Legislative Joint Auditing
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- October 2, 2026
Representative Robin Lundstrum
Unverified
2:23
Folks it's that time OK the chair calls to order first order of business is the adoption of minutes from the June 5th meeting motion who made that motion OK and the second thank you senator dotson
executive standing executive and standing committees oh any discussion I'm sorry hearing no discussion all in favor say aye opposed all right passed thank you all right senator dotson could you give us the executive committee report thank you madam the executive committee met Thursday,
Senator Jim Dotson
Unverified
3:15
August 13,2026 and adopted the minutes from the meeting held June4,2026. Staff reported to the
committee the audits and special reports scheduled to be presented to the
standing committees and the full legislative joint auditing committee this month with no new business or other business to discuss the meeting was adjourned. The next meeting of the committee is scheduled for Thursday, September 10th,2026 or at the call of the chairs. I move for adoption of this report. all right thank you. Do I have a motion
Representative Robin Lundstrum
Unverified
3:45
or we have a second have a second from Representative Ladyman. all in
favor or excuse me discussion I tend to want to go a little fast there. Sorry discussion all in favor opposed
all right we accept it's pasted standing committee on counties and municipalities. Senator Wallace the committee adopted the
Senator Dave Wallace
Unverified
4:22
minutes of the meeting held for June 2026. The committee was updated on the status of the December31st,2022
tolumentrivate waterter andir audits and after all recorded reports were submitted turnback funds have been reinstated for40 of the original43 entities since Leslev audit meeting held the le1th of July2025. The remaining the three remaining entities are currently not able to receive past or future turnback the committee was notified that the four entities have not filed their December31st,2023 delinquent private water and sewer audits in December I'm sorry in 26 entity have not
filed their December31st,2024 delinquent private water in Sura audits The committee was also notified that the city of ofaldox has not filed December31st,2024 delinquent private city audit. the committee was notified that after staff follow up visit with the town of umm, the city the town is now in substantial compliance with municipal accounting law the town of Fargo remains in substantial noncompliance with the mmissal accounting law and the committee
approved a motion to notify the secretary of the treasurer of state to escrow50% of the town's turnback per Arkansas code 1459117. Officials for the town of Lead City were present to address substantial noncompliance with municipal accounting law and the committee approved a motion to give town officials60 days to reach compliance as required under Arkansas code 1459117. the committee reviewed 14
deferred reports and 225 current reports officials from en entities were present to address repeat findings five previously deferred reports were filed and 9 were deferred. Of the224 current reports reviewed 21 we referred to a prosecuting attorneys 22 were referred to the attorney general and one was certified to the governmental bonding boardard. the committee filed 211 current reports and deferred 14 reports to allowed officials to answer the questions to provide additional
information in that future meeting and madam chair that's the longest I've ever talked down here and I'm done. you did a great job and I tell you what
Speaker 14
6:48
your committee's been doing a great job.y'all have been
Representative Robin Lundstrum
Unverified
6:52
getting it done I moved to adoption by Senator dotson second Second, Representative ladyman discussion
I just want to make a comment here that committee has been working very hard and we're down
to three cities that's really impressive so thank you for all your
diligence and thank those cities they we now see the benefit of getting those audits done all those in favor
opposed report has passed Representative Duke you're up on
deck. thank you madam chairir. The committee met Thursday,
Representative Hope Duke
Unverified
7:34
August 13,2026 and adopted the minutes
from the June meeting79ucation audit reports were included on the committee's agenda for review. There were56 auto reports with no findings and 23 reports with findings. Officials from five school districts and two open enrollment public charter schools were present to answer questions from the committee related to repeat findings in the respective audit reports p re s ent ative s from the AdE division of elementary and secondcondary Education were also present to answer committee questions. 11 audit reports were reviewed by the committee contained findings that were
referred to the applicable prosecuting attorney and attorney general. In addition, two of these reports were also certified to the governmental bonding board the audit reports for Blathville school district were deferred to the September meeting. The committee filed78 audit reports and deferred one audit report that were brought before it. I moved to adopt this report. Thank you. Do I have a motion? or a second ndpresentative Browns discussion
Representative Robin Lundstrum
Unverified
8:40
all right this committee's also been doing some good work. all those in favor opposed it's passed thank you moving
on we have the state audit comprehensive financial report oh I'm sorry we went past state agencies Representative Unger 9
Representative Steve Unger
Unverified
9:03
reports were on the committee's agenda yesterday the following findings were presented the department of parkk's herritage and tourism
had an unauthorized payroll distribu disbursement and in official in physician collateral on a bank account the treasurer of the state failed to make accounting entries to record known liabilities ar ious state agency members were present how to report to report how the agencies intended to address the audit findings and how to answer committee questions during the meeting the committee filed7 reports
The committee deferred the two following reports to the September meeting the September excuse me the special report regarding sexual risk avoidance education federal funds at the department of healthalth and the audit report for the department of parks Heritage and tourism. madam chairir I move to adopt this report we
Representative Robin Lundstrum
Unverified
10:04
have a second from Senator dotson Dis discussion
those in favor those opposed spassed right Mr White.
