Transcript Highlights:

• So I want to give credit where credit is due.
• to submit that until that audit was complete, even had we gotten the single audit work done.
• audit procedures.
• They did have three programs that we audited, which is more than they would normally have audited.
• the single audit.

Summary: The meeting focused first on a legislative working group report created under House Bill 368 from the prior session on medical education in Idaho. The presenter described Idaho’s physician shortage, noting the state ranks 50th per capita in physicians and would need roughly 1,400 additional physicians to reach the national average. The group’s unanimous recommendations included maintaining current state-supported medical school seats, adding 10 new non-WAMI seats this year, expanding graduate medical education by 15 seats, prioritizing in-state training, and creating a dedicated health education coordination role to manage undergraduate and graduate placements, clinical sites, and data. Members discussed whether WAMI should also expand, the quality of WAMI graduates, the need for more clinical preceptors and residency sites, rural recruitment incentives, and whether the plan should include other health professions such as nurse practitioners and physician assistants. The presenter said the plan includes benchmarks and timelines, and estimated costs of about $350,000 for coordination, $350,000 to $485,000 for 10 new UME seats depending on placement, and $900,000 for the GME request. The committee then heard from Legislative Audit Division Manager April Renfro on the state’s 2024 single audit and related accountability work. She reported $5.4 billion in federal assistance audited, 21 major federal programs across 15 agencies, 45 findings, seven repeat findings, $2.4 million in known questioned costs, and $2 million in projected questioned costs. Major issues were concentrated at the Department of Health and Welfare, including Medicaid findings involving delayed health and safety surveys, managed care provider eligibility and roster controls, and capitation payments tied to ineligible members; Child Care and Development Fund reporting and cost-allocation errors; and repeat issues in vocational rehabilitation and low-income home energy programs. She also noted Department of Environmental Quality problems with indirect cost proposals and a duplicate grant draw, while Transportation had no findings. Members asked about accountability for repeat findings, the role of Luma in reporting errors, fraud detection, and how to prioritize corrective action; Renfro said agencies, federal management decisions, and legislative oversight all play a role, and she planned to send a prioritized list of key findings to the co-chairs. A later presentation by budget analyst Brooke Dupree introduced front-end reports in the legislative budget book, explaining state government structure, the constitutional limit of 20 executive departments, and how the Legislature uses decision units to build appropriations. She walked through the original appropriation, reappropriations, supplemental appropriations, and how those pieces roll into the current-year total appropriation, with members asking brief questions about departmental divisions and the budget model.

Transcript Highlights:

• As Chairman Guerin said, this bill would extend the current R&D credit for franchise tax that's set to
• The bill would extend the franchise tax credit, repeal the sales tax exemption, and tie the franchise
• tax credit directly. on the federal return, which allows the comptroller to conduct audits, as well
• Recent audits have investigated the park board's use of restricted funds.
• As Sheila mentioned, the park board is under an audit.

Bills: SB263 , SB467 , SB850 , SB1030 , SB1352 , SB1453 , SB2064 , SB2206 , SB2779 , SJR84

Committee: House Ways & Means

Transcript Highlights:

• </c><02:07:01.440><c> are</c> realize only then that their credits are realize only then that their credits
• </c> credits for an additional three years. credits for an additional three years.
• These tax credits insurance premiums.
• </c><03:19:19.520><c> The</c> detect fraud, including audits. The detect fraud, including audits.
• The<03:21:19.600><c> audit</c><03:21:20.000><c> continues</c> The audit continues that between March

Transcript Highlights:

• and court cases bandwidth on the audits and court cases and<00:21:21.919><c> etc.
• </c> the low-income housing tax credit the low-income housing tax credit program<00:37:28.000><c> in<
• Uh as Tax Credit in front of you today.
• Um, appreciate you letting me testify on the New Markets Tax Credit.
• </c> testify on the new market uh tax credit. testify on the new market uh tax credit.

