State Treasurer Dennis Milligan's office spent $4,293 in state funds for two catered events and meals for its employees, $839 for gifts for its employees and $813 in personal purchases without a reasonable business purpose, a state auditor told lawmakers Thursday.
Milligan's office made these purchases between June 2015 and February this year. The office has been reimbursed for the gifts and personal purchases by a handful of officials in the office, said Deputy Legislative Auditor Jon Moore. About $1,080 of the $1,652 paid back to the state was reimbursed on June 13, according to Arkansas Legislative Audit records.
Arkansas Code Annotated 19-4-2103 bars a state constitutional officer or his employees from spending for personal use any funds appropriated by the General Assembly for the maintenance and operation of the office, Moore said in his report on an audit of the treasurer's office for the fiscal year that ended June 30, 2016. These appropriated funds are required to be spent only for state official business, he said.
The $4,293 spent by the treasurer's office on two catered events and meals for its employees included $3,728 for Christmas catered events in 2015 and 2016, and $565 spent on office-furnished meals, Arkansas Legislative Audit records show.
Regarding the food items cited in the audit, Milligan said in a letter to Arkansas Legislative Audit that "this office was under the impression that the expenditures at issue constituted a legitimate expense for this office.
"We now know that Legislative Audit takes a differing view. We respect Legislative Audit's position and will refrain from making such purchases in the future," Milligan wrote in his letter dated Aug. 1 to "To Whom it May Concern."
As to the personal items identified in the audit, Milligan said "those amounts were previously reimbursed to the state."
Milligan said his office also "has instituted a new process whereby approval from a supervisor and a chief deputy treasurer are needed before items can be purchased."
He noted in his letter that "we appreciate the work and duty of Legislative Audit to ensure the proper and responsible use of state funds in the administration of state agencies.
"I will continue to be a good steward of the taxpayers' funds and implement whatever processes are necessary to accomplish that task," Milligan wrote.
Chief Deputy Treasurer Jason Brady reimbursed about $755 to the office, and fellow Chief Deputy Treasurer Grant Wallace paid back about $448 to the office, Moore said after a meeting of the Joint Legislative Auditing Committee's State Agencies Committee.
Milligan reimbursed about $351 to the office, while former Chief of Staff Jim Harris paid back about $52 and Chief Operating Officer Gary Underwood reimbursed about $45, Moore said. Because of rounding, the numbers equal $1,651.
Appearing alongside his chief legal counsel, T.J. Fowler, Milligan told lawmakers that he had no further comment about the audit's findings beyond his letter "unless there is some questions."
Sen. Trent Garner, R-El Dorado, was the only lawmaker at the meeting to ask a question of Milligan.
"What I would like to hear in more specific detail is do you think that buying personal gifts and ... personal purchases are allowed in the office, even if it goes through this approval process, because that seems to be the crux of this issue," Garner said. He was referring to the process of requiring the approval of a supervisor and chief deputy treasurer for items to be purchased.
"What I want is an assurance in the future that these kind of items will not be approved for purchase by your office," Garner said.
"I think you have that assurance, sir," Fowler said.
The office's spending of $839 for gifts for employees included $632 for 35 state Capitol Christmas ornaments for staff members and $207 for five ink pens for the office's executive staff members, Arkansas Legislative Audit records show.
The office's spending of $813 for personal purchases included $765 in "Treasurer of State personalized leather items: 2 belts with metal name plates, luggage tag, checkbook cover, mouse and desk pad with personalized desk plate," and $48 for miscellaneous items including Listerine, lint roller, shoe polish, lip balm and breath strips, according to audit records.
Legislative Audit was critical of the treasurer's office a year ago over other spending.
In October 2016, Legislative Audit said Milligan's four-year, $450,000 contract with a company to provide a digital financial literacy course for students in grades four through six didn't appear to be within the scope of his office's duties under the Arkansas Constitution.
At that time, Milligan said he disagreed with auditors' concerns about his office's contract with EverFi Inc. of Washington, D.C.
In November 2016, Milligan shifted the program to under the umbrella of Arkansas' 529 college investing plan, Milligan spokesman Stacy Peterson said Thursday. The 529 program is governed by a board including the treasurer, executive director of the Arkansas Teacher Retirement System and the director of the state Department of Higher Education, Peterson said.
Milligan has been treasurer since January 2015. He's a former Saline County circuit clerk and a former chairman of the state Republican Party.
The treasurer's office manages more than $3 billion for the state. Interest earnings on that money have increased since Milligan became treasurer. The treasurer also serves on various state boards, including the Arkansas Teacher Retirement System's board of trustees and the Arkansas Public Employees Retirement System's board of trustees.
In September, Milligan announced that he is seeking re-election to his second four-year term in the 2018 election. No one else has announced their candidacy for the treasurer's office.
For the 2018 election, the filing period for state and federal offices will be Feb. 22-March 1. The primary will be May 22, and the general election will be Nov. 6, 2018.
A Section on 11/03/2017