Legislative Joint Auditing Committee – June 12, 2009
Posted on June 12th, 2009
Date & Time: Wednesday, June 12, 2009 at 9:00 AM
Location: Room 171, State Capitol Little Rock, Arkansas
Agenda: http://tr.im/oh6Z
Attachments: none
9:05 am – The Reports of the Executive and Standing Committees are being reviewed. Senator Pritchard gave executive report. There are some big developments concerning the audit of Tobacco Settlement money and agencies.
9:15 am – The Shortage Updates were reviewed. There was significant discussion about the Pine Bluff School District and audit findings.
9:23 am – Currently reviewing the Levee District Performance District.
9:30 am – All of these audit reports that we are reviewing can be accessed by the public here: http://www.legaudit.state.ar.us/. The ones that we are currently looking at will be posted by this afternoon.
9:41 am -Significant discussion about the lack of common standards for the maintenance of levees. There is a diversity of governmental organizations that are responsible for maintaining levees has created a coordination problem.
9:47 am – Rep. Burris is inquiring why the Vicksburg Levee district has been unresponsive to the committees request for information. This is fundamentally why we have the problem with the levees. When the local districts and counties are unresponsive to requests of the Corps of Engineers, then the Corps turns the maintenance and responsiblity over to the local district. The core of the problem is probably just local apathy.
9:56 am – John Sweeney with the Arkansas Natural Resources District recommened that the legislature develop state legislation to deal with manage and enforce the maintenance of the levee systems in Arkansas.
10:03 am – There is some confusion because there is Drainage Districts, Irrigation Districts, and Levee Districts that are sometimes working at cross purposes. Any solution will need to incorporate a way to coordinate all three improvement districts.
10:05 am – Rep. Hall expressed concern over how the local improvement agency boards would react and resist the state control over the local districts.
10:10 am – This levee situation has significant political ramifications. Issues such as local control, property rights, infrastructure needs, taxing authority, and other nasty political topics come into play.
10:12 am – The Levee District Oversight Report is adopted as review and has been forwarded to ALC to send to appropriate standing committees for interim study and develop future legislation to address these issues.
10:20 am – Currently reviewing the special report on case prioritization and turnaround of the Arkansas Crime Laboratory. There have been significant improvements in the performance of this organization.
10:22 am – I am concurrent with live reporting this committee attempting to put together a post about special actions the legislature is taking concerning the Tobacco Settlement Proceeds Act funds. I will try to make that post immediately following this meeting.
10:25 am – The Arkansas Crime Laboratory Special Report was adopted as reviewed.
10:26 am – We are currently reviewing the Performance Audit Report for Evaluation of Academic Facilities Transitional and Immediate Repair Programs Disbursements. There is also a corresponding report for the Facilities Partnership Program Disbursements.
10:30 am – Four and a half years doing this job and I still feel like I am drinking from a firehose pointed at my face…. can we call it information-waterboarding?
10:33 am – There are some interesting graphs in the Academic Facilities Performance Audit reports. Apparently districts in the third district recieved substantial state funds but had a very large local percentage of contributions. This is probably due to growth. Other schools around the state, even though they would have gotten a much larger percentage of contributions, did not have the need for new construction. The report adopted as reviewed.
10:40 am – Committee adjourned.
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Opportunity Online Summit
Posted on June 11th, 2009
2:33 pm – The Arkansas Opportunity Online Broadband Summit assembles library leaders, community partners and statewide stakeholders to examine the current state of connectivity in Arkansas libraries and raise awareness about the need for increased connectivity.
2:42 pm – My experiences today at getting a connection creates a great deal of empathy for the rural residents in Arkansas that might only have broadband access at their local library… if at all.
2:45 pm – The Arkansas Opportunity Online Summit is not just about libraries, it is about establishing community partnerships which strive to ensure that everyone will have at least one place in their community to use the power of broadband technologies.
2:48 pm – Apparently the purpose of the summit is to reach out to community partners and state leaders who can work with thier libraries to harness the power of new technologies for the benefit of all their people and to extend teh reach of broadband to areas not currently served. It is the beginning of an important partnership among libraries, communities, and the state who are dedicated to improving library connnectivity.
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Legislative Joint Auditing: Orientation – June 11, 2009
Posted on June 11th, 2009
Date & Time: Wednesday, June 11, 2009 at 10:00 AM
Location: Room 171, State Capitol Little Rock, Arkansas
Agenda: http://tr.im/o9V4
Attachments: none
10:06 am – Meeting fairly informal today. The orientation session means there are no legislative issues on the table. Presentation being made by Roger Norman, the Legislative Auditor.
