Alright, take a deep breath y'all. Last, but certainly not least, meeting of the day: Legislative Audit, where the only thing on the agenda: the #lecterngate audit report, where Legislative Audit identified seven areas where the Governor's Office violated the law.
This... could be a long one. The report itself is nearly 70 pages, and we think Audit will have some sort of presentation/slideshow walking through the report. The legislators will then have the opportunity to ask questions of the auditors. So we'll see how it goes!
Buckle up! We're gaveling into session, Rep. Gazaway and Sen. Wallace presiding. Roger Norman, the head of Audit, is here.
The audit report concerns May 1-Dec 10, 2023, with additional work through 2024. Objectives were to establish events surrounding orders, procurement, and where the dang thing ended up.
(quick side: the auditor is reading, and reading a bit quickly, so forgive any mistakes! Hazards of live-tweeting)
Original $400k+ was tracked as governmental transition funds. First Falcon lectern provided by Salem Strategies. Later, quote for custom lectern similar to that one was requested.
In March, Stone provided computer draft w/ estimated cost between 10-15k. 30 day turnaround.
In March, Stone provided computer draft w/ estimated cost between 10-15k. 30 day turnaround.
Gov's office couldn't recall any other quotes, but Audit turned up quotes requested from Arkansas-based vendors.
On April 12, Gov Office (GO from here), selected the Salem Strat lectern, w/ Virginia Beckett acting as point person. She had both Salem and Beckett event emails.
On April 12, Gov Office (GO from here), selected the Salem Strat lectern, w/ Virginia Beckett acting as point person. She had both Salem and Beckett event emails.
In late May, TSS explained that state purchasing regs don't allow for prepayment until item was delivered. To use the transitions funds, lectern had to be received by end of fiscal year. Purchasing card would be used, rather than purchase order.
Audit reviewed Code & AG opinions related to procurement, p-cards, use of public funds, sections of FOIA. Audit maintains GO is an "agency" under law.
Objectives: establish events surrounding the procurement.
Objectives: establish events surrounding the procurement.
First invoice was for $21,475, dated 5/23/23. Second invoice with a "preferred customer discount" was received May 30 for about 19k.
In June, purchase card was approved by TSS.
In June, purchase card was approved by TSS.
Final invoice, $19k, received June 8, sent by Beckett Events. Invoice paid on 6/12 using purchase card issued to Exec Asst to the GO, Deputy Chief of Staff.
Final transaction recorded in state system on 6/28; purchase card balance paid on 6/29. Audit staff did not identify any additional expenditures from 5/1-12/20.
Business expense justification statement was completed after delivery, not on day of purchase as it should've been.
Business expense justification statement was completed after delivery, not on day of purchase as it should've been.
Beckett informed GO in late July the lectern was completed. GO then requested assistance from Sec. of State on delivery procedures, and it was delivered.
GO discovered height didn't meet order specifications.
GO discovered height didn't meet order specifications.
GO failed to notify TSS about the delivery until TSS asked about it. Audit couldn't confirm specific customization requests that would have resulting in increased cost. GO couldn't provide formal purchase docs or any other documentation.
Bill of lading originally shredded by GO staff, a mistake. Replacement bill acquired later.
Reimbursement request to state GOP party initiated on 9/14/2023. Exec Assistant was asked to write "to be reimbursed" on receipts/invoices by the Deputy Chief of Staff.
Reimbursement request to state GOP party initiated on 9/14/2023. Exec Assistant was asked to write "to be reimbursed" on receipts/invoices by the Deputy Chief of Staff.
No indication GO was seeking reimbursement until FOIA request received.
Second objective of the audit: Who actually owns the thing?
Second objective of the audit: Who actually owns the thing?
Asset wasn't created in the state system until 9/25/23. Two days later, the asset was still included. By early Oct, the asset was removed.
GO may be exempt from procurement law, but not from redistribution requirements. GO properly disposed of other surplus state property.
GO may be exempt from procurement law, but not from redistribution requirements. GO properly disposed of other surplus state property.
Audit maintains the lectern and case remain state property because of improper disposal procedures.
Audit has actually seen the lectern and case! They exist!
Notably, it does not include any electrical/mic additions, despite GO's claim to the contrary.
In Oct, the RPA took delivery of the lectern/case. No documentation of exact delivery date, and RPA staff were unhelpful.
Notably, it does not include any electrical/mic additions, despite GO's claim to the contrary.
In Oct, the RPA took delivery of the lectern/case. No documentation of exact delivery date, and RPA staff were unhelpful.
3rd objective: determine market value of the lectern/case.
Audit relied on Beckett Events invoice and bill of lading. (We're still cracking up at the 3% credit card processing fee).
Notably again, there was a previously undisclosed "consulting fee" of about $2500.
Audit relied on Beckett Events invoice and bill of lading. (We're still cracking up at the 3% credit card processing fee).
Notably again, there was a previously undisclosed "consulting fee" of about $2500.
Audit couldn't determine the reasonableness of the lectern, case, or "consulting fee" despite repeated attempts in multiple forms. None of the venders responded, and GO doesn't seem to be have been helpful.
4th objective: FOIA issues.