Speaker 22
10:18
Thank you madam chairir. this presentation is going to cover the next two reports on the agenda which are the annual compreh of financial report in the single audit report during the last meeting in June this committee deferred both reports to allow members additional time to review these reports and submit requests to invite entities back to the meeting today to answer additional member questions at the chair's request, staff sent reminder emails to committee members with an august3rd deadline. no questions or requests were submitted as such, no agency representatives were
invited for the meeting today. Madam Chair, that concludes my presentation on both of these reports. thank you.
Representative Robin Lundstrum
Unverified
10:58
Do I have a motion motion motion to adopt
both reports motionpresentative Ledymann and a second senator dotson discussion all those in favor all those opposed all right bothth reports have passed
Misterright the special report OK. camemeron spybebe which if
Speaker 26
11:37
you would come on up thank you madam chair
Speaker 27
11:39
Arkansas code requires Arkansas legislative audit to conduct an annual review of the employee benefits division EBD and the performance of the health and benefit plans. the primary objective of this report was to analyze the fund balances of
both the state and public school employee health and benefit plans at June30th,2025. This year's report contains no EBd administers the health and benefit plans for both state and public school employees benefitnefits are provided through self-funding a method by which the state takes in contributions from both the employee and the employer. Separate funds are set up for each plan to pay health and pharmacy claims aimed to serve as reserves to prevent dramatic rate increases to subscribers. EBD pays Unitedhealthcare
to manage the group medicare advantage plan commonly referred to as the MAPD plan for medicare eligible retirees. This exhibit, which is found on page two of the report shows the planned enrollment for both subscribers and members for each plan. The term subscribers refers to both employees and retirees who are enrolled in the plans while the term members refers to subscribers and the qualifying dependents who are enrolled in the plans. as detailed in this exhibit from fiscal year 2024 to2025, the
number of subscribers increased by625 for the AC plan and increased by 1,027 for the psE plan creating a total increase of 1,652 for both plants. The exhibit shown on this slide and on page two of the report provides medicare eligible retirees by enrollment in a retiree plan. The bottom row of the exhibit provides a provides the participation rate for the MAPD plan as of June30th,2025
andchedule one on page 12 of the report provides a three year comparison of the MAPD plan participation rate The first plan discussed is the Arkansas State employee AE plan as shown in the exhibit on the slide and on page three of the report, the AE plan had just under402 million in fund revenue for fiscal year 2025. State contributions provided63% of total revenue subscriber monthly premiums made up 22% and
other revenues accounted for 15%. Other revenues included items such as FicA savings, investment income and pharmacy rebates. As shown in exhibit6 on page 5 and on the slide, the ASC fund balance increased to 151.3 million at the end of the fiscal year. The fund had a growth rate in fiscal year 2024 of44.3% compared to the 26.6% growth rate in fiscal year 2025. The
funds growth was primarily the result of planned revenue succeeding expenditures by34 million and a $2.2 million increase in the actuarial incurred but not reported claims. revenues were higher primarily due to the increase in employer monthly contribution rates and the increase in pharmacy rebates. Exhibit for on the side and on page four of the report provides a five year comparison of cost per subscriber for the AC plan. The health and pharmacy claim
costs to the fund per subscriber represented by the blue line totaled771 dollars 11 cents per month and 82 dollars70 cents increase from the prior year'688 dollars41 cents The out of pocket costs to subscribers represented by the red line decreased from366 dollars 29 cents per subscriber per month in fiscal year 2024 to351 dollars 9 cents in fiscal year 2025.