Bills: HF2048 , HF2360 , HF2006 , HF950 , HF912 , HF3140 , HF2931

Committee: House Taxes

Transcript Highlights:

• </c> becomes eligible for these tax credits. becomes eligible for these tax credits.
• So, this bill aligns us with credits.
• </c><00:04:45.240><c> provision</c> low-income housing tax credit provision low-income housing tax credit
• credits credits that<00:09:56.640><c> we're</c><00:09:56.800><c> allowed</c><00:09:57.200><c> to</c>
• </c><00:10:24.320><c> to</c> through the sale of the tax credits to through the sale of the tax credits

Bills: HF4234 , HF3697 , HF1183 , HF4738

Committee: House Taxes

Transcript Highlights:

• We can match that tax credit."
• </c> "Hey, Minnesota's given this tax credit. "Hey, Minnesota's given this tax credit.
• So, what We can match that tax credit."
• That sends period of that tax credit.
• And particularly, there was one audit."

Transcript Highlights:

• In the audit, Mr. Chairman.
• In terms of the audit that is in other states, that audit goes to the city, or whose audit?
• So they conducted the audits.
• In the audit, Mr. Chairman.
• That audit goes to the city, or who's audit?

Bills: SB32 , SB464 , SB996 , SB1163 , SB1173 , SB1277 , SB1452 , SB1453 , SB1548 , SB1882 , SB1883 , SB2016

Committee: Senate Local Government

Summary: The Senate Local Government Committee heard several bills by Senator Bettencourt focused on property tax and local government accountability. SB 32 would provide about $700 million in business tax relief by raising the business personal property exemption from $2,500 to $25,000 and continuing a 20% franchise tax credit for inventory taxes paid. Witnesses from NFIB, the Texas Retailers Association, and Texas Realtors supported the bill, saying business personal property and inventory taxes are burdensome and especially hard on small businesses. After no opposition testimony, SB 32 was left pending. The committee also heard SB 1453, which would change how interest and sinking tax rates are calculated by using only the minimum debt service required under bond schedules, while still allowing a higher rate with a 60% governing body vote and a public explanation. A witness from the Texas Taxpayers and Research Association supported the bill as a way to keep debt rates from rising as property values increase and to preserve tax relief. The bill was left pending after testimony. SB 1883 would tighten rules on local impact fees by requiring 60 days of public availability for capital improvement plans and land use assumptions, raising the approval threshold for adopting impact fees from a simple majority to two-thirds, limiting how often fees can be increased, and expanding notice requirements. Builders and developers testified in support, arguing that impact fees are often poorly reviewed, lack accountability, and are passed on to homebuyers, worsening housing affordability. Committee members discussed adding audit provisions and questioned the lack of city testimony. The bill was left pending with subcommittee action. SB 1452 would require a voter election to decide whether a municipal management district continues to exist, with dissolution if voters reject it; supporters said it would add accountability, while others noted some districts provide essential services and infrastructure. The committee heard testimony from district representatives and builders, then left SB 1452 pending before recessing.

Transcript Highlights:

• They input the homestead credits, vet credits. The tax statements are basically all the same.
• , whether it was bad credit, homestead credit, primary residence credit, didn't matter.
• We are auditing until... We are auditing until March. There's a lot of audits that we do.
• Homestead credit, disabled veterans credit reporting because we need to get all of that worked before
• The credit itself, the amount of the credit.