TSS normally compiles/reviews FOIA requests for GO, which redacts info if needed. GO reviews and returns info to TSS. Working papers, unpublished memos, and correspondence of Gov. exempt.
TSS normally compiles/reviews FOIA requests for GO, which redacts info if needed. GO reviews and returns info to TSS. Working papers, unpublished memos, and correspondence of Gov. exempt.
Some clarification from General Assembly needed re: who is "custodian" of records for GO.
TSS compiled 151 pages of docs for review and excluded - 8 invoices related to Gov Mansion expenses, 2 invoices re postage fees, 2 invoices re: custom framing/glass purchases...
TSS compiled 151 pages of docs for review and excluded - 8 invoices related to Gov Mansion expenses, 2 invoices re postage fees, 2 invoices re: custom framing/glass purchases...
1 duplicated invoice, and something else we missed. Sorry!
140 total pages compiled for the requester, which included 2 docs related to travel expenses and one version of the Beckett Events 1 invoice, which Audit found at least 3 versions of later.
140 total pages compiled for the requester, which included 2 docs related to travel expenses and one version of the Beckett Events 1 invoice, which Audit found at least 3 versions of later.
Notes that there are likely FOIA violations here.
This is when Exec Assistant made the "to be reimbursed" notation.
This is when Exec Assistant made the "to be reimbursed" notation.
Two versions have "to be reimbursed", but the notations are obviously different. We come now to version C, which was included in supporting documentation for the recorded transaction in the state purchase recording system.
Versions B and C were both included in the FOIA'd docs. Version A and Quickbooks receipt not included. Exec Asst. made the alteration later, which potentially conflicts w/ Ark. Code.
Audit reports that 2nd and 3rd FOIA requests proper.
Financial management next objective.
Audit notes several potential violations of Ark. Code here. - improperly issuing payment, failing to properly notify TSS, etc.
Financial management next objective.
Audit notes several potential violations of Ark. Code here. - improperly issuing payment, failing to properly notify TSS, etc.
Gets a little wonky here, but Audit saying the lectern was also improperly classified - IE, GO used wrong bucket of money to make the purchase. Audit could find no Code statute exempting GO from this.
No documentation exists that confirms error corrections occured in comms between GO and TSS.
Disposal: Audit maintains GO is subject to these laws, and no exemptions were requested by GO. Another possible violation of code.
Finally, document retention. Another violation.
Disposal: Audit maintains GO is subject to these laws, and no exemptions were requested by GO. Another possible violation of code.
Finally, document retention. Another violation.
Shredding of the bill of lading big thing here. Some poor employee going to get thrown under the bus on this one.
Delayed creation of business expense justification form is another potential violation of Ark. Code.
Delayed creation of business expense justification form is another potential violation of Ark. Code.
Recommendations from Audit: TSS should comply with FOIA; GO needs internal controls to retain original documentation and ensure improper purchasing doesn't happen; Ensure timely completion of forms; don't alter public documentation; comply with FOIA.
Recommends Assembly better define a number of terms and purchasing officer roles, all basically centered around.
And the conclusion: forwarded to 6th district prosecuting attorney and state AG. Report is concluded.
Members of the GO are here to answer questions.
And the conclusion: forwarded to 6th district prosecuting attorney and state AG. Report is concluded.
Members of the GO are here to answer questions.
They look like they're already having a bad day.
Courtney Kennedy, Chief Legal Counsel, and Judd Deere, Deputy Chief of Staff. They're sworn in to give testimony.
Courtney Kennedy, Chief Legal Counsel, and Judd Deere, Deputy Chief of Staff. They're sworn in to give testimony.
Deere starting off. Says GO welcomed the Audit and cooperated fully. Says audit report proves GO did nothing wrong, and the report wasted significant taxpayer resources.
Claims that there are things Audit got wrong, like the definition of "state agency." Believes Audit misapplied the law, leading them to incorrect conclusions.
Emphasizes that a "handwritten note, absent of an alteration, isn't a violation of the law."
Emphasizes that a "handwritten note, absent of an alteration, isn't a violation of the law."
Says the GO has a "record of transparency on the topic" OH WOW DON'T HAVE TIME TO COMMENT FURTHER.
Kennedy doesn't have anything to add.
Kennedy doesn't have anything to add.
Sen. Petty up first, has a question for Audit staff. He's a CPA, keeps his license current. Thanks Audit staff and GO staff.
Reminds everyone that Audit has proven their competence and independence time and time again.
Reminds everyone that Audit has proven their competence and independence time and time again.
First Q: Have you ever felt there was any bias toward the GO staff or the legislature by anyone in Legislative Audit?
Wants to confirm that Audit is in fact unbiased.
Norman says absolutely not, we've been unbiased since 1953.
Wants to confirm that Audit is in fact unbiased.
Norman says absolutely not, we've been unbiased since 1953.
Q: do you think there was any independence violated by any legislative or audit staff, trying to influence outcome? Undue coercion? Did anyone try to influence Audit staff one way or another?
Norman: Our report is unbiased. We've provided a good report.
Norman: Our report is unbiased. We've provided a good report.
Petty says he hated asking those questions but felt it was important to come out of the gate.
Petty still: who came up with these objectives?
