Legislative Joint Auditing- Counties and Municipalities
Video
Transcript
Machine transcript
May contain errors. Verify important quotations against the official video.
About transcript accuracy
- Source
- Whisper
- Model
- ggml-large-v3-turbo.bin
- Processing date
- October 4, 2026
Counties and municipalities will come to order. Mr. Co-Chair, any comments? Yes, sir. Okay. With that, we'll move on to item B, the adoption of minutes. Does the Chair hear a motion to adopt the minutes of the June 4th meeting by Representative Rye? Second by Representative Dalby. Any discussion? Not all in favor say aye. Aye. Opposed, no. Minutes are adopted. I recognize Mr. Archer now for update on private reports on
the water and sewer reports delinquent from 12-31-22.
Speaker 6
0:42
July 2025 LJAC meeting, this committee requested that the state treasurer escrow 43 entities state turn back under Act 453 of 2023, which amended Arkansas Code 104412 for the failure to file a 2022 water and sewer report. Over the past 12 months, 40 of these 43 have filed all required reports and have been fully reimbursed their escrow turn back funds.
That leaves three, Biggers, Falk, and Ulm, and per Act 453, these three will have their escrow turn back redistributed to other cities and will remain ineligible to receive future turnback until the LJAC notifies the treasurer that all reported reports covering the most recent physical year ended have been filed. The total combined turnback forfeited
Speaker 7
1:34
by these three entities was just under $126,000. Mr. Chair, this concludes my report.
Okay. Mr. Archer, is there any comment or motion that the committee needs to accept this? Not
Speaker 12
1:49
that I'm aware of. I mean, we're still operating
under the motion that was made in July. Okay. Any questions or comments about his report? And I want to emphasize those three communities and their total $126,000, as far as they're concerned, is gone. Unless we change the statute, they won't ever see that money going forward.
So any questions or comments? If not, we'll move on to item D, private
reports delinquent for 23 and 24. Mr. Archer. Thank you, Mr.
Speaker 17
2:26
Chair. We have four entities that are 30 months delinquent on filing their 2023 water and
Speaker 6
2:34
sewer report, which is the same point in the process, the 43 were at last July. These are Black Rock, Omaha, Briarcliff, and Garner.
Okay. We sent letters dated July 22nd, 2026. We're sent notifying 50 entities that their 2024 water and sewer report was 18 months delinquent. But a staff note here, currently that number is down to 26. We
Speaker 17
3:00
have received 24 of those reports since we sent those letters out. That's 24 of the 29?
24 of the 50. Of the 50. Okay, now we have one here that's got 29 on it. Well,
Speaker 17
3:15
that list is now down to 26.
Okay. Since I emailed those out, we
Speaker 23
3:20
keep it current. Mr. Chair, that concludes my report. Okay.
Any questions or comments? If not, we'll file a report. Thank
you. Okay. Moving on to the item E, the 2024 year-end reports, box side.
Speaker 6
3:39
Yes, sir. This is the report on the city private reports. We were talking about water and sewer. We sent a letter dated July 22nd of 2026, notifying the city of Bauxite that their 2024 private city report was now 18 months delinquent.
Speaker 17
3:56
And this is one of 40 private reports that we received. So we're down to
Speaker 26
4:01
all 39 have complied, and we're down to one. And that's Bauxite? Yes,
sir. That concludes my report. Is there any information or feedback from the county of Bauxite? They had not responded to the
letter. Okay. Committee, questions, comments, or complaints? Senator Sky,
Senator Jamie Scott
Unverified
4:26
you're recognized. Thank you, Mr. Chairman. My question was back to the first three cities who hadn't made their report.
That's the Biggers, Falk, and Ullam. But
Senator Jamie Scott
Unverified
4:36
have we heard anything from those cities? I know the money is not going to be able to go back to them, And we're recollecting a hundred and some thousand dollars. But have they given us any kind of explanation as
Speaker 33
4:52
far as why they're still unable to be in compliance? As far
Speaker 35
4:58
as communications with staff, it's been a while. But I know Biggers had some engagement letters that had signed.
Speaker 17
5:06
They were pretty far in the rear, so it takes a pretty good while to get caught up. They were coming from like 2016 maybe. And most auditors like to, if there is a report, they like to start there and work themselves forward. So as far as Falk,
Speaker 23
5:22
they were at the meeting in July, and he said he had an engagement letter at that time, but he was looking for a better price. That's the last I've heard from the city of Falk. I don't remember off the top of my head about Ulm.
Now, the Municipal League is here. They have done a fantastic job with these cities, and that's why we're down to three, is because of their
Speaker 17
5:46
efforts. You may ask if one of them want to answer that question as well. Would
anyone from the Municipal League like to respond to Senator Scott's question? Please come to the table
Speaker 38
6:02
and introduce yourself, and John, you can join him too.
Speaker 40
6:09
Someone here? John Wilkerson, General Counsel of
Speaker 42
6:15
the Arkansas Municipal League. Okay. Steve Dixon, Field Rep for the Arkansas Municipal League. I can speak concerning vigors. I've had multiple contacts with them, and like Mr. Archer says, they're behind all the way back to 2016, I think was their last submitted report. I've talked to their CPA, and she is telling me that she will not skip ahead and get out of line.
She's got an audit starting in 17 and go through 24.
Excuse me. When you say she said she wouldn't skip ahead, does that mean she will only do them
Speaker 42
6:53
in chronological order? Yes. Okay, go right ahead. I'm sorry. That's the way she indicated to me that, you know, her policy was that she, you know, they might find another auditor that would, but she's holding the documents right now. But last conversation I had with her, she only had the documents for 2017 and was still waiting on the rest of them.
And she indicated, and I asked her, I said, how much money are we talking about to get them caught up? And I was surprised at the amount, considering that it's seven years. but she said it would be $25,000. I thought it would probably be more than that for seven years because usually what we're seeing averages more than that per year. But that's the only one I can speak to on those three. For Falk, Philip Patterson is a
Speaker 47
7:40
field rep for that area. Last I talked to him, it took some time to get in contact with Falk
Speaker 40
7:48
despite our best efforts. And from what I gathered from about two or three months ago, mayor had finally started working with the CPA I don't know where they are since then but we did have some trouble getting them to the mayor's here oh perfect yes sir
do want you to come forward and state your name for the record and be on the microphone because we are on live stream I understand you're the mayor please please take a seat to hit at
the end there and introduce yourself for the record thank
Terry Purvis
Unverified
8:22
you and I apologize for being late. Parking is not real conducive today. But anyway thank you for letting me be here. My name is Terry Purvis. I'm the mayor of the City of Falcon. Okay. Mayor I wouldn't worry
about being late. If you weren't late on some a lot more important we wouldn't be having this conversation. So thank you. Do you have
any comments or anything to report to the committee yes I
Terry Purvis
Unverified
8:51
do the only and it's and all the times that I've been here the
only hurdle I have is the cost and being able
to pay for it you're talking about the cost to pay the auditing firm yes sir okay and
Terry Purvis
Unverified
9:09
the Arkansas Municipal League put me in touch with Communities Unlimited. And they came down to the city of Falk and not only were they going to help me with the audits, trying to find a portable way of getting
my audits done, but also they are doing my rate study, pray a charge. If I'm allowed to say. I praise God for them. They're very godsend. I appreciate the Arkansas legislature for putting me in contact with them. About four months into their work, they came down to City Hall and they told me that they had some people leave. So it was pretty much I'm
my own with the audits which is okay I get it but they're still doing my rate study thank God that's one thing where we're going to look at when we're doing our rate study is to be able to put in enough of what we've got to do to raise the water rates to not only pay for these but to make sure that we're going be able to perform the services that we provide. I come to you today and I know
we're behind and I've got the hurdle taken care of. I've got here for the records if you would like to enter it this is my general fund bank account for For which I've got right now as of the last, this is the most current bank statement, $137,005.40.
We average generally about $40,000, $50,000 in our general fund. This is above what we are used to. I didn't come before you today just to show you a budget that we had a budget to do what we got to do if I come before you the only thing I wanted to show you is I can write a check now there's a lot of things that has gone into this we've overcome and what we had to overcome unfortunately for me it took a lot few
sleepless nights trying to figure all this stuff out we cut back on spending that was non-essential. We saved the money up. We got it. We're going to start with the Pryler, Jack Pryler, please forgive me, I'm sure I'm mispronouncing his name, in Magnolia. He's out of town right now. I mean, I couldn't get anything from him, he won't be back until Monday, but we're, My secretary is working with our center point accounting firm that we got the software firm
from to make sure that the documents he gave me on the list is true and correct of what he wants. Right now, that's where I'm at. But I'm proud to say, hey, right, check, I'm going to get it done, not only for this round, we're going to keep going until it's caught up. I've still got a lot of work to do on the budget to literally pay this back to our reserve funds. I've got a
lot of work to do. I'm not there yet. I'm gonna get there. I got to pay this back. We've got to have our reserve funds in case of an emergency, so some of it, not all of it, is coming out of that. It's our
Speaker 64
13:22
cutting back and saving up the money so we could write the check
is where I'm at right now. Mayor, thank you for your report, and I want to tell you I'm sympathetic, but $78,986 would have helped y'all work this thing out, and you have lost that.
You have totally lost it because under the law, it went away. We in this committee and the entire legislature can't give it back to you unless we change the law, which the soonest opportunity would be in January. And I'm not so sure that you could get 18 votes in the Senate and 51 in the House to do that. And I'm just saying it sounded like you were saying that you were trying to find a better price on the audit. And, you know, it's kind of a, you know, you're kind of like your car's broke down on the side of the road.
You can't argue with the tow truck driver on how much he's charging. You needed to get out of the ditch. And, again, I'm sympathetic, but I want to help you get out of the ditch. But I specifically ask our legislative auditor, is this money totally gone? And he said, unless the General Assembly changes the law, it is. And you understand that, don't you? very much sir
Speaker 38
14:37
okay well I can't and please understand I had to have the
Terry Purvis
Unverified
14:45
money in the bank to write the right to check and I'm sorry I mean I I look I don't I take full responsibility for losing that money but I had to be able to write the check if I'm gonna have the audit I mean guys I just can't put it in budget come up and say, hey, it's in the budget. I'm ready to go. I want to prove to you that I've got to write the check. You know, we got it. We had to have our water tower totally
repurposed, sandblasted inside and out. It was almost a two-and-a-half-year project. I had $148,000 left in my CARES Act funding. Not a problem. It was budgeted for that and allowed to be spent on that, but it had to be spent by December 31st of last year, or I had to pay the money back. I got the invoice on that thing December 30th.
