FAYETTEVILLE (KFSM) -- Whenever the state of Arkansas has a state budget surplus, the money goes into a General Improvement Fund, also known as GIF.
A large chunk of that money will be distributed among eight economic development districts around the state, including Northwest Arkansas. The money can be used by a city, municipality or nonprofit for repairs or construction.
"Those groups have a granting process, where different organizations can write grants requesting money," said Rep. Charlie Collins, R-Fayetteville.
A representative from one of those entities may approach their elected officials to get started on the grant process. In Northwest Arkansas, that official would then take the request before the Northwest Arkansas Economic Development District.
"I would say, 'hey, I think this is a worthy cause in my district,'" said Sen. Bart Hester, R-Cave Springs. "The Northwest Arkansas Economic Development Commission out of Harrison would look at that. They have a board, and they would vote on that. If the board approved it, then it would be funded."
That GIF is as the center of the case against former Rep. Micah Neal, R-Springdale, who pleaded guilty Wednesday (Jan. 4) to taking bribes from two nonprofits to appropriate them $600,000 of GIF money.
Court documents state a state senator was also involved in the bribe conspiracy. 5NEWS sources confirmed that state senator is Jon Woods, R-Springdale, who did not run for reelection in 2016. Sources also confirmed to 5NEWS that Ecclesia College in Springdale was one of the nonprofits.
"Ecclesia College has received probably more than their fair share of general improvement fund money over the years," Hester said. "From a lot of legislators, but certainly from Representative Neal and Senator Woods."
The names of three other people implicated in the investigation and the name of the second nonprofit have not yet been released.
Collins called the revelations a surprise and a blow to public trust.
"We've got to work even harder to continue to earn [people's] trust everyday," Collins said. "That's not good when we call that into question."
Both men agreed they would rather see state budget surplus money go back to taxpayers in the form of a tax cut. Hester said he's confident the GIF will be addressed in the upcoming legislative session that begins Monday (Jan. 9).
"I don't think it's an appropriate process, and there's been different lawsuits in the past talking about that," Hester said. "But, I would say that we will see this program come to an end."
In a statement, Gov. Asa Hutchinson said his budget does not include appropriations for the GIF.