Norman: Audit staff brainstormed based on legislature's original authorization of the audit.
Petty still: who came up with these objectives?
Norman: Audit staff brainstormed based on legislature's original authorization of the audit.
Petty: Referencing a specific AG opinion - none appear to have specifically referenced Gov. as agency. Wants to know why they picked the AG opinions they did?
A from Audit attorney: none specifically referenced GO, but there's a lot of nuance here. She references...
A from Audit attorney: none specifically referenced GO, but there's a lot of nuance here. She references...
... another opinion that DID hold these statutes are applicable to constitutional officers. If there's not a specific exemption, then it's applicable. Seems to clear up the GO's defense re: agency vs. Constitutional Officer.
Petty: in the audit, where there any convos w/ CFO about their thoughts on the issue?
A: Atty wants to clarify the individual we're talking about; there's a bit of confusion over the exact job title. Petty may have overlooked that, no sweat.
A: Atty wants to clarify the individual we're talking about; there's a bit of confusion over the exact job title. Petty may have overlooked that, no sweat.
Q from Petty, referencing a financial management guide - there's some discrepancy in these documents about GO as agency or constitutional officer. Some say agency, some don't.
(maybe unwarranted commentary: this uncertainty is probably going to be the GO's best defense)
(maybe unwarranted commentary: this uncertainty is probably going to be the GO's best defense)
Petty going to "areas of potential noncompliance" in the report and the same agency vs. Const. Officer confusion.
Audit Attorney notes the original act that's under consideration is like, 200+ pages long, with only one Supreme Court case on it.
Audit Attorney notes the original act that's under consideration is like, 200+ pages long, with only one Supreme Court case on it.
References another AG opinion that says definition of agency may depend on specific subchapters/subsections of the Code. Because of the specific Sections Audit believes may have been violated, they think definition of GO falls under agency.
Gazaway says we gotta move this along
Gazaway says we gotta move this along
Auditor running circles around Petty. He's finished up.
Gazaway calling a member of the AG's staff up to try and clarify the Agency vs. Const. Officer debate.
Gazaway calling a member of the AG's staff up to try and clarify the Agency vs. Const. Officer debate.
They're sworn in. Sen. Hammer is recognized.
Q: Which individuals refused to respond to Audit?
A: Stone, Beckett, and furniture vendors. They simply didn't respond at all.
Q: Which individuals refused to respond to Audit?
A: Stone, Beckett, and furniture vendors. They simply didn't respond at all.
Q to GO: Why did Gov. Sanders decline to speak to Audit?
A: Gov. gave multiple public statements, and didn't feel there was anything else to say.
Q: What's the rationale going with the higher cost podium?
A: Requested customized lecterns. ???
A: Gov. gave multiple public statements, and didn't feel there was anything else to say.
Q: What's the rationale going with the higher cost podium?
A: Requested customized lecterns. ???
Q: Who initiated convos re: payment timing between GO and TSS? (related to payment being requested before receiving delivery of the lectern)? Why is this necessary if the GO isn't an agency?
A: *shrug emoji*, basically
A: *shrug emoji*, basically
Actual answer: questions re: purchase card usage that we needed answered.
Hammer says this did indeed raise an issue. Asks if TSS told GO they were agency vs. Const. Officer.
A: No convos to that matter.
Hammer says this did indeed raise an issue. Asks if TSS told GO they were agency vs. Const. Officer.
A: No convos to that matter.
Hammer to the AG staff: If this goes to litigation, how can the AG, as a Const. Officer, properly represent the GO on this matter?
A: Sometimes GO is agency, sometimes Const. Officer.
Q: so specifically with procurement, what's the conclusion?
A: Sometimes GO is agency, sometimes Const. Officer.
Q: so specifically with procurement, what's the conclusion?
A: Based on language used in specific subchapters of procurement law. There's no general definition of agency. There is a definition in subchapter under consideration. Some other subchapters include "offices" in the definition, some don't.
Hammer asks if Assembly should clear this up.
A: Thinks it's clear enough, but leaves it up to Assembly.
A: Thinks it's clear enough, but leaves it up to Assembly.
Gazaway: Appears we have a disputed question of law. Audit says one thing, AG says another. Audit says: In other statues, GO is specifically exempted. If GO isn't specifically exempted, then shouldn't it apply then?
AG says kind of the opposite?
Sorry y'all. This is dense.
AG says kind of the opposite?
Sorry y'all. This is dense.
Gazaway thinks there's valid legal arguments on both side. Defers to deputy AG to further explain.
AG mostly agrees with what Gazaway said. Some provisions expressly exclude Const. Officers, and some expressly include. So the question is, which do you prioritize?
AG mostly agrees with what Gazaway said. Some provisions expressly exclude Const. Officers, and some expressly include. So the question is, which do you prioritize?
Does the presence of an inclusion in the definition weight you toward a general exclusion in the definition, or vice versa?
AG says conclusions are important, but reasoning is even more important because that's what gets extrapolated to other cases. Says Audit focused on conclusions and came to valid conclusion on that, but AG's opinion last week focused on reasoning.
There's also, claims the AG, a possible separation of powers issue. Gazaway asks for a more thorough explanation.
