FAQ

Treasurer FAQs

What is “excess commission” and is the term actually found in Arkansas code? If so, what is the basis for calculating and distributing “excess commission” and who is responsible for seeing that the task is performed?

When the term “excess commission” is used in the arena of Arkansas county government reference is being made to the amount of commission in excess of the level of commission it takes to cover the expenses of the county collector and county treasurer. For example, if a county collector earns $250,000.00 in annual commission and the cost for the operation of the office for that year is $175,000.00 the excess commission is $75,000.00. The same principal applies concerning the county treasurer.

Arkansas Code Annotated 21-6-302 and 21-6-305 are the primary commission codes for county treasurers and county collectors respectively. These codes provide the commission formula to be charged against the funds coming through the hands of these county constitutional officers, as well as any restrictions, exclusions or anomalies to the normal commission structure.

Until recent years, the term “excess commission” was not found in the Arkansas Code. However, it was dealt with in case law dating back to the early 1900’s and in Attorney General Opinions. Since 1997 the term “excess commission” has been added to four Arkansas codes – three of those additions were made in 2009 and none of them define the term nor do they deal with the calculation or distribution of the excess commissions.

The term “excess commission” or “excess commissions” can be found in the following Arkansas codes with the term inserted by the referenced Arkansas Act:

  • A.C.A. 26-36-209(d) – Act 213 of 1997
  • A.C.A. 6-20-2305(C)(ii)(a) – Act 1186 of 2009
  • A.C.A. 6-20-2303(17)(A)(iv) – Act 1397 of 2009
  • A.C.A. 26-80-101(3)(D) – Act 1397 of 2009

The prevailing authority, for many years, concerning “excess commissions” is Attorney General Opinion No. 78-112 issued during the tenure of Bill Clinton as Arkansas Attorney General. This opinion was based on: (1) case law; and (2) constitutional principal. This is an old AG Opinion – but it has never been refuted or overturned in a court of law…..so it stands as the easily accessible guide concerning “excess commissions” of county treasurers and collectors. It concisely summarizes the case law and constitutional principal by which counties have handled excess commissions for decades.

At least five (5) court cases were cited in AG Op. No. 78-112 as well as Article 16, Section 11 of the Arkansas Constitution which provides that, “No tax shall be levied except in pursuance of the law, and every law imposing a tax shall state distinctly the object of the same; and no moneys arising from a tax levied for one purpose shall be used for any other purpose.” In summarizing the opinion the Attorney General said, “From the foregoing decisions and the cases cited we are of the opinion that the excess commissions over the operating expenses of the collector’s and treasurer’s office should be returned to the taxing units pro rata.” Of course, we know and understand that the Treasurer’s office commissions some accounts that are not taxing units – but nevertheless each account commissioned should get their pro rata share of the excess.

To prorate or pro rata is defined by Black’s Law Dictionary – “to divide or distribute proportionately; according to an exact rate”. In other words, each taxing entity or fund account that is commissioned will receive its share of the excess commission based on that fund’s percentage of the whole commission. Although there is more than one mathematical way to arrive at the correct conclusion – here is an easy way to make the calculation: Total commission earned in accordance with A.C.A. 21-6-302 or A.C.A. 21-6-305 less the actual office expense of the particular office = the Excess Commission. Divide the excess commission amount by the total commission earned (carried to at least 9 places). This factor will be used to multiply against the commission amount charged each entity to calculate each entity’s share of the excess commission. Here is a simplified example:

Total Treasurer or Collector Commission $224,610.50

Less Total Treasurer or Collector Office Expense $195,307.10

Excess Treasurer or Collector Commission $ 29,303.40

Excess Comm $29,303.40 / Total Comm $224,610.50 = .13046318

County General$25,305.25 X .13046318 = $3,301.40

Road $22,305.25 X .13046318 = $2,910.01

County Library $18,000.00 X .13046318 = $2,348.34

City #1 $ 5,000.00 X .13046318 = $652.31

City #2 $ 3,000.00 X .13046318 = $391.40

School #1 $90,000.00 X .13046318 = $11,741.69

School #2 $33,000.00 X .13046318 = $4,305.28

School #3 $28,000.00 X .13046318 = $3,652.97

Excess Commission $29,303.40

Now we get down to the question of whose responsibility is it to calculate and distribute the excess commissions. Although you will find it no where in “black letter law” – the same AG Opinion which we have referenced in answering these questions, AG Op. #78-112, says that it is the responsibility of the county treasurer to calculate and distribute the excess commissions. The Attorney General opined, “Since according to Arkansas Statute 84-1401[A.C.A. 21-6-302 - this was prior to the laws being codified and referenced as codes – circa 1987] all funds received by the various county officers including the County Treasurer and County Collector are required to be paid into the treasury, it would appear that the responsibility of returning the excess commissions to the respective units from which they were assessed would inure to the County Treasurer."

When a county receives “unclaimed property proceeds” from the Auditor of State’s office, which county fund should it be receipted to, how can the money be used, and does the county have any future liability for the unclaimed proceeds?

You will find the Unclaimed Property Act codified in Arkansas Law as A.C.A. 18-28-201 through 18-28-230. As you read this code section you will note that after a county (any office or department of county government) submits “unclaimed property” to the State of Arkansas the State tries to find the lawful owner of the property. At least one time each year the State transfers to the treasurer of the reporting county all funds collected from that county that have not been claimed and that have been held for a full three (3) years at the state level [A.C.A. 18-28-213(c)(i)].

The funds received by the county treasurer are to be deposited into the general fund of the county. The county may use the funds for any purpose for which it may use general revenues – which is any legal county expense [A.C.A. 18-28-213(c)(ii)(iii)].

After the State remits the “unclaimed property” from the Unclaimed Property Proceeds Trust Fund to the county, the State is released from any indemnity and the liability of payment to the rightful owner becomes a responsibility of the county. The county receiving the funds must maintain an accounting of the funds in perpetuity, unless payment upon a valid claim is made. If the rightful owner or the owner’s heirs or assigns ever appear and petition the county for the return of the funds, after providing proof of ownership, the county has to pay the rightful owner from the general fund of the county. “Proof of ownership” is defined in the law. The law says that “proof of ownership means a finding by a court of competent jurisdiction that the person petitioning the county is, in fact, the rightful owner, heir or assignee” [A.C.A. 18-28-213(B)(i)(ii)(iii)(iv)].

It is unusual for a claim of ownership to surface after the “unclaimed property” comes back to the county. By then, both the county and state have exercised “due diligence” in trying to find the rightful owner.

Note:The disposition of “unclaimed” or “abandoned” mineral proceeds is handled separately under A.C.A. 18-28-401 through 18-28-403.

