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Legislative auditors file multiple municipal reports, start 60‑day probation clocks and refer several matters to prosecutors
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Summary
The committee filed dozens of audit reports, deferred others, certified several to prosecutors and began 60‑day withholding clocks for towns with repeat municipal accounting failures; notable cases included Gum Springs, Denning and Strong, where missing deposits and improper transfers were identified.
The Legislative Audit Committee moved through a long docket of municipal and water‑system reports on Feb. 12, filing many items, deferring others and taking formal steps in several cases with repeat accounting weaknesses.
Staff summarized findings across numerous towns: repeat failures to adopt budgets by ordinance or resolution, unreconciled bank accounts, missing prenumbered receipts, incomplete fixed‑asset lists, unsupported disbursements and payroll documentation lapses. Auditors repeatedly cited Arkansas municipal accounting law (Ark. Code §§ 14‑59‑101 through 14‑59‑119) as the standard many local governments had not met.
Key outcomes and referrals
- Gum Springs: Staff read repeated findings for the town, including missing budget adoption, unreconciled accounts and inadequate receipts and payroll documentation. Tony Beard (recorder treasurer) and Mayor Meldin Ivory told the committee they are restoring records and pledged new controls. The committee voted to start the 60‑day clock that can lead to withholding of turnback funds and filed the report while the probationary clock runs.
- Denning: The committee heard findings that the town made multiple payments without authorizing ordinances and lacked supporting documentation for thousands of dollars in disbursements. Staff said the Denning report was certified to the bond board and referred to the prosecuting attorney and the attorney general. Mayor Paul Lee and recorder Candace Harmon described multiple personnel losses and record‑keeping challenges and said they are implementing software and training.
- Strong: Auditors reported more than $11,000 in garbage‑bag sales receipts that were not deposited and apparent use of solid‑waste funds for private business dumpster rentals; staff said the matter has been referred to the prosecuting attorney and the attorney general. Mayor Daryl Howell told the committee internal controls have been implemented and that the city has hired a CPA firm; the committee deferred the Strong report to the March meeting and requested a progress update.
- Faulkner County Fair & Livestock Exposition: An investigative review identified missing daily deposits, commingling of public and private funds and numerous undocumented disbursements; staff forwarded that report to the 20th judicial district prosecuting attorney and the attorney general.
Committee members repeatedly urged towns to use available training resources (Municipal League, CSA software) and to adopt ordinances or resolutions when required. Where auditors recommended referral, the committee accepted those referrals or deferred towns for further review. Staff closed the docket by filing 57 reports with no findings and setting the next meeting in Room 149.
What happens next: Several towns must report back to the committee in March on progress; staff will continue to coordinate referrals to prosecuting attorneys and the attorney general where auditors found possible misuse or missing funds.