10:10 am – Wow, Mr Norman is going through his presentation faster than I can even follow it, not to mention even begin to blog it. I will try to get you his slides and post them here.
10:11 am – The Legislative Joint Auditing Committee provides for the auditiong of the state and political subdivisions to furnish the General Assembly with information vital to the discharge of it’s constitutional duties.
10:14 am – The Committee co-chairs assign members to three standing committes for the purpose of reviewing audit reports: the Committee on State Agencies, the Committee for Education Institutions, and the Committee for Counties and Municipalities. The full Committee meets on the Second Friday of each month with the standing committees meeting on the preceding Thursday.
10:17 am – The Legislative Joint Auditing Committee is comprised of 44 members of the legislature. 16 members of the House, 20 members of the Senate, and the remaining from House and Senate leadership positions.
10:19 am – Mr. Norman’s pace has become a lot better. He did a really quick 50,000 foot overview, then circled back to the points. That is actally a good method of presentation. Hopefully I will be able to get you the slide presentation anyway.
10:23 am – Distinct from the Committee itself is the Division of Legislative Audit. Here is a link to their website: http://www.arklegaudit.gov/
10:27 am – The mission of the Division of Legislative Audit is to serve the General Assembly, the Legislative Joint Auditing Committee, and the citizens of the State of Arkansas by promoting sound financial management and accountablity of public resources entrusted to the various governmental entities.
10:30 am – The Division of Legislative Audit is annually responsible for over 1000 engagements providing audits, agreed-upon procedures, and special reports to assist the Legislature in oversight of state and local government.
10:32 am – The Legislative Auditor serves as the Director of the Division of Legislative Audit. The Legislative Auditor is selected by the Legislative Joint Auditiong Committee (this committee) and confirmed by both chambers of the General Assembly.
10:34 am – The Division of Legislative Audit is part of the legislative branch but conducts audits of constitutional offices, executive and judicial branches of state government, counties, municipalities, prosecuting attorneys, public school districts, educational cooperatives, and institutions of higher education. This constitutional separation provides organizational independence recognizeed under Government Audition Standards published by the Comptroller General of the United States.
10:38 am – The General Assembly has expressed its intent and desire for the Legislative Auditor and the staff of the Division of Legislative Audit to be free from partisan politics. By statute, is is against public policy for any member of the General Assembly to recommend or suggest the appointment of any person to a position on the staff of the Legislative Auditor.
10:41 am – The auditors have to adhere to and comply with standards that include GASB, FASB, AICPA, and GAO.
10:43 am – There are 263 professional staffers in the Division of Legislative Audit. Some have multiple professonal designations: 149 CPAs, 46 Certified Fraud Examiners, 6 Certified Information Systems Auditors, 9 Certified in Financial Forensics, and 2 Attorneys.
10:45 am – Mr. Norman is discussing the extreme difficulty in auditing the Stimulus package funds, especially in light of the shortening time frames that are being proposed. He also mentioned that audit responsiblity of the newly created Lottery is going to place an additional burden on the Division. If you got purple nurples and wedgies in high school, it is looking like you might send your resume in to them soon. They will probably be hiring CPAs.
10:51 am – The Division of Legislative Audit has some useful Publications and Guides for those in County and City government. Those of you who want to hold your local government accountable might find that information useful too.
10:54 am – You may go here to Report Public Corruption and Fraud
10:59 am – Senators Salmon and Pritchard are pointing that Legislative Joint Audit is an important committee. Sen. Pritchard is drawing legislators attention to the fact that the committee has supeona powers.
11:02 am – Here is an interesting article in Arkansas Business: Legislative Audit Keeps Watch for Financial Monkey Business
11:06 am – Rep. Garry Smith is asking about staffing sufficiency to properly audit the stimulus package funding. Points out that there is a shortage of people qualified to be able to perform these duties in the first place. Mr. Norman says that the economic downturn and several recent business events in Arkansas has meant that there are a temporary surplus of talent.
11:09 am – Mr Norman has completed his presenation.
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Review Subcommittee of the Arkansas Legislative Council – June 10, 2009
Posted on June 10th, 2009
Date & Time: Wednesday, June 10, 2009 at 01:00 PM
Location: Room 171, State Capitol Little Rock, Arkansas
Agenda: http://tr.im/o3yv
Attachments: http://tr.im/o3xT
1:00 pm – Meeting called to order. A follow-up response from the Arkansas Economic Development Commission was quickly reviewed.
1:05 pm – As required by AR Code 22-9-104, Reviewing Methods of Finance for various state agencies.
1:07 pm – Represenative Reep asking questions about U of A Fayetteville renovation of Peabody Hall. He is concerned about the listed funding source called “University Reserves.”