Two more days and I had to pay that money back, and I had to have that money because the federal government, I'm sure, would not be nice about it. We had the money, well, didn't have all the money in the reserves but to pay that money back if I didn't spend it I mean it came down to the last two days yeah that put me behind now where do I come from January till now I want to make sure I got the money
I have in the bank I feel bad bad and did we got to this point we lost that money yes I understand what's happening sir I got to get caught up and
you have a question representative right you're recognized
Representative Johnny Rye
Unverified
16:41
yes sir sir you keep referring to losing money where did it go
nah did I say something I lose the money I apologize I use the term that under the
Speaker 64
16:54
law, the $78,906 that they would have gotten under the law that I got from the turnback funding. That's the
money I lost. Yes, sir. I take more responsibility. He didn't lose it. He
never got it. No, yeah. He just never got it. That's the issue. Unlike some where it's delayed, our statute, and Joe, when was that passed? 2023. 23. In 23, Representative
Wright, we passed a bill that says that you go so long and you haven't complied, then that turn back that's kind of been held in escrow, it totally goes away. And that's the situation on these three communities.
Yes. So when he says he lost it, he didn't lose it. He never had it. I never got it. I apologize. I misspoke. We understand. I just wanted to clarify that point. Other questions for the mayor?
Okay. Mayor, again, we're sympathetic. We hope you can get this worked out, and then you've got good folks there from the Municipal League helping you, but I don't have anything else to tell
you other than we'll pray for it. I understand, sir. I completely understand. I understand, sir.
Okay. I'm just proud I got the money. I can now write the check. To the staff, we'll keep it if it helps us. Senator
Senator Jamie Scott
Unverified
18:16
Scott. This is my final question. Thank you for coming. Thank you. Thank you for your explanation and thank you for your hard work. So the cuts that you've made, are they sustainable for you to move forward? Yes, ma'am. Because I know you made cuts to get
Terry Purvis
Unverified
18:33
where you are. Yes, ma'am. But they weren't essential. No, ma'am. It was only non-essential spending that I did and I really slaved over to make sure that I don't want to cut any services that were given to our small town.
we were very proud I know Lane has
Speaker 64
18:49
been there we're proud of what we got and I don't want to
Terry Purvis
Unverified
18:56
stop it I don't want I don't want to quit what we're doing there was some non-essentials that I did quit I mean Miss Dalby's been there too a lot thank you Miss Dalby I love her you know it's really cool and please let me says Ms. Dalby don't even represent us. I mean she's up in Texarkana but she's
always there to help what I call her so thank you. I'm sorry I got into the situation but this is it. That's my only hurdle. I got money in the bank and I had to have that the right check. I got it. I'm doing I'm gonna get it
done. We'll work with the Municipal League work with our staff and we'll try to get you where you we're not in this bind again and thank you for coming and testifying today mayor we have sometimes have uh local officials that that don't
pay us the courtesy of showing up and answering our
Terry Purvis
Unverified
19:53
questions and we appreciate you coming um i sure don't want to be here like this but i ain't gonna i sure ain't
gonna turn you down on an invite thank you okay thank you for your candor mayor and god bless you safe trip back to god bless you man thank you very much i i appreciate y'all thank you okay uh come see us
Speaker 35
20:18
girl okay mr chair i love you mr archer your record one of our one of our staff members um has been working with
Speaker 23
20:24
ulm as well just handed me a note and said they were
working on getting an engagement letter at city of ulm as
well so there it's all in the process Okay. Is there any other from Biggers or Ulm? Is anybody else here? I was told by one of my good friends in Prairie County that it's Ulm, in case y'all are wondering. And Representative Gene, who knows everything about Arkansas cities, concurs, so it must be correct. Okay. Did we dispose of the box item?
Unless there's some additional questions. Any other questions or anything about the box side? Okay, we'll move
to item F, and that's Fargo, Ullum, Lead Hero, and St. Joe. Mr. Archer. Thank you,
Speaker 23
21:16
Mr. Chair. In the June meeting, we deferred Fargo, I mean, excuse me, in the June meeting, we started the 60-day clock on the city of Fargo for noncompliance of municipal accounting law.
And with the chairs, so we checked with them in August. They have not made any real progress of getting their records. And per 1459-117, the next step would be to escrow 50% of their turn back for the next 60 days until they get in compliance. The staff recommends we move forward with that. Okay. Without objection, we'll move forward. Okay. are we ready for
g yet uh no we got three more on oh okay yeah okay go ahead i'm sorry you got
um in the june meeting
Speaker 23
22:04
uh this committee started the 60 day clock on on that uh town we visited with them on uh first of august and they are have made substantial uh progress and staff recommends that we remove them from the uh 1459 117 process
okay any questions about uh Call them, if not, without objection, we'll move forward. Go ahead. Town
Speaker 6
22:30
of Lead Hill, with the chair's permission,
we'll have to go ahead and
Speaker 6
22:51
synopsis. Town of Lead Hill, 2024, 23, and 22. Under the mayor, an audit agreed upon procedure and non-compliance report was not obtained for the Water and Sewer Department as required by Arkansas Code.
We actually received this report on July 14th after the June meeting. This was a deferral as well. So that one's been taken care of. On page 4, under the recorded treasure, a review of disbursements revealed that supporting documentation was not maintained for the following disbursements in non-compliance with code. Almost $1,900, almost $1,000, just over $1,200 dispersed in 24, 23, and 22, respectively.
Due to the lack of documentation, the validity of these disbursements could not be determined. Just over $700, just under $1,000, and just over $800 dispersed in 24, 23, and 22, respectively, to vendors that appear to be for legitimate business purpose. However, supporting documentation was not available. This is a repeat finding in the previous five reports. Accounting procedures for municipalities are set forth in a municipal accounting law, Arkansas Code 1459-101-119.
The town is in noncompliance with these codes as noted below. A detailed fixed asset listing was not maintained. This is a repeat finding for the previous five reports. All disbursements from municipal funds were not made with pre-numbered checks, and electronic disbursements were made without establishing electronic funds transfer policy approved by ordinance. This is a repeat finding. Cash receipts and disbursement journals were not properly maintained for all activities. Pre-numbered receipts were not issued for all items of income.
This is a repeat finding in the previous two reports. Bank reconciliations were not properly prepared for all bank accounts or approved by a municipal official or employee other than the person preparing the reconciliation. This is a repeat finding in the previous two reports. An annual
Speaker 100
24:58
publication for financial statements was not prepared or post. This is a
repeat finding. I have a question on this one, Mr. Archer, where it says,
It appeared to be, this is on the 732, 987, and 843, appear to be for a legitimate business purpose. Is it allowable for the auditor to contact those businesses and see if they have paperwork that would clear up that documentation? We
Speaker 17
25:32
looking at the Municipal League staff. of some of those, we have contacted them before for their conference billing for some of the officials that don't, they didn't retain the documentation. These
are like utility bills or stuff that is reoccurring. And the reason we differentiate between the two paragraphs, the top paragraph was referred to the prosecuting attorney and we know that the second group were, well we say we know, we're pretty confident that the second group were not something that was going to be prosecuted, so we didn't want to conclude the system by referring those. So we We try to separate them out with those that we just have no idea for versus those that, you know, we may have the utility bill from the month before.
It's pretty much the same amount, so we can assume that even though they lost the bill, it was for the streetlights or whatever. And we
presume that the prosecutor will look at it in much of
Speaker 101
26:24
the same manner. Correct. He gets the entire report, so if he or she does. Okay, so we've kicked that can down
Speaker 104
26:31
the road, so to speak. mayor uh kale thompson was here in june oh you're here again no that's not mayor thompson i know
Speaker 6
26:39
who that is recorder treasurer kathleen france was invited here today and she's here to answer
she's here yes ma'am and again staff recommends that we we start
the 60 day clock after questions okay ma'am please join us and
Speaker 109
26:54
introduce yourself for the record i'm katherine france um i am the recorder treasurer for Lead Hill. I started this
Speaker 110
27:02
job in 2020, came into a very outdated system, no proper filing system, and a previous recorder that had to resign for improprieties and was prosecuted. At this time, I worked endlessly to correct situations in the 20-hour week allotted
by council, working many weeks over 20 hours and not being compensated. This council has finally listened and voted to have a second person in the office. Moving forward, here are the corrections that we have already implemented for the Leadhill audit. Please
Speaker 109
27:36
let me know if I missed one. Passed an ordinance for electronic payments. We have a fixed
Speaker 110
27:42
access asset list. I now have the Municipal League reconcile form to make sure we are reconciling correctly. A policy has been
been implemented to receipt everything that is auto deposited we are scanning every receipt into the computer and into folders to be prepared for a timely audit we are aware of the annual publication law and we have six locations that we do post council meetings at and we will be sure to be posting our financials on April 1st 2020 by April 1st 2027 and I have all the receipts that you didn't
Speaker 113
28:23
have on those paragraphs they're right here
okay Miss France thank you and then you can provide those to staff and if it are those copies no I he just well the good staff can copy them if we need to but thank you for bringing any before we move on any questions for Miss France about what we just discussed if not I guess we move over to the
Speaker 104
28:52
police chief next no we don't go ahead staff still
recommends that we start to six at eight
Speaker 17
28:58
o'clock the way the the the law reads is that we would come out immediately if she requests and we'll take a look at these and report back in September and then take them right back off the
clock there's no turn back involved in this or anything like that but you know do we need a motion to start the 60-day clock is there a motion just motion by Co-Chair Womack second by representative Dalby any discussion all in
Speaker 115
29:26
favor say aye opposed no okay the 60-day clock has started so it's France
Speaker 7
29:30
thank you and thank you France could you reach out to your auditors as soon as at your earliest convenience so they can pay you a visit? Yes. Yeah, I
Speaker 118
29:39
just talked to one of them yesterday. Okay. Just call them back. Let them come see you, and we'll get to take care of it,
Secretary. Okay. And thank you for coming. We have a motion to file it. Does that, what about the part on
Speaker 26
29:56
the police chief? That's next page. He's not. Is it all one report? It is, but, I mean, if there's questions
about it, I'll be glad to answer it. Any questions about the part that's on page five at the top of it from the police chief?
those are not ones we normally read okay without then if not without objection i will file the
Speaker 124
30:15
report okay the structure the next the final city on
Speaker 6
30:19
the non-compliance is the city of saint joe with um chair's permission i'd like to present that report from pages six and seven okay town of st joe 2024 23 and 22 under the mayor and treasurer county procedures for municipalities
are set forth in the municipal accounting law arkansas code annotated 1459 101 through 119 the town was in non-compliance with these codes as noted below monthly bank reconciliations were not prepared, pre-numbered receipts were not issued for all funds received, and deposits were not made timely, cash receipts and disbursement journals were not established, annual financial statements were not prepared or posted, invoices and supporting documentation was not provided for tested disbursements, totaling just over $1,450, $368, and $823 for $24, $23, and
22 respectively. However, disbursements were to vendors that again appear to be for legitimate business purposes. Electronic disbursements were made from the general fund without proper approval by the council, by ordinance, or without establishing a written policy and procedure. This is a repeat finding the previous two reports. Continuing on page seven, the governing body did not review the prior report or company comments at the first regularly scheduled meeting following on the receipt of the report, non-compliance of the code.
This was deferred from the June meeting because the town of St. Joe did not have a mayor or a recorder treasurer. Since then, they have appointed a mayor and a recorder treasurer. And newly appointed Mayor Travis Chadwick and recorder treasurer Pam Kidder are here today to
Speaker 23
32:09
answer questions. They'll come to the table. We had previously in June recommended that we start the 60 day clock. We have been in contact with the city. After they answer questions, staff withdraws that recommendation.
