Legislative Joint Auditing – September 11, 2009
Posted on September 11th, 2009
Date & Time: Friday, September 11, 2009 at 9:00 AM
Location: Room 171, State Capitol
Agenda: http://www.arkleg.state.ar.us/assembly/2009/Lists/Meetings/Attachments/12074/I7776.pdf
Attachments: none
The duties of the Legislative Joint Auditing Committee shall be to provide for the auditing of each department, institution, board, commission, office, and agency of the state government for the purpose of furnishing the General Assembly with information vital to the discharge of its constitutional duties. (A.C.A. 10-3-407)
9:02 am – Meeting called to order, previous meetings minutes adopted.
9:03 am – Rep. Patterson is presenting the Executive Committee report. Report adopted without questions or comments.
9:05 am – Rep. Thompson is presenting the report from the Committee on Counties and Municipalities. Report adopted. Sen. Smith asked questions concerning audits that had been delayed.
9:11 am – Rep Cheatham is presenting the the report of the Committee on State Agencies.
9:12 am – Rep. House is presenting the report for the Committee on State Agencies. The report adopted without questions or comments.
9:14 am – The committee just observed a moment of silence in memory of the 911 tragedy.
9:17 am – Mr. Norman is currently discussing the impact of the American Recovery and Reinvestment Act (ARRA) on the state auditors. Apparently alot of their time will be spent being Federal Auditors instead of State Auditors.
9:20 am – The State of Arkansas now spends more in Federal Funds than the entire country did in 1960!
9:21 am – Since 1960 there has been an extremely steep rise in Federal Grants, which has created a large amount of work for the state auditors, especially since the U.S. Congress passed the Single Audit Act in 1984.
9:24 am – The “Single Audit” requires a Schedule of Expenditures of Federal Awards (SEFA) fairly presented, internal control over federal program compliance requirements, and complied with laws, regulations, contracts and grant agreements.
9:26 am – The Arkansas Department of Legislative Audit also conducts the our own single audit and 200+ single audits of the Arkansas School Districts.
9:29 am – The compliance requirements for the single audits include a) activities allowed and unallowed, b) allowable costs/cost principles, c) cash management, d) Davis-Bacon Act, e) eligibility, f) equipment and real property manangement, g) matching. level of effort, earmarking, h) period of availiablity of federal funds, i) procurement and suspension and debarment, j) program income, k) real property acquistion and relocation assistance, l) reporting, m) subrecipient monitoring, n) special tests and provisions.
9:32 am – Apparently the rules and regulations to perform the audit for the ARRA and the volume of work created by it are expected to double the number of auditor hours invested.
9:35 am – Sen. Glover mentioned that to sustain the programs created by the ARRA will require a massive tax increase after ARRA funds are terminated. The projected timing of the ARRA shows approximately $45 to $50 billion in 2009, $109 billion in 2010, $60 billion in 2011, $20 billion in 2012, $15 billion in 2013, then tapering until it terminates in 2016.
9:40 am – I have mentioned this before, but Arkansas is going to recieve approximately $2.9 billion in new and pre-existing federal programs.
9:42 am – Rep. Abernathy is expressing concern that the State of Arkansas is going to make unrefunded expenditures for auditors to maintain the required level of audit services.
9:44 am – Sen. Glover and Sen. Smith have expressed concern about how difficult it has been historically to discontinue funding to agencies and organizations once they have been started. They seem to be very concerned that the situation could force a massive future tax increase.
9:47 am – Beverly Thwing is currently presenting the Special Report: Prosecuting Attorneys – Disposition of Matters Referred by Legislative Joint Auditing Committee – January 1, 2008 through December 31, 2008. Rep. Abernathy asked an information question, no content questions or comments. Report Adopted.
9:49 am – Tim Thompson is presenting the Special Report: Athletic Expenditures – Update Reviews of Selected Arkansas Public School Districts, For the Year Ended June 30, 2008. Of the 50 schools visited 32 were out of compliance by variances of more than 5%. 19 had variances of more than 10%. DLA revisited those 19 schools and 17 had shown improvement, but even then 11 still had variances more than 5% as required by law. The primary cause of the 2008 adjustments exceeding 10% was because the district did not properly calculate athletic salaries. This audit was only conducted in the central Arkansas region, but is coming to a school near you. School boards need to be prepared and get things in order.
9:58 am – Tim Thompson is currently presenting the report Performance Audit: Health and Benefit Plans – Employee Benefits Division, Arkansas Department of Finance and Administration.
10:01 am – Off current topic but presented earlier during ARRA Audit discussion: The ARRA distribution of funds in Arkansas are as follows: $34 million to Safety and Community, $50 million to Water and Environment, $88 million for Energy and Weatherization, $379 million for Transportation, $443 million for Fiscal Stablization (what I call the “Governor Bailout Funds”), $454 million for Housing and Labor, $476 million for Education and Higher Ed., and $954 million for Medicaid and Human Services.
10:07 am – Committee adjourned.
10:08 am – More info from ARRA Audit discussion: Federal Expenditures in Arkansas from 2002 to 2008 have risen from approximately $3.75 billion to approximately $6.25 billion.
10:10 am – More info from ARRA Audit discussion: The growth in Medicaid in Arkansas from 1996 to 2010 (Projected) has gone from $1,284,000,000 to $4,462,000,000 !
10:11 am – Okay folks, that is all for today. I’m off to see the wizard, or look for a way to slip back through the looking glass.
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One Response to “Legislative Joint Auditing – September 11, 2009”
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Beth Frederick Says:
September 11th, 2009 at 10:57 amThe truth about Blanche Lincoln:
http://crosssection.wordpress.com/2009/09/11/i-cant-hear-you-senator-the-oinking-is-too-loud/
