Legislative Audit: Jan. 9

Representative Robin Lundstrum All right, let’s go ahead and get started and call this meeting to order if everybody could take their seats. First of all, first item on the agenda is the adoption of the minutes for December 12. Do we have any questions? Motion by Representative Ladyman. Do I have a second? Second by Representative Beck. All those are all in favor? Opposed? All right, motion passes. Next, we have the Executive Committee minutes. And Senator Petty. 

Senator Jim Petty Thank you, Madam Chair. The Executive Committee met Thursday, January 8, 2026, and adopted the minutes from the meeting held December 11, 2025. Staff reported to the committee the audit and special report scheduled to be presented to the standing committees and the full Legislative Joint Audit committee this month. Staff also noted one committee requested report that it is outstanding and currently in progress. 

In new business, the committee directed staff to gather information regarding a request from Representative Eubanks for a special report to be considered in the February meeting. In other business, the request for a study of fiscal impact statements was withdrawn. With no additional business discussed, the meeting was adjourned. 

The next meeting of the committee is scheduled for Thursday, February 12, 2026, or at the call of the chairs. I move for adoption of this report. 

Representative Robin Lundstrum Thank you. We need a second. All right, Representative McElroy. All those in favor. Report passes. All right, next we have from Representative Womack a report from City County Local. 

Representative Richard Womack Thank you, Madam Chair. The committee adopted the minutes of the meeting held December 11, 2025. The committee was updated on the status of the December 31, 2022, delinquent private water and sewer audits. Seventeen entities’ turnback funds have been reinstated after all required reports were submitted. 

The committee also updated on the status of December 31, 2023, delinquent private water and sewer audits. Of the 64 delinquent entities, 59 have filed their reports since the LJAC meeting held on July 10, 2025. Officials for the town of Daisy were present to address questions regarding the town’s failure to meet the requirements of Act 709 of 2021 for repaying the misused street funds. The committee approved a motion for the town to repay 10% of general fund revenue to the street fund annually until the balance is paid in full. 

The committee reviewed 12 deferred reports and 85 current reports. Officials from nine entities were present to address repeat findings. Five previously deferred reports were filed and seven were deferred. Of the 85 current reports reviewed, eight were referred to prosecuting attorneys and the attorney general and one was certified to the governmental bond board. 

The committee filed 82 current reports and deferred three reports to allow officials to answer questions or provide further information at a future meeting. Madam chair, I move for adoption of this report. 

Representative Robin Lundstrum Thank you, Representative Womack. Do we have a second? Second, Representative Ladyman. Any discussion? All those in favor? All those opposed? Motion adopted. Next we have Education, standing committee on Education. I believe, Representative Duke, you’re giving that report. 

Representative Hope Duke Thank you, Madam Chair. The committee met Thursday, January 8, 2026, and adopted the minutes from the meeting held December 11, 2025. Four higher education audit reports were included on the committee’s agenda. University of Arkansas System officials were present to answer questions from the committee related to findings in their audit report. 

The report contained findings resulting from the system’s internal audit division performing reviews at three member institutions after being notified by management of potential issues. The audit report was certified to the Governmental Bonding Board and referred to the Prosecuting Attorney and Attorney General. 

The audit for Northwest Arkansas Community College was deferred to the February meeting so that officials from the college can be present to answer questions from the committee related to a repeat finding in the report. The committee filed three audit reports and deferred one audit report that were brought before it. I move to adopt this report. 

Representative Robin Lundstrum Thank you, Representative Duke. We have a second, Representative Rye. Any discussion? All those in favor? Those opposed? Motion adopted. Next we have State Agencies, Representative Unger. 

Representative Steve Unger Six reports were on the committee’s agenda yesterday. Two reports with the following findings were presented. The Department of Human Services reported instances of improper benefit payments to employees from the Disaster Supplement Nutrition Assistance Program and the Medicaid program, and had a payee of a $610,000 warrant that was cashed by someone other than the intended payee and had several issues regarding capital assets. 

The Department of Parks, Heritage, and Tourism reported a loss of receipts at one of its museums and had an error in a couple of its change funds. Various agency staff members were present to report how the agencies intended to address the audit findings and to answer the committee’s questions. 

During the meeting, the committee filed four of the reports. The committee deferred the Department of Human Services and the Department of Parks, Heritage and Tourism reports to the February meeting so that the agency could obtain additional details on the corrective action to the findings. Madam Chair, I move that we adopt this report. 

Representative Robin Lundstrum Thank you, Representative Unger. I need a second. Second, Representative Ladyman. Any discussion? All those in favor, say aye. Those opposed? Motion is adopted. All right, next, ladies and gentlemen, we have some guests here for a special report to review the scholarships. 

If you could come forward. Oh, excuse me. Let’s see. Charlie Camp, if you could do the presentation first. If you’ll pull this presentation up in your packet, they went through quite a bit of effort to make sure we understood all this. And it’s in your packet and has the front PowerPoint on there. 

Report on minority scholarship financial issues

Report

Staff Thank you, Madam Chair. This report is issued in response to a request for Legislative Audit to conduct a review of scholarships awarded, expenditures made, and grants received by the Charles W. Donaldson Scholars Academy at the University of Arkansas Little Rock. The Donaldson Academy is referred to as the program in the report and in this presentation. 

The program had three components which are discussed on page 2 of the report and listed on the slide. Program goals included providing application assistance for the ACT, increasing student confidence regarding college attendance and graduation, building community and relationships, and providing financial support through scholarships. 

The program was funded by the Pulaski County Special School District using $10 million in state desegregation funding and functioned as a collaborative effort among UALR, Philander Smith College, and Pulaski Technical College with approval from the state and federal court. Total revenues and expenditures for the life of the program are shown on exhibit 1 on page 3. 

The majority of funds were spent for salaries, wages, and fringe benefits, scholarships and administrative and other expenditures, as shown on the slide. The first objective of this review was to document requirements and eligibility for students receiving scholarships. 

One of the program’s goals was to provide a $2,500 scholarship that was renewable up to four years. To be eligible for the scholarships, students had to remain in the program through graduation from Pulaski Special School District or Jacksonville North Pulaski School District, successfully complete three-week Summer Bridge Academy after their senior year, and enroll as a full-time student at UALR, Philander Smith or UA Pulaski Tech. 

To renew the scholarship annually, students were required to maintain full-time enrollment, maintain a cumulative GPA of at least 2.5, and complete at least 27 hours in the first academic year and 30 hours each year thereafter. 

During the review period, the program awarded $1.87 million in scholarships to a total of 379 students, and 116 of these students graduated from college. The total number of students receiving scholarships, amount of scholarships awarded, and number of students graduated are provided in Exhibit 2 on the slide and page 4 of the report. 

It should be noted that scholarship awards documented in student files as shown in this exhibit did not agree with the expenditures recorded in the general ledger due in part to misclassification of expenditures. Legislative Audit tested 10% of students who participated in the program for scholarship eligibility and noted exceptions for 32 of the 39 students tested. 

As shown on the slide, these exceptions include scholarships awarded in excess of the maximum award of $10,000, as well as scholarships awarded to students who did not complete the required number of enrollment hours, did not meet GPA requirements, were enrolled longer than four years, and were not enrolled full-time. 

Of the $350,000 in scholarship awards tested, nearly 32% were awarded to ineligible students. Furthermore, further information is provided in Exhibit 3 on page 5 of the report. The second objective was to assess whether expenditures were properly authorized and documented, as well as in agreement with the general ledger. A disbursements test was conducted for the review period, excluding payroll expenditures. 

Of 147 disbursement tested, totaling $1.9 million, we noted 124 exceptions as shown on the slide. These exceptions include lack of proper authorization for payment, lack of documentation and clerical inaccuracies. Additionally, we cannot determine disposition of two capital assets after the program’s closure. Disbursements tested were properly posted to the general ledgers. 

The third objective was to identify funding and grants obtained by the program and determine if funds were expended for allowable purposes. The program received a $50,000 grant from the Central Arkansas Planning and Development District, which was used to fund travel for students and faculty to Spain and Morocco in 2015. 

This trip was to fulfill the study abroad and global leadership component of the program, and the itinerary is provided in Appendix A. Trip-related costs totaled over $89,000, and funds were properly expended for the purposes outlined in the grant. A portion of the funding provided to UALR by ADE was used to purchase supplies, books, ACT testing programs, curriculum, and UALR catering services for the program’s Saturday Academy. 

Grant funds were awarded to UALR, therefore compliance with grant guidelines was the responsibility of UALR. 