One, because the law says if they get a new recorded treasurer, they would get another opportunity to fix it. And actually, they've already provided a great deal of documentation to our staff that they have fixed the majority of this. But they're
here to answer questions. If y'all would please both introduce yourself for the record.
Speaker 127
32:42
Pam Kidder, St. Joe, City Treasurer. Yes, ma'am. Travis Chadwick,
the Mayor of St. Joe. Thank you both for being here.
First of all, thank you for taking these jobs in obviously a less than perfect situation. So I always want to thank our local officials that step up
to the plate. Any questions for the Mayor and the Recorder Treasurer?
Mr. Archer, do we need a motion to rescind the-- No,
did not actually start the clock on that. And they've moved a long way towards the right direction, so we--
We just recommend we file the report. So
we're going--if there's no other questions, then we'll file the report. And we wish you both the best for--and thank you for stepping up, being good citizens, and helping your community. Thank you. you and
you can go back now it's safe travels up 65 now where are we
Speaker 24
34:04
um just say good instructor you're recognized we're going to move ahead for a reason that you
Speaker 6
34:14
Okay. We're going to go out of order a little bit. We're going to jump over to item number 38 on the listing, which is on page 31, and do Marion County, which has a repeat finding, real quick, on page 31. Marion County 2024, under the county judge. We were unable to reconcile the county's W-3 to the appropriation journal
due to inadequate documentation. This is a repeat finding in the previous two reports. Fixed asset records were not properly maintained as required by code. This is a repeat finding in the previous seven reports. Under the treasurer, we were unable to reconcile or verify the following due to the lack of documentation and errors in the posting of accounting software. Unable to reconcile total receipts and disbursements per the treasurer's summary to deposits and withdrawals per the treasurer's proof of cash,
unable to balance transfers and tax transfers on the treasurer's summary. It's a repeat finding in the previous two reports. Under the sheriff, the ending balance in the bond and fine, circuit account, commissary, paper service, and drug confiscation accounts had unidentified balances of almost $2,000, over $93,000, over $113,000, $650 and $589 respectively. This is a repeat fine in the previous six reports.
The County Judge and the Sheriff were invited here today, but they both had conflicts. But Treasurer Suzanne Crispinoe is here today to answer questions. Could you come forward, Ms.
Crispinoe? Thank you. and welcome please identify yourself for the record if there's a button you push there to turn that mic on
Speaker 146
36:12
there you go suzanne crispino marion county treasurer apologize for mispronouncing
your name it's all married in italian always my fault you're recognized
Speaker 146
36:27
to respond yes sir I took office in January of 2023. We had done a prior administration had done a computer conversion starting in October of 2022. Let's just say it was not a smooth and successful one. The fixes that we began in 2023 and continuing to build the database did carry over into 2024
And we're pretty, I guess, hopefully confident that our 2025 audit will be clear. Okay. Any questions? Anything we
need to do other than file a report,
Speaker 35
37:09
Joe? Well, staff recommends that we defer the report and not invite back the treasurer and invite the judge and the sheriff. And we'll do their
part next week. Is that everybody cool with that? Without objection, we will defer this until the judge and the sheriff can be here.
Speaker 146
37:25
All right. Thank you, ma'am. Special thank you for stepping
that up, too. I appreciate it. Okay. We're glad. You have a
Speaker 35
37:36
safe travel back. Can we go back to the list? Yes, sir. Where are we? Number one. Thank you. Thank you, Mr. Chair. We have 14 reports deferred from
Speaker 6
37:45
the June meeting, starting on page one with the town of Alpena. The mayor was here last meeting, but the recorder treasurer, we deferred this so the recorder treasurer could be here.
She's actually resigned her post, but the mayor said he would, excuse me, I misspoke. He was not here
Speaker 23
38:02
in June, but he will, he has volunteered to be here in September if the committee wishes him to be here to answer these questions. Staff recommends that we defer this until that time. Without objection,
we'll defer this one. Go ahead. The next
Speaker 35
38:18
one. Continuing on number two for deferred reports, we have the City of
Speaker 6
38:25
Cotton Plant 2024 that was deferred from the June meeting.
With Chair's permission, we'd also like to include on page 33
Speaker 23
38:32
the City of Cotton Plant 2025 report. We have since completed it, and we'd like to do both of
them together. Is there any objections to us putting those two
Speaker 6
38:45
years together? If not, we'll do that. On page two, City of Cotton Plant 2024, page 33, City of Cotton Plant 2025. Under the mayor, accounting procedures for municipalities are set forth in Arkansas Code
annotated 1459.101 through 119. The city was in noncompliance with these codes and other accounting procedures as follows. Fixed asset listing, including additions and deletions, amounts, acquisition dates, identification numbers for equipment were not provided for review. This is a repeat finding for the previous 10 reports. The general fund bank statement was not properly reconciled. This is a repeat finding. The cash disbursement journals for the general fund and street fund were not properly classified or posted.
This is a repeat finding. That last bullet also appears in the 2025 report on page 33. Continuing on page 2, per review of payroll records, the city has unpaid federal and state taxes due totaling $211,000 for taxes, penalties, and interest for prior years dating between 2015-2023. This is a repeat finding of the previous seven reports. That figure on page 33 for that same finding has grown to $345,000 at the end of 2025.
Back to page 2. Although Schedule 1 of this report shows a balance of almost $27,000, it was brought to our attention that as of December 31st, 2024, the general fund owed a significant amount of balances due to the IRS and DF&A. As shown in Note 6, Schedule 3, when these outstanding amounts were considered, the general
Speaker 17
40:29
fund has a deficit fund balance of $184,000. That amount for the deficit fund balance at the end of 2025 would be $345,000.
Speaker 24
40:41
Mayor Clara Hustable-Brown is here today to answer questions. Mayor, you're welcome to
come forward. ladies please have a seat and turn and make sure your mics are on the green light and introduce yourselves for the record you go first mayor
Speaker 162
41:09
good afternoon I'm mayor Clara Houston Brown the mayor of cotton plant okay ma'am Nicole
Speaker 163
41:16
glass Carroll mayor's assistant treasurer okay we here to
Representative Cameron Cooper
Unverified
41:22
answer all the questions that uh that we are negligent on some of them is our fault but some of them is not so well please move a
little closer to your microphone so we can hear you you could slide that thing it's wired okay better thank you ma'am and the question y'all
Representative Cameron Cooper
Unverified
41:42
won't answer you start off one at a time and I could tell you why they're there why they liked it and what we're doing to straighten them
out that what we've been doing but she fell understand since I've been out for For eight years, I have had four treasurers, had one deceased, one that resigned, and I had one in the state, took out the office. Now I got another one here. Every time we try to get the paperwork in order, something changed. So what I did, I put in my whole new system with someone else, Ms. Pam Wright, to come in and set it up for, we get everything right.
So now we're working on getting that right. Then on the bills, those IRS bills, those IRS bills was there when I got there, and I've been trying to pay our taxes, and we haven't had any time we get up to where we can pay a little something, something always come up. The only time we had a chance to try to pay something, COVID hit. Another chance, a tornado hit. Then last year, we had a certain length of time to get three audits did and a month and a half or two months' time.
I had to go back and do cutbacks, cutbacks, cutbacks in order to get that money together to do those audit reports before the state will lose its state turn back. The City of Captain Plan do not have but one little store for revenue and one little restaurant. That's all the revenue that the city have. No income we got from that bold team factory there. We get $20,000 a month from there.
That's what we get. That don't pay my payroll for a month. So with the bills, the back bills that were left on the city when I got there, half a million dollars for bills. I done cleared those bills almost up. I done worked out all the penalties that the cotton plan had on them. But with this latest incident that went on with COVID up to now, it looked like we were working ourselves back into the same place I just worked myself out of. This year is my last year.
I'm no longer running. I didn't even run for the position. I feel like I have done what I could for the town. I'm getting older. It's time for somebody else to come in and do the things that I can't do because they got a chance to do it because what I had on me, they won't have on them. I didn't have a chance to go forward. The whole time I've been in office, I've been working backwards. Now I got so when the next mayor come in, they can go forward. That's one pledge I didn't have.
That's it. We just didn't have the money. Now we get in a position where we're doing better. Now, this is my sister-in-trudges here. We have made out agreement where we're going to start paying so much a month until, you know, we get it caught up, until we get some more income coming in. And up until that, that's the best we could do. I've been on a slight budget ever since I've been there. I've been stealing from Peter the PayPal. Now, Peter, Mac, Apollo, broke them.
Both of them is broke. And I sat there, and I'm the one who got to catch the headache from all this, whatever going on. We had the revenue, sure, if I could have came in running, yes, I would have been glad to run. You can't go forward if you started going backwards. And I worked hard to get work from backwards. That's the reason I went there to work. I knew it wasn't nothing in that town, but I figured if I clean up some of that debt
of this town, that the next person come in, they can move it forward. I refused all my life. I would have never left a place like that town was there. I wouldn't do that to my worst enemy. I started to resign, but I didn't. I took all the sweat, but I stayed, I got the town now it can move forward, and that's what I worked for the last past eight years. Now the next year, I give this town two years, it's going to be in compliance, I guarantee
you that, because what I went through, the next mayor don't have to go through that. We're a small town, we don't have that much revenue coming in, but you got to work with what you got. See, I know how to do without. I raised nine kids as a single parent. I know how to budget. That's the reason I took the job. I knew how to save. And that's what I did. I took that town and raised it like I did my family. We knew how to do without. And that's what I did at that town until I got it where it's at now, where it can stand
because it was dead. Now what the next person gonna do? Blame them because they don't have no reason no reason not to move that town forward because I done worked too hard these eight years to pull it up to see if somebody had to walk in and run it back down. Now that's where I'm at now. And I done cleared up a lot of that stuff all them penalties we working on we done cleared those up.
Representative Cameron Cooper
Unverified
47:28
we still survived. We still survived. Every year, people come down for Camp Plant Day. They usually give donations for it. Every
Speaker 173
47:40
year, Camp Plant Day gets smaller. And everybody look at me like the city posts to
Representative Cameron Cooper
Unverified
47:45
sponsor that. No, city it on. I cannot use city money for knowing a bit like that. Now this is my
Speaker 173
47:53
last year, at least she's doing it this year because I refuse to do it again. She's doing it. Now whoever take it on, Lord I know I wish them luck, anything I
Representative Cameron Cooper
Unverified
48:06
could do to help, because then nobody come to that office to help me do nothing, not even the previous mayor. And two of them lived in the town. I had to go out business and other murals. As for help, they ain't got time. It wasn't easy for
Speaker 173
48:20
me, but I did it. I did it. I did, and I do it again. Now, if this town go down again, you're not going to be the
Representative Cameron Cooper
Unverified
48:30
only one on these people's back, because I didn't work too hard for this, to let them sink it. It was, you know
Speaker 173
48:37
what the last mayor told me when I was going in office? He
Chair
Unverified
48:46
asked me, why would I jump on a sinking ship? That's what he told me. Well, Mayor, I appreciate your candor and hard
work you've done to try to right the ship. Is there there's a candidate or two running for
Speaker 175
48:59
mayor this fall? Yes, there's two candidates running, Mr. Doyle
Flattery and Miss Nicole Carroll. Those two are running. Okay, so have
you talked to them and they understand exactly where the town is? She do. The rest of them don't
Speaker 173
49:14
there, they're going to walk out. If I had any sense, I'd have walked out. But now, they come in there, they can stay because things are not like it was then. Yes. And I wish, yeah, you know what? I fought myself for that. I was on the council for eight years before, for 12 years before I run for
mayor. And I got mad at all them lying papers I was getting. I'm on city council and I didn't know the shape of town was in.