Summary: The subcommittee of the Tax Reform and Relief Committee met to begin its study of the feasibility and desirability of revising the content of the real estate tax statement to improve property tax transparency. Legislative Council staff reviewed the study directive under House Bill 1176 and the statutory requirements for tax statements, including required line items such as true and full value, mill levy, legislative tax relief, primary residence credit, and the Legacy Fund portion of that credit. The Tax Department then explained how the current uniform statement is prescribed and approved, and noted that changes are typically driven by statute and implemented collaboratively with counties and vendors. County officials from the North Dakota Association of Counties described the full annual tax cycle, from county budgeting and valuation notices to budget hearing notices, levy certification, cap calculations, and final tax statement mailing. They emphasized that counties and auditors do extensive coordination with taxing districts and neighboring counties, and that the process is labor-intensive and often manual. Members discussed the limited public response to budget notices and tax statements, the difficulty of explaining the legislative tax relief line, the 3% cap and valuation issues, and whether more frequent assessments or different timing would improve understanding. Several members and witnesses noted that many taxpayers only engage when they receive their final bill, and that clarity may be more important than adding more detail. NDACO also presented a rough cost survey from eight counties, estimating an average tax statement cost of about 74 cents and a statewide total near $600,000 for printing and mailing tax statements alone, with outsourcing generally cheaper than in-house printing. Witnesses noted that House Bill 1176 added other mailings and notices, increasing county workload and cost beyond the statement itself. The committee then heard from software vendors, who explained how their systems handle tax billing, budget notices, valuation notices, primary residence credit processing, and tax levy calculations, and they identified the 1600/1685 primary residence credit and discount interaction as a current programming challenge. No votes were taken; the meeting was informational and focused on gathering testimony and identifying issues for possible future recommendations or bill drafts.

Transcript Highlights:

• Um, she has the audits on all the sunset bills.
• He said the board had a very clean audit and, from conversations he had, they have had no issues and
• </c> &gt;&gt; as I understand had a very clean audit.
• &gt;&gt; as I understand had a very clean audit.
• House Bill 275. their credits over from the military to their credits over from the military to um<00

Bills: SB100 , SB122 , SB127 , HB182 , HB275 , SB100 , SB122 , SB127 , HB182 , HB275

Committee: House Boards, Agencies and Commissions

Keywords: property tax, ad valorem tax, real property assessment, assessment cap, county-wide reappraisal, CPI-U, Consumer Price Index, tax assessor, Class II property, Class III property, local government revenue, property tax relief, reappraisal, tax increment district, retroactive tax law, Alabama Code 40-7-2.2, appropriation, education funding, Southern Preparatory Academy, fiscal responsibility

Transcript Highlights:

• The audit was conducted by the independent firm Showberg-Eveshank Consulting under contract with our
• and collaborative effort during this audit cycle.
• So it sounds like a lot like forensic-type auditing needs to be done on the data too.
• The audit did confirm that the demand vastly outstrips the supply of investigative staff.
• 40-hour work week manually processing credit card payments.

Committee: House House Health & Human Services Committee of Reference

Transcript Highlights:

• These audits often stretch on for months.
• I'm not opposed to audits now. We believe in accountability.
• It's reasonable, but no audit should delay final payment indefinitely.
• That is going on indefinitely using this power of an audit.
• Sometimes these audits take one to two years to be completed.

Bills: HB2963 , HB3005 , HB3287 , HB3288 , HB3289 , HB3290 , HB3344 , HB3712 , HB3862 , HB3874 , HB4196 , HB4308 , HB4901 , HB4984