The fourth and final objective was to determine expenditure categories, types, and amounts, as well as examine documentation for cultural and social activities and events funded by the program. Appendix B provides a list of total expenditures by general ledger account for the life of the program and illustrates the decline in activity beginning in fiscal year 2020 due to the COVID 19 pandemic. 

Students participating in the program attended cultural and social activities and events that were funded by the $10 million from Pulaski Special School District and the $50,000 grant from CAPDD. Examples of activities are listed on the slide and provided in appendices C and D of the report. 

This concludes my presentation. Management response from UALR is provided in Appendix E. Philander Smith and UA Pulaski Tech were provided an opportunity to respond to the report and did not provide a response to ALA. Representatives from UALR are present to respond to committee questions. 

Representative Robin Lundstrum Thank you. And thank you for that overview. It looks like there was a lot of work done on that and I appreciate that. I also want to thank Representative Springer for asking the question that brought this information to light. Let’s first bring folks down from UALR that have come, and they’re here to answer some questions. If you could come forward. And I would ask you to stand. Okay, if you would, we’re going to swear you in. If you would state your name, employer, and position. 

Allen Stanley Hi, Allen Stanley, Vice Chancellor for Finance and Administration at the University of Arkansas at Little Rock. 

Charles Lyford Good morning, I’m Charles Lyford, Associate General Counsel for UA Little Rock. 

Representative Robin Lundstrum We’re going to ask the witnesses to stand. You’ve stated your name. If you would raise your right hand. I do solemnly swear or affirm that the testimony I’m about to give will be the truth, the whole truth, and nothing but the truth. Thank you and thank you for coming. I want to remind the committee members these folks were not in charge of the program, but they are here to give information about the program. So I w ill let you– the board is lighting up. Representative Beaty. 

Program oversight

Representative Howard Beaty Thank you, Madam Chair. I guess my question goes back, and it may be a question for staff or for the folks at the table. On page 2, I see and understand that it states all employees materially involved in this program, including the director, are no longer employed by UALR and weren’t unavailable for interview. 

My question is, who are these individuals and where are they in state government now? Are they still involved somewhere? Are they in charge of state funds and some other entity or organization in the state? And if so, we need to be looking at what these folks are doing. So can you give me names and who the responsible people were? 

Charles Lyford Thank you, sir. Charles Lyford, Associate General Counsel. Vice Chancellor Allen Stanley may fill in some information here. My understanding, to your question, are the individuals referenced in this report still employed in state government? My understanding is no. 

There was an individual– and Allen, correct me if I’m wrong– Amber Smith, who was a UA Little Rock employee, I believe, assigned to the program. She is a former employee. She no longer works for UALR. I’m not sure, Allen, if you know the names of the other individuals. But the program staff are no longer employed at UALR, as stated in the report. 

Allen Stanley Laverne was the other employee, but she is deceased. 

Representative Robin Lundstrum Sir, if you could pull into the microphone so we can hear you. And give us first and last names. 

Allen Stanley Yes. Laverne Owens, but she’s no longer– I mean, she’s deceased. So the other party, Mia Phillips. And she’s no longer employed with the state. 

Representative Howard Beaty So when you say no longer employ with the state, are you specifically referring to your institution? 

Allen Stanley She’s no longer– my understanding she’s no longer in the state of Arkansas even. 

Representative Howard Beaty Well, with some leniency, I guess my deal is, after looking at this report, I think any member that looks at this would be outraged. I think that any of our constituents and members in the state that see the waste of money that was supposed to go and encourage students to attend college and be successful students. 

If anything, I mean, this is just an embarrassment and a total waste of money. I mean, out of $10 million, what, $1.8 million actually went to students? And the rest were field trips and nice hotel stays and trips abroad? What a joke. 

The other thing I would say is this is a lot of information for us to digest and review. So I would hope that this committee and voting members of the committee would hold this report and give members time to dissect this and to break it down and look and see what the failures were. So I would request that members of the committee would take that action at such time that that motion would be proper. Thank you, madam chair. 

Representative Robin Lundstrum Thank you. And yes, we will. I will entertain that motion at the proper time. Representative Burkes.

Representative Rebecca Burkes I would like some more time to review this. I do have a question while we have the witnesses here. Over the period of time– this is 10 years that these funds are being administered. And I understand that these staff members, Amber Smith, Owens, and Phillips are no longer here. Was there anybody else within the organization, though, overseeing the expenditure of these funds? And at any time during the 10 years did anybody look at this and say, Wait, this might not be right? 

Charles Lyford Well, I can speak to some of that, ma’am. And I would start by saying that the program initiated in 2014 by order of the federal court that’s presiding over the desegregation case still pending in the Eastern District federal court. The court as well received regular progress reports and approved the wind down and ultimate end of the program in 2024. 

So there was that continual oversight. The program was treated, and correct me if I’m wrong, VC Stanley, as a sponsored research program, a sponsored program, meaning external funding, these funds that were approved to pass to UALR by the federal court. And so there was oversight institutionally through the sponsored research division. 

Representative Rebecca Burkes So I guess, a quick follow-up. I saw the management response. There were two items that there was not a response to. Do you have a response today to those two items? And specifically, that’s on the exhibit E, objective 3 and 4. Objective 3, other funding grants obtained and whether these funds were expended for allowable purposes. 

Charles Lyford The institution had no additional information to provide with respect to those objectives. 

Representative Rebecca Burkes All right. Thank you 

Representative Robin Lundstrum Senator Petty, you had a follow-up question. 

Senator Jim Petty Yes, thank you, Madam Chair. So, going back to your statement regarding the federal court, was there periodic accounting to the federal court? And if so, what was the nature of that, the details, et cetera, of that reporting to the court? 

Charles Lyford Thank you, sir. There was, I would say, while the program was active– that is, when cohorts of students were being admitted from 2014 through 2020, I believe, with the 2020-2021 COVID year being the last year that incoming students were admitted. The federal court– I think I’d have to consult the report here– received status reports, I think totaling seven filed on approximately an annual basis by the intervenors in that case. 

Representative Robin Lundstrum I have a follow-up question to that. You mentioned sponsored research. Is there some follow up on that? Where’s the research, the paper, the documentation? I’m thinking research like we did in graduate school or post grad. 

Allen Stanley Yeah, so for this particular program, there wouldn’t have been any research documentation along with it because the objectives of the program and the documentation that that office had available to them did not provide any guidelines to provide metrics or data. Those reports were provided by the intervenors based on guidelines that were not housed at the university or in that office. 

Representative Robin Lundstrum So the only thing we know for sure is 379 students participated, and at the conclusion after 10 years and this amount of money, only 116 actually graduated college either from UALR or Pulaski Tech or Philander Smith. Representative Richardson.

Representative Scott Richardson Thank you, Madam Chair. I appreciate you guys being here. I know this was outside of your oversight necessarily, but I did want to speak to the oversight and go back to Representative Burke’s question and make sure I have a clear understanding of how something like this could be missed. 

So we’re saying that the funding was approved through or oversaw by an external source, the judge, the court’s judicial system. And so there’s no spending authority requirements for these types of programs within the U of A’s purview. There’s no review. The U of A isn’t looking at that money at all? 

Charles Lyford No, sir. I don’t think that’s accurate. This program, again, was treated internally as a sponsored program with the external funds from Pulaski County Special School District. The Office of Research and Sponsored Programs at UALR review the expenditures per program guidelines as funds were issued. 

Also the Office of Financial Aid would have been packaging any scholarships, issuing them to students, making sure those students had met eligibility requirements, be it admission requirements, enrollment requirements, program requirements. And there were also program staff employed by UALR, the individuals we mentioned earlier, who were in regular contact with program participants. 

Representative Scott Richardson So, follow-up. So if I understand you, then whoever was responsible for overseeing the expenditures, they were looking at the specific program guidelines. And from that, they felt like that the expenditures were within the guidelines? 

Charles Lyford I can’t speak to that personally, but that’s my understanding, yes. I mean, the program staff were administering the program per the guidelines that have been approved by the federal court and that the Legislative Audit staff reviewed for this report. 

Representative Scott Richardson Okay, so just want to get to the bottom of that and make sure I understand what you’re saying. So the guidelines were presented to someone that’s currently employed with ASU or was at least at that time. They reviewed those guidelines and determined that these expenditures were okay and within those guidelines?

Charles Lyford That’s my understanding. But, again, none of the people at the table here were in these roles at the time. I do know that there were program staff reviewing the expenditures. 

Representative Scott Richardson Were the program staff that were there at that time, the individuals that were viewing the expenses, are those individuals still with the U of A, or excuse me, ASU? 

Charles Lyford UA Little Rock. 