1:08 pm – Senator Jimmy Jeffers asking about if fee increases to fund bonds. Response is that the bonds are funded from regular tuition and no tuition increases have gone to the bond requirement. Representative Hutchinson is following up asking about fee and tuition increases to fund bonds. She points out that funding is fungible, so even if the increases are not directly attributed to bonds does not mean that they are not causative.
1:13 pm – Rep. Gaskill asking about successes of the Arkansas Department of Health Tobacco Prevention and Cession Program. He points out that it is a lot of money to invest if the program is not effective. He doubts the success of the program. Rep. Reep is asking a follow up question about source of funding. It is from the Tobacco Settlement. He is asking for clarification about how the non-profits apply to the AR Health Department for funding.
1:18 pm – Chairman Dunn asking for amount of expenditures on the programs. Answer:
$2,000,160 dollars spent on Tobacco Cessation Program
$14,000,692 dollars on Tobacco Prevention and Cessation Program
1:20 pm – Rep. Pennartz are asking for a list of funding grantees to determine who is continually recieving money. She is making the point that a “grant” is not intended to be a long term stable funding source. The list will be provided as a follow-up. Rep. Pennartz makes the point that this committee has not received information on effectiveness of these programs and cannot decide if these perpetual fundees desire
1:24 pm – Rep Lovell asking what percentage of the Tobacco Settlement is spent on administrative functions. The AR Dept of Health agreed to provide that number.
1:27 pm – Senator Madison asked if there are multiple providers in some communities that could recieve grants. Answer was no.
1:28 pm – Representative Billy Gaskill asked what the amount in dollars per person served. The question was avoided, no promise of answering that question in follow-up was made.
1:30 pm – Rep. Maxwell asked if we could get a report on the rate of success of the cessation program. This will be provided in follow-up. Mr. McGrew, CFO at AR Dept. of Health claims the “Quit Line” has a success rate of 35%.
1:34 pm – Rep. Cook points out there are no grantees from Northeast Arkansas. The response is that there were not applications. Rep. Stewart follows up with the fact that the rural areas are very under represented in the grantees.
1:36 pm – Senator Pritchard reports that the Senate Health Committee has also been having difficulty getting information from the Cessation and Prevention Programs. They have formed a subcommittee that will perform an intensive evaluation.
1:38 pm – There is a lot of frustration among legislators about the evasiveness and stubborn resistance to provide information about the Tobacco Prevention and Cessation Program.
1:41 pm – Senator Terry Smith points out that rate of decrease of smokers in the state does not match the claims to success of the cessation programs.
1:44 pm – Rep. Martin (me) asked that when the success statistics are provided to the committee in follow-up that they also provide the rate of decline in smoking in Arkansas to the rate of decline in states that do have this program.
1:47 pm – Rep. Hutchinson asked what percentage of the legislature would be required to pass a bill to change or end this program. The answer is two-thirds.
1:49 pm – Currently reviewing the Minority Initiative Grants from the Tobacco Settlement. The amount going to this program is $2,200,000. Senator Pritchard is asking about the distribution of the money and how much goes to U of A, Pine Bluff. He also asked what this program does that is not duplicated by the Minority Health Commission.
1:54 pm – Rep. Pennartz asking how many grant recipient programs are are first time programs. Answer is 8 of 17. She asked how much goes to Masters Program at UAPB. Answer is about 20%. Rep Pennartz asked for positions and salaries for the program in a follow-up report.
1:58 pm – Rep. Hutchinson asked about distribution of Minority Initiative Grants to serve the Native American Population. Apparantly there are currenty none.
2:00 pm – State CASE Grants reviewed without comment.
2:01 pm – Representative Dunn asking about why Forrest City got less than requested from the Arkansas Historic Preservation Grant while all other applicants got the entire amounts requested. The answer will be provided in follow-up.
2:03 pm – Arkansas Dept. of Human Services Grants review. Some clarification for personal understanding asked by several members, no notable issues raised. AAFA (Stimulus) Grants and Dept. of Workforce Services reviewed without comment.
2:09 pm – Out of State Professional/Consultant Services Contracts being reviewed so fast I can’t keep up. There are 50 contracts adding up untold millions being passed over very quickly. This part of the job always makes me terribly uncomfortable.
2:17 pm – Rep. Cook is asking if the switch to an augmented testing benchmark was completed. It has. Rep. Cook is asking about reduced “seat time” for testing. Legislators were led to believe that the switch was supposed to reduce “seat time.” Apparently that “hype” of reduced seat time never happened.