This exhibit which is provided on page five of the report shows the changes in claims and administrative costs represented by the blue line as well as premiums and other revenues represented by the red line for the AC plan for the past five years since 2022, revenues have exceeded cost which has contributed to the growth in the fund balance. Schedule4 on page 15 shows healthal and pharmacy claims bylany shown on this slide is the portion of the schedule related to the AE plan for
fiscal year 2025, healthal and pharmacy claims paid from the fund totaled 203.219.2 million respectively while the MAPD plan costs totaled 20.5 million. Additionallychedule5 on page six provides a five year comparison of health and pharmacy claims for active employees health health plan claims and pharmacy plan claims both increased approximately 15 million from fiscal year 2024 to2025.
As noted on page four of the report in fiscal year 2024, pharmacy claims totaled 99.7 million and pharmacy rebates totaled 21.9 million resulting in a net cost of77.8 million in fiscal year 2025, pharmacy claims increased to 119.2 million and pharmacy rebates increased to47 million resulting in a net cost of72.2 million year over year costs decreased by5.6 million.
The next few slides contain information regarding the public school employee PSE plan the exhibit on the slide and on page six of the report shows over505 million in fund revenue for the psE plan for fiscal year 2025. Legislative funding provided28% of the total contributions from school districts amounted to 29% subscriber monthly premiums made up 28% and other revenues delivered 15%. As shown in exhibit 10 on page 8
and on the slide, the psE fund balance decreased to 173.8 million at the end of the fiscal year and fiscal year 2024, the fundal grew at a rate of0.9% over fiscal year 2023 and fiscal year 2025 the fund balance experienced a decline of 15.8%. The health and pharmacy claims costs to the plan per subscriber as represented by the blue line totaled63 dollars41 cents per
month, a75 dollars 97 cents increase from the prior year's527 dollars44 cents per subscriber per member claim cost. out of pocket cost to employees as represented by the red line increased3 dollars559 cents from346 dollars 88 cents per subscriber per month in the previous fiscal year to350 dollars47 cents per subscriber per month. exhibit 8 on page 7 and on the slide provides a five year comparison of costs per
subscriber for the PSC plan. This exhibit which is provided on page se of the report shows the changes in claims and administrative costs represented by the blue line as well as premiums and other re revenues represented by the red line for the pSE plan for the past five years since 2024 costs have exceeded revenues which has contributed to the decline in the fund balance. Schedule4 on page 15 shows healthal and pharmacy claims by
plan type shown on this slide is the portion of the schedule related to the PSE plan. for fiscal year 2025, healthal and pharmacy claims paid from the fund totaled346135.2 million respectively while MAPDpla costs total just under 10 million. Additionally, Schedule7 on page 18 provides a five year comparison of health and pharmacy claims from fiscal year 2024 to2025 healthal plan claims
for active employees increased over 23 million and pharmacy plan claims increased over 25 million. as noted on page eight of the report in fiscal year 2024, pharmacy claims costs totaled 106.1 million in pharmacy rebates totaled 22.5 million resulting in a net cost of 83.6 million. in fiscal year 2025, pharmacy claims increased to 135.2 million in pharmacy rebates increased to53.6 million
resulting in a net cost of 81.6 million. year over year costs decreased by AOA also reviewed 1el members of the ASE plan and34 members of the psE plan with cumulative claims exceeding500,000 dollars. ALA tested these claims for accuracy and timeliness of case management services and noted no discrepancies. The cumulative health and pharmacy claims succeeding500,000 dollars were reviewed by ALA totaled37.5 million in fiscal year 2025.