Representative Scott Richardson I’m sorry, UA Little Rock. 

Charles Lyford No, sir, they’re not. 

Representative Scott Richardson So they’re not here either? 

Charles Lyford Correct. 

Representative Scott Richardson Okay. Thank you. 

Representative Robin Lundstrum Thank you, Representative Richardson. Representative Long. 

Representative Wayne Long Thank you, Madam Chairman. Y’all mentioned earlier that several of the people that were involved in this were no longer employed by the state. I was wondering, were they fired or did they resign? 

Charles Lyford I’m not sure of the answer to that. 

Representative Wayne Long And, yeah, I heard that one person passed away. But it was one about the others. If you could find out and get to let us know, I’d appreciate that, because that kind of makes a difference to me. The second thing was, you mentioned this program had wound down. Is there any other program similar to this that’s ongoing? 

Charles Lyford No. 

Representative Wayne Long Thank y’all.

Representative Robin Lundstrum Representative Brown. 

Representative Karilyn Brown Thank you, Madam Chair. I’m reading here under the portion, results of review, objective 1, it says one of the goals of the program was to provide a $2,500 scholarship that was renewable up to four years. Therefore, eligible students could receive a maximum amount of $10,000. 

To be eligible, they had to remain in the program through graduation from Pulaski County Special School District or Jacksonville North Pulaski– and just to be perfectly open about all this, I represent both districts. Not the whole district, but portions– successfully complete the three-week SBA after their senior year and enroll as full-time students at UALR. 

So when it says, ‘remain in the program through graduation from’ the high school, does that mean they receive the $2,500 while in high school or when they enrolled full-time at one of these colleges? 

Charles Lyford Thank you, ma’am. To my knowledge, the $2,500 was a scholarship awarded only after the students matriculated to one of these institutions. 

Representative Karilyn Brown And I assume as serious as this desegregation program is, and as long as it has gone on, $10 million from these school districts was a sacrifice. And the goal was to enhance their students’ academics. 

And I know those people are no longer with you, but I’m just wondering why they thought trips to New York City and Madrid– of course, we had to pay the faculty to go with them. So none of those faculty are still with UALR? 

Charles Lyford I’m not sure of the answer to that. 

Representative Karilyn Brown Well, the report says that the people involved in the program are no longer employed. 

Charles Lyford I think that referred to program staff, not necessarily faculty, some of whom may still be at UA Little Rock. 

Representative Karilyn Brown It looks like everybody had a good time. But I just wonder how enhanced the academic abilities of the students, how much they were enhanced. This is a sad report. And I guess I want to follow up with a couple other of my colleagues. Do we have better controls on existing programs right now? I would really like to be assured that this kind of foolishness is not continuing. 

Charles Lyford As stated in the management response, I believe there are two answers there. The sponsored program review process has been strengthened. I think there is no longer– Allenn correct me if I’m wrong– no longer a dollar threshold above which the expenditures would be reviewed. I believe sponsored research now reviews all such expenditures for eligibility. Also, scholarship awarding is now centralized in the Office of Financial Aid. 

Representative Karilyn Brown No further questions at this time. 

Representative Robin Lundstrum Thank you, Representative Brown. Representative Matt Brown. 

UALR role

Representative Matt Brown Thank you, Madam Chair. When did UALR first have an inkling that there was some problem in this thing? Did y’all catch this before or was it when the audit happened? 

Allen Stanley So when we got to getting close to the COVID period, yes, we were looking at the expenditures then. But there was a decision to turn back the unspent funds. So we didn’t spend– the full 10 million was not spent. And we returned back– was it 1.6 million back to Pulaski Special County School District, if I’m not mistaken on that. And so we did start to strengthen our internal controls around just expenses all around. 

But this particular program, we were relying on those program administrators for the allowability of those expenses based on the information they had regarding the objectives of that program. And so that was their determination that these expenditures were allowable under the terms of that of the program to provide cultural experiences and things of that nature for those students who are participating in this program. 

Representative Matt Brown Follow-up, Madam Chair. Okay, I’m sorry. I’m pretty stupid. So I didn’t quite understand the question. So is it the institution’s position that even though it turned money back that everything that happened was okay because it was allowable under the terms of the program? What are we arguing about? 

Because I got to tell you, taking people to Magic Springs doesn’t seem allowable under any program to me. Or like this airfare to Spain coming up to like $1,600 a pop, I mean, are we flying these people premium economy? None of this smells right. But is the institution’s position that it was all okay? 

Charles Lyford Sir, and I appreciate the question. The program rules, and I believe this is reflected in the Legislative Audit report, allowed for such student experience activities. The study abroad, I think, was actually paid for through an external grant that the program pulled down. 

The turn back of funds as well was by motion to the federal court. UA Little Rock did not file that motion. The involved school districts did. So, a request was made to the federal court that originally authorized the program to wind it down and allow the disbursement of funds back to the school districts, which that court approved. 

Representative Matt Brown It wasn’t that UALR turned this money over willingly, it was that it was forced to turn it back over. 

Charles Lyford There was a joint motion by the school districts, Pulaski County Special and Jacksonville North Pulaski to the federal court requesting that the funds be returned to the school district. 

Representative Robin Lundstrum Thank you. Representative Dalby? 

Representative Carol Dalby Thank you, Madam Chair. This question is for staff. My question is, has this report been turned over to the attorney general’s office and our federal prosecutor’s office to look at? Or is it that you are awaiting action from this committee to get that turned over to the proper authorities to investigate under their fraud units? 

Representative Robin Lundstrum No, ma’am, that has not been done. That is something we can suggest in this committee. 

Representative Carol Dalby Okay, I would suggest that. Thank you. 

Representative Robin Lundstrum I’ll take that as a motion at the proper time. Next up, we have Representative Beck, then Senator Stone, Representative Brown, and Representative Rye. Representative Beck. 

Poor graduation rates and ineligible student awards

Representative Rick Beck Thank you, Madam Chair. I was just playing with some numbers here a little bit. It seems like a lot of the problem with the program was– basically I did a percentage, in other words. From each institution, the percentage of students that actually completed versus didn’t complete. 

And although it’s not a direct correlation, it is a very close correlation to the next page number over there, which is the amount of ineligible scholarships that were awarded. So it almost looks like the biggest problem with your program was that there were people that shouldn’t have been in there and those people didn’t complete. 

So I guess I’ll ask for any comments that you have on that, but it actually looks like that’s where the problem was. If we’re ever going to do this again, that would be a great place to look. I don’t know if you have any comments about that. 

Charles Lyford Just, sir, and thank you for your comments, that the program overall, especially with regard to scholarships, I think was designed as a student achievement initiative to help encourage students who might have been struggling academically and otherwise not interested in applying or graduating from college to secure their attendance and increase the likelihood that they graduated. 

I think what we’ve seen, and some of the audit reporting is, that students who were initially eligible for the scholarships dropped below the minimum GPA or dropped below the minimum credit hour requirements and were awarded scholarships, I suspect, in an attempt to retain them as students and to ensure that they did not drop out. 

Representative Rick Beck Just a quick follow-up. So you’re saying that what happened was– you might need to correct me, I might be wrong about this if I didn’t understand. But what you’re saying is that in the program, ineligible students were– or the eligible students were basically, I guess the credentials or whatever were dropped just to keep them in the program. Is that what you’re saying? 

Charles Lyford No, sir. That’s not what I intended to say. I think– I suspect– I do not know this for a fact— but as some of the students who were initially eligible in the sense that they met the GPA and the credit hour requirements, those students might over the course of their attendance at college have dropped below the minimum GPA. 

And we’ve seen from this that they received that next scholarship, likely in an attempt to keep them as students and ensure that they did not drop out in order for them to graduate, which was the ultimate goal. 

Representative Robin Lundstrum There aren’t words. Representative Brown. I’m sorry, that’s me. 

Representative Karilyn Brown Thank you, Madam Chair. I have one other request. I would really like to hear from the faculty members who designed the program. I understand the administrators are gone, but faculty designed the programs. And I believe we need some accountability from those faculty members. I would like to hear from them next time. 

Representative Robin Lundstrum Representative Rye. 

Representative Johnny Rye Yes, thank you, Madam Chairman. On page 4, I saw something that threw up a red flag to me. And at the bottom, it says during the review period, the program awarded 100–1.87 million in scholarships to 379 students, of whom 116 graduated from college. Does that not seem like a mighty low figure? 

Charles Lyford We do not contest those numbers. I mean, I think those are accurate figures. 

Representative Johnny Rye But that would only be about 30 percent. 

Charles Lyford That sounds correct, sir. 

