Jamie Bass, presenting the audit of the city of Helena‑West Helena for the year ended Dec. 31, 2023, told the Legislative Joint Auditing Committee the report contained two material weaknesses and 11 management‑letter findings that raise questions about internal control, budgeting and financial stability.

Bass said the audit found a lack of adequate internal controls: journal entries were not reviewed and approved by someone other than the preparer, which the report cited as failing Arkansas code requirements for maintaining an adequate accounting system. The audit also found the city council and management did not operate within adopted budgets: Bass said street‑fund and landfill‑fund expenditures exceeded appropriations by approximately $424,000 and $24,000, and budgeted revenues exceeded actual revenues in the general fund and street fund by about $388,000 and $206,000, respectively. As of Dec. 31, 2023, the report shows deficit fund balances of about $173,000 (general fund), $192,000 (street fund) and $239,000 (landfill fund).

The report identified over $1 million in general‑fund accounts payable, including about $633,000 in payroll taxes, $140,000 owed for housing prisoners at the county jail, and roughly $263,000 to other vendors. Bass also reported nine unauthorized bank withdrawals totaling about $7,300 between May and July 2023; the bank recovered $4,800 and nearly $2,500 was not recovered. The audit noted supporting documentation missing for numerous credit‑card transactions and disbursements; in one instance the city paid approximately $7,500 to two vendors before work was completed.

Bass told the committee that several pieces of equipment had been repossessed in 2024 after the city fell behind on payments; the audit also documents finance purchase agreements the city executed for new equipment in mid‑2024 and early 2025 totaling roughly $2.0 million for dozers, an excavator, a fire pumper and garbage trucks. The report also notes late remittances to the department identified in the transcript as “DFNA,” resulting in penalties and interest of about $18,000 and an unpaid balance of $118,000 as of April 2024; late IRS filings produced penalties and interest of about $62,000 for certain payroll tax filings.

Other findings included apparent conflicts‑of‑interest and related‑party transactions without required ordinances, overtime and compensated‑absence record errors, and vehicle allowance payments to the mayor totaling $10,000 not reported on his IRS Form W‑2.

Christopher Franklin, introduced as the former mayor, was sworn but declined to answer committee questions, saying he was under advice of counsel because of pending cases. City Clerk Sandy Ramsey and City Treasurer Derek Turner told the committee they had kept the council apprised of indebtedness and were attempting to limit spending. Ramsey said the city’s population is about 8,000 and that payroll is a major recurring cost — she said net payroll is about $140,000 every two weeks. Turner said the city was carrying roughly $1.6 million in total liabilities for 2023 (excluding short‑term financing) and that subsequent equipment financing added approximately $2.0 million in purchase agreements executed after the audit period.

Council member and mayor pro tem Don Eatherly said he voted against at least one equipment purchase but acknowledged the council approved some purchases to maintain essential services. Eatherly said the council lacks direct control over all day‑to‑day executive decisions in the strong‑mayor form of government and that court actions and legal advice have constrained immediate council action.

Committee members asked whether the city had discussed bankruptcy; the treasurer said not to his knowledge. The committee filed the audit report after questions and presentations from city officials; a motion to file the report passed by voice vote.

Ending: The audit identifies significant financial and control problems that the city and committee said will require severe spending reductions and a multi‑part plan; the committee set no specific statutory enforcement action at the meeting but recorded referrals and deferred questions for follow‑up in future sessions.