This concludes my presentation agency representatives are here to answer committee questions right we have a number of questions let's get
Representative Robin Lundstrum
Unverified
21:02
one of the agency folks up here and get some answers miss Mr Wallace we'd like to swear you in if you could please rise.
bothth you gentlemen if you would do you solemnly swear or affirm? I'm sorry did not do that but if you would state your name and employer first and position Grant Wallace director of the employee benefits division and office
Speaker 36
21:33
of property risksk. uhjacaldwell CFfo for sharered administrative Services thank you gentlemen if you'd
Speaker 37
21:38
please raise your right hand do you solemnly swear or affirm
Speaker 38
21:41
that the testimony you are about to give will be the truth the
Representative Robin Lundstrum
Unverified
21:48
whole truth and nothing but the truth. thank you gentlemen right Senator Boyd thank you madam chairir so this is
Senator Justin Boyd
Unverified
22:02
a timely report as you know the we've had a lot of discussion about this public school employees plan needing more funding and then also we've got contract review for Novitis and United Healthcare in your
ALc subcommittee next week. So the one question I I definitely have whether it's for Mr. Wallace or for staff is when we audit this this is great information but are we auditing versus what state laws might be or are we just auditing numbers versus you know members what have you if you could answer that
Speaker 22
22:51
it's not I'm sorry Mr White appreciate that thank you. so the audits that we perform of the employee benefits division it covers both aspects some of it is the financial side and some of it is the compliance side what you're seeing before here today is more of the financial side and in that aspect as opposed to the compliance with state laws. OK so
Senator Justin Boyd
Unverified
23:16
if state law said you can't reimburse your affiliate more
than you reimburse another pharmacy is that something specifically that you are e va lu ating in your thank you that's a great question in the course of what we do
Speaker 22
23:32
here and then when we audit Ebd that is not within the scope of what we would look at that would be a request for us to go to the the provider level OK because I'm assuming
Senator Justin Boyd
Unverified
23:43
you're aware as Mr. Wallace is there is a lot of discussion at the insurance commissioner about you know whether
the the state's pbM is following the laws now that gets you know is it specifically related to the EbD claim we're we're trying to get to the bottom of that but madam chair with your permission I would ask that we hold this over one more month while we have the chance to hear about the contract review and you know AlC next week and then have a little bit more time to study and see how this fits into the public school employees potential rate increase
Representative Robin Lundstrum
Unverified
24:24
thank you if you could hold that while we're get some of these other questions answered
Representative Julie Mayberry
Unverified
24:34
I'll come back to you uhpresentative Mayberry thank you yes we had long discussion in education recently about the public school employees so this is this I I agree with Senator Boyd very timely information coming in. So I'm looking at page7 and I don't know who can answer this and probably can't get the information right now but that second graph only goes back to 2021.
and I'm just kind of curious what a 10 year graph would look like. you know this is a sharp increase from 2021 of claims and administrative costs at386 all the way up to531 that that's a very sharp increase and I don't know maybe it increases that much every few years. I doubt it but I'd like to see what that curve is. Is that something that audit would have is this something that's done every so often to begin
with? I'll start with that question we can direct staff
Representative Robin Lundstrum
Unverified
25:34
to prepare that and have that for you next month and
Representative Julie Mayberry
Unverified
25:38
then the second question, so this says claims and administrative costs and to me that's two very different if we're looking at addressing this that's two very different issues claims is well what can we do to keep people healthier you know and monitor some of that if that's what's causing
the increase but then the other part is the administrative cost. so is there any way do you all know what the breakdown is or would audit know what the breakdown is because I think that's two very different things to look at Yes if you if you're talking specifically about
Speaker 31
26:21
the psE plan if you look atchedule six on page se7,
Speaker 27
26:25
there's it's about three quarter of the way down there's
a section that says paid from the pSE fund and it actually has a breakdown of the administrative cost and then the claims cost which is under healthcare cost. OK. that might take me a minute to to
Representative Julie Mayberry
Unverified
26:41
