State Auditor Crit Luallen is urging the Kentucky League of Cities to look at her guidelines for public, non-profit boards and make appropriate policy changes before she determines whether she needs to take any official action.

"It's critical that appropriate controls and oversight are in place to ensure the proper use of public dollars," Luallen said in a statement yesterday. "We look forward to seeing how the board addresses these issues before making any decision about additional steps this office might take."

Luallen was reacting to Herald-Leader stories on Sunday about the League, a non-profit organization that provides lobbying, insurance and other services to 382 cities throughout the state. The top three officials of the League spent more than $304,000 on travel in three years, according to documents obtained by the Herald-Leader under the state's Open Records Act. League Executive Director Sylvia Lovely has a compensation package of more than $315,000 and is provided with a BMW SUV by the League.

Richmond Mayor Connie Lawson, the chairwoman of the League's board, said she expects that action will be taken at the League's June 19 board meeting.

"I'd say there will be some changes," Lawson said.

Lawson, who was attending a funeral on Monday, said she could not remember whether the board had separately approved Lovely's salary after a 2008 compensation study. Lovely has received raises totalling 25.5 percent since 2006. But Lawson said she did not know how much money Lovely makes until a couple of weeks ago.

In a letter to Lawson, Lexington Mayor Jim Newberry, a member of the League's executive board, called for several policy changes after receiving information about the League's spending. Newberry specifically asked that the League stop paying for the travel of executives' spouses, use more economical cars and put an end to doing business with relatives of League officials. The stories showed that League officials had spent almost $21,000 at Azur, a south Lexington restaurant co-owned by Sylvia Lovely's husband, Bernard Lovely.

Newberry also asked the board to adopt recommendations made by Luallen on May 11. At that time, Luallen issued 28 written guidelines for public agencies in the wake of a spending scandal at Blue Grass Airport. The Herald-Leader uncovered more than $500,000 in spending by airport managers in three years. A criminal investigation is under way.

Lawson appeared to be unaware of Luallen's recommendations, saying she wished that the auditor would give some written guidance on what board members should do.

"We didn't realize we were supposed to be micro-managing" the League, Lawson said. "It would be a positive thing to get some guidelines out of Frankfort."

One of the major recommendations Luallen made in May was that boards oversee credit card expenditures and expense reimbursements. At the League, executive board members approve a yearly budget. However, no one on the board oversees any executive expenses.

Sylvia Lovely oversees the expenses of her two top lieutenants. Neil Hackworth, the deputy director of the League, signs her expense reports.

Lovely could not be reached for comment on Monday.

Many of the League expenses did not detail why the money was spent.

Luallen also recommended training for board members to understand a group's structure and policies so that appropriate monitoring of employee travel and reimbursements could occur.

She also suggested that boards review situations in which vehicles are provided to employees, and that raises be reviewed to ensure that they were reasonable. The League provides vehicles to four executives.

The most recent raises were included in and approved as part of the annual budget, Lawson said. However, that was apparently a line item covering all League salaries, with no detail of individual salaries.

Lexington council member Diane Lawless said that she is outraged by the third example, following the airport and the Lexington Public Library, of a public board not properly overseeing an organization.

"I want boards, including this one, to take responsibility for the oversight they are charged with," she said. "I'm tired of everybody pointing fingers at everybody else."