Audit Counties and Municipalities: Jan. 8

Representative Richard Womack …We have a motion and a second. All those in favor say aye. All opposed, no. Thank you. That’ll stand adopted. Up next is an update on private reports. Mr. Archer, you’re recognized. 

Staff Thank you, Mr. Chair. Update on the delinquent water and sewer, private water and sewer reports for the year ended December 31, 2022. We received five additional 2024 reports since the December meeting. That brings the total to 17 total that we have released their escrow funds. And that leaves 26 that continue to be escrowed with the deadline of the July meeting of last year that started the year’s clock. Mr. Chair, this concludes my report. 

Representative Richard Womack Thank you, sir. Are there any questions from committee? Any discussion? Okay. Then without objection, we’ll file this report. Next up is an update on those same reports delinquent December 31, 2023. 

Staff Thank you, Mr. Chair. Since the December meeting for the ’23 delinquent reports, we’ve received two additional reports. This brings the total to 59 of the original 64 that are in compliance now. So we have five outstanding ’23 reports. And Mr. Chair, these entities are not having their turn back currently escrowed because the committee has not requested to do so. Mr.Chair, this concludes my report. 

Representative Richard Womack Any question or comment from committee concerning those? All right, without objection, we will file that report. Thank you. Committee, next up is our discussion of Act 709 of 2021, repayment of street turnback for Daisy. Mr. Archer.

City of Daisy

Staff Do we have someone pressing here from the city of Daisy? Okay. Okay. Mr. Chair, I wasn’t sure. There was a question whether or not they could make it today. With your permission, we’d like to go ahead and present that report from page 12. 

Representative Richard Womack Yes, sir. Please. 

Staff On page 12, the town of Daisy, 2023 and ’24, under reports referred to the prosecuting attorney and the attorney general’s office. Under the mayor and recorder treasurer, the town paid Daisy Community and Non-Profit Corporation $2,000 in both ’24 and ’23 without a contract for services in non-compliance with Article 12, Section 5 of the Constitution. 

According to town officials, this was a donation towards the annual fireworks show sponsored by the nonprofit. In 2022 and 2021, the town spent street fund monies which were restricted by Arkansas Code annotated 27-7-207 in the amount of $42,731 for payment relating to the acquisition of a fire truck and the construction of a fire department building. 

Additionally, the town has not passed the ordinance or resolution to repay the street fund 10 percent of general revenues until the street fund is repaid and has not obtained the authorization from the Legislative Joint Auditing committee for repayment of less than 10 percent of general fund revenues annually in non-compliance with Arkansas code. This is a repeat finding. I believe we have Mayor Lisa Cogburn here to answer questions today, if she’ll come to the end of the table. And as the finding states, we need to discuss whether or not how they’re going to repay this money. 

Representative Richard Womack Thank you. Just take a seat there and reach up and turn your microphone on. And if you don’t mind, just for the record, if you’ll state your name and affiliation, the reason you’re here, please. And then we’ll hear any statement that you may have. 

Lisa Cogburn Yes, sir. My name is Lisa Cogburn. I’m the mayor of Daisy. 

Representative Richard Womack Okay, thank you. Do you have a statement you’d like to make? 

Lisa Cogburn Sir? 

Representative Richard Womack Do you have a statement you’d like to make regarding these findings? 

Lisa Cogburn As far as this repaying the street fund back, I have presented it to my council multiple times and the council has not passed it. They don’t think that the amount is correct, the total amount. And I would like to, planning on sending a letter over to ask if we could drop that 10 percent down to 5percent, if I can get my council to finally approve. 

Representative Richard Womack Okay, what’s the council’s hold up? 

Lisa Cogburn They think the amount is wrong. They think it should be a lower amount. 

Representative Richard Womack Oh. Yeah. Okay. Senator Stone’s got a question real quick. 

Senator Matt Stone You believe the council believes– am I on here? You say the council believes that the amount is incorrect. But what are they basing that on? 

Lisa Cogburn They’re not– from what they see on– I’ve even asked the auditor to send us where they’ve calculated it all up, and I’ve presented that to the council members. But they just think that that amount should be lower than the 42,000. 

Senator Matt Stone But if we lower it to 5 percent, then they’ll agree to pay that amount, even though they think that’s wrong, an incorrect amount? 

Lisa Cogburn I’m hoping if I can submit it to the Council, that you guys have lowered the amount to pay back yearly, that they would go ahead and approve it. 

Senator Matt Stone Honestly, those two things don’t add up. Why would you agree to pay an amount that you don’t owe? That just doesn’t add up. 

Lisa Cogburn Right, I understand. I’m just hoping that I can eventually get the council members to approve it. I keep, like I said, I keep submitting it, but nobody’s approving. I’m open to suggestions if anybody can give me some suggestions on how to present it to them that they might approve. 

Representative Richard Womack Okay, real quick, we’ll address a couple of committee members’ questions. Senator Gilmore, you’re next. Oh, okay, thank you. Senator Johnson. 

Senator Mark Johnson Thank you, Mr. Chairman. Mr. Chair, just talking off the cuff with Senator Gilmore, I walked in this building today with another colleague, and I mentioned what we do in here. And this is specifically what I mentioned. It’s Senator Clark. He’s laughing because he remembers me saying that to him. 

But we see this a lot. I shudder to think how many times we’ve had this exact thing where they didn’t have an appropriation. They used highway funds in the general fund and then to hear the lady– and I appreciate you, ma’am, your candor. I really do, because you’re telling us the truth. That’s what we want. That the council said, Well, we don’t think that number’s right. 

Well, that number came from what our auditors determined. I mean, they didn’t pull it out of thin air. And I’m to the point where– I was discussing the city of Allport, which we’ve tried to make them comply, and I don’t know where that actually is. And I’m not picking on Daisy. It’s just that they’re the one that this came up again and again. This one’s the one today. 