Representative Johnny Rye It just seems awful low. Thank you, Madam Chairman. 

Representative Robin Lundstrum Thank you, Representative Rye. I think your point’s well taken. Senator Stone. 

Senator Matt Stone I have two questions. Do we have a total amount that may have been said? And I overlooked it or didn’t hear it. But what was the total amount of money that was spent outside of the parameters of the program? 

Representative Robin Lundstrum I think the whole program was 8.5 million. The total allotted was 10. And the courts, they returned a million and a half back to the courts in general figures. 

Senator Matt Stone I know they turned back 1.6 that wasn’t spent. Some of the money that was spent was spent properly on scholarships, but what money was spent improperly. Do we have a total on that? 

Representative Robin Lundstrum No, sir. 

Senator Matt Stone The reason why I’m asking, I’m just sitting there thinking. In County and Municipalities, it’s just month after month, we have counties and cities receive money to their road fund that’s dedicated to that account. Then they improperly spend it. And when they do, they have to take revenue from their general account to replace it. I’m sitting here thinking, I almost see the same scenario here. 

Because really what I’m hearing right now, something happened, money was misspent, oops, everybody’s gone. And students have been denied scholarship money. I’m almost thinking we need to even pursue the criminal prosecution that was mentioned a while ago. But we need to determine how much was spent under the purview of UALR and let that money be made up out of their budget and put it back in there so the students who were denied their scholarships and could have gone to school didn’t. 

Representative Robin Lundstrum We’ll take that under advisement. I think that’s one reason Representative Beaty wanted this report held so we could digest it a little bit better and dig into the numbers a little better before moving forward. I also want it noted that UALR sent representatives to try to answer these questions, whereas Philander Smith College and Pulaski County Technical did not. We have a hand in the audience. You’re from Philander Smith? All right. Would you join us at the table, please, and state your name? 

Latonya Hayes I’m Latonya Hayes, and I’m the interim CFO at Philander. 

Representative Robin Lundstrum All right. Would you please raise your right hand? Do you solemnly swear or affirm that the testimony you are about to give will be the truth, the whole truth and nothing but the truth? Thank you ma’am. Thank you for joining us. We will continue with the questions. Any other additional questions? Senator Petty.

Senator Jim Petty Thank you, Madam Chair. I would just give you the opportunity to see if there’s anything in addition. You’ve heard their testimony. If there is anything new or different or in addition that occurred at your institution, just maybe get ahead of any of the questions that might be there. 

Latonya Hayes Yes, so the only thing I can add is that at Philander Smith, that we did not do eligibility for the program, that we confirmed enrollment, and then did an invoice based on the students that were given to us as participants in the program. So we did not do eligibility. 

Representative Robin Lundstrum Thank you for that clarification. 

Latonya Hayes You’re welcome. 

Representative Robin Lundstrum Representative Richardson. 

Representative Scott Richardson Thank you, Madam Chair. Just want to ask the same question. Who was responsible for review of the expenditures at your school? 

Latonya Hayes So that would have been the business office. And so for this program, we treated it as an outside scholarship. And so we received the funds– we did a request to receive the funds, but the only thing we did was verify enrollment. So those eligibility requirements– I went back and looked at all the documentation we had on file for the program, and we didn’t have any of that. So all we did was verify enrolment. 

Representative Robin Lundstrum Representative Unger. 

Representative Steve Unger Within this program, was there any single person that was in charge of review and accountability? 

Charles Lyford I’m not sure the answer to that. I believe the answer is no, as far as a single person. But I’m not sure. 

Representative Steve Unger [inaudible] …is a camel. And so this is ‘good intentions met a pot of money and came out with bad results.’ And I think there just needs to be a better way going forward that has one person who’s a point of contact who owns this and could put their name on the blame line. 

Representative Robin Lundstrum Thank you, Representative Unger. Any other questions? Senator Petty.

Request for judge’s order

Senator Jim Petty Thank you, Madam Chair. I am not making any excuses for anything that has been said or done. This, obviously, if you follow the federal lawsuit and desegregation, is very complicated. And I think I heard both representatives that were here indicate that this was treated as an outside scholarship as opposed to internal or state funding. And so what I’d like to see, since it sounds like we may table it, I’d like to see staff pull together the judge’s order and see if we can garner anything from that it, just by way of summary, since we’re going to have a little time to review that. 

Because as just quite frankly wasteful as this might seem, if it was intended to comply with a judge’s order to encourage or recruit or entice students that might not otherwise come, and this is what they decided to do was best, then in reality nobody has done– and even our audit report here says that most of these components were generally complied with. And so I’d like to see a little bit more. 

I don’t want to get too deep in the weeds on the federal judge order, but I think it might be helpful to know what they were told to do and whether we can determine whether or not that was the highest and best use of that order. Obviously a judge felt like for a period of time at least that it was complying with his order. 

I don’t know what kind of detail is in the report, and maybe that’s a follow up. We could get a copy of the report to the court or something. If you don’t mind, staff, to try to get a sample of one of those reports to the court. But I think that there’s a lot of information here. Some doesn’t, at least in the public view, doesn’t sound very helpful, doesn’t sound like it was the highest and best use of these dollars. 

But I think if we’re going to pursue this further, I think we need to hear what the man or woman that ordered this to be established said and how he required reporting periodically for us. So if you could do that, staff, that would be great. 

Representative Robin Lundstrum Thank you, Senator Petty. And we have a couple more questions in the queue. Representative Ladyman, then Senator English. Representative Ladyman. 

Representative Jack Ladyman Thank you, Madam Chair. I was just looking on page 4 and 5. So there’s three institutions involved here, UALR, Philander Smith, and Pulaski Tech. And when you look at the number of students that graduated out of that small number, Pulaski graduated 56% of the students that were in the program. Not really a very bad number, really. 

And Philander Smith, 39%. UALR only graduated 27%. And then also when you look at students awarded over the maximum amount, Pulaski Tech had none, Philander Smith only had two, UALR had 20. So I think it would be interesting to know, this money that was maybe fraudulently spent– we don’t know for sure unless the court weighs in– but is there any way we know how much of the money was spent by which institution? Is that something we could see or is it in the report? 

Staff We can get back to you on that, but I believe we could get that for sure. 

Representative Jack Ladyman I think that would be something that the committee would be interested in if you can send that in. 

Representative Robin Lundstrum Thank you, sir. That would be very helpful. Senator English. 

Senator Jane English As I go back and think about this, and my friends over here to the right of me probably can help me along a little bit, it seems to me that this was a negotiated settlement as part of the state no longer paying the $70 million in desegregation funds and that this was a requirement on the part of– I can’t remember the name of the group, but to be able to move out of that $70 million settlement. 

So this was just a program, $10 million set up that the Pulaski County Special School District had to put up in order to be able to help students move along. But as I remember it, and I certainly don’t remember anybody ever talking about all of these kinds of expenditures, the idea was to help kids move from high school or stay in high school and move on to college. 

And I think most everybody concerned thought that that was exactly what we were going to be doing was helping kids move from high schools, stay in a high school and move onto college, certainly not all the rest of these things. 

But I honestly believe it was a pot of money, a federal judge agreed to it, everybody agreed to it, and then they had to plop it someplace. And the place they plopped it ended up being at UALR. And obviously there wasn’t a whole lot of control over what was going on with those dollars. 

Representative Robin Lundstrum Senator, I think you’re exactly correct. And I’m a little concerned when I see things like hotels in New Orleans, Marriott in Little Rock. We’re in Little Rock. I don’t know why we’re staying in a hotel there. Capital Hotel, Hotel Tybee Island, Omni, La Mason, Airbnbs. And then you look at the restaurants, plus we paid for catering. So there’s a lot of questions that I’m sure you’re wanting to ask, but we’d like to have some answers to it too. So thank you for pointing that out. Representative Burkes. 

Representative Rebecca Burkes Thank you. At this time, I would make a motion that we table this until our next meeting so we all have a chance to get the answers to these questions. 

Representative Robin Lundstrum Thank you. That is a proper motion. All in favor? Excuse me, discussion? All right. All in favor? And Representative Ladyman, second. Opposed? Okay, thank you. We will table this and do some more homework. Thank you. I’d like to thank you all for being here today and taking that time, and we look forward to seeing you again. All right, next on the agenda we have a special report. I’m sorry. Senator Hammer, you popped up. 

Senator Kim Hammer Thank you, Madam Chair. Would the Chair instruct staff to send a strong letter of encouragement to the third institution that was not here that they are expected at the next meeting, please? 