Representative Cameron Cooper
Unverified
49:45
You know that was a shame? That was a shame. And I'm standing there for
this report every month. Look at all of them
Representative Johnny Rye
Unverified
50:01
lies. Any questions for the mayor? Representative Rye. Yes, sir. Thank you, Mr. Chairman. Ma'am, the only thing that really concerns me
is I'm a little bit concerned about this unpaid federal and state taxes. Yes, we're paying those now. We've been paying
Representative Cameron Cooper
Unverified
50:15
on those. Maybe some months we don't pay, but that IRS check, that $34,000. Now, did that come from the previous administration? Let me tell you what I did for that. I swept it and saved up $80,000 to put on that debt four years ago, saved from nothing.
Speaker 171
50:46
know what they told me if irs don't get in touch with me and me not to get in touch with them and they took that
Representative Johnny Rye
Unverified
50:55
money and allocated places that wasn't even needed ma'am let me ask you this of this 211 000 how much do you think that it's still owed on
Representative Cameron Cooper
Unverified
51:04
those federal and state it's not that much it's just the interest rate and everything they got combined all together, but I know when I came in there with interest and everything, it was $150,000.
Now, back then, when I paid the aid on that, we could
Speaker 173
51:19
have knocked down some of that interest, but since they didn't let me do it. But see, people fail to understand. Y'all, come up and y'all recommend me. And the council won with the power. I can't do no more than they let me do. If they tell me don't, I don't. They tell me what to do, I do. Would I like to allocate that money to anybody else? No, I would love to pay that debt off, but
Representative Johnny Rye
Unverified
51:43
I couldn't. Well, yes, ma'am, but you know, this money right here is supposed to be taken out on the front end.
That's what I'm talking about. That's what we do. No, ma'am, you got this right here. Which one is that? This is 211 on page two. It looks like about halfway through the page. Which one is that, Nicole? It's $211,000, ma'am. And, boy, to me, that's serious
Speaker 186
52:05
business. Well, which one? It's actually $364,000 now.
Did you get your answer, Representative? Yes. She's still answering. Okay, go ahead, Mayor. Could you tell them what you've been
Speaker 173
52:27
doing to try to pay that debt off? When I'm
Speaker 191
52:32
on the, yes, sir. On the, say the state that we're behind, I just sent a little extra with it. I know, because that's all we have is a little extra. And on this federal, we hadn't start paying the federal at all. Like she said, that when it was time to start paying on the federal, I was going to start paying on the federal.
Then we got knocked with the audits. And there were $5,000 each, so we had to come up with $15,000 at one time. It's not that we're not trying. We just don't have it. Yes, ma'am. Well, I hope you can get
Representative Johnny Rye
Unverified
53:08
this straightened out because this is, that's really serious. Yes, sir. And definitely, we
Speaker 162
53:13
are trying. Thank you, Representative Wright. I'm working all that now trying to get out of here. That's what I'm trying
to address. We've got some more questions.
Representative Duffield, you had a question? You're recognized.
Representative Matt Duffield
Unverified
53:27
Yes, sir. Thank you, Mr. Chair. Thank you, Mayor, so much for your service and
cotton plant in the community. I have a question. Bold Team LLC, the medical marijuana cultivation facility there, I've read that it was really going to be a big factor for you guys and in that area. I thought it was too, but
Speaker 171
53:49
some kind of way, I don't know who did it.
Representative Cameron Cooper
Unverified
53:55
Bold Team contract, we got a 10-year contract for 1%. We get 1%, and we have to wait 10 years before we go back to the table again, That's what I'm counting on, but help this town to get out of debt when they go back to the table again because all we get is just 1%. 1% is what we get.
Speaker 162
54:18
How much is that? About $20,000 a month. Sometimes maybe $21,000.
Speaker 191
54:22
Maybe $20,000 to $25,000 a month maybe.
Maybe $20,000 to $25,000 a month. Thank
Speaker 200
54:29
you, Mr. Chair. Thank you, Representative. Senator Hamer, I believe you had a
Senator Kim Hammer
Unverified
54:35
question. Thank you. I just want to bring some clarity to something. It sounds like maybe previous administration
where you inherited this problem, whenever they collected the federal, the state employee tax. They didn't pay it. They were not remitting it to the state or to the feds. Is that correct? No.
Okay. And so now, under your administration, you are. And what you're doing is, instead of that money being diverted somewhere else or used somewhere else, you're putting something with it in order to get the past debt knocked down, but at the same time, you're not creating debt because you're paying it every month as required. Yes, because when I first got in
Representative Cameron Cooper
Unverified
55:17
the office, you know, we had a system set up. You know, payroll always come out by itself, the tax and everything, so we send that in. It was six months when I even found out that it wasn't going towards taxes that I'm paying disciples in there.
It's going towards the back taxes. That's where it was going. I'm on something that we're paying our taxes every month, which we were, but they're not going on my current tax. They were going on the taxes that was owed already. When we're paying now, it's still the same thing. Part of it goes to what's already there. Okay. So it's a little bit of a water under the bridge, but I've
Senator Kim Hammer
Unverified
55:57
got to ask you, What were they doing with the money that was supposed to be being paid to DFA and the IRS?
Do you know what they were doing with that money
Representative Cameron Cooper
Unverified
56:09
within the city budget? No, sir, I do not know. The altar came down in an audit, so I, two times, at least twice, for two separate mayors. So they didn't see nothing, so there was no need
Senator Kim Hammer
Unverified
56:24
of me complaining. Okay, and then the last
question. Who negotiated the contract with the medical marijuana people in order to get such, what seems like a low deal for the city? Who negotiated that contract?
Speaker 212
56:37
The Marijuana Council, and we didn't know nothing about it. You mean the Marijuana Commission, Medical Marijuana Commission? She said the
Speaker 191
56:45
mayor, the former mayor, and one of the council members. And when is that
Speaker 171
56:52
up for renewal? Should be next year. Next year, that's what I'm hoping in July, that's when
that 10 years will be up. Has it been 10 years? Lord. Time
Speaker 210
57:01
flies when we're having fun. And you won't be the mayor during that negotiation, will you? No, sir. That's right.
Representative Cameron Cooper
Unverified
57:08
I'm getting out of there. A little money I can handle. Big money started coming in, I got to run. Okay. So I don't want to be around when it start coming in. Down there, they got a bad reputation how the mayor steals money. So I want to get out of there before the big money comes. I can handle a
Speaker 217
57:25
little money. I don't want to have no policy, no big money. No, I'm not getting in
Senator Kim Hammer
Unverified
57:32
it. Big money, I'm gone. Well, appreciate you, sir. I do have a question for staff. Because that money should have been paid to DFA and the IRS,
and it sounds like it was redirected to other needs of the city at that time by the previous mayor and by the city council. Is there a history, or do you know the history of what, if they were held accountable for that at that time?
Speaker 23
57:56
Yes, sir. The finding there, the last finding on page 30, first finding on page 33, says this is a similar finding in the previous eight reports. So we've been reporting on this since 2014. That's what I'm talking about. And it says in the finding, it says these were taxed per period 2015 through 2023.
Okay. Thank you. Okay. Thank you, Senator. Representative Cooper, you're recognized.
Representative Cameron Cooper
Unverified
58:28
Mayor, how many city employees do you have? I got three full-time for the streets and two part-time in the summer when the grass started growing. That's how
Speaker 211
58:38
many I have. Do you have a police force?
Representative Cameron Cooper
Unverified
58:44
I've had two or three of them since I've been there. The last one, I got one now where I got three full-time officers and then I had two full-times
Speaker 169
58:56
and one part-time, one auxiliary. But I try to keep at least two in
Representative Cameron Cooper
Unverified
59:05
auxiliary for the town. So three full-time employees in streets and three full-time police officers, is that right? And we don't never
get to three until some altercation start going on. And, you know, then I'm hiring some more officers to help out with the city. Because, you know, this mother had a shooting down there, killing. And that's what made me hire the other officer down there for some help.
So what is your total salaries for the city employees per month? Do you have that figure? Do you have that figure
Speaker 191
59:39
with you? I can say on yesterday when it was payroll and it was like $18,000 for the whole payroll.
Representative Cameron Cooper
Unverified
59:46
And was that for two weeks or? For two weeks, yes. $18,000 for two weeks. Yes, sir. And then you have five
council members? Six. Six, okay. What's their monthly salary?
$200 a month. Okay. and then mayor and your position that would round out
Speaker 191
1:00:11
the the entire then we have up the the water clerk which she's also the recorded recorder and we have the water department as well
Representative Cameron Cooper
Unverified
1:00:21
okay do you happen to have the figure on what the entire city including elected officials what that monthly salary
Speaker 191
1:00:28
would be when in including the council usually all right so this the payroll on yesterday
It was a tad bit much because it was some overtime for us, the officers, like the police officers had a little overtime. So usually with the council, it's usually maybe like $14,000 a month, maybe $14,500 a month total. For all elected officials and employees? But the payroll a
Representative Cameron Cooper
Unverified
1:00:55
minute ago you said was $18,000? Yes, I said because it was overtime. The officers
Representative Cameron Cooper
Unverified
1:01:06
It was a little more. Okay. So average per month, your entire city workforce and your elected officials? I would
Speaker 191
1:01:16
say 14-5. 14-5, okay. That's every two weeks. That's not a month. That's every two weeks.
Representative Cameron Cooper
Unverified
1:01:22
I'm sorry, every two weeks. That's 14-5 every
two weeks. That would be every two weeks. Yes, sir. So you're right at $30,000 a month. So $360,000 a year on your annual budget.
Speaker 44
1:01:41
Okay. Other questions? Oh, come on, folks. Well, yes, ma'am. Thank you, Mr. Chair. How
Representative Joy Springer
Unverified
1:01:58
much income are you getting on a monthly basis to cover that? Old
Speaker 190
1:02:04
money coming in and then the money we get from the state
Speaker 191
1:02:12
I would roughly I would say maybe 30,000 because I think when we get the turn back money 30 maybe 30 I'm going to say $33,000 because turn back, I think it's usually like $8,000 for the general
Speaker 198
1:02:27
and maybe like $3,500. It may be more than $30,000, maybe $40,000, I'll say. Oh,
Representative Joy Springer
Unverified
1:02:32
okay. So you all are barely making it then. I see. So you need to find some places.
Representative Springer, I believe staff can help answer that question. Okay.
Speaker 245
1:02:43
Mr. Archer. General Fund's annual revenues for 2025 were just roughly
Speaker 222
1:02:47
north of $500,000 as well as their expenditures. So about $500,000, you divide that out, it's about $42,000 a month total each way. Okay. No, sir.
