Legislative audit finds unaccounted receipts and questioned purchases in Pine Bluff; mayor orders forensic review

Legislative audit staff told the Legislative Joint Audit Committee that the City of Pine Bluff’s 2024 financial audit carried unmodified opinions on its major financial units but uncovered management-letter findings involving the mayor’s office, parks and recreation, and the finance director.

Auditors said their review identified $179,629 in manual receipts that could not be traced to the city collector’s deposits, $448,415 in purchases judged unallowable (including holiday decorations, personal items, gift cards and electronics), and about $13,000 in questionable purchases such as snacks and office decor. The report said invoices from some vendors appeared altered to conceal items and shipping addresses, several vendors used for questionable purchases were not approved by the city council, and three lawnmowers were unavailable for inspection. The management letter referred two matters to prosecuting attorneys and the attorney general and certified one matter to the governmental bond board; auditors also noted the Arkansas State Police is investigating aspects of the parks transactions.

“Once we discovered these irregularities that what we saw evolve into fraud, waste and abuse, we immediately called the authorities and met with the authorities as well as state auditors,” Mayor Vivian Flowers said. She told the committee she had appointed a parks director who quickly uncovered problems, that two employees with direct access to the affected activity were terminated, and that city officials handed evidence to law enforcement.

Flowers said the city contracted UHY, a forensic accounting firm, to review seven years of sales-tax fund activity and to examine departmental operations for 2023–24. “That forensic audit will cover the 2017 sales tax fund activity as well, and that's for seven years,” Flowers said, adding the city also performed internal reviews before the forensic team arrived.

Finance Director Gina Devers said the city is implementing standardized operating procedures and a three-day rule for deposits so checks received on Monday are deposited by Thursday. “Those procedures are being implemented and documented across all the departments,” Devers said, adding that documented processes will help avoid disruptions when staff leave unexpectedly.

Parks and Recreation Director Purdy Holman said she immediately moved to reduce reliance on manual receipts after taking the job. The department has shifted to the New World system (now maintained by Tyler Technologies), eliminated on-site cash at the RV park, added QR-code pay.gov options and trained staff on standard operating procedures. “We eliminated cash at the RV park…once we enter that information into the system, I can't do anything to change it,” Holman said.

Legislators asked whether nonprofit partners handle park revenues and whether prosecution was underway. Holman said the city has informal partnerships (for example, with the Boys & Girls Club) that do not handle money. Mayor Flowers said the matter remains under investigation with the Arkansas State Police and that the city has met with the prosecutor’s office; she did not say whether charges have been filed.

The committee moved to file the Pine Bluff audit report and approved the motion by voice vote. The audit presentation noted the city received a clean opinion on the financial statements even while management-letter issues require follow-up review and potential legal action.

The committee also reviewed routine committee reports from the executive committee, counties, education and state agencies earlier in the meeting. The Pine Bluff management-letter findings and the city’s steps to hire a forensic auditor and strengthen internal controls are expected to be followed up at the next audit cycle and may prompt additional reporting to prosecutors and the bond board.