Gov. Asa Hutchinson has asked the directors of state agencies under his control to place on hold decisions on what he described as "any anticipated, yet significant, new or renewed financial or contractual commitments currently under review" until his reorganization has been implemented.
"This should include any commitments such as large purchases or lease renewals," the Republican governor wrote in a one-page letter dated last Friday to agency directors.
"This will maximize the ability of our Cabinet secretaries to make the best decisions for the department, while also meeting the mandate to achieve efficiencies and cost reductions," Hutchinson said. "Any pending decisions you determine must be finalized by the end of this state fiscal year should be referred to my office for approval."
Fiscal 2019 ends June 30.
Hutchinson's plan to reorganize state government by reducing the number of agencies reporting to him from 42 to 15 will become law July 1 under Act 910. On April 11, the governor appointed a 16-member transition team, chaired by the governor's chief transformation officer Amy Fecher, to help with the implementation of Act 910.
Act 910 will establish the following Cabinet-level departments: agriculture; commerce; corrections; education; energy and environment; finance and administration; health; human services; inspector general; labor and licensing; military; parks, heritage and tourism; public safety; transformation and shared services; and veteran affairs.
The governor's office was asked by a reporter whether there is any particular threshold for significant financial or contractual commitments that should be placed on hold under the governor's directive and, if not, how any director would figure out how to comply with what seems to be a fairly sweeping directive.
In response, Hutchinson on Tuesday said in a written statement that his "letter is designed to assure maximum flexibility for the new Cabinet departments that come into existence on July 1.
"No problem has been experienced, but this is needed specifically for building lease renewals for the agencies. Any contracts issued in the normal course of business should not be impacted and will be quickly approved for execution," the governor said.
Asked what are the largest projects placed on hold by the state Department of Finance and Administration as a result of this directive, department spokesman Scott Hardin said Tuesday in a written statement that the department "has not yet made any determinations as the letter was received [Monday].
"These decisions will be made over the next several days," he said.
The same question was put to the Department of Human Services. Spokesman Amy Webb replied in a written statement, "DHS has many significant financial and contractual projects ongoing.
"After having conversations with the Governor's office, the only areas we'd put new projects on hold would be for the Division of Services for the Blind, the state-pre-K program, and AmeriCorps -- the three areas that will be transferring out of the agency. At this time, I don't know of any large projects that are being put on hold."
The Arkansas State Police also was asked about large projects. Spokesman Bill Sadler replied in a written statement, "This morning Colonel [Bill] Bryant asked our fiscal staff and deputy directors to prepare a list of projects, that may meet the criteria identified in the third paragraph, (i.e. significant new or renewed financial or contractual commitments).
"There are ongoing internal discussions to identify any items or services, and if any are identified, determine where the department is in the process of moving forward or if the projects can be placed on hold," Sadler added.
Arkansas Economic Development Commission spokesman Brandi Hinkle said, "No projects are on hold.
"We do not anticipate any large purchases or lease negotiations. AEDC will adhere to the memo as we move towards the end of the fiscal year and transformation is put into place," she said.
Hutchinson has estimated the reorganization effort could save about $15 million a year starting in fiscal 2021, which starts July 1, 2020.
In the regular session that adjourned a week ago, the Legislature and the governor enacted bills that would boost the fiscal 2020 general revenue budget by $124.1 million to $5.75 billion, with most of the increase targeted for the Department of Human Services and the Public School Fund.
Hutchinson's letter dated Friday to directors of state agencies also asked them to prioritize requests from the transition team and to provide timely responses.
"They have committed to honor your time and attention by engaging with your agency as efficiently as possible," the governor said. "As directors, you know your agency better than anyone else, and ideas from you and your team will be critical to their work."
When he signed Act 910 on April 11, Hutchison said his 15 Cabinet secretaries "will be announced most likely within the next 30 days."
Asked whether the governor plans to announce the Cabinet secretaries next week or some other time, Hutchinson spokesman J.R. Davis replied in a written statement that "announcements on Cabinet secretaries will not be made until late May."
Metro on 05/01/2019
Print Headline: Governor tells agencies to postpone contracts, purchases