Legislative Joint Auditing - Counties and Municipalities
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Speaker 2
0:00
to prayer, please. Heavenly Father, we come to you today thanking you for this great land and the many blessings you have bestowed on us and our land. We ask for the wisdom to discern the issues of today that we best serve the people of Arkansas. And we ask all these things in Jesus' holy name. Amen. Our first
order of business today will be to look at the minutes from the last meeting and at the appropriate time, I'll entertain a motion in a second.
We have a motion. Second. Second. All in favor of approval of the minutes, say aye. All opposed. Saying none, the minutes are approved. Mr. Archer, would you please proceed? excuse me thank you
Speaker 8
0:52
mr chair item number c for a update on our delinquent the 2023 and 2024
Speaker 10
0:57
water and sewer reports for the 2023 year we are down to three that have not complied as we picked up black rock uh since our last meeting and we moved it from the 23 to the 24
list the 24 list is now down to 22 the mail out list had 24 on it but we picked up marvel and higginson uh this earlier this week mr chair this completes my report without objection we
Speaker 10
1:36
to item d we have an update on our delinquent city reports from december 31st 2024 the only private city report that we don't have at this point is the city of bauxite
Speaker 13
2:00
report without objection we will file this report
Speaker 10
2:04
moving on to item e discussion on non-compliance with the arkansas code 277207 misuse of street funds we had two reports that were deferred from the june meeting that were non-compliance with their uh approved payment uh repayment of street funds that'd be jericho and haynes and with the
chair's permission i'd like to go ahead and uh present these two reports on pages 13 and 14. yes please proceed we'll start with the city of jericho uh city of jericho 2024 Mayor Ida Sumner and Recorder Treasurer Elaine Dupree were invited here today. They could not make it due to illnesses and a wedding. But just to recap, at the June meeting, the finding in question was restricted funds of over $57,000
were not transferred to the street fund from the general fund as required by Arkansas Code. The town received approval by the legislative joint audience committee on February 9th, 2024 to pay $100 and $200, alternating each month for three years, and paid $300 monthly thereafter, which would total $1,500 in the current year beginning March of 2024. However, the town paid only $1,007, which is 67% of the 2024 amount due.
This is a repeat finding in the past 16 reports. committee asked that we update this for the June meeting and at the June meeting obviously they were $493 short at the end of our report period for 2024 they caught up during 2025 and then on May 5th when we were preparing for the June meeting they were $1,193 short on May 28th they made a $1,200 deposit to get caught up and since then we reached staff reached out on September 1st and
they had made a $300 payment in June $350 payment in July and another $350 payment in August so as of right now they are current so I don't think the staff doesn't recommend any action taken on 27 7 207 but staff would recommend that we defer this report until which time they can come here and answer Whatever questions y'all have. What
is the will of the committee on deferring
the report? So moved. Second. All in favor say aye.
Speaker 20
4:36
Aye. Mr. Archer, we will defer the report. Mr. Chair.
Representative Carol Dalby
Unverified
4:44
was good with the motion. But my question is, is this a town that we should, I know we've deferred it until they can come the next time, which is in October, but is this a town that maybe we ought to have like a six-month check-in on to make sure they're keeping these payments up that they're supposed to be paying? And is that something that we can maybe consider or look at come October
that we ask audit to report? And I know we'll go into general session and we'll be out during that time, but just so that we keep a thumb on them and make sure that they're paying what they're supposed to be paying is is that a possibility that we could look at come october well i understand
Speaker 20
5:26
what you're saying let me ask mr arger is what's the normal procedure for that well you
Speaker 13
5:31
know we go every year so every year and where jericho is we actually go every year so it wouldn't be we hadn't done a single single year audit on i mean a multi-year audit on jericho in
several years okay so we'll be there every year uh so you know every 12 months we're going to check on it but we'll do whatever the will of the committee is if we want to make
Representative Carol Dalby
Unverified
5:52
a wellness check at the midpoint we can do that as well well the reason why i'm bringing it up mr chair is
it seems like they don't do anything until we show up right audit i say we audit shows up and then they get back on track and then audits not there until the next time around and they don't do anything until audit shows back up so it's just something i wanted the committee to kind of think about come
october it's just a thought all right i think
Senator Mark Johnson
Unverified
6:16
senator johnson has a question uh more more of a support and comment on representative dalby's point uh mr chairman if since we've already asked deferred him and asked him to come back next month i think that's the proper time to to do to do what you said i think it's a great idea and maybe we need to be doing more of it but uh since we we asked him to come and we'll give him a
excused absence this time but next time we
need to get some answers and and i think that's a great idea rather than letting them go so far down the
the road that the problem is, I hate to say insurmountable, but more difficult. So thank you for bringing that up. Thank you. That's all I had,
Mr. Sure. I agree with that. Let's have them at the end of the table in October. Let's lay out our expectations, and if they become delinquent again, then the committee's immediately notified, and we can get it done in one payment instead of letting them be six or eight months behind delinquent again. I think that's a great idea. So let's get them at the end of the table in October,
Mr. Archer, and then we'll lay out our expectations.
Representative Carol Dalby
Unverified
7:16
Thank you, Mr. Chair. That was my thought exactly, wait until we had them at
Speaker 13
7:22
the end. Thank you. Appreciate it. My pleasure. Mr. Archer, please proceed. Continuing with item E, we
Speaker 10
7:28
have the City of Haines again on page 13 of the Town of Haines, 2024, under the Mayor and Recorder Treasurer. Restricted funds of just over $16,000 noted in previous years were not transferred from the General Fund to the Street Fund in noncompliance for code. The Legislative Joint Audit Committee on February 9, 2024, approved the town to repay $100 per month.
However, only $178 was paid in 2024 to reduce the balance owed to the street fund. This is a repeat finding in the previous eight reports. Although Schedule 1 of this report shows a balance of just over $1,900, it was brought to our attention that as of December 31, 2024, the general fund owed a significant amount for balances owed to the street fund and the IRS. As shown on Note 4 on Schedule 3, when these outstanding amounts were considered, the general fund has a deficit fund balance of just over $35,000.
This is a repeat finding in the previous six reports. Same with Jericho, this was deferred from the June meeting. At the end of our reporting period, they had paid $178 towards the $1,000 that was due. In 2025, they deposited all their property tax from general fund in the street fund directly. And up through September 1st of 26th, they had made three $100 payments on the $800 owed.
And yesterday, they made a $394.13 payment to become current as of today. I believe Mayor Willie Coleman and Recorder Treasurer Charlotte McFadden's here today. Yes. End the table please. Could y'all come to
end the table please? But as
Speaker 10
9:14
of yesterday, they are current on what's, what they, their payment plan. If you would,
state, turn your microphones on and state your name and
your position with the city for the record please.
Okay. Mayor, Willie C. Coleman. Okay. Recording clerk Charlotte McFadden. Do you
Speaker 48
9:44
have an open statement on anything that you would like to make? Yes, I appreciate being here and y'all checking and making sure everything get back the way it should be and learning that I'm just, you know, becoming a mayor in a year and hopefully we stay current like we're supposed to.
I just said we will. I'm having trouble hearing you, can
Speaker 27
10:12
you speak into the mic a little better, please? He said hopefully, he
was saying hopefully we'll stay current, I said we will.
Okay, well that's good news. Well, you know, if you're here today and you're current, I don't guess there's any sense in belaboring the point, but I'm also thinking that while we just extended to the city of Jericho, we probably need to keep tabs on the city of Haines just in case you become delinquent.
It's easier to put out a small problem or handle a small problem and then ended up becoming six or eight months in arrears again, and then we have a problem. So I'm going to ask Mr. Archer to keep us notified if you become delinquent in your payments, and if you do, then we'll call you back to the end of the table, and we'll get a small problem fixed before it becomes a big problem. But with that being said, I don't have any other thing to say unless any members of the committee have any comments or questions they would like to ask.
Saying none, I thank you for coming today, okay? You're free to leave. Just a
Speaker 56
11:14
staff note, Mr. Chairman, we're there now doing the 25 audit. I think we just completed it as well. So
Speaker 13
11:20
they're in an area that we also do a single audit on every year. So we will be there every year, but we will check in at mid-year as well. All right. Thank you, Mr. Archer. Can we get to file this report, please? Yes. I'm going to make a motion. Yes. Do
Speaker 59
11:36
I have a motion? So will I have a second?
I have a second. All in favor, say aye. Aye. Any opposed? Claiming none. The ayes
Speaker 10
11:48
have it. Thank you. Moving on to item F, reports to be presented. On page, we have 26 reports that were deferred from the August meeting. The first one's on pages 1 through 3. Let me get my list back here. It is a special report, six regional solid waste management districts,
a review of selected policies, procedures, and transactions, July 1, 22 through December 31st to 23. We have staff member Charlie Camp here to present it, and i believe we have pulaski county regional solid waste district manager district executive director craig douglas here to answer questions as well staff would note that on the bottom of your stack mr douglas provided a handout that the chair approved so it should be on the bottom of your stack your packet charlie thank
Speaker 63
12:41
you joe uh pulaski county regional solid waste management
district had six findings that were issued. Finding number one involved payroll items, salary increase, contract for services, and employee bonuses not properly approved by the board. This finding was referred to the six judicial prosecuting attorney and the attorney general. The remaining findings involved credit card disbursements without proper supporting documentation at the time payment was made, contracts not properly approved by the board,
Issues related to car allowances, personal use of Pulaski County District vehicles and cell phones, competitive bids not being solicited for the cost of multiple services and lack of an electronic funds payment system with written policies and procedures for internal accounting controls and documentation for audit and accounting purposes. Other matters included the Pulaski County District expending $312,977 in public monies for advertising, which appears excessive in comparison with amounts expensed by other
districts in this report. As noted in a prior report, the Pulaski County District had a contract with a vendor that required the vendor to repair and maintain district-owned equipment located at the vendor's facility and used by the vendor. However, the district paid for maintenance of the equipment from the district's maintenance and repair capital fund. Subsequent to the issuance of the prior report, the district closed this fund and sold 46 trailers to the vendor for substantially less than the purchase price. Finally, other items were sold to a second vendor, but detailed descriptions and purchase prices were not available for the items in this sale.
Speaker 67
14:26
Mr. Chair, this concludes my report. All right. Mr. Douglas. I see you seated at the end of the table. Would you state your name and your position for me? Your
Speaker 70
14:46
mic's going up. But it's not. Oh. This thing has come completely unscrewed up here. Can
you hear me now? Mr. Douglas, I see you're seated at the end of the table.
Yes, sir. For the record, would you
Speaker 75
15:00
state your name and your position, please? Craig Douglas, Director of the Pulaski County Regional
Solid Waste Management District. All right. Thank you for coming today.
Speaker 75
15:10
Do you have an open statement that you would like to make? Thank you, Mr. Chairman. At the June 4th meeting, we covered the items that Mr. Camp just enumerated. And your handout that was included in today's packet has gone a little bit further to explain the items that you had most of the questions on.
We have covered in that handout the audit methodology which compared Pulaski County solid waste management district to five other districts. There are 18 solid waste management districts in arkansas each solid waste management district operates their programs primarily as it relates to recycling and the management of solid waste operates their program differently as do we
from other districts the audit was conducted in the 2023 fiscal year comparing pulaski county with the Southwest District, and then in the 2023 calendar year, it compared the Pulaski County District with four other districts. So we have expenditures over fiscal years and on calendar years that the audit took
a look at. Most of the questions on June 4th had to do with our district's operations and performance as related to our responsibilities primarily on recycling and our residential recycling program. While all of the districts do things differently, the Pulaski County District does processing,
pickup, and recycling on the following items, all of them. Plastic bottles, jugs, tubs, clamshell containers, and to-go cups, glass bottles and jars, electronic waste, household hazardous waste, aluminum, steel, and tin cans, cardboard, loose paper, cartons, and paperboard, plastic bags, and waste tires. The Pulaski County District does all of that, most of which is done by biweekly residential
pickup, not just in Little Rock, not just in North Little Rock or Sherwood, but throughout the municipalities as well as the unincorporated areas of the county. In a look at all of the other districts through our association, which includes all of the solid waste management districts. Pulaski County is the only district that picks up and processes all of the recyclable items that I just mentioned and does so at a curbside recycling pickup
program. Those that are not picked up curbside are picked up at one of our five green, we call green stations which are transfer stations. Now in the 2023 years fiscal and calendar that were audited, we had special programs. Those special programs were to increase participation, reduce waste and also because the state discontinued its electronic waste grant program,
we dedicated more funds to educating the public about the toxicity of electronic waste and why they should not be put in the trash, but should be deposited at one of our green stations to be recycled. In addition, we provided research and also customer education on the fact that we began collecting glass in our curbside recycling carts the research that we conducted and the
education programs that we pursued and spent money on to educate and inform the public were designed to ensure that there was a enough volume of glass in order that a glass recycling plant privately built and employing private sector jobs could handle glass in our solid waste management district.
