A recently released Arkansas Legislative Audit report disclosed multiple discrepancies within Jefferson County, the Pine Bluff School District, and the city of Altheimer. Made public last week by the legislative auditor to the Legislative Joint Auditing Committee, Governor Sarah Huckabee Sanders and several state legislators, management letters highlighted key findings from the audit.
The legislative auditor issued a report for the period ending Dec. 31, 2022, to Jefferson County officials and Quorum Court members. The county officials in office during the period included: County Judge Gerald Robinson, Treasurer Vonysha Goodwin; Sheriff Lafayette Woods Jr.; Tax Collector Tony Washington; County Clerk Shawndra Taggart; Circuit Clerk Flora Cook; Assessor Gloria Tillman; District Court Clerk Division 1 Brooke Stayton and Circuit Judge Juvenile Division Earnest Brown Jr.
Three findings were mentioned under the County Judge section of the audit report. The first one was the Quorum Court entered executive session during the meeting held on Dec. 12, 2022 to review the 2021 audit in noncompliance with Arkansas Code Section 25-19-106. Also, the applicable meeting minutes did not document the review of the audit and accompanying findings, in noncompliance with Section 10-4-418.
The letter notes a similar finding was issued in a prior report.
The second finding dealt with Section 14-16-106, which requires a notice of public auction to be published in a newspaper having general circulation in the county for any personal or real property to be sold at public auction and be approved by court order setting forth the description of the property sold, the name of the purchaser, the terms of the sale, the proceeds of the sale have been deposited with the county treasurer and the funds to which proceeds credited. The letter states that in 2022, the county sold road department tow trucks and a street sweeper at a public auction without advertising and including the required information in the court order.
The last finding listed on the audit was on March 8, 2021, the county received bids totaling $376,650 for a road project but invoiced amounts for the project completed in May 2022 totaling $415,011, exceeding the bid by $38,361.
A finding under the Sheriff’s Department included funds of $207,313 that were restricted for sheriff communication purposes were expended for food purchases, in noncompliance with Section 21-6-307.
The letter issued to the Pine Bluff School District and its school board members addressed the findings from the audit conducted for the fiscal year ending June 30, 2023.
The letter highlighted various items that had been brought to the attention of the auditors during the audit process. These matters were previously discussed with district officials during the audit fieldwork and the exit conference.
The first finding was during the examination of bank reconciliations. It was noted the district’s operating bank account was unreconciled during the 2023 fiscal year with unexplained variances ranging from $60,446 to $3,734 and as of June 30, 2023, there was an unreconciled variance of $60,446.
The letter states during their review of receipts the following deficiencies were noted:
Receipts were not always issued when revenues were received and were not entered into the general ledger in a timely or accurate manner. It was noted revenue of $5,230,846 was receipted and recorded.
Cash/check composition was not always indicated.
In the audit examination of payroll expenditures the following was noted:
Two employees’ employment contracts were not provided; therefore proper payment could not be determined.
One employee’s contract did not agree to the approved salary schedule resulting in an overpayment of $699.
One employee was not paid according to their employment contract and stipend resulting in a $7,853 underpayment.
One employee’s contract did not agree to the approved salary schedule resulting in an underpayment of $2,900. This same employee was overpaid for additional duties by $95 for a net underpayment of $2,805.
Two certified teachers were not properly licensed.
According to the letter similar findings were reported in a previous audit.
The letter states that the Arkansas Department of Education and proper accounting procedures require proper maintenance of capital asset records. While performing capital asset procedures, the following deficiencies were noted:
Five equipment assets with a cost exceeding $1,000 were not added to the district’s capital asset listing.
Two construction projects completed during the year were not added to the district’s capital asset listing.
Four out of 10 assets selected for inspection could not be located.
The district failed to properly update the capital asset records including assets from the annexation of Dollarway School District on July 1, 2021.
Similar findings were reported in a previous audit as the above as well.
Other findings from December 2022 to February 2023 include two unauthorized withdrawals totaling $18,820 that cleared the district’s bank account. District personnel discovered the unauthorized withdrawals upon reviewing the affected bank and all funds were recovered from the bank.
The district also discovered, which was verified by the legislative audit, gross salary overpayments totaling $74,110 to former employees for the fiscal year 2023. As of the report date, $5,253 has been reimbursed to the district.
The city of Altheimer underwent an audit for its fiscal years ending Dec. 31, 2022, and Dec. 31, 2021. The audit findings were addressed to the following officials: Mayor Zola Hudson, Recorder/Treasurer Doris Hudson-Gaddy, and District Court Clerk Jeanetta McClinton.
The audit report covered the city’s noncompliance with specific state laws related to general and district court accounting, budgeting, purchasing, and investing and depositing public funds. The audit identified the following discrepancies:
Under the Mayor’s section of the audit, the city paid $1,325 to the mayor’s spouse for labor without an authorizing ordinance, in conflict with Section 14-42-107.
Notated under the Mayor/Recorder/Treasurer section of the letter, the city’s bank accounts were under-collateralized by $590,610 on Dec. 31, 2022, in noncompliance with Section 19-8-107.
The letter goes on to say the city filed an insurance claim related to damages to city property incurred on Jan. 26, 2022. The insurance company paid $10,010 on April 6, 2022, to settle the claim. The itemized list of costs to the city included labor and administrative fees for individuals working on the incident. Nonemployees and employees including the mayor, recorder/treasurer and two council members received, as part of the claim settlements, stipends totaling $3,009 on April 28, 2022. The employees had already received payment for hours worked during January and payments to nonemployees were not approved by the City Council. Additionally, the city paid $234 in payroll taxes on the stipends which were not reimbursed by the insurance claims.
Another finding included invoices and supporting documentation was not provided for tested disbursements in 2022 and 2021 of $6,136 and $25,055 in noncompliance with Section 14-59-105. Of those amounts, $4,909 and $284 in 2022 and 2021 were for charges incurred on a credit card. Due to a lack of supporting documentation, the validity of these disbursements could not be determined.
The last audit of the city’s financial records revealed a failure to accurately report employee compensation on the Internal Revenue Service (IRS) Form W-2. The audit identified unreported income for the mayor ($777), the recorder/treasurer ($777), and another employee ($50).