AG says that our position is not that Const. Officers entirely exempt, but exempt when they're specifically exempted.
AG says that our position is not that Const. Officers entirely exempt, but exempt when they're specifically exempted.
References specific lines in the AG opinion, which we don't have in front of us.
Sounds to us a little bit like we're still chasing tails in a circle on this question.
Sounds to us a little bit like we're still chasing tails in a circle on this question.
(There are a lot of mic lights lit up in front of legislators. We might be here a while).
Gazaway comes back to the business expense justification form. Says we *know* this applies to GO. How does AG justify its differences with Audit given this? Seems to weight toward Audit's argument.
AG overall claims it's taking a very textualist approach to the issue. "If it says exempt, exempt, if it's included, it's included."
Somehow we've gotten to rules of Statutory construction. Sorry y'all, that's just how this is gonna be we guess.
Somehow we've gotten to rules of Statutory construction. Sorry y'all, that's just how this is gonna be we guess.
"What you all put in language matters. When it moves chambers, some folks may have different interpretation of intention. At the end of the day, what's voted on - the language - is what the statute is supposed to mean. That's what guides statutory interpretation."
Convo got here because of this division between what's meant by certain exemptions or inclusions re: GO.
Gazaway and AG both think this is probably going to have to go to court.
Sen. Wallace: Are you saying Audit should not have conducted this audit?
Dep. AG: No, they work at your pleasure. Audit worked with the facts, and applied those facts to the law. I'm here for the law.
Sen. Wallace: Are you saying Audit should not have conducted this audit?
Dep. AG: No, they work at your pleasure. Audit worked with the facts, and applied those facts to the law. I'm here for the law.
Of the seven potential violations, five depend on the agency vs. Const. Officer question. Business expense justification and FOIA issues are certainly potential violations.
Rep. Mayberry: Frankly, I want to see the lectern. (Got a chuckle in the room.) We can all agree $19k was spent and few people have seen it. If it's not used, it was a complete waste of money. When will it be publicly available? Where is it, physically, right now?
A from Deere: physically in the GO, where it's been since August. The press has seen it (one DemGaz photographer does not = "The Press"), the Gov doesn't want this to be a distraction."
"She's going to use it, as indicated by the video she posted last night."
Q: did the Gov's office make a good faith effort to get the vendors to respond?
A from Kennedy: yes, I sent emails personally.
A from Kennedy: yes, I sent emails personally.
Q: Can you explain the $2500 consulting fee? Who was consulted, and what was provided?
A from Deere: Important to remember Stone and Beckett are talented individuals I've worked with before. They procured previous podiums that we liked."
A from Deere: Important to remember Stone and Beckett are talented individuals I've worked with before. They procured previous podiums that we liked."
"You don't ask people not to charge you." Okay but still didn't answer what work they did.
Sen. Dees: Curious about convos with timing about private funds. When quotes started to rise above market value, when did private funds come into the conversation?
A from Deere: "To be clear, the lectern itself is $11,000, within market value for a similar model."
A from Deere: "To be clear, the lectern itself is $11,000, within market value for a similar model."
Doesn't remember when private funds entered the convo, but preferable private funds should be used. Late August we thought private funds should be used to reimburse the state. GO belives RPA own the podium.
Sen. Flippo returns to the consulting fee issue.
A from Deere: doesn't have a detailed breakdown. That was the cost Beckett and Stone charged for ensuring customization options were provided to manufacturing.
A from Deere: doesn't have a detailed breakdown. That was the cost Beckett and Stone charged for ensuring customization options were provided to manufacturing.
Flippo: then did it meet specifications? Report says no.
A: height specifications wasn't met, but a matter of inches.
Missed that next question. Relates to which funds were used.
Q: how was the expense classified?
A: height specifications wasn't met, but a matter of inches.
Missed that next question. Relates to which funds were used.
Q: how was the expense classified?
A: never classified in state system because it was reimbursed by private party.
Q: Was it the intent from beginning for RPA to reimburse?
A: No, but preference for private funds.
Q: Why:
A: *shrugs*
Q: Was it the intent from beginning for RPA to reimburse?
A: No, but preference for private funds.
Q: Why:
A: *shrugs*
Sen. Bryant: Returning to agency vs. Const. Officer question. Still chasing this rabbit.
A: this question has come up in previous General Assemblies. Answer seems to be to go by subchapter rather than entire chapter because of separation of powers concerns.
A: this question has come up in previous General Assemblies. Answer seems to be to go by subchapter rather than entire chapter because of separation of powers concerns.
Sen. Chesterfield: If AG chooses to buy a $20k car, you don't have to go through procurement, but you could then sell that car for $500?
A from AG office: No. Previous const. officers have *voluntarily* complied.
Q: but now we don't know who owns the lectern.
A from AG office: No. Previous const. officers have *voluntarily* complied.
Q: but now we don't know who owns the lectern.
Chesterfield wants to know, basically, if this procurement loophole could be used to basically pass equipment/whatever to private individuals/groups for much cheaper. Legislature and Audit would have no recourse.
AG office isn't answering her specific question.