All mineral proceeds that are owed by the holder and that have remained unclaimed by the owner for longer than five (5) years after the mineral proceeds became payable are presumed abandoned and are subject to the unclaimed provisions of the Uniform Disposition of Unclaimed Property Act, A.C.A. 18-28-201 et seq., except that funds received by the Auditor of State are deposited in a special trust fund known as the “abandoned Mineral Proceeds Trust Fund” [A.C.A. 18-28-403(a)(1)(A)(B)].

The Abandoned Mineral Proceeds Trust Fund is used by the Auditor of State to pay the claims of persons establishing ownership of any mineral proceeds that are in the possession of the state. At least one (1) time each year, the Auditor of State transfers to the County Aid Fund in the State Treasury all funds in the Abandoned Mineral Proceeds Trust Fund in excess of an amount that the Auditor of State determines to be sufficient to pay the anticipated expenses and claims of the trust fund [A.C.A. 18-28-403(b)].

The funds that are credited to the County Aid Fund are distributed equally among the 75 counties of Arkansas by the Treasurer of State. Upon receipt, the county treasurer credits the funds to the general fund of the county [A.C.A. 18-28-403(c)(1)(2)].

What funds are devoted to the Treasurer’s Automation Fund and what are considered legal expenditures from this fund?

The Treasurer’s Automation Fund is funded with a portion of the county treasurer’s commission. The primary code addressing county treasurer commission is Arkansas Code Annotated 21-6-302 Under A.C.A. 21-6-302(d)(1), “the treasurer may set aside up to ten percent (10%) of the gross commissions collected annually to be credited to the county treasurer’s automation fund”.

Because this law is couched in a permissive context rather than mandatory the county treasurer may choose whether or not to establish the fund. If the treasurer decides to establish the fund, any percentage of annual gross commissions may be set aside in the County Treasurer’s Automation Fund – up to a maximum of 10%.

The moneys deposited in this fund are not subject to excess commission and may accumulate from year to year. The funds are to be appropriated by the quorum court at the direction of the treasurer and are to be expended for the uses designated in A.C.A. 21-6-302(d)(A)(B)(C)(2).

The original uses of the fund were “to purchase, maintain, and operate an automated accounting and record-keeping system”. So, the original intent was to use the funds for computerization of the office, including the acquisition and update of software. The Attorney General even opined that a portion of the funds could be used for a Deputy Treasurer’s salary. AG Opinion No. 2001-094 said, “Although the language of the statute [A.C.A. 21-6-302(d)] does not explicitly address the use of the fund to pay for salaries, its statement of the permissible use of the fund is nevertheless couched in terms that are broad enough to encompass the payment of salaries that are in compensation for duties devoted to the stated permissible use.”

Act 844 of 2003 liberalized the legal uses of the fund considerably by adding, “to operate the office of the county treasurer” and “for administrative costs”. This amendment to A.C.A. 21-6-302 is very broad language. Black’s Law Dictionary defines “administrative expenses” or costs as “overhead” which would cover a multitude of expenditures. The language “to operate the office of county treasurer” is even broader terminology. Although I believe the real focus of the fund is still computerization of the county treasurer’s office, the fund can now be spent on any legal expenditure of the treasurer’s office [AG Opinion No. 2009-192].

Unlike some other “automation funds” or “cost funds” where the officials have the discretion to transfer to the county general fund any moneys they deem excess and not needed for the intended purpose or purposes of the Automation Fund or Cost Fund – that is NOT so with the Treasurer’s Automation Fund. Any use of the money in the Treasurer’s Automation Fund, since it is treasurer commission (much from tax collections), has to be used solely for the salaries and expenses of the County Treasurer’s office. The only way that you could transfer any additional Treasurer Commission funds or funds from the Treasurer’s Automation Fund to the County General Fund would be if expenditures, clearly tied to the Treasurer’s office, had been paid outside the Treasurer’s budget. [This logic is based on Attorney General Opinion No. 78-112 which cites several court cases and constitutional law, including Article 16, Section 11 – “no moneys arising from a tax levied for any purpose shall be used for any other purpose.”]

What is the proper method for the establishment and operation of the County Recorder’s Cost Fund?

The County Recorder’s Cost Fund was established with the enactment of Act 768 of 1995, which was the Recorders Uniform Fee Bill – amending A.C.A. 21-6-306 to increase recording fees and to include language to implement the County Recorder’s Cost Fund. This code was amended again by Act 1144 of 2001; Act 1339 of 2003; Act 615 of 2007; and Act 202 of 2009. These amendments of A.C.A. 21-6-306 have changed both the amount of the recording fees and the uses of the County Recorder’s Cost Fund.

Since the inception of the County Recorder’s Cost Fund there has been misconception and consternation about the fund and how it is to be used. It apparently is handled differently from county to county. I will delineate in the next few paragraphs what the law currently says about the establishment and uses of this fund.

All of the “recording fees” that are listed in Arkansas Code Annotated 21-6-306 are to be paid over to the County Treasurer by the County Recorder. The treasurer is to credit all of these fees to a fund in the county treasury to be known as the “County Recorder’s Cost Fund” [A.C.A. 21-6-306(b)(1)].

The moneys deposited in the County Recorder’s Cost Fund are to be appropriated by the quorum court in a line-item budget, at the direction of the recorder, for administrative costs of the recorder’s office and to purchase, maintain, and operate an automated records system [A.C.A. 21-6-306(b)(2)(3)(c)(1)(2)(A)].

At least 25% of the moneys collected annually in this fund are to be used to purchase, maintain, and operate an automated records system. The acquisition and update of software for the automated records system is a permitted use of these funds. This law creates a minimum of 25% of the annual fees collected to be used for the purposes just mentioned, but more than 25% of these funds can legally be used to purchase, maintain, and operate an automated records system [A.C.A. 21-6-306(c)(2)(A)].

Before the creation of the County Recorder’s Cost Fund, the revenue created by the recording of various documents by the County Recorder was general revenue of the county. With the passage of Act 768 of 1995 “recorder revenue” became “special revenue” and is credited to the special revenue fund – County Recorder’s Cost Fund.

The portion of the statute that directs the use of the funds is couched in mandatory terms, stating: “All moneys collected by the recorder as a fee as provided in this section shall be used by the recorder’s office to offset administrative costs. At least 25% of the moneys collected annually shall be used to purchase, maintain, and operate an automated records system.” According to case law the use of the term “shall” in statutory language means the legislature intended mandatory compliance (AG Opinion No. 1996-235). In other words, as first enacted, moneys in the County Recorder’s Cost Fund had to be solely used for the recorder’s office.