And is there anything we can do– and this may be a question for Mr. Archer, but it’s probably a question for you and then leadership– is there anything we can do to get compliance, or at least give them enough incentive to where they really, really don’t want to be out of compliance. 

Representative Richard Womack It’s my understanding, and please correct me if I’m not clear in this, but I think at this juncture, we’re to the point where we have to decide as a committee whether we stop their turnback funds until there’s compliance or not. I don’t know that there’s anything, any other tool that we have. Does your council understand where we’re at in this process, that that’s basically where we are at today? 

Lisa Cogburn I don’t think that they understand that. No, sir. 

Representative Richard Womack Okay. Senator Gilmore.

Senator Mark Johnson Just to follow up quickly. 

Representative Richard Womack Sure, go ahead. 

Senator Mark Johnson Again, ma’am, I’m not picking on you, nor this town Daisy. We got a lot of others that have done this. But this is not a negotiation. This is something that’s found by auditors and we expect it to be fixed. And we’re not going to sit and negotiate. We can bring the hammer down, and that includes withholding turnback funds. And I hope they don’t want that, just for their own citizens. Thank you, Mr. Chair. 

Representative Richard Womack Thank you. Good point. 

Staff Mr. Chair, — has provided me with, for the work papers, they spent $25,731 on a fire truck and the $17,000 on the construction of the fire building is what the records show. And if they’ve repaid some of that, those receipts were not provided to audit. So that’s where we got the number. 

Lisa Cogburn They were hoping that when the general fund took overpaying for the mowing, that that would take care of some of that that they owed. And the audit, of course, I’m sure y’all seen, has said that that would not be sufficient. 

Staff We’ve got to have proper documentation that that was actually mowing that was required to be paid for from the street fund to start with. So if it’s documented that it’s a right of way on a street, then that would be acceptable. 

If it’s the park or some other non-street related funds that 27-7-207 are allowed to be used for, then it can’t give you credit for that. So the documentation we’ve been provided stands at that balance. And  we recommend straight payments to the fund so it can be easily tracked and y’all get credit for everything that you’ve done. Switching services around, you need to make sure you document that very detailed for audit purposes. 

Representative Richard Womack Representative Ladyman, you had a question? 

Representative Jack Ladyman Thank you, Mr. Chairman. First of all, I think I got a question for staff. This 10 percent, is that annual or is that monthly? 

Staff It’s 10 percent of the annual unrestricted general fund revenues or 10 percent of the monthly general fund. 

Representative Jack Ladyman So they’re going to pay 10 percent back, but are they going to pay that 10 percent monthly or per year? 

Staff The law says monthly, but this committee, they can approve any– in the past, we’ve approved alternative payments, like every other month, different amounts, as long as at the end of the year it equals 10 percent. But that’d be up to the committee’s will. 

Representative Jack Ladyman So the city would be required to pay $4,273 back per year?

Staff No, it’s not 10 percent of the amount due. It’s 10 percent of unrestricted general fund revenues for that year. 

Representative Jack Ladyman Oh, 10 percent of their general. 

Staff So it would be– 10 percent is $228 a month. So it’d be $2,283 a year is what they’d pay. Almost $2,300 a year is what 10 percent would be. 

Representative Jack Ladyman Of their general? So, Mayor, thank you for being here. When you talk to the council about passing this, can you pay $2,300 out of your general fund to the street fund annually? Does your budget allow that? 

Lisa Cogburn Yes, sir. 

Representative Jack Ladyman And you presented that to them that you have the funds to do that? 

Lisa Cogburn Yes, sir. 

Representative Jack Ladyman Okay. Thank you, ma’am. 

Representative Richard Womack Representative Dalby, you’re recognized.

Representative Carol Dalby Thank you, Mr. Chair. I think this is for Mr. Archer. It’s my understanding, and correct me if I’m wrong, that this committee has within its purview the ability to pass a motion that says, This is what you’re going to do, despite what the City Council is doing. Because they’ve not provided us any information that disputes your $42,000 figure, correct? 

Staff Yes ma’am. That’s our number, and we’ve audited the financial statements. And that’s what we’re standing on. 

Representative Carol Dalby Okay. And so we have that ability in this committee just to go ahead and move on and say, Here’s what the committee’s going to do, make that recommendation and then let Audit vote on it tomorrow? Am I correct? 

Staff That is correct. And then just to follow up, if that will is a percentage less than 10 percent, if they fail to ever make that payment, it automatically defaults. The 100percent balance is due within 12 months. Well, at that point, y’all have the authority to then hold out the complete street fund revenues from the state until it’s paid in full, as long as it’s done within one year. And then that money will be gone, be redistributed to other cities. And until they get paid back, they don’t get nothing. 

Representative Carol Dalby I understand that. It was my understanding that the Mayor said, in response to Representative Ladyman’s question– I believe it was your question– that they have the money to be able to do it. I see others in the queue so I’m not making a motion. But it is my personal thought that we need to move forward and do just that to assess it and move on. 

Representative Richard Womack Thank you. Senator Gilmore. 

Senator Ben Gilmore Thank you, Mr. Chair. My question is very simple. I didn’t know if there was anybody with the city or the council, rather, that would be here to speak to their action or inaction on that. 

Lisa Cogburn I’m the only one here. 

Senator Ben Gilmore You’re the only one here?I think that’s the answer to my question.

Representative Richard Womack All right. Are there any more questions from committee? Representative Rye.

Representative Johnny Rye Thank you, Mr. Chairman. Ma’am, in the beginning of the conversation, I noticed that you said that the reason that they didn’t want to pay this was because they didn’t think the figures were right. 

Lisa Cogburn Yes, sir. 

Representative Johnny Rye But there’s no documentation from you guys saying anything other than what we have in front of us. So you would think that we would be right unless we was proven wrong. And I don’t think that we would have anything to gain by not charging the right amount of money. 