The research in our education programs did indicate that a glass recycling plant could be constructed and could recycle glass in Arkansas instead of sending glass to Kansas city where it normally went. That recycling plant in North Little Rock, Arkansas currently employs 24 full-time equivalent workers working two shifts. So that's just an example of some of the things that we committed our dollars to.
We also had a program to ensure that plastic bags were not deposited in the curbside recycling cart because they shut down the recycling equipment. And lastly, in 2023, Pulaski County and a number of counties in North Central and Northeast Arkansas experienced an EF3 tornado. What the district did was we dedicated funds working with waste management and other independent
haulers to ensure that toxic waste and construction waste that was caused by that tornado, that the residents of Pulaski County and the businesses knew where that waste needed to go, that a lot of it didn't need to go in the trash, but could be recycled. So those are some of the programs on which we dedicated our funds, which were all in the service of education and information to our residential customers.
That's a long-winded way of saying that's what we're doing. Okay.
Well, I just wanted you to state for the record, anything that you may have want to say that
you thought would be germane to what we're going to
discuss today. Are there any questions from the committee members? Senator
Senator Mark Johnson
Unverified
21:52
Johnson, you're recognized. Thank you, Mr. Chairman. Mr. Douglas, thank you for coming back. And I want to, frankly, let you know that I don't intend to continue to rehash all this.
And I appreciate your willingness to come. I'm almost thinking that perhaps we should have one or more members of your board who happen to be mayors and the county judge that, let's just say more so than just your average volunteer board member, they have a dog in this fight. Yes, sir. And we want to make sure that everybody's moving on the same page. And I want to mention two things, Mr. Chair, and then I reserve to have a motion.
Sure. You mentioned this glass recycling program. It's been a long time. I can't even remember how many years. But I toured a glass recycling program in Benton County. And it was staffed by volunteers. And it was a tremendous program, what they were doing with glass recycling. And they were even selling it to someone that mixed it with asphalt when they paved new runways. And when a plane would come in and turn their landing lights on, the pavement would glow from a reflection.
I thought that was a great idea. And then a few, maybe less than a year later, they closed that facility, which I might say it was the personnel were almost all volunteers because it was near Bella Vista. They had a lot of retired people that wanted to give back. So I'm wondering who is running this glass recycling center? Is it come out of your budget or is it a third party? Could you just kind
of let me know how that works?
Speaker 75
23:43
It's Epic Glass Recycling, which is a part of Ace Glass in Little Rock. The plant is in North Little Rock. They manufacture now because we are collecting glass in our curbside recycling carts, and they're collecting glass around the state. They are manufacturing now what is called a lightweight glass foamed aggregate that is used in construction. In fact, 30 Crossing used that aggregate, not from this company because it wasn't built yet,
but aggregate from Pennsylvania. They are now manufacturing this product in addition to what's called cullet, which is also the small beaded glass that can be used in manufacturing. This is a private business employing private sector jobs. As I mentioned, they have a payroll now of 24, And that is an example of what my board has instructed over the last number of years to discover ways where recycling can be a catalyst for economic development and job creation.
And that's why we supported the glass recycling program and continue to. And so we could
Senator Mark Johnson
Unverified
24:58
say this is a newer technology. Yes, it is. And I applaud you and the organization in North Little Rock for doing that. On this disaster recovery effort, I want to give you kudos on that because we can't plan completely around that, but I think your response was appropriate. There's a whole lot of stuff that maybe we can keep out of the landfill that comes from the damage of a tornado
or equivalent natural disaster, so thank you on that. Mr. Chairman, I appreciate Mr. Douglas bringing us this and some further explanation, But it generates more questions than I think I need to be asking at this hearing. And I would like to move, again, I apologize to Mr. Douglas for asking him to come back again. But I would like us to, once again, delay consideration of what we will do with this audit until the October meeting.
and I can have a chance to digest what Mr. Douglas has provided the committee. And perhaps, Mr. Douglas, you might have some of your other board members come because we don't want to leave this on the agenda indefinitely. We won't do that to you, but we do, I think, need to. It's somewhat more complex than many of the items that we find ourselves dealing with. So, Mr. Chairman, I would move that we hold it. I think
you're going to make a motion, but before you do,
I want to hear from Representative Beatty.
I think he asked some questions, and I'll come back to you, and you can make that.
Speaker 86
26:38
Thank you, Mr. Chair, and I would yield to
Representative Howard M. Beaty, Jr.
Unverified
26:42
Representative Beatty. All right. Representative Beatty, you're recognized. Thank you, Mr. Chair. I guess this question is maybe for staff, and I was not at the June 4th meeting, so I know this is a callback to clarify some of the findings. But just for memory, how many of these are repeat findings? Because I do recall a couple-hour meeting that we sat through on your district in the past. So can staff answer that question for us?
For this particular report and for this particular oddity, there were no repeat findings in this report. So none of these
are repeat findings? No, sir. But, I mean, it seems like when this waste district comes up, there's always pages of findings. So, I guess my question for you, Mr. Douglas, has this been a
learning experience and something that won't be a repeat the next time this audit's performed?
Speaker 75
27:35
Well, I certainly hope so, and my commitment to this committee is that there would not be any repeat findings
or findings in any of these categories. And we have consistently reported to our board these sessions, obviously these findings, and also continue to do our own independent audits which our board meticulously looks at. And so as I have explained on June 4th and would be happy to continue to answer any questions that you may have today, every operation, every performance that the district does is
Representative Howard M. Beaty, Jr.
Unverified
28:18
board approved. Well, some of these, I mean, just a quick follow-up. Some of these are pretty, I guess, basic accounting controls, like the credit card disbursements, maintaining, supporting documentation for those, service contracts, those type things that would just be, I
Speaker 75
28:39
would consider, common business sense and practices. Yeah, since this again was 22-23, our chief financial officer at the time, he did not require any credit card, for instance, this is a for instance, any credit card receipts, since all the credit card bills had all of the descriptions on that.
We since have started maintaining all credit card receipts. The electronic funds transfer that Mr. Camp mentioned, that has been corrected. Everything that, and Charlie can correct me, but everything that we have been, that has been mentioned in any findings over the last two, three years, we have corrected. Good. We'll hope for the day when we don't
Representative Howard M. Beaty, Jr.
Unverified
29:27
have to correct anything. I hope for
All right. I want to come back to Senator Johnson. You're recognized for your motion. Oh, I'm sorry. One
more. I overlooked Representative Jean. I apologize. Go
Representative Lane Jean
Unverified
29:45
ahead, Representative. Thank you, Mr. Chairman. Mr. Camp, on the finding one that referred to the -- and you may have mentioned it and I missed it -- to the prosecuting attorney, Attorney General, Did we
Speaker 101
29:57
ever get back, anything back from them? To my knowledge, I
Representative Howard M. Beaty, Jr.
Unverified
30:03
don't know what response they have.
That should be covered in the report that y'all get for the year for everything that gets referred. I'm not really sure when that's going to come
they're at on that? I don't. Okay, thank you. Seeing no other
Senator Mark Johnson
Unverified
30:25
questions, I'll recognize Senator Johnson for his motion. Thank you, Mr. Chairman. I move that the committee defer this report until the October meeting. In the meantime, Mr. Douglas, I will get us a little bit more organized
so we can hopefully wrap this thing up next month and come up with some finality to it. And again, I apologize for dragging you back up here, but we want to make sure that not just you and your staff, but also your board is on, pardon the expression, on board with the solutions that we will all hopefully agree to. So in the words of Representative Mayne,
that we're going to not see you up here as much and we'll avoid all these. And I realize your situation is a little more complex than the others, which is why this is standing out more. But again, it's a lot of money. It's a lot of recycled material, and it's things that we need to get right so we can have a better organization of this for the public. So my motion is just to defer this matter until October meeting, Mr.
Chairman. All right, so on your motion, just for clarification for myself, do you want just Mr. Douglas back by himself?
Because earlier you mentioned about bringing other mayors who are also board members. Are you including them in your motion or
Senator Mark Johnson
Unverified
31:54
do you just want Mr. Douglas back? I would request that as many members of his board that could come just to clarify and we can hopefully get further along on that. And some of them are my acquaintances and some of them are my longtime friends and I don't mind reaching out to them and encouraging them to join us for that. But in the interest of putting some finality on this particular audit in the report.
we have a second? A second? All in favor say aye. Aye. All opposed? Hearing none, the motion passes. And I would also ask that I think Representative Lane Jean ask a relevant question. And
let's get the answer to his question in October and follow up on where we're on that so we don't have to assume anything. Thank you. Mr. Douglas, thank you for your time. We'll see you next month.
Speaker 112
32:53
Mr. Chair, I know you clarified it. You're going to invite the members of the board or you want us to do it? Why don't you let the
audit officially invite them. And if you want to follow up at your behest, that's fine also. Thank you, Mr. Chair. Thank you. Mr. Chair, thank you for clearing. Did you get that, Charlie?
Speaker 10
33:26
We're inviting the board. We are. Okay. Okay. All right. Go ahead, Mr. Archer. Continuing with reports deferred from the August meeting on pages 4 through 10,
we have Helena, West Helena, 2024. Starting on page four, under the Mayor, the Treasurer, and the City Clerk, during disbursement testing for 74 items, we noted the following. Adequate supporting documentation was not provided for 17 disbursements totaling just over $100,000 in noncompliance for code. Of this, five disbursements totaling almost $73,000 appear to be for legitimate business expenses. However, documentation was not maintained.
Individual fuel tickets were not maintained for a disbursement tolling just over $25,000. Therefore, the validity of these disbursements could not be determined. An employee was paid over $2,200 for travel and or reimbursements without proper documentation. Therefore, the validity of these disbursements could not be determined. This is a repeat finding. A reimbursement of over $1,400 was paid before order was placed. in conflict with Oracle 12, Section 5, which prohibits cities from loaning credit to an individual.
This is a repeat finding. Supporting documentation was not provided for 12 of the 53 credit card transactions, totaling just over $2,500 for the three statements tested for the physical year 2024 in noncompliance for code. Due to the lack of documentation, validity of these transactions could not be determined. This is a repeat finding. On page five, after employee's payroll check was voided and reissued, the voided check was deposited and cleared the bank.
Improper deposit and additional clerical errors resulted in the employee being overpaid just over $1,250. Instead of seeking reimbursement for the check cashing, the city treasurer made a journal entry to eliminate the unreconciled difference as an expense. As a report date, the city has not recouped the overpayment or reversed the journal entry. Continuing on page six, Arkansas Code requires the city council to approve an annual budget, which is the appropriation of funds for operations and city management to function within this appropriation.
However, the city failed to expend funds within appropriations due to the lack of management oversight, Resulting in the general fund and street fund expenditures exceeding appropriations by over $407,000 and over $390,000, respectively. Also, general fund and street fund budgeted revenues exceeded actual revenues by more than $238,000 and more than $257,000, respectively. As of the result of overspending, the general fund, the street fund, and landfill fund had
deficit balances in excess of $926,000, $811,000, $454,000, respectively, at the end of '24. Another factor contributing to this deficit was various payroll accounts payables in general fund totaling over $2.1 million, including the following: 1.2 million in payroll taxes, $242,000 for retirement benefits, $140,000 for housing city prisoners, $133,000 for truck rentals,
$88,000 for camera leases, $280,000 to other vendors. In addition to the general fund deficit fund balance, failure to pay retirement system payments resulted in the loss the city's general revenue turnback received from the state. Furthermore, the city's inability to pay its debts timely led to late payment fees, bank overdraft charges, utility shutoff notices, repossessions. Some vendors require cash payments on delivery. This is a repeat finding.