It soon became apparent that in most, if not all counties the fund produced more revenue than could adequately, effectively or efficiently by used by the Recorder. Many counties were amassing large balances in the County Recorder’s Cost Fund as the years elapsed. In 2003 the Arkansas Legislature passed Act 1339 which amended A.C.A. 21-6-306(c) to allow the County Recorder to transfer unneeded funds from the County Recorder’s Cost Fund to the County General Fund.

Act 1339 of 2003 amended A.C.A. 21-6-306(c)(2) to create (c)(2)(A) and (c)(2)(B). Subdivision (c)(2)(A) was the previous (c)(2) which was unchanged and says, “At least twenty-five percent (25%) of the moneys collected annually shall be used to purchase, maintain, and operate an automated records system. The acquisition and update of software for the automated records system shall be a permitted use of these funds.” Subdivision (c)(2)(B) is the new wording added by Act 1339 of 2003, which says, “At the discretion of the recorder, any funds not needed by the recorder for any of the purposes under this subdivision (c)(2) may be transferred to the county general fund.”

In essence, the amendment of 2003 [A.C.A. 21-6-306(c)(2)(B)] allows adequate flexibility. Here is one scenario for use of the County Recorder’s Cost Fund. The County Recorder may determine the amount needed to “purchase, maintain, and operate an automated records system”, including accumulation for future need; can pay for the administrative costs of the Recorder’s operation from the fund; and can choose to transfer any part of the remainder to the County General Fund to offset other costs of his or her office, including the Circuit Clerk office operation and any other legal general fund expenditure.

There are also other expenditure scenarios since the enactment of the 2003 amendment made the use of the funds so much more flexible. But, remember that the law still requires that ALL of the Recorder Fees first be credited to the County Recorder’s Cost Fund.

Act 615 of 2007 also amended A.C.A. 21-6-307 and added (c)(2)(C) which caps the County Recorder’s Cost Fund balance at $1,000,000. Any funds in excess of one million dollars must be transferred to the county general fund – but, in accordance with “county accounting law” the transfer should be an appropriated transfer.

What does Arkansas law say about the establishment and use of the County Clerk’s Cost Fund?

The County Clerk’s Cost Fund, established by Act 1765 of 2003, has not been the topic of as much discussion as other cost funds or automation funds – because as a general rule the County Clerk’s office does not generate as much revenue. No Attorney General Opinions have been issued concerning the County Clerk Cost Fund – and there have been no court cases involving this fund as of late 2011.

Although this fund is probably handled differently from county to county – here is what the law says concerning the County Clerk’s Cost Fund.

Fees collected by the County Clerk pursuant to A.C.A. 21-6-413, 21-6-415 and 16-20-407 are to be paid into the county treasury to the credit of the “county clerk’s cost fund”. In strict accordance with the law 100% of these fees are to be credited to the fund – even though only 35% of the fees are restricted and considered “special revenues”.

Many counties probably credit 35% of the fees to the County Clerk’s Cost Fund and 65% of the fees to County General. To be in full compliance with the law 100% of the fees should be credited to the County Clerk’s Cost Fund with 65% then transferred to County General as an appropriated transfer or the 65% can actually be appropriated and expended from the County Clerk’s Cost Fund for “any legitimate county purpose.”

A.C.A. 21-6-413(e)(1)(A) says that the county clerk fees “shall be paid into the county treasury to the credit of the fund to be known as the county clerk’s cost fund.” The law goes on to say in subsection (e)(1)(B) that “with the exception of those funds referred to in subdivision (e)(2) of this section, all funds deposited into the county clerk’s cost fund are general revenues of the county and may be used for any legitimate county purpose.”

The funds referred to in subdivision (e)(2) are the 35% “special revenue” funds. These funds, in accordance with A.C.A. 21-6-413(e)(2)(A)(B) “shall be used to purchase, maintain, and operate an automated records system. The acquisition and update of software for the automated records system shall be a permitted use of these funds.”

Normally “special revenues” or “restricted funds” are just that – they can be used only for the purposes set out in law…..unless there is an exception laid out in the law. In this case the exception is espoused in A.C.A. 21-6-413(e)(2)(C) which says, “Funds set aside for automation may be allowed to accumulate from year to year or at the discretion of the clerk may be transferred to the county general fund by a budgeted appropriated transfer.

Special Notes concerning the County Clerk’s Cost Fund:

  1. In those counties having combined offices of county clerk and circuit clerk/recorder or in those counties having combined offices of county clerk and recorder, the clerk must decide to utilize the county clerk’s cost fund as authorized by A.C.A. 21-6-413 or the county recorder’s cost fund as established by A.C.A. 21-6-306.
  2. The clerk’s decision must be made in writing and filed in the office of the circuit clerk.
  3. The clerk is not allowed to use both funds – except for the revenue generated under A.C.A. 16-20-407(b). [The $2.00 kept locally from a $13.00 additional marriage license fee.]
  4. In the case of a dual clerk who has chosen the County Recorder’s Cost Fund as their “automation fund” of choice – he or she will still have a County Clerk’s Cost Fund specifically and only for the $2.00 they retain from the $13.00 additional marriage license fee levied under A.C.A. 16-20-407. This money (the $2.00 retained from the $13.00 additional marriage license fee) MUST be appropriated and expended exclusively for the operation of the office of county clerk [A.C.A. 16-20-407(b)(1)].

What is the proper procedure for the establishment and use of the County Collector’s Automation Fund?

The Collector’s Automation Fund, much like the Treasurer’s Automation Fund, is funded with a portion of the collector’s commission. In accordance with Arkansas Code Annotated 21-6-305(2)(A), “The county collector may set aside up to ten percent (10%) of the gross commissions collected annually to be credited to the county collector’s automation fund”.

Because the law concerning the establishment of a County Collector’s Automation Fund is permissive in nature – the collector may choose whether or not to establish the fund and whether or not to keep funding it. If the collector decides to establish the fund, any percentage of annual gross commissions may be set aside in the County Collector’s Automation Fund – up to a maximum of 10%. And, that percentage can change annually at the call of the collector.

The moneys credited to the Collector’s Automation Fund are not subject to the excess commission rule and may accumulate from year to year. The funds are to be appropriated by the quorum court at the direction of the collector for the uses designated in A.C.A. 21-6-305(2)(i)(ii)(iii)(B).

The original uses of the fund were to “purchase, maintain, and operate an automated record-keeping system.” The acquisition and update of software for the automated accounting and record-keeping system was a permitted use of the original law for this automation fund.