Lisa Cogburn I agree with you, sir. Like I said, I’ve presented it to them many times, and I get told the same thing. And the auditor has given me what he’s figured out, and I presented that to them. And I even tried figuring it out myself and come up to that amount. But for some reason, they will not approve it. 

Representative Johnny Rye Well, thank you. And thank you, Mr. Chairman. 

Lisa Cogburn I apologize on my city for being so hard-headed and not wanting to approve. I do apologize. 

Representative Richard Womack Is there any other discussion from the committee, real quick or question? Okay, let’s hear that motion. 

Representative Jack Ladyman I believe the mayor, if the mayor says they have the money, and the mayor has tried to convince the council, and they don’t have good reason, then I would make a motion that we give the mayor the authority to do that transfer. This committee gives the mayor authority to transfer that money, that 10 percent. Is that a valid motion? 

Representative Richard Womack So just put that on hold for just a second for a little more discussion. And I’m sure, Representative Dalby, you can make it around that motion while we’re talking. 

Representative Carol Dalby Well, no, and I agree, I think that’s exactly what we need to do. But I would offer a substitute motion, if Representative Ladyman would like to hear. My motion would be that we require the 10 percent repayment, as per the statute. And failure to do that, then we withhold their turnback funds. That would be my motion.

My explanation of that motion would be, I don’t believe that we could authorize– we don’t need to authorize the mayor to do something. I think just by doing this, that takes care of it. And we don’t have to give– because I don’t think we have that power to authorize. But that would be my substitute motion, which does the same thing that you’re wanting to do, I think. 

Representative Richard Womack Thank you. 

Representative Jack Ladyman I accept that. 

Representative Richard Womack Would you just withdraw your motion? 

Representative Jack Ladyman I withdraw my motion. 

Representative Richard Womack Thank you. Representative Dalby, would you like to make that motion for the record? 

Representative Carol Dalby Yes. For the record, I move that we require the 10 percent repayment of the turnback funds as pursuant to statute, and upon failure to pay the 10 percent that we withhold the turnback funds, the street fund.

Representative Richard Womack Thank you.

Senator Mark Johnson I second that motion, Mr. Chairman, but I do have a question. 

Representative Richard Womack Okay, we have a second on that motion. But before you ask a specific question, can we– yeah, let me open up to discussion around the motion and go ahead in that vein. 

Senator Mark Johnson Representative Dalby, do you think we could put a specific timeline on when that repayment must start? Next month? 

Representative Carol Dalby Mr. Archer may have– 

Staff Well, yeah, I mean, it would be monthly starting at the month following this meeting. She said per the code. So the code would be every month starting– 

Senator Mark Johnson Starting in February. That answers my question. Thank you, Mr. Chair. 

Staff That’s my understanding of how the– since you worded it, ‘per the code,’ and that would be how the code would be interpreted. 

Representative Richard Womack Okay, thank you. That was very helpful. Any other discussion or question on this motion? Representative Rye. 

Representative Johnny Rye Thank you, Mr. Chairman. Mr. Chairman, let me ask you this, sir. Would this be 10 percent a year or would it be 10 percent each month? 

Representative Richard Womack Mr. Archer just broke that down and is prepared to do it again, I think, if you can give him just a second.

Staff Let me make sure I get the wording just right. Give me a minute. There it is right there. ‘Committed to pay a percent of less than 10 percent of the city’s and non-incorporated town’s general revenue from the street fund.’ So it’s just 10 percent. So it would be annually. I mean, we break it down by month, but we would test it. We do an annual audit, so we would test it by annual unless the committee specifies something differently in the motion. 

Representative Richard Womack Any other question on this motion or discussion? All right, all those in favor, say aye. All opposed, no. All right. Thank you. The motion is passed. Miss Mayor, thank you for being here today. I’m sorry you’re in the hot seat alone. Feel free to contact staff to figure out exactly how this is going to work moving forward and do your best to explain to council where we’re at. 

Lisa Cogburn Thank you. 

Representative Richard Womack But we appreciate you being here today. 

Lisa Cogburn Thank you very much. 

Staff Mr. Chair, could we get a motion to file the report as well? 

Representative Richard Womack Working on it. Thank you. 

Staff I’m sorry. 

Representative Richard Womack No, no, no. Thank you for that. So without objection, we will file this report. All right, thank you. We will file that report. Thank you, Mr. Archer. So now we’re just going to move to the next item on the agenda, the review of reports that you have in front of you there on your desk. Mr. Archer, you’re recognized again.

City of Harrison

Staff Thank you Mr. Chair. Starting on page 1, we have 12 reports that were deferred from the previous meeting, starting with the city of Harrison, 2024, under the district court clerk. Bank reconciliations were not properly prepared for all accounts, and balances remaining in the bank account were not identified with receipts issued for cases not yet adjudicated and payments made on all unpaid individual time accounts as required by Arkansas code. This is a repeat finding from the previous two reports dating back to 2022. I believe we have District Court Clerk Sandy Wright here to answer questions. 

Representative Richard Womack Thank you, Mr. Archer. Ms. Wright, if you wouldn’t mind, just state your name and affiliation for the record. And then we’ll listen to your statement. 

Sandra Wright Hi, I’m Sandra Wright, the court clerk from Harrison, the chief court clerk. And I’m happy to report that I worked hard in 2025 and one account has been completely reconciled and is ready to be closed. And I just have my general fund account and it has been reconciled as well. 

Representative Richard Womack Okay, thank you. 

Sandra Wright So I’m hoping at the next, at the end of this year, 2024, that it will show that. It will reflect those payments. 

Representative Richard Womack Thank you, ma’am. Okay. Are there any questions or discussion from committee on this report? All right, seeing none, without objection, we will file this report. Thank you for being here today.

Staff Continuing on page 2 under deferred reports, we have Carroll County, 2024. Is the airport manager here today? You must have got here early. You didn’t sign in. That’s fine. I’m just glad you’re here.