Representative Robin Lundstrum Thank you, that’s duly noted. All right, next up, we have a special report. And I believe we have some folks here. Would you please come to the table? First, we need to recognize Michelle Atchley to give a report and then we’ll have folks come to the table. Michelle, Ms. Atchley. 

Report on outcome of audits turned over to prosecutors

Staff Thank you, Madam Chair. This report is issued to provide this committee a summary of the disposition of matters referred to the prosecuting attorneys and the attorney general for the calendar year 2024. Arkansas Code provided in Appendix A requires the legislative auditor to notify the applicable prosecutor and the attorney general of unauthorized disbursements or unaccounted for funds or property. 

Report findings related to the prosecuting attorney’s office are also referred to attorney general. Prosecutors and the attorney general are required to submit a disposition report of matters referred, and then Legislative Audit compiles the report that is being presented today. Arkansas Code directs the legislative auditor to notify the Arkansas Governmental Bonding Board of audit reports reflecting improper transactions for which a public official, officer or employee may be liable. 

Entities are required to meet a $2,500 deductible per occurrence before payment is made by the bond board and the Fidelity Bond Program coverage limit is $300,000 per occurrence. This slide reflects an example of matters referred: receipts not deposited, missing assets, unauthorized or undocumented disbursements, unauthorized payments, unauthorized bank withdrawals, conflict of interest issues, non-compliance with the public purpose doctrine, and potential violation of the speed trap law. 

As shown on the screen, using the 15th Judicial District as an example, each judicial district’s report Page includes a map identifying the counties located in the district. In addition, matters referred are detailed individually by the counties in the judicial district, the prosecuting attorney, the governmental entity involved, the year the matter was referred, and the status according to the prosecutor or the attorney general. Payment by the bond trust fund is also indicated when applicable. 

Presented in Exhibit 3 on Pages 6 and 7 of the report is a summary organized by judicial district. As reflected in this Exhibit, 164 matters were referred, 39 matters are under review, criminal charges were filed in 28 of the matters referred, five of those cases are pending in court, three cases were dismissed, and 20 cases resulted in a conviction and a court ordered sentence. 

Exhibit 4 on Page 8 lists all the matters referred for which a conviction was obtained. Four defendants were incarcerated and received probation upon release, 12 defendants received probation only, and four defendants received a suspended imposition of sentence. 

Also shown in Exhibit 4, all 20 defendants were ordered to pay fines, fees, and court costs totaling over $18,000, 18 defendants were ordered pay restitution totaling just under $789,000, and 5 defendants were ordered to pay audit costs totaling over $52,000. Of the 20 matters for which a conviction was obtained, the bond trust fund paid claims to three entities as shown on the slide and noted on Pages 19, 61, and 77 of the report. 

Additionally, 11 claims were pending with the bond board. Four claims were below the deductible or restitution was paid in full, and two were governmental entities that are not covered by the bond program. 

This concludes my presentation on the disposition of matters referred. A representative from the Office of Prosecutor Coordinator and Attorney General’s Office is available to answer any committee questions. 

Representative Robin Lundstrum Thank you. This represents a lot of work and a lot of money that’s been recovered, as well as a lot of money lost. We have guests with us today, Bob McMahan with the Prosecuting Coordinator’s Office, Wayne Booley– I’m not sure how to say that– Dan Shue and David Ethridge. 

If y’all could come in today, I appreciate it. I changed that. Are these with the AG’s office? Jeff Chandler. And ff you could introduce yourself for the record. Gentlemen, let me swear you in. If you could state, each of you state your name. If we could start with you. If you could state your name. 

Daniel Shue Daniel Shue. 

David Ethridge David Ethridge. 

Bob McMahan Bob McMahan. 

Jeff Chandler Jeff Chandler. 

Wayne Booley Wayne Booley. 

Representative Robin Lundstrum Okay, thank you sir. If you would raise your right hand. I do solemnly swear or affirm that the testimony I’m about to give will be the truth, the whole truth and nothing but the truth. Thank you, gentlemen. Thank you for being here. If any of you would like to give an opening statement, this is a lot of information and help us understand and digest it. 

Bob McMahan Madam Chairman, Bob McMahon, Prosecutor Coordinator representing the Prosecutors Association. This report is done every year, and I come as a representative of the Prosecutors Association for the new members and usually have with me our president or past president. 

Our policy in the past has been, I will try to answer any general questions that I can and that I may be familiar with. But if there is a specific audit that you have questions about, we always contact staff and see so that I could have that prosecuting attorney or that deputy prosecuting attorney show up to answer the specific questions. 

Audit does a tremendous job of putting this stuff together, but one thing you need to understand is it’s very different. Their job is to find all the things that Michelle outlined in the report, and then it’s up to the prosecuting attorney or the Attorney General’s Office when we prosecute one of those cases to go much further than that. We have to determine, to have probable cause to make an arrest. 

And then we have to be able to prosecute somebody and prove beyond a reasonable doubt. So the standards of Audit finding money missing and what the prosecutors or the attorney general has to do is very different. But with that just general statement about how we do things, we’ll be happy to answer any specific questions. 

Representative Robin Lundstrum Okay, I do have one question just to give some background on the bond trust fund. It’s been used a number of times. Who pays for that trust fund? Is that something the cities pay? 

Bob McMahan Madam Chair, I do not know the answer to that question, how that program works. 

Representative Robin Lundstrum Staff does. Hang on. Mr. White. 

Staff Thank you for the question. So the Bond Trust Fund, it’s a percentage of turnback in regard to some of the municipalities and counties. There’s a portion taken off prior to them receiving their funds. That money then goes into a pot that’s collected at the state level. It’s the Bond Trust Fund that is a fidelity bond to help ensure if there’s theft by employees of those entities that there’s coverage for those thefts from that. 

Representative Robin Lundstrum Representative Duke. 

Representative Hope Duke Thank you, Madam Chair. And this question may be to staff initially. But when you read through the report and the responses that we get from prosecuting attorneys, I guess number one, are those summaries of what they sent? Or is that literally what they sent in a response to what they did? 

Staff If it’s a very lengthy response, then we will provide a summary of that. But if not, if it’s something within a paragraph, then we sign it verbatim what they send in.  

More report details requested

Representative Hope Duke Okay. But obviously you’re going to grab the highlights and the really important pieces of it. So I guess, turning to you all, one of the things that I found a little bit frustrating as I went through the report is there’s such a variance of information that we get from different prosecuting attorneys. 

And when you’re sitting on those subcommittees and things get referred or you come in here and they get referred and you’re wondering what happened next. And then, of course, obviously, it’s a space of time before we see this report. But it is a little– I mean, I had made several notes in here. 

Well, was there any kind of restitution made? Why did they not choose? And I don’t know the answers to that. But in some of these districts, we get a little bit more thorough responses than we get in others. And so I would at least find it helpful to have a little more thorough response because I have questions on several of them whenever they didn’t pursue the charges, they didn’t– I think one of them– this is one that said that concern of the expenditures didn’t rise of the level of criminal activity. 

And like I get it, there’s smaller amounts, but smaller amounts of other people’s money matter. And in school districts and areas that are really small, those percentages, although may not be very big to Springdale, can be very, very large to a much smaller district and to the community. So I get that they can’t chase down everything and they have to make choices or maybe if there’s not stuff involved. 

But like my question here was, was there any effort to get this employee to reimburse the money, even if you don’t pursue criminal? And I don’t know if you all don’t know the answer to that. I mean, I understand that you’re not going to know the specifics on each of these, but that is something I would like to have a little bit more insight on as we read through at the end. 

If they have that information or even if it’s ‘the school district didn’t pursue it’ or ‘we weren’t able to do it.’ Just to know, was there any effort, even though it’s a smaller amount of money, and maybe you can’t get all the ducks in a row. 

Did any of these people– because some of these are superintendents, and some of these are little mistakes. But goodness gracious, if they made an error, I would hope they would have the character, especially if they’re employed in the state of Arkansas, Oh, okay, well, I’m going to pay that back, we’re going to work out a plan to pay that back. So don’t want to dig through– thank you for the leniency here– but I don’t want to, I guess, go through all the different ones where I have questions. I’m happy to share that with staff. 

Representative Robin Lundstrum Representative Duke, I don’t think it’s a bad idea if you have questions on specific issues if you can go to the Page number and let them answer those questions. That’s why we have this wealth of information here. So if you want to take a moment and put together two or three that you have questions on, I think that’s perfectly appropriate. Now is the time and place. 

Representative Hope Duke Okay, well, I will just give the highlight one that I just had pulled up here, and then I’ll get out of the queue. I know there’s some other questions. But again, it was a small amount. But on Page 27 on Randolph County and the Maynard School District– I’m not sure if I’m saying that right, so my apologies. 

