LITTLE ROCK — A legislative panel Thursday OK’d two legislators’ requests for an audit of the Arkansas Forestry Commission, which is laying off 36 employees today as a result of a $4 million shortfall.
The Legislative Joint Auditing Committee’s Executive Committee approved audit requests from Rep. Kim Hammer, R-Benton, and Sen. Missy Irvin, R-Mountain View, who have emerged as two of the leading critics of Gov. Mike Beebe’s administration’s handling of the situation at the commission.
Hammer and Irvin told lawmakers that they want an unbiased accounting of the commission.
Sen. Bill Pritchard, co-chairman of the auditing committee, said, “with all the back and forth that has been going on in the newspapers - with he said, she said [about the shortfall] - I think it is appropriate that we find out the facts.
“Once we know all the facts, then we the Legislature and the executive branch will be in a position to make appropriate decisions to make sure that [the commission’s] mission is carried out,” said Pritchard, a Republican from Elkins.
Beebe, a Democrat, said Wednesday that he has told legislative leaders that he wants the audit division to find out who was aware of and responsible for erroneous official reports that masked the commission’s slide into the shortfall and its misuse of federal funds.
“I am happy for an independent organization to make that determination,” Beebe said. “We are trying to make that determination, too. I am trying to personally make that determination.”
But state Rep. Bryan King, R-Green Forest and a third leading critic of the administration’s handling of this matter, said Beebe “needs to point the finger at himself for this whole problem.”
Beebe spokesman Matt DeCample countered that the governor and the state Department of Finance and Administration didn’t fail to do their jobs, and the governor’s office has offered for more than a month to meet with King to answer his questions, but King hasn’t accepted the offer.
King said, “That’s funny because I have been waiting on them to set up a phone conference after looking at the governor’s schedule. Good grief. I have been waiting on the governor’s staff to e-mail answers to questions about the e-mails that they won’t answer.”
Several weeks ago, the commission announced it would lay off 36 employees because it projected that its costs will exceed available funds by $4 million.
At that time, State Forester John Shannon and Beebe said they only recently became aware of the extent of the commission’s fiscal distress though they knew that the timber industry was struggling during the housing-market downturn and that revenue from a timber severance tax on which the commission relies was lower than in previous years.
Shannon and his former chief fiscal officer, Robert Araiza, later told lawmakers that Beebe discouraged the commission from holding a meeting of industry representatives in 2010 to discuss a tax increase as a possible solution to the fiscal problems. A Beebe spokesman said the decision not to hold the meeting was practical, based on the strong anti-tax climate at the time and the fact that it involved an industry hit hard by the recession.
No legislator has announced any support for a tax increase since then.
Richard Weiss, director of the state Department of Finance and Administration, has maintained that the department learned in November that its understanding of the commission’s financial situation was wrong. That was after the commission asked for additional money.
The department subsequently found that the commission had erroneously included certain federal funds in its operating budget. The department’s accountants found that for the past four years the commission included federal funds in the income it told the department it had available to operate on, but most of the federal money was not supposed to be used for that, according to Weiss.
Hammer, who requested an audit in a letter dated Dec. 20 to the auditing committee’s co-chairmen, told the executive committee Thursday that an audit “will produce some unbiased perspective.
“Numbers don’t lie, and I think it will be a good point of reference for people of all political parties to be able to go to and help to make decisions regarding the future of the Forestry Commission, not only the financial, but also the personnel matters, as it would fall under their jurisdiction, ” he said.
Irvin, who requested an audit in a letter dated Wednesday to the auditing committee’s co-chairmen, told the executive committee that “we owe it to the people of the state of Arkansas to really take a good look at what happened and to know fully what happened.”
The division will produce “unbiased findings,” she said.
Legislative Auditor Roger Norman told lawmakers that Beebe provided some information to him regarding the commission last week, and the governor “is very concerned about the Forestry Commission and determining what has happened.”
Hammer said he wants the division to work on the audit “as quickly and expeditiously but thoroughly as possible, so we could have some information” for the fiscal session that begins Feb. 13, especially in light of Beebe’s request for a supplemental appropriation of roughly $2.7 million for the commission.
Norman said the division was gathering information for the audit even before Thursday’s meeting.
“We hope to put the resources necessary to get the report out sometime during the fiscal session,” he said.
Norman said the division may have four to six employees working on the audit at one time in some form or fashion, and probably will have at least two of them working full time on it.
Beebe’s request for a $2.7 million supplemental appropriation from unrelated state surplus funds is aimed at helping the commission get through the rest of the fiscal year and repaying federal grant money that the commission improperly used by spending it for payroll and other operating expenses.
Shannon, who has been in charge of the commission since 1994, has said he accepts official responsibility for the erroneous reports but that he learned about the incorrect reports in November, and the mistakes had been happening for four consecutive years. Araiza has contended that all his key decisions were known to and accepted by Shannon or other officials.
Beebe acknowledged Wednesday that some lawmakers have told him he should fire Shannon.
He declined to speculate about Shannon’s future.
“I work at the pleasure of the governor, so as long as I have the governor’s confidence, I’ll continue to be the state forester,” Shannon said in an interview at his office Thursday morning when asked about whether he should remain in the job.
“I do think it is important now to have somebody with some institutional knowledge of this place to push us through these problems. I am pretty determined to push us through these problems,” Shannon said.
Asked whether more layoffs will result if the Legislature rejects the governor’s request for a supplemental appropriation for the commission, Shannon said he might be able to use employee furloughs in lieu of further layoffs before the end of the fiscal year.
But, he added, “I am not sure I can furlough enough to cut $2.7 million by the close of business June 30.”
Front Section, Pages 1 on 01/13/2012