Mark Pepple I didn’t realize I needed to sign in. 

Carroll County airport

Staff You’re good, you’re good. Carroll County, 2024, under the airport manager, bank reconciliations were not prepared for the airport account as required by Arkansas Code. This is a repeat finding. Pre-numbered receipts were not issued for all items of income as required by code. This is a repeated finding. We have airport manager Mark Pepple here today to answer questions. 

Representative Richard Womack Thank you for being here. Please state your name and affiliation for the record, and then we’ll gladly listen to your statement. 

Mark Pepple My name is Mark Pepple. I’m the airport manager for Carroll County, Arkansas. As far as the reconciliations, I was not understanding. I took over three years ago. There was some back things I was trying to work out from previous managers. We do use an outside accountant to do our book work at the end of the month. And she and I were trying to figure out exactly what was wanted. 

She has now switched over to QuickBooks. I do have two examples here where we’re reconciling everything by the end of– well, at the end of the audit of 2025, there should be enough evidence there. It won’t be completed in 2025 because it didn’t start until the latter part of the year after Mr. Patrick told us what he wanted. But by the end 2026, it should be all corrected at that point. We’re actively working on putting in place what the council was asking for. 

Representative Richard Womack Okay, thank you. Any question or comment from committee? All right, thank you. Then without objection, we will file this report. Thank you for being here today. 

Mark Pepple As far as, do you need to talk about the second finding? 

Representative Richard Womack Oh yeah, we have a second. Thank you for that. 

Mark Pepple I mean, I’ll step away. 

Representative Richard Womack I’m sorry. Thank you, thank you. Yeah, so explain that one to us where we’re at on it. 

Mark Pepple Sir, this is totally on me. The funds that they’re talking about are fuel funds and the Delphi funds that I draw down from the FAA. Because they’re not physical checks that I handle or cash that I handle, it was a brain function on my side that I don’t see that, I don’t handle that, it goes into the bank accounts, it’s accounted for. 

I did not realize that I needed to be making physical receipts for that. And there again, I’m working on correcting that on my side. It was just not really not realizing it is income that comes into the county that I need to be accounting for. 

Representative Richard Womack Okay, thank you. Representative Beck, did you have a question? You’re recognized. 

Representative Rick Beck I really do appreciate you coming down here and explaining this to me. The question I always have when we have findings like this is to maybe take one step further, ask you to take it one set further and make sure. Because you didn’t know, and therefore it got like this. Somewhere in a procedural manual or something like that, for the next manager to make sure that it’s written down, that this is taken care of so it doesn’t go deficient in the future. I would ask you to do that. Thank you. 

Mark Pepple Yes, sir, and I’m working on that. I’m ex-military so I believe in an SOP. And I was never left something like that, so I am working, putting those things in place so when I leave there will be adequate things in place where that can be taken care of. 

Representative Richard Womack A good thought, Mr. Beck. All right, any question or comment on that finding while we’re here? All right, then without objection, we will now file this report. Thank you for being here today. 

Izard County

Staff Continuing on page 1, we have Izard County, 2024, under the treasurer. Arkansas code requires accounting management to maintain adequate financial records. Financial statements contain omissions and errors that are considered material and specified below. The general fund financial records contain misstatements of revenue and expenditures of just over 371,000 and 3,200 respectively, primarily due to posting errors and misclassifications of revenue. I believe we have county treasurer Warren Sanders here today to answer questions. 

Warren Sanders Thank you, sir. My name is Warren Sanders, Izard County Treasurer. From the auditors, basically, I overstated the revenue from County General as a simple transfer. And I understated the different revenue code for property taxes, treasurer’s commission, and collector’s commission. I’ve worked very closely with my auditors in 2023 and 2024 to try to fix that for 2025. 

Our county software had templates in them that sets these revenue codes and they stay there and we use this template once a year. I inadvertently put the wrong revenue codes in there when I set it up. And so in ’23, whenever they found this finding, I fixed it on my spreadsheet that I worked off of. In 2024, I didn’t fix it. 

So it was two years in a row. We have since fixed it. We’ve worked with our auditors and I’ve worked with fellow county treasurers to make sure it was correct. And I’ve also requested that we have a training for final settlements in February for all the county treasurers so that we can figure out how this doesn’t happen again. 

Representative Richard Womack Okay, thank you. Were you able to, just out of curiosity, to fix your template? 

Warren Sanders Yes, yes sir, I did. 

Representative Richard Womack Get it to the right, not just the spreadsheets? 

Warren Sanders  Yes sir I do. 

Representative Richard Womack Alright. Any questions from committee? Alright, not seeing any, we’ll move on to the next finding, please. 

Staff We just need to file that one. 

Representative Richard Womack Okay, yeah, okay. Without objection, we’re going to file that report. Thank you. 

City of Alexander

Staff Continuing on page 2, under deferred reports, we have the City of Alexander, 2023 under the district court clerk. Balances remaining in the bank account were not identified with receipts issued for cases not yet adjudicated and payments made on all unpaid individual time accounts, as required by Arkansas Code. This is a repeat finding in the previous three reports. We have District Court Clerk Janet Guess here to answer questions. 

Janet Guess Yes, I’m Janet Guess. I’m the district court clerk at Alexander. 

Representative Richard Womack Thank you for being here. 

Janet Guess Thank you. In response to this finding, the auditors believed that the change between the 2022 and 2023 in their professional judgment was a change due to deposits increasing from 2022 to 2023. The bond and fine deposits were approximately $180,000 in 2022 and $409,000 in 2023. 

Upon the auditor’s recommendation, and I’ve been working with them, I am going to be instituting a monthly audit on the bonds pending to see where– take the calculation and see where the changes are coming from and to review all the old cases in the criminal bonds pending to see how many have been adjudicated or if there are other problems. Hopefully we will find some resolution to this error and there won’t be any other findings. 

