Audit committee files and refers dozens of municipal and county audit reports, including several referred to prosecutors

The Legislative Joint Auditing Committee spent the bulk of its session reviewing a packet of deferred and new audit reports covering dozens of municipalities and counties across Arkansas, filing many reports, deferring several pending responses, and referring a number of matters to prosecuting attorneys and the bond board.

Auditor staff opened with updates on delinquent private water and sewer reports (2022 and 2023) and then walked the committee through a sequence of deferred and current audit findings. Highlights include: bank reconciliations and receipt issues in the City of Harrison (district court clerk reports reconciliations in progress); Carroll County airport manager Mark Pepple acknowledging reconciliation work and conversion to QuickBooks with an expected completion timeline into 2026; Izzard County treasurer Warren Sanders acknowledging misclassified revenue codes that produced material misstatements and stating the county has corrected templates and scheduled training; and Alexander district court discrepancies involving bond deposits and a separate city-credit-card matter referred to the prosecuting attorney.

The committee reviewed multiple private water and sewer audits reporting deposit mismatches (e.g., Ralston Water and Thornton Water Works with discrepancies totaling more than $12,000 in tested deposits), several of which staff recommended referring to the prosecuting attorney and certifying to the bond board for further action. In one district court review covering Jan. 1, 2024, through April 30, 2025, auditors identified 13 receipts totaling $2,190 and a $20 money order that were not deposited or recorded; the account’s responsible clerk resigned in March 2025 and the matter is under investigation by the fourteenth judicial district prosecuting attorney and the Arkansas State Police.

Other findings included apparent unauthorized or unsupported credit-card charges in multiple towns (example: city payments without supporting documentation; one town paid thousands to a mayor and the mayor’s spouse without a signed ordinance on file), budget overruns (one city had disbursements exceeding appropriations by $339,415), missing fixed-asset documentation (VIN numbers and valuations), and payroll-questionable payments in Lonoke County. In several cases staff noted repeat findings dating back multiple years and recommended deferrals or additional follow-up. The committee took a mix of actions: filing 19 reports with resolved findings, deferring several reports while awaiting responses, filing 53 reports with no findings, and referring a set of matters to prosecuting attorneys and the attorney general’s office.

Committee members requested additional documentation and process improvements in several hearings. For example, the Carroll County airport manager was asked to implement written procedures and ensure documentation for fuel and FAA drawdowns; the Alexander city matter involving a credit card taken out in an individual’s name was referred for criminal review; and Lee County district court officials described training gaps and ongoing work with auditors to bring accounts into compliance.

Staff recommended and the committee generally approved filing reports where corrective action is underway, deferring those lacking adequate responses, and referring suspected criminal matters to prosecutors. The committee closed by confirming the next meeting date and adjourning.