d digest that and look at that thank you because that's going to help. Do you have any comments on that though if you can address what do you see in your experience and and it was mentioned in our education committee that you all are trying to do some things to lower some of the cost and maybe not everybody is
you know here today was at that meeting and if you could share I think you were not
there that day so anyway now now's your opportunity to explain. thank you for those
Speaker 56
27:12
do appreciate kind of trying to do a 10 year look back but we all can appreciate and
Speaker 57
27:17
understand postOVID the inflationary index is going crazy all over the place so really yes taking that snapshot of the last ive years you're going to see the largest impact of inflationary costs both on the pharmacy side and medical side so that really is the
biggest driver when you're looking at claimspin and those things it's just getting costlier to treat people yes there are some things that we are trying to layer in both on the pharmacy side and the medical side to contain costs I jokingly will kind of laugh when vendors approach us of trying to save costs there's no saving costs in this space it's how do we contain it how do we redirect it and spend our money more wisely? how do we prevent illnesses? how do we get
there earlier obviously obesity is a high driver we're looking at those things and how do we create a healthy lifestyle program that we can layer in to where we can incentivize making healthier choices and we can deflect some of these later in life expenses that we get to as far as the administrative cost we have done extreme amount of work of really making our vendors sharpen their pencils when it comes time to renew or when we look at RfPs we've gotten more competitive in the way that we
have drafted our RfPs we're utilizing outside consultants to help us make sure we're really looking at these in comparison to the market and that the state is getting the best plans that's where you'll see from an administrative perspective we are keeping these things pretty flat year over year and that's the goal is to maintain that flatness that that on the administrative side really capping what we're going to do over there knowing that while it's a smaller part of it every
Speaker 52
29:04
dollar helps. OK you mentioned the obes ity and I know a question came
Representative Julie Mayberry
Unverified
29:11
up about GLPs and and is that part of the issue although it might be solving some obesity issues are we seeing the increase because of that yeah the GP ones and that's a great kind of
Speaker 56
29:22
call out when you look at the pharmaceutical spend
Speaker 57
29:24
that's our highest one of our highest if not the highest spend when we look on on our drugs those are expensive drugs and it's one of those you know if we
could get creative here and s and go let's shift that to a direct to cons the direct to the manufacturer and and give our employees like $1200 and let them go direct to the manufacturer who is selling this for hundreds of dollars compared to the $1100 1200 dollars that they're charging our plan. there's some tremendous savings there we're not quite there yet for operational aspects but it's those kind of things that we're just seeing in the space of this huge discrepancy of what you're
seeing advertised or what via TrumprxXxxx or direct to direct to consumer pricing is versus what they're charging the plants and I think that's really where a lot of us on the plan space need to step up and challenge manufacturers challenge our Pbms that they need to be negotiating those prices with the manufacturers more in line with what consumers can get direct and I'm sorry one last question and I'll
Speaker 62
30:30
let someone else I'll get back in I I guess just kind of an overall statement
Representative Julie Mayberry
Unverified
30:38
because in the education committee we were saying we need to come up with some more money somehow to to fund this for our public school employees and I just want to remind everybody that you know the teachers did get a pay raise but we have so many other staff members in our public school system that really have not seen any significant raise. our our janitors our paros and and many of them are willing to work
for less money because they know that their insurance is that's that's how they can get their insurance. So you start increasing the insurance for them and then it doesn't it's not a benefit for them to work there anymore and so I I think as we we look at this issue in a in a wide wide angle lens that we keep that in mind that we just many of them won't be able to afford to work. So I I do and thank you for kind of asking that but I do
Speaker 56
31:40
want to point out that for this particular year that is auditing the the district minimum went from300 dollars down to 23,450 so
Speaker 57
31:47