Continuing on page 7, the city failed to make payments as specified in five financial purchase agreements. For the third consecutive year, an annual payment of over $32,500 was not made for police body cameras on october 23rd 2024 the city was notified that a caterpillar articulated truck was repossessed loan balance of just over 251 000 on september 24th of 24 the city was notified that two caterpillar track type tractors were repossessed and would be sold at public auction
on November 7th, 2024. Loan balances were just over $61,000 and over $158,000. On September 27th, 2024, the city was notified that Caterpillar Excavator was in prepossession status. Loan balance was just over $92,000. A similar finding was noted in the prior two reports. Additionally, if the sales proceeds of the prepossession equipment does not compensate the secured parties for the contracted balances and reasonable expenses for repossession and selling of the equipment then the city may be held liable paid overtime exceeded
budgeted appropriation of over 283 thousand dollars consisted primarily of the following departments police department in excess of 168 000 street fund in excess of 47 000 fire department in excess of 46 000. this is a repeat finding continued on page eight under the mayor and treasurer general fund street fund expenditures exceeded appropriations in excess of 407 000 or five percent in excess of 390 000 31 respectively non-compliance the arkansas code
this is a repeat finding the previous three reports continuing over on page 10. under the treasurer and city clerk we noted the following issues during the review of payroll The employee did not prepare timesheets or leave slips as required by city policy. This is a repeat finding in the prior report. Of the three employees tested for leave payouts, two were paid for leave in excess of the amount allowed by city policy. One employee was overpaid a total of just over $2,700 for 176 hours not earned.
The other employee was paid $915 for 80 hours without having worked for the city for more than one year. This is the result of the city's failure to maintain adequate leave records. The city incurred penalties and interest total over $161,000 due to the lack of timely payroll tax submissions as discussed below. DF&A penalties were in excess of $14,000. At the end of 2024, the ballots due DF&A was just over $80,000. The city entered into a payment plan with DF&A
to pay the balance, including assessed penalties and interest over 25 months. As a report date, the City had made 16 payments totaling $94,000. This is a repeat finding. Withholdings and matching reports for the IRS form 941 and 945 were not submitted timely, resulting in penalties and interest of over $147,000. The balance due to the IRS at the end of 2024 is just under $1.2 million.
As a report date, the city has made payments totaling almost $220,000. We noted additional payments totaling $301,000. However, we could not determine if they were for past due amounts. This is a repeat finding. Under the treasurer, vehicle allowance payments due to the mayor totaling $12,000 were not reported to the IRS on its W-2. This is a repeat finding. Recorder Treasurer Derrick Turner and City Clerk Sandra Ramsey are here to answer questions.
Speaker 125
41:15
This report has been filed with the Prosecuting Attorney and the AG's Office.
If you would, state your name and your position for
Speaker 128
41:32
the record, please. Sandra Ramsey, City Clerk. Derrick Turner, City Treasurer. Mr. Turner, do you have an
opening statement? No, sir. Do any committee members have any questions of Mr.
Turner, Ms. Ramsey? Senator Johnson, you're recognized.
Senator Mark Johnson
Unverified
41:54
I'll start this off, and I'll keep it brief, Mr. Chairman. Ma'am, sir, it's
a whole lot of money. I mean, we see problems like this in this committee regularly, but not in these kind of numbers. For a town of under 10,000 people to have, you know, seven-figure problems like this, I don't even know where to begin.
Can you all help me wrap my
Speaker 135
42:22
arms around this? Well, like the report said, overspending.
Speaker 137
42:28
But I would like to add that the city clerk or myself, we don't have the authority to spend. The mayor has the authority to spend statutorily, and so we can't control his spending. All I can do as a treasurer is report to the city council what the spending is, and as the City Clerk, all she can do is try to pay for the purchases.
Senator Mark Johnson
Unverified
42:59
So I assume you all did that, you reported it to the Council, so the Council was aware of
Speaker 138
43:05
this even before the audit, correct? Yes, sir. That's one of the
Speaker 137
43:10
things that the auditors have commended me on personally, is that they said they couldn't find, they wouldn't know
Speaker 140
43:16
about the problems if the books weren't maintained correctly. I
Senator Mark Johnson
Unverified
43:19
want to give you kudos for that. At least you've left the trail that they could off. Yes, sir. But the trail is frightening, actually. It is.
Speaker 137
43:30
I don't know how many of you know, but last year we had a mayor that was removed from office by a circuit court judge. And I would like to commend the first replacement was Councilman Don Ethelie. He was placed as the interim mayor by the circuit court judge. He did a great job of stopping the bleeding. I like to say that Mr. Ethelik put a cast, we had a fractured leg, and he put the cast
on the leg. He set the fracture, he put the cast on the leg. He made payroll cuts. He increased benefit payments that the employees contributed to their health insurance. And he permitted the clerk and myself to begin making payments on the IRS debt to become current. So, we started making current payments and we started working on the past debt.
He was the interim mayor when we came into the payment arrangements, the payment agreements for LOPFI and we became current in April. We paid off one of the, for truck rentals, we paid that off. We paid off most of the two aided to other vendors. And so we began to take care of the debt. But you had to have a person like Mr. Ethelik that was serious about cutting spending, and
that's what he did. Subsequent to that, Governor Sanders appointed Joseph Whitfield to the mayor's position. And so what I would say about him is that when I said Mr. Ethelik set the cast, put the cash on, but when Mr. Whitfield became married, the cash came off and he's tending to the broken leg. You can't put too much pressure on it. And so he knows that he can't put too much pressure financially on the city.
He's continued with the spending cuts that were initiated by Don Ethelie. He made, I think, about $800,000 in budgetary cuts. Most of those were payroll related and some other areas and he's cut spending tremendously since he's been there. He's only been there 10 months, but just on an annualized basis, I believe we're going to come under budget in 2026.
I don't know what the results are for 2025, they're still conducting the budget right now, but I believe we'll be okay on the 2025 budget, and I would like to attribute a lot of that to Mr. Ethley and Mr. Whitfield, and we've started spending cuts, payroll cuts, and it appears that we're on the right track, so I would like to add that. Just a quick follow-up, if I
Speaker 33
46:44
could, Mr. Chairman. Yes, Senator Johnson.
Dearing with all this going on, y'all also had a serious water issue.
Senator Mark Johnson
Unverified
46:55
Yes, sir. Is that somewhat resolved or at least under control so your people still have clean water?
Speaker 137
47:01
Yes, okay. So the governor came down a few days ago, had a round table, and we kind of updated her on the situation. And so what was happening was we were awarded a lot of money by the state, I think somewhere in the neighborhood of $30 million. But in order to spend the money, you have to have a plan.
You have to have an engineer's plan. They don't give you the money and say, have at it. And so it took a little time for us to-- for our city engineer to develop the plan. And so he came up with a plan which areas he was going to attack first. And that was submitted. And so the plan was approved. and now we are beginning to initiate the waterline replacement. So I think they just started doing that last week.
So we're starting to see some dirt.
Senator Mark Johnson
Unverified
47:55
As far as that, it is not a burden on your budget with the governor's funding and the fact that it came through to us. But still, that problem is not an imminent problem. You still got to go back and deal with this past debt issue. Yes, sir. Thank you for the answers you gave, and I'm thrilled that my friend, Representative Gene, who's a former mayor, has got his hand up, and I know he'll have some help us get through that. Thank you, Mr. Chairman.
All right. Senator Hammer at all school indicated he wanted to ask a question, so Senator Hammer, you're
Senator Kim Hammer
Unverified
48:32
recognized. Thank you. I just, for a point of clarification, a lot of these findings, and maybe staff could weigh in, a lot of these findings are the result of the previous mayor's time frame that
he was in office. Is that a correct observation? Yes, sir. I think Mr.
Speaker 137
48:51
Etherley was the interim mayor for three months, and I think Mr. Whitfield was the interim mayor,
Senator Kim Hammer
Unverified
49:00
Okay. and so it's your opinion or your view that with uh new leadership in the town that y'all are turning the ship on this thing and getting it in the right direction would you have any idea based on how things currently are uh with you know with the irs debt and all the other things how long it might be till y'all you know get out of the red and get
into the black Okay, so we have a payment agreement with LAPFI.
Speaker 137
49:33
I think we're about eight months before we finish it, six, seven, eight months. Mayor Whitfield has been working with Senator Womack. He's been helping us with our IRS situation. And so we're in the middle of working out a payment agreement with them for the pass-through amount, and we've continued to stay current
with the current payrolls and make current payments. It's going to take some time. I couldn't put a definite finger on it, but we are certainly heading in the right direction. Okay. And then
Senator Kim Hammer
Unverified
50:16
the last question I ask, and if it's appropriate, Mr. Chair, I see that you all are on the delinquent
list for the water and sewer report. Um, can you go ahead and just tell us with, you know, the 30 million that the city was granted or is being granted, how are you on your, um, because it would seem to me like
having the, the water audit along with the engineer plan that they all go together in order to, to get everything caught up. Can you speak to that?
And that'll be it, Mr. Chair. Thank
Speaker 137
50:53
you. Yes. Like I said, the governor was in Helena, West Helena a few days ago. We had a roundtable discussion. And that's when we learned about, well I think the water superintendent knew about it. But they were going to grant us an extension to get those reports in.
Speaker 103
51:13
And they're currently working on that right now. All right. Thank you.
Yes, sir. And, Representative Jane, do you have a question? Yes, Mr.
Representative Lane Jean
Unverified
51:29
Chairman. Yes, we'll get recognized. I'm guessing the city council, are they in supportive of the two interim mayors? Are we having still some challenges there?
Speaker 158
51:43
I would say, for the most part, they are. They
Speaker 137
51:52
are conscious enough to not want to see anything bad happen to the city. So any disagreements that they may have personally, they don't let it affect how they vote. I would say, for the most part, they vote the way they
Speaker 140
52:10
should, and that's just my personal opinion. Well, you say
Representative Lane Jean
Unverified
52:14
for the most part, I'm garrer than it's not 100%.
Yeah, I mean, you don't have city councils. Oh, I know, I've dealt with them. Yes, sir. All right, the other question is, how long on these payroll taxes, how many years are we talking about to bring up this $1.2 million that they weren't paying them? That I'm not sure of.
Speaker 137
52:36
The Mayor Whitfield, the one that was appointed by Governor Sanders, he is in the middle of trying to, he's working on a payment arrangement. So it's kind of hard for me to say how long the terms are.
Representative Lane Jean
Unverified
52:52
Yes. And when you say with overspending, I'm assuming the city council, which sets the budget, so was the mayor just ignoring the budget and spending whatever he wanted to spend on it? Yeah, that's what-- Or
Speaker 166
53:09
was the city council in on this? No, absolutely not.
Speaker 137
53:13
OK. Like I tried to explain to people all the time is that the clerk,
she writes the check, she pays for payments. I report to the city council. But sometimes we don't know that a purchase has been made or a contract has been entered into until we receive an invoice. And so that counts as an expenditure, whether we sign a check or not. That's an expenditure on our books. And so, like I said, we don't have the authority to spend. That's the exclusive authority and responsibility of the mayor.
Representative Lane Jean
Unverified
53:51
Okay. And you feel like your lot fee in April's retirement money will be
Speaker 161
53:57
able to pay back in a timely manner? Yes, sir. We had, I think, an 18-month payment plan, and we're
Speaker 137
54:04
on schedule to do that. We've set a reserve aside just in case we have some financial difficulties or an emergency comes up. We have a reserve set aside to make sure that we have enough to pay the lot fee payment. But we're on time. We haven't missed a payment. And I'm not sure exactly when it ends, but I don't foresee any problem in April of next year.
