The Richmond Register

October 23, 2013

State auditor not required to do city oversight

Smart relates Richmond’s experience

By Ronnie Ellis
CNHI News Service

FRANKFORT — Some lawmakers are getting some heat from constituents about local government operations and what they see as too little oversight by the state.

So lawmakers — as they are wont to do — are demanding answers from someone else, in this case the state Auditor of Public Accounts and the Department of Local Government.

But Auditor Adam Edelen explained to the Interim Joint Committee on Local Government that the lawmakers are looking in the wrong direction. He is required, by law, to audit county governments but not cities — and if they want him to take on that chore, he will need more resources.

“My office does not have the statutory authority to audit cities,” Edelen said. Cities are required to conduct independent audits, and Edelen’s office will sometimes perform special examinations of cities upon receiving complaints or referrals as it currently is doing in Barbourville.

In fact, Edelen said, his office is “deluged with requests about cities,” but his office already performs 600 audits a year with only 109 auditors, some of whom make under $40,000 a year and often move on to better paying positions.

“If we’re going to get into cities, I can’t afford to do it with what I’ve got,” Edelen said.

That prompted lawmakers to complain Edelen was asking for more funding at a time of tight state finances.

“We’ll be happy to add your name to the list of agencies lining up to ask us for more money,” quipped Sen. Damon Thayer, R-Georgetown, the Majority Floor Leader of the Republican-controlled Senate. Rep. Stan Lee, R-Lexington, scolded Edelen for asking for more money.

“I wasn’t making a request for additional funding,” Edelen said. “I was answering an honest question posed by a member of this body about what it would take to do the job of reviewing cities.”

Edelen agreed with the need for more oversight, although an official with the Kentucky League of Cities later told the committee the cities don’t need more “state centralization or oversight.”

Rep. Rita Smart, D-Richmond, spoke of her personal experience as a one-time member of Richmond’s city council. “For three months we never had a treasurer’s report.”

Smart eventually learned the city had run deficits for several years, dipping into reserves to make ends meet until the reserve fund was depleted.

“I was appalled,” Smart said. “And we had an audit every year.”

Committee Co-Chair Rep. Steve Riggs, D-Louisville, suggested the law be revised to require alternate year audits of county governments to free Edelen and his staff to examine city governments.

“That would be robbing Peter to pay Paul,” said Edelen who said he could not support anything which would diminish the current level of oversight.

Sen. R.J. Palmer, D-Winchester, chided the committee for complaining to Edelen about problems arising from the way the laws are written.

“It is our responsibility to decide whether we want cities to have some oversight as counties do,” Palmer told his colleagues. “It is our responsibility to fix that.”

After Edelen, it was the Department of Local Government’s turn to answer to the lawmakers. State law passed by the General Assembly requires city audits and financial reports to be submitted to DLG but gives DLG no authority to monitor or examine city operations.

Following the debate over city audits, Midway Mayor Tom Bozarth, president of the Kentucky League of Cities, told the committee the KLC’s top legislative priority is legislation to allow local communities to levy a 1-percent sales tax for specific projects for a limited time upon approval by the city’s voters.

That prompted Thayer to state his opposition to tax increases and to ask Bozarth if KLC will support legislation to repeal prevailing wage laws and to make Kentucky a right-to-work state. Bozarth agreed with both but said cities are faced with declining revenues and growing expenses and need to “diversify their revenues.”

It also prompted an exchange between Thayer and Rep. Jim Wayne, D-Louisville, over taxes and what Wayne called “right-to-work for less” laws.

Ronnie Ellis writes for CNHI News Service and is based in Frankfort. Reach him at rellis@cnhi.com. Follow CNHI News Service stories on Twitter at www.twitter.com/cnhifrankfort.