Representative Richard Womack Okay, thank you. Any question from–. 

Representative Jack Ladyman I got a question. 

Representative Richard Womack You’re recognized, Representative. 

Representative Jack Ladyman Thank you, Mr. Chairman. Thank you for being here. I really have a question on that first. If I’m reading this right, a council member got a credit card in their name and gave that to the police chief and he spent money, like $8,000 on that. Is that what happened? 

Janet Guess No, that’s the city. I’m just the court. 

Representative Jack Ladyman Okay, sorry about that. 

Janet Guess No problem. 

Staff I apologize, I was distracted. Oh, the first finding. No, the city was not– we have a new recorder treasurer. And committee rules are we give them one year. This wasn’t the recorder treasurer that’s in office now– correct me if I’m wrong– wasn’t in office during the time we audited for ’23.

So it wouldn’t be her mistake. So the normal rule for this committee is we don’t invite them until they make that mistake. The elected official in office makes the discrepancy two years in a row, that’s the rule. But you can, if you want to meet them here, we can invite them up here for the next meeting. 

Representative Jack Ladyman A follow-up. So do you pay the bills? Are you the treasurer? 

Janet Guess Me? 

Representative Jack Ladyman Not the clerk. Okay, I’m sorry. 

Janet Guess I’m just the court clerk. I’m not the treasurer and I’m not the office manager. 

Representative Jack Ladyman I apologize. 

Janet Guess That’s okay. 

Staff Oh, that’s right. Oh I apologize. It’s been a while. Yes, this finding was– she was here last month and addressed that finding. Okay, that’s right. She wasn’t here last month, but it was a PA finding. That finding has been referred to the prosecuting attorney and we addressed it in the deferred meeting. I apologize for that. But yes. But we, this committee, has the discretion to invite whoever they want to and defer this report if that’s what you want to do and discuss it.

Representative Jack Ladyman Well, I wanted to know how somebody other than the leadership of the city would be able to get a credit card. But a bigger question would be, how did the bill get paid? I mean, but they’re not here, so I can’t ask that.

Staff Michelle’s here, but I’m going to try, and you correct me if I’m wrong, Michelle. The credit card was taken out in the name of the individual, not the city. And they were submitting these bills as for reimbursement to be paid for that. And that was the documentation they provided. And obviously, it’s not within compliance. So we wrote the finding and to the prosecuting attorney for them to look into it deeper. 

Janet Guess Just doing the core work. 

Representative Richard Womack What’s the question? Sure, sure. 

Senator Mark Johnson I’m sorry, Michelle. I’m confused. I just have a question, Mr. Chairman. 

Representative Richard Womack Yeah, you’re recognized. 

Senator Mark Johnson Thank you, sir. Michelle, the credit card was issued in John Doe’s name, like John Doe, City of Alexander, but the bill went to who? The city clerk? 

Staff We’re looking. 

Representative Jack Ladyman Who approved the payment is what I was…

Senator Mark Johnson So we presume that would be the city clerk would get that and say, Hmm, what am I supposed to do with this? 

Staff And they paid it. 

Senator Mark Johnson As Representative Ladyman said, this is highly unusual. 

Staff It’s been referred to the prosecuting attorney for further investigation. 

Senator Mark Johnson Well, then we can be patient on that, Mr. Chairman. Thank you for letting me ask questions. 

Staff I apologize. Shouldn’t have tried to file that one in two different meetings. That’s my–. 

Representative Richard Womack Representative Rye, did you have a question? 

Representative Johnny Rye Yes, sir. Mr. Chairman, that $8,018 for purchases made with the card, 5,521 was examined, and 5,057 did not have proper documentation to support a business purpose. Just wonder if all of that was used for the county or–? 

Representative Richard Womack I think that’s what the prosecutor will figure out. He’s looking at that. All right, that was a little confusing. Is there any other question or comment while we have her at the table? All right. Seeing none, without objection, we’re going to go ahead and file this report. Thank you for being here today. 

Janet Guess Thank you. 

Town of Fifty Six

Staff Continuing on page 3 with deferred reports, we have the town of Fifty Six, 2024, ’23, and ’22 under the mayor and recorder treasurer. A fixed asset listing was provided. However, the listing did not include all additions, deletions, or control totals in non-compliance to Arkansas Code. 

This is a repeat finding in the previous two reports dating back to 2017. Under the recorder treasurer, receipts were not issued for all funds received in noncompliance with Arkansas Code. A similar finding has been noted in the previously six reports dating to 2009. I believe we have mayor Ernestine McDaniel and recorder treasurer Christina Byrd here today to answer questions. 

Representative Richard Womack Okay, thank you for being here today. Please state your name and affiliations for the record before we begin. And then we’ll be happy to hear your first statements. 

Ernestine McDaniel Ernistine McDaniel, Fifty Six. Oh yeah, I’m the mayor. 

Representative Richard Womack All right. Thank you. 

Christina Byrd I’m Christina Byrd, I’m the recorder treasurer. 

Representative Richard Womack Okay, thank you. Do either of you have a prepared statement or just would like to share your thoughts on this finding? 

Christina Byrd On the fixed asset? 

Representative Richard Womack Yes ma’am. 

Ernestine McDaniel I do those. That’s all on me. We’re such a little town. We don’t buy hardly anything. We’re just making it. And I know I need to be in numbers, maybe even pictures of it. But everything that’s on there, that’s all we have, the land, everything. But I want to ask you a question. Okay, on some of the buildings that we’ve got, like the old city hall or DAV building and the land that’s on it, all I have on them are how much they’re worth is how much we pay on the insurance for them. Do I need to put that on there? 

Representative Richard Womack Mr. Archer, is there somebody here, staff that can? 

