Politics & Government

Kentucky auditor says he ‘follows the data.’ Opponent says not far enough.

In the four years since he surprisingly won the election to be Kentucky’s auditor over perceived Democratic rising star Adam Edelen, Republican Mike Harmon said he regularly tells his staff to “follow the data.”

Harmon’s constitutional office audits accounts and financial transactions of state government spending agencies.

His opponent in the Nov. 5 general election, Democrat Sheri Donahue of Frankfort, said Harmon hasn’t taken his own advice often enough.

“He has had some accomplishments but I would contend there has not been enough of them,” said Donahue. “To be kind, Mike Harmon’s work as auditor has been very superficial.”

In addition to the 500 to 600 audits the office must do each year under the law — such as those of county fiscal courts and sheriffs’ offices — Harmon has performed several high-profile examinations.

In a recent interview in his Frankfort campaign headquarters, Harmon mentioned that he undertook the first-ever outside examination of the state Administrative Office of the Courts and revealed deep financial problems within the KentuckyWired project to make high-speed Internet access available in every Kentucky county.

“I have 13 years of experience in the Kentucky legislature, I have always carried myself as an independent, non-partisan in the execution of my duties,” said Harmon, a Republican. “I tell my staff not to give anyone a pass, just simply follow the data to wherever it takes you.”

Donahue, an industrial engineer who for 20 years audited multimillion-dollar weapons systems projects and managed classified security intelligence contracts for the U.S. Navy, contends Harmon has failed to properly scrutinize Gov. Matt Bevin’s administration.

“When we see financial questions like with Braidy Industries’ aluminum mill in northeastern Kentucky, the troubled Martin County water district and Gov. Matt Bevin’s use of the state plane, so much has not been investigated by the auditor’s office,” she said.

Harmon dismissed Donahue’s criticism as partisan politics.

“Unfortunately Sheri is very partisan in her comments,” said Harmon. “This is not an office that should be politicized.”

The office of state auditor was established in the first Kentucky Constitution of 1792, but did not become an elected position until 1850.

It often garners much publicity as it unveils questionable, and sometimes illegal, spending by state and local agencies. It has an annual operating budget of about $16.5 million and fluctuates between 130 and 140 employees. The job pays $124,113 a year.

Donahue says her goal as auditor would be to root out waste, fraud, and abuse and help restore people’s faith in their government. She says she especially wants to focus on auditing the economic incentive packages that state officials offer private businesses looking to locate or expand operations in the commonwealth.

The Democrat also pledges to use her engineering background to evaluate office operations and improve cybersecurity as well as the auditing processes.

She said she has “stood up to billion-dollar defense contractors. So, entrenched special interests and Kentucky bureaucrats in Frankfort don’t impress me.”

Harmon, a former inurance agent in Danville, said his record in office speaks for itself.

“I don’t go after anybody,” he said. “We just follow the data.”

He said it’s easy to criticize a state auditor for “deliberate work.”

“Lots of people today want an answer over night. We get all kinds of tips of improper spending,” he said. “We have to do an assessment, which may take a month or two and then an audit usually takes eight months to a year.

Harmon said he never asks about the political party affiliation of someone being investigated. “Sometimes I already know it but that is never a factor in what we do,” he said.

State campaign finance reports from Oct. 6 to Oct. 21 showed Donahue with a beginning balance of $3,515. She took in $11,605 during that period and spent $8,129 for an ending balance of $6,991.

Harmon started that time period with $106,025 and then took in $17,734 and spent $98,136. He reported an ending balance of $25,662.

The Libertarian Party has fielded a candidate in the auditor’s race, Kyle Hugenberg of Louisville. He is a certified internal auditor, credentialed by The Institute of Internal Auditors. He has worked in the financial services, health care, manufacturing, and payment processing industries.

Hugenberg says on his campaign website that he will perform audits fairly and strictly because he is not controlled by any special interests or party bosses.

The Candidates On The Issues

Question: Should the governor’s use of the state airplane be audited?

Donahue: Yes, without question. I’ve worked alongside a lot of people in law enforcement and the intelligence community. They would call the governor’s use of the plane irregular and worthy of greater scrutiny. It’s unacceptable that the current auditor has ignored the situation.

Harmon: Yes, an assessment should be done as to whether there has been compliance with the requirements in law and regulations regarding personal use of the state plane. To provide a fair comparison, this assessment should look at the last two gubernatorial administrations.

Question: What state program or expenditure needs to be audited the most?

Donahue: The state hands out more in tax breaks in the form of economic incentive packages each year than it takes in. We must ensure that taxpayers are getting their money’s worth from these investments. Braidy Industries is just the tip of the iceberg.

Harmon: Economic development incentive programs, including whether limitations are needed on the Kentucky Economic Development Finance Authority’s authority to issue bonds, as was done in the case of Kentucky Wired, where the Beshear administration obligated taxpayers to a $1.5 billion commitment with only a $30 million investment approved by the legislature.

Question: Transparency has become an issue in the state’s public pension systems. What should be done to improve that?

Donahue: First, the auditor’s office must secure its own systems. It’s understandable the Kentucky Teachers’ Retirement System wanted to hold back information from the auditor’s office since the auditor is not following basic encryption practices for data. Regarding Senate Bill 2, work is needed to clarify the standards.

Harmon: My office recently found 80 percent of Kentucky Retirement System and Teachers’ Retirement System contracts were not posted online as required by current law. An enforcement mechanism should be added, and laws should be clarified to ensure transparency and compliance with statutes by our public pension systems.

Jack Brammer is Frankfort bureau chief for the Lexington Herald-Leader. He has covered politics and government in Kentucky since May 1978. He has a Master’s in communications from the University of Kentucky and is a native of Maysville, Ky.
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