That's just general fund. Other questions? If not, the Chair would entertain a motion to file this report. Representative McElroy makes a motion.
Is there a second? Representative Duffield has a second. All in favor say aye. Opposed? Report will be filed. Thank you both for coming. We appreciate your candor and your service. And ma'am, I wish you a great retirement when your successor fixes everything. I appreciate it. Every time
Speaker 162
1:03:34
I come up here, I get one more trip before I get out of here. Thank
Speaker 6
1:03:44
you. Number three. Yes, ma'am. Back to our deferred reports on page three.
We have the City of Falk 2024. Under the mayor, I think we've covered his lack of water report. We'll skip that one. The government body did not document the review of the prior report and accompany comments at the first regular scheduled meeting following receipt of the report as required by code. And the street fund disbursements exceeded budget appropriations by $27,000 in noncompliance with code. Both of these are repeat findings. Did the mayor leave? No. Okay. Well, staff still recommends we file.
Speaker 35
1:04:20
I think he answered the most, as far as staff's concerned, he answered the most important question. But that'd be at the will of the committee, whether we file or... Without objection, we'll file
Speaker 6
1:04:33
that report. Okay. On number five, on page five and six, we have the town of Mount Vernon, 2024.
Speaker 24
1:04:43
Mayor Jonathan Hawkins was invited here today. He had a conflict and asked that he be deferred till the September meeting.
Staff recommends that we defer. Without objection, it'll be deferred. Boy, September's
Speaker 6
1:05:01
going to be fun, y'all. Y'all don't want to miss it. On pages 7 and 8, we have seven private water reports that we have yet to receive proper responses for. Those would be Highway 4 and 24 water, McRae Municipal Water for 24, Van Buren County for 24, West Saline for 24, Western Grove for 23, and Wilmar for 23 and 22.
Staff recommends that we defer these reports until the time we get a proper response. Without objection, they'll be deferred. On page 7, we have Montrose Water and Sewer Department 2024, which is a private report. Just this week, we received a proper response to them. Staff recommends that we file this report. Without objection, it'll be filed.
Okay, on pages 9 and 10, we have one report that was referred to the bonding board. I was certified as a bonding board and referred to the prosecuting attorney and the attorney general's office. It was Phillips County 2024. County Judge Clark Hall was invited to be here today, and he called and said he had a conflict and asked that he had this report deferred until September. Staff recommends we defer this report. Well,
that's good, because I've got some questions for him, especially on almost $10,000 of prepaid phone cards.
But we'll ask the mayor when he gets here, or
the county judge when he gets here. Without objection, it will be deferred until
Speaker 6
1:06:43
September. On page 11, we have one report that was referred to the Attorney General's office, and it's Union County 2024. Again, on page 11, under the county clerk, a review of three months of credit card transactions made by the Office of the Prosecutant Attorney revealed just over $1,000 in snacks and other food-related items purchased for the PA's office staff
and parent conflict with Article 12, Section 5, as interpreted by Attorney General Opinion 91.410. Additionally, due to delay in receiving documentation from the prosecutor's office, the county incurred late fees and interest of $100. Again, this fine has
Speaker 23
1:07:19
been referred to the Attorney General's office. If there are no questions, staff recommends that we file this report. Without
Speaker 17
1:07:27
objection, it will be filed. Starting
Speaker 6
1:07:36
on page 12, we have 20 reports that were referred to the prosecuting attorney in the AG's office.
Starting with the city of Crossett, 2024, under the clerk treasurer, on May 31st of 24, the city discovered that an employee's payroll direct deposit had been fraudulently diverted to another bank account after the employee contacted the city about not receiving the payroll direct deposit. It was determined that the city made a direct deposit change after receiving the e-mail request that appeared to be from the employee's e-mail without verifying the authenticity of this request. The transaction resulted in a loss of just over $3,000 to the city.
Again, this finding has been referred to the PA and the AG. There are no questions. Staff recommends we file this report. Without objections, we'll file the report. Continuing on page 12, the city of Fairfield Bay, 2024, under the mayor and recorder treasurer, The city expended just over $2,800 for a catered meal not associated with city business. An apparent conflict with Article 12, Section 5, as interpreted by AG's opinion 91-410. This finding has been referred to the PA and AG.
Staff recommends that we file this report if there are no questions. Without objection, it will be filed. On pages 12 through 18, we have the city of Helena, West Helena, 2024. Treasurer Derek Turner and Clerk Sandra Ramsey were invited here today. Both called and said they had transportation issues and requested that we defer this report. There are no questions. Staff recommends
Speaker 24
1:09:09
we defer. Like I said, September is going to be fun. Get your tickets early.
Without objection, this will be deferred until
Speaker 6
1:09:25
September. Page 19 of Jefferson County 2024 under the county judge. During the review of contracts and bids, we noted the following. Competitive bids were not solicited for resident trash services as required of Arkansas Code. The county contracted with the company through December 31st of 2024 under a five-year contract that had been extended multiple times since 1994 with the option to renew.
On December 5th of 2024, the contract was signed with a new vendor to begin service on January 1 of 2025. A emergency order, court order, was issued for this contract on December 10th of 2024. The emergency order being prepared after the contract appears to be in conflict with Arkansas code. Bids were not solicited for county road trash cleanup services totaling $68,000 in noncompliance of code. Competitive bids were not solicited for the construction project for a road department in the amount of $178,000 in noncompliance of code.
Speaker 24
1:10:30
The county did not report the disposition of a county-owned building to the Quorum Court as required
Speaker 6
1:10:37
in the Arkansas Code. Additionally, although bids were advertised for this project, it was only published in the newspaper one week in noncompliance for code. Furthermore, the scope of the work performed was not in accordance with the bid requirements advertised. On February 10th of 2021, the county paid over $305,000 for the installation of solar panels on three county buildings.
Speaker 24
1:11:03
As of the report date, the panels have not been installed in noncompliance with Article 12, Section 5.
This is a repeat finding. Hold on a minute there, Joe. It's a repeat finding that
Speaker 273
1:11:20
they didn't... Is this the same installation? Yes. Okay. It
Speaker 274
1:11:24
sounds like they didn't pay, and then they had another installation. No,
Speaker 275
1:11:29
sir. It's the same transaction. Okay. All right. Thank you.
Speaker 6
1:11:33
Please continue. Continuing on page 20, the county provided catering services for 100 meals at $15 each, plus additional meats and fees for a total of almost $3,000 for a road department safety meeting. The sign-in sheet provided, listed 45 attendees, some of whom were neither road department employees nor county employees. It should be noted that 39 individuals are paid from the road department during 2024. Under the county judge and the county clerk, Arkansas Code requires management to maintain adequate financial records.
The financial statement contained misclassifications of county judge expenditures totaling almost $900,000 in noncompliance with Code, which requires county management to maintain accurate financial records. The effect of these errors constitutes a controlled deficiency in the process of preparing financial statements. Records were not adequately maintained or filed in the county clerk's office in noncompliance with the Arkansas Code as follows. Lease purchase agreements and service contracts entered into by the county judge
and documents pertaining to bids were not filed with the county clerk. contract for Mack trucks was awarded and payments were made prior to issuance of court approval this is a repeated finding I have a
question on that Mr. Archer of course the county judge the county court makes can of course this has to do the road department I presented so the quorum court doesn't have to act on that that's simply within the purview
of the county court is that correct
Speaker 116
1:13:15
yes okay county judge has authority to enter into contracts on behalf of the quorum court within certain frequencies because and
Speaker 6
1:13:25
please continue on page 21 under the sheriff county policy requires an employee to work continuously for the county for one year or more to be eligible for vacation leave payout at resignation during our examination the leave payout we noted that two sheriff department employees were hired, resigned, were rehired, and resigned again were paid for vacation leave upon both
resignations, even though neither had worked continuously for one year for the county at the time of the resignations. As a result, overpayments of these individuals totaled just over $1,000 and
Speaker 100
1:13:59
just under $2,000 for the years ending December 31st, 2025, and 2024, respectively. County
Speaker 24
1:14:07
Clerk Shawanda Taggart was invited here today to answer questions. Okay. Ms. Taggart,
do you want to join us?
Please sit and introduce yourself to the record. And gentlemen, please, you do the same thing.
Speaker 281
1:14:31
Good afternoon. I am Shawanda Taggart, Jefferson County Clerk.
Speaker 282
1:14:35
Lloyd Franklin, Chief of Staff, to the new county judge, Ivan Whitfield. He's here also. Okay, so the judge
Speaker 284
1:14:42
is here. He is here. Okay. Oh, the new county judge. Okay. The new judge. I know,
ma'am. Give me a second for it to register.
And you came, I believe, judge in July. Is that correct? July 1st. Okay, all right. Thank
you. Okay. Go right ahead, ma'am. I'm sorry. Can you? Um, yes, yes, that's okay.
Okay. Well, let's judge. If you'll also introduce yourself and we'll, we'll share the mic as it works out. I'm Ivan Whitfield, the interim County judge, Jefferson County.
Speaker 287
1:15:14
Okay. Thank you, judge. All right. Ma'am, you're recognized. So my office does have
Speaker 283
1:15:19
policies and procedures and my deputies are aware of that. This particular deputy chose to, well, I guess was basically to me corrupt and follow the judge's lead and did what the judge told her to do. But we do have policies and procedures.
Speaker 288
1:15:34
the previous judge yes the previous judge sorry judge we'll keep
that straight thank you it has been resolved i've
Speaker 281
1:15:40
gotten rid of that employee and the judge hired her okay all
right well we had a lot of things here committee questions representative cooper looking back
Representative Cameron Cooper
Unverified
1:15:55
on looking back on page 19 on these solar panels uh the county paid three hundred and five thousand dollars for installation of solar panels on three county buildings and that was
february 10th 2021 so that's been five and a half years ago and the panels are not installed can y'all let us know what happened did
that company go out of business
Speaker 282
1:16:20
what what exactly is going on with that so that was uh it was actually a self-reported finding uh when i was on the quorum court 2024 we reported that the legislative audit that the solar panels had not been installed I do believe that last year during the audit reportings here at this committee had the same findings and they referred that particular finding to the AG's office and the prosecuting
attorney. So this is just a repeat finding that we still have not resolved the issue. They're not there. But I think that's currently in the hands of Ms. Special Prosecutor Gina Sharrell in the AG's
Representative Cameron Cooper
Unverified
1:16:56
office. Okay. The city did pay the $305,000, and there's no solar panels, correct? Correct. County,
I'm sorry. Yeah, yeah. So staff, do you have any idea on what's going on with that? There
Speaker 23
1:17:07
was a contract. It was part of the building, those three buildings, if I remember correctly.
And again, Mr. Franklin is correct. They did notify us of that. And we're carrying it forward because it is an open investigation and it is, you know, such a large amount of asset that's missing. But they're not there as of the report date. We check every year to see if they've installed them
yet. So there's no solar panels in any of these three buildings yet? Still no
Representative Cameron Cooper
Unverified
1:17:39
solar panels. Okay. And the prosecuting attorney is investigating that? Is that correct?