Staff Yeah, well, yes, I can answer that question. As long as you document how you determine the evaluation, either going to the assessor’s office and get their evaluation of it or insurance person. The actual cost is the original cost is what we carry. Items on cash basis accounting is cost basis. If that’s not available, we can document a secondary method. And either one of those would be insurance value or assessed value at the courthouse would be acceptable. 

Ernestine McDaniel Okay. Now that’s what I’ll do. I mean, I have the insurance on the buildings and how much they paid for the trucks. But that is about, that’s about all I’ve got, the value of that I know. It needs VIN numbers, right, on all the vehicles?

Staff Yes, ma’am. We have to have a value of all the assets that the city owns above whatever level y’all set in your ordinance or resolution. 

Ernestine McDaniel We have a lawn mower that we use to mow all the city property. And it’s 10 years old. And you want me to get a VIN number on that and what was originally we paid for it back in 2015?

Staff  Yes ma’am. That’s what the law requires. 

Ernestine McDaniel Yeah. 

Staff You can reach out to your auditor that was there and they can give you a little more detail on exactly how maybe we can get some alternative methods to get some stuff that’s not available. We can get alternative values on these things. They can help you with that. 

Ernestine McDaniel Okay, well, I’ll do it. I’ll do what I can. 

Representative Richard Womack All right, thank you. Representative Dalby, do you have a question? 

Representative Carol Dalby Yes, sir. Thank you, Mr. Chair. Mayor, thank you. Thank y’all for being here. My suggestion is really more of a suggestion and not a question, was exactly what Mr. Archer said, to get with your auditor, but also the Municipal League. They’re sitting off over here to your left and they can give you a lot of guidance and they’ll be happy. 

There’s a field representative for your area. And if you’ll just stop and visit with these three people right here, they’ll tell you. If you don’t know your field representative, they will help you with that. And they maybe can get you straight and down what you need to do. So I would suggest before you leave here today that you talk with those individuals. 

Ernestine McDaniel Thank you. 

Representative Richard Womack Thank you. Are there any other questions or discussion on that finding? Alright, seeing none, we’ll move over to the next finding, please. Do you have any statement regarding that one? 

Christina Byrd I went over the receipts and the books, and it said it goes all the way back to 2009. I didn’t come in office until ’19. So I can’t answer for that before me. But as far as me, I’ve been updating the bookwork since the audit and have found there are interest payments from the bank, the monthly interest, that I did not have receipts for. And it’s been an oversight and I’ve been going back and making sure that every month I write down the interest from the bank. 

Representative Richard Womack Okay, thank you. Any question or comment from committee on this one? All right. Seeing none, then without objection, we’re going to file this report. Thank you ladies for being here today. 

Christina Byrd Thank you. 

Ernestine McDaniel Thank you 

Staff Continuing with deferred reports on pages 3 and 4, we have seven private reports for water and sewer reports that we have not yet received proper responses. And staff recommends we defer those seven reports. 

Representative Richard Womack Any discussion on that committee? Then without objection, we’ll defer. 

City of Bull Shoals

Staff We have one report that’s been certified to the bond board and referred to the prosecuting attorney and the attorney general’s office. Pages 5 through 7, we have the city of Bull Shoals, 2024. And on page 6 of that report, we had, under the recorder treasurer, we have, of the $10,000-plus dollars in credit card payments tested, the city paid charges totaling almost $2,000 without supporting documentation in non-compliance with Arkansas code. Therefore, the validation of these disbursements cannot be determined. 

Of this amount, charges total $242 were paid from funds included in this engagement. Charges totaling $490 were paid from a water fund that has not been audited as of report date. And we were unable to determine the fund of which the other charges totaling over $1,200 were paid.

 On page 7, under the district court clerk, we examined district court records for the period January 1, 2024, through April 30, 2025, after receiving allegations of missing funds. The district court bank account and accounting records were not maintained in accordance with Arkansas code as follows. The bank balance remaining in the bank was not identified with receipt numbers for cases not yet adjudicated and the payments made for all unpaid individual time accounts. 

The bank account was not properly reconciled each month. Cash receipts journal was not probably maintained and was not reconciling monthly to the total bank deposits as shown on the bank statement. Cash disbursement journal was probably maintained, and was not reconciled monthly to total bank disbursements as indicated on the bank statement. Pre-numbered receipts were not issued for all funds collected. 

CID officials also provided copies of receipts and other documents obtained from defendants indicating payments made in cash were not credited to court records. The receipt books of which these payments were recorded could not be located. Based on our comparison of district court bank and accounting records to documentation provided, we identified 13 receipts totaling $2,190 for fines and costs that were not deposited or recorded, and one receipt for $20, a money order that was not recorded but not deposited in the bank account. 

The United States Post Office, Postal Service, confirmed that the money order had been cashed. The court clerk who appears to have been responsible for making deposits resigned in March of 2025. This matter has been investigated by the 14th Judicial District Prosecuting Attorney and the Arkansas State Police. This finding has been referred to the prosecuting attorney and certified to the bond board. If there are no questions, staff recommends we file this report. 

Representative Richard Womack You’re recognized, Representative Dalby.

Representative Carol Dalby I have a question for staff. If we could look at page 6 about partway down, it says finding general fund disbursements exceeded total appropriations by $339,415. Where did that money go? 

Staff The budget just wasn’t updated. It wasn’t amended at the end of the year. Based on our review, they appeared to be regular city legal expenditures. It just exceeded the budget. 

Representative Carol Dalby Okay, so, but you were able to account for the expenditures? 

Staff Our test did not indicate anything that was against code. 

Representative Carol Dalby Okay, because that sure popped out at me. 

Staff Large number. 

Representative Richard Womack All right, thank you. Any discussion or questions? Sure. You’re recognized.

Senator Mark Johnson Mr. Archer, what proportion of their budget is $339,000? 

Staff 39 percent. 

Senator Mark Johnson Thirty-nine percent. Wow. Okay. So let’s just say, as a budget, they’re not being transparent to their citizens on how much city government costs. Okay. All right. Thank you.