Committee: House Trade, Workforce & Economic Development

Summary: The committee heard testimony on several bills related to technology, construction, economic development, and consumer protection. HB 3862 would restrict minors’ access to certain social media apps and limit smartphone use in classrooms; supporters, including Champions for Childhood, argued that smartphones and social media contribute to addiction, distraction, depression, self-harm, and trafficking risks, and the bill was left pending. HB 3712 would change Texas retainage rules so owners could not withhold payment on specially fabricated construction materials once they are delivered, approved, and warranted; subcontractors and suppliers said current retainage practices delay payment for years and create financial risk, and the bill was left pending. HB 2963, the right-to-repair bill, would require manufacturers to provide parts, tools, and information for independent repair of digital devices, with exemptions for medical devices, vehicles under existing agreements, and trade-secret protections; consumer, environmental, business, and repair advocates supported it, while Safelite asked that automotive manufacturers not be excluded from the bill, and it was left pending. HB 4308 would create county industrial development districts to attract major employers and finance infrastructure through local elections and bonds; Fort Bend County supported it as a tool to add jobs and broaden the tax base, and it was left pending. The committee also heard HB 3344, which would create a licensing system for re-roofing contractors, require insurance and bonding, and establish a public database and complaint process. Supporters said it would help curb storm chasers and protect homeowners after storms, while opponents argued it would add burdens on legitimate small roofers, duplicate existing fraud laws, and potentially restrict consumer choice and contractor pricing flexibility. After extensive testimony and questions, the bill was left pending. HB 4196 would create a task force on modernizing manufacturing through digital integration and automation; Schneider Electric and the Texas Workforce Commission supported it as a way to improve competitiveness and create skilled jobs, and it was left pending. HB 3874 would require contractors to receive copies of incorporated contract documents before signing if requested; subcontractors and construction attorneys said it would improve transparency and prevent parties from being bound by unseen terms, and it was left pending. In pending business, the committee voted out several bills. HB 74, creating the Port Verde Port Authority District, was reported favorably to the full House without amendment. HB 112, relating to a science park in certain counties, was reported favorably as substituted. HB 2214, on floodplain notice requirements for leased dwellings, HB 3016, on rental vehicle damage waivers, HB 3133, on explicit deepfake material on social media, HB 3173, on workforce development program planning and evaluation, HB 3807, on child care waiting list priority for children of certain child care workers, HB 463, on unilateral memoranda of contract for residential property, HB 4115, on shareholder proposals to certain domestic corporations, and HB 5008, on use of the Skills Development Fund by certain entities, were all reported favorably, most without amendment and some as substituted. HB 2652, creating a certified caregiver pilot program in the Borderplex workforce area, was also reported favorably and sent to the Committee on Local and Consent Calendars.

Transcript Highlights:

• This provides that the Joint Legislative Audit Review Committee will conduct this study independently
• This provides that the Joint Legislative Audit Review Committee will conduct this study independently
• This would provide that the city or county real estate excise tax for affordable housing be a credit
• This would provide that the city or county real estate excise tax for affordable housing be a credit
• It's critically important that these things are done by these professional audit standards.

Summary: House Finance heard briefings on several tax and housing-related bills, including HB 1717 on a local sales and use tax remittance program for affordable housing, HB 1859 on expanding density bonuses for housing on religious organization property, HB 1960 on a renewable energy excise tax, HB 2133 on making a senior citizen center property tax exemption permanent, HB 2135 on extending a disabled veterans housing sales tax preference, HB 2140 on tax treatment for land transferred to government entities, HB 2442 on a broad package of local tax and levy changes, and HB 2559 on a local option short-term rental tax for affordable housing. Staff also described multiple proposed substitutes and amendments, many of them technical or aimed at shifting administrative duties, changing tax credits, or requiring voter approval. In executive session, the committee adopted a substitute for HB 1717 and reported it out unanimously with a due pass recommendation. HB 1859 was also reported out with a due pass recommendation after members discussed added flexibility for affordable housing on faith-owned land. For HB 1960, the committee adopted amendments clarifying tax administration and JLARC review, rejected an amendment that would have adjusted property tax levies to offset shifts, and then advanced the bill on an 11-4 vote. HB 2133 and HB 2135 both received technical amendments and were reported out unanimously, with members emphasizing the value of permanent or extended tax preferences for senior centers and disabled veterans. The committee then advanced HB 2140, which narrows tax consequences when land is transferred to a governmental entity and is used for current-use purposes, with members describing it as a fix for unintended burdens on landowners and farmers. HB 2442, a large local government finance package, drew the most debate; amendments to make new taxes credits against state taxes and to require voter approval were rejected, and the bill passed 9-6. HB 2559, which would allow a local option excise tax on short-term rentals to fund affordable housing, also saw rejected amendments on state tax credits, local control, and voter approval before passing 9-6. Throughout, supporters framed the bills as tools for local governments and affordable housing, while opponents argued they would increase taxes and should require direct voter approval or state offsets.

Transcript Highlights:

• We did do an audit of DTA. We did then. Last year, I believe it was. We did do an audit of DTA.
• I'm one of the audit directors here with the State Auditor's Office. I oversee our audits of...
• , we have been auditing.
• audit report rather than getting a bunch of small audits going and doing an audit of each agency, where
• part of larger, more comprehensive audits, a multi-agency audit, so to speak.