Like other county automation and cost funds, the uses of the County Collector’s Automation Fund were liberalized in 2003. The Arkansas Legislature through Act 847 of 2003 added the terms “to operate the office of county collector” and “for administrative costs” to A.C.A. 21-6-305. The new language of this law is very broad in nature. Black’s Law Dictionary defines “administrative expenses” or costs as “overhead” which would cover a multitude of expenditures. The language “to operate the office of the county collector” is even broader terminology. No doubt the real focus of the fund should still be “computerization” or “automation” of the collector’s office as the moniker of the fund would indicate. But, with the 2003 amendment to the law, the fund can now be spent on virtually any legal expenditure of the collector’s office [AG Opinion No. 2009-192].

Unlike some other “automation funds” or “cost funds” where the officials have the discretion to transfer to the county general fund any moneys they deem excess and not needed for the intended purpose or purposes of the Automation Fund or Cost Fund – that is NOT so with the Collector’s Automation Fund. Any use of the money in the Collector’s Automation Fund, since it is collector commission, taken from local tax entities, it has to be used solely for the expenses of the County Collector’s office. The only way that you could transfer any additional collector commission funds or funds from the Collector’s Automation Fund to the County General Fund would be if expenditures, clearly tied to the Collector’s office, had been paid outside the Collector’s budget. [This logic is based on Attorney General Opinion No. 78-112 which cites several court cases and constitutional law, including Article 16, Section 11 – “no moneys arising from a tax levied for any purpose shall be used for any other purpose.”]

Is it a requirement of law for a county to fund a county jail operation and what are some of the main sources of revenue for county jail operations?

Arkansas Code Annotated 12-41-502 say, “The county sheriff of each county in this state shall have the custody, rule, and charge of the jail within his or her county and all prisoners committed in his or her county,…..”. Also, A.C.A. 14-14-802(a)(2) requires, “A county government, acting through the county quorum court, shall provide, through ordinance, for……..law enforcement protection services and the custody of persons accused or convicted of crimes”. There are other state laws and court case decisions that indicate that a county government should not only have a county jail, but should properly fund the jail operation.

County jail operations are one of the largest financial burdens on county governments in Arkansas – but, there are several revenue sources for the operation of a county jail that can be secured. The two largest and most common revenue sources are a dedicated sales tax (must be approved by a vote of the electorate) and general funds of the county. Other sources of jail revenue include housing fees for housing prisoners of other government jurisdictions, including state prisoners and 309’s; commissary fees; and pay-for-stay fees. In most counties, the sheriff’s office may allocate up to 50% of the commissions from prisoner telephone services for the maintenance and operation of the county jail in accordance with A.C.A. 12-41-105(b)(2). Two other sources of revenue for jail operations are the $20 booking and administrations fee and the local fine that can be levied by the quorum court to help defray the cost of incarcerating prisoners.

Let’s take a closer look at those last two sources of jail revenue mentioned and the laws that regulate them –

Act 117 of 2007 amended Arkansas Code Annotated 12-41-505 [Expense and support of the jail] to add a booking and administration fee of $20 to anyone convicted of a felony or a Class A misdemeanor. The fee is assessed in one of two ways. It is assessed upon the conviction of a person and included in the judgment entered by the court – or if the court suspends imposition of a sentence on the person or places the person on probation and does not enter a judgment of conviction, the court is to impose the booking and administration fee as a cost.

The “booking fee” is to be deposited into a special fund within the county treasury to be used exclusively for the maintenance, operation, and capital expenditures of a county jail or regional detention center. The “special fund” can be a newly created special revenue fund – or if the county operates the jail out of a “special revenue” fund it can be credited to that fund (i.e. County Jail Fund, County Detention Center Fund, etc.).

Act 209 of 2009 amended A.C.A. 16-17-129 so that a city and/or county could, by ordinance, levy an additional fine not to exceed $20 to be collected from defendants in District Court to be used to defray jail expenses.

A.C.A. 16-17-129, as amended, reads in part:

(a)(1)(A) In addition to all fines now or as may hereafter be provided by law, the governing body of each town or city in which a district court is located may by ordinance levy and collect an additional fine not to exceed twenty dollars ($20.00) from each defendant upon each conviction, each plea of guilty or nolo contendere, or each bond forfeiture in all cases in the first class of accounting records as described in A.C.A. 16-17-707.

(b)(1) In addition to all fines now or as may hereafter be provided by law, the quorum court of each county may by ordinance levy an additional fine not to exceed twenty dollars ($20.00) to be collected from each defendant upon each conviction, each plea of guilty or nolo contendere, or each bond forfeiture in all cases in the first and second class of accounting records as described in A.C.A. 16-17-707. A county ordinance enacted under this subdivision (b)(1) applies to all district courts in the county.

As a result of this amended state law, cities may now collect up to $20.00 in fine money on accounting one records, and counties may collect up to $20.00 in fine money on accounting one and two records. Accounting one records are “city cases” and accounting two records are “county cases”. Counties should assess this fine in district court on both city and county cases. However, it can only be assessed by the passage of an ordinance to levy the fine.

The revenue collected by the assessment of this fine can be used for: (1) the construction, maintenance, and operation of the city, county, or regional jail; (2) deferring the costs of incarcerating county prisoners held by a county, a city, or any entity; (3) the transportation and incarceration of city or county prisoners; (4) the purchase and maintenance of equipment for the city, county, or regional jail; and (5) training, salaries, and certificate pay for jailers and deputy sheriff’s. The only exception to these uses is that sums collected from this fine on “city cases” cannot be used for training, salaries or certificate pay for deputy sheriffs.

As an additional note of explanation – since the question has been raised – this additional fine allowed under A.C.A. 16-17-129 to be used to help defray jail expenses should apply also to a seatbelt conviction.

Under A.C.A. 27-37-706, any person violating the mandatory seatbelt use law shall be subject to a fine not to exceed $25, and when a person is convicted and pleads guilty, or forfeits bond, no other court costs or fees shall be assessed. However, the fines allowed by Act 209 of 2009 (A.C.A. 16-17-129) can be applied to seatbelt convictions because additional fines are not the same as court costs and fees. Attorney General Opinion No. 2003-117 states, “The statute prohibits the imposition of additional court costs and fees,” but it “does not prohibit additional fines. Courts have traditionally distinguished between fines, which are intended to be punishment for the offense in question, and court costs or fees.” This same logic was reiterated in Attorney General Opinion No. 2009-148 issued in October 2009 after Act 209 of 2009 was passed and went into effect.

Is it a requirement of law for a county to fund a county jail operation and what are some of the main sources of revenue for county jail operations?

Arkansas Code Annotated 12-41-502 say, “The county sheriff of each county in this state shall have the custody, rule, and charge of the jail within his or her county and all prisoners committed in his or her county,…..”. Also, A.C.A. 14-14-802(a)(2) requires, “A county government, acting through the county quorum court, shall provide, through ordinance, for……..law enforcement protection services and the custody of persons accused or convicted of crimes”. There are other state laws and court case decisions that indicate that a county government should not only have a county jail, but should properly fund the jail operation.

