Employees at the state Department of Finance and Administration handle tax collecting, budgeting, alcohol licensure, vehicle registration and a list of other duties that has expanded under Gov. Asa Hutchinson.
Since the Republican was sworn into office in January, the department has absorbed the Arkansas Scholarship Lottery, the Arkansas Building Authority and the Arkansas Governor's Developmental Disabilities Council, which had operated independently for 43 years.
Larry Walther, director of the Department of Finance and Administration, said his 2,700-employee department -- because of its size -- can economize on the costs of administration, payroll, billing and more -- while also providing strong oversight.
The department, which has an annual budget for its operations of about $320 million, is also responsible for tracking the billions of dollars that state government collects and spends, helping ensure that the state never runs at a deficit.
"DFA has an outstanding reputation within state government," Walther said. "The men and the women who are in DFA just have a great reputation for getting things done."
The now-defunct Arkansas Lottery Commission saw lottery revenue decline, and some lawmakers said it needed additional oversight. Moving the Building Authority under the Department of Finance and Administration, Hutchinson said, eliminated redundant positions.
Moving the Developmental Disabilities Council was a matter of some urgency because the federal government had suspended its funding after criticizing its management, Hutchinson spokesman J.R. Davis said.
"There were some real problems over there, and the governor is committed to fixing those problems," he said.
The U.S. Department of Health and Human Services wrote a letter ordering the Developmental Disabilities Council to "cease and desist" dispersing federal money to projects on July 27. Three days later, the governor announced that the council was being placed under the Department of Finance and Administration.
The governor-appointed, 23-member council was established in 1972 and is responsible for identifying the needs of the developmentally disabled, educating the public about the needs of disabled people and distributing money through grants to community programs.
The letter from Washington said the council could no longer fund grants because of inadequate staffing, compliance problems and deficient governance.
"The governor is certainly aware of those problems now," Davis said. "The feds want to fix the grant process over there, and DFA has experience with grants, they have better resources."
Walther said his staff is ready to address the council's problems.
"Something had to be done. We have some expertise in [grants]," he said. "Eric Munson is responsible for that organization, and we're going to do everything we can to make him successful."
Munson is director of the council and was appointed by Hutchinson earlier this year. Previously he was a lobbyist for banks, small businesses and other entities.
He is the fourth director of the council in the past five years.
Davis said the council could not be placed under the Department of Human Services -- which operates programs for the developmentally disabled -- because the federal Developmental Disabilities Assistance and Bill of Rights Act of 2000 prohibits supervision of the independent council by any state agency that provides or pays for services for individuals with developmental disabilities.
Walther said it made sense for the Department of Finance and Administration to take over the council and the lottery since the department handles state money.
"We're in the business of being responsible for taxes and revenue generation, and so this was logical," Walther said.
While the council has 23 members and an estimated $1 million budget, it is dwarfed by the lottery in terms of money.
Lottery revenue has dropped for three consecutive years, and proceeds for scholarships have fallen from a high of $97.5 million in fiscal 2012 to $81.4 million in fiscal 2015, which ended June 30.
Rep. Chris Richey, D-Helena-West Helena, said it made sense to put the lottery under the Department of Finance and Administration.
"They handle the money," he said.
But, he said, that department hasn't made any significant changes since it took over the lottery nearly six months ago.
"One of my concerns about putting it under DFA is that change would be slow," he said. "I don't see what DFA brings to the table to improve the lottery, except some administrative cost savings."
However, Sen. Jimmy Hickey, R-Texarkana, said the Department of Finance and Administration stands a chance of fixing the problems in the disabilities council.
Hickey, who is also chairman of the Arkansas Lottery Commission Legislative Oversight Committee, said he's pleased with the lottery's progress since the Department of Finance and Administration took over.
"The governor can get in there with DFA and the lottery director, and can move things along faster if need be," he said. "We are definitely in a workout mode."
Only three lawmakers voted against the lottery's consolidation into the Department of Finance and Administration.
Rep. Joe Jett, D-Success, was one of them. He said his opposition stems from how the lottery was pitched to voters -- as independent from the legislative and executive branches.
"I just had heartburn," he said. "We pitched this to voters as one thing, and seven years later, turn around and do something totally different."
But that doesn't mean he's opposed to other sorts of consolidations.
"It needs to be done on a case-by-case basis," he said. "If we can save Arkansas taxpayer money -- and when you do it in a responsible manner -- I'm all for it."
The legislation consolidating the Arkansas Building Authority into the Department of Finance and Administration passed without any opposition during May's special legislative session.
The legislation also consolidated the Department of Rural Services and the Arkansas Science and Technology Authority into the Economic Development Commission, and the Division of Land Survey into the Arkansas Geographic Information Office.
Hutchinson estimated that combining the agencies would save $10 million over five years.
"We're looking for economies of scale and providing efficiencies and doing more with less," Walther said. "We can absorb personnel costs, administration costs, billing costs."
Davis said the governor isn't preparing for any other transfers to the Department of Finance and Administration.
"But the governor is always looking for efficiencies and has asked agency heads to also look at efficiencies," he said. "That's the name of the game right now."
Current and future consolidations won't affect requests filed under the Arkansas Freedom of Information Act, Davis and Walther said.
"We're pretty much an open book," Walther said. "The only place that it gets a little more problematic is in tax records, just because personal tax returns are private. Otherwise, everything is open to the FOI."
Metro on 08/16/2015