State agency moves to clean up surplus sales as investigation continues

The Administrative Office of the Courts is considering changes to clean up its sales of surplus goods and vehicles in the midst of an ongoing investigation by Attorney General Andy Beshear’s office.

The AOC has begun discussions to give control of surplus sales to the executive branch of state government, as well as handing over management of the AOC’s fleet of vehicles, according to AOC spokeswoman Leigh Anne Hiatt.

“We regret that the AOC has deviated over time from applying best practices to the disposal of surplus property,” Hiatt said Friday. “We’re making every effort to ensure that controls are in place to prevent this from happening again. The AOC is deeply committed to being good stewards of taxpayer dollars and transparent in how it spends state funds.”

Since 2013, the AOC has been holding “employee only” surplus sales, where the office would sell old furniture, out-of-service computer equipment and high-mileage vehicles. Only the 225 employees who worked in the AOC’s Frankfort headquarters were allowed to participate in the sales.

The AOC is the administrative arm of Kentucky’s judicial branch of government. It administers the budget for the state’s courts system, is responsible for court facilities, maintaining court statistics, administering personnel policies and payroll. It has an annual budget of $74.85 million.

In the executive branch of state government, surplus sales are open to the public, as required by state law, according to Pamela Trautner, the spokeswoman for Kentucky’s Finance and Administration Cabinet. Those same laws, though, do not apply to the judicial branch of state government.

The potential changes by AOC come after questions from the Herald-Leader and attorney general’s office sparked an internal review of surplus sales by the AOC. The AOC acknowledged Thursday that there are “potential irregularities” in their surplus vehicle sales, but they have refused to give the Herald-Leader the documents it requested about those sales.

Kentucky’s Open Records Act would require any other public office to release documents about the vehicles, but the judicial branch of the government is not subject to the law.

So far, one employee has been temporarily suspended during the investigation.

On Friday, the AOC released information about one surplus vehicle purchase, on Jan. 9, 2015, by former Kentucky Supreme Court Justice Will T. Scott. Scott paid $2,532 for a Ford Crown Victoria with 95,744 miles, according to Hiatt.

“This is the only time we are aware of that the AOC has sold a car to a Supreme Court justice or Court of Appeals judge,” Hiatt said. “It is highly likely that this price well exceeded what the car would have brought at public auction.”

The current Kelley Blue Book value for a 2006 Ford Crown Victoria with the same mileage in “good” condition from a private party is $2,653.

The AOC has refused to release information about a 2014 surplus vehicle sale run by J. Scott Brown, the AOC’s executive officer of administrative services, where five surplus vehicles — four Chevrolet Impalas and one Chevrolet Express van — were for sale.

“When your request first came in, we were compiling information with the intention of providing it without delay,” Hiatt said Thursday. “However, at this time these documents are now the subject of an Office of Attorney General investigation and cannot yet be released to preserve the integrity of the investigation.”

The AOC also met with the Auditor of Public Accounts on Friday to obtain assistance in reviewing the AOC’s internal audit procedures, Hiatt said.

This story was originally published April 14, 2017 at 1:38 PM with the headline "State agency moves to clean up surplus sales as investigation continues."