Speaker 103
54:29
- Of 27? - Yes, sir. - Okay, appreciate
your answers. - Yes, sir. - All right, I believe Senator Hammer
Senator Kim Hammer
Unverified
54:38
has another question he'd like to ask. - Thank you, I wanna tag onto something Representative Gene asked you about. You made a statement, if I heard you right, that the city council was not aware of this spending practices of the previous mayor,
Speaker 158
54:55
or did I misunderstand that? they wouldn't know until somebody brought it to their attention.
Speaker 137
55:02
The report that I give them, I give them a monthly treasure report. It's just going to show the expenditures that we've paid for and that we've set aside as a liability, but there may have been some things that they were unaware of, just like the clerk Kirk and myself may have been unaware of a certain contract or a certain purchase. They wouldn't have any idea of it either. I mean, I think a lot of it caught them off guard as well.
Senator Kim Hammer
Unverified
55:33
So throughout the time frame of which these debts were occurring and the IRS payments weren't being made, the city council was not aware, they didn't see the trend developing? As far as the IRS payments, they weren't being made. any of it, like the equipment that got repossessed or any of all the things that have been
Speaker 137
55:55
shared in the report today? The City Council was aware that we were behind on IRS payments, and they were aware that we were having problems paying for the, and that equipment was landfill equipment.
So they were aware of it, and they were aware of the fact that we were having problems paying it because the spending was more than the revenue, but, like I said, statutorily, the mayors have exclusive authority to spend. Okay.
Senator Kim Hammer
Unverified
56:32
And I would think, and I can go back to listening to Representative Jean's questions, I would
hope and think that the city council members would not be resistant to the current mayor trying to follow conservative practices as far as the spending and that there would be no problem of the city council members aligning with the mayor so that they can all work on this together as team because the previous mayor is not there right anymore, but some of those city council members are there now that were there during that. So I would hope that they would all, you know, yoke up together and have some conservative
approaches to getting out of this and get behind the mayor to help make that happen
Speaker 135
57:20
would would you agree with that yes sir they they they are aware of the seriousness of the uh problems that we have
Speaker 137
57:27
and they like i said they supported mr etherley and his cuts there was a a lot of people that weren't happy about the payroll cuts who i think we cut a whole department we cut uh the police dispatch and then we contracted it out so we didn't he didn't make a lot of
friends or a lot of people happy but he did it um mayor whitfield has made significant budget cuts so like i said over 100 800 000 in and the 2026 budget and it seems like we're going to recognize that i think he's going i think we're going to come in on the budget actually And the City Council, when you're cutting
Speaker 128
58:10
spending and you're trying to take care of the problem, they've been nothing more than supportive. Perfect, thank you. Representative Rye, do you have a question?
Representative Johnny Rye
Unverified
58:18
Yes, sir, I do, Senator Stone. Yes, sir, it's almost on the same order as Representative Lane Jean, But this $1.2 million for payroll taxes, and also $242,000 for retirement, how are we going to get that straightened out? Because that can
cause these folks trouble with the federal government that's working there. Yes,
Speaker 135
58:43
sir. Well, with Lotfi, the issue was with, the big concern was with,
Speaker 137
58:50
if we had a police officer or a fireman retire, was he going to get his money? And so Lafay assured us that if we followed this payment plan, that anybody who retired during that time period would get everything that was owed to them. And so we are working out the plan with Lafay right now. The plan would be, we would have completely paid for it in April, April of '27. And like I said earlier, Mayor Whitfield is currently working with Senator Womack
and the IRS to come up with a payment plan for the past due withholdings as well. So I can't give you a timeline on that, but they're working on it now. Thank
Speaker 179
59:42
you, sir. Thank you, Mr. Chairman. Representative Jean, and then Representative Leibyman. I
Representative Lane Jean
Unverified
59:46
just had one to follow up. You said you're contracting your dispatch, are you all doing with the county now? Yes, sir. Okay, and before that, because a lot of counties have
done that, cities have come together, so you just did away with City Dispatch all together? Yes, sir.
Okay, thank you. Representative Leiterman, you're recognized.
Speaker 181
1:00:08
Thank you, Mr. Chairman. Am I on here? Well, you know, this
Representative Jack Ladyman
Unverified
1:00:12
is a multi-headed snake here. There's a lot of things. How do you attack that? You know, you've got a lot of things that you've got to do, and you've got plans, it looks like for law fee, you payroll, you've cut that, you're working on that.
Water and sewer, you've got money for that, you're working on that. IRS, so I guess my question is, are there things that you don't have a plan for or you don't know how, you don't really know how to fix those? And I'll give you an example of what I'm talking about. How about streets? I mean, I'm looking at this, and you had a lot of your equipment that was taken back. How are you able to maintain your streets, or are you, or do you have a plan to be able to do that?
And then also, you talk about overtime down here for police, street, and fire, and you've cut back on your personnel. Do you have adequate resources to protect the safety of the public? I mean, are your policemen and your firemen and your street workers able to at least maintain the streets and the safety where it's safe
Speaker 137
1:01:30
for the public? Okay, so I'll attack the equipment issue first. So it wasn't the street equipment that was repossessed, it was landfill equipment.
And so the landfill, the management at that time, they just weren't doing a good job of managing the landfill. We have a new landfill director now. He was a former fire chief. He knows how to, he's more of an administrative leader and so the revenue in the landfill has increased and so they're more able to pay for their equipment.
I think we just got new equipment and it costs more than the equipment that was repossessed and we haven't had a problem making the payments. So the landfill is good. We have new management, new leadership in the landfill and they're doing good right now. When you mentioned-- Streets, so you're OK on your streets? Yes. The streets, the problem that we have is more of probably an accounting issue. What I do when I do the budget is I account for the street's payroll and the street fund
and the landfill's payroll and the landfill fund. So when we process payroll, those expenses hit those two funds. But the general fund actually pays it. And so we set up a receivable from the landfill and the street and a payable to the general fund from there. So most of the problems that the street department has is that they aren't paying their payroll. They don't have the capacity to pay the payroll, but it's still hitting their books as an expense.
So that's why you see a negative fund balance. In my estimation, a negative fund balance in the street and the landfill fund. As far as overtime, we just had a situation recently. You've got to have somebody in leadership that's serious, that takes it serious. And so the mayor just recently tried to cut the schedules in order to reduce overtime in the police and fire department, told him he wanted to schedule different, particularly
in the police department, go from 12-hour shifts to eight-hour shifts. And so we had some police officers that weren't happy about it. But that situation was resolved with -- I want to say we had the blue flu for it, right? But I think we had a special call meeting and the officers returned back to work. But the problem that we have with the police department is that we need to have more officers.
So we're understaffed and that contributes to the overtime, but I think the mayor just wanted the police chief to try harder to do it. We know that we're understaffed, but we want to do everything you can to cut out overtime, and I think what they're saying is not justified overtime, but maybe just some frivolous overtime. It's what they're more concerned about. All right,
Speaker 128
1:04:53
Representative Beck, did you have a question a while ago? I was unsure.
All right, I'm seeing no more questions. Without objection, we will file this
Speaker 10
1:05:09
report. Mr. Chair, with your permission, I'd like to skip over to number 28 on our list, which is on pages 23 through 26. Please do. This is Wachita County, 2024. Under the county judge, the county dispersed funds totaling $821,000 to provide financial
assistance to the Wachita County Medical Center without a contract for services. This arrangement appears in conflict with Article 12, Section 5, which prohibits counties from appropriating funds to corporations. This is a repeat finding. Federal guidelines require county management to obtain federal compliance audits when federal expenditures exceed $750,000. The county had federal expenditures in excess of $750,000 in 2024, '23, '22, and '21, but due to management oversight did not obtain federal compliance audits as required.
The county could be responsible for repayment of federal expenditures if instances of noncompliance are noted during the federal compliance audit. We recommend the county obtain federal compliance audits for each of the respective years. This is a repeat finding. Continuing on page 24, appropriation ordinances passed by the quorum court were not adequately posted to the appropriation journal in noncompliance for code. Failure to process appropriations and amendments accurately does not allow for
accurate monthly reporting to the quorum court. This is a repeat finding. Under the tax collector, receipts issued by the tax collector's office exceeded bank deposits for almost $3,600 during the period January 1st, 2024 through June 2nd of 2026. The office manager who was placed on administrative leave on June 2nd, 2026 was custodian of the undeposited funds. Cash receipts and disbursement journals were not properly prepared or reconciled to monthly bank statements
for the tax collector's account in noncompliance of code. As a result, over $15,000 of unidentified tax funds remain in the tax collector's bank account at year end and was not paid to the county treasurer on the first of each month or within 10 working days in noncompliance of code. This is a repeat finding. Continuing on page 25, under the county judge and the county clerk, the sheriff's tax collector was paid almost $6,400 more than the amount appropriated by ordinance in noncompliance of code.
This is a repeat finding. Under the county clerk, invoices were not always paid timely. As a result, the county incurred late payment fees and finance charges totaling over $2,800. This is a repeat finding. The county did not establish by ordinance the number and compensation for all county officers and employees in noncompliance with code. This is a repeat finding. Under the sheriff, expenditures for the sheriff's communication facility and equipment fund were not made by pre-numbered check in non-compliance with code.
This is a repeat finding. Sheriff Collector David Norwood was invited here today. He was unable to attend due to prior engagement. County Judge Robert McAdoo and County Clerk Sherry Hunter are here. This report has been filed with the certified to the bonding board
Speaker 125
1:08:32
and referred to the prosecuting attorney and the AG's office. If you would, would both of
you say your name and your position for the record, please? Robert McAdoo, county judge.
Sherry Hunter, the county clerk. Judge McAdoo, do
Speaker 188
1:08:51
you have an open statement to make? I do,
Speaker 189
1:08:58
I do. First of all, there was mistakes made in my office. I had an executive secretary that we have since separated employment with. And the problem was
Speaker 190
1:09:14
that she would not communicate with the county clerk.
The county clerk had the payroll absolutely right. But she did not communicate, so we
Speaker 189
1:09:29
didn't start out on the same page as far as the budget ordinance. So it appears that the sheriff was overpaid,
Speaker 190
1:09:40
but really he was paid what he was supposed to have under the county clerk's payroll. But that secretary did not start out with the same value on our budget ordinance.
Now, the secretary did it, but it's my fault. It all comes back to me. And what bothered me on it was that I didn't catch it. But I knew at the end of the year, I was having to balance
Speaker 193
1:10:15
the budget as far as personnel. And I couldn't figure
Speaker 190
1:10:23
out why until the auditor said the sheriff got overpaid.
Well, I started digging and come to find out the budget ordinance was not right. And it was like in the collector's side of it, you know, the sheriff and collectors paid half by each one. Well, especially on the collector's side, it was $2,500 less.
And so that was the problem. Now, how we have remedied, how we have put a remedy in place. In the 26 budget, first of all, we use a software company called Financial Intelligent. And in the Financial Intelligent, the breakdown of individual salaries, it doesn't break it all the way down to the person.
Speaker 189
1:11:31
It breaks it down by, you've got a group of deputies, they're going to
Speaker 190
1:11:41
be paid X amount of dollars, but what legislative audit couldn't see exactly what each deputy was paid, same way with sheriff. So the remedy was the treasurer, myself, the county clerk, and one member of the finance committee of the quorum court.
We sat down, made an Excel spreadsheet with every person's name and exactly what they're supposed to be making so legislative audit can have that. That was the
Speaker 189
1:12:25
correcting of that part. Can I stop there and you ask me any
Speaker 198
1:12:35
questions as far as this one before we go to the next thing?
Well, you can take a breath if you need to, but I see Ms. Hunter, she asked like she had something she would like to add.