Committee: Joint Joint Committee on Ways and Means

Summary: The joint budget hearing opened the FY27 budget process with remarks from the Senate and House Ways and Means chairs, who described the fiscal outlook as challenging because of slow revenue growth, rising health care and other costs, and uncertainty from federal policy changes. Governor Healey and Secretary of Administration and Finance Matthew Gorzkowicz then presented House 2, a $62.8 billion budget that they said grows by about 1% and does not raise taxes or fees. They emphasized affordability, fiscal discipline, protection of core services, and continued investment in education, transportation, housing, child care, health care, and public safety. The administration also discussed a separate bill to delay and phase in certain federal tax-code changes from the so-called OB3 law, especially research and experimental expense provisions, to reduce immediate budget impacts and preserve competitiveness. A major portion of the hearing focused on education and municipal aid. The administration said House 2 provides about $7.6 billion for Chapter 70 aid, fully funds the final year of the Student Opportunity Act, increases special education circuit breaker funding, and raises rural school aid. Senators and representatives from both parties raised concerns that Chapter 70 and other aid formulas are not equitable for small, rural, and low-wealth communities and are not keeping pace with inflation, and several called for broader review of the formula and related funding streams. The governor and secretary said they are open to further discussion, pointed to additional support through rural aid, special education, transportation reimbursements, and minimum aid, and said total Student Opportunity Act investment would reach about $2.1 billion over the life of the law. Transportation, housing, and fair share spending were also central topics. The administration said fair share revenues are being used holistically, with education-heavy spending in the operating budget and transportation-heavy spending in the supplemental budget, and estimated the overall split to date at roughly 57% education and 43% transportation. They highlighted MBTA stabilization, regional transit authority support, microtransit, fare-free regional transit, and bridge and commuter rail investments, while noting the MBTA remains a major fiscal concern. On housing, the governor stressed production, permitting reform, ADUs, down-payment assistance, and support for public housing authorities, while lawmakers pressed for more funding for local housing authorities and for ways to address out-migration, energy costs, and affordability. The governor also said the administration will not withhold fire safety grants from communities over MBTA Communities Act noncompliance and will handle such issues case by case. No votes were taken at the hearing; it was an informational presentation and question-and-answer session.

Transcript Highlights:

• The money spent would have been credited to my account. The bill has been paid.
• The first five pages of this bill address pharmacy audits.
• The bill extends the notice of an audit from 7 to 14 days.
• We're asking for a reasonable number of prescriptions to be audited.
• audits, and so forth.

Committee: House Health and Mental Health

Transcript Highlights:

• I want to welcome everybody to the Legislative Audit Education Institution Subcommittee.
• Today there are 57 education audit reports for the committee's review.
• Finding two, the district discovered and we verified unauthorized credit card charges of $2,140 on the
• district's credit card between September 9, 2024, and February 27, 2025.
• So since these were not a repeat finding or a deferred audit report, they were not required to be here

Committee: All LEGISLATIVE JOINT AUDITING-EDUCATIONAL INSTITUTIONS

Summary: The Legislative Audit Education Institution Subcommittee met to adopt the previous minutes and review 57 education audit reports, 52 of which had no findings and were filed as reviewed. The committee heard several findings involving school district spending and internal control issues, including Camden-Fairview’s use of operating funds for an employee awards banquet and unauthorized credit card charges, Forest City’s use of operating funds for an end-of-year celebration and entertainment event, Nettleton’s fraudulent vendor payment scheme involving $1.9 million in attempted transfers, Cedar Ridge’s misallocation of Title I funds and payroll/bank reconciliation errors, and Green County Technical’s diverted vendor check that was recovered. Three of the reports had been referred to the prosecuting attorney and attorney general. Members asked questions about whether district officials were present, how the questionable expenditures were broken down, and whether school boards had prior knowledge or approval. The committee deferred the Camden-Fairview, Forest City, and Nettleton reports to the June meeting and requested district representatives attend to answer questions. Cedar Ridge and Green County Technical were not deferred; Cedar Ridge was filed, and Green County Technical was reviewed without further action. Staff also discussed recurring fraud and banking-control issues seen in school audits, including altered checks, email-based banking changes, and the use of positive pay and in-person verification for deposit changes. Members encouraged better communication with school districts and noted that clean audits should be recognized. The committee then filed the remaining no-finding reports and adjourned with no new business.

