State Auditor Adam Edelen released an audit of the Jefferson County Clerk’s 2011 financial statement last week, detailing numerous questionable practices under the leadership of Bobbie Holsclaw, who has held the position since 1999.
The report found public money commingling with a private nonprofit and a charitable fund run out of the office, as well as illegal Christmas bonuses for employees totaling almost $100,000. Edelen also found the office’s donation to the WHAS Crusade of Children was $1,337 less than what they raised for it, and this fundraising account paid for “reward lunches, breakfasts, and trophies for fundraising efforts,” as well as “retirement party expenses and other refreshments.”
In response, Holsclaw came out swinging against the report, painting it as a false and politically motivated attack by an overly ambitious Edelen. She claimed repeatedly in the media — as well as numerous times in their official response to the audit findings — that past auditors and audits had “approved” of every issue detailed in the report.
But as Edelen’s report countered to Holsclaw’s response, that’s not actually how state audits work. During a routine examination of a government agency, auditors do not have the time or manpower to test the entirety of its books and transactions, instead using a sample to find any weakness. Therefore, a “clean” audit doