Arkansas lawmakers asked the state’s nonpartisan auditing body on Thursday to examine more than two years of “procurements and related processes” at Arkansas PBS.
The request comes after the state’s regularly scheduled fiscal year 2022 audit into the publicly funded educational channel revealed what auditors considered questionable purchasing practices. At the heart of lawmakers’ and auditors’ concerns is that Arkansas PBS officials allegedly sidestepped state laws related to contract bidding.
Arkansas PBS, previously known as Arkansas Educational Television Network (AETN), has been under legislative scrutiny for months. The audit for the year ended June 30, 2022, has been a subject of Legislative Joint Auditing Committee meetings since August.
Agency administrators again faced questions from lawmakers at Thursday’s audit committee meeting. Legislators also heard accusations of misconduct by public TV executives from former Arkansas PBS employees.
The committee approved a request for a special audit to investigate Arkansas PBS’ purchases, decisions and procedures from July 1, 2021, to the present. The committee also deferred approval of the 2022 audit.
Auditors who worked on the 2022 audit “noticed numerous purchases right at that $20,000 threshold,” the amount that would trigger a bidding process, Tom Bullington, deputy auditor for state agencies, said.
This gave the impression that Arkansas PBS “was intentionally trying to toe that line,” Bullington said in response to questions from Sen. Linda Chesterfield, D-Little Rock.
The audit also found that Arkansas PBS entered contracts with two companies owned by the same person. Bullington mentioned that the owner of one of the companies formed the second company eight days before Arkansas PBS entered a contract with the second. The two companies’ services were similar enough that the agency appeared to be attempting to avoid a bidding process, he said.
Contracting with one company would have required bids because the total would have been above $20,000, while contracting with two companies circumvented this requirement, according to the auditors.
No intention to circumvent
Sen. Missy Irvin, R-Mountain View, asked Arkansas PBS Executive Director Courtney Pledger who directed the owner to start a second company. Pledger said she did not believe anyone at the agency gave this instruction.
Upon further questioning from legislators, Pledger said she and other administrators did not violate or circumvent procurement law, nor did they intend to do so.
“We followed the advice and guidance of our former fiscal officer,” Pledger said. “Now that we are aware that it is perceived to be not good practice, not solid practice, we will not conduct business in that way in the future. We felt we were acting, and always aimed to act, within the law.”
Auditors could not “unequivocally” conclude that Arkansas PBS committed the offense of split purchasing, or the intentional division of a purchase into multiple purchases to avoid following procurement rules, Bullington said in response to lawmakers’ questions.
Pledger told lawmakers last month that Arkansas PBS is training its entire staff in state procurement law, the Arkansas Democrat-Gazette reported.
Karen Watkins, the agency’s chief financial officer since February, said she was surprised to learn upon starting the job that agency staff were regularly making purchases and entering contracts without training in procurement law. She said she reviewed the agency’s fiscal year 2022 purchase orders and “observed the same things” that auditors did.
“It is unfair to hold division directors responsible for knowing procurement rules when they have to know lots of other rules,” Watkins said. “They should have a resource within the agency to support them in that function, and that did not exist.”
In response, Irvin told Pledger it is the agency director’s responsibility to know purchasing rules and to make sure employees know and follow them.
Accusations and concerns
The committee heard testimony under oath from Pledger, Watkins, and Arkansas PBS Director of Education Sajni Kumpuris.
Four former agency employees, also under oath, claimed to have firsthand or secondhand knowledge that current and former administrators, including Pledger and Kumpuris, circumvented procurement law. They also claimed the administrators ordered staff to falsify time sheets, disregarded Federal Communications Commission standards for published content and created a hostile work environment that pushed employees out of the agency.
Stephanie Lilly-Palmer, the agency’s former human resources director, said she and other employees approached the administrators with questions about the issues they observed, including “bullying and feeding on chaos.” She also said her office received several staff complaints.
“Employees were saying this was not the AETN [or] PBS they had worked for all these years,” Lilly-Palmer said.
She also said she was one of five department heads that have been fired from the agency since Watkins was hired as chief financial officer.
In April, Lilly-Palmer filed a complaint against Arkansas PBS in Pulaski County Circuit Court, alleging wrongful termination as retaliation for voicing her concerns. A circuit judge dismissed the suit in October.
Former chief technical officer Andrew Bicknell, former education program coordinator Kayla Fletcher and former “Exploring Arkansas” host Chuck Dovish joined Lilly-Palmer in testifying to lawmakers about their problems with Arkansas PBS.
The committee did not give Pledger, Watkins and Kumpuris a chance to directly respond to the former employees’ accusations.
Sen. Dan Sullivan, R-Jonesboro, asked Kumpuris earlier in the meeting if any agency employees were told to falsify their “time and effort sheets” documenting their work on grant-funded projects. Kumpuris said she did not direct anyone to do this and did not hear from any employees that they received this direction.
Chesterfield asked Bullington if the auditors found violations of FCC standards; Bullington said they did not.
Several lawmakers, including Chesterfield and Flowers, said they weren’t sure the Legislative Joint Auditing Committee was the right body to be hearing former Arkansas PBS employees’ personnel concerns.
“While I think these are issues that are important to be looked at in the proper forum and in the proper process, this is not that,” Flowers said. “These issues that we’ve heard today are not directly germane to the audit.”
Flowers also expressed concern that the fiscal year 2023 audit of Arkansas PBS, which is currently in progress, might be “inappropriately or unfairly impacted” by the former employees’ public complaints.
The Legislature is responsible for reviewing and filing annual audits of state agencies, and so far lawmakers have not filed the 2022 audit of Arkansas PBS.
The audit should be filed at the same time as the special audit authorized Thursday, since much of the same information will be reviewed in both audits, said Rep. Jeff Wardlaw, R-Hermitage, a member of the Legislative Joint Auditing Committee and the House chair of the Arkansas Legislative Council.
Wardlaw said he expects lawmakers to direct the 2022 audit to a prosecuting attorney upon being filed.
In August, lawmakers tabled a potential merit pay raise for Pledger at Sullivan’s urging, citing the lack of resolution of the findings in the 2022 audit.
Sullivan said Thursday that two of the four ex-employees of Arkansas PBS sought him out months ago to discuss their complaints about the agency, including some of the auditors’ findings.
This article was originally published by the Arkansas Advocate and is republished here under a Creative Commons license.