Sen. Peyton: was going to ask that same question. "What troubles me most that the GO isn't admitting any kind of mistake. They're trying to justify it... I think there's a lesson learned if you accept the fact it was bad judgment
Sen. Peyton: was going to ask that same question. "What troubles me most that the GO isn't admitting any kind of mistake. They're trying to justify it... I think there's a lesson learned if you accept the fact it was bad judgment
If the specs were provided to manufacturer, why wouldn't Audit have those? Especially since the customization was wrong? We don't pay for stuff up front and thus have no leverage over the vendor.
"Is the GO willing to not use these three vendors in the future?" Dislikes that because they're out of state, they're not really subject to Audit. "Obviously you didn't have a good enough relationship with them to compel them to cooperate with Audit."
A from Deere: GO has no plans to use these vendors at this time.
Peyton: Can we plan on never using them? How do you have respect for the vendors when they refused to cooperate?
Deere: We felt important GO not unduly influence Audit.
Peyton: Can we plan on never using them? How do you have respect for the vendors when they refused to cooperate?
Deere: We felt important GO not unduly influence Audit.
Peyton: Isn't it naive to have "great respect" for their ability when they failed to provide the requested product to specification?
Deere: "it was provided"
Peyton: ??????????? it says the specs are wrong in the report??
Deere: "it was provided"
Peyton: ??????????? it says the specs are wrong in the report??
Kennedy: You raise a good Q about why this info wasn't provided in the report, but the customization was present.
Peyton not buying it. Wants those documents if possible.
Peyton not buying it. Wants those documents if possible.
Audit lawyer chimes in: those text messages re: specs are working papers, exempt from FOIA, but we did examine them. It's addressed in report, but not specifically referenced.
GO agrees that final product not to spec.
Sen. M. Johnson: "not sure where to begin." Starts with AG office. "Are prosecuting attorneys Const. Officers?"
Dep. AG: Depends.
Q: Not sure I know where the line between divisions of government is anymore.
Sen. M. Johnson: "not sure where to begin." Starts with AG office. "Are prosecuting attorneys Const. Officers?"
Dep. AG: Depends.
Q: Not sure I know where the line between divisions of government is anymore.
Q: "Our job is to make sure taxpayer money is properly used." Meant to discover discrepancies that need to be addressed in the law. "Were the taxpayers robbed or defrauded?" Doesn't see that in the report. Thinks the law needs clarification, though.
Thinks the process has been politicized. He's, shall we say, wandering a bit. "This particular procedure has been politicized." Apologizes to the Gov.
Well, that's certainly a take.
Well, that's certainly a take.
He doesn't really have a question at this point? Just carrying water for the Gov.
SEN HICKEY IS UP. Reminder he's the one who pushed through the audit last year.
Q: My understanding you met with the Gov. last week. DId you make a statement that the audit is out of control and needs to be reigned in?
Oh. My. Gosh.
Q: My understanding you met with the Gov. last week. DId you make a statement that the audit is out of control and needs to be reigned in?
Oh. My. Gosh.
That question was to REP GAZAWAY.
Gazaway doesn't "recall making a statement like that. I've heard other members make statement along those lines. Whether or not that's true is a question for this body to determine."
Gazaway doesn't "recall making a statement like that. I've heard other members make statement along those lines. Whether or not that's true is a question for this body to determine."
Hickey to the AG: Appropriations bill defines GO as an agency. Did y'all look at that?
AG office: Yes, we're aware of that terminology. It's not dispositive. The question isn't how the term agency is being used.
Hickey: so if it's not standard language it doesn't count?
AG office: Yes, we're aware of that terminology. It's not dispositive. The question isn't how the term agency is being used.
Hickey: so if it's not standard language it doesn't count?
Hickey: since you've inserted yourself, have you looked at your appropriations bill to see if similar language is there?
AG: Very common for these general terms to be used in different ways across different statutes. Most relevant question is how it's used in certain statutes.
AG: Very common for these general terms to be used in different ways across different statutes. Most relevant question is how it's used in certain statutes.
AG was asked to be in a meeting with GO and Audit, the exit interview. Their understanding was that Audit presented GO with draft report, sat for exist interview but was called off because GO didn't have enough time to prep.
AG was invited to the rescheduled meeting. AG rep didn't say anything in that meeting.
Hickey: if we're trying to allude that Audit doesn't have the power to provide transparency, I'm not willing to vote for the appropriation. If that's what we're alluding to, we need to do some work.
Hickey: "if you're trying to say that Const. Officers are subject to procurement, then I don't want to vote on any of these appropriations." Constituents are worried about transparency.
Well that was something. Jimmy Hickey saying what he feels.
Rep. Lundstrum: Confused about the RPA's choice to reimburse when the original use of state funds was fine.
Rep. Lundstrum: Confused about the RPA's choice to reimburse when the original use of state funds was fine.
Deere: It was a perfectly legal purchase, we just decided private funds were preferable.
Q: process of purchase - shouldn't there have been a bid, with drawing, tax estimations, etc?
A: that's an internal procedure we've already changed?
Q: process of purchase - shouldn't there have been a bid, with drawing, tax estimations, etc?
A: that's an internal procedure we've already changed?
Q: could this just be a simple mistake and the correction went too far?
A: we don't recognize this as a mistake.
