A special examination found several policy and financial problems with Kentucky’s criminal justice training program and an associated fund to provide training and incentive pay for officers.
The exam of the state Department of Criminal Justice Training and the Kentucky Law Enforcement Foundation Program Fund, both of which are housed at Eastern Kentucky University, found “a serious lack of oversight and transparency, resulting in poor policies and procedures, circumventing state procurement and hiring law, and unnecessary expenditures,” said state Auditor Mike Harmon.
The department, which is part of the state’s Justice and Public Safety Cabinet, provides criminal justice training. The department administers the foundation to provide training and incentive payments to law enforcement officers.
It is funded by a 1.8 percent surcharge on property and casualty insurance premiums paid by Kentucky citizens. The surcharge generated $67.6 million last fiscal year. Each officer gets $4,000 a year in training incentive pay from the fund.
The performance audit reviewed financial transactions of the department and foundation between July 1, 2006, and June 30, 2016, and raised several questions about how the department interacts with EKU.
Among other things, it questioned a contract the department has with EKU that allows it to circumvent state procurement laws and regulations and a hiring arrangement it has with EKU that allows the department to circumvent state hiring procedures, creating potential salary and benefit inequities.
The exam said “auditors analyzed an unusual contractual arrangement with EKU in which department staff were hired as EKU employees, rather than merit system employees or state-approved contract employees, and paid via a $1.6 million annual contract with EKU.”
The department’s personnel contract with EKU should be discontinued, Harmon said.
Harmon said the audit found no criminal wrongdoing but it will be referred to the Executive Branch Ethics Commission for its review.
Justice and Public Protection Secretary John Tilley and state Rep. Denny Butler, R-Louisville, had requested the audit.
“I’m pleased to report that our new team is already implementing reforms based on the results of this review,” said Tilley.
Mark Filburn, who took over as new commissioner of the department in late May, said he has an all new staff in place.
Other findings from the audit include:
▪ Inadequate analysis of the surcharge rate on insurance premiums led to surpluses which were swept to the state’s General Fund and not spent for law enforcement objectives. Since 2010, more than $56 million has been swept from the foundation’s fund to the General Fund, which pays for most state programs.
▪ Funding arrangements created uncertainty regarding ownership of the department-occupied buildings and confusion regarding the responsible party for building maintenance.
▪ Certain foundation expenditures did not appear to be necessary or reasonable. The audit mentions purchases of custom-engraved mint julep cups, wrist watches, bracelets, catered food and facility rental for retirement parties.
▪ The department utilized travel vouchers for expenditures which should have been paid for through other means, and excessive travel was identified. For example, $1,108 was spent for an employee to drive to a one-day workshop in Canada when the same training was offered a month before in a closer location. Another employee claimed $4,482 in expenses for a three-week management course in Illinois.
▪ Costs for the quarterly magazine published by the department are excessive at more than $500,000 a year.
▪ The department’s hiring and contracting practices led to potential conflicts of interest. Auditors found multiple family relationships between employees. A spouse of a high-ranking employee had a $50,000 personal services contract with the department to monitor training instructors and a cousin of the former commissioner received an annual salary and benefits totaling more than $158,000.