John W. Heltzel quit Thursday as director of the Kentucky Division of Emergency Management, two days after a state audit questioned millions of dollars in spending at the agency and accused him of threatening employees to keep them silent.
"Team, for the good of our agency, today I have tendered my resignation to the governor and he accepted it," Heltzel told his staff in an email Thursday afternoon.
"I am proud of what we have accomplished together, and I know you will continue to protect and restore the commonwealth," said Heltzel, a retired brigadier general in the Kentucky National Guard. "Please pull together and continue on the path. I have been blessed to serve with you."
Reached by phone later, the 55-year-old Heltzel declined to comment. He made $79,538 a year.
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Democratic Gov. Steve Beshear appointed Heltzel in 2008 to head the agency that coordinates state and federal responses to disasters and runs a 24-hour Emergency Operations Center in Frankfort. On Thursday, Beshear said the resignation was appropriate.
"The findings in the recent auditor's report made it clear that new leadership was needed in the agency, given the numerous questions and grave concerns it raised about the proper handling of funds, reliable and transparent accounting, and appropriate work environment," Beshear said in a statement.
"The public's trust is a sacred investment that we all must safeguard, and this change in leadership will help to restore accountability and transparency to this critical agency," Beshear said.
State Auditor Adam Edelen unveiled a special audit of Emergency Management on Tuesday that he said revealed "waste and abuse at one of the most vital agencies in state government." The audit documented questionable spending on alcohol, meals, gifts, entertainment, hotel rooms, no-bid contracts and other items.
Edelen estimated the total for questionable spending from 2007 to 2012 at $5.6 million. He said his auditors had difficulty determining exactly how Emergency Management spent money because Heltzel and other managers "openly threatened" employees to intimidate them into staying quiet. Simultaneously, finances were poorly organized and spending records were altered or manufactured to conceal where money went, he said.
Beshear on Thursday named a temporary replacement for Heltzel: Mike Jones, executive director of the Office of Management and Administration at the Department of Military Affairs. Jones' first task will be to draw up a corrective plan for problems identified in the audit, the governor said.
It's disappointing that Heltzel remained in his post for two days following the audit's release, said Steve Robertson, chairman of the Kentucky Republican Party. Beshear's initial responses expressed disappointment in the audit's findings but praised Emergency Management for its work responding to disasters.
"Beshear should have taken decisive action by terminating the KyEM director as soon as the auditor's findings became public," Robertson said. "It's also troubling that this level of mismanagement, fraud and intimidation could have occurred without the governor's knowledge in the first place."