Senate Revenue and Tax committee reviews DFA statutory reports; committee directs repeal of child-support report and scales ARPA reporting

The Senate Revenue and Tax Committee on Monday reviewed a long list of reports the Department of Finance and Administration (DFA) provides to the legislature and directed staff to prepare legislation to repeal one statutory report and to modify others.

Chair, Senate Revenue and Tax Committee, opened the session by describing a review of longstanding reports and the committee’s goal of improving efficiency: “If we all decide that we believe that report needs to be deleted, since these are in statute, we'll have to have our staff to prepare bills and we'll have to, run them through the process,” the chair said.

Why it matters: the committee reviewed which reports should remain mandatory, which can be provided without statutory requirement, and which may be discontinued. Several reports are tied to federal reporting requirements or longstanding fiscal oversight; others were created years ago and, committee members said, may no longer be needed in statute.

DFA staff presentation and key recommendations Paul Gehring, Department of Finance and Administration assistant revenue commissioner, said DFA reviewed the committee’s spreadsheet of reports and recommended which the agency believes should be retained and which could be discontinued. “DFA is always looking for areas to improve efficiency, and to allow this opportunity to balance the usefulness of the report against the resources that are required to generate the information,” Gehring said.

DFA recommended keeping the annual comprehensive financial report (ACFR) from the office of accounting (the agency’s complete audited financial statements) and the Schedule of Expenditures of Federal Awards (SEFA). Andy Babbitt, DFA state controller, explained the ACFR is the full picture of the state’s financial position and that legislative audit coordinates the audit of that report and related federal filings.

American Rescue Plan Act reporting DFA recommended retaining the ARPA expenditure report but changing its frequency. DFA staff said the ARPA report had been produced monthly when funds were newly available; with most funds now obligated, DFA proposed moving the report to semiannual submission. The committee agreed staff should prepare statutory language to change the frequency and to include a sunset tied to the federal expenditure deadline. Committee discussion identified that the federal expenditure deadline for ARPA funds is late 2026 and committee staff instructed counsel to draft a sunset provision six months after that deadline so the report would terminate once the federal deadline has passed.

Child-support enforcement report: repeal directed DFA presented the semiannual child-support enforcement report, which the agency estimated takes roughly six hours to prepare. Committee members discussed usage and frequency; one senator noted no members currently request the report. Without recorded objection, the committee directed staff to prepare repeal language for the statutory semiannual revenue-division child-support enforcement report and designated Senator Crow to carry the repeal legislation. A committee member characterized the action as a repeal request to staff rather than a roll-call vote.

Budget-office items and other reports The committee generally agreed to retain a set of budget- and fund-related reports DFA now provides to the Arkansas Legislative Council (ALC), including the general revenue allotment reserve report, securities reserve (restricted reserve) report, budget stabilization trust report and monthly general revenue report. Secretary of DFA Jim Hudson said he wants fund-balance reports monthly and noted the reports are readily generated from DFA’s accounting system.

The committee also discussed the State Central Services report, the approved miscellaneous federal grant and workforce investment program report (which is statutory and retained), carry-forward reporting (currently in appropriation special language) and the ALC/JBC peer report. For the carry-forward report, the committee requested staff draft statutory language to replace the special-language requirement so the requirement would be in statute rather than appearing only in the annual appropriation language.

Budget manual and format discussion Committee members and DFA staff agreed to convene a working meeting—including legislative budget staff, DFA budget staff and the governor’s budget director, Robert Breck—to review the budget manual’s data elements and formatting. Members sought options to reduce paper production and to make the manual’s data elements more flexible and focused for members’ use. Several senators said they prefer a concise presentation to accompany full underlying detail that can be available electronically.

Tax-exemptions report: heavy lift, further review DFA staff said the biannual tax-exemptions report (originating in Act 819 of 2019) requires substantial DFA resources and recommended the report be discontinued. Staff described the report as a heavy lift and estimated hundreds of staff hours and involvement from roughly 10 people across DFA. Committee members asked DFA to explore alternatives—such as less frequent production or a narrower scope—and to return with proposals; no final action to discontinue was taken at this meeting.

Process notes and next steps Across multiple items the committee distinguished federal-mandated filings from reports maintained by special language in appropriation acts. On items in special language, committee members requested staff propose code-based statutory language where appropriate so future legislatures need not rely on recurring special-language provisions. Committee members asked DFA and legislative staff to return to the committee with draft statutory language on items the committee directed for change (ARPA frequency and sunset language, repeal language for the child-support report, and codification of some special-language reports), and to invite other agencies (for reports outside DFA’s purview) to future meetings.

Ending The chair closed the meeting after staff confirmed next steps and the committee’s plan to continue reviewing the remaining reports at the next meeting.