Representative Richard Womack Any other question or discussion? Then we will, without objection, we’re going to file that report. 

Lonoke County

Staff We have seven reports that we’ve referred to the prosecuting attorney and the AG’s office. Starting on page 8 and 9 , we have Lonoke County, 2023, under the county clerk. A review of payroll records in the county clerk’s office for the period of March 13, ’24, through September 12 of ’25 revealed over $4,100 in questionable payments. 

Of this, $1,470 was paid to employee A. Of that, over $1,100 is for overtime hours that did not exceed the 120 hours of comp time that must be accrued before cash payments are made according to policy established by the quorum court and $352 for unallowed leave that was not accrued or earned. 

$2,700 paid to employee B for overtime hours that did not exceed the 120 hours of comp time that must be accrued before cash payments are made in according to policy established by the quorum court. A similar finding was reported in the previous report. 

Under the sheriff, a review of claims in the sheriff’s office revealed over $4,300 in questionable credit card transactions, almost $2,400 without documented business purposes, almost $1,500 without adequate supporting documentation, just over $400 for lodging in Little Rock in non-compliance with county policy, which requires overnight stay to be more than 50 miles from the employee’s residence. 

In addition, over $3,900 in charges were misclassified per the county financial management system manual. We have County Clerk Dawn Porterfield here today to answer questions. 

Representative Richard Womack Thank you. Will both our guests at the end of the table please state your name and affiliation for the record? 

Dawn Porterfield My name is Dawn Porterfield. I’m the Lonoke County Clerk. 

Representative Richard Womack Thank you. 

Jason Owens Jason Owens, Lonoke county attorney. 

Representative Richard Womack Okay, thank you. Do either of you have a statement you’d like to share for the committee? 

Dawn Porterfield Actually, what we had discussed last year when I came has been corrected. The compensation during that time was still kind of an up-and-the-air thing. So that was kind of back in that error back there, but it has been corrected. No one will be paid out unless it’s 120 hours, period. A lot of these girls have been, as of this year, have been taking their comp time instead of taking pay. 

Representative Richard Womack Okay, thank you. Committee, do you have any question or comment on this one? All right. Thank you. Okay, without objection, then we will go ahead and file this report. Thank you guys for being here today. 

Town of Beaver

Staff Continuing under reports referred to the prosecuting attorney and attorney general’s office, on pages 10 and 11, we have the town of Beaver, ’24 and ’23, under the mayor and the recorder treasurer. The town paid over $6,900 and over $9,200 to the mayor for park attendant services in ’24 and ’22 respectively. 

The town council minutes indicated ordinance number 1001 was adopted to authorize these payments. However, a signed and completed copy of this ordinance was not provided for audit inspection. In addition, the town paid over $7,000 and over $7,500 to the mayor’s spouse for bookkeeping and park attendant services in ’24 and ’23 respectively without an authorizing ordinance in apparent conflict with Arkansas code. This finding has been referred to the prosecutor and the AG’s office. If there are no questions, staff recommends we file this report. 

Representative Richard Womack Do we have any question or comment, discussion from the committee? All right, seeing none, without objection, we’re going to file this report. 

City of Central City

Staff Continuing on page 12, we have the city of Central City, 2024, under the recorder treasurer. A review of selected credit card transactions for the period January 1, 2021, through December 31 of ’23 revealed disbursements totaling $985 with no supporting documentation or indication of business purpose in non-compliance with the Arkansas Code. Therefore, the validity of these disbursements could not be determined. In addition, the city incurred $137 in late fees related to credit card transactions. If there are no questions from the committee, staff recommends we file this report. 

Representative Richard Womack Alright, any discussion from committee, or questions? Alright, seeing none, without objection, we’re going to file that report. 

City of Gravette

Staff We’ll jump over to page 13 since we’ve already done Daisy to the city of Gravette, 2024, under the mayor. The city paid $975 to an employee for heating and cooling equipment without authorizing ordinance in apparent conflict with Arkansas code. This finding has been referred to the PA and AG. If there are no questions from the committee, staff recommends we file this report. 

Representative Richard Womack Any question or discussion, committee? All right, without objection, we’re going to file that report. 

Thornton and Rosston Water

Staff Continuing on page 13, we have a private audit report for the Rosston Water Department, 2024. The following deposits totaling over $12,000 did not match the total of the corresponding daily receipt report. This finding has been referred to the prosecutor and AG’s office. So, if no questions, staff recommends we file this report. 

Representative Richard Womack Are there any questions from committee or discussion? All right, seeing none, without objection, we’re going to file that report. 

Staff Page 13, we have the Thornton Water Works, 2023. And this one of those engagements that was on our 2022 delinquent water report. And the ’22 was filed in the December meeting. And the response for that, it’s also with the prosecutor. And they acknowledge the shortage in the ’22 report. 

This is the ’23 report, and the finding in it is: The following deposits totaling over $12,000 do not match the total of corresponding daily receipt reports. And it’s also been filed with the prosecuting attorney and the AG’s office. And just a staff note, we have also received the ’24 audit, so their funds have been released for Thornton. 

Representative Richard Womack Thank you for that. Are there any questions from committee or discussion on that one? All right, then without objection, we’re going to file that report.

Green Forest and Ozan

Staff Okay, we have three reports with repeat findings. On page 14, we had the city of Green Forest, 2024. The city clerk, Morgan Darby Gonzalez, was invited here today. And I don’t believe she’s here. She did contact me and asked to be deferred. So staff recommends we defer this report. 

Representative Richard Womack Okay, any discussion on that? May I have a motion from somebody? All right, we have a motion and a second to defer. Without objection, we’re going to go ahead and defer that report. 

Staff Continuing under reports with repeat findings, on page 14 we have the town of Ozan, ’24 and ’23 under the mayor. The minutes of the governing body did not document the review of the findings and recommendations and actions taken by the governing body for the prior report as required by Arkansas code.

