The Arkansas Legislative Audit (ALA) released a report Friday finding improper implementation of Gov. Asa Hutchinson’s 2% salary increase for state employees, which was announced in February.
In a letter to cabinet secretaries in February, Hutchinson authorized a 2% increase for state employees; he cited a 6% increase in inflation for needing the pay raise.
During a meeting of the Arkansas Legislative Joint Auditing Committee last month, Frank Arey, legal counsel for the Arkansas Legislative Audit, explained to lawmakers that the governor has the authority to increase salaries; the concern with the salary increases has to do with the implementation.
According to the report, the state’s Office of Personnel and Management (OPM) should have given the pay raises in June, instead of including it in Feb. 25 paychecks. At the time the inquiry was approved into the pay raises, Arey said the payments should have been made in June since that is when the fiscal year ends.
In an email to KUAR News in April, Alex Johnston, chief of staff for Department of Transformation and Shared Services which oversees the OPM, said March 11 paychecks were adjusted to correct the $1.3 million dollars’ worth of mistakes on the Feb. 25 payroll.
During the Legislative Joint Auditing committee meeting on Friday, officials from the ALA argued salary increases should have been calculated as 2% of the employees’ salary from February to June, instead of the full year, since the governor said the increase is effective on Feb 6.
Kay Barnhill, state personnel director, said changing the increase to prorate for those five months instead of the whole year would be a challenge.
“It’s just a really negative impact on those people who may have spent and they thought they were getting $500. They might have spent the 500, now they’re getting 100,” Barnhill said.
Sen. Kim Hammer, a Republican from Benton and Sen. Linda Chesterfield, a Democrat from Little Rock, shared concerns with Barnhill that there were employees who saw hundreds of dollars pulled from a single paycheck to correct mistakes made in the Feb. 25 paychecks.
Barnhill told lawmakers that OPM worked with employees to create a plan to rescind the money, if the employee gave a reason why they couldn’t have the amount corrected in one paycheck.
Attorney General’s office
The report by the ALA also questions the legal basis of the salary increases in the Attorney General’s office.
Thirty-five employees at the AG’s office received lump-sum payments that were rescinded by the OPM. The attorney general’s office requested a reversal to reinstate the payments.
The audit found all 35 employees received the 2% raise, which resulted in the office exceeding appropriations for salaries by about $37,500. Brian Bowen, chief of staff for Attorney General Leslie Rutledge, says she has the authority to make these appropriations.
“The simple answer is our constitutional authority to give raises and in our appropriations we are not prohibited from doing this,” Bowen said.
According to the report, auditors wrote they couldn’t identify any laws that would allow the attorney general to increase employee salaries past the maximum line-item appropriations. Arey said the AG’s office could have made the increases under state law if they didn’t exceed the maximum appropriations amount.
“Our issue at this point with the AG’s office is ‘ok if you’re not using this [state law] then what are you using?’ And we still haven’t had a citation to anything other than it was the AG’s discretion,” Arey said.
In a letter responding to the report, the Attorney General’s office wrote the AG has the authority to increase salaries since the office is exempt from the Uniform Classification and Compensation Act, which gives the Office of Personnel and Management oversight of salaries.
