal vehicle.
The count does not have a travel or Travel or vehicle allowance policy. Therefore we were unable to determine if this is proper use of these funds. There
Speaker 42
1:51:13
are no questions. Staff recommends we file this report. Without objection,
Speaker 28
1:51:17
we'll file this report. Continuing on page 44 under referred to the PA and AG. We have a private CPA report of the West Sale Water User Association for 2023. Customer adjustments were not
documented in accordance with the leak policy. And we noted 18 disbursements made to employee re yeah disbursements made to employees were not adequately documented. Without
Speaker 17
1:51:41
uh questioning staff recommending we file this report. Without objection,
Speaker 28
1:51:54
on page 45, we have 7 reports with repeat findings. Starting on uh with City of
Cersei 2023. On the district court clerk district court clerk was unable to identify $124,603 remaining in the bank account with receipt numbers for cases not yet adjudicated and payments on all unpaid individual time pay accounts as required by Arkansas Code. Some finding was noted in the
Speaker 17
1:52:22
previous 11 reports. I believe District court clerk Linda Wiseman is here to answer questions.
Mr. Wiseman, would you state your name
Chair
Unverified
1:52:38
and title for the record, please. I'm Linda Wiseman, chief court clerk for Searcy District Court. Thank you. Do you have an opening statement? if I may, it'll just take a second, um, the, the previous chief clerk was Ms. Linda Maddox. She retired in 2022. We have the city of Cersei, the district court has had, it's my understanding, 3 different software systems we're currently
on context, provided by the state of Arkansas. We went on context in 2015, prior to that, they were on a system called relativity or RPS from 2008 to 2015 and then there was a system even prior to that. Um The large amount of funds that are held as unidentified funds have continued to roll from one
year to the next in the audits, um, we do not have access to records. On prior to context, prior to 2015 due to the system crash with relativity. Um, the intent that, and I can only refer to Miss Maddox and I apologize, um. The intent that Miss Maddox always said if that figure of the unidentified funds would ever be consistent. Her opinion and the judge's
opinion was pay it out. So that it could come to a a near zero amount because it is, it seems to be in the system as funds that we absolutely cannot attach to, um, to receipt numbers, to defendants. We do not have a high case of people claiming I paid bonds years ago, anything like that. Uh, we simply cannot identify these funds. Are there any?
Representative Carol Dalby
Unverified
1:54:41
Representative, you recognize for a question. Thank you, Mr. Chair. It's my understanding, ma'am, that the district judge can issue an order ordering those to be paid out. Have you had that conversation with him or her. I don't know who your district judge is, but there is a way of clearing that out and moving down the road and my question
Chair
Unverified
1:55:00
is, how come that hasn't been done because um um the previous, the, the judge that this began to roll along with was uh Judge Mark Pate, who is now our circuit.
Our current judge is Judge Eric Kennedy. Judge Eric Kennedy, and Miss Maddox had that very same conversation and that's where they were of the opinion if it could be a, a. Settled amount basically uh continue forward. Judge Kennedy and I discussed that very thing yesterday afternoon, and, um, He wants to pay it out, pay it out to the entities that it should go to so we could start fresh, um.
