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EAC MANAGEMENT DECISION:

Resolution of the OIG Audit Report on the Administration of 

Payments Received Under the Help America Vote Act by the 

Arkansas Secretary of State, for the Period April 16, 2003 

Through June 30, 2009, Report No. E-HP-AR-03-09 

September 30, 2010 

BACKGROUND

The EAC is an independent, bipartisan agency created by the Help America Vote Act 

(HAVA). EAC assists and guides state and local election officials in improving the 

administration of elections for Federal office. EAC distributes HAVA funds to States for 

the acquisition of voting systems, and supports the establishment of statewide voter 

registration lists, and other activities to improve the administration of elections for 

Federal office. EAC monitors State use of HAVA funds to ensure funds distributed are 

being used for authorized purposes. To help fulfill this responsibility, the EAC 

determines the necessary corrective actions to resolve issues identified during Single 

Audit Act and Department of Inspector General (OIG) audits of state administration of 

HAVA funds. The EAC OIG has established a regular audit program to review the use 

of HAVA funds by States. The OIG’s audit plan and audit reports can be found at 

www.eac.gov. 

The EAC Audit Follow-up Policy authorizes the EAC Executive Director to issue the 

management decision for OIG audits of Federal funds to state and local governments, to 

non-profit and for-profit organizations, and for single audits conducted by state auditors 

and independent public accountants (external audits). The Executive Director has 

delegated the evaluation of final audit reports provided by the OIG and single audit 

reports to the Director of the HAVA Grants Division of EAC. The Division provides a 

recommended course of action to the Executive Director for resolving questioned costs, 

administrative deficiencies, and other issues identified during an audit. The EAC 

Executive Director issues the EAC Management Decision that addresses the findings of 

the audit and details corrective measures to be taken by the State. 

States may appeal the EAC management decisions. The EAC Commissioners serve as 

the appeal authority. A State has 30 days to appeal the EAC management decision. All 

appeals must be made in writing to the Chair of the Commission. The Commission will 

render a decision on the appeal no later than 60 days following receipt of the appeal or, in 

the case where additional information is needed and requested, 60 days from the date that 

the information is received from the State. The appeal decision is final and binding. 
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AUDIT HISTORY 

The OIG issued an audit report on the administration of payments received under the 

Help America Vote Act (HAVA) by the Arkansas Secretary of State (SOS) on February 

26, 2010. The audit concluded that, except for the lack of personnel certifications and the 

maintenance of comprehensive equipment inventories, the SOS generally complied with 

the financial management requirements established by the U.S. Election Assistance 

Commission. The SOS also complied with Section 251 requirements. All corrective 

actions required in this audit are to be completed before November 30, 2010. 

I. Personnel Certifications 

The State of Arkansas’s Office of the Secretary of State (SOS) did not complete semiannual certifications for employees that worked full-time or solely on HAVA activities 

for the period during which the SOS was paying personnel costs with HAVA program 

funds (July 16, 2003 through June 30, 2007). No HAVA program funds were used to pay 

personnel costs during the period from July 1, 2007 to the end of the audit period (June 

30, 2009). All personnel costs during the time period after July 1, 2007 were paid through 

the State of Arkansas’ general fund. 

RECOMMENDATION: 

We recommend that the SOS resolve with the EAC the appropriate corrective action 

regarding the lack of periodic certifications for the period personnel costs were paid by 

HAVA program funds. 

SOS’S RESPONSE: 

The SOS contacted the EAC both by phone and via email, and was advised that, unless 

the EAC specifically requests the information, the SOS is not required to send the 

certifications at this time. The SOS is now aware of the requirement and has updated the 

personnel certifications. If federal funds are spent on personnel salaries in the future and, 

if applicable, the SOS will prepare the required certifications and submit to the 

appropriate agency. 

EAC MANAGEMENT DECISION: 

The EAC will resolve with the SOS the appropriate corrective action regarding the lack 

of periodic certifications for the period personnel costs were paid by HAVA program 

funds. 

II. Property Management 

During testing of the existence of HAVA purchased equipment to the inventory 

documentation provided by the SOS staff, discrepancies were noted at five of eight 

counties visited. The serial numbers on four of the equipment items at two of the 
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counties did not match the serial numbers per the counties’ written inventory records. At 

three of the counties, they did not have written records or physical possession of a total of 

five equipment items that the SOS indicates were transferred to them. 

Also noted during review of the counties’ equipment/property maintenance records, the 

counties were not complying with the requirements of 41 CFR 105-71.132 with regards 

to the identification and management of equipment purchased with federal funds. The 

counties did not maintain property records that included the attributes outlined in 41 CFR 

105-71.132. 

RECOMMENDATIONS: 

We recommend that the SOS: 

1. Ensure that the property listings of HAVA funded equipment owned by the State 

reflect accurate information as prescribed by the State fixed asset guidelines. 

2. Instruct the counties to ensure that the property listings of HAVA funded 

equipment in their possession reflect accurate information as prescribed by 41 

CFR 105-71.132. 

3. Issue guidance to the jurisdictions that identifies 41 CFR 105-71.132(d) as the 

regulation that describes the property records to be prepared and maintained, and 

implement procedures to periodically monitor compliance with this regulation. 

SOS’S RESPONSE: 

The SOS will prepare and send correspondence to all Arkansas counties regarding the 

requirements of the Arkansas County Accounting Law 14-25-106, “Fixed Assets and 

Equipment Records” and the Code of Federal Regulations 41 CFR 105-71.132. In 

addition, the SOS will send a template for the counties to use when establishing this 

inventory tracking procedure/policy. The template will include the following: 

Description of Property, Serial Number, Who Holds Title, Acquisition Date, Cost of the 

Property, Percentage of Federal Participation, Location of Property, and Use and 

Condition. The SOS will conduct a physical inventory on all HAVA-funded equipment 

in the possession of the counties in order to correct and properly record any 

discrepancies. 

EAC MANAGEMENT DECISION: 

The EAC will verify correspondence was sent to all counties and appropriate actions by 

the SOS were taken to comply with State fixed asset guidelines and 41 CFR 105-71.132 

including a physical inventory and any needed corrections to county inventories.