that's why you are seeing some of the numbers kind of skew in this particular report we are correcting that currently it's at350 district minimum per participating employee we still need to do more work because obviously when you decrease like that it puts us behind the curve so we've got it a little bit of catching up to do and I think that's part of the conversation that started with the education committee
we'll have it additionally in the state insurance committee next week and that we need to have going into the session
Representative Robin Lundstrum
Unverified
32:19
you Thank you Representative Maybeberry. Senator hammer
Senator Kim Hammer
Unverified
32:26
thank you and it I think this kind of hits on what you were just talking about so it won't be too redundant but on page four it said in fiscal year 2024 the pharmacy claims cost 99.7 million the pharmacy rebate's total 21.9 resulting in a net cost77.8
fiscal year 25 pharmacy claims increased to 119.2 pharmacy rebates increased47.0 million resulting in that cost72.2. so the cost overall decreased by5.6 million. What were we doing in 2 5 to get the greater rebates that we weren't doing in 24. I think that's just ongoing you're going to have some utilization mix that's going to
Speaker 57
33:07
vary year from year depending upon which drugs are are used. I think it's also part of just this agreements that they're working
out with the rebate contracts and maybe a mix of what manufacturers are offering they may increase a particular rebate there are a lot of variable factors that go into that but ultimately it's utilization mix and just kind of the offerings that are out there do you have any crystal ball theory as far as what you see 26
Senator Kim Hammer
Unverified
33:37
is going to look like will the rebates go back to the 24 levels or do you think we'll be able to hold them at the 25 because to me that'll have a direct impact
on the overall costs of the plan I I think we're leveling
Speaker 55
33:52
out closer to 25 than we would be to 24 again with a vague crystal ball but I I think that's
Speaker 57
33:57
where we're kind of trending this year and and I would say it's interesting when you look at the coupons and the rebates you know obviously this is a national conversation. I think there's gonna be a lot of movement in this space over the next five years so I I think we just need to be aware of that cognizant of that and make sure that we position our plan to respond to any changes that are going to be
happening in the global economy when it comes to coupon programs rebate programs and
Senator Kim Hammer
Unverified
34:25
on those costs on those pharmacy utilization you track those by type of need such as blood pressure, you know, diabetes cancer you have that breakout and are seeing certain trends in certain areas right so we have drug and treatment type so
Speaker 55
34:42
we have it by both OK we'll talk to you about that offline. Last question
Senator Kim Hammer
Unverified
34:47
I'll have is that unrelated to this cause her
name hasn't been brought up in this report that I can tell but like Bluecross Blue Shield you recently combined like with Utah Washington state and some of the things that are happening under that new arrangement is the deductibles are being jacked up out of sight to the consumer is there any indication in this report or anything that you see involving this plan where the deductibles are going to become greater to the you know to the covered population so we just renewed like we did a
Speaker 55
35:22
new RfP for that particular service Blue advantage one and under that there was no structural
Speaker 57
35:27
change to our members' deductibles the only deductible levels that would change for us would be related to our high deductible health plan and those are just statutorily or regulatory as we align with IRS code to make sure that we still qualify for the high deductible health plan so there are often tweaks hundreds of dollars this isn't huge changes year over year when it comes to the deductible
structures. So no sir as far as our plan design is we should not be experiencing great shifts in the underlying deductibles for our members thank you thank you senatorhammer Representative Brown. my question has been asked thank
Speaker 50
36:10
you all right thank you Representative Duffield.
Speaker 74
36:27
there you go thank you madam chair thank you for
Representative Matt Duffield
Unverified
36:34
coming today you mentioned you had hired some outside consultants could you elaborate a little more on these outside consultants how much that cost and where this company
Speaker 57
36:44
was from OK so for our the example that I was utilizing was Boston Consulting Group they are statewide vendor that was selected through the office of state procurement to assist any agency in negotiating
contracts we utilize them on our uhrfP for our third party administrator the Blue Cross Blue Shield contract and they helped us draft that do some underlying kind of evaluation to make sure we were kind of in the right space and getting the most competitive offer. I want to say that was $240,000 is what we spent thank you right thank you Representative Duffield Senator Johnson.