2:22 pm – Senator Terry Smith asking about the testing date. Pointed out that as soon as testing was over, it seems like all “teaching” stops. He feels like the students are missing out on a month and a half of the required intensity demanded by the frameworks. The representative for the AR Dept of Education reluctantly agreed. Apparently the amount of homework drops drastically after testing as well.
2:27 pm – Rep. Webb asked about funds of two and four year colleges spend to lobby in Washington D.C. This information will be provided in a follow-up.
2:28 pm – Rep. Pennartz is asking why a contract for distance learning is being filled by an out of state firm. Apparently the initial procurement happened in 2003, at that time only out of state firms applied. The contract allowed seven 1-year extensions. Rep. Pennartz is asking why the contract was not reissued periodically. The response is that due to the complexity and need for continuity, they opted to do the extensions.
2:32 pm – Rep. Pennartz asking about G4S Youth Services contract extension and discussed some of the issues encountered in the last year. Rep. Cook followed up with question about improvement of educaton in Youth Services. It was pointed out that this company received a bad situation from a company that was fired a couple of years ago.
2:40 pm – In-State Contracts are currently being reviewed. There are 251 contracts, again worth millions of dollars.
2:53 pm – Sen. Pritchard is asking about the Correction Department contract for nearly $37,000.00 “to write religious and medical diets.” Response claims that they cannot do that in-house.
2:55 pm -
Rep. Tracy Pennartz admiring my Netbook
2:56 pm – Wow, the bureaucrats and lobbyists just left en-mass. We must have covered whatever it was they were all here to see.
3:01 pm – We are currently reviewing the monthly reports and communications from the Arkansas Department of Finance and Administration. It is actually quite impressive how many of your legislators are here sitting through this mind numbingly boring ordeal.
3:04 pm – Meeting adjourned.
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Committee of Performance Evaluation and Expenditure Review (PEER) of the Arkansas Legislative Council (ALC) – June 4, 2009
Posted on June 4th, 2009
The agenda for this meeting can be found here. You can see all the information and attachments that the legislators are looking at during this committee meeting here.
Richard Wilson is presenting the May 2009 Revenue Report. We are currently 26.3 million ahead of forecast but net availiable for distribution of is down by 0.9%. This is due to an large increase in refunds.
Tobacco tax revenues increased from $11.7 million to $19.7 million due to a near doubling of the cigarette tax during the session. If collection levels hold, sufficient funds will be availiable to cover new programs.
The severance tax is DOWN by 10.5%
Cash fund appropriation increase requests for Board of Public Accountancy (FY09), Commission on Law Enforcement Standards and Training(FY10), Arkansas State Police(FY10), and Board of Nursing(FY10) all reviewed.
Representative Maloch is questioning the Tobacco Control Board, asking why they are needing at budget classification transfer this soon after the session. Explaination seems to indicate that a Governor’s letter changed distributions that needed to be adjusted but were not. This is a corrective action.
Rep. Lea asked for clarification on some of the Tobacco Control Board expenditures. Mrs. Lea was concerned that tax increase led to an additonal increase in enforcement efforts.
Answer from the Tobacco Control Board was rather unresponsive.
Rep. Maloch has question for the Minority Heath Commission. Mr. Maloch is especially uncomfortable with budget tranfer requests this soon after the session. Wants to know what has changed. Explaination is a recent completion of a strategic planning process.
Attorney General’s office is moving budgeted money from professional fees to purchase vehicles. Rep. Reep asked if this would negatively impact funds availiable for professional fees. Rep. Ray Kidd wanted to know if the vehicles would be purchased in Arkansas.
The “Miscellaneous Federal Grant Appropriation Requests” for FY10 are currently being reviewed. I will spare you the mind numbingly boring details. Rep Reep sought clarification about a state contribution percentages. Rep. Rice sought to ask Dept. of Workforce Services about addtional postions. There are 38 new positions for the duration of recovery act funding. The hiring is reported to be “temporary” and positions end January 2011. Rep. Rice is asking if there are assurances that the positions will end when federal funding is eliminated. Rep. Sample asked if the average expected salaries really are about $44,000 per year per position. Rep. Sample makes the point that when the federal funding is eliminated the State of Arkansas is still going to me obligated to additional expenses such as unemployment. The response is that these positions will not likely be eliminated but personnel will move into positions created by attrition.
Tim Smith, procurement manager for the Dept of Health answering questions. Rep. Reep seeking clarification on salaries, since some of the salaries are funded from two different sources, the actual salaries tend to be much higher than is apparent at first glance. Sen. Teague is also asking follow-up questions to try to determine Dr. Thompson’s actually salary. Rep. Lea asking about “comprehensive and risk appropriate maternity and family planning care to low-income women” contract for $524,772.00. She wanted to know if any of those funds provided abortion services. She was assured they were not. Many legislators, Republican and Democrat, feel that they need to be kept on record an that subject.