Transcript Highlights:

• Each year, the state has received far more tax credit requests than the cap currently allowed.
• Or if they're opening a Petland credit card, it's the right choice for that family.
• I'm thinking about compliance and maybe the opportunity to audit AI providers.
• I don't recall any audit provision.
• But there's no specific audit function. Okay. Thank you, Chair Leek.

Bills: S0214 , S0482 , S7030 , S0554 , S0994 , S0998 , S1004 , S1074 , S1076 , S1266

Committee: Senate Commerce and Tourism

Summary: The Committee on Commerce and Tourism heard and advanced several bills focused on economic development, consumer protection, workforce issues, and technology. SB 1076 would raise Florida’s research and development tax credit cap from $9 million to $50 million beginning with the 2027 allocation, and it was reported favorably. SB 1266, as amended, creates a cybersecurity experiential internship and clearance-readiness program with Cyber Florida and was also reported favorably. SB 554, a Florida Bar-backed update to the not-for-profit corporations statute, was approved without opposition. SB 1004, aimed at protecting buyers of dogs and cats from deceptive sales practices and predatory financing at retail pet stores, received supportive testimony from animal welfare advocates and was reported favorably. SB 1074, which sets rounding rules for cash transactions if pennies are unavailable, also passed favorably. The committee also considered SB 998, the Department of Commerce package, which combines updates to the Small Cities CDBG program, clarification of rural community eligibility, an exemption from a reverter clause for military-related land conveyances, and revisions to E-Verify enforcement. The E-Verify portion drew the most debate, with questions about employer cure periods, treatment of current investigations, and whether the bill creates a loophole for independent contractors. Senator Smith opposed the bill, arguing it creates unequal enforcement between employers and immigrant workers, while Senator Wright supported the military-related provisions. SB 998 was reported favorably on a divided vote. SB 214, which expands the rural community definition to include special districts in rural counties, was reported favorably. The committee then took up SB 482, an artificial intelligence consumer-protection bill that creates an “AI bill of rights” covering companion chatbots, parental controls for minors, data privacy, de-identified data, unauthorized use of likeness, and enforcement by the Attorney General, with a limited private cause of action for minors. The bill drew extensive testimony both in support and in opposition, including concerns about privacy, age verification, and enforcement, but it was reported favorably. Finally, the committee approved SPB 7030, a public-records exemption tied to Department of Legal Affairs investigations under the AI bill, and adjourned after members requested to be recorded on certain votes.

Transcript Highlights:

• and collaborative effort during this audit cycle.
• So it sounds like a lot like forensic type of auditing needs to be done on the data too.
• We did have a story to tell after our last audit in 2020.
• The audit did confirm that the demand vastly outstrips the supply of investigative staff.
• 40-hour work week processing credit card payments.