I am Encouraged 2022, 2023 audits showed the $124,000 figure, very small difference. Brandon Grady, our auditor has already given me an estimated amount for 2024 audit and, and it is literally within $100 of this same $124,000. Judge
Kennedy's comment was, 3 years if, if that figure is true in the 2024 audit that would be 3 years for the amount to be basically the same. Go ahead. And I, and I
Speaker 53
1:56:28
appreciate that and I might suggest that you get with the judge probably tomorrow if not this afternoon when you
Representative Carol Dalby
Unverified
1:56:34
get back and suggest to him that he get to the, with the AOC and uh get with that division that
deals with the district judges and see if we can expedite that along. I think the AOC will be. very helpful in resolving
Speaker 96
1:56:54
sorry we're we're getting, we're getting short on time, so please, please hurry. That's right,
Chair
Unverified
1:56:58
we have been in contact with and getting training from the AOC on a regular basis. So, um, thank you all very much for
Speaker 281
1:57:05
your time. staff recommends we file with
Speaker 41
1:57:16
that objection, we'll, um, we'll uh we'll file this report. Uh, you're
Speaker 28
1:57:21
excused. Thank you, Ms. Wiseman. continuing on page 45 under reports repeat findings. We have the city of BB 2023 on the district court clerk. During our review of the BB District court, we noted the following noncompliance with Arkansas Code. Cash receipts and disbursement journals were not properly maintained and reconcile with the bank deposits and withdrawals. The cash disbursement journal did not
indicate the correct date, check number, payee, classification or amount for numerous disbursements. This is a repeat finding,
Speaker 202
1:57:51
and I believe we've got district court clerk Jennifer LaCo here. Would you state your name and position for
the record, please. sure Would you turn your mic on?
Jennifer Latour, chief court clerk, maybe District court. Do you have an open statement, Mr. Tur? No, sir. Are there any
Representative Carol Dalby
Unverified
1:58:28
questions by the committee? Represented, you're recognized, not necessarily a question, Mr. Chair, but more of a comment or a suggestion. Have you gotten with the AOC and the to get training and to with the district court division of the AOC to work on this
Speaker 283
1:58:42
matter have not, but I plan on doing that
and then also we've opened or we've exchanged bookkeeping systems and also opening or in the process of opening a new bank. account. Are there any other
Speaker 192
1:59:05
questions? I Without objection, we'll file this report. Thank you, thank you for your time. You're excused.
Speaker 28
1:59:12
Yes, sir. Continuing under reports with repeat findings on page 46, we have the city of Chichester. Under the mayor
Street fund expenditures exceeded budget appropriations in 23 and 22, uh, about almost $6000 and just over $5200 respectively in non-compliance with Arkansas code. Similar finding was noted in the prior 5 reports dating back to 2014. I believe Mayor Bobby Box Senior is here to answer questions. Would you officially state your name
Bobby Box
Unverified
1:59:42
and position for the record, please, Mayor Box. My
Bobby Waton
Unverified
1:59:45
name is Bobby Waton mayor of Chichester, Arkansas.
And do you have an opening statement? No. in there. It's cold in here OK. do you need to borrow my jacket. Does anybody have any questions of the mayor?
Saying none without objection we will file this report. Thank you, Mr. Mayor Box you're excused. Thank you. Continuing
Speaker 28
2:00:16
on page 47 of the reports with repeat findings of the town of Uh, Georgetown.
On the quarter treasure. Counter procedures for municipalities were set forth in Arkansas Code. The town was a non-compliance with these codes as follows. Receipts were not deposited in a timely manner. Cash receipts and disbursement journals were not properly maintained. Adequate supporting documentation was not maintained for tested disbursements of over $1700.23 and over $31,000.22. A detailed fixed asset listing was established was not maintained properly for
additions. IRS quarterly forms 941s were not provided. DFNA forms AR3 were not provided and W2 forms were not provided. We were unable to determine if the proper amounts of withholdings were remitted. Therefore, additional penalties and interests could be due. This is a repeat finding from the prior year. The town's accounts were under collateralized by over $426,000 at the end of December at the end of 23 and we're under
collateralized about 293,000 at the end of 22 and no compliance for code. This is a repeat find as well. I believe the quarter treasurer Debbie Bryant is here to answer questions. Would you
state your name and position for the record, please. Deborah Bryant recorded treasure town of Georgetown. Do you have an opening statement? No, I do not. Are
Speaker 90
2:01:45
there any questions, uh Ms. Brian? Seeing none,
Chair
Unverified
2:01:50
uh, without objection we'll file this report. Ms. Brian, you're excused. Thank you. Thank you. 10 year on page 48.