County jail operations are one of the largest financial burdens on county governments in Arkansas – but, there are several revenue sources for the operation of a county jail that can be secured. The two largest and most common revenue sources are a dedicated sales tax (must be approved by a vote of the electorate) and general funds of the county. Other sources of jail revenue include housing fees for housing prisoners of other government jurisdictions, including state prisoners and 309’s; commissary fees; and pay-for-stay fees. In most counties, the sheriff’s office may allocate up to 50% of the commissions from prisoner telephone services for the maintenance and operation of the county jail in accordance with A.C.A. 12-41-105(b)(2). Two other sources of revenue for jail operations are the $20 booking and administrations fee and the local fine that can be levied by the quorum court to help defray the cost of incarcerating prisoners.

Let’s take a closer look at those last two sources of jail revenue mentioned and the laws that regulate them –

Act 117 of 2007 amended Arkansas Code Annotated 12-41-505 [Expense and support of the jail] to add a booking and administration fee of $20 to anyone convicted of a felony or a Class A misdemeanor. The fee is assessed in one of two ways. It is assessed upon the conviction of a person and included in the judgment entered by the court – or if the court suspends imposition of a sentence on the person or places the person on probation and does not enter a judgment of conviction, the court is to impose the booking and administration fee as a cost.

The “booking fee” is to be deposited into a special fund within the county treasury to be used exclusively for the maintenance, operation, and capital expenditures of a county jail or regional detention center. The “special fund” can be a newly created special revenue fund – or if the county operates the jail out of a “special revenue” fund it can be credited to that fund (i.e. County Jail Fund, County Detention Center Fund, etc.).

Act 209 of 2009 amended A.C.A. 16-17-129 so that a city and/or county could, by ordinance, levy an additional fine not to exceed $20 to be collected from defendants in District Court to be used to defray jail expenses.

A.C.A. 16-17-129, as amended, reads in part:

(a)(1)(A) In addition to all fines now or as may hereafter be provided by law, the governing body of each town or city in which a district court is located may by ordinance levy and collect an additional fine not to exceed twenty dollars ($20.00) from each defendant upon each conviction, each plea of guilty or nolo contendere, or each bond forfeiture in all cases in the first class of accounting records as described in A.C.A. 16-17-707.

(b)(1) In addition to all fines now or as may hereafter be provided by law, the quorum court of each county may by ordinance levy an additional fine not to exceed twenty dollars ($20.00) to be collected from each defendant upon each conviction, each plea of guilty or nolo contendere, or each bond forfeiture in all cases in the first and second class of accounting records as described in A.C.A. 16-17-707. A county ordinance enacted under this subdivision (b)(1) applies to all district courts in the county.

As a result of this amended state law, cities may now collect up to $20.00 in fine money on accounting one records, and counties may collect up to $20.00 in fine money on accounting one and two records. Accounting one records are “city cases” and accounting two records are “county cases”. Counties should assess this fine in district court on both city and county cases. However, it can only be assessed by the passage of an ordinance to levy the fine.

The revenue collected by the assessment of this fine can be used for: (1) the construction, maintenance, and operation of the city, county, or regional jail; (2) deferring the costs of incarcerating county prisoners held by a county, a city, or any entity; (3) the transportation and incarceration of city or county prisoners; (4) the purchase and maintenance of equipment for the city, county, or regional jail; and (5) training, salaries, and certificate pay for jailers and deputy sheriff’s. The only exception to these uses is that sums collected from this fine on “city cases” cannot be used for training, salaries or certificate pay for deputy sheriffs.

As an additional note of explanation – since the question has been raised – this additional fine allowed under A.C.A. 16-17-129 to be used to help defray jail expenses should apply also to a seatbelt conviction.

Under A.C.A. 27-37-706, any person violating the mandatory seatbelt use law shall be subject to a fine not to exceed $25, and when a person is convicted and pleads guilty, or forfeits bond, no other court costs or fees shall be assessed. However, the fines allowed by Act 209 of 2009 (A.C.A. 16-17-129) can be applied to seatbelt convictions because additional fines are not the same as court costs and fees. Attorney General Opinion No. 2003-117 states, “The statute prohibits the imposition of additional court costs and fees,” but it “does not prohibit additional fines. Courts have traditionally distinguished between fines, which are intended to be punishment for the offense in question, and court costs or fees.” This same logic was reiterated in Attorney General Opinion No. 2009-148 issued in October 2009 after Act 209 of 2009 was passed and went into effect.

Real property reappraisals are required to be conducted on a cyclical basis by county governments in Arkansas. What is the history of these reappraisals and how are the reappraisals paid for under current law?

The beginning of ad valorem taxation in Arkansas starts with the Arkansas Constitution of 1874. Article 16, Section 5 of the Constitution, as amended, provides that: “All real and tangible personal property subject to taxation shall be taxed according to its value, that value to be ascertained in such manner as the General Assembly shall direct, making the same equal and uniform throughout the State.”

Laws on property taxation in Arkansas have been in constant change throughout the years. Because of a court case in the late 1970’s that ruled that ad valorem taxation in Arkansas was not “equal and uniform throughout the State” the court ordered reassessment of all real estate in Arkansas. Amendment 59 to the Constitution was passed by the electorate in 1980 due to the court-ordered reassessment to keep real property taxes from rising exorbitantly. Act 848 of 1981 [A.C.A. 26-26-401 et. seq.] was adopted by the Arkansas legislature as the enabling legislation for Amendment 59.

Each of the 75 counties in the State of Arkansas is now responsible for a cyclical county-wide reappraisal. Each county is required to appraise all market value real estate normally assessed by the county assessor at its full and fair market value in accordance with Arkansas Code Annotated 26-26-1902. Depending on the real property value growth – a county is either on a 3 year or a 5 year cycle for a complete reappraisal of real property.

The reappraisal is paid for from the Arkansas Real Property Reappraisal Fund – established by Act 1185 of 1999 and codified as A.C.A. 26-26-1907. The proceeds of the fund are used to pay counties and professional reappraisal companies for the reappraisal of real property in lieu of real property reappraisal funding by the local taxing units in each county of the state.

In reality the tax entities are still paying for nearly all of the reappraisal since the funding source of $14,250,000 of the cost is withheld from state funds that would otherwise flow to schools, counties and cities. The State Treasurer withholds 76% of the amount from the Department of Education Public School Fund Account; 16% of the amount from the County Aid Fund; and 8% of the amount from the Municipal Aid Fund and credits the amounts to the Arkansas Real Property Reappraisal Fund [Act 217 of 2011, Section 7 Special Language – included in the Arkansas Assessment Coordination Department budget act each year]. The other $1.5 million of the current fiscal year (2012) appropriation of $15,750,000 for Real Property Reappraisal will come from the State of Arkansas Miscellaneous Agencies Fund [Act 217 of 2011, Section 11 Special Language]. However, the proportion that an entity pays is not necessarily the same proportion that the entity would pay if they were reimbursing the county direct for their share of the reappraisal costs.

