The Urban County Council voted unanimously Thursday to ask investigators with the U.S. Department of Labor to audit the Bluegrass Area Development District’s management of federal workforce dollars.
The council took the unusual step after the executive board of Bluegrass voted April 13 to appeal a nearly $900,000 order to repay the state Education and Workforce Cabinet for money misspent from 2010 to 2013. The order also found Bluegrass had failed to correct ongoing financial management issues, a charge the Bluegrass executive board said was untrue.
The resolution passed Thursday asks the Office of Inspector General for the U.S. Department of Labor for an audit. The resolution does not guarantee that an audit will be conducted.
Bluegrass manages workforce, aging and independent living, planning and other services for a 17-county region that includes Fayette County.
A March 2014 state examination by former auditor Adam Edelen found mismanagement of the district and questionable spending. The state Education and Workforce Cabinet and the Department of Aging and Independent Living followed up with its own examinations. The two agencies found more than $2.8 million in questioned costs.
The state workforce cabinet issued its final order on March 31 finding that the district needed to repay $898,525 of federal workforce dollars that it says was misspent. Some of those costs include rent for Bluegrass’s Perimeter Drive building that was paid to a nonprofit started by a former Bluegrass director. Other questioned costs included one-time bonuses, credit card charges and travel expenses.
The Department of Aging and Independent Living, which is part of the Cabinet for the Health and Family Services, has not issued a final determination letter. Last month, the state was notified the Office of Inspector General of the U.S. Department of Health and Human Services has launched in investigation. Bluegrass officials have said that investigation is ongoing.
Bluegrass executive committee has maintained that it has made key changes to its management structure and its financial oversight. No one from Bluegrass attended Thursday night’s meeting.
David Duttlinger, the executive director of the Bluegrass ADD, issued a statement Wednesday that said if Lexington wanted the audit, the city should pay for it.
Councilwoman Susan Lamb, who introduced the resolution, said an office of inspector general review would be paid for by the federal government. Lamb said she hoped the audit would help the organization finally clear its name after nearly three years of audits and questions about its ability to manage federal contracts.
Lamb asked that the council give the resolution two readings on Thursday night in hopes the federal review can start quickly.