Senator Mark Johnson
Unverified
37:30
thank you madam chairir Mr Wallace thank you for this presentation I appreciate what you said about trying to take a long view on healthy outcomes and you touched a little bit on the GLp one issue I'm reminded of gosh it's a long time ago 20 years maybe and I was working during the for an organization that was educating seniors on the roll out of medicare Part D. I remembered a conversation with then congressman Snyder who also was a physician
and he he said that it didn't make a lot of sense that you know if you have diabetes and you have to have your leg amputated that medicare will pay to cut your leg off they'llpa in those days he said30,000 dollars probably a lot more now but they wouldn't pay for the nominal amount for the drugs that would keep you from having heavier leg amputated and I'm hoping that we can use that same logic maybe to fight obesity which you know is I think most people consider it
a a a major health problem well beyond just the diabetic issue and I would hope that that you and your board could look at that and I'm sure there's probably some studies that would would would back that up but to to make those drugs more affordable it might actually be a net cost savings to the system so I would you agree absolutely we need to be studying this and looking at
Speaker 57
38:55
it we are we're having these conversations I think the challenge for us is at the price point right now it would not be
sustainable to move that to to full on weight loss and it's how do you build the guardrails? how do you make sure that that quite frankly somebody like me who just wants to get beach ready has the shot for three months and and and that's on the plan versus somebody who really needs it to be able to make a lifestyle choice. I would also say we don't need to just solely rely upon a shot it's not the silver bullet we need to make sure any plan that we design is a holistic plan that
en com pa s s es behavioral health, mental support, nutritional support, exercise support and that it's all wrapping because it's a lifestyle change it's not just a one and done kind of thing and we got to make sure that we are holistically supporting our employees through that process so that we truly get that lifelong impact and that it like I said it's not just a flash in the pan that we're getting it right now but there's some rebound that we have to deal with five years from now would it be possible
Senator Mark Johnson
Unverified
40:06
for a a a scenario something like you know that EbD could pay up to and you mention a few $100 a month as opposed to the $1500 a month and then the the employee could make it a rational decision based on hey I I can pay a certain amount of copay but I just can't pay $1500 and I think that's what we're trying to figure out the mechanism by which that could work and how do
Speaker 57
40:27
we build the system to do that and we just don't have that done right now Great well thank you for working on it thank you madam chair
Representative Robin Lundstrum
Unverified
40:38
thank you any other questions? Representative our Senator Boyd Thank you madam chairir.
Senator Justin Boyd
Unverified
40:47
chairir, I just again I'd move that we hold this audit over one month to see if we've got any unanswered or other questions that we'd
like to ask before finalizing it right thank you. I have a motion. Do I
Representative Robin Lundstrum
Unverified
40:59
have a second? Multiple seconds discussion all those I'm sorry Senator Love, did you have a question
Senator Fredrick J. Love
Unverified
41:10
you want to get in the key real quick right go for it thank you madam chair. I just want to ask by holding this report
Speaker 86
41:24
over is there is there any impact or negative impact to the agency that's I don't think so it's this is an audit report if they
Representative Robin Lundstrum
Unverified
41:32
want to take time to review it some more I don't think that's gonna be a problem. Well, I just, I just want to ask that question. thank you fair enough thank you
all right any other discussion all those in favor of the postd it passes. thank you all right moving on thank you gentle Next up we have a review of case transfers in the 19th western District
Speaker 90
42:18
Mr Camp thank you madam chairir. This report is issued in response to a request approved by this committee for legislative audit to conduct a review of cases transferred between divisions in the 19th west judicial District Circuit Court. the review is conducted primarily for court cases that were open on February 25th of this year the date the data was downloaded and provided by the administrative office of the court.
The objectives of this review were to document processes for random assignment of judges within the context software system document processes for initiating and making transfers between the divisions and the court compare distribution of case load for open cases pursuant to the courts 2026 administrative plan and examine selected transfers and related documentation for propriety and assess internal controls related to case transfers
The court is comprised of seven divisions and consist of Benton County in its entirety in 2025 approximately 13,600 cases were opened in the court with an approximate daily average of 9200 open cases cases in the court are assigned to judges on a random basis as outlined in the 2026 administrative plan which was approved by the Arkansas Supreme Court and is provided in appendix A. the administrative plan allows
for the distribution of cases among the seventh circuit judges with criminal civil juvenile domestic relations and probate cases separated as shown in exhibit one on page two of the report As previously mentioned objective one was to document processes for random assignment of judges within the context system. according to aoc staff the system uses a weighted random method of selection based on a set pool size if the judge