(if they did, back in Sept., all this probably wouldn't have gone this far. Complete lack of humility.)
A: we don't recognize this as a mistake.
(if they did, back in Sept., all this probably wouldn't have gone this far. Complete lack of humility.)
"No taxpayer money was used to purchase this."
Yeah, now, only after RPA reimbursed.
Q: What are we using as a podium now?
A: Prev. governor's podium.
Yeah, now, only after RPA reimbursed.
Q: What are we using as a podium now?
A: Prev. governor's podium.
Sen. Hammer to Audit: How long have you been down here?
Norman: 47 years.
Q: Has the AG's office ever sat in the exit interview for an audit?
A: None that I'm aware of.
Norman: 47 years.
Q: Has the AG's office ever sat in the exit interview for an audit?
A: None that I'm aware of.
Q to the AG: then who invited the AG's office to that meeting?
A: Gov's office. We were there for 8 minutes. Our sense was not that it was an exit interview. Our rep didn't say anything.
A: Gov's office. We were there for 8 minutes. Our sense was not that it was an exit interview. Our rep didn't say anything.
Q: Was this opinion handled in standard pratice?
A: Yes.
Q: How long did it take to turn around the opinion?
A: A week.
Q: Is that standard? I'm still waiting on a couple.
A: average turnaround is 30-40, but some are longer, some shorter. We were asked to expedite.
A: Yes.
Q: How long did it take to turn around the opinion?
A: A week.
Q: Is that standard? I'm still waiting on a couple.
A: average turnaround is 30-40, but some are longer, some shorter. We were asked to expedite.
Q: Was it asked to be expedited to get out ahead of this meeting?
A: No specific reason given, just that it be expedited.
A: No specific reason given, just that it be expedited.
Rep. McCullough: Why doesn't the lectern live at the RPA?
A: Once the audit was started, we felt it was important not to move it to prevent damage. Case is at the RPA. Available for any Const. Office or RPA meeting to use.
A: Once the audit was started, we felt it was important not to move it to prevent damage. Case is at the RPA. Available for any Const. Office or RPA meeting to use.
Q: Seems there was further response from the GO last night. Do you believe the social media response was appropriate in light of the seriousness of this matter. Was any taxpayer money used to create the video?
A: Gov's actions and words made it clear this was a priority.
A: Gov's actions and words made it clear this was a priority.
A: Gov put out a response that was tongue in cheek. She believes we've cooperated, but it's time to move on to important issues.
A: was produced by staff during his personal time, using personal assets. No taxpayers funds used.
Rep. Maddox to GO: Facts seemed to be agreed upon. Taxpayers need to know that nothing nefarious agreed.
Softball question to the GO, of course they agree nothing nefarious.
Rep. Maddox to GO: Facts seemed to be agreed upon. Taxpayers need to know that nothing nefarious agreed.
Softball question to the GO, of course they agree nothing nefarious.
Rep. Mayberry: You said the lectern was available. To my knowledge, only DemGaz has seen it. Other media have asked and been denied. Wanted to make it clear that when you said it was available to the media, and it hasn't been.
Deere tries to waffle: "Before the audit it was available." Okay but we didn't care before we knew something was fishy.
Q: How do we reconcile the discrepancy re: Gov. claiming a bunch of fancy sound stuff was included, but Audit didn't find any of that?
A from Deere: yeah but we say it is there, so.
Q: Elaborate, please.
A from Deere: yeah but we say it is there, so.
Q: Elaborate, please.
Deere says electronic hookup for mic.
Still far below what the Gov. said was included.
Still far below what the Gov. said was included.
Rep Wright: Had these vendors ever worked handling these expenditures before? You should never pay for anything before you get it.
A: This is most staff's first time working for a Gov (Deere paused Kennedy to whisper in her ear) customization requires payment upfront.
A: This is most staff's first time working for a Gov (Deere paused Kennedy to whisper in her ear) customization requires payment upfront.
This is part of the law that doesn't apply to GO. (Would love to know what Deere said there.)
Rep. Dalby: Who checked the box to designate this?
A: Ms. Hamilton.
Q: Is that the same person who wrote LH on the invoice? Who's her supervisor?
A: Mr. Deere, here today.
Rep. Dalby: Who checked the box to designate this?
A: Ms. Hamilton.
Q: Is that the same person who wrote LH on the invoice? Who's her supervisor?
A: Mr. Deere, here today.
Q: So which document is correct? Both can't be the same. What was the intent?
A: All of the documents in front of you are correct.
Dalby is FLABBERGASTED.
A: Common government practice to write on invoices.
Dalby disagrees.
A: All of the documents in front of you are correct.
Dalby is FLABBERGASTED.
A: Common government practice to write on invoices.
Dalby disagrees.
Dalby: Who produced the video the Governor posted?
A: Keaton Davis (sp?)
Q: How long has he been an employee?
A: A year.
A: Keaton Davis (sp?)
Q: How long has he been an employee?
A: A year.
Q: What policies has the GO changed in response to all this?
A: Related to procurement, mentioned in the audit. Timing for completion of paperwork.
Q: So you are following a procurement/purchasing procedure?
A: Related to procurement, mentioned in the audit. Timing for completion of paperwork.