Speaker 28
2:02:02
We have the town of 48 and 49, excuse me, where the town of Gum Springs, 23, 22, and 21. Mayor Ivory was invited here today and he could not get transportation to Little Rock today so staff recommend we defer this report until he can get
Speaker 291
2:02:25
here. Um, I'm sorry I got sidetracked,
Speaker 201
2:02:27
but that, but that objection we will file this excuse me, defer this report.
Speaker 35
2:02:38
Continuing on page 50. We have the town of Ulm.
Speaker 28
2:02:41
Uh, for 2023 and 2022. Is Mayor Floyd, I mean, as a quarter clerk Floyd here. Uh, the clerk treasurer, Mary Beth Floyd was invited. Uh, she had called and uh said she couldn't be here today due to health reasons. Staff recommends we defer this report. That
Speaker 40
2:03:00
objection we will defer this report. Oh, excuse me,
Speaker 28
2:03:02
can I go back up on that um
this was uh I apologize, uh, the town of Ulm was um Being considered for considered uh
Speaker 16
2:03:16
for substantial miscompli uh uh non-compliance with the municipal county code and we pay them a visit in the first of May, and their records have much improved, so, uh, there will be no need to consider that anymore and staff recommends we file this report and leave that uh additional visition we
Speaker 41
2:03:32
will file this report. town of Weldon, uh.
Speaker 28
2:03:40
Reporter treasurer Beverly Tooley was invited and she called and said there was a family emergency last night and
Speaker 28
2:03:54
deferred. Without objection, we will defer this report. We have 3 reports with findings with without proper uh Responses. We've got uh two private reports, uh, gray Rock Water Association and outside Kingsland Rural Water Association, uh, staff
recommends we defer these reports to give time for
Speaker 32
2:04:14
adequate responses. Without objection, we will defer
Speaker 28
2:04:18
these reports. On page 51 and 52, where the town of Norman, 2322 and 21. The Tower of Norman actually provided responses to all the findings, however, uh, they have two findings that um we need to address. Property tax is restricted for street fund
purposes of $3040.20 $2,854.22 and 21 respectively. Will not transferred to the street fund as required of the Arkansas code. And under the mayor and recorder treasurer restricted funds were expended from the street fund as noted below, over $4200 over $1200 and over $7100 for 23, 22, and 21 respectively for general fund expenditures and $100 and over $3800.23 and 21 respectively for water and sewer fund expenditures.
In their response, the city indicated that they didn't have the funds to pay this back. Well, um, Arkansas code 277207 requires that as of December 31st of 22, All street funds had to be repaid. The staff recommends that we defer this report and invite them to come up with a payment plan for these funds. With that objection, we will defer this report.
Speaker 17
2:05:39
On pages 53 through 76, we have
81 reports with with findings and had adequate responses, uh, staff will allow, will, uh, let y'all have a few minutes to look through those if you hadn't, if you have any questions, if not, staff recommends that we file these reports. requested to file these reports. The motion
Chair
Unverified
2:06:27
have a question. Your uh recognized for question Representative Doby.
Representative Carol Dalby
Unverified
2:06:31
Thank you, Mr. Chair. On page 55. On the city of Lincoln. That's an awful lot of money. Um, Uh, can you kind of explain that? We've got
Uh, financing sources and uses of the amount of 5,206,700,014,000, 190, 970,457,503,000 and on and on it goes, can you kind of explain those numbers
jumped out at me. Could you explain what that is, I'll do my best. This
Speaker 16
2:07:03
is a private report prepared by a private CPA firm, so we didn't do this report. But uh We issue findings similar to this, these would just be posting errors due to the, in the financial statements that uh
these are the net results of the errors in the financial statements. Is my understanding of reading that, but if you, if you would like to have the city come in,
Representative Carol Dalby
Unverified
2:07:31
that would be up to the committee. And I hate to prolong it the next meeting, but that
sure is a lot of money for a little bitty town. Our smaller town, I shouldn't say little bitty. Um I'm good
if y'all are good. I trust with y'all. The advice our staff gives us.