That’s where I quoted that part from, ‘it did not rise to the level.’ And so then my question just was, on that overpaid amount, was there any effort to try and get a repayment by the district or by anybody else just because they know it happened but maybe you can’t prosecute it. I understand you may not have the answer to that, but that was one of them. 

Bob McMahan Representative, thank you for the question. And this is a great example of something that we do not have the example. You know, I would guess that every specific prosecutor or deputy that handled any one of these cases would be able to, by looking at their file, be able answer those good questions that you asked. 

I am sure that the thorough study of the case would allow them to answer that, every one of those questions on every particular case. I just don’t have that information, but I’ll be happy to get that for you on a specific case or have the prosecutor or deputy either get the information to me to where I could answer your question or have them come to a future meeting. 

But I feel fairly comfortable that prosecutors in the AG’s office that handle those cases would be able to answer those questions on each specific case. I just don’t know in specifics to that one what the answer is. 

Representative Hope Duke I appreciate that, and I understand that. And I guess maybe just from our perspective, or at least from mine, if they would include in their reports maybe a little bit more of those details so that we would have. Because that closure, I think, is important, especially for members of those committees, but also for the people that we represent to be able to say, Okay, this is what ended up happening. 

And even if it’s, unfortunately, couldn’t chase it down, couldn’t get it reimbursed, but we were able to, I guess, thoroughly exhaust every option that we had. And I will jump back in and let somebody else and I’ll come back.

Representative Robin Lundstrum  Questions are the best thing, so don’t worry about that. Senator Hammer. 

Low percentage of charges filed

Senator Kim Hammer Thank you. You gentlemen have a copy of the report in front of you, correct? Draw your attention to Page 7. And I just want to make sure I’m interpreting the numbers correctly. Number of matters referred, 164. You got 20 convictions, five pending, three that were acquitted and dismissed, and then 96 charges not filed. 

The percentage of the matters referred against the matters that charges were not filed, that seems to be– and this is, as long as I’ve been down here, there’s been ongoing discussion. But 96 out of 164 is a pretty high number. So am I misinterpreting the numbers, first of all? Or am I accurate in my interpretation? 

Bob McMahan I don’t want to speak for everybody else, but I think you’re accurate in your numbers to some extent. There is 164 and only 96 been prosecuted. But when you do the math, I think you also have to take into consideration that there are 39 other cases pending. So those 39 cases may get added to the 28 that were prosecuted or they may not. 

But your numbers are correct. It’s just that we always want to consider there are 39 pending. So it kind of skews our numbers a little bit if you’re just going to say the ones that have gone to trial now compared to the numbers that were presented to both of our offices. 

Senator Kim Hammer Okay, so potentially the 39– in a perfect world, the 39 may come off of the 96 charges not filed yet. If you determine, of those 39 under review that you have the ability to prosecute, they could come off the 96.

Bob McMahan I think the 39 would come off the 164. Because the 96, or I guess the 39 could be added to either the conviction or the charges not filed. So the 39 will come off some of the 164 but I don’t know specifically what column. Does that make sense? 

Senator Kim Hammer Yeah. But the charges not filed, you have determined that based on what you were given that there was not enough to pursue charging them. Is that a correct answer? 

David Ethridge That is correct. Audit does a wonderful job and we have a great relationship with them. A lot of the matters that are referred to us, there may be something that Audit flags that under Arkansas law we cannot prosecute criminally for a variety of reasons. And that’s what we have to filter through once it’s given to us. 

Senator Kim Hammer So hearing that response, it’s not that Audit’s doing a bad job. It’s not that you’re doing a bad job. It’s that there’s something in the law that does not allow you to prosecute. Is that correct? 

David Ethridge That’s absolutely correct, sir. 

Senator Kim Hammer So would it be worth the effort– obviously, they’ve done something that– and I guess what I’m trying to understand is they found something that doesn’t necessarily break the law, but it has risen to the level that it has resulted in an Audit finding. So the question is, those things that you can’t bring convictions on, do we need to create the laws that would allow you to bring convictions? 

Bob McMahan Senator, the first thing I would think that might be problematic with that is you won’t be able to create a law that creates criminal intent. So without criminal intent, we would never be able to file charges on something. So I don’t think we could fix that in the law. There may be things that don’t rise to the level of a crime that you could fix or make a crime. 

But in terms of criminal intent, that’s always going to be something that a prosecutor or an attorney general serving as a prosecutor would have to prove to go forward. So I don’t know if we could legislate the creation of intent.

Senator Kim Hammer  All right, then what you’re saying is the reason you’re not filing charges is because you don’t see criminal intent. 

David Ethridge In some cases, absolutely. And there’s, again, a lot of examples we could probably give you that sound a little odd. But when we get these cases, we have to go through them. Again, I want to give Audit credit. Their auditors are great to work with. But you start looking at who’s the person that committed the crime and sometimes we can’t determine who that person is or sometimes it’s now a misdemeanor. And we can’t file a misdemeanor charge after a year has passed. 

So we’re stuck in those situations. We can’t charge someone. And sometimes we don’t know who the person who committed the act is. And so those are some things that keep us from being able to file charges. But to answer your question, yes, there may be some things y’all could do to help us tighten that up. But again, intent is a thing that we can’t change. 

Senator Kim Hammer Okay, so last question, and I’ll yield. Is it in this report where you show the cases that you couldn’t prosecute because of criminal intent? Is it anywhere in this report? Is it summarized in each one of the individual responses? Or what would it take to be able– because I think that could paint a clearer picture. As far as these numbers, we can’t do anything because we couldn’t prove criminal intent. 

David Ethridge I can’t say that it’s summarized in there. I know it’s one of the things we look at, and I think those answers that we respond to y’all with might identify that better for you to understand what is taking place. Absolutely. 

Senator Kim Hammer Right. But how hard would it be to add a summary sheet in here that says, These were the ones that we could not find criminal intent.’ And then we could identify those and see what as legislators we might want to do to help create something. Or am I asking too much? You don’t have enough staff? Be honest with me. Is it not going to be worth the effort to put it in to do that? 

Bob McMahan Senator, I think we probably have that. It’s just called different things. Some say no specific intent. Some say, didn’t rise to the level of criminal activity. I think there are various language that’s used to say the same thing, but I think we could go back through and probably tally those up. 

Senator Kim Hammer But that’s at each end of one that we have to look at and see that, correct? 

Bob McMahan Yes, sir. 

Senator Kim Hammer Okay. All right. Thank you, madam chair. 

Representative Robin Lundstrum Good questions. Representative Ladyman. 

Representative Jack Ladyman Thank you, Madam Chair. This may be adding on to what Representative Duke and Senator Hammer just said. But if you look at Page 18, Representative Duke said that they need a better description. And this is my county, Craighead County, and I’m familiar with this East Arkansas planning issue. 

But the comment that the prosecutor has there I think is very good, and it also kind of addresses what Senator Hammer was saying. It says the PA requested an Arkansas State Police investigation. It is the PA’s understanding that the monies have been paid back and the district has put measures in place to prevent this from happening in the future. 

And then it says, At this time, the PA declines to prosecute for any criminal offense. So that’s a very good description, I think. If you look at the other, back on Page 17, our prosecutor under the ASU system incident is not good. It says, under review. There’s no description of why it’s under review. That’s an old item. But how often, the first example I made, how often is that used? And that’s kind of what Senator Hammer asked. 

David Ethridge You’re asking how often is the ‘under review’ used?

Representative Jack Ladyman The other one. 

David Ethridge The other one is what we would like to try to do if we can give that amount of information. You know, we’ve turned it over to the Arkansas State Police or local law enforcement to let them investigate it further to help us bring charges. 

And so that is well done. The reason, and I don’t want to over-answer your question, which I’m quite capable of doing, unfortunately, is that the under review means they’re still looking at it, which is what we want to do with an investigation and not talk about it until we are completed with it. 

Representative Jack Ladyman So maybe they can’t put that information out? 

David Ethridge That’s what I would suggest from looking at this. Yes, sir. 

Representative Jack Ladyman So in your estimation, or can you estimate how often is that first example there for East Arkansas Planning, is that used 50% of the time? I mean, what’s a guideline there? And I don’t want to put you on the spot. 

David Ethridge I can’t give you a guess, but a lot of times what we see once Audit has done what they do, we’ll find the money has been determined, it’s been paid back, and the parties involved may look at it and say, This is not one that needs to be criminally prosecuted. And yet everyone’s been made whole, which is what we’re trying to get to the majority of the time, is get the money back to the taxpayers who paid the money out. 