That is correct. Okay. Thank you. Okay, other questions? don't anybody jump in at once mr. archer are there other items we need I mean shall we file this
Speaker 17
1:18:03
report that's for the recognition of the staff just
to file the report okay without objection we will file the report appreciate the three of you coming thank you for coming to Lowry thank you so
Speaker 6
1:18:14
much continuing on page 22 we have montgomery county 2024 under the county judge the county donated 19 000 from latc funds to local non-profit organizations in a current an apparent conflict with article 12 section 5. there are
Speaker 17
1:18:32
no questions staff recommends that we file this report i
have a question yes sir what is a local assistance
Speaker 24
1:18:49
those are one of the arpa funds arpa funds ah that's the proper name for
Speaker 303
1:18:58
arpa funds oh okay come of this second i think there's a second go around of them all right i think that was
what the second version of opera funds was entitled well they changed these names and it gets me very confused I'd just
Speaker 88
1:19:11
get used to one name and then there's a new one. But anyway, okay. All righty. With that
Speaker 6
1:19:17
objection, we'll file that report. Continuing on page 22, we have the Hope, Water, and Light Commission 2025.
This is a private report. The Hope, Water, and Light Commission spent over $5,100 that failed to satisfy the legal criteria for a valid public purpose in compliance with the Arkansas Public Purpose Doctrine. These items consist of employees' hams, turkeys, other food for Thanksgiving, Christmas, and other events, corporate dues, bereavement flowers, and gift cards for employees' appreciation. This report had been filed to the prosecutor and attorney in the AG's office.
There are no questions. Staff recommends we file
Speaker 17
1:20:00
this report. Without objection, it will be filed. Page 23 of the City of Dequeen, 2025.
Speaker 6
1:20:05
The mayor, the city donated $25,000 each to the Cosatoc Community College for soccer field improvements and the Severe County Chambers of Commerce for mold removal in apparent conflict with Oracle 12, Section 5. This finding has been referred to the PA and the AG. If there are no questions, the staff recommends we file this report.
Mr. Archer, when it says soccer field, who owns the soccer field? The college. Okay. Hustak Community College. Okay, all
Speaker 305
1:20:35
right, thank you. Without objection, it will be
Speaker 6
1:20:38
filed. Continuing on page 23, the city of Hutted, 2024, under the mayor and CFO, the elected recorder treasurer resigned her position as office manager on June 30th of 2024 and was paid over $2,000 in unused vacation. Leave records were not maintained, so we were unable to verify the validity of this payment.
Subsequently, she received a $700 bonus that was not appropriated for her elected position. This report's been filed with the PA and the AG. There are no questions. Staff
recommends we file this report. I have a question. It said she's an elected recorded treasurer but resigned her position as office manager. Are those not one and the same? Basically, did she say I give up this work as office manager that she's paid for but remained as recorded treasurer?
Speaker 26
1:21:32
If you don't know, it's perfectly okay. I'm not 100%
sure, but that is my understanding. Two separate positions. Okay, that does answer your question. We'll just
Speaker 33
1:21:48
presume that's correct. Any other questions? Without objection, it'll be filed. Tenure on page 23, City of Reno, 2025, under the Mayor
Speaker 6
1:21:56
and Recorder Treasurer. On June 18, 2025, an unauthorized withdrawal of $40,000 was made from the city's bank account to a former employee's personal account.
Allegedly, after this individual's account was compromised, the individual discovered the unauthorized withdrawal and notified the bank and the city officials. Funds were recovered from the bank the same day. This report was referred to the prosecutor and attorney to the AG's office. Staff recommends we file this report if there are no questions. So
the employee was not, was a victim and not a perpetrator. Is that fair to say, Joe?
That's the story we've got, yes. Okay, all
Speaker 309
1:22:42
right. Prosecutor will work that out. This is called
Speaker 118
1:22:44
passing the buck, friends. They got their money back, so we didn't dig too deep. Okay,
Speaker 263
1:22:49
well, that's good. Without objection, that'll be filed. Let's go
Speaker 6
1:22:54
on to page 24 of the city of Rockport, 2024, under the mayor. In March of 24, the city disbursed $5,000 to the police chief, who stated this amount was for comp time earned.
However, the city does not have a policy regarding paying officers for comp time. The police chief's comp time balance decreased in March of 24 after the city dispersed payment and returned its prior balance in April of 25 after the police chief reimbursed the city $5,000 in cash, which was deposited in general fund. City personnel indicated that the mayor and a council member authorized the payment to the police chief. However, authorization was not documented in the council meeting minutes.
Transaction appears to be in conflict with Article 12, Section 5, which prohibits cities from loaning credit to individual. A review of disbursements revealed that supporting documentation was not maintained for the following disbursements in noncompliance with the Arkansas Code.
Speaker 100
1:23:56
Just over $3,800, or 12% of disbursements in 2024, due to the lack of documentation, the validity of these disbursements could not be determined. This is a repeat finding.
Um, Mr. Archer, it appears that this, because comp time is what you get. You don't get overtime, you just get additional time off. That's what comp time means to me. Maybe I'm missing something. It sounds to me like, uh, this was a, it appears to be basically
a short-term loan, interest-free. I mean,
I'm going to be missing something.
Did I miss something? Would that be a plausible
Speaker 35
1:24:45
presumption? We referred that to the prosecuting attorney in the AG's office, and that's their job
to make that attorney. Okay, well, it prohibits cities from loaning credit to any individual, so we'll let them figure that one
Speaker 6
1:25:03
out. Okay, without objection, that will be filed. Page 26, we have Miller County, 2024. Under the county judge, during our examination of construction contracts, we noted the county did not comply with requirements contained in Arkansas Code.
Contract for re-roofing the Miller County Health Unit was executed prior to the county advertising for bids. Although the court order was issued explaining why the company was awarded the contract, it should be noted this company was the highest bidder. Bid documentation for the Miller County Health Unit office renovations could not be provided for the company that was awarded the contract. Three of the nine contracts reviewed were awarded based on quotes received prior to the county advertising for bids.
Additionally, eight of the nine contracts reviewed were not recorded by court order or filed with the county clerk as required by Arkansas Code. under the tax assessor. Using a county vehicle, the county assessor drove 949 miles for a personal vacation in June of 2024. According to AG's opinion 2000-243, the personal use of a county vehicle is permissible only when it is incidental to the use that fulfills a public purpose.
$336 calculated using the IRS standard mileage rate was not included in the assessor's wages or reimbursed by the assessor for this trip, as outlined by IRS Publication 15B. Additionally, the assessor acknowledged that the county vehicle does not display the Miller County seal as required by county policy. Both of these findings were referred to the prosecutor and AG's office. If there are no
Speaker 17
1:26:47
questions, staff recommends we file this report. Without objection, it's filed.
Speaker 6
1:26:56
Okay, on page 27, we have three private reports, all three for the City of Carthage Water Department for 24, 23, and 22. All three contain findings that have been referred to the prosecuting attorney. The 24 report found no documentation relating to three separate employees reimbursement and mileage reimbursement. The 23 report, the receipt reports maintained by the water department do not agree with daily deposits for cash check.
The 22, the receipt reports, that would be the same finding in 23. We have not received a response for these findings yet. Staff recommends we defer this until which time we can get responses. Without objection, they'll be deferred. Page 28, we have a case of water department, 2023. This is also a private CPA report. We noted that the employee received a supplemental health insurance payment
as a reoccurring basis for which management could not locate documentation specifying the terms of the agreement. The mayor signed each of the checks to the employee, which totaled $4,000 in 2023. This finding has been referred
Speaker 17
1:28:14
to the prosecuting attorney in the AG's office. If there are no questions, staff recommends we file this
Speaker 6
1:28:27
report. Without objection, it will be filed. The HAC Regional Wastewater System 2024, also a private report.
There was no supporting documentation for an official check in the amount of $9,200 withdrawn from the Depreciation Reserve Fund. For a conversation with the manager, this was the purchase of a mower to maintain the sewer plant property. This finding has been referred to the prosecutor in the AG's office. The Honorable Questions staff recommends that we file this report. Without objection, it will be filed. The Leola Water and Sewer System 2025, another private report. The following five deposits did not agree with the corresponding daily receipt reports.
These five deposits totaled just over $40,000. this fine has been referred to the pa and the ag there are no questions staff recommends we file this report the objection will be filed magazine water and sewer department 2024 another private report three of the payments selected reported on the billing payment report could not be traced any deposit cash or check credit card or draft bank draft resulting in an overstatement of these
payments according to the billing records. Further review indicated that a reoccurring shortage of bank deposits as compared to payments recorded in the billing account. This finding has been referred to the PA and the AG. Arnold Questions staff recommends that we file this report. Without objection, it will be filed. Magazine Water and Sewer Department 2023, another private report. We did find exceptions as a result of these receipt procedures. Those procedures in question would be the check cash composition test, tracing receipts to deposits, and agreeing
the proof to the cash receipts journal. These findings have been referred to the prosecutor and attorney in the AG's office. There are
Speaker 17
1:30:21
no questions. Staff recommends we file this report. Without objection, it will be filed. The Norman
Speaker 6
1:30:29
Water and Sewer Department 2023 is a private report. We have not received a proper response from norman yet uh staff recommends we defer this report without objection it will be deferred on page
Speaker 35
1:30:48
29 we have eight reports that have repeat findings starting with the city of
Speaker 6
1:30:53
dermot 2024 under the mayor accounting procedures for municipalities are set forth in the municipal accounting law, Arkansas code annotated 1459-101-119. The county was in noncompliance with these codes and other proper accounting procedures as noted below. The bank reconciliations were not approved by a municipal employee or official other than the preparer. Bank reconciliations were not properly prepared for three accounts.
Adequate supporting documentation was not provided for six out of 60 tested disbursements, totaling $13,000 or 5% to vendors that appear to be for legitimate business purposes. Prenumbered checks were not always issued in sequential order. Cash receipts and disbursement journals were not properly posted. Financial statements and council packets were not always provided to city council members on a monthly basis. A lack of management oversight permitted these instances of noncompliance with municipal accounting law and proper accounting procedures.
The effect of not following municipal county law and proper county procedures precludes management from making appropriate, informed decisions on behalf of the city. This is a repeat finding in the previous three reports. The city paid a total of just over $1,000 for late fees and conflicts of the public purpose doctrine as discussed in Attorney General's Opinion 91-14. This is a repeat finding in the previous two reports. Check image provided by the bank. We're not in compliance with Arkansas code for one fund.
This is a repeat finding the previous two reports. Mayor, Walter Jordan is here today to
answer questions. Mayor, can you come forward and introduce
Speaker 314
1:32:45
yourself for the records? Name is Walter Jordan, Dermott,
Arkansas. Mayor, I had a quick question about that last issue on the checks. Now, that's something that the bank does
in your statement as far as the copies.
