Arkansas Legislative Joint Auditing Committee members say it’s time to resolve a disagreement between the Arkansas Legislative Audit and the state attorney general’s office regarding implementation of 2% raises for employees who are paid at their maximum-authorized salaries.
The committee on Thursday held filing an audit report that states 29 employees in the attorney general’s office were paid in excess of the line-item salary appropriation, per Act 47 of 2020, by a total of $64,629 in conflict with the Arkansas Constitution. The report recommended that the attorney general’s office ensure employees are not paid above the appropriated line-item maximum salary amounts.
“The attorney general’s office continues to disagree with Legislative Audit on our office’s authority to award bonuses and raises to the hardworking public servants of the office of the attorney general,” Amanda Priest, the office’s communications director, said in an emailed statement to the Arkansas Democrat-Gazette. “The discussion to hold the findings is at the discretion of the Legislature, and we will continue to cooperate and advise the legislative body on this issue.”
Brian Bowen, chief of staff for the attorney general, said the attorney general’s office believes it and the state’s other constitutional offices are exempt from the state’s Uniform Classification and Compensation Act. Bowen also said the original discussion of the audit moved from a statutory issue to a constitutional issue.
“While we agree that we are bound by the Arkansas Constitution, your citations to Articles 16 and 19 are not relevant to the findings in your report, as we comply with the constitution and all applicable laws and statutes,” representatives for the attorney general’s office said in response to the audit. “The Office of the Attorney General will continue to comply with all applicable statutes and the Arkansas Constitution.”
The audit report cites the state’s constitution that states, “Except as provided in Arkansas Constitution, Article 19, the General Assembly shall fix the salaries and fees of all officers in the State, and no greater salary or fee than that fixed by law shall be paid to any officer, employee, or other person, or at any rate other than par value; and the number and salaries of the clerks and employees of the different departments of the State shall be fixed by law.”
The position of the attorney general’s office is that it has constitutional and statutory authority to issue bonuses and raises to employees, Bowen said.
“Furthermore we are exempt from the Class and Compensation Act,” he said.
Bowen said this was not over and above what legislators appropriated, and that the office actually had $1.6 million in salary savings this year.
“We were well within our budget,” he said.
Bowen said the office has given employees bonuses using this method repeatedly under the current administration.
Tom Bullington, deputy legislative auditor, told committee members it wasn’t looking into the overall appropriation for payroll but at each individual position. He said that means some employees had exceeded their line-item salary appropriation in conflict with the Arkansas Constitution.
Mon. Jonathan Dismang, R-Beebe, said his fear was a decision made during Thursday’s meeting would set a precedent for all constitutional offices.
“If we are going to use it in such a way that it allows money to move around freely, regardless of what is in the actual appropriation of how it’s supposed to be spent, then I guess we will have to change that practice for all constitutional officers ,” Dismang said. “Either the attorney general is correct and we need to really focus in on the appropriation levels, or the attorney general is incorrect and we can continue what we are doing with a little excess appropriation as needed. If not, we lose control of the process and you can have a constitutional officer runaway then at that point, with salaries and very little oversight, and I don’t think that would be a good situation for any of us.”
Bowen agreed there needs to be clarification in the statute.
“We are happy to offer assistance if you like,” he said.
Dismang questioned how a statute would add clarification to a constitutional argument.
Bowen said originally it was a statute issue and only recently turned into a constitutional debate between the attorney general‘s office and Arkansas Legislative Audit.
Frank Arey, staff attorney for Arkansas Legislative Audit, told the committee that based on law there is no need to change anything, citing a 1950s court case that stated the number and salary of state employees is a legislative matter that cannot be delegated to anyone else .
“In that particular case the two employees involved had to repay what they had been paid without legislative authority to receive that money,” he said. “So I don’t think, based on the law, you have to do anything different. In the AG’s appropriation you have a position named and you have a specific dollar amount. It could not be more clear they cannot exceed that amount.”
Arey said this isn’t an issue of changing the law, but rather holding agencies accountable.
Dismang said there needs to be a discussion between Legislative Audit, the Bureau of Legislative Research and all constitutional offices about where legislators need to go when it comes to writing appropriation bills moving forward because the current setup doesn’t make sense.
“Something is wrong somewhere,” he said.
The discussion was highlighted in May when Kurt Cover, supervising senior auditor for Arkansas Legislative Audit, said 35 employees in the attorney general’s office had received 2% of their annual salaries as a lump-sum payment and would exceed their line-item salary appropriation by a total of $37,546 as of June 30.
Thirty-six employees in the office received the lump-sum payment and the Office of Personnel Management reversed payments to those employees, which was consistent with the reversals for executive branch employees, who were paid a lump sum at that time, Cover said.
He said the attorney general’s office subsequently requested the lump-sum payments to be reinstated as a cost-of-living increase, saying that “AG’s discretion” provided the authority to make such payments.
Cover said that on March 7 the Office of Personnel Management manually entered into the state’s computerized accounting system the lump-sum payments for 35 employees based on a spreadsheet provided by the attorney general’s office and backdated the payments to Feb. 6.
All 35 employees received a full 2% of their current salary — which totaled $57,127 — as a lump-sum payment, Cover said, and they would exceed their line-item salary appropriation by $37,546 as of June 30 in conflict with the Arkansas Constitution Article 16, Section 4. In addition, one employee received 2% added to the base salary, he said.
Cover said Arkansas Legislative Audit could not identify authority for an “AG’s discretion” lump-sum salary increase that would allow employees to be paid in excess of their maximum line-item salary appropriation.
Bowen said the attorney general’s office has historically granted pay raises to employees and not exceeded the line-item maximum salary, and it was granted bonuses to employees. The attorney general’s office is not prohibited from giving bonuses to its employees and has followed state law and the Arkansas Constitution and stayed within its appropriation for salaries, he said.
Bowen told the committee Thursday that some employees received merit bonuses and some received retention bonuses.
“We try and reward not only our attorneys but also our staff who work very hard to do the business of the state,” Bowen said. “During the time frame, [which] if my recollection is correct was around February, we were starting to lose some people and we were offering bonuses to try and retain based on the premise of what we have to compete with. Not just private firms, but also other state agencies.”
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