Special Reports

Auditors descend on library

City auditors arrived at the Lexington Public Library on Thursday to secure records and begin a broad examination of its finances, catching library officials by surprise.

In a statement released Thursday night, Kathleen Imhoff, the library's chief executive officer, said the auditors told her they were acting on an anonymous tip sent to State Auditor Crit Luallen and city officials.

Luallen confirmed in an interview that her office recently received a tip about "personal expenses at the library that are possibly excessive and inappropriate."

Luallen said she referred the information to Mayor Jim Newberry for action, because the city of Lexington provides most of the library's funding, although her office will continue to monitor the case.

The city auditors "demanded a significant number of financial, personal and personnel records from my computer ... copies of expense reports from all library employees as well as many other items," Imhoff said.

After some confusion — Imhoff had been planning to leave for Louisville to accept an award — the library sent for its lawyer but agreed to cooperate with the audit, which will resume Friday morning, said library board Chairman Burgess Carey.

"I've since talked to the mayor and assured him that any information they want will be provided to them," Carey said.

"It was a pretty comprehensive request," he added. "They're asking for transactions, for ledgers, for expense account statements."

Imhoff said the auditors departed Thursday with a box of records and interviewed her for more than two hours.

"I have nothing to hide. They just didn't tell me they were coming," Imhoff said.

A spokeswoman for Mayor Jim Newberry declined to comment on the city auditors' actions. Luallen could not be reached late Thursday.

On March 16, Newberry asked the city's internal audit board to determine whether it had the authority to review the finances of 10 civic agencies that get public funding, including the library, the Lexington Center Corp., the Downtown Development Authority, the Lexington-Fayette Urban County Housing Authority and the Lexington Transit Authority.

Newberry said he wanted city auditors to determine if the agencies have adequate internal controls in place and if the agencies are properly audited on a regular basis to detect problems.

In an interview last month, Newberry said he was moved to act because of the credit card scandal at Blue Grass Airport.

Following on Herald-Leader stories, state auditors determined that top airport officials misspent more than $500,000, largely on airport credit cards. The scandal has led to resignations and a criminal investigation.

"There is no reason not to ask if there are similar issues at other agencies affiliated with the Urban County Government that get money," the mayor said at the time.

So far, only the library is being visited by auditors, said DeWitt Hisle, chairman of the city's audit board.

Hisle declined to say what specific concerns the auditors might have at the library or which other agencies, if any, might be next on their list.

"I really can't comment on an ongoing investigation," Hisle said.

The library is run by a board of trustees who are chosen by the mayor, and by law is guaranteed a slice of local property taxes, which last year came to $12.4 million, or most of its $15 million budget.

Imhoff was hired as CEO in 2003.

Following on its airport investigation, the Herald-Leader is examining spending at the library and some of the same civic agencies the mayor cited in his letter. The newspaper has requested financial documents under the Open Records Act and is interviewing agency officials and others.