Speaker 26
2:07:51
Standards we file it, but that's up to the committee's wishes. Will it go, go along with whatever the
committee wishes. Well, I get a motion to without objection to file this report then. I'm going to
Representative Carol Dalby
Unverified
2:08:04
object. Let's see if we can get them in here to answer those questions. That's a lot of money.
OK. Do you need a, you make a motion on that,
Representative Carol Dalby
Unverified
2:08:19
please. I mean, I move that we hold this
report over until next month and invite the city of Lincoln
to come and explain, uh, Some of these discrepancies have seconded by Senator Gilmore, all
in favor say aye. I opposed say none. Your motion passes. I would ask about the rest of it now. Are there
any other questions about, about the other cities on the report. With that objection,
Speaker 24
2:08:49
I make a motion we file this report. Uh
Speaker 17
2:09:01
OK, on pages 77 through 83, we have 203 reports without findings. Staff recommends we file these reports. Without objection, I'd make
Speaker 24
2:09:13
a motion that we file these reports. That's all the reports we
Speaker 13
2:09:19
had to review today. ask me about Off the top. We have just a couple of
minutes if there's anybody in the room that has a comment or if
anybody, if any of the legislatures have a question. If not, this meeting is adjourned. Sorry I.
Agenda
A. Call to Order by Chair
B. Adoption of Minutes of the December 5, 2024 meeting
C. Update on Act 709 of 2021, Repayment of Turnback Funds – City of Gilmore
D. Update on Delinquent Private Reports 1. City of Dermott 2. City of Black Rock 3. Town of Russell
E. Update on Noncompliance with Municipal Accounting Law 1. Town of Oil Trough
F. Review of Reports (Refer to the Synopsis)
G. The next meeting of the Legislative Joint Auditing Committee will be held on July 10, 2025.
H. Adjournment
Documents
| Title | Type | Pages | Source |
|---|---|---|---|
| Agenda — LEGISLATIVE JOINT AUDITING - COUNTIES AND MUNICIPALITIES, Jun 5, 2025 | Agenda | 8 | Official source ↗ |
Speakers
Senator Matt Stone Chair
Unverified
Speaker 14
Speaker 17
Speaker 16
Speaker 24
Speaker 28
Speaker 36
Speaker 41
Representative Carol Dalby
Unverified
Speaker 50
Speaker 56
Speaker 60
Speaker 66
Speaker 67
Senator Steve Crowell
Unverified
Speaker 75
Speaker 77
Speaker 78
Speaker 76
Speaker 82
Speaker 87
Speaker 92
Speaker 112
Representative Cameron Cooper
Unverified
Speaker 124
Speaker 123
Speaker 134
Speaker 121
Speaker 144
Speaker 154
Speaker 159
Speaker 163
Speaker 148
Speaker 108
Speaker 13
Speaker 184
Speaker 186
Speaker 187
Speaker 188
Speaker 194
Speaker 201
Speaker 202
Speaker 40
Speaker 204
Speaker 210
Speaker 212
Tamika Butler
Unverified
Speaker 223
Clark Terrell
Unverified
Representative Jack Ladyman
Unverified
Chair
Unverified
Speaker 232
Representative Stan Berry
Unverified
Speaker 244
Speaker 90
Speaker 250
Speaker 254
Speaker 256
Speaker 260
Speaker 262
Speaker 266
Speaker 268
Speaker 269
Speaker 120
Speaker 168
Speaker 32
Speaker 42
Speaker 53
Speaker 279
Speaker 96
Speaker 281
Speaker 283
Speaker 192
Bobby Box
Unverified
Bobby Waton
Unverified
Speaker 291
Speaker 35
Speaker 71
Speaker 26