Q: So you are following a procurement/purchasing procedure?
Dalby: I have a law degree, don't explain the statutes to me.
She disagrees with the GO's assertion they're exempt.
Sen. Flippo (missed question, but think it's related to the FOIA section of the audit)
A: busy time for Audit, lots of federal and budgetary issues.
She disagrees with the GO's assertion they're exempt.
Sen. Flippo (missed question, but think it's related to the FOIA section of the audit)
A: busy time for Audit, lots of federal and budgetary issues.
Q: Still moving forward with second portion of audit?
A: Yes.
Sen. M. Johnson, responding to Dalby: reading from Statute relating to tampering with public record.
Pop your popcorn y'all.
A: Yes.
Sen. M. Johnson, responding to Dalby: reading from Statute relating to tampering with public record.
Pop your popcorn y'all.
He claims tampering is different from altering.
Dalby isn't bothering herself to respond.
Gazaway follows up: "This was a point of contention in the audit." Notes there's two versions w/ note, but the note is different. Asks for explanation.
Dalby isn't bothering herself to respond.
Gazaway follows up: "This was a point of contention in the audit." Notes there's two versions w/ note, but the note is different. Asks for explanation.
A: Once the RPA reimbursed, office manager/disbursement officer requested another copy from TSS to explain which item was being reimbursed. Submitted to TSS to be input to the state system. When she returned to office, she forgot to make that note, so she created a second record.
A: The fact we have all these receipts means no nefarious intent.
Q: When the FOIA request came in, which were provided?
A: original document not provided. Still in processing.
Q: Was second version ever turned over?
A: Not in the first FOIA. In subsequent FOIA requests.
Q: When the FOIA request came in, which were provided?
A: original document not provided. Still in processing.
Q: Was second version ever turned over?
A: Not in the first FOIA. In subsequent FOIA requests.
Gazaway returning to tampering question. Audit doesn't seek to prove intent, but to prove tampering it is important to prove intent. Says could potentially impair the veracity of the document.
GO says no, naturally.
GO says no, naturally.
Q: Did Laura Hamilton at the time she made those marking falsely alter the document?
A: Argues that this is a "true" alternation, it reflected what was going on with that check.
Q: Your argument is that it reflects the reality of the situation.
A: Yes.
A: Argues that this is a "true" alternation, it reflected what was going on with that check.
Q: Your argument is that it reflects the reality of the situation.
A: Yes.
Speaker Shepherd: Important for the public to know that the legislature provides oversight to Audit, but Audit is independent and this audit has been done independently. This is a unique situation.
Q: Would it be correct to say this is a full-fledged investigation? Fair to say it's exhaustive as much as possible?
A: Yes. it took a lot of time because we were trying to fulfill our responsibilities and get all the facts.
A: Yes. it took a lot of time because we were trying to fulfill our responsibilities and get all the facts.
Q: Point of the audit is to reveal all the facts.
A: We believe that's the case.
Q: If that wasn't the case, staff wouldn't have issued it?
A: This is our report, and we stand by it.
Shepherd wants to emphasize this audit was impartial and apolitical as much as possible.
A: We believe that's the case.
Q: If that wasn't the case, staff wouldn't have issued it?
A: This is our report, and we stand by it.
Shepherd wants to emphasize this audit was impartial and apolitical as much as possible.
It wasn't intended to hold over the GO, and it wasn't to help her hide anything.
Shepherd: Don't want to shy away from our responsibility. Important for membership and public to know we trust this audit to be unbiased and uninfluenced. Things that both sides will disagree with.
Shepherd: Don't want to shy away from our responsibility. Important for membership and public to know we trust this audit to be unbiased and uninfluenced. Things that both sides will disagree with.
Rep. L. Fite to the AG: Historically AG wouldn't have opined on a case mired in controversy?
A: we don't opine on matters that are pending litigation or in litigation. Audit has not been lititaged, nor is litigation pending yet.
A: we don't opine on matters that are pending litigation or in litigation. Audit has not been lititaged, nor is litigation pending yet.
Rep. Dalby: We can agree the box was checked for "government asset" in the first invoice, we then changed the asset to "private." Maybe I used "tampering" in a loose way, but this objectively changes the legal status of the lectern.
Missed question to Deere: "You said this audit was a waste of time. But it's Legislature's responsibility to hold the pursestrings. Have there been discussions about returning the lectern to get what we ordered?"
A: "we discussed that but decided not to."
Q: Why?
A: "we discussed that but decided not to."
Q: Why?
A: Took a while for lectern to arrive, the audit started, it became not preferable to ship it back.
Q: I think it's concerning we're being accused of wasting taxpayers' time and money when we're just doing our job.
Deere: no taxpayer money was used to make this purchase.
Q: I think it's concerning we're being accused of wasting taxpayers' time and money when we're just doing our job.
Deere: no taxpayer money was used to make this purchase.
Sen. Hammer to Mr. Norman: You are still pursuing the rest of the Audit?
A: Yes.
Hammer to Chair: To let them be independent on part 2 of the audit, give us some guidance on how to approve this report while letting Audit do the rest of their job.
A: Yes.
Hammer to Chair: To let them be independent on part 2 of the audit, give us some guidance on how to approve this report while letting Audit do the rest of their job.
