Fayette County

Bluegrass ADD appeals state decision on aging, workforce

The Bluegrass Area Development District building 699 Perimeter Drive in Lexington.
The Bluegrass Area Development District building 699 Perimeter Drive in Lexington. Herald-Leader

The board of the Bluegrass Area Development District voted Wednesday to pursue appealing the state’s decision to yank its designation as an area agency on aging.

It also voted to pay 40 employees who work in its aging and independent living programs through July.

The votes came after the Cabinet for Health and Family Services Department of Aging and Independent Living Services abruptly announced it was not going to use Bluegrass to oversee $6.4 million that pays for aging services after June 30. On Wednesday, the Department of Aging and Independent Living sent the agency a letter saying it was revoking its federal designation as the area agency on aging for the 17-county area that includes Fayette County.

In that letter that arrived Wednesday while the executive committee of the Bluegrass Area Development District was meeting, a state aging official said it was revoking Bluegrass’ designation as the area’s agency on aging because on Tuesday Bluegrass staff refused to allow state officials access to computers and other information regarding its aging services.

Those aging services include home-nutrition programs, home-care services and programming money for senior centers.

Refusing the state access to those files violated the contracts the agency has with the state. As a result, Bluegrass could lose more of its contracts for services, including a Medicaid program for people with disabilities who live in their homes.

David Duttlinger, the executive director of Bluegrass, said the agency did not think it had the authority to give all of its computer and patient records to state officials because it is required to keep records for five years.

“If they just want access to the files, they can have access to the files,” said Jon Gay, a lawyer for Bluegrass. “They can have copies of anything they want.”

Duttlinger said they had no warning the state was going to terminate its aging contracts. The first it knew of the decision was when state officials came to Bluegrass’ offices on Tuesday morning demanding its computers and files.

The board voted to give Gay the authority to pursue appealing the state’s decision to revoke its area agency on aging designation. The board took no action on whether to appeal the state’s decision to no longer use Bluegrass to administer the 17 counties aging programs come July 1.

State aging and independent living officials said the move was prompted after Gov. Matt Bevin terminated Bluegrass’ federal workforce grants citing alleged ongoing financial problems at the district.

The problems started more than three years ago when a 2014 examination by then State Auditor Adam Edelen found questionable spending and mismanagement of the district. That examination was forwarded to the Education and Workforce Cabinet, which oversees federal workforce training dollars, and the Cabinet for Health and Family Services, which oversees aging and independent living.

Education and workforce officials determined Bluegrass owed the state nearly $900,000 in questionable spending. Much of those costs involved rent payments to a nonprofit that owned Bluegrass’ Perimeter Drive building. The founding director of Bluegrass started the nonprofit. Other questioned costs included one-time bonuses and travel expenses.

Bluegrass appealed the workforce cabinet’s final order on what needed to be repaid. That appeal is still pending. Then in May, Bevin sent Bluegrass a letter saying Bluegrass would no longer oversee federal workforce training money when its current contract ends June 30. That letter also said a cabinet review of 2015 spending raised further questions about the financial oversight of the agency.

Bluegrass appealed the decision to terminate Bluegrass from the workforce program to the U.S. Department of Labor, which oversees federal workforce programs.

“Neither of the two issues are final,” Gay said. “We have asked to see the 2015 monitoring report and have not seen it.”

The Department of Labor has 45 days to make a decision

Meanwhile, the Department of Aging and Independent Living determined in mid-June Bluegrass must repay the state a little more than $187,000. Some of those questioned costs involved one-time bonuses given to aging and independent living staff. The board voted on Wednesday to also appeal the questioned costs. The questioned costs involved spending from 2010 to 2013.

Duttlinger also asked the agency to pay the salaries of 40 aging and independent living employees for the month of July. It’s not clear how much that will cost the agency. Duttlinger said those employees need to help transition clients to new providers.

The actions of the state “are going to create chaos,” Duttlinger said. Many of those employees may eventually get jobs with other agencies, he said.

State aging officials said Tuesday they will contract directly with vendors such as senior citizen centers and promised that no services to seniors would be disrupted. State officials began contacting those providers Wednesday.

Beth Musgrave: 859-231-3205, @HLCityhall