Speaker 201
1:12:51
Do you want to add any clarification
Speaker 190
1:12:55
to that? No, I would just agree with what he was saying. Okay. Ms. Hunter, she's a dot-the-eye, cross-the-t kind of girl. she comes in to me all the time and saying hey you can't do this you can't do this and so but i kind of my mistake kind of drug her in here she's very ocd in trying to do the job exactly right
and well me i need that we
appreciate that but she's also the county clerk and so if any members have uh questions of miss hunter she's quite capable of picking her on her own too so with But that being said, does anybody have any questions at this point? If you have some other comments you'd like to make at a later time,
Speaker 198
1:13:39
judge, we'll be happy to listen. No, I'd rather answer the questions on this
part right here. Okay, I see Representative Beatty has a question. Yes, sir.
Representative Howard M. Beaty, Jr.
Unverified
1:13:49
Thank you, Mr. Chair. My question starts with the first item on the finding, dealing with the hospital and the contract for services. Do you have a signed contract for services
Speaker 190
1:14:03
with the hospital at this time? No, sir, we don't because this happened in 2024. But each time that we disperse money to the hospital, if you'll look in these files right
Speaker 189
1:14:17
here, we don't disperse any money until they show us the council check and the invoice.
The fault was mine, Mr. Beatty. I didn't do the actual three-line contract
Speaker 190
1:14:29
saying Washtenaw County is giving Washtenaw County Medical Center for maintenance and operations 821,420, okay? And it's my fault. I didn't do that. Now, in the back of my mind, when it was appropriated from the quorum court, I thought I was okay.
But I know now I'm not. I know it's just a three-line
Representative Howard M. Beaty, Jr.
Unverified
1:15:01
do that. Well, the reason I ask is the response said that there would be a signed contract for services signed by the county judge and receiving organizations. So that's why I was just saying if we had that contract. Follow-up question. I mean, I know we're all concerned about our hospitals, especially in rural Arkansas. And even though I'm not in your community, I still have dire concerns about the hospital
and folks in South Arkansas. So my question, are there other monies and funds that are there that are available for the hospital? I know they're struggling now, and they're
trying to keep things together. And can you give us an accounting of
Speaker 213
1:15:45
what's there and what's available for the hospital?
Speaker 189
1:15:49
Yes, sir. Back last year, they passed another half-cent sales tax. Let me back it on up to 2014.
Speaker 190
1:15:58
In 2014, before I became judge, the county passed two half-cent sales tax. One was for construction projects, and one was for maintenance and operation of the hospital. And it had a five-year sunset, okay? Well, on the construction part, the bonds paid off early, and that's county money, okay? That's county money.
The bonds paid off early, so we put that in a CD and started drawing the interest on it. So when the hospital came back to the quorum court and says, hey, we're in dire need. So the Corn Court approved using some of that money to do this. The only thing on here, and I wouldn't have been written for it if I'd have done the three-line contract and had
Speaker 189
1:16:55
the hospital administrator's name on it and my name on it and the exact dollar amount,
I wouldn't have got this right
Speaker 217
1:17:07
up. But it had happened once before on something I missed on a smaller thing. But it's, you
Speaker 190
1:17:14
know, you look at $821,000 and you're thinking, wow, well, that money was appropriated properly, but I just didn't do the contract and
Representative Howard M. Beaty, Jr.
Unverified
1:17:23
that's on me. So are there other monies that are available for the hospital? And if so, what's
the plan and process for getting that money from the county to the hospital?
Speaker 190
1:17:34
Okay. They went back to the voters and approved another half cent sales tax, this time with the 10 year sunset. And each month that tax money comes in, they present the canceled checks and invoices, and the treasurer writes them that
Speaker 189
1:17:58
check directly. so that that's what happened now our hospital we
Speaker 190
1:18:03
have an outstanding hospital administrator right
now and she's come in and she's had to make massive cuts and you know anytime you make massive cuts you lose services but if you're going to meet the payroll you're going to have to do that We were losing about $750,000 a month in the hospital. Well, with the cuts, because of an excellent job the administrator is doing now,
Speaker 189
1:18:39
last month we only lost $314,000, which you might say, well, that's $314,000, but it's not like the million two, million one we were losing. So, our hospital is in communications with three other big hospital organizations, and possibly by the end of this year, they would have sold out.
Our hospital's in bankruptcy, y'all. They're in Chapter 11 bankruptcy, and they're having a hard time at that. but it's not because our administrator is not doing a wing-ding job of trying. She's awesome. I told someone I wish we'd have had her 10 years ago, but
Representative Howard M. Beaty, Jr.
Unverified
1:19:37
line of my questioning. With the hospital and the condition it's in, if the county's holding funds and money that could help operations at the hospital
and alleviate some of the problems
they're having, Is the county holding some money there that would help with those operations? No,
Speaker 221
1:19:56
we don't have enough money left to help
Speaker 189
1:20:01
with those operations. And, you know, I don't have a quorum court now that would prove it, to be honest with you. And so, no, we don't have any extra money laying around for the hospital.
Representative Beatty, I want to ask a question for clarification on the judge. Yes, sir. Just for disclosure, you know, I'm state senator for District 2, and Washtenaw County is squarely right in the middle of the district. And also, just further disclosure, I mean, I know Judge McAdoo, and I know Ms. Hunter personally. Judge McAdoo was the principal to all three of my children in junior high and high school, And I've gone to church with Mr. McAdoo the last 20 years, so I just want to put that out there for what it's worth to just have a disclosure there.
But also, I'm sitting here thinking about money, and I was listening to what Representative Beatley was saying. And I was thinking back to some conversation that we've had about the hospital. I know that at one time, I think there was some money that was collected past the sunset. And I think you had told me that that money was set aside in an account or a CD and that money was not going to be necessarily paid to the hospital
but was in a reserve that way if the hospital ever had a catastrophic failure like the boiler went out or a major roof
repair or a major air conditioner repair that you would have that money available to make that repair.
What is the amount of money that was in that money you had
Speaker 189
1:22:00
repairs for the hospital? There was $1.2 million, and we wrote them $821,149 of that money.
Speaker 190
1:22:08
But let me clarify something. that was not money collected past the sunset that was money on the county construction bond project that paid off early that's where that money came from it wasn't from past collecting and that's county money that the quorum
Speaker 206
1:22:32
court can approve whatever they want to approve it for.
So my question is, that money was collected on a hospital bond, but since it paid off early, early there was an excess amount. I'm just merely asking, was that the money that you set aside or wanted to hold for a catastrophic failure of the hospital? Is that
the funds that you were talking about on our previous
Speaker 189
1:23:09
conversation? Well, the money was there from the early county construction bond payoff.
Speaker 190
1:23:16
And so when the hospital came to the quorum court back then and say, hey, we got to have help. And so that's when they approved the $821,149, but I'm telling you, there's $677 left of that money, and my quorum court
won't approve it now. So let me ask
the question again. Is that the money that was set aside, in your opinion, for a catastrophic repair for the hospital?
I mean, that's a yes or no question. No, sir. It's not? No, sir. So what money were you thinking of that you had set aside for the hospital? Because I know that I was in a meeting with one of the three hospitals that was looking at coming in and maybe taking over Washington Medical, and you were there along with Representative Shepard and Representative Andrews, and you brought up about some money that was also left over
because when the emergency room at the hospital was remodeled, it came in under budget, which is a good thing, but that was hospital money, and it would be available. Where is that money, and what's the amount of
Speaker 203
1:24:40
that money? I don't know anything about that money. Well,
what money were you talking about earlier this spring? The
Speaker 206
1:24:50
money, the money, the only money I've talked about is the money where the county
Speaker 193
1:25:01
So that's the only money that's ever been there?
Speaker 189
1:25:06
Yes, sir. Yes, sir. And that's what, that's the, that's where the money came from when they come and ask for the $821,149. That's where that
money came from. So when we had the conversation, you said you had a block of money set aside in case the hospital had a catastrophic failure. Where did that money come from and where is it now? Okay. I mean, let me hang on just a second.
Ms. Hunter, you're the clerk. I'm assuming that you see everything that comes across your desk. Can you shed any additional lighter information on the money that I'm talking about for the hospital? No, sir. So, you keep up with the books, but have no knowledge of what I'm talking about. She keeps up with all of this. No, Judge, she's
Speaker 231
1:25:57
quite capable of answering for herself. This is what I have on the bills that come into the hospital, but as far as that, the excess money, I don't know about that.
Are you aware of money that was in an
account that was set aside
Speaker 245
1:26:23
for catastrophic maintenance on the hospital? No. No, sir. You're not? Okay. Well, I had
an occasion to talk to Mr. Archer earlier today.
There did, is there a 600 and plus thousand dollar CD
that the county has? It is not a CD anymore.
Speaker 217
1:26:44
It is, it matured and it is in the general fund to use as the quorum court
Speaker 206
1:26:51
sees appropriate to use it. So was that the money that you had set aside? So
you never had any money set aside? Not set aside for capture. Well, I mean that you were just, because I'm just trying to ask because, I mean,
the hospital is down on its knees struggling. And I also know that I've talked to the current board chairman, and I think he was under the impression also that there was money set aside. They have a major roof that's leaking, a repair that they can't pay for. And they reached out to see about getting money to get the roof repaired and there's been no response. So I'm just, I mean, while we're talking, and I think Representative Beatty is the target, do we have to protect our rural hospitals and I just want to make sure that
everything is being done to protect that hospital to make sure it succeeds because, you know, the backbone of any community in job growth and job attraction and job retention is that hospital. We're having a major economic boom in Highland Industrial Park in the defense industry right now Camden and it's tantamount that that hospital stays viable and open so it doesn't have to file chapter 7 and they lock the door if they do that's going to be a death nail in the county in that industrial park and we need to make sure
that it's open and in viable until one of the three people that are looking at coming in and taking over to the hospital so I guess I'm just wanting to fair it out, even to the last nickel, any money that could be available to make sure that hospital stays open. Representative Baye, do you have another
Representative Howard M. Beaty, Jr.
Unverified
1:28:45
question? Yes, thank you, Mr. Chair. My, I guess my question's for staff, uh, to clear this audit finding without a contract
for service, what, how, how do they clear this? I mean, if they're not going to have a contract for service or is this just going to
Speaker 29
1:29:01
be an outstanding issue? Well, with the new sales tax that are passed, we did a little looking, and they haven't paid any more money to the hospital other than what the sales tax was. Sales tax is due to the hospital. It's restricted for the hospital by the voters, and as long as they can either document it that way or document it with the claims that they have.
So there's documentation for those expenditures. Now, we haven't audited those. So I'm speaking of hypotheticals here. Right. That if that's what's going on and I'm, you know, I'm taking everybody at face value,
Representative Howard M. Beaty, Jr.
Unverified
1:29:35
that's how that would take place. Yeah. So don't make the same mistake here again and you're good. If it sells tax money, they're clear. This has been detected and reported and good. And, again, my main point of asking was just because the response that you provided that there would be a contract provided, and that was the issue.
But I want to clarify something you said and something that Senator Stone, Chairman Stone, mentioned. Is this excess money that you're both talking about, that was from an early
Speaker 96
1:30:09
payout on the bond for the hospital? For the construction project on our building of the hospital. We own the building. I understand. so that excess money was
Representative Howard M. Beaty, Jr.
Unverified
1:30:22
generated from the collections and from the bond issue to construct the hospital.
So it was tied to-- - To do a construction project. - Construct the hospital, so in one way, that's kind of still considered hospital money since it was tied to, I understand, the accounting side of where it's going, but I think that cleared some of that up for me, is the fact it was the early payout of the bond collections uh for construction of the building so
Speaker 190
1:30:59
have been told by that that's county money that's not hospital money and so that's why the quorum court
Speaker 239
1:31:07
approved it to help the hospital but i'm telling you if they come back again and ask for it
Representative Howard M. Beaty, Jr.
Unverified
1:31:14
it's It's not going to be approved. Yeah. Well, that was, again, my question was more geared toward the contract that there was a comment that it was going to be there, and it's apparent that there won't be a contract, but there's not one
Speaker 190
1:31:28
required. No, if for some reason we gave any more money to the hospital, I guarantee you, Mr. Beatty, it's going to have a contract with it. Good. Absolutely. Protect everybody. Absolutely.
