Legislative lectern audit finds several issues; Governor’s office calls report ‘deeply flawed’

A state legislative audit was released Monday (April 15) of the purchase made of a $19,000 lectern and road case by Gov. Sarah Sanders last year with several findings by auditors and a dispute of those findings from the governor’s office.

The Arkansas Legislative Audit (ALA) bureau has been researching for months the controversial transaction made by Sanders’ office. ALA outlined the breakdown of the expenses that totaled $19,029. They include:

• $11,575 for the podium;
• $2,500 for a consulting fee;
• $2,200 for the road case;
• $1,225 for shipping and delivery of the lectern;
• $975 for freight shipping of the road case;
• $554 for a 3% credit card processing fee.

ALA determined the cost of the road case to be reasonable, but “could not determine the reasonableness of the consulting fee.” It also said it could not determine the reasonableness of the lectern “due to lack of vendor responses.” Legislative Audit noted that it attempted to reach three out-of-state vendors involved in the transaction to confirm the “ordering, procurement and shipping” of the podium, but received no response.

Other key findings in the 67-page report, which includes appendices and documentation, are:

• Critical of lack of formal purchasing documents or detailed invoice listings;
• Questioning the use of transition funds for the lectern and road case that were qualified as “computer expenses” or “maintenance services,” which was the stated intent of the funds;
• Critical of citing a delivery date of the lectern;
• Critical that a business expense justification statement should have been included before the purchase of the podium and travel case were made.

Legislative Audit said there was no indication the reimbursement by the Republican Party of Arkansas was planned before blogger Matt Campbell’s Freedom of Information Act (FOIA) request on the transaction.

“ALA maintains that the podium and road case remain state property and should have been disposed of through M&R [maintenance and reconditioning],” the audit said.

Legislative Audit cited an issue with the redistribution process conducted by the governor’s office, although the governor’s staff disputes this audit finding. ALA said lack of notification as well as the process the office made during the lectern redistribution to the RPA was in violation of state procedures. It also said a bill of lading was “shredded” by the governor’s office. The governor’s office said the bill of lading may have been misplaced in the delivery process, but was not intentionally shredded or lost.

The governor’s office has maintained that it and other constitutional offices are exempt from certain state agency procurement procedures, a position supported by a recent opinion from Attorney General Tim Griffin. Legislative Audit disputes the recent Attorney General’s opinion that the governor’s office is not a “state agency.” The audit bureau said the office has procurement exemptions, but maintains the governor’s office should have followed state agency procedures in disposing of the lectern to the RPA.

The report is being forwarded to the Pulaski County prosecutor’s office and the Arkansas Attorney General for review, a standard practice of most legislative audits with findings. State lawmakers have scheduled a hearing on Tuesday (April 16) to review the report with legislative auditors.

GOVERNOR’S RESPONSE
The governor’s office took issue with several of the findings in the report stating that “no laws were broken” by the Governor’s Office. It called the report “deeply flawed.”

“The facts outlined in the report demonstrate what the governor’s office said all along: we followed the law, and the state was fully reimbursed with private funds for the podium, at no cost to the taxpayers,” said Alexa Henning, spokesperson for Gov. Sanders.

Sanders’ office said the report notes the podium and travel case are real and exist; the podium and travel case price was not found to be unreasonable; and the transfer of ownership to the Republican Party of Arkansas was lawful. Legislative Audit findings declared they could not determine the lectern cost, and it challenged the transfer to the state GOP.

The governor’s office said it has taken actions to improve its internal procedures. In a response released to the media, Sanders’ office said Legislative Audit overlooks:

• That the Governor’s Office is not a “state agency” and is exempt from the majority of agency accounting and budgetary procedures, statutory capitalization requirements, and procurement rules for disposing of assets;
• The office was lawfully allowed to use state funds;
• A copy of the bill of lading was provided to Legislative Audit; and
• Procedures to improve internal controls was in process before the audit began.

“The Legislative Audit Special Report exonerates the Governor’s Office. The podium and travel case were fully authorized, fully transparent, and fully appropriated. A handwritten note, absent a false alteration, is not a violation of law, and no court has ever held otherwise. No laws were broken. No fraud was committed,” a statement from the governor’s office said.

A spokesperson for Sanders said no member of the governor’s staff was fired as a result of this incident, and the governor is expected to utilize the lectern in the future.

You can access the audit at this link.