Special Reports

Bill calls for agencies to be more transparent

A bill filed in the General Assembly Wednesday would require the Kentucky League of Cities, the Kentucky Association of Counties and other similar groups to post their expenditures on a Web site for the public to examine.

Republican Sen. Damon Thayer of Georgetown, who filed the bill, was among those lawmakers who publicly excoriated both groups after stories in the Herald-Leader and state audits revealed questionable spending, high salaries and numerous conflicts of interest at the quasi-governmental organizations.

Executive directors of both groups, which supply insurance and other services to cities and counties, resigned last fall.

Thayer's bill would require "substantial and substantive" financial information to be posted on a Web site that would be updated monthly. The information would include the amount of all expenditures, who received the payment and its purpose.

It also clarifies that the groups are subject to the state's Open Records Act and would require them to be audited by a certified public accountant at least once a year. Those audits also would be available online.

Thayer said Wednesday that he is likely to amend the bill so the associations must be audited by State Auditor Crit Luallen. The agencies would have to pay Luallen's office for those audits. Thayer said the bill is a companion to another measure he filed, Senate Bill 40, which would make all government expenditures available online.

"I know that in this environment, my constituents are very mad about any government waste, fraud and abuse," Thayer said. "They want the legislature to have more oversight."

Thayer said his bill does not address whether the organizations should comply with the state's Open Meetings Act, which requires most of an organization's meetings be conducted in public, with some limited exceptions.

"Maybe they do need to be subject to the open meetings law," Thayer said. "I think my bill is a good start, but it may be amended."

Jackson Mayor Mike Miller, the chairman of the KLC executive board, said there has been discussion about making the League's finances more transparent. "I would not object to that," he said of Thayer's bill.

KACo spokesman Rick Smith said he had not seen the bill and he had no comment.

Meanwhile, the League finished up a two-day executive board retreat Wednesday, less than a month after a scathing audit by Luallen.

Board members decided to hire a search firm to find a new executive director and will continue to close its meetings to the public, Miller said.

Miller said he hoped to see finalists for the search firm at the board's Feb. 4 meeting.

Miller said the board also discussed personnel issues but made no decisions.

Insurance Services Director William Hamilton and Deputy Director Neil Hackworth came under strong criticism from Luallen for spending money without a clear business purpose. Hamilton was criticized in particular for numerous conflicts of interest, including payments to various family members for League work.

Miller said the board's meetings will remain closed because some issues related to the insurance industry need to remain confidential. The League is subject to the state's Open Records Act because it receives more than 25 percent of its funds from public money, but the same criteria does not apply to the Open Meetings Act.

Luallen praised Thayer's bill. "Certainly, any steps to increase transparency and public accountability of these organizations is beneficial," she said.