Thank you, Judge. Thank you, Mr. Chair. All right. Thank you. and senator wallace i believe you're
Senator Dave Wallace
Unverified
1:31:48
recognized for a question thank you mr chair judge i'm i'm uh i have two small i have one hospital has two different facilities so i i can understand what you're
going through um are you are the the building or the structures are they in good shape your buildings they're old
Speaker 190
1:32:05
they were built in the 50s now we have had
Speaker 189
1:32:09
we have completely rebuilt on this bond issue we're talking about a new surgery ward and in a new er but the er was not part of the original construction the surgery was at at your current site yes sir those buildings at your
Senator Dave Wallace
Unverified
1:32:28
current side the the the village you just talked about the the emergency
room that's going to be at the current site they're connected to the
Speaker 262
1:32:38
old building. Yes, sir. Okay. Are you looking
Senator Dave Wallace
Unverified
1:32:41
to move the hospital? No, sir. Okay. I know
you say that they're talking with three different bigger hospitals. Yes, sir. My county, Mississippi County, we did that as well. If you don't, is there a plan B if those don't
Speaker 189
1:33:10
come through? I mean, are you looking at losing your hospital? Well, we're down now to what the hospital has, the rural emergency hospital declaration, okay? And with that, we can't keep in-house patients.
We can keep them for observation. And it's really a really, really good emergency room. So, and I've been told that the rural emergency hospital is going to bring in a revenue of about $300,000 more a month for the hospital. I
Speaker 217
1:33:53
haven't seen that yet.
It's supposed to be October when we see that
Speaker 189
1:34:03
first payment. you know the hospital has been under contract since 1994 with the county and when they put that contract in place the county had absolutely no they were to do every bit of the maintenance cover the cost on the maintenance and everything but uh that's in the contract and if the contract says that
if the con if the hospital sells then all the equipment in the hospital reverts back to the county i don't know what we're going to do with it but it reverts back to the county so uh but But yes, sir, it's, I don't have a plan B. The only thing
Speaker 206
1:34:52
I have is the same conversations with those three big entities for the hospital. Representative Dalby.
Representative Carol Dalby
Unverified
1:35:05
Thank you, Mr. Chair. Thank you, Judge, for being here. How long have you been the county judge? Twelve years. And
Speaker 189
1:35:15
you're finishing up and not, you didn't run for re-election, did you not? I did not. Midnight of December
Representative Carol Dalby
Unverified
1:35:22
31st, I will turn it over to the next county judge. Judge, moving on, I'm interested. I read all the rest of the report, all the findings, your responses, the different responses. Are you satisfied and are you coming to this committee saying that you believe you now have this,
All these issues taken care of, ready to go, resolved for the new person that will come in 1201 a.m. January 1st. Yes,
Speaker 193
1:35:50
ma'am. That is a goal of mine. And the big goal of
Speaker 189
1:35:56
mine is we noted on there that about the federal single audit, I'm going to tell you all something. it's been like pulling teeth to try to get the auditor to finish this up six months ago i sent
the last set of documents that they asked for and i told him at that time i said i need to have a copy of that when i go before the legislators i gotta have a copy of it well yesterday morning he called me back and says i hadn't heard from him six
Speaker 217
1:36:29
months he called me back said well i need this docket, this docket, this dock. You know, and our legislative auditor is very much aware
Speaker 221
1:36:44
of what I've been going through with
Representative Carol Dalby
Unverified
1:36:47
them. And when you're talking about, I'm sorry, and when you're talking about them, you're talking about the
Speaker 221
1:36:54
federal auditors. No, no. I'm talking about the private firm. Okay, the private firm.
Speaker 189
1:36:59
Private firm that we Had to do an RFP for and so. To get all of that,
Representative Carol Dalby
Unverified
1:37:06
I understand. Yes, ma'am. But in regard to the rest of the findings and some of them being repeat findings and all of that,
you've now got that in order so when the, in essence, the books are turned over come January the 1st, do you believe they're in good shape and these issues have been addressed so that your successor can now go forward? Or at least you're working on that. I'm going
Speaker 230
1:37:33
to give it my 100% to have that fixed when the new guy comes in or new gal comes in.
Chair
Unverified
1:37:39
Okay, thank you. Thank you, Mr. Chair. Senator Johnson, you recognize for a question.
Senator Mark Johnson
Unverified
1:37:46
Thank you, Mr. Chairman. Judge, who is the private audit firm that you're speaking? Parks and Associates in El Dorado. Okay.
Senator Mark Johnson
Unverified
1:37:55
seen this I think we went through a lot of this Mr. Chairman on our our water audits is that we've had some small localities that have said that they can't even get somebody to bid on when they put out an RFP because I guess it's just not enough work in some of the cases and I'm not excusing some of them because as we know there have been other problems there too
but judge I understand you've placed all this responsibility in a third-party firm and you've got to have it or and i know you're trying to have a clean desk when the new judge comes in i appreciate you doing that but uh i just i wanted to get that in the record of who the firm was all right thank you
mr chairman yes judge just one other question i'm sitting here thinking just for clarification and i don't want to belabor the point and i know that you had
the right and authority under law to take that money that was collected for the hospital after the bond was serviced and move it to the county general fund. But if that money had never been collected on behalf of the hospital, you wouldn't even have had it to move into your general account. I think you recognize the importance of the hospital. I'm sitting here thinking if that money was collected for the hospital,
and you can move it legally, and I'm not accusing you of anything. But I was also, I was taken aback by your firm stance of what the quorum court would or wouldn't do. If there's in excess of $600,000, it was collected on behalf of the hospital, and the bond retired, it kind of became money that could be moved to any account. do you mean the quorum court would in quoting you said they will never give them a pen i don't i don't think so i don't think i mean you were adding that while
hospital go down before they let them have access to
Speaker 190
1:39:56
that money the hospital can come and ask for that money they come and ask for it because i can't give it to the hospital without the quorum court
appropriation of it i know that but you said they would never approve it and i'm pretty sure Sure they won't, sir. So why would they even come and ask at the foregone conclusion? I'm just kind of taking it back that your position as the quorum court has done with the hospital, but you also acknowledged that the new hospital administrator inherited a bad situation and is riding the ship.
She absolutely has. But we're not giving her the benefit of the doubt and tying her hands to try to ride the ship. I'm just a little bit confused as to what's going on. But I don't want to belabor the
point. Does anybody else have any questions? Representative Rye,
Representative Johnny Rye
Unverified
1:40:47
you're recognized for a question. Yes, sir. Thank you, Mr. Chairman. And I'll try to
keep this brief, but I'm trying to figure out what's going on here. Judge, when
Speaker 190
1:40:58
was the bond actually paid off? Okay. It was passed in 2014.
We started collecting in 2015. The
Speaker 189
1:41:05
sunset on it was five years, and about six months before the bond issue was
Speaker 190
1:41:14
paid off. And so there was an excess. And so. Okay, sir. Now, this is
Representative Johnny Rye
Unverified
1:41:27
another thing I need to ask you. Yes, sir. The amount that
has accrued since basically 2019, has that been held in some type of a special account or something?
Speaker 193
1:41:40
It was in a CD that had a short-term high-interest CD for
Speaker 189
1:41:46
interest. And so matter of fact, when the hospital came and asked for the $821,149, we had to pay a penalty on the CD because it wasn't a maturity date, but the hospital really needed it. So the quorum court went ahead and proved it.
Representative Johnny Rye
Unverified
1:42:13
Okay. Now, that's happened since 2019. Yes, sir. Okay. Well, let's just say 2019. I don't know how much it was monthly, but it would be a good thing to know how much is accrued there since 2019, since that was paid off. And then once it's paid off, where is
the money being held? It's now in the general
Speaker 188
1:42:39
fund. It hadn't been appropriated. It's being held in the general fund, but it hasn't been appropriated.
Speaker 189
1:42:47
And it's $677,000 is what it is. It matured last month, and that's when the treasurer asked me to move it by court order to the general fund. Okay.
Representative Johnny Rye
Unverified
1:43:02
So basically, everything, even after that was paid off, it was in some type of a CD? And that CD, it was cashed
Speaker 189
1:43:14
in about, was that cashed in? Well, we've had two drawdowns on it.
One was to cover this dire need of $821,000. Okay, that was one drawdown. That's the only drawdowns we've had on that money, and none of it's been used for anything else. Thank you, sir. Thank you, Mr. Chairman. Yes. I hope I answered your question. Thank you. Are there any other
Representative Johnny Rye
Unverified
1:43:38
questions? With that objection, we'll file the report.
Seeing none, the report will be filed. Judge, thank you for your
time. Ms. Hunter, thank you for your time. Y'all are free to exit, leave. You can stay. You're
Speaker 189
1:44:07
welcome to stay. I think the judge, you have another engagement to get back to this evening. Yes, sir. tonight once a year uh we have uh we recognize our county-wide uh veterans we'll have 450 to 500 veterans and their families at a big banquet that we it's completely funded through donations and
support of the industrial park and we run it through the vfw so we don't configure any county money being dispersed or anything but it's a big thing and this is uh it's tonight we always try to have it to
Speaker 188
1:44:46
have it to thursday right around 9 11. so
i'll make one comment on that that program started off by a local barber
shop that was giving veterans free haircuts on one day a year and it
morphed into what it is now. I know that Josh Steed started that, but he was at his barbershop, then he ended up working with the judge. They have done an outstanding job. It is always a top program. Four or five hundred people there. Good food. It's good fellowship. So if anybody has, Fred and I, I've been several times since they started that, and it's always a great event. Judge, you need to exit so you can get down there and lead that and do the job that that you always do, but as late as it is, I know what I have going, I won't be able to make it down there.
Speaker 211
1:45:35
I understand. It's in my regards. We're
Speaker 190
1:45:39
going to miss you, Senator Stone. We appreciate you. Thank you. Appreciate all of y'all. Thank you. Thank you. And again, all I can do is
apologize on my part. Well, it's rare we have someone step up at the end of the table and say, let me
Speaker 265
1:45:56
take ownership of it, so I appreciate
Speaker 10
1:45:59
that, okay? Yeah. Thank you. All right, y'all. Thank you. Thank you, Mr. Archer. Continuing with the 26 deferred reports on page 11.
We have Marion County 2024 under the county judge. We were unable to reconcile the county's W3 to the appropriation journal due to the inaccurate documentation. This is a repeat finding the previous two reports. This asset record will not properly maintain its required of Arkansas code. This is a repeat finding the previous seven reports. Under the Sheriff, the Indian balance in the bond and fine circuit court, commissary, paper service, and drug conversation accounts had unidentified balances of just over 1,900,
just over 9,300, just over $173,000, excuse me, that was $93,000, just over $113,650 and $589 respectively, to repeat finding the previous six reports. The previous, in the August meeting, the county treasurer was here to answer for her questions, so we won't repeat those.
Speaker 284
1:47:01
But County Judge Jason Stump and Sheriff Greg Alexander are here today to answer questions.
Would you please state your name and your position, please,
Speaker 286
1:47:22
for the record? Jason Stump, county judge, Marion County. greg alexander
Speaker 288
1:47:27
marion county sheriff all right judge do
you have an open statement i do when i first came
Speaker 289
1:47:35
in in 23 uh marion county i hate to use this analogy right now because of all the burn bans but was under fire a lot of fires were put out in 23 the first audit that we had was 21 followed by 22 and there was over 20 reportable findings
since then now that we're in uh into 24 you see that there's four reportable findings that's a That's a leap forward for Marion County. As to the reconciliation of the W3s, Marion County has also taken on financial intelligence as their main support for this, and it was late '23 into early '24 before I had a chance to actually get into the daily activities of the administration employees that I kept from the prior administration. The HR payroll employee that was doing the W3s and was supposed to do the journal entries
has been given a chance to, in 24, to be successful somewhere else, no longer with Marion County. I have since hired new there as well. And with the fixed asset records, the deputy OEM that we hired found money for that. That is now part of their job. And procedures and reports have been set and implemented in place to make sure we never have an issue with asset records going
forward. Sheriff? Yes, sir. Do you have anything you'd like to add?
