Report: Arkansas employees' checks docked after AG bumps pay beyond authority

(The Center Square) – Arkansas mistakenly paid state employees $1.3 million in February and had to recoup the money from those workers’ paychecks, according to a legislative audit finding.

Additionally, the audit showed that employees in the attorney general’s office exceeded their salary appropriation by over $37,000.

The Legislative Joint Auditing Committee heard the findings on Friday in a report reviewing the implementation of a 2% cost of living salary increase for state employees that Gov. Asa Hutchinson announced in February.

The salary increase was automatically applied to state agencies under the Uniform Classification and Compensation Act (UCCA). Non-UCCA agencies did not automatically receive salary increases but could choose to award the salary increase, according to the report.

The audit found Arkansas Code was not thoroughly followed in implementing the salary increases.

Arkansas Code dictates a state employee cannot receive compensation greater than what the General Assembly has established as the maximum pay for that position unless specific provisions are made by law. If an employee has already been compensated at the maximum level for their pay grade, they could receive the salary increase as a lump sum in the last pay period of the fiscal year.

However, the report said the Office of Personnel Management (OPM) paid lump sums to employees in February, not at the end of the fiscal year like Arkansas Code dictates.

In total, 22,452 employees who had not yet reached their approved maximum pay received a 2% salary increase to their base hourly rate, which resulted in a total cost of $21.3 million, the report said.

But the error was in paying over 1,200 employees one-time lump-sum payments totaling $1.3 million, which should have been paid out at the end of the fiscal year, the report said. OPM reversed the payments and rescheduled them to be paid at the end of the fiscal year.

However, the attorney general’s office requested that the lump-sum payments be reinstated to 36 of its employees as a cost-of-living adjustment, claiming “attorney general’s discretion,” the report said.

OPM then manually re-entered the payments to those employees, audit findings show. The change caused employees in the attorney general’s office to exceed their line-item salary appropriation by over $37,000, in conflict with the Arkansas Constitution, according to the report.

That fact became a point of discussion between the staff attorney for the auditing committee and AG Chief of Staff Brian Bowen.

When asked where the authority for “attorney general’s discretion” came from, Bowen replied: “Our position has been that we have regularly given raises and bonuses and employees throughout the history of this administration as well as other attorney generals.”

“That’s our problem with the AG’s office,” said Frank Arey, the staff attorney for the auditing committee. “They have not or cannot yet tell us what that other provision of law is that let them do this. They make reference to the AG’s discretion, but they never tell us what the basis for that discretion is. Is it in the constitution or the code or some court decision? We’ve not been provided with that, but we would love to have it. That’s our issue with the AG’s Office at this point.”

The next Joint Auditing Committee meeting is scheduled for June 2.

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