Newport council orders prepayment review after audit flags leave‑pay errors

Mayor Ratliffe told the Newport City Council on Oct. 6 that the city had received the 2024 Legislative Audit Report, which found "noncompliance with state law and accepted accounting practices" in the offices of the Mayor and Clerk/Treasurer.

The audit review, which Mayor Ratliffe summarized for the council, identified two individuals who were paid a total of $1,673 in unused vacation leave in excess of the maximum allowed by city policy and one individual who was underpaid $849 for unused vacation leave in apparent noncompliance with Ark. Code Ann. 14-52-106. The report also found that the person responsible for maintaining leave records received overpayments of $538 and $179 and began receiving payment for unused leave three months before retirement; that individual later reimbursed the city for those amounts, the mayor said.

After discussion, Council member Carol Falwell moved and Regina Lake seconded a motion directing that the Mayor or City Clerk review calculation of unused leave payments before they are issued to ensure compliance with city policy; the motion carried 8-0. The action follows the audit recommendation that the city investigate remaining unused leave payments to determine whether previous payments were calculated properly.

City Clerk/Treasurer Hembrey had received and distributed an electronic copy of the city's financial statements with the council packet and was identified by the mayor as the contact for any follow-up questions on the city's accounting records.

Next steps: The council's unanimous motion requires the mayor or city clerk to review future unused‑leave payment calculations before payments are made. The audit recommended a broader investigation of prior unused‑leave payments; the council motion implements a prepayment control but does not specify a timeline for a retroactive audit of past payments.