Currently reviewing contracts between state agencies. Just shoot me now, I would be less bored as a dead man.
Appropriation and Fund Transfer Request for Dept of Education – Better Chance Program (FY09) was approved. Reallocation of resources for Dept of Human Services (FY09) also approved. Merit pay and bonuses were reviewed. Emergency transfer requests were reviewed. Dept. of Workforce Services is growing by 141 additional jobs. Legislators are concerned about the long term state obligations with this level of government growth. Again, the director thinks that these will be permanent positions filling positions opened by attrition. Rep. Rice is asking what the historical statistics for attrition has been been. He is being assured that the statistics are appropriate for the additional temporary positions created.
Routine monthy reports read and reviewed. Committee room is losing observers quickly, mostly only legislators present now. Committee is adorned.
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Arkansas Lottery Commission Legislative Oversight Committee – June 4, 2009
Posted on June 4th, 2009
The agenda for the Arkansas Lottery Commission Legislative Oversight Committee can be found here: http://tr.im/nrnu
There was a lot of buzz in the committee room this morning about the “surprise” executive session that occured this morning. The press advisory occured little more than an hour before the meeting.
Ray Thornton, the Chairman of the Arkansas Lottery Commission give a report on the last meeting. He mentioned that the last meeting location was not a vacation area. He spoke about needs for facilities to conduct business.
House Speaker Robbie Wills is asking questions about the amount of the directors salary and is also asking about the applicants for the director position. Mr. Thornton says there have been 55 applications, many are for not just the director position, but also other areas within the organization. He says that only four or five with lottery experience have applied and those are not from top level positions in other state lotteries.
Mr. Thornton says that in order to get a top level person for the director position, the commission will likely be asking for additional funding. Speaker Wills is inquiring why top level people are not applying for the position. Was wondering if the salary is the reason for the lack of applications.
Mr. Thornton pointed out that the director of the Tennessee lottery makes around a million dollars per year. Speaker Wills asked if he has an idea of how much is it going to take. The answer was “about the national median,” which I think is 300 to 400 thousand per year.
Senator Steele asking a question about the selection of the executive director. He wants to know if the person will be selected by knowledge of lottery, or knowledge of Arkansas. He wonders if those skills may need to be met with two positions. Mr. Thornton believed that experience in both areas are going to be needed. Suggested at COO in addition to CEO. He pointed out that no one should be excluded due to lack of lottery experience.
Rep. Gaskill asking about how much “staff” will be necessary to run the Arkansas lottery. Former Congressman Thornton says that the staff will be largely Arkansas citizens and will represent the “diversity” of Arkansas.
State Senator Robert Thompson expressing concern about the use of a nationwide search for selection of the position. Says that he hopes that whoever is hired is well aware of issues that need to be addressed such as those encountered with ATRS (the Arkansas Teacher Retirement System). Congressman Thornton agreed.
State Senator Terry Smith has a “grave concern”, mentioned that a lottery expert said that the people of Arkansas has to have confidence in the Arkansas Lottery, and expresses desire that close attention is paid to maintaining the reputation of the Arkansas Lottery. Mr. Thornton pointed out that the well written legislation should serve to build confidence that the lottery is run in an honest and forthright manner.
Represenative Linda Tyler is asking if additional criteria has been defined for selection of the director position. Mr. Thornton said that the job descriptions and criteria were defined at the Petit Jean meeting last month. Said that some suggest that the level of precision may have scared off applicants. He thinks it is the converse.
Rep. Johnnie Roebuck asking if the commission is benchmarking other state lotteries. Mr Thornton says yes, but understand that Arkansas lottery will by necessity be somewhat different. Rep. Roebuck cautioned that we should also avoid what failing lotteries are doing. Frmr. Cong. Thornton agreed.
With only a few exceptions almost every member of the committee asked a question. Sen. Key, Rep. Maloch, and Rep. Williams did not feel the need to hear themselves speak.
Paul Louthian, Administrator – DFA Office of Accounting is requesting a $25,000.00 transfer of budget funds from professional services to travel and expenses for the Arkansas Lottery Commission.
Rep. Williams asked if $1000 per day worth of travel is planned. Mr Louthian explained that alot of training travel is needed. Rep. Key asked a follow-up question, inquiring if these funds may be used for “recruiting” travel. Transfer was approved. Meeting adjourned. Kudos to Rep. Maloch for being the sole member to listen and not speak.
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