Has that been rectified by the bank? Yeah, that's been rectified. Okay. Other questions for Mayor Jordan? Okay. the staff recommends we file the report without objection it'll be filed mayor thank you for coming to speak to us is that it yes sir thank you thank you now you know that was worth the
drive up here you'd be safe going home drive was fine but then woke up that heel
Speaker 136
1:33:39
Uh-oh. All righty. That's how I learned it last. On page
Speaker 6
1:33:43
31, continue with reports with repeat findings. We have Stone County 2024 under the county judge and county circuit clerk. Appropriation ordinance approved by the courtroom court were not properly posted to the appropriation journal in noncompliance with the Arkansas Code. This is a repeat finding.
Speaker 24
1:34:03
County judge was invited here today, but he had a meeting so he couldn't attend. but County Circuit
Speaker 140
1:34:10
Clerk Angie Hudspeth is here today to answer questions. Hubsteth,
excuse me, Polly Stills, ma'am. Welcome, ma'am, and turn your mic on
Speaker 319
1:34:22
and introduce yourself to the record. Angie Hudspeth-Wade, County and
Circuit Clerk in Stone County. Okay, please
Speaker 319
1:34:30
proceed, ma'am. You have a statement. um i had uh the same findings similar for two years in a row um i had three employee three
different employees at that desk from 2022 2023 and 2024 um and i take responsibility my training should have been better um it's is what it was is i don't know if y'all are familiar with entering transfers versus appropriation ordinances but in my system if it's a transfer you enter from a line item to a line item or if it's just an appropriation you don't put anything in from
you just put it to to where the money is getting appropriated and I had some issues with them getting put on the wrong, whether it was to or from, and like I said, I had different employees, but it was my responsibility for the mistakes, and I have went over 20, 25s already, and I'm retiring at the end of this year after 30 years. This is my first time to be here, but I got to take my mistakes, and I'm going to try
to make sure that for the next person that it doesn't happen again. So
you've been in that position for 30 years and this is the first time you had
Speaker 319
1:36:01
to come up here. I've worked in this office for 30 years yes and this is my first time. That may be a record. And December 31st I'll be retiring so I'm excited about that. We should invest
in retirement and I assume that the procedure's in place to keep this from recurring. It is
yes sir. Great thank you ma'am. Any questions by the committee. If not, we'll file this report. No bad objection. Thank you, ma'am, for coming
Speaker 319
1:36:28
and happy retirement. Thank you. And real quick, like you said, my county judge is at the meeting in Hot Springs. Will somebody, I did talk to my leg audit people about whether him not coming or not. Will somebody let him know if he still needs to come at the next meeting or how will we know that they they voted they
Speaker 222
1:36:48
filed the report and since it was a joint finding we're going to let you take full responsibility
Speaker 319
1:36:53
and i and it was not his fault as bad as i hate to admit it he except for being the administrative part it was not his fault so
Speaker 212
1:37:07
doesn't get another letter he won't be required to come okay thank you next time we'll
Speaker 321
1:37:11
put it on him because you won't be okay all right
Speaker 6
1:37:17
thank you actually he's retiring okay all right thank you ma'am okay on page 32 the town of case of 2024 under the recorder treasurer county procedures from municipalities are set forth in arkansas code the town is in non-compliance with these codes and other proper county procedures is noted below
fixed asset listing was established but records were not updated cash receipts journals were not properly maintained and there was no reconciliation uh and not really reconciled to total deposits for the general fund street and fire funds this is a repeat finding they have a new recorder treasures the staff recommends that we go ahead and file this report without objection it'll be filed moving over to page 34 we have the city of ghoul 2024 under the mayor bank reconciliations were
not approved by municipal officer official or employee other than the person preparing the bank reconciliation non-compliance Arkansas code is the repeat finding dating back to 2017 mayor Hazel Pruitt is here today to answer questions welcome mayor please identify yourself for
Speaker 323
1:38:27
the record Hazel Pruitt Mayor of Gould Arkansas
Speaker 324
1:38:32
can you hear me okay yes ma'am we were cited the clerk the
Speaker 323
1:38:46
clerk that uh did this these reports she's no longer there we have a new clerk and she was a former city council members and the records the minutes are being kept she's getting them completed in a timely manner and then the recorded treasure that was there they got us into this and I did too because I didn't
know what was going on. They broke that record a treasure thing up and they hired a bookkeeper and she's experienced, her name is Alicia Huggins, she's experienced in government procedures because she's been working for Star City a long time and we're hoping that to stay on top of this that we we can correct this problem. That's all I got unless you got something else you
want me to address. So you've got someone now that's straightened
Speaker 323
1:40:04
that out then Mayor? Yes. Ms. Alicia Hawkins she's been working at Star City Bookkeeper Recorder Treasurer for a long time and they hired her. Good. Any other
questions for the mayor if not the objection
we'll file the report thank you mayor we appreciate you coming up here thank
Speaker 5
1:40:24
you ten you know page 34 the city of Park
Speaker 6
1:40:29
Dale 2024 mayor Latrice Taylor were invited here today she was having some transfer transportation issues today staff recommends we defer this report if she can be here. Without objection, it'll be deferred. On page 35 and 36, we have the town of Wabaseka, 2024. Under the mayor, an audit agreed upon procedure report has not been obtained for the town's water and sewer system for the years 2016 through 2023 is required by code.
We actually received this report on June 3rd of 2026, so that one's been taken care of. Under the record of Treasurer, accounting procedures for municipalities are set forth in the Arkansas Code. The town was in noncompliance with these codes and other proper accounting procedures as noted below. Cash receipts and disbursement journals were not properly maintained for all funds. Bank reconciliations were not properly prepared for two funds. Bank reconciliations were not approved by someone other than the prepare for two funds.
Receipt books were not properly maintained for all funds. Invoices and supporting documentation were not maintained for disbursements of $831. Due to the lack of documentation, the validity of these disbursements could not be determined. Numerous disbursements were made by debit card rather than pre-numbered check. Electronic disbursements were made without proper approval by the town council by ordinance and without establishing their written policy and procedures.
Speaker 24
1:42:06
Checks did not contain the signature of two authorizing dispersion officers. This is a repeat finding
Speaker 6
1:42:19
back to 2007. So that's 19 years. On page 36 on the mayor and the court of treasurer, the following payroll issues were noted. Town failed to remit payroll taxes for a reporting period dating back to 2015. The review of IRS notices indicated unpaid federal payroll taxes, penalties, and interest totaling $267,000, consisting of $167,000 for the town and $90,000 for the water department at the end of 2024.
The town met with IRS on September 9, 2025, and is in the process of setting up a payment plan. This is a repeat finding for the previous 10 reports dating back to 2012. IRS Form W-3 and Quarterly Payroll Reports 941s were not in agreement. Although Schedule 1 of this report shows an ending general fund balance of $2,200, a review of records revealed that the town owed significant amounts to the IRS. Furthermore, IRS quarterly tax payments were not paid for 2024.
As shown in Note 5 on Schedule 3 of this report, when the outstanding amount is considered, The General's Fund has a deficit fund balance of over $174,000 at the end of 2024. This is a repeat fine in the previous five reports dating back to 2018. Mayor Andrew Goodloe and Recorder Treasurer Jennifer Moore are here today. If y'all would please come forward.
Speaker 165
1:43:57
All right, welcome. Please introduce yourselves for the record.
Speaker 328
1:44:06
Andrew Goodloe, Mayor Wabaseke. Hey ma'am. Jennifer Moore, Recorded Treasurer for the City of Wabaseke. Thank you both. I see
here it says that you've been working with Congressman Westerman's staff, and I know he will help you as he can, but you know, he can't write a check for Wabaseke. Y'all got to come up. Where do y'all stand on that with the IRS?
I mean, of course, we at the state, we can't do anything. You got to work it out with them. Can you tell us
Speaker 329
1:44:41
where you are on that right now? Well, as of the first, last of what, August, July, We received information from the staff at IRS, from Mr. Jimmy Clark, and we're working with him to get the documentation back into him that we had been missing.
And we got until the 22nd, I believe, of August to get everything back into him to be in compliance with them. And then at that time, he would set up a payment plan for us. once we get out of documentation
back in. Okay. Mayor, Senator Hammer has a question. You recognize, Senator? Thank you.
Senator Kim Hammer
Unverified
1:45:26
And thank y'all for being here today. We appreciate your presence. Just curious, did you inherit this? How long have you been mayor and did you inherit this or has this occurred under your watch?
Speaker 329
1:45:38
I was elected mayor in 2023, January. Start serving January 1st 2023 the majority of it. We inherited and once we got To knowing how to and to make this process We start making payment plans and we haven't missed one since so we are current with as of now Like I said, we hadn't missed one since we start
Doing the payroll taxes and stuff. Once we got it all mapped out and whatever, we're now making them on time every two weeks now. One
Senator Kim Hammer
Unverified
1:46:21
thing it seems to be consistent in here
today is a lot of these IRS problems have been inherited because of previous administrations' actions, and I don't know, just wanted to bring that out. It seems like there's a pattern of inheriting the predecessor's mistakes.
That may not be 100% against everything. And when you talk to the IRS, and I'm curious, and maybe staff can wear it, I don't know. So I'm asking, what's the
IRS threaten you with if you don't pay the back
Speaker 329
1:47:02
taxes? What do they threaten you with? Well To means to being I Think they used to wait your land
property whatever property season your property Not able to sale and also not able to apply for Certain grants and loans But as long as you're under a payment program That you're you're
Senator Kim Hammer
Unverified
1:47:27
not under the threat of that My understanding that long as you're on the payment plan you won't be
Speaker 329
1:47:34
threatened with that. Okay. All right. Thank you all for being here today. Thank you
Representative Wright, do you have a question? Yes, I do mr. Chairman
Representative Johnny Rye
Unverified
1:47:47
recognized. Thank you, sir sir, this 267 516 Are y'all paying month by month the way that we're supposed to pay and
then are you going back and paying a certain amount on the whole bill? We
Speaker 328
1:48:06
because we hadn't been set up on the payment plan yet But we pay bi-weekly now, but y'all are working toward that I guess
Yes, okay. Thank you. Thank you. Mr. Chair. Thank you. Senator hammer. You got
Senator Kim Hammer
Unverified
1:48:21
a follow-up question Thank you. And I want to direct this to staff. And I asked you a question a while ago about, and I forgot what city it is, it doesn't matter, that the mayor was straightening, I do remember what city, I just don't want to call their name out, that they were working on straightening out what they had inherited. Right. But when a previous administration, whether that be the mayor or the city council,
like in the case of what we heard a while ago, the mayor recommended that that money be paid down because that should have been money that should have been paid in the first place. So that means that those employee taxes were taken and used for something else. Do you have a history of that being turned over to the prosecutor? And that was turned over to the prosecuting attorney,
Speaker 104
1:49:11
is that correct? Probably would not have been unless we could
Speaker 17
1:49:15
track that those funds were spent on something that the law didn't allow.
Most of these cities that do this, they're keeping this money to operate on. They're paying the actual salaries, they're paying the utility bills. It's what we see, these funds. If there were some sort of
Speaker 222
1:49:32
fraudulent activity, we'd report that in a different finding that would have been referred
Senator Kim Hammer
Unverified
1:49:38
to the prosecuting attorney. Are you aware of any law on the book that prohibits a city from redirecting money that was collected from employee taxes to be spent on anything else?