Speaker 291
1:48:52
I do have. I would like to add that the sheriff's department has five findings that he read off just shortly ago. I have a handout that I would like to hand out to each one of you so that you could look at it, if that would be appropriate. I've made all the
Speaker 117
1:49:30
copies. Yeah, that's fine. I don't know why they're going to sit here next to you.
I don't know why they're going
Speaker 116
1:49:38
to sit here next to you. No, I don't
Speaker 100
1:49:43
want to wait here. This makes me look over there. You need one
Speaker 295
1:50:01
more over here. yes sir you've been handed out an
Speaker 291
1:50:05
audit sheet if you will and it shows the five findings that you
had listed or that the auditors had listed and this is going back six audits this goes back to 18 2018 but after we've started diving in and trying to figure out where all the money was at and who it's owed to we've gone back to 1996 owing people money so the findings we have been working on the five findings that y'all have identified and if you will look at the first page of the report the bond and fine money
the audit finding was $1,959. We have reduced that down to only $27.50 that is not resolved as of yet. In the circuit court fines, there was $93,021 that was in the account that we got credited for. Now then we have reduced that, the active review and paying it out, we've got it reduced down to $31,443.
The commissary account that we inherited, I mean, we inherited all of this, and the commissary account was the biggest problem. The commissary we had, CTC commissary was the people that were taking care of the inmates, And their reporting system was so poor that we could hardly get through it. But we did, we managed to get through it. And the commissary is totally resolved now. It's zero, there's nothing else to look at.
Their current, the paper service is $650, I believe we're done with that. The drug confiscation money, there was $589 in that account. We've gone back and found the deposit where it was made in 2011. But to this day, we can't find out who it belongs to or what case it came from. Now, as we were working toward getting all this resolved,
and we will be going to the clerk's office next to try to find the case that it came from. So all the findings that, the five findings, we are aware of them, we inherited them, and we are trying to address the problem. And we will have it fixed going forward.
All right, are there any questions of the gentleman at
the end of the table? Seeing none, make a move that we file the report.
Speaker 295
1:52:55
Gentlemen, thank you for your time, thank you. Thank you for your time
Speaker 10
1:53:02
and thank you for each one here in the job you do. Thank you. Continuing on page 11, we have the Lakeside Water Association Incorporated. This is a private report from 2025. We would defer this one from the previous meeting with a lack of proper response. Staff recommends that we defer this one again if we have not
Speaker 298
1:53:25
received a response letter. So moved, Mr. Chair.
Do I have a second, second, all in favor?
Aye. Any opposed? All right, motion carries. Page 12, we have
Speaker 300
1:53:34
the town of Alpena for 24, 23, and 22. Under the
Speaker 10
1:53:39
record of treasurer, county procedures for municipalities are set forth in Arkansas code. The town was in non-compliance with these code sections and other proper county procedures as noted below. Pre-numbered receipts were not issued for all income in '24 and '22. A detailed fixed asset listing was not established. It's a repeat finding for the previous five years.
Cash receipts and disbursement journals were not properly maintained. This is a repeat finding. The recorder treasurer was invited to the June meeting. She resigned her post shortly there after the June meeting. And the current mayor, David Meyer,
Speaker 284
1:54:15
has volunteered to come answer questions on her behalf. Please state your name and position for
the record, please. David Meyer, Mayor of Valpina. Do you have an open statement, Mayor? I have a question.
Speaker 302
1:54:30
Is there a doctor in the house?
I need my head examined for being here. Well. For volunteering for this position. Anyway, I hope I can help.
Would you do one other thing for me, please? Sure. Would you remove your hat while you're sitting at that table, if you don't mind? Thank
you. Proceed, please. How's my hair? Well,
Speaker 302
1:54:54
I love the way you parred it, so proceed. All right. No, I don't have anything more. You stated that my recorder
Speaker 305
1:55:00
treasurer did quit. She was a little stressed about coming here.
She didn't want to. She actually was a little confused about her position over the last couple of years because we had a bookkeeper that was taking on the treasurer responsibilities and she didn't think she needed to. because the council decided in a resolution that she didn't have to and gave it to a bookkeeper but the bookkeeper quit about two years ago officially although she's hanging around trying to help us out. Fortunately just
recently in August the council meeting appointed a new recorder treasurer who has 10 years experience to bring to the table so we're pretty happy about that and she's going to help us go forward correctly with some of these things but as far as the findings that you guys that their auditors had I think I addressed those already we have an asset listing that is now more current
with and we passed a resolution for a thousand dollars or more which we didn't have before. We do now. I have the resolution with me and my asset listing if you guys wanted to see it. But we were putting that together. We did a basically assessment of all our assets and they're on the list now. And I pulled down the list from the legislative audit site with the proper columns that we didn't have before. Even though we had an asset book,
I understand that it was lacking some of the detailed information, but that's why I pulled it down from your site, and we are now recording it, I believe, properly with all the information that's necessary. In terms of the receipts, the cash and the other receipts, we were not keeping. We have QuickBooks. I don't know if anybody else uses that, but we have begun putting the sequential receipts
in the memo section of the entries for all our transactions. So that, I believe when I met with the auditor, that that would be sufficient and necessary. So we have been doing that from essentially day one that the auditor came and, you know, we actually hired somebody to fill that position and track that.
So along with the bank statements and so forth, reconciling those. So that's all. evidence of that here, if you guys wanted to see it, that we are actually doing that now. So, um, but anyway, that's, that's my statement. Ask your questions. Does anybody
have any questions of the mayor?
Seeing none, uh, we'll file the report. Thank you. Okay.
Speaker 300
1:58:13
We'll jump down to number eight, uh, Mount, town of Mount Vernon on page 15. Mayor Jonathan
Speaker 10
1:58:20
Hawkins was invited here today. He called and could not make it. Staff recommends that we defer this
report. I have a motion to defer the report, I have a second. Second, all in favor say aye. Aye.
Speaker 112
1:58:39
All opposed, motion carries. Page 16, we have the city of Parkdale, 2024.
Speaker 10
1:58:44
Is the mayor here, Parkdale? Okay, so there's no one here for the part that
Speaker 308
1:58:53
Mayor Latrice Taylor was invited. Staff recommends we defer this report. Got
Speaker 301
1:59:01
a motion, second, all in favor, say aye. Aye. Aye, opposed, motion carries. Pages
Speaker 8
1:59:07
16 and 17, we have Phillips County 2024. County Judge Clark Hall was invited here today.
Speaker 10
1:59:14
He had a dentist appointment, staff recommends that
Speaker 315
1:59:17
we defer this report. With that objection, we will defer
Speaker 114
1:59:23
this report. On pages 19 through 22, we
Speaker 10
1:59:27
have 16 private reports that were deferred from the previous meeting because of the lack of proper responses. We have received responses for Highway 4 and 24 for 25, for McRae Water for 24, for Van Buren County, 24,
West Saline Water for 24, Western Grove for 24 and 23, and Wilmer Water for 23, 24, and 22. That's nine reports. Staff recommends that we file these reports. Without objection, we'll file these reports.
Speaker 10
2:00:04
have not received proper responses for. Staff recommends that we defer these reports. Without objection, we will defer these reports.
Unknown speaker
2:00:16
You're going to give me a minute to catch up here. Sure.
Speaker 114
2:00:52
of these were referred to the prosecuting attorney in the AG's
Speaker 10
2:01:01
office, those would be the Carthage 24, 23, and 22. The 24 had a finding referred to some reimbursements that were not documented. The 23 and 22 had some daily deposits that didn't agree with the cash check payments.
The city of Norman Water and Sewer 2023 had a cash check composition that didn't agree. Van Buren 24 had cash receipts that were not prepared for six customer payments, but the Cash was included in 10 deposits tested, there were about $620 that weren't accounted for, and then the West Saline Water had 14 debit card transactions initiated by an employee but were not adequately documented.
So, that concludes our deferred reports. We have two reports that were certified to the bond board referred to the prosecuting attorney in the Attorney General's office. The first one is on page 23, that's the city of Benton 2025 under the mayor. In June of 2026, city personnel notified audit when they became aware of a bank account in the name of a non-profit organization established by the city's animal control director and
the animal control service manager. The account was not authorized by the city and the city officials were not previously aware that donations were being collected and records maintained on city property. Our review of expenditures totaling just under $19,000 from January 1 of 2025 through June 8, 2026, revealed the following withdrawals. Just over $14,500 in bank withdrawals and debit transactions of which 645 were not supported
by adequate documentation. over 1,900 in PayPal withdrawals for which adequate supporting documentation was not retained. Validity of withdrawals without adequate supporting documentation could not be determined. It should be noted that the Animal Control Service Manager self-reported personal expenditures of $866 that were reimbursed on June 9, 2026. The Animal Control Director retired effective July 20, 26, and the Animal Control Service Manager resigned effective
July 28th of '26. This report has been filed with the bond board and referred to the prosecuting attorney in the AG's office. If there are no questions, staff recommends we
file this report. No objection. We'll file the
Speaker 123
2:03:46
report. We've already filed Wachita County,
Speaker 10
2:03:49
which was the other referred to the certified of the bond board. On page 27, we start with the seven reports that were referred to the Prosecuting Attorney
in the AG's office. We've got the Dumas Water and Sewer Department 2024. This is a private report. The department made three advanced loans to three different employees for the city for an amount totaling just over $2,600. article 12 section 5 mandates no count no city shall loan money to any individual this report's been filed with the uh referred to the prosecuting attorney in the ag's office staff recommends we file this report if there are no questions without objection we will file this report
pages 28 excuse me in 29 we have the city of dumas the 2023 report that we prepared Under the Mayor and Finance Director, the payroll preparer received additional pay of just over $5,300 without adequate supporting documentation, non-compliance with code. Therefore, we were unable to determine the validity of these payments. Under the Mayor, the City made disbursements of just over $12,000, of which $9,500 was for gifts,
just over $2,700 was for meal expense for an employee appreciation event in apparent conflict with article 12 section 5 as interpreted by AG's opinion 91.410. In addition, these gifts were not reported on the employee's W-2 form. This report has been referred to the prostitute and attorney in the AG's office. If there are no questions, staff recommends we file this report.
I'm saying none without objection, we'll file the report.
Speaker 8
2:05:36
Page 30, we have the town of Emerson, 2025 and 24. Under the Mayor and Treasurer, the mayor was overpaid
Speaker 10
2:05:46
a total of $3,000 for 25 and 24 due to calculation errors that occurred when the town changed from monthly to weekly payroll processing. As a result, the mayor was paid more than the appropriated salaries. None of the overpayment or have been recouped as of the report date. Under the mayor, in 2025, street fund disbursements exceeded appropriations by just over $15,000, or 35%, in non-compliance of code.
This is a repeat finding in the previous six reports. Mayor, Linda Mullins is here
Speaker 199
2:06:21
today to answer questions. Mayor, if you would,
Speaker 323
2:06:25
state your name and your position for the record, please. Yes, I'm Linda Mullins, mayor for town of Emerson. Good afternoon, chairman and ladies and gentlemen of the committee. Do you have an opening statement, ma'am? Yes. And we had a city council meeting this past Tuesday on which they made a motion for me
to pay back the amount of money that was given to me in salary that the bookkeeper and treasurer and I did not realize, honestly. What had happened, we went to weekly, and there was five weeks sometimes in a month. So we just, she, we, I'll say we.
The checks were made out in the same amount, and that's what caused the overpayment of $1,500 per year. So last Tuesday, the city council did agree with the audit founding and allowed me to pay in a motion, allowed me to pay back the money and for it to be reportedly on the books that I had paid back.
I do have that city council meeting, and I would have handed that out earlier, but I wasn't aware that I could do that. But I do have that meeting of the minutes from last Tuesday and the agenda. As far as the mix of preparation, we have CenterPoint as our software and we acquired that four years ago. Our new treasurer, Bookkeeper, started two years ago.
She only works anywhere from eight to ten hours a week. And they had a training for treasurers from the Arkansas Municipal League, which she participated in. And they were talking about budgets. And it brought her to the attention that in that software, she could, with my appropriations to begin with, that she could take that and we could keep up with it much better with the budget.