initially selected recuses and other judges chosen based on the same method and a chip from the new judge's pool is added to the recusing judge's pool for the next selection. it should be noted that per the administrative plan all juvenile adult protective services and specialty court cases are assigned to division3 therefore awaited random selection does not apply. Objective two was to document
processes for initiating and making transfers between the divisions and the court based on information provided by court personnel when a case is opened the system automatically assigns a case number and randomly assigns a judge. after the initial judges assigned transfers between divisions can be either randomly selected by the system or entered directly transfernsfs entered directly into the system are appropriate when there's a circuit court order transferring a case signed
by the presiding judge. transfersfers may also be authorized by administrative order number 2015-1 provided in appendix B. and initiated by the prosecuting attorney it should be noted that the circuit clerk's office instituted an internal policy in which prosecuting attorney is asked to confirm the direct assignment of cases in writing this policy is not required by the administrative order and there are no controls in place to require this documentation in the system. Additionally
transfers may be authorized when circuit court bond hearings are provided over by a district judge. transferss entered directly into the
Speaker 96
46:04
system should be accompanied by documentation that is entered into the official court
Speaker 90
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record Objective3 was to compare distribution of caseload for open cases pursuant to the 226 administrative plan on February 25th9,351 open cases were divided between the seven divisions of the court as noted
in exhibit two on page four and each judge's case load by type of case was compared to the administrative plan differences between actual results and the administrative plan are deemed reasonable considering the direct transfers noted and objective too. Objective4 was to examine selected transfers and related documentation for propriety and assess internal controls related to case transfers. a total of 1,673 or 18% of the
open cases had at least one transfer between divisions of these cases 27 were transferred two or more times resulting in a total of 2013 transfers between divisions as noted in exhibit three on page 4. Legislative audit examined documentation and related court documents for 1074 cases or64% of all cases with transfers this group consisted of all
cases with transfers occurring two days or less after the case initiation date in any cases where the first transfer date prior to the case initiation date. this review revealed the following instances in which documentation supporting the transfer could not be located in internal court connect. hree related cases were transferred to division one but had all been randomly assigned by the system to division 2. these transfers occurred without following the internal controls established by the
circuit clerk and without proper documentation as noted in objective 2. the circuit clerk through legal counsel and the prosecuting attorney provided responses to these transfers which are included in their entirety in appendicesc and B. for 26 cases transfers were confirmed by the administrative judge for the court as being properly made. for two transfers the assigned division noted in the data obtained from AoC injective3 did not agree with the actual court order uploaded to the internal court connect.
these discrepancies have been corrected As a result of this review legislative audit recommends the following first although the circuit clerk has instituted an internal policy in which the prosecuting attorney is asked to confirm the direct assignment of cases in writing the court should consider incorporating this policy into administrative order number 2015-1. Second the administrative office of the court should consider strengthening system controls
in regard to transfers requiring that one documentation be included with all transfers and two a second authorized individual sign off electronically on all transfers in the system. The court was provided an opportunity to respond to the report but no response was received a response from the administrative office of the courts is included in appendix E madam chair this concludes my presentation. officialcials from Benton County and the administrative office of the
courts are present to respond to committee questions. you'll
Representative Robin Lundstrum
Unverified
49:38
open it up to the members first and see if you have any questions all
right? I do understand we have guests here today Judge Bradarron and Benton County Circuit lark reed the shields. do you wish to make a statement all right thank you for
coming Mrss Shields so you I I can't see her it's no all right thank you so much.
we're ok thank you all right since we have no questions and no discussion do I have a motion? have one motion do I have a 2nd 2. discussion all those
in favor opposed all right thank you it passes Our next meeting will be
Unknown speaker
50:34
September 10th and 11th see you soon. thank you so much for coming.
Agenda
A. Call to Order by Chair
B. Adoption of Minutes
C. Reports of Executive and Standing Committees:
D. Review of Reports:
E. Other Business:
F. New Business
G. Adjournment
Documents
No documents posted.
Speakers
Representative Robin Lundstrum
Unverified
Senator Jim Dotson
Unverified
Senator Dave Wallace
Unverified
Speaker 14
Representative Hope Duke
Unverified
Representative Steve Unger
Unverified
Speaker 22
Speaker 26
Speaker 27
Speaker 36
Speaker 37
Speaker 38
Senator Justin Boyd
Unverified
Representative Julie Mayberry
Unverified
Speaker 31
Speaker 55
Speaker 56
Speaker 57
Speaker 52
Speaker 62
Senator Kim Hammer
Unverified
Speaker 50
Speaker 74
Representative Matt Duffield
Unverified
Senator Mark Johnson
Unverified
Senator Fredrick J. Love
Unverified
Speaker 86
Speaker 90
Speaker 96