Speaker 17
1:49:51
Is there a law on the book that prohibits them? I'm not aware of a state law, no, sir, because those taxes are withdrawn based on federal IRS regulations. So that would be where that would fall, I would think. Don't know that
Speaker 338
1:50:06
for sure, but that would be a IRS audit, payroll audit. But that
Senator Kim Hammer
Unverified
1:50:11
only applies to the federal employee taxes withheld. What about the DFA, the money that's remitted to the state for the state withholding? This finding
Speaker 23
1:50:18
doesn't mention any of that. This is all IRS findings.
We must have record of them paying those to state taxes.
So you would presume, Mr. Archer, that they remitted the state withholding to DF&A but did not remit the federal withholding to the IRS. Is that at least a presumption? We did not draw an
Speaker 7
1:50:37
exception to that in our findings. But you would
Senator Kim Hammer
Unverified
1:50:42
We have in other instances, yes. Okay, so all these conversations we're having today about the IRS, and refresh my memory, I guess I don't remember anything involving the state withholding
that would have been paid to DFA. So they're paying to the state, but they're not paying to the IRS.
Speaker 23
1:51:00
Is that right? In Wabasika's case, yes. One of the other findings today, we did mention some DFA payments. I'd have to go back and look which one it was. One of them we did also have made note of that. So
Speaker 12
1:51:13
if we did note it during our review, we would
Senator Kim Hammer
Unverified
1:51:16
note the difference in the two. But there's no law in the books that says that they can't use, they are prohibited from using money that's collected from employee taxes
for other purposes at the DFA level or the IRS level. Not that I'm aware of. That might be a good piece of legislation. I think you're right, Senator. I appreciate your point. Because that would keep you guys from inheriting a mess. If there was a law that said you can't redirect those funds because those funds were paid by those employees and paid by the city. And you other folks weigh in on this if you want to. But that would prohibit, like, your generation from inheriting the sins of previous generations that didn't use that money.
And I get it. Small towns, one grocery store, one restaurant, I get it. But it's also not right to those that are coming behind to have to inherit and pay off somebody else's debt that was correct because they didn't solve the problem some other way. So, wouldn't you agree? Thank you. Absolutely. Did you have
another question, Representative Wright? Mr. Chairman,
Representative Johnny Rye
Unverified
1:52:21
I do. You know, if you go back and look at the process that we have been going through, if there was any money out there, you know, we always made sure that the road money went to the roads.
And we've had a whole lot of that that's happened. Now, do you see anything that's kind of comparable with what we're going through here compared to that situation with the road money that actually was probably put over in the general fund? and it may have been spent for
something worthy. I mean, I don't know. Are you directing
that question to the chair? Yes, sir, I am. I'm not 100% sure, Representative Frye, but I do see a pattern
of basically, and private companies and individuals do the same thing.
It appears that these cities are basically have
a cash flow bind and they're borrowing from one fund to cover the other with a certain hope of it being short term but just like when we do that as individuals we're sometimes you know there's a day of reckoning so I presume that we're seeing that and you're looking at the same thing I am but again as Senator Hammer is pointing out it's not right when you're using that employee
that was the employee's money that any employer whether it's a state or a private employer or our city, their responsibility is to remit that to the taxing entity. Or if they don't do it, they're in violation of at least the IRS regulations, if not federal and possibly state law. But we'll find out, Senator Hammer, if there's a state law that parallels that. And since you're not going to be around to help me next year with it, we'll have to figure out
how we're going to do that.
But I'll have Representative Rye here. Yeah, I'm with you. Representative Dovefield, and I know Senator Wallace will be with me on that. But you
Representative Johnny Rye
Unverified
1:54:23
know, Mr. Chairman, I think that was a good place to throw that in because, boy, those payroll taxes, that's a serious situation there, especially. The IRS looks at it that way,
is my estimation. Thank you, sir. Other questions? Staff recommends we file this report.
Staff has recommended we file the report without objection. It'll be filed. Mayor, ma'am, thank
Speaker 6
1:54:54
you all for coming today. We appreciate you coming up here. Thank you. On pages 37 and 38, we have six reports without proper responses. They would be the Lakeside Water Association 2025, Jefferson Public Water Authority 2025, Spartus Goose Camp Water 2024, Valley Springs Water 2024, Western Grove Water 2024, City of Wilmar 2024.
All of these are private CPA reports. Staff recommends that we defer these reports until which time we have a proper response. Without objection, they'll be deferred. On pages 39 through 46, we have 34 reports that have findings that have been resolved. Staff are at request that y'all take a few minutes and look at that. And if you have no questions, staff recommends that we file these reports.
Chair
Unverified
1:56:03
Mr. Chair, I have a question for Representative Dalby, you're recognized.
Representative Carol Dalby
Unverified
1:56:18
Thank you, Mr. Chair. Joe, you said that all of these have responses, but on page 39, right off the bat, the city of Stuttgart, there's a finding, but no response. garland county there's a finding and no response if it's underlined that means we had a proper
Speaker 23
1:56:37
response to it you just didn't know we don't we normally these we do not include in the report unless they're a repeat or a pa finding the indication by the underlying underlying of the finding the ones that we do include there are private reports if you'll see the uh the difference Stuttgart, we did, Garland County, we did, the City of Marion, we do not do, that's a CPA report. So
Speaker 7
1:57:05
we include their findings, their responses to the local, to the private reports, but not ours, we just underline them.
Has everyone had adequate time to glance at these? I'll hold on a minute or two if you want to
look at them some more. I have
a question, Mr. Archer, on page 43, with Salem Water Users Association, said that about uninsured cash balances. Could you explain that? That means there are
Speaker 23
1:57:40
funds that the bank were collateralized properly. They were over the minimum required by the, I mean, provided by the government.
Okay. All right. Thank you. Any other questions on these? Senator Hammer, you're right. So
Senator Kim Hammer
Unverified
1:58:01
that's like they have funds in a financial institution
that's above what is federally guaranteed by the government. Is that correct? That is correct, sir. Are they required as a result of this to get that money moved around to where they are, or how do you address that? Or
Speaker 17
1:58:17
they can get additional coverage from the bank. The bank will give them a certificate that says they move money within the bank to different institutions,
Speaker 23
1:58:25
and they provide them with that safekeeping receipt to show that it's put in other banks. That's normally the case. They don't really move the money. They can keep it all in one bank, but then they're supposed to ask the bank to move their assets around so that they're covered in other banks for the
Speaker 17
1:58:40
bank. Do you know if that was done in
Senator Kim Hammer
Unverified
1:58:44
this case, sir? Could you just offline, you can get it for me. Let me
Speaker 341
1:58:49
know, please. And that was, you said page 43. That's 43. Sale.
Speaker 141
1:58:55
please thank you we'll get there to you all
Speaker 347
1:59:03
right any other questions on these if not
Speaker 263
1:59:08
without objection we will file all of them okay we'll make some notes real quick okay
we'll want you to make sure you get
this down I hadn't thought about that but I guess you know you got a balance and you need to have it in an FDIC or equivalent insured financial institution and there
in the worst case scenario that money would be lost so this
Speaker 5
1:59:43
check that okay on pages 47 through 51 we have 155 reports that had no findings, staff recommends that we file
Speaker 17
1:59:52
these reports. Without objection, they'll be filed.
I'm done. You're done? I'm done. So we don't have anything on this
one? No, sir. Okay. my it's only 3 30 and i think we've actually may have gotten done
Speaker 337
2:00:27
any any other business or any questions or any other business
Representative Matt Duffield
Unverified
2:00:33
uh representative duffield uh thank you mr chair said a procedural question for staff um when this committee asks that a mayor or a member of any of these entities come before this committee how are they contacted and how soon in advance
they contacted before our meeting date. The Friday
Speaker 17
2:00:52
before, Tina, the Friday before they're mailed a
Speaker 35
2:00:55
certified letter. That same day I contact all the regional supervisors and give them a list and they contact each and every one of them personally if they, two weeks, two weeks,
Speaker 17
2:01:08
the Friday prior to, so two weeks out from tomorrow they all sent a certified letter and then we reach out to them through the staff at some point, and we try
until we contact them. My phone or in person. Phone, email, however we can get a hold of them, in person sometimes, to verify that they got the letter and that their intention, so we'll be prepared. Okay, thank you.
Other questions? Other business? If not, we will meet next month. I think that's, what's the date on that? September 10th. September 10th, I expect that to
be a... Supposed to be down back in our old room is what I've been promised.
Well, I'm glad to see all this work is getting done and we'll look forward to seeing y'all and hopefully representing Womack and Senator Stone will have a good time next month. And without objection, we're adjourned.
Agenda
A. Call to Order by Chair
B. Adoption of Minutes of June 4, 2026, meeting
C. Update on Private Reports – Delinquent December 31, 2022, Water and Sewer Reports
D. Update on Private Reports – Delinquent December 31, 2023 and 2024, Water and Sewer Reports
E. Update on Private Reports – Delinquent December 31, 2024, City Reports - Bauxite
F. Discussion of Noncompliance with Municipal Accounting Law – Fargo, Ulm, Lead Hill, and St. Joe
G. Review of Reports (Refer to the Synopsis)
H. The next meeting of the Legislative Joint Auditing Committee will be held on September 10, 2026.
I. Adjournment
Documents
No documents posted.
Speakers
Senator Mark Johnson Chair
Unverified
Speaker 5
Speaker 6
Speaker 7
Speaker 12
Speaker 17
Speaker 23
Speaker 26
Senator Jamie Scott
Unverified
Speaker 33
Speaker 35
Speaker 38
Speaker 40
Speaker 42
Speaker 47
Speaker 49
Terry Purvis
Unverified
Speaker 64
Representative Johnny Rye
Unverified
Speaker 22
Speaker 94
Speaker 100
Speaker 89
Speaker 101
Speaker 104
Speaker 109
Speaker 110
Speaker 113
Speaker 115
Speaker 118
Speaker 124
Speaker 127
Speaker 14
Speaker 24
Speaker 146
Speaker 162
Speaker 163
Representative Cameron Cooper
Unverified
Speaker 171
Speaker 173
Chair
Unverified
Speaker 175
Speaker 167
Speaker 179
Speaker 186
Speaker 191
Representative Matt Duffield
Unverified
Speaker 200
Senator Kim Hammer
Unverified
Speaker 212
Speaker 210
Speaker 217
Speaker 211
Speaker 169
Speaker 44
Representative Joy Springer
Unverified
Speaker 190
Speaker 198
Speaker 245
Speaker 222
Speaker 273
Speaker 274
Speaker 275
Speaker 116
Speaker 215
Speaker 281
Speaker 282
Speaker 284
Speaker 287
Speaker 283
Speaker 288
Speaker 303
Speaker 88
Speaker 305
Speaker 309
Speaker 263
Speaker 314
Speaker 136
Speaker 140
Speaker 319
Speaker 321
Speaker 323
Speaker 324
Speaker 165
Speaker 328
Speaker 329
Speaker 338
Speaker 322
Representative Carol Dalby
Unverified
Speaker 341
Speaker 141
Speaker 347
Speaker 337