Companies Will Go Easy in Check Snarl

Copyright 2001 Little Rock Newspapers, Inc.
The Arkansas Democrat-Gazette

August 16, 2001, Thursday

SECTION: NEWS; Pg. A1

LENGTH: 1470 words

HEADLINE: Companies will go easy in check snarl
Banks, utilities: Just how state fouled up

BYLINE: MICHAEL R. WICKLINE, ARKANSAS DEMOCRAT-GAZETTE

BODY:

Child-support recipients and state employees who face insufficient-funds penalties and utility service cutoff notices because state government processing problems delayed their checks can expect mercy from major banks and utilities, provided they can prove the state caused their problems.

Officials of utilities and banks contacted by the Arkansas Democrat-Gazette say they are willing to waive fees and overdraft charges and extend the period for paying utility bills for people who can prove delays in the state's processing of their checks led to their financial difficulties.

Thousands of child-support recipients have been struggling to pay bills because the state Office of Child Support Enforcement has been tardy in processing their support payments since July 1. Hundreds of state employees have received part or all of their checks late during the same period because of problems with a separate processing system.

Eight days ago Gov. Mike Huckabee, who has called the processing flubs "a massive screw-up," asked banks and utilities to waive fees and overdraft charges and delay shutoff notices for people caught in the predicaments.

In addition, seven state employees so far have filed claims with the state Claims Commission for costs that they incurred as a result of the problems. The commission has authority to grant payments to compensate people for wrongs done against them by the state.

Carmie Henry, vice president of governmental affairs for the Arkansas Electric Cooperatives, said the 17 cooperatives serving 375,000 customers began granting extensions for paying bills early last week to single mothers who haven't received their child-support payments on time.

"We are going to do the best we can with whatever information we have," Henry said. "Without a master list from the state, we don't have any way to avoid the fraud of folks using that as an excuse to avoid paying the bills."

The cooperatives don't have a specific policy for dealing with state employees who receive late checks, he said. "If a state employee could show reason to us, something could or would be worked out."

Entergy spokesman James Thompson said the state's largest electric company, serving 640,000 customers in Arkansas, has a standing policy of working with customers who have lost income, to help them pay their bills. "We attempt to renegotiate the arrangements in any way that we can."

Margaret Preston, a spokesman for Reliant Energy Arkla, said the company, which serves 440,000 Arkansas customers, isn't doing anything special in response to the governor's request. "We will make payment arrangements," she said, but customers must call Arkla before the bill is due to extend the period for making the payment or to break up a large bill over a longer time period.

Steve Wade, executive vice president for Metropolitan National Bank, said the bank put together a clearinghouse in the customer-service area 10 days ago to help out state employees and child-support recipients whose checks were late. Many state employees and support recipients have automatic drafts that come out of their checking accounts to cover some of their bills, he said.

The bank has been refunding insufficient-funds fees in situations where state employee and child-support recipients checks were late, he said. "What we have to be willing to do is to give the customer the benefit of the doubt. The tie is going to go the customer."

Diane Wagner, a spokesman for the Bank of America in Chicago, said bank officials will look at each request to waive fees on a case-by-case basis. It is the bank's intent "to work with the state to do what is best for our customers and make sure they are not faced with any hardships," she said.

Sherry Ashley, Regions Bank senior vice president for marketing, said bank officials are waiving fees if they are associated with a late deposit. Again, this is on a case-by-case basis, she said.

Mike Kemp, a spokesman for the state Department of Finance and Administration, said on Wednesday that six state employees weren't paid at all and 62 other state employees were underpaid on Friday, the third payday under the state's new computerized accounting system. In contrast, 690 employees weren't paid part or all of their checks on the first shorted payday and 423 weren't paid all or part of their checks on the second payday, according to state officials. More than 29,000 state employees are covered by the state's new computerized accounting system, which is called the Arkansas Administrative Statewide Information System (AASIS).

Leslie Haber, state director of Service Employees International Union Local 100, said she will have a better grasp about how many state employees have been charged bank fees or face the shutoff of their utility service as a result of receiving their paycheck late later this week. "If the banks and the utilities work with folks, it will cost the state less money," she said.

The Claims Commission has approved three claims totaling $ 2,268 for costs that state employees incurred either from not receiving their paychecks or from getting their checks late. The other four claims are pending.

James R. Franquemont, a project manager for the state Department of Information Systems, has filed a claim for $ 50 to cover insufficient-funds charges at Pulaski Bank as a result of his check being directly deposited into his account late. "Everybody is getting nailed left and right," he said Wednesday. "It isn't just the downtrodden."

Franquemont, who isn't involved with the state's new computerized accounting system, said he was stunned about "the lack of thoroughness" in testing the system before it went live on July 2. "Even though I am part of the inside [at the Information Systems Department], it is stunning to see what is going on," he said.

Last week legislative auditors said the final period to test and train for the new system was reduced from 30 weeks to only 11 weeks because two of the three previous phases lasted longer than expected. But state officials said the system was tested over a longer period than legislative auditors indicated and the time devoted to training and testing was both reasonable and legitimate.

State Sen. Kevin Smith, D-Stuttgart, has blamed Huckabee, contending the governor pushed too hard for Arkansas to be the first state to implement the system, an accusation that Huckabee has denied.

State Democratic Party Chairman Ron Oliver on Wednesday criticized Huckabee, a Republican, for contending that some state employees who have told the news media that they didn't receive checks actually got checks and that one of these employees had been fired beforehand and wasn't entitled to a check.

"Why is Huckabee wasting time examining the records of people he thinks are lying about paychecks," he asked in a news release. "If he's got so much time on his hands, why isn't he at the Department of

Finance and Administrative digging for a solution to this interminable problem?" Oliver later acknowledged that he has no evidence that Huckabee is examining the records of state employees who he thinks are lying about paychecks. "Obviously, someone has done some checking, or they wouldn't be making that accusation," he said, referring to the Huckabee administration.

Huckabee said Tuesday that the suggestion that his administration was having officials go through employee personal records to find "dirt" on those who complain to the news media is "absolute nonsense and an unfounded lie."

He said he got the impression at a meeting of state agency directors that a state employee was fired and was not entitled to a paycheck and then claimed to the news media he didn't get one to which he said he was entitled. He said he was not told the employee's name. Huckabee spokesman Jim Harris said the disciplinary action was discovered by an agency payroll clerk when the clerk was asked to investigate why the employee had not received a check as part of an effort to make the computer process work better.

Oliver also has blamed Huckabee for the delays in processing child-support payments. Huckabee has set a deadline of Friday for processing the backlog of support checks.

Dan McDonald, administrator of the state Office of Child Support Enforcement, said missing information was holding up the processing of 1,985 support checks from noncustodial parents and employers totaling $ 434,459 at the close of business on Tuesday. At the close of business on Thursday, omissions had been holding up the processing of 11,769 checks totaling $ 1.5 million, he said.

He has attributed the delays in processing support checks to the state's assuming more child-support cases than expected in July and to it taking it longer than expected to convert data into a new computer system.