So she was trained two weeks ago in that part of the software. So we're really trying in the future for that misappropriations not to happen again because of this software that we can better calculate our figures with. I'm open to any questions if there's-- All right, does anybody have any questions?
Saying none, we'll, and without objection, we'll file the report.
Speaker 323
2:09:35
Mayor, thank you. Okay. Did you need the minutes from the meeting? Just provide them
Speaker 125
2:09:41
to your next auditor when they arrive for your next engagement. It'll
Speaker 10
2:09:48
be fine. Thank you, ma'am. Thank you. Continuing on page 30 with the Town Alexa 2024 under the mayor. City made payments totaling just over $8,700 to the mayor's son and father for various services is without ordinances authorizing this related party transaction, apparent conflict with Arkansas Code. This report's been filed with the PA and the AGs.
If there are no questions, staff recommends we file this report. Without objection, we'll file this report. On page 31, we have the town of Amagon for 2025 under the mayor. Restricted street fund revenues of $11,000 was used to replace septic tanks on two private properties in apparent conflict with Arkansas Code and apparent conflict with Article 12,
Section 5. Staff would note that we checked with the city this week. They have repaid all the street funds with these monies except $330, and as soon as the money is available, they will continue to do that. This report has been filed with the prosecuting attorney in the AG's office. recommends we file this report if there are no questions. With that objection, we'll file this report. Continuing on page 31 of the town of Pottsville Water and Sewer Department, 2024. This is a private report.
Due to the lack of documentation maintained by former Water Department personnel, out of the 10 selections, we were unable to agree four payments by credit card to credit card deposits on the bank statements. We were unable to agree for customer payments by cash or check back to the bank deposit slips and
Speaker 13
2:11:27
cash check composition. Due to the multiple days deposits being included on the deposits and not maintained supporting documentation.
Speaker 10
2:11:35
This report's been filed as a prosecutor attorney and Attorney General's office.
There are no questions. Staff recommends we
Speaker 326
2:11:42
file this report. Saying none, we'll
Speaker 13
2:11:45
file the report. The next report is a special report, Used Tire Programs 1 and
Speaker 10
2:11:51
3, Review of Selected Policies, Procedures, and Transactions for the period July 1 through 2024 through June 30th to 2025. We have staff member Charlie Camp here
Representative Howard M. Beaty, Jr.
Unverified
2:12:00
to provide this report. Thank you, Mr. Archer. This report is issued pursuant to Arkansas Code 89410, which requires Arkansas legislative audit to review selected policies,
procedures, and transactions of Arkansas's used tire programs. For this report, ALA selected used tire programs one and three for review. The locations of the four programs in the state are shown in Exhibit 1 on page two of this
Speaker 63
2:12:24
report. The code does not require the programs to obtain an audit by CPA. Consequently, programs one and three did not do so. ALA issued no findings for program one. ALA issued two findings for program three. First, pre-numbered receipts were not issued for all items of income and non-compliance with code.
Second, check images provided for use tire program through bank accounts did not include both sides of canceled checks in noncompliance with Arkansas code. Management responses to the findings are contained in the body of the report.
Mr. Chair, this concludes my report. If
Speaker 10
2:13:06
there are no questions, file. Seeing no questions, we'll file the report. We have six reports with repeat findings starting on page 32 with the city of Grady, 2025.
Mayor Charles Knight and Lindley Power, the recorded treasurer, were invited here today. They called and said they could not attend. Staff recommends we defer this report. Without rejection, we'll defer this report. Let me back up when I skipped one there, accidentally. That's okay. City of Garland, 2025, under the mayor, we have street fund disbursements, exceeded budget appropriations by $2,300 or 31% noncompliance with code.
Speaker 8
2:13:51
We have a, this is a repeat finding, we have Mayor Tashika Antwine. Yes,
Speaker 242
2:13:56
sir. Ooh. You got it just right on the list. That's rare for
Speaker 330
2:14:00
me. So thank you. All right, if you would, would
you state your name and position for the record, please? Tashika Antwine, Mayor of Gawler. Okay. Mayor, do you have an opening
statement? No, sir. Does anybody have questions of
the mayor? Saying none, without objection, we'll file the report.
Speaker 10
2:14:23
Mayor, thank you. Thank you. Continuing with repeat findings on page 33, We have the City of Marville in 2024 under the District Court Clerk. Balances remaining in the bank account were not properly identified with the receipt numbers for cases not yet adjudicated and the payments on all unpaid individual time accounts as required by Arkansas Code. This is a repeat fine in the previous
Speaker 13
2:14:48
two reports. We have District Court Clerk Jennifer Williams here today to answer questions.
Speaker 334
2:14:55
Would you state your name and position for the record, please? I'm Jennifer Williams, Marble District Court Clerk, Phillips County Branch. Do you have an opening statement? Yes, sir. On that finding, I was previously cited for that, but I don't think that the auditor researched it properly. The report that shows criminal bonds pending does include names, citation number, as well as dates that payments are received. And I have proof of that.
Speaker 335
2:15:25
All right, are there any questions? Would you please, do you have a copy of that for
Speaker 334
2:15:34
us? I didn't make a copy for everyone. I didn't, I wasn't aware. Just for me. I mean, just for all this. That one copy would be plenty. But I can, I have it in my monthly report. We use the virtual justice system and each month of report I print out a form because I don't do the, I don't do the accounting. We have an accountant. So I print out a report that I give her for disbursement of checks and what has been accumulated
in my system, and that criminal bonds pending report does include all of that information he requested. Okay. Including receipt
Speaker 125
2:16:05
numbers? Yes, sir. Okay. Just provide that to your auditor on the next trip and explain, have a good conversation with them to explain exactly what, you know, what you
Speaker 334
2:16:14
think you have and what's required. And it's a continuous finding because they keep finding me for the same thing. So I think they're asking about consecutive receipt numbers, and we do take payments through a credit card system, and we do not receipt those payments manually. As per the previous
auditor, she stated I did not have to receipt them in the manual book because it is kept at the police station. So that's how the receipt numbers are not consecutive. The receipt numbers are there, but they are consecutive in the order in which they come out of the credit card program. Now, as far as the manual receipts, they are listed there concurrently as they are in the manual receipt book.
Speaker 335
2:16:55
Okay. Okay. Just provide that information to the auditor and we recommend we
Chair
Unverified
2:16:59
file this report. Without objection, but I'm sorry, Senator Hammer, you're recognized.
Senator Kim Hammer
Unverified
2:17:03
Thank you. Which one are we on again? I've been listening, but which one are we on? City of Marvel, page 33. Okay, so just the thing is, if we go ahead and file this report and it turns out that she's right this is going to be part of a permanent record and should it be part of a permanent record if it turns out that she's right and there's corrective action that needs to be taken on the part of audit because we file this how
Speaker 13
2:17:33
do you unfile it point and we can defer it and we'll go back and we'll look at what she has I mean normally we got we our report dates are set in date now did she have it and we didn't ask for I mean I don't know I wasn't there so I So I don't know what transpired, but we can go back and find out. We can defer it,
and we'll report back in October if that's what the
Senator Mark Johnson
Unverified
2:17:59
committee wishes. Senator Johnson, you're recognized. Thank you, Mr. Chairman. I appreciate my colleagues, Senator Hammer. These are some of the things I'm going to miss when he moves upstairs.
But the thing is, I think he's absolutely right. If you've got adequate documentation and staff can accept that, then deferring it until October will give us an opportunity to kind of clean that up and whatever the permanent record ends up being, I think it will be more favorable to you and
Speaker 148
2:18:26
appreciate you coming all the way down here to bring that. All right,
Senator Kim Hammer
Unverified
2:18:32
Senator Hammer. Are you full-time with city? Are you part-time?
Speaker 334
2:18:37
You had to take off work to come down here today or what? full-time with the city, but they allowed me to come because I had this previous finding last year and I wasn't aware that I needed to come. So this year, the auditor that came in, he specifically called me back and said,
Senator Kim Hammer
Unverified
2:18:54
Jennifer, can you be here? Okay. So how would you feel about if we hold this report over, so you and the auditors, because I mean, moving forward, if, you know, we're kind of in the middle of who's right, who's wrong, I'd rather give you a month to work with them and if it turns out that they're right then you know no harm no
foul if you're right no harm no foul we just want to make sure it's right before we move forward will you be okay coming back if we ask you to come back and yes sir yeah
Speaker 337
2:19:20
okay then i got a motion mr chairman all right
Senator Kim Hammer
Unverified
2:19:22
you're making motion at the proper time i'd like to make a motion that we hold this report over and uh let the young lady and audit have a conversation let's see how it shakes out and come back next month
and report to the committee do we have a second second all in favor say aye aye any opposed the motion passes
Speaker 283
2:19:40
mr chairman point of clarification yes uh ma'am miss miss williams do you have you said you have a
Speaker 29
2:19:46
copy for us or do you have something we can make copies of yes sir i should have something to make copies brianna can you help me
Speaker 10
2:19:58
with that staff members going to help you with that please Thank you. Thank you. All right, Mr. Archer. Continuing on page 34, Town of Strawberry, 2025. Mayor Stanley Malin was invited here today. He called and could not be here today. We recommend we defer this report.
Speaker 316
2:20:13
Without objection, we'll defer this report. Defer this report. Continuing on page
Speaker 10
2:20:18
34, the Town of Weldon, 2025. Quarter Treasurer Beverly Tooley was invited here today. She called and could not come. Staff
Speaker 10
2:20:31
objection, we'll defer the report. Continuing on page 34, we have Arkansas County 2024. County Judge Thomas Eddie Best had a previous commitment. Staff recommends
Speaker 315
2:20:42
we defer. Without objection, we'll defer this report.
Speaker 10
2:20:47
On page 35, we have three private reports, West Stone County Water Association 25, City of Smackover 25, and Norman Water and Sewer 24. We have not yet received responses from these three reports. Staff recommends we defer all three. Without objection, we will refer these
Speaker 12
2:21:04
three reports. On pages 36 through 40,
Speaker 10
2:21:09
we have 18 reports with resolved findings. Staff would request that we take a few minutes to take a look at that.
If there are no questions, staff recommends we file these reports. Any
Speaker 43
2:21:42
questions? I'll give you just a minute to continue to look.
Representative Johnny Rye
Unverified
2:22:43
Mr. Bride, do you have a question? Yes, sir, I do, and it may have already been answered. But down close to the bottom on the Huntsville Water and Wastewater Department, what those fixed assets, they're supposed to, if it's anything, I think up and above $500, it may have changed. That's supposed to be kept on a fixed asset list. I
Speaker 350
2:23:03
just wonder if that had been upgraded,
Speaker 8
2:23:06
Mr. Archer? The amount is actually not set in law. they
Speaker 10
2:23:09
can set it at any amount they want to by policy.
This is a private report, so we'll get their 2025 report and follow up
report. Thank you, sir. Thank you. Any other questions? Shane, we'll make a move that we file this report.
Speaker 122
2:23:33
On pages 41 through 42, we have 70 reports with no findings. Staff recommends we file these reports. Without
Speaker 41
2:23:40
objections, we will file these reports. I'm done, sir.
Any other questions or comments? Saying none, we're adjourned. Thank you. Mr. Archers,
Agenda
A. Call to Order by Chair
B. Adoption of Minutes of August 13, 2026, meeting
C. Update on Private Reports – Delinquent December 31, 2023 and 2024, Water and Sewer Reports
D. Update on Private Reports – Delinquent December 31, 2024, City Reports – Bauxite
E. Discussion of Noncompliance will A.C.A. § 27-70-207 Misuse of Street Funds – Jericho andHaynes
F. Review of Reports (Refer to the Synopsis)
G. The next meeting of the Legislative Joint Auditing Committee will be held on October 8, 2026.
H. Adjournment
Documents
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| Agenda — LEGISLATIVE JOINT AUDITING - COUNTIES AND MUNICIPALITIES, Sep 10, 2026 | Agenda | 3 | Official source ↗ |
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Senator Matt Stone Chair
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Representative Howard M. Beaty, Jr.
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Senator Kim Hammer
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Representative Johnny Rye
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Senator Dave Wallace
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