Published: July 02, 2009 09:23 am      

State auditor to review organizations’ spending

KLC, KACo audit could take several months

FRANKFORT — Kentucky Auditor Crit Luallen said Wednesday that her office is planning to review the spending habits of two state associations that represent counties and cities.

The action follows media stories regarding employee expense reports at the Kentucky Association of Counties and the Kentucky League of Cities, Luallen said. Luallen sent letters to presidents of both organizations Wednesday informing them of the pending audit.

“There needs to be a complete and full review of how the boards in each case oversees its finances and its spending to ensure that they’re being as accountable as they can possibly be to the taxpayers,” Luallen said in a telephone interview.

A Lexington Herald-Leader report this week found that top officials at KACo, a nonprofit group that lobbies on behalf of Kentucky’s 120 counties, have charged nearly $600,000 in travel, entertainment and other expenses during the past two years — including hundreds of dollars in charges at strip clubs and a local escort service.

Three top officials at the Kentucky League of Cities had spent more than $300,000 on travel, meals and other expenses during the past three years.

Luallen’s office also recently audited the Lexington airport after it was reported officials had spent thousands of dollars on premium tickets to sporting events, a Hannah Montana Concert, Wii video game bundles, trips and $4,400 at a strip club. The results of that investigation were forwarded to the Kentucky attorney general, U.S. attorney’s office and the FBI.

Luallen said her office has a “responsibility to Kentucky citizens to ensure accountability for their tax dollars.”

KLC board president Connie Lawson, also the mayor of Richmond, Ky., said she was “sure they’ll cooperate” with the audit, adding that KLC officials were ready to make necessary policy changes.

“If there’s something that we could do differently that would be perceived differently, that’s what we will do,” Lawson said.

KACo Executive Director Bob Arnold said there may be a question about whether Luallen has the authority to conduct the audit. Arnold said the association also has other audits it pays for each year, including by the Department of Insurance and the Department of Workers’ claims.

“All of those items are in our budget,” Arnold said. “An audit from her is not in our budget, so I don’t know if she would expect us to pay for her audit or not.”

Luallen spokesman Terry Sebastian said the office would charge fees for its audit, but was uncertain of the cost. Sebastian said the recent airport audit cost approximately $78,000.

KACo board president Mike Foster, meanwhile, said he had began reviewing KACo’s finances since last December and considers an audit useful. Foster is also the Christian County attorney.

“I’m always looking for alternatives to be sure we can do a better job of managing the organization,” Foster said.