 A similar finding was noted in the previous three reports dating back to 2016. The town was in noncompliance with Arkansas code as follows: Budgets were not adopted for the general and street funds in ’23, a budget was not adopted for ARPA funds in ’24, the budget could not be provided for the General Fund in ’24. This is a repeat finding as well. We have mayor David Stalsworth Jr. here to answer questions. 

Representative Richard Womack All right, Mr. Mayor, thank you for coming today. If you wouldn’t mind, just state your name and affiliation for the record and then we’ll gladly take your statement.

David Stallsworth  My name is Dave Stallsworth, mayor of Ozan. And we are making the corrections that are on this, on all your findings for sure. 

Representative Richard Womack Okay. Any question from committee or discussion on this? All right, seeing none, without objection, we’ll go ahead and file that report. Thank you for being here today. 

Lee County

Staff Continuing with reports of repeat findings, on page 15, we have Lee County, 2024, under the district court clerk. The following items were noted in the analysis of the district court bond and fines bank account in non-compliance to the Arkansas Code: The bank reconciliations were prepared for the city and county accounts, but were not accurate. 

Cash receipts journals were not properly prepared for the city and county accounts. Balances remaining a year in for the district court accounts, city, county, circuit, and small claims in the amount of $61,000 $18,000 $44,000 and $21,000 respectively were not identified with receipt numbers issued for cases not yet adjudicated and payments made on all unpaid individual time accounts. 

The district court accounts for city and county had negative ending balances due to errors and settlements. This is a repeat finding from the previous year. I believe we have District Court Clerk Sonia Thorne here today to answer questions. 

Representative Richard Womack Thank you. If both the guests at the end of the table would mind for the record, please state your name and affiliation and we’ll be glad to hear your statements. 

Sonia Thorne Sonia Thorne with Lee County District Court. 

Jason Carter I’m Jason Carter. I’m the district judge for Lee and Phillips County. 

Representative Richard Womack Okay, thank you for being here today. 

Jason Carter I’ll just say we’ve talked with the auditors. When Miss Thorne started what in the middle of ’22, I think, there was no training for new district court clerks. And this district court accounting law is fairly complex. I don’t know most of it. I know enough to get through the audit meetings and that’s about it. 

She has worked and worried herself to death trying to get this stuff together, get it right. It’s not been right before she got here. It seems like in trying to get things right, we’ve kind of made a mess and that kind of seems like what we’ve got there. But she’s been working with the auditors. She knows what she needs to do going forward. 

We’re going to continue to work with the auditors. She’s built a pretty good relationship with the auditor we’ve had most recently, and we’re going to do our best to make sure that we get this right and don’t have any future findings. 

Representative Richard Womack Okay, thank you. So sitting here today, Ms. Thorne, do you think you’ve got a good handle on what? 

Sonia Thorne I’m trying my best. 

Representative Richard Womack To the best of your understanding, you’ve got a handle on it? 

Sonia Thorne I talked to the auditor this morning and she’s walking me through how to get our things situated. But we’re trying our best to get into compliance with the way it’s supposed to be. 

Jason Carter And I will say she has reached out to other court clerks. She’s reached out to AOC. She has reached up trying to get help from other people and has not really been very successful. But it seems this auditor that we’re working with now, she has been extremely helpful. And so I’m confident we’re going to be better off going forward.  

Representative Richard Womack Okay. Thank you. Thank you for being here today. Are there any questions, comments from committee? All right. Seeing none, we are going to, without objection, we will file this report. Thank you for being here today. 

Quinn Water, Strong Water

Staff We have two reports that have findings. They’re both private reports. The Quinn Water Association, March 31 of ’25 private report, and the Strong Water and Sewer Fund for ’23, a private report, that we have yet to receive proper responses from. The staff recommends we defer these until which time we get a proper response. 

Representative Richard Womack Any question or discussion? All right, may I have a motion? We have a motion and a second to defer these reports. So without objection, seeing none, we’re going to go ahead and file this report. 

Staff On pages 16 through 21, we have 19 reports with resolved findings. Staff. We need to correct that. 

Representative Richard Womack I’m sorry. 

Staff We need to defer those two reports. Thank you, Charlie. Those two water departments. He said you said ‘file.’

Representative Richard Womack Okay, I made a mistake, committee. I’m sorry. I said to file those reports instead of defer. I made a mistake, committee. I’m sorry. I said the wrong word the second time. May we have a motion to defer? And I see a second. I see that. Thank you. Without objection, we’ll defer those reports. Thank you, committee, for your patience. 

Staff On page 16 through 21, we have 19 reports with resolved findings. Staff would ask that we take a minute to review those for the committee. And without any questions, staff recommends we file these 19 reports. 

Representative Richard Womack All right, everybody take a minute to look over that, please. 

Representative Carol Dalby I just have a quick question for staff. On Washington County, it shows unauthorized withdrawals of 28,000, 109,000 and 31,000 were made but then they recovered it. Was that a phishing scam or was that somebody taking money from them? I mean, like an employee. 

Staff It wasn’t turned over to the prosecutor, so that would tell me that it was just a check that was stolen and someone did an unauthorized check where they changed the payee on it from outside the government entity. 

Representative Richard Womack  All right, everybody’s had a chance to look it over. You got any other questions? All right, seeing none, without objection, we’re going to go ahead and file that. 

Staff On pages 22 through 23, we have 53 reports with no findings. Staff recommends that we file these reports. 

Representative Richard Womack All right, any question or discussion from committee? Alright, without objection, we’re going to file those reports. That was the end. Is there anything that the committee needs to discuss before we leave today? All right, seeing nothing, the next meeting of Legislative Joint Auditing Committee will be held on February 12, 2026. And this meeting will stand adjourned. Thank you for your attendance.