LITTLE ROCK, AR — December 5, 2024
The Arkansas Legislative Joint Auditing Committee reviewed issues facing several towns and counties across the state, with discussions centering on financial mismanagement, noncompliance with municipal accounting laws, and overdue reporting requirements. The meeting resulted in significant actions against delinquent cities, while others received conditional approval pending compliance improvements.
The committee addressed overdue financial reports from Black Rock, Dermott, and Russell, which had failed to submit required documentation despite multiple reminders. Legislators unanimously voted to withhold state turnback funds for these municipalities until they demonstrate compliance.
“These towns have had over two years to comply,” said Senator Steve Crowell, emphasizing the committee’s responsibility to enforce financial accountability.
The town of Gilmore faced scrutiny for years of underpayments to its street fund, a deficit exacerbated by improper use of restricted funds. Mayor Bruce Delaney pledged to follow a repayment schedule after consulting with auditors. "I understand everything now and am committed to getting in compliance," Delaney said.
Similarly, Oil Trough officials, including Recorder-Treasurer Judy Smotherman, admitted to long-standing financial lapses, such as missing payroll records and unreconciled bank accounts. Smotherman expressed a commitment to improvements, noting, “Our goal is to correct all these citations.” The committee placed the town on a 60-day compliance track, with progress to be reviewed at the next meeting in May.
Senator David Wallace advocated for approval of the city of Zinc’s report, citing its proactive steps, including hiring a CPA. Despite repeat findings of unauthorized payments, the committee acknowledged progress and approved the report without objection.
Jefferson County emerged as a focal point for extensive financial irregularities. Findings included splitting invoices to circumvent bidding laws, entering unauthorized financial commitments, and overspending by more than $1 million. Justice of the Peace Lloyd Franklin II testified that the county judge’s actions had forced the quorum court to allocate reserve funds to cover illegal transactions.
“This is about transparency and accountability,” said Senator Ben Gilmore, urging immediate action. The committee filed the report and referred the findings to the prosecuting attorney and attorney general.
Phillips County also faced repeat findings of financial mismanagement, including duplicate payments and late fees. County Judge Clark Hall assured the committee that systems have been improved and oversight strengthened. The committee approved the report but emphasized continued monitoring.
The committee reviewed cases from Independence County, Sharp County, and Gurdon, each involving improper use of funds or internal controls. In Sharp County, for example, a former employee was found to have deposited duplicate payroll checks. The funds were recovered, and the employee was terminated, and they were reported to the bond board to prohibit future public work.
Committee Chair Representative Johnny Rye expressed the importance of these hearings: “Our role is to ensure taxpayer dollars are spent responsibly. These findings help us identify where we need tighter oversight.”
As Arkansas continues to grapple with the challenges of maintaining fiscal responsibility in local governments, the committee’s actions serve as a reminder of the critical importance of transparency and compliance.