Representative Jack Ladyman So can I say that would be the best outcome?

David Ethridge It would be the best outcome. There are people who need to be prosecuted, people who need to be incarcerated. But at the end of the day, this is what we’re trying to get to, yes, sir. 

Representative Jack Ladyman Okay. Thank you. 

Representative Robin Lundstrum Representative Duke.

Representative Hope Duke Thank you, madam chair. And thank you, Representative Ladyman, for pointing out one that was really well done and information and why sometimes there are misses in them or not all the information is provided. And I do understand that. 

One of the ones– and I’m trying to go back through these– one of the ones that I had a question on back on Page 10 in Monroe County, the Department of Agriculture. And it has on here about  what happened, why they were referred, I guess. And the district employee resigned. And then there’s going to be no further action taken. 

But again, my question is, is restitution made at all? Are they paying anything back? Is anyone following up to make sure that some of these things are paid back? Or do these people just resign? They don’t get prosecuted? And they may be paying money back. I have no idea, but I would love to have some kind of insight if any efforts being made to that. Or do they just go on to the next entity and work for them? 

nd typically people have no idea. And again, I realize you’re not probably going to have the answers to that, but I don’t know if that is something we can find answers to. Sometimes, at least I do on the Education audit side, but I know in school districts, it’s just sometimes people just move from one to the next to the next the next. And you don’t necessarily know there was a problem with one because they just leave. And so that was one of the questions I had.

 And then similar on Page 27– oh, that was the one I just did. Sorry. I’m just going in order. Then there was– I’m not going to try to hit them all– Page 30. And this was just, they are still employed in this school district– or not the school district, in this Goose Camp Water Users Association. I guess my question in that area, and this is not really for prosecuting attorney, but just for, I guess, that entity, is there oversight on that, a little bit of additional oversight on the area? 

And those are just kind of things I would just like to see so that when we’re coming down here and having these meetings and we’re asking our questions and now we get the follow-up on them that we know that some of our concerns are being addressed. 

Another one I had was on Page 35. No current charges were filed. I’m sorry, skip that one. I read that one through. Page 37. And this was a DHS one. And this one, I think we could have probably a good chance of finding out that information fairly quickly. At the very bottom, the funds have not been recovered. And it has the answer from the prosecuting attorney. 

And again, just the questions I just have sometimes is how much do we pursue trying to get– I agree that not everything needs to end up with people going to jail. But I do think restitution has to be made an effort in that part. And there’s some of these that I just, I’m curious if that’s happening. 

Page 43 at the Nevada School District and decided no criminal prosecution would be forthcoming for that unused sick leave. Again, I would think that would be something we could find out fairly easily but is that being paid back? And then 44 right on the next Page or close that issue there with the gun. OK, what did we do with that? We sent a letter, told don’t do it that way, but with the gun that happened there, and with how that process was supposed to be taking place, did that change or did he keep the gun? Did he give it back to the city? I mean, what happened with that other than just the letter being sent? 

And so those are some of the things at least– I’m not, like I said, I am not going to go through all of these. I’m happy to get offline because I have a few more, not a lot, but that’s generally the questions that I have is some of these just doesn’t seem to be clarity in what happened. 

And maybe because they choose not to prosecute or whatever, but then we don’t circle back, or maybe we do. What happens within the school district? What happens with these entities? Is anyone pursuing getting money or are these people taking money inappropriately or items inappropriately? Get a letter, get caution, they resign, and then they become potentially somebody else’s problem that has no idea. And is that money ever being recouped? 

Because eventually, these are the taxpayers’ dollars. I get that this is kind of tedious and not the most exciting thing in the world, but we should be guarding their dollars, in my opinion, more than I would even guard my own because we’ve been given the right and the responsibility to manage this money and all these different entities. 

And so it may just look like $2,000 here compared to millions of dollars somewhere else, but faithful in small things, you’re faithful in big things. And if you’re not going to be faithful in the small things, you’re going to not be faithful to the big things either. So the small details do matter. So, again, I understand you’re not going to have answers to all of these here today. 

But that’s just kind of even my feedback and maybe the staff can share with all of the different entities. I think taxpayers would like to just kind of have the bow tied up very neatly and nicely when issues like this occur. So thank you very much. Thank you for the latitude. I appreciate it. And I also, I do want to say, there were lots of really great descriptions in this and lots of details in lots of them. 

So the fact that I say that there’s some areas, but that also makes the ones that are a little sparse, they’re a little bit more noticeable because there are other ones that are, I feel like it’s tied up very nicely and we know the information. 

And I also understand some are still under investigation and things like that are happening as well. But there were some where they’re like, we’re done, and it was very minimal in what we had as far as the closing of that case. So thank you very much. I appreciate the leniency again. 

Representative Robin Lundstrum You’re welcome. And next we have Representative Beck and then Representative Ladyman. Representative Beck. 

Representative Rick Beck Thank you, Madam Chair. Just kind of building a little bit on some of the conversation. I think we’ll start with Senator Hammer. This number that the charge is not filed, it’s 2.7 million, right? There is a number below there. 

Representative Robin Lundstrum Representative Beck, would you give us the Page that you’re on? 

Representative Rick Beck I’m sorry. I’m on Exhibit 3. It’s Page 7. 

Representative Robin Lundstrum All right, thank you. 

Representative Rick Beck Is that number– my question is about that number. Is that the total number of charges that– and this might be for staff. Is that the total number of dollars associated with the charges that were not filed? 

Bob McMahan It’s probably a question for staff, but I believe that’s correct. 

Staff That is correct. 

Additional information requested

Representative Rick Beck That’s kind of what I thought. But I think a lot of people, we tend down here to kind of look at the bottom line to make sure that taxpayers are being taken care of. And what would help there is if in those cases restitution was made in all of those, right? So that all the charges that were filed and everything, the taxpayers came out even. I think that would make people feel a lot better about it. 

My question is, could this report be just a little bit more granular at the top level and say, Hey, these are the things that didn’t get prosecuted or didn’t get filed, no charges filed– excuse me– but the taxpayer was made whole on all these or a large percentage of them?

David Ethridge I’m going to try to answer that question by saying that I know that our policy in my office is that’s what we’re always seeking is the restitution to make the taxpayer whole. And I know that’s how the other 27 elected prosecutors feel the same way. And if we can’t have any input in that, we want restitution be paid. There are some times we don’t have control over that because, again, the action is not criminal. 

And so we don’t have the tools in our toolbox to force them to pay it back. But I can say for the 28, we all want the restitution and we will do everything in our ability to make that happen. And if we need to give some more information about that and what we’ve done or not done, I think we’re all glad to do that, by all means. 

Representative Rick Beck Yeah, and follow-up. I think my question, I’m sure that you guys are doing exactly what you’re saying. But my thing is, if we had on the report where it looks like– and I don’t even know what the number would be, 50% or whatever it would be, then that would be another number that we could top line take a look and say, hey, things look like they’re flowing along right here. And we still could go to the individual reports when we wanted to, but I think that would make– I know it’d make me feel a lot better to make sure that that’s happening. And then one other question. 

Representative Robin Lundstrum Representative Beck, let me let me answer that. Mr. White has some information. 

Staff What I wanted to mention, Representative Beck is, currently, I don’t think we’re asking for restitution in the non-criminal charges filed section when the prosecution attorneys are filing. We provide some presentations to the prosecuting attorneys as well as some of these staff that are representing all prosecuting attorneys. We can communicate the message that when charges aren’t filed to include the restitution amount, and we can try to summarize that for this committee moving forward. 

Representative Rick Beck That would be great. And then one more quick question. You mentioned that sometimes with misdemeanor charges, it had to be done within a year. And I could easily see how the system down here, which these wheels move a little bit slow sometimes, we could see a lot of people, we can be filing stuff, send stuff to you to be filed after there’s no way it’s going to– and that’s a waste of a lot of people’s time to do that. 

But also If we knew that, we might adjust our systems to get you those so that maybe you would have time to act on them by the time we got them. Because I know, and coming from education, I know that education is one that we really have a hard time sometimes getting– those people are gone. They’re in the next school district. We pay out one contract and they’re in the next school district before we get anything done about it. 

So anything like that, as a group, I would suggest that you feed to us so that we could possibly maybe make our timelines a little bit quicker and get to those a little bit quicker to get you what you need. 

Representative Robin Lundstrum I think you have a volunteer if you need something done. Representative Ladyman, and we will go to Representative Beaty.

