When an organization receives federal grants it is expected to follow the federal laws and guidelines that govern the flow of those funds. In most instances this is the case, but when those funds are going to entities that are closely controlled by elected officials there appears to be a different set of guidelines.
The Bluegrass Area Development District and some of its board members (locally elected officials from Fayette and surrounding counties) have a long history of mishandling taxpayer funds from a variety of sources, including the U.S. Department of Labor and the U. S. Department of Health and Human Services.
This history of abuse is well documented in two reports by Kentucky state auditors, Ben Chandler in 1995 and Adam Edelen in 2014.
The Edelen audit cites an incident in which $20,000 was disbursed by the BGADD's Administrative Review and Finance Committee with no questions asked. The committee didn't even ask for receipts to justify the request. The report also cites the use of $600,000 in Medicaid money to purchase a property that the BGADD intended to use for a controversial reentry program.
The report also cited interviews with several employees who claimed that all funds flowing into the organization were lumped into one big pot and spent as needed throughout the year, with the individual grants being reconciled at the end of the year. Hardly the accounting procedures that the federal government expects fund recipients to follow.
These violations are expected to run into the millions of dollars when rents paid to the Bluegrass Industrial Foundation are taken into account. In addition, I and others who have followed this story have confirmation that similar activities are occurring in area development districts in other areas of the state. These incidents have been reported to state officials as well.
Recently, using the open-records process, I have obtained documents detailing the senior manager of the BGADD's calculated decision to appropriate about $48,000 of federal workforce funds despite the workforce board's decision otherwise.
Furthermore the method recently used in the office of Beth Brinly, deputy secretary of the Education and Workforce Development Cabinet, to resolve this issue would involve reviewing the charges again and going back and retroactively amending the budget to approve these previously disallowed expenditures — or, in layman's terms, cook the books.
The Education and Workforce Development Cabinet has been made aware of these issues through multiple complaints lodged over the last year, which means Gov. Steve Beshear should be apprised of the situation. Yet he remains eerily silent on this matter.
The governor is the primary recipient of all federal workforce funds that flow into this state under the Workforce Investment Act. He approves the boundaries of the workforce areas, and is responsible for conflict resolution when it arises.
When fiscal agents disobey the law, it is his responsibility to act in a corrective manner up to and including punitive measures. Yet, to my knowledge no fiscal agent has ever been removed. How long will the governor's office allow these blatant activities to continue before taking action to fix a broken system?
The citizens of the commonwealth deserve leadership that will stand for what is right and what is expected under the law, even when it is not politically expedient to do so. We need a leader who will demand full compliance with federal law.
We need a leader who will recognize that there is a problem that extends across this state and who will take action to reform our workforce development system. Will Beshear be that leader?