LITTLE ROCK — The Little Rock Municipal Airport Commission on Tuesday unanimously accepted an audit that found “two significant deficiencies” at the state’s largest airport, after spending much of a nearly three-hour meeting discussing it.
“This is as thorough an audit that I’ve been a party to in my five years on the commission,” commission Chairman Virgil Miller said, noting that most discussions of annual audits take little more than five minutes. “It was very necessary; it was a great discussion.”
Ron Mathieu, the executive director of Little Rock National Airport, Adams Field, said he has implemented some of the auditors’ recommendations and plans to introduce more in the coming weeks. Those changes, he said, will include staff changes and additional resources. Separately, he has given up use of airport credit cards, a move commission member Tom Schueck labeled “ludicrous.”
“Anybody that has a company has problems with credit cards,” Schueck said. “The most important thing is not limiting credit cards, but monitoring them.”
Others commission members agreed. “I don’t think it’s fair or reasonable to expect” senior staff members to “use their own credit card” for airport business, said commission member Wesley Clark. “If it’s official business, it can be done on the official credit card.”
But Mathieu said it was a prudent response, given the public perception of the airport’s finances and the audit, which uncovered shortcomings in the airport’s fiscal controls.
“What the audit shows is we haven’t gone far enough,” he told the commission. “My goal is to have no findings.”
Nonetheless, the “basic financial statements” of the airport were found in “excellent shape,” auditor Mike Schaufele, a partner at the Little Rock accounting firm of L. Cotton Thomas & Co., told the commission.
But a “risk assessment,” in which auditors analyze financial statements and interview employees, found changes from previous years in the way disbursements were monitored and managed, Schaufele said. A decentralization of management left more discretion to managers, which gave them the ability to override the controls. Mathieu said that was partly to allow the airport’s finance workers to concentrate on implementing a new electronic purchasing system that is supposed to be in place by the end of the year.
“Prior to decentralization, everything ran through Carol’s office,” Schaufele said, referring to Carol Snay, the airport’s finance director. “With decentralization, she didn’t feel it was her responsibility.”
Schaufele said he recommended the commission reinstall Snay’s staff as an extra layer of accountability involving disbursements, which Mathieu said amounted to requiring four signatures for a disbursement rather than the three required now.
“It sounds like a little overkill,” said Schueck.
“At the same time, we are dealing with perception,” Schaufele responded.
Snay also will meet periodically with the commission’s finance committee chairman, currently former Little Rock Mayor Jim Dailey, said Schaufele, who described Snay’s role as that of an internal auditor. The airport isn’t a large-enough organization to employ a separate internal auditor, he added.
The audit report is the latest chapter in a review of the airport spending practices that grew out of revelations that airport staff paid $40,000 to Little Rock Christian Academy for a football-field advertisement promoting the airport’s website. One of Mathieu’s two sons attends the private school in west Little Rock.
The Arkansas Times, a weekly newspaper, first reported the donation to the school on its website. The school returned the money in November after Mathieu met in executive session with the commission and publicly apologized for what he called a “serious error in judgment.”
Mathieu also reimbursed the airport more than $1,600 in expenses, including for a birthday dinner for commission member Jesse Mason and his wife, that were allowable under the old policy but would be prohibited under the new policies.
In December, the commission tried to quell questions over spending and travel practices at the airport when it approved a series of measures to rein in staff spending. The proposals included cutting in half, to $25,000, the amount Mathieu can authorize in spending without obtaining previous approval from the commission. The measures also took aim at increased supervision of advertising spending.
In a separate letter accompanying the audit, the accounting firm also said the airport may have violated state law in presenting gifts to two departing commission members. The gifts - music boxes for Carl Johnson and Jimmy Moses - cost a little less than $500 each, but the state law limits to less than $100 the value of gifts to public servants. But Carolyn Witherspoon, the airport attorney, said that based on research with the city attorney’s office, the attorney general’s office and the state Ethics Commission, it was unclear whether the law applied to “retired” public servants, such as commissioners’ whose terms had ended.
But Schueck and other commission members said they didn’t want any gifts and certainly nothing more than $100.
“I don’t need a gift,” said commission member Bob East. “Let’s just say not to have a gift. We want to do the right thing.”
Arkansas, Pages 9 on 05/18/2011