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October 30, 2009

Call for action — 11/01/09

County officials need to be better watchdogs over KACo

Anonymous The Daily Independent Fri Oct 30, 2009, 01:36 PM EDT

Kentucky Auditor Crit Luallen has released her office’s audit of the Kentucky Association of Counties (KACo) for the period from July 1, 2006, through June 30, 2009, and its findings should enrage county officials throughout the state and taxpayers who have helped support the wasteful spending of the organization that portends to be the voice of the state’s 120 counties in Frankfort.

It also should convince county leaders throughout the state to take a more active role in KACo, if for no other reason than to keep a closer eye on the organization’s expenditures. Clearly, elected officials in the state’s 120 counties were asleep at the wheel while KACo officials — both members of the KACo board and the organization’s professional staff led by former executive director Bob Arnold — wasted thousands of dollars on everything from lavish dinners and alcohol to sports and entertainment tickets, extravagant Christmas parties and even an escort service.

Fortunately, KACo has already initiated changes aimed at ending the abuses. Arnold last month resigned at the request of the board, meaning he was essentially fired — as well he should have been. The board also adopted a code of ethics for employees and board members that bans many of the abuses listed in the audit.

But more needs to be done. The 400-page audit makes 150 recommendations for better controls and oversight — some already implemented by the KACo board — and 40 findings.

Local officials expressed shock at the findings of the report. Laurel County Clerk Dean Johnson serves on KACo’s board, though not on the executive board which approved the reimbursements.

“I couldn’t believe some of the charges on those credit cards,” said Johnson. “Some of this was extremely excessive and shouldn’t have ever happened.”

Rowan County Judge-Executive Jim Nickell said the disclosures of spending “concerns me a great deal. Evidently for years there’s been very little oversight of how those monies have been paid out and for what they were paid out.”

Little oversight is right. The audit lists credit card and reimbursed expenditures which had an “unclear business purpose, inadequate documentation, excessive or no supporting documentation,” including $48,426 for board Christmas dinners; $28,700 for sports tickets; $11,593 for staff birthday parties; and $7,262 for staff Christmas gifts. Examples of “questionable expenditures” were double retirement payments for staff of $622,355, board payments for meetings of $334,300, a sports advertising contract of $247,944 and $12,600 for a Frankfort condominium.

And then there were the charges for the escort service and for a Louisville strip club. Arnold and former KACo President David Jenkins, judge-executive of Spencer County, signed the credit card receipts for the adult entertainment services but have claimed someone else made those charges. However, Luallen’s report concludes, “According to documentation obtained by this office, auditors found evidence to support that the escort charges were incurred by the cardholders.”

While KACo’s current board seems to have taken the right steps to end the abuses, it is disturbing that the same release that announced Arnold’s forced resignation also praised the former executive director for his accomplishments. It was as if the board was saying that Arnold did a great job and it was sorry it was necessary to fire him.

“Our examination provides the leadership of KACo the proper tools to continue to strengthen accountability and to fulfill its responsibilities to the counties and the taxpayers,” Luallen said. “I believe the public expects no less. In this current economic downturn, when our counties are struggling, our citizens have no patience for waste and excess from those who hold their trust and handle their tax dollars.” She’s right, of course.

To our knowledge, the majority of county officials in northeastern Kentucky have not been particularly active in KACo. To be sure, counties have taken advantage of the insurance provided by KACo and have given some support to the legislative proposals advanced by KACo but, beyond that, their role in KACo has been minimum.

That needs to change. For one thing, there is value for county officials from throughout the state gathering several times a year to discuss common concerns. As such sessions, they can learn what has worked — and not worked — in other counties.

Since KACo provides essential services to counties — primarily insurance protection — every elected county official has an responsibility to see that their payments to KACo are being spent wisely and that the organization is being operated efficiently. KACo clearly has not been properly managed and tax dollars have been wasted.

County officials need to cease sitting passively on the sidelines while their money is being wasted. They need to get more involved in KACo.

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County officials need to be better watchdogs over KACo

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