Funding to any county for property reappraisal is for actual appraisal cost, up to a maximum of $7 per parcel, per year. Counties must use other taxing unit sources of revenue to provide for the cost of real property reappraisals if the cost exceeds $7 per parcel [Act 217 of 2011, Section 9 Special Language – special language of this sort is found in each annual budget Act of ACD].

There is nothing in the law to prohibit a county from charging each tax entity their proportionate share of the cost exceeding $7 per parcel on a monthly basis in order to keep the County Property Reappraisal Fund from running a negative balance. There is no need for the county to suffer the burden of paying the excess cost of reappraisal until the “final tax settlement” is made in December. Charge each entity their share on a monthly basis.

What sources of revenue are produced by the Sheriff and identify any Special Revenue Funds that are used for the Sheriff’s operation and how the revenue is generated for these “special revenue funds”?

The County Sheriff’s office budget is probably the largest office budget of the county constitutional officers. Although the Sheriff’s office has the ability to generate quite a bit of revenue it will not be enough to cover the cost of running the office.

The County Sheriff may be the county official designated in your county by the quorum court to collect fines [A.C.A. 16-13-709 Responsibility for collection]. Of course, many circuit and district court fines remain at the local level and are remitted to the general fund.

The County Sheriff has several “Special Revenue” funds – such as the Communications Facility and Equipment Fund [A.C.A. 21-6-307]; the Boating Safety Enforcement Fund or Emergency Rescue Fund [A.C.A. 27-101-111]; the Drug Enforcement Fund [A.C.A. 14-21-201 through 14-21-203]; the Drug Control Fund [A.C.A. 5-64-505, A.C.A. 29-30-160, A.C.A. 12-17-105]; and possibly others that may have been established by county ordinance.

Fees to be charged by the County Sheriff are set forth in A.C.A. 21-6-307. The Sheriff fees are divided 75% to County General and 25% to the Communications Facility and Equipment Fund. The 25% amount does not have to be remitted to the county treasury – and can be retained by the Sheriff. In fact, in strict accordance with the law the Sheriff maintains this money and fund and it is not subject to appropriation by the quorum court [AG Opinion #2002-008 and AG Opinion #2003-074]. The funds, however, are restricted to certain types of expenditure and the fund is subject to audit by the Division of Legislative Audit.

However, in many counties the Communication Facility and Equipment Fund is on the books of the County Treasurer. When the Communications Facility and Equipment Fund first became a part of the law in the 1980’s (was first called the Sheriff’s Radio and Equipment Repair and Replacement Fund – changed to current name by Act 662 of 1995) the Division of Legislative Audit did not think it was a good idea for the Sheriff to maintain control of the fund and suggested that they remit it to the County Treasurer (that was before Enron and when they made those types of suggestions). There were some Sheriffs also that thought it was not a very good idea for them to maintain this money in their office. Therefore, in many counties – contrary to what the law says – the Communications Facility and Equipment Fund is on the books of the County Treasurer. In such case, the fund is a part of the county treasury and is subject to quorum court appropriation [A.C.A. 14-14-1102(b)(2)(C)(i) and Arkansas Constitution, Article 16, Section 12].

At the discretion of the Sheriff, any funds in the Communications Facility and Equipment Fund not needed by the Sheriff may be transferred to the county general fund.

The 25% of Sheriff fees is not the only source of revenue for the Communications Facility and Equipment Fund. One hundred percent (100%) of the commissions derived from prisoner telephone services provided in the county jail are to be credited to the Communications Facility and Equipment Fund. However, the Sheriff may allocate up to 50% of the commissions deposited to the fund for the maintenance and operation of the county jail. [Note: Commissions from prisoner telephone services are addressed in A.C.A. 12-41-105 and the provisions of that code do not apply to Benton, Pulaski and Washington counties – the three counties in Arkansas with populations in excess of 175,000.]

Another source of “special revenue” for the County Sheriff comes from boat registration fees. A percentage of those fees are credited to the County Aid Fund and remitted to the County Treasurers in the proportions thereof as between the respective counties that the total of the fees produced from each county bears to the total of the fees produced from all counties. [A.C.A. 27-101-111]

Upon receipt of these funds the County Treasurer credits the funds to the Boating Safety and Enforcement Fund – if the Sheriff has established a patrol on the waterways within the county. Otherwise, the funds are credited to the County Emergency Rescue Fund for use exclusively by either the county or the cities within the county, or both, for operating and maintaining emergency rescue services.

If neither the county nor any of the cities within the county operate emergency rescue services the fees should be deposited into the Game Protection Fund for use by the Arkansas State Game and Fish Commission.

A county may provide the Sheriff with another Special Revenue Fund – a Drug Enforcement Fund. For this fund to be established the quorum court must pass an ordinance establishing the fund and set a maximum balance for the fund – not to exceed $10,000. There are restrictions on how the fund can be used. Everything there is to know about the Drug Enforcement Fund is in Act 362 of 1997 (which has never been amended) and codified in A.C.A. 14-21-201 through 14-21-203. These codes/laws are so straightforward that there are no AG Opinions addressing the meaning of these codes.

Another one of the Special Revenue Funds for use by the County Sheriff is the Drug Control Fund. Information concerning the Drug Control Fund is found in the rather extensive “Property Subject to Forfeiture” law which is codified as A.C.A. 5-64-505. Subdivision (i)(2) lays out the creation of the Drug Control Fund on the books of law enforcement agencies and prosecuting attorneys. The Drug Control Fund moneys come from the disposition of moneys in the Prosecutor’s Asset Forfeiture Fund as outlined in subdivision (i)(1). Moneys in the Drug Control Fund shall be used only “for law enforcement and prosecutorial purposes” – which is a rather broad definition of what the moneys can be used for. There are several Attorney General Opinions dealing with the Drug Control Fund.

In connection with the Drug Control Fund as established under A.C.A. 5-64-505 – at least two other codes are worth mentioning. They are:

  • A.C.A. 29-30-160 – This code delineates a process whereby a county’s Drug Control Fund could receive a percentage of proceeds from a drug task force which has been disbanded or is otherwise no longer in operation.
  • A.C.A. 12-17-105 – This code allows the use of Drug Control Funds to meet the local match for a grant to a multi-jurisdictional drug crime task force receiving a grant award from the State Drug Crime Enforcement and Prosecution Grant Fund.

