Committee investigating fraud will subpoena documents

list of information sought isn't complete yet, Myers says

vhoneycutt@herald-leader.comJuly 7, 2010 

An Urban County Council committee investigating fraud allegations by a city employee will subpoena documents as part of its inquiry, according to an interim report given to the full council.

The committee is investigating fraud allegations made by Patrick Johnston, the city's director of risk management. Johnston made the allegations in confidential questionnaires in 2008 and 2009 submitted to the city's external auditors as part of the annual city audits.

The committee received the questionnaires from the auditors last week. So far, the questionnaires have been made available only to members of the investigative committee.

At issue is whether the allegations are related to the proposed elimination of Johnston's job. A separate series of e-mail messages from 2007 shows that Johnston had concerns about the city's procurement of insurance through the Kentucky League of Cities, which was embroiled in a spending scandal in 2009.

The committee's chairman, Councilman George Myers, wrote the interim report, and it was e-mailed to the council Friday.

Myers said after Tuesday night's council meeting that the list of documents they want to subpoena has not yet been submitted. "We're still compiling that list ... I don't have that list for you," he said.

He said he hopes to have a complete list in a week or so. Members of the investigative committee meet again Aug. 9.

The city's external auditor, Mountjoy Chilton Medley, and its internal auditor, Bruce Sahli, found no evidence that the Urban County Government's financial statements were materially misstated due to fraud, the legal definition of financial fraud.

Reporter Beverly Fortune contributed to this report.

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