Agency paper: Save if 8 lottery jobs cut

Eight employees at the Arkansas Scholarship Lottery could have their positions eliminated, reducing salaries by more than $400,000 a year, if the lottery becomes part of the Arkansas Department of Finance and Administration, a department document states. The employees range from the department's spokesman to a postal courier.

The undated document, called "Positions for consideration," says their duties could be handled by other lottery and finance department employees.

The Arkansas Democrat-Gazette obtained a copy of the document Friday in response to a Freedom of Information Act request.

The lottery's annual salaries for 78 employees total nearly $4.2 million, according to a fiscal 2015 budget the lottery submitted to the Legislature in September. The lottery now employs 72 workers, according to finance department records.

State Sen. Jimmy Hickey, R-Texarkana, has proposed legislation that would create an Arkansas Lottery Division in the finance department, require the governor to appoint the lottery director, and abolish the nine-member Lottery Commission. Hickey amended the bill to place the lottery in the finance department rather than the state Department of Higher Education, after Republican Gov. Asa Hutchinson said the lottery would fit better in the finance department.

Tim Leathers, deputy director for the finance department, said Friday that the document created by the department's internal auditors doesn't reflect "any conclusion" by finance department officials and is simply the result of a "fact-finding mission" by internal auditors.

"It's just auditors looking at what efficiencies are there if we were handling [the lottery] administratively," he said. "It's just if we were going to organize it, where we might find efficiencies."

Paul Louthian, the finance department's accounting administrator, said the department's internal audit administrator, Rickey Quattlebaum, created the document about 2½ weeks ago after Quattlebaum and auditor Margaret Garrett consulted the lottery's internal auditor, Matt Brown.

"We haven't given anyone outside [the finance department] the document," including the governor's office, Leathers said.

Hutchinson spokesman J.R. Davis said Friday that Hutchinson "has not seen the document."

"The governor will work with the Legislature on specifics, but he supports the efforts of Sen. Hickey's bill," Davis said.

Bishop Woosley, who has been the lottery's director since February 2012, said in a written statement that "it is my understanding that the governor has not seen this list."

"In light of that, I think it would be premature for me to offer any comment."

Hickey said he's not seen the list of eight employees who were the focus of the one-page finance department brief.

The document says the duties of the lottery's public and legislative affairs director, Patrick Ralston, "could be handled by the lottery's director and this position eliminated." Ralston's salary is $89,847 a year. Woosley makes $165,000 a year.

The duties of human resources director Valerie Basham and human resources generalist Gwen Armbrust would be handled by the finance department's Office of Administrative Services, and "these two positions could be eliminated," according to the document. Basham earns $67,834 a year and Armbrust is paid $46,840 annually.

Accountant Demetria King's duties would be handled by the Office of Administrative Services and "this position could be eliminated," the document says. King is paid $46,257 a year.

Accountants Undrea Ellis and Michelle Gladden "should be evaluated for possible elimination of one or both positions" because their duties could be performed by the finance department's Office of Administrative Services. Ellis is paid $51,195 a year; Gladden's salary is $44,137.

Payroll specialist Ryan Hackey's duties will be largely moved to the department's Office of Administrative Services and thus, "this position is subject to being eliminated," the document said.

Postal carrier Rosalynn Bogard's position "could be eliminated as DFA has their own couriers that deliver mail between the buildings used by DFA." Hackey is paid $29,545 a year; Bogard makes $33,119.

"The total salaries for personnel in the eight listed positions are $408,774," the document notes.

Three weeks ago, Hickey, who has been a critic of the state lottery, proposed a bill that would abolish the Lottery Commission, which hires and supervises the lottery director. The governor would appoint the director instead.

Hickey has said he proposed the bill because he doesn't believe that the Lottery Commission has been either effective or efficient since it was first created in 2009.

"I think that our best chance to get this turned around is under our governor's direction," he said.

The lottery's revenue and proceeds for college scholarships have dipped during each of the past two fiscal years.

The lottery has helped finance college scholarships for more than 30,000 students during each of the past five fiscal years. In recent years, the Legislature has twice cut the size of the scholarships for future recipients partly because of net proceeds falling short of the lottery's initial projections.

Last month, a consultant recommended by Hickey told lawmakers that the lottery has too many scratch-off and draw games, lags behind its peers in per-capita sales and profits, pays more than its peers do to its vendors and isn't perceived as trusted.

"The overriding strategy must be to move the lottery away from a gambling organization to a consumer goods sales and marketing organization," Philadelphia-based Camelot Global Services Inc. said. It recommended that the governor appoint a majority of the Lottery Commission. The governor, House speaker and Senate president pro tempore each appoint three commissioners under current law.

Woosley has said the Lottery Commission has implemented or discussed many of the recommendations made by the consultant.

Last July, Hutchinson said the state lottery "has become an important funding source for student scholarships, but we have seen problems arise from the beginning."

"These problems can be more effectively handled by making the Arkansas Scholarship Lottery program a state agency that is accountable to the governor's office along with continued oversight by the Legislature," Hutchinson said.

Metro on 01/31/2015