Committee: House House Health & Human Services Committee of Reference

Summary: The committee met as a Joint Health and Human Services Committee of Reference to hear sunset reviews and performance audit findings for several health-related boards. The first action taken was on the Arizona State Board of Pharmacy. The Auditor General reported that while the board met some licensing deadlines, it had significant problems enforcing controlled substances prescription monitoring program (CSPMP) requirements, timely investigating complaints, and documenting fee analyses and other compliance items. The board director said the agency had implemented some recommendations, was seeking legislative help on CSPMP enforcement and data issues, and described staffing and vendor challenges. A public member testified that the board was generally efficient but that statutory gaps limited its effectiveness. The committee then voted 13-0, with six not voting, to continue the Board of Pharmacy for six years until July 1, 2032, with statutory changes to improve its operations. The committee next reviewed the Arizona State Board of Nursing. The Auditor General found the board timely processed licenses but continued to resolve too many complaints late, with a large and growing backlog of open cases, and identified additional issues in oversight, accounting, public records, and conflict-of-interest practices. The executive director said the board had been under-resourced as nursing volume and complaints increased, requested 28 additional investigative positions, and described efforts to triage cases and improve tracking. The Arizona Nurses Association supported the board’s role and said it was working on a bill, House Bill 2408, to improve accountability, prioritization, and fairness in the disciplinary process. A nurse attorney testified that changes to complaint notice, the scope of investigations, and triage could shorten delays. The committee approved continuation of the Board of Nursing for four years until July 1, 2030, by a 14-0 vote with five not voting. The committee then heard the sunset review for the Arizona Board of Occupational Therapy Examiners. The Auditor General reported that the board generally met licensing timelines but had documentation problems verifying fingerprint clearance cards or criminal history checks, and it failed to act promptly on a renewal application involving serious sex-trafficking-related charges. The board said it had accepted all recommendations, had implemented most of them, had moved to a new licensing platform, and had hired help to address rulemaking delays. Members asked about fingerprint verification and the handling of the serious criminal charges. The committee voted 16-0 to continue the board for four years until July 1, 2030, with statutory changes to improve its performance. Finally, the committee began the review of the Arizona Regulatory Board of Physician Assistants. The Auditor General found the board had met some licensing and enforcement requirements but lacked adequate executive oversight, accountability, and tracking systems, and it had very high complaint-resolution delays. The report also criticized the board’s incentive pay structure, which paid all staff based on measures unrelated to complaint timeliness. The new executive director said the board had created formal investigative timelines, improved reporting, sought additional support staff, and was updating IT and incentive metrics; she also explained that the board is a shared agency with the Medical Board. The transcript ends during this presentation, before any vote on the physician assistant board is shown.

Transcript Highlights:

• I want to welcome everybody to the Legislative Audit Education Institution Subcommittee.
• Today there are 57 education audit reports for the committee’s review.
• Finding two: The district discovered, and we verified, unauthorized credit card charges of $2,140 on
• the district’s credit card between September 9, 2024, and February 27, 2025.
• And so we're on each audit now when we go out, we try to ask questions along these lines to see.

Committee: All LEGISLATIVE JOINT AUDITING-EDUCATIONAL INSTITUTIONS

Summary: The Legislative Audit Education Institution Subcommittee met to review 57 education audit reports, including 52 with no findings and five with findings. The committee adopted the previous meeting’s minutes and then heard staff summaries of the findings, which focused largely on school district spending and internal control issues. Two reports, Camden-Fairview and Forest City, involved district use of operating funds for staff end-of-year celebrations that staff said conflicted with the Arkansas Constitution and AG opinions. Camden-Fairview’s questioned costs totaled $10,668, including meals, door prizes, and facility rental, and Forest City’s totaled $33,436, including decorations, catering, entertainment, and rental fees. Members discussed whether district officials should attend to answer questions, and both reports were deferred to the June meeting with requests for district attendance. The committee also reviewed a referred finding at Nettleton School District involving a $1.9 million fraud scheme tied to emailed bank-account change requests; the district recovered $1.5 million from the bank and arranged for the vendor to reimburse the remaining $204,890 loss. Members questioned why the vendor would repay money it did not receive, and the report was also held over to the June meeting for further explanation. A separate referred case at Camden-Fairview noted unauthorized credit card charges of $2,140, with $262 remaining as a loss after bank reversals. Staff also presented non-referred findings at Cedar Ridge, including improper Title I payroll charges, salary overpayment and underpayment errors, and an unreconciled bank account variance, and at Green County Technical School District, where a $1,400 vendor check was fraudulently diverted but later recovered. Those reports were filed after no objections. During discussion, staff explained that Legislative Audit is trying to reduce recurring fraud and control problems by advising schools on verifying banking changes in person or through other direct contact, using bank controls such as positive pay, and monitoring accounts more frequently. Members encouraged schools to take audit training seriously and noted that clean reports should be recognized as a positive result. The remaining 52 reports with no findings were filed as reviewed, and the meeting adjourned with no new business.