Of course, another great expense to the county in the realm of law enforcement is the incarceration of prisoners in the county jail. There are a number of revenue sources for the operation of a county jail. I have addressed and delineated those in a separate “question and answer” segment of the Association of Arkansas Counties FAQ’s.

How many years can a county legally go back to make a refund of property taxes paid in error?

As a general rule tax refunds must be made within three (3) years from the date the taxes were paid. Arkansas Code Annotated 26-35-901 is the primary state code dealing with real or personal property taxes erroneously assessed and paid. After providing satisfactory proof to the county court [the county judge in his/her judicial capacity with exclusive original jurisdiction in all matters relating to county taxes / A.C.A. 14-14-1105] the county court issues a county court order directing the county treasurer to refund the person the amount of taxes erroneously assessed and paid. The claim for refund at the county level has to be made within 3 years from the date the taxes were paid. And the claim of erroneously assessed and paid taxes must fall within the definition of “erroneously assessed” as defined in A.C.A. 26-28-111(c).

The refund is normally paid from the general fund of the county and the general fund is then reimbursed by transfer from funds of the respective taxing units. The amount contributed by each taxing unit will be the amount of the erroneous payment received by the taxing unit. All of the pertinent information for the tax refund transaction should be contained in the county court order. [Some counties accomplish the refund by making the appropriate transfers from each tax entity to the Collector’s Unapportioned Account and the county treasurer issues the county check from the Collector’s Unapportioned Account.]

There is a possibility that a refund could be made for up to a five (5) year period. A.C.A. 26-39-220 [Adjustment of errors.] says the county court has the duty to reconsider and adjust the settlement of any county officer for any error discovered within 3 years from the date of the settlement. If the error in a settlement is discovered after three (3) years, but within five (5) years from the date of the settlement, the county judge (county court) has the duty to petition the chancery court (now circuit court under Amendment 80) to obtain an order to correct the error or errors. [See AG Op. #1992-357]

Counties are sometimes told they cannot pay late charges or a penalty on overdue bills. Is it true that counties cannot pay penalties on bills that are past due?

I will preface the answer to this question with the statement that a county should not get in the situation of having to pay penalties because of the late payment of a bill. County government should exercise diligence in taking care of tax payer money – including timely payment of claims so as to avoid the wasteful payment of penalties.

However, if a county finds itself in the position of paying an overdue invoice to which a penalty has been applied – I do not believe there is any law that forbids the payment of an actual “penalty”.

Some people tend to view “interest” and “penalty” in the same light – when, in fact they are different animals. A county cannot pay interest (except in certain instances)….but there is no state law prohibition against paying a penalty.

“Interest” is legally defined as “the compensation fixed by agreement or allowed by law for the use of money”. Article 16, Section 1 of the Arkansas Constitution says, “Neither the State nor any city, county, town or other municipality in this State shall ever lend its credit for any purposes whatever; nor shall any county, city or town or municipality ever issue any interest bearing evidences of indebtedness, except such bonds as may be authorized by law…….”. Amendment 78, Article 2 of the Arkansas Constitution provides for short-term financing for counties and cities allowing the payment of interest. Amendments 62, 65 and 72 also allow various types of bond issues and debt obligations, which entail interest.

However, a “penalty” is legally defined as “an extra charge against a party who violates a contractual provision.” When a county makes a purchase from a vendor they automatically agree to the terms of payment. If those terms are not met then the county is subject to paying the penalty just like anyone else. I have found no law or AG Opinion to the contrary.

The District Court system is one for which both counties and municipalities have financial responsibilities. What is the financial responsibility of county government as it concerns District Court?

The prevailing Arkansas code that establishes the framework for the division of costs associated with District Court is A.C.A. 16-17-115 [County’s, town’s and city’s portion of district court expenses – Appropriation.]. A.C.A. 16-17-115(a) deals with the county portion of expense and says, “except as authorized otherwise, the county wherein a district court is held shall pay one-half (1/2) of the salaries of the district judge and each chief court clerk of any district court organized in that county under the provisions of A.C.A. 16-17-901 et seq and the quorum court shall make an appropriation of a sum sufficient to pay the county’s proportion of the expenses of any such district court. These payments shall be made out of the district court cost fund and general revenues of the county.” So, in many cases, the county is only legally responsible for one-half of the salary of both the district court judge or judges and the chief district court clerk(s).

There are Attorney General Opinions that say the county is not responsible for other expenses of the district court – other than outlined in law. For many counties those opinions opine that the county is not responsible for salaries of deputy district court clerks. They go as far as to say that the county is not responsible for paying fringe benefits for the judge and clerk – fringe benefits like health insurance, retirement, etc. Arkansas Attorney General Opinion No. 1996-207 is a concise opinion that covers this topic.

However, notice the first four words of A.C.A. 16-17-115(a) – “except as authorized otherwise”. Arkansas Code Annotated 16-17-108 is a state law that establishes the salaries or the perimeters for salaries of personnel and other requirements of various district courts. This code may or may not establish the proportion of salaries paid in accordance with A.C.A. 16-17-115(a) – but it is a state law that normally has the blessing of local officials concerning the division of district court expenses before it is enacted by the legislature. There are a few other state code sites that are specific to individual district courts and the cost division thereof.

The local political subdivisions may also have local agreements concerning the division of district court expenses in accordance with A.C.A. 16-17-115(b)(1)(A)(ii).

To synopsize the division of expense for district courts in Arkansas the fall back position according to A.C.A. 16-17-115 is that county government is responsible only for one-half (1/2) of the salaries of the district court judge and each chief court clerk [subdivision (a)] and towns and cities are responsible for the other one-half of the salaries of the district court judge and each chief court clerk in addition to the operational expense of the district court [subdivision (b)(1)(A)(i)(ii)]. According to Attorney General Opinion No. 1999-207 the salaries of deputy court clerks would be included in “operational expense”. However, the division of expense for district court can be otherwise if delineated for a specific district court(s) in state law or by local agreement of the political subdivisions.

What is a county’s financial responsibility in the cost of the operation of a public defender’s office?

Until January 1, 1998 county government had full responsibility for the financial operation of public defender offices – including salaries. That changed with the passage and enactment of Act 1341 of 1997 to phase in the transfer of funding of the state trial court system from county government to the State of Arkansas. This act of the legislature made public defenders state employees, but left counties with some financial responsibility for the funding of public defender operations.

With the passage of Act 1341 of 1997 county government had to relinquish 85% of the amount certified as having been collected during calendar year 1994 for the purpose of funding the office and operation of the public defender. This money had been available each year in the County Administration of Justice Fund for use in funding the public defender. County government gave up 85% of this funding source for the State to take over the salaries for public defender offices and counties retained the other 15% to pay for office operations.