Representative Jack Ladyman Thank you, madam chair. And I thank you all for being here, and I apologize for asking so many questions. But I think Representative Duke raises a really good question about these summaries. And my question to you all, through the Prosecutors Association, you probably have meetings or communications– I don’t want to call it training because y’all are lawyers. You’ve probably been trained enough.

 But just information on what this body would like to see. You know, maybe a check off list: Was the money given back? Why was there not prosecution? Or do you have an answer as to why there’s– some kind of a guideline that you could give your prosecutors so that they give us the information that we think we need so we can go back to our districts and talk to our prosecutors or whatever the association is that’s involved and have a better communication there. And the Municipal League, which I used to be a part of, does similar thing to that. Do y’all do that or can you do that? 

Bob McMahan Yes, sir, we do that. Not only do we have training, and we do continue to have training. Maybe not enough sometimes, but we do. We have big conferences, at least two a year, where all of our prosecutors come, including deputies. 

And we also as an association with our leadership, have almost monthly meetings, probably about nine a year. And your staff has attended some of those meetings before, so it’s absolutely doable for us to invite y’all to those meetings where we can hash this out or to present whatever you want me to present on our packets of materials to discuss. 

One of the issues here that might be– I’m not trying to create work for anybody, but there’s not a template that exists on every case that we have to check a box or fill out. So that may be something, if you want that information in that form. Now I realize, like I said, some prosecutors will respond with stacks of information. Others will be like this. I know the staff would be able to address that more than I would. But some type of a template where we made sure that we answered your questions is probably something we could get together and work on. That seems like maybe a solution to a lot of what you all are asking. 

Representative Jack Ladyman I think that’s a very good suggestion. I think we need to provide to you what we want to see. I don’t know how we do that, madam chair, but I think that’s something that we probably need to work on. And I know you have turnover in the prosecutors and so you have new people coming in, as we did with mayors, and you got to train them up because they’re new and they don’t know the ropes. But I think if we provide you what we want to see, you all may be able to provide that better for us. So thank you. 

Representative Robin Lundstrum Thank you, Representative Ladyman. 

Bob McMahan We’ll be happy to do that. 

Representative Robin Lundstrum I believe it’s a combination and they’ve been taking notes. Representative Beaty. 

Additional financial needs for prosecutors

Representative Howard Beaty Thank you, Madam Chair. Gentlemen, I’m over here. I would just say, first, it’s always a privilege to be sitting and speaking with you guys. I know you came today. And I’ll just say this is my favorite way to deal with prosecutors is sitting in a meeting. But what I would ask is, I feel like it’s incumbent on me to ask, with you being here today, what can we do to make your jobs easier or better help you fulfill the duties that are incumbent on you? 

Is there something that– fiscal session is coming up. Everybody wants the green salve. Everybody wants a little money. But is there something that this body can do while we have your attention and you have ours that you could share with us that would assist you in fulfillment of your duties? 

Victim witness coordinators

Bob McMahan I very much appreciate the opportunity to answer that question. We might not have enough time for me to start to answer that question, but we do appreciate that. In terms of the audit issues, I think we’ve kind of hashed out what we could do. For prosecutors, I mean, manpower is always an issue. We present things to you, usually not in a fiscal session, when we need additional deputy prosecutors. 

But I can say with the opportunity to say so, one of the things we’re very much interested in from the legislature is hopefully helping us get our state victim witness coordinators to be state employees. A lot of those, they’re very important people. Those people that don’t understand, they hold the hand of the victim from the beginning of the process through the end. And they have state statutory mandated duties to do that. 

And unfortunately, the funding sources for those employees are very different. Some are funded out of federal grants and those grants have been cut. So we have lost employees in prosecutors’ offices for that. So that is one thing we as an association are contemplating doing in the fiscal session. 

We don’t usually do that much stuff in a fiscal session, but we are contemplating doing that because we have actually lost employees recently. So off the top of my head, that’s probably the first thing that comes to mind. 

And again, I appreciate the opportunity to say that. And we will be reaching out to everyone as we get a little bit closer to the session and working with the governor’s office, of course, to present that. And we have made that information available to them. They know we’re working on this. We did file a bill last session. 

But we’re planning on doing it again. So I appreciate that. That is one thing. These guys may have something else. But for me, that’s the most pressing thing financially that I think we should be concerned with doing. 

David Ethridge I’ll just say, briefly, and I appreciate, Representative Beaty, you asking that question. Again, I say this every time, Audit is great for us. We work with them. We have a good relationship. And when they need things, we try to get it for them and vice versa. I don’t know how many cases right now Audit’s working on for me that y’all will be seeing in the future, that they’re doing some really good work. And I’m grateful for that. 

What y’ all have asked about a checklist, we think it’s a good idea. If y’all get us what you want, we can make that happen. And I want to echo what Bob’s saying. Y’all have taken very good care of us in the past, and we’re grateful for that. 

But we are very concerned about victim witness, because everything we do as prosecutors are victims of crimes. And these people do a great job of helping those victims. The most vulnerable people on the planet are those victims sometimes, and those people are critical. And they’ve got some very strong state mandated by y’all, what you have said is important to do, and we need help with their funding, desperately. 

Representative Robin Lundstrum Thank you. We have one more question, and one more question. We’re going to land this plane. Representative Brown and then we’ll close with Senator Petty. 

Representative Karilyn Brown Thank you, Mr. Shue. One thing– which one is Shue? Him? I’m sorry. Forgive me. One thing that was mentioned to me last year was that the victim advocates in the prosecuting attorney’s offices have to be paid for out of your prosecutor budget?

Bob McMahan Yes and no. Those positions are funded in different offices different ways. That’s the very position I was referring to a minute ago, the victim advocates. We call them victim witness coordinators. Those are not state employees. That’s what we’re trying to do. So right now they’re either county employees or grant employees. Even if they’re grant employees, they are county employees. But the pay is either through the county, through a VOCA grant, or in some places, a combination. 

Representative Karilyn Brown Well, one of the things that was mentioned to me is that in different counties, different budgets. So one of them might be paid better in one county than they would in another and that there’s a big turnover of those people. 

And maybe you and I are talking about the same thing now, that it would be best if those victim advocate coordinators– have I got that right?–iIf they were paid for out of the state budget rather than out of county budget. Is that a possibility or is that reasonable? 

Bob McMahan No, yes, ma’am. That’s exactly what I’m talking about. And then we did file a bill to do that last session that would have put a lot more uniformity in the payroll. We took existing salaries and put that all together. But I’ll be happy to get with you to do that. But yes, it was filed–  Representative Gazaway and Senator Gilmore were the sponsors of that piece of legislation last time. But that is the very people we’re talking about. 

Representative Karilyn Brown Well, I would like to talk with you about that at another time. 

Bob McMahan Yes, ma’am. Absolutely. 

Representative Robin Lundstrum Thank you, Representative Brown. Senator Petty. 

Senator Jim Petty Thank you, Madam Chair. The plane is on approach, and I’m going to let you land it here in just a second. But this has been a good conversation. But one thing that, as probably the only auditor in here, and that was 30 years ago, that might be helpful to this body is to maybe have a brief 30 minute-ish presentation by staff and maybe the prosecutor’s office as well on the nature of what we’re talking about. 

Because there are certain things that, and again, I’m not going to speak for staff, but I in Jim Petty words, there are certainly things that we turn over to them that may or may not be what would be a prosecutorial item. But we don’t want to make that decision as auditors. We’re going to turn that over. And so there’s scope and materiality. There’s law. Believe it or not, we have gray areas in the law. 

And so I think maybe some training, brief training about what happens. So this report is for the period January to December 2024. Some of these reports that were reported on go into 2022, 2023. And, so the reports may be are due, as we know from our water reports, they may be 18 months later. Some may be shorter than that. 

But I think a general understanding of the process of turning it over to the prosecutors and then how the prosecutors respond to those and the timing might help us in creating laws, to Representative Beaty or whoever made that comment, but I think that my observation is there’s a little bit, at least, if not a significant amount, of really not understanding the process from the auditor perspective and from the prosecutor perspective. 

And so maybe just a brief training on that area by staff one day might be helpful. So with that, I’m going to turn over the autopilot to you and let you land this plane. 

Representative Robin Lundstrum Thank you so much. First of all, I also want to just reiterate, always ask questions. They’re the anti venom to bad government. So never apologize for that. And I love the fact that so many of you stayed and stuck on it. So with that, I would move that we file this report. Do I have a second? Second, Representative Brown. Discussion of the motion? All in favor. All right, motion passes. 

Gentlemen, thank you so much for being here today and answering our questions. With that, we have no other business coming before us. We will see everybody on February the 12 and 13. Plane landed.