The director of the Arkansas Department of Labor traveled five times out of state between January 2015 and Sept. 1, 2016, without any beforehand approval at a cost of $5,918, and some expenses were questionable or unrelated to his job, a state legislative auditor told lawmakers Thursday.
The auditor said $1,958 of those travel costs were for questionable business purposes and director Leon Jones was reimbursed $666 for nonbusiness purposes. One lawmaker said Jones should resign, and another said he should consider resigning.
On two of the out-of-state trips, it appeared that Jones scheduled personal trips and then subsequent business-related meetings, said Deputy Legislative Auditor Jon Moore.
Moore also said Jones didn't properly record his sick and annual leave, and if Jones had, this would have resulted in an annual-leave balance deficit of 68 hours and a sick-leave balance of 80 hours instead of a higher balance.
Jones also was absent from work for 57 additional hours, and auditors were unable to determine from available records whether the absences were for business-related purposes or should have been recorded as annual or sick leave, he said.
The auditors' findings and Jones' response led Sen. Terry Rice, R-Waldron, to call for Jones' resignation, saying he has lost confidence in Jones.
"I hate it, but I think you let the agency down and yourself down," Rice told Jones.
Rep. John Payton, R-Wilburn, suggested that Jones should consider resigning.
After the meeting of a legislative audit committee, Jones declined to comment about Rice's call for his resignation.
Asked about Rice's comment, Gov. Asa Hutchinson's spokesman, J.R. Davis, said: "This is a matter for the executive branch, and we are managing it."
"We have taken interim steps to remedy these problems," Davis said. "The audit is still ongoing. We are going to let the process play out. That's the way it should be."
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Jones, appointed by Hutchinson, started work as director on Jan. 13, 2015. He said in his written response to the audit that the Republican governor has been informed of Arkansas Legislative Audit's findings, and Jones will now obtain previous approval from the governor's office before confirming any out-of-state travel. He said his annual salary is $130,000.
"As the director, newly appointed in 2015, I acknowledge mistakes were made regarding out of state travel," Jones said in his response. "I relied on the expertise and advice of the administrative services manager [Becky Bryant of Sheridan], a 40-year employee, to guide me through the travel processes and act as my travel supervisor. However, I absolutely acknowledge that I have final responsibility to ensure compliance."
He said Bryant didn't advise him that what he was doing was improper before she was terminated in August.
Jones said the department will recover unallowable expenses and that he would repay $666 in travel expenses that auditors considered unallowable. Also, he said, the department has taken steps to establish internal controls to prevent future problems.
He said his state-paid trips were educational in nature to help him do his job more effectively.
Jones said a claim has been established in the state's accounting system for it to recoup 68 hours of annual leave, and 18 payments of $236.36 will be deducted from his pay before the end of fiscal 2017. The fiscal year ends June 30.
He said he was instructed by the governor's office to report his leave in a particular way, and he later learned that it was supposed to be reported another way.
Jones said Bryant disagreed with how the governor's office had instructed him to report his leave. He said the approval of the department's general counsel Denise Oxley is now required for him to take sick or annual leave.
Jones said he worked during the 57 hours questioned by auditors. "I'm not always in the office. But because I am not in the office doesn't mean I am not working," he said.
Bryant told lawmakers that she worked for 40 years at the department, and some of the employees at the department "referred to me as the TR [travel reimbursement] Nazi because I was so particular about the documentation that accompanied the travel reimbursements.
"I believe the reason [Jones] sits before you today in defense of findings of Legislative Audit is because he rarely ever communicated with me or asked questions, or he chose not to listen or heed the advice he was given with respect to the agency's own policies and procedures, related to processing leave requests, out-of-state travel authorization and travel reimbursements," she said reading from a statement.
"I don't know how in good conscience he can attack my integrity and plead ignorance or say he was inappropriately advised in any of these matters, when in most cases he had not discussed his travel plans with me at all," Bryant said.
Bryant said Jones fired her Aug. 5 after she questioned two of Jones' travel expense forms that he had turned in to her for reimbursement.
"I truly believe my termination was in retaliation because he felt I was trying to dive too deep into his business," she said. "Instead, I was trying to make sense of what I had and ensure there was sufficient documentation to satisfy an audit."
Jones later told lawmakers that he terminated Bryant because she jeopardized more than $1 million in federal grants, although the department didn't ultimately lose the grants. Afterward, Bryant said she did everything that she could to ensure that the grants wouldn't be lost.
Moore said the department didn't have adequate internal controls regarding authorization for Jones' out-of-state travel, and so authorization and the business purpose were not documented for five out-of-state trips by Jones. There was no process set up for the beforehand approval of Jones' travel, he said.
Moore said Jones took a trip at a cost of $1,817 from July 26-29, 2015, to the National Association of Governmental Labor Officials conference in Minneapolis, but that included $105 in unallowable hotel costs and $107 in unallowable mileage reimbursements.
Jones took a trip costing $773 from Sept. 24-29, 2015, to Washington, D.C., and Richmond,Va., to meet with various officials regarding labor matters, Moore said, but that included $550 in questionable travel costs, $96 in unallowable meal costs incurred on weekend days and $78 in unallowable taxi costs with most of the trips starting or ending between 10 p.m. and 4 a.m.
The travel reimbursement form showed that Jones lodged with relatives, Moore said. "Over a six-day period, only three one-hour meetings occurred, two of which were scheduled two days prior to the director's departure, giving the appearance that the director scheduled a personal trip and subsequently scheduled business-related [meetings]," the auditor said.
Jones took a trip costing $1,006 from March 2-6, 2016, to Oakland and San Jose, Calif., for meetings on various labor-related matters, but it included $748 in questionable travel costs and $129 in unallowable reimbursement for a rental car, Moore said. Moore said Jones stayed with friends, based on information from a staff member.
"Over a five-day period, only three meetings occurred that were scheduled nine days or less before the director's departure, giving the appearance that the director scheduled a personal trip and subsequently scheduled business-related meetings," Moore said.
Jones traveled at a cost of $1,662 from April 6-10, 2016, to Washington, D.C., for the American Bar Association National Symposium on Technology in Labor and Employment Law, but the trip included $97 in unallowable meal costs and $54 in unallowable taxi costs for nonbusiness purposes, Moore said.
Moore said a questionable $660 was spent on Jones' trip from Aug. 29-Sept. 1, 2016, to Kissimmee, Fla., for the Voluntary Protection Programs Participants Association conference.
Moore said Jones attended only one day of a four-day conference, and Jones said his schedule allowed for only one day of attendance and he went specifically to meet with "certain people."
"The names of these individuals were not provided, and the business purpose for the meeting with them was not documented. According to the director, the conference fee of $700 was waived because he was a 'first-time guest,'" Moore said.
The Legislative Joint Auditing Committee's Committee on State Agencies voted Thursday to recommend that the full audit committee meeting today refer the audit and sworn testimony from Bryant and Jones to Attorney General Leslie Rutledge's office. The audit already has been referred to Pulaski County Prosecuting Attorney Larry Jegley.
"My assumption is that even though this smells, that we'll trust the governor's office to see that it doesn't happen again," said a co-chairman of the Joint Budget Committee, Sen. Larry Teague, D-Nashville.
A Section on 12/02/2016