Transcript Highlights:

• Fink in audit.
• There has been a private audit. Okay. So there has been an audit.
• audit.
• So when they have their private audit, do we review that audit?
• Legislative Audit?

Committee: All LEGISLATIVE JOINT AUDITING-EDUCATIONAL INSTITUTIONS

Summary: The meeting opened with prayer and approval of the January 8 minutes, then moved to review of education audit reports. The first report concerned Northwest Arkansas Community College, which had three findings, including repeat internal control deficiencies that caused financial statement misstatements and a tuition revenue loss tied to a new student information system. College officials said the issues were largely misclassification and process problems, not missing money, and described corrective steps such as monthly closing checklists, approval controls for journal entries, cross-training, and efforts to address staffing turnover and fill finance vacancies. Members asked about the tuition issue, whether students were notified or billed, and whether the software problem affected other institutions; audit staff said they were not aware of the same scenario elsewhere. The committee then filed the report as reviewed. The next report was Cedarville School District, which had one finding involving $794 in improper credit card charges by a resigned elementary teacher. The district was reimbursed, a police report was filed, and the matter was referred to the Professional Licensure Standards Board; members asked whether any further action or license-related consequences were known, but staff said they were not aware of additional action. The report was filed as reviewed. The final finding was for West Memphis School District, where auditors reported repeat capital asset issues, including failure to capitalize about $851,000 in construction costs for a baseball-softball complex and problems with inventory and asset inspection. The superintendent said the district had recently begun using Legislative Audit after prior private audits, and described new controls such as multi-level purchase approvals, separation of duties, tagging of equipment, and a cleanup of old inventory records. Members also discussed the relationship between private audits and Legislative Audit reviews, with staff explaining that private audit reports for public school districts still come before the committee and that the executive committee determines when Legislative Audit performs an audit. The committee filed the West Memphis report as reviewed and noted that 28 school districts had no findings before adjourning.

Transcript Highlights:

• </c><01:39:50.560><c> audits</c><01:39:51.000><c> of</c> 12416 say it does say audit audits of 12416
• They're talking about the audits, and that all funds set aside shall be credited to a separate account
• and used only for the audit.
• The LBA will do the audit.
• :05.360><c> separate</c> aside shall be credited to a separate aside shall be credited to a separate

Summary: The committee reviewed selected House Bill 2 provisions, focusing first on the group two pension reform language and whether it matched prior legislation and the fiscal note. Members discussed two main issues: the treatment of extra and special duty pay in the pension calculation for employees hired before 2011, and the annuity multiplier after 15 years of creditable service. Several members said the HB 2 language was intended to restore prior law and protect against pension “spiking,” while others worried the draft and fiscal note may not have fully reflected current law, potentially affecting the cost estimate. The discussion repeatedly emphasized the need to avoid underfunding or double counting and to make sure Finance had the correct actuarial assumptions. No vote was taken; the committee agreed to flag the issues for Finance and to clarify the fiscal note. Members also discussed the vested-rights language, which was described as an explicit definition of vesting and a restriction on future legislative changes to compensation calculations after three years of service. Some viewed it as a policy protection with no immediate fiscal impact, while others noted it had been included in prior legislation and should be clearly understood before the bill moved forward. The committee also briefly referenced prior pension legislation, including House Bill 436 and House Bill 727, and noted that HB 2 was being used to carry forward related pension repair provisions. The committee then turned to an OPLC-related section transferring building, plumbing, electrical, and fuel gas inspector positions from OPLC to the Department of Safety’s Fire Marshal’s office. Testimony explained that the nine inspector positions are funded from the licensing fund, and that the move was justified as a public-safety function better aligned with the Fire Marshal’s mission because the inspections are statewide code-enforcement work rather than facility-specific licensing work. The discussion ended with a note that the remaining HB 2 changes run through 2034 and a brief announcement about memorial arrangements for C.J. Gerard.