Section 12 of Act 1341 of 1997 [Funding of Public Defenders.] was codified as A.C.A. 16-87-302 and breaks down the responsibility for the funding of public defenders.

The State of Arkansas is responsible for: (1) salaries of public defenders; (2) salaries of secretaries and other support staff of the public defender’s office; and (3) the payment of the costs of certain expenses. Those expenses are outlined in A.C.A. 16-87-212 which are expenses regarding the defense of indigents and include, but are not limited to, fees for appointed counsel, expert witnesses, temporary investigators, testing, and travel.

County government is responsible for the payment of the following for public defenders: (1) the cost of facilities, equipment, supplies, and other office expenses necessary to the effective and efficient operation of the public defender’s office; and (2) the compensation of additional personnel within the office of the public defender, when approved in advance by the quorum court.

One final note – read Arkansas Attorney General Opinion No. 2004-079 for some insight on the transition of funding for public defenders from counties to the State.

Since County General funds are transferred to other county funds to supplement the operations of particular county funds, such as the Road & Bridge Fund – is it legal to transfer Road & Bridge funds or money from other county funds to County General to supplement general operations?

The general answer to the question is “no” – but there are some exceptions to the rule. There is no state law that specifically says you can transfer from General to Road but not vice versa. The law is “unwritten” and is a conclusion of deductive reasoning using the laws that are written concerning county government accounting practices, Attorney General Opinions, and case law.

The premise is this – the County General Fund is made up of “general” or unrestricted revenues of the county. General revenues of the county can be spent for any legal expenditure of the county. Therefore general funds of the county can be transferred through an appropriated transfer to the Road & Bridge Fund or any other fund of the county where those funds can then be appropriated and spent for whatever purpose the receiving fund is established for.

However, the Road Fund and many other funds on the books of the county are “Special Revenue” funds – which mean they are restricted use funds. They are used to account for the proceeds of specific revenue sources that are legally restricted to expenditures for specific purposes. Even general funds of the county that are transferred to a “special revenue” fund take on the persona and expenditure restrictions of that fund. Therefore, “special” or “restricted” revenue funds cannot, as a general rule, be transferred to County General for general purpose expenditures.

The only legal way that Road & Bridge funds (or other special revenue funds) could be transferred to County General would be in the event of an error. Here is an example: A legitimate road expense was inadvertently paid with general fund revenues. Upon discovery of the error a county court ordered transfer from Road to County General could be made to reimburse the general fund for the legitimate road fund expenditure. The court order should actually be written in such fashion to accomplish a reduction of expenditures in the general fund and an increase of expenditures in the road fund.

As mentioned earlier, there are a few exceptions to the rule. Normally “special revenues” or “restricted funds” are just that – they can be used only for the purposes set out in law. But, in the case of some special revenue funds the law establishing the fund(s) allows for an exception. State law allows an appropriated transfer of funds from a few of the county official special revenue funds to the general fund at the discretion of the official for whom the fund was established. Those exceptions include the:

  • County Clerk’s Cost Fund [A.C.A. 21-6-413(e)(2)(C)
  • County Recorder’s Cost Fund [A.C.A. 21-6-306(c)(2)(B)
  • Communications Facility & Equipment Fund [A.C.A. 21-6-307(b)(2)(D)

Can a quorum court set salaries of elected county officials as long as the salary is between the minimum and maximum set by the legislature even if they choose to decrease the salaries?

The answer to the question is answered by Section 5 of Amendment 55 which provides that “compensation of each county officer shall be fixed by the Quorum Court within a minimum and maximum to be determined by law. Compensation may not be decreased during a current term……”

The minimums and maximums have been established by the legislature in Arkansas Code Annotated 14-14-1204 for the following county constitutional officers: (1) county judge; (2) sheriff and ex officio collector of taxes; (3) collector of taxes, where established by law; (4) circuit clerk; (5) county clerk, where established by law; (6) assessor; (7) treasurer; (8) coroner; and (9) surveyor. Also, A.C.A. 14-14-1210 enacted by Act 320 of 2009 provides for a cost-of-living adjustment to be added to the minimums and maximums. This COLA became effective with the 2011 county budget year and does NOT automatically require an increase in salary. The provisions of A.C.A. 14-14-1210 simply provide a process for adjusting or indexing the minimum and maximum salaries to be paid to county officials.

The quorum court does have the authority to set salaries of these elected county officials anywhere between the minimums and maximums established by law, however, under the language of Amendment 55 those salaries may not be decreased during a current term. A.C.A. 14-14-1203(d) provides for the implementation of a legal decrease in salary stating, “Any decrease in the annual salary or compensation of a county officer shall not become effective until January 1 following a general election held after such decrease shall have been fixed by the quorum court of the county.”

Is it a requirement of state law that the County Clerk and County Treasurer jointly reconcile the expenditures of the county each month?

This practice of reconciliation makes perfect sense since both the offices of County Clerk and County Treasurer are involved in the expenditure of county funds. Reconciliation would be the monthly culminating step for check and balance. However, you will not find a state law in the Arkansas Code Annotated that specifically requires this financial reconciliation tool. But, that is not the end of the discussion.

The Division of Legislative Audit was mandated by the General Assembly through the provisions of Act 122 of 1981 [A.C.A. 14-21-101] to develop a comprehensive financial management system for county government. The Comprehensive Financial Management System was developed and the counties of Arkansas were required to implement it on or before January 1, 1983. This manual IS law. Even the preface of the manual says, “the accompanying manual codifies and formalizes the components of the financial management system……”

The Financial Management System manual [both the original and the revised version] contains a section called “Other General Information” that includes a subsection entitled “Reconciliation of Expenditures – Clerk’s and Treasurer’s Records”. This section of the manual says, “As the County Clerk maintains the County Court Claims Docket/Warrant and Transfer Register as supporting records, it is imperative that the warrants or check/warrants evidencing these expenditures as recorded in the Claims Docket/Warrant and Transfer Register be reconciled with the warrants or check/warrants issued and/or redeemed by the Treasurer, who acts as the financial custodian of county funds. The reconciliation is necessary to substantiate the recorded expenditures – by warrant or check/warrant – of county funds between the Clerk’s records and the Treasurer’s records and to determine the Treasurer’s cash balance for each operating fund based on the warrants or check/warrants issued and redeemed.”

The answer then is “yes”. The law requires a monthly reconciliation of the Clerk and Treasurer records for county expenditures as required by the current Comprehensive Financial Management Manual [as required by A.C.A. 14-21-101] and the revised manual which must be implemented by the counties of Arkansas on or before January 1, 2014.

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