Gazaway: We can approve this report without influencing Audit. If Audit staff has a different opinion they should say so.
Mr. Norman: They're two different reports. No trouble at all.
Hammer: So to be clear on record, it's the Chair and Audit's position we can approve this...
Mr. Norman: They're two different reports. No trouble at all.
Hammer: So to be clear on record, it's the Chair and Audit's position we can approve this...
... report today and you can do your job in an unbiased way.
Norman: yep, totally.
Gazaway agrees.
Norman: yep, totally.
Gazaway agrees.
Sen. Petty: Why refer to the prosecuting attorney on an ultimately insignificant dollar amount?
A from Audit Attorney: Four areas that give auditor cause to refer to attorney. FOIA noncompliance = criminal misdemeanor, consistency with Audit's past referrals...
A from Audit Attorney: Four areas that give auditor cause to refer to attorney. FOIA noncompliance = criminal misdemeanor, consistency with Audit's past referrals...
Allegation re: falsifying business records (shredding bill of lading), and tampering allegation.
Sen. Petty: Thanks for clarifying.
A: We don't make criminal intent evaluations. Anything that appears a potential violation, we refer. Nothing more, nothing less.
Sen. Petty: Thanks for clarifying.
A: We don't make criminal intent evaluations. Anything that appears a potential violation, we refer. Nothing more, nothing less.
Sen. Irvin: When was the AG's opinion issued?
A: April 10.
Q: As far as the GO response to Audit, who worked on that?
A from Kennedy: Three of the four attorneys on staff in consultation with other experts around the exec branch.
A: April 10.
Q: As far as the GO response to Audit, who worked on that?
A from Kennedy: Three of the four attorneys on staff in consultation with other experts around the exec branch.
Q: Did you have comms with AG's office?
A: We sat down with them after we wrote it to see if we were off base. They didn't edit or change it in any way.
Q: So then the AG's opinion was crafted after you saw the GO response. Did that alter the opinion?
A: No. (Uh huh.)
A: We sat down with them after we wrote it to see if we were off base. They didn't edit or change it in any way.
Q: So then the AG's opinion was crafted after you saw the GO response. Did that alter the opinion?
A: No. (Uh huh.)
A: we have a multitiered response that ensures independence.
Q: Is it normal practice for the AG's office to be legal representation for an agency during an audit process?
A from Audit: Not sure. their presence at the exit conference was unusual. I
Q: Is it normal practice for the AG's office to be legal representation for an agency during an audit process?
A from Audit: Not sure. their presence at the exit conference was unusual. I
... refused to go over the report with the AG present.
Irvin says she appreciates the response from the GO re: "oversights", even if she calls them mistakes.
Q: Do you appreciate the audit gave you better responsible fiscal practices?
A: Yes
(Complete softball, unserious)
Irvin says she appreciates the response from the GO re: "oversights", even if she calls them mistakes.
Q: Do you appreciate the audit gave you better responsible fiscal practices?
A: Yes
(Complete softball, unserious)
AG: We went to exit interview to provide legal perspective. We reviewed every opinion cited in the Audit report, so we happened to disagree. We've solely dealt with the law, and that's what went into the opinion.
Irvin: There's just a lot of similarities between the management response and the AG opinion. Trying to understand that timeline.
Us too! Kudos to her for asking that.
AG continues to claim all the similarities are a coincidence.
Us too! Kudos to her for asking that.
AG continues to claim all the similarities are a coincidence.
Norman agrees clarification needs to happen re: procurement. "We've operated for 50 years on the assumption Const. Officers are agencies unless they're specifically exempted. If that's not the case, Assembly needs to clarify immediately."
Sen Hammer: Who would represent Audit if this goes to litigation?
AG: Depends on how the case progresses. If there was a conflict, we couldn't represent Audit. Hard to answer without more facts.
Hammer: Could you rep GO or Leg?
AG: Depends on how the case progresses. If there was a conflict, we couldn't represent Audit. Hard to answer without more facts.
Hammer: Could you rep GO or Leg?
AG: don't think so.
Sen. Chesterfield tries to move for consideration. There's not a motion, she says "Hurry up and find one."
Sen. Chesterfield tries to move for consideration. There's not a motion, she says "Hurry up and find one."
Shepherd supports the vibe. Some confusion about what the motion needs to be.
Sen. Hickey: Thought the motion should be "to file the report." If we use the word "presented", would that keep working papers from going to prosecuting attorney?
A from Audit attorney:
Sen. Hickey: Thought the motion should be "to file the report." If we use the word "presented", would that keep working papers from going to prosecuting attorney?
A from Audit attorney:
... "believes motion to file, receive, adopt, etc" are all similar. Audit's statutes call for "present to the committee" if that's acceptable to the body.
Speaker just wants this to be handled consistently to past practice.
Speaker just wants this to be handled consistently to past practice.
Audit Attorney: once report is presented, our working papers are subject to FOIA. That's why the terminology needs to be correct. We believe "presented" is best term in her opinion.
No nays. The report stands presented.
No nays. The report stands presented.
We're done folks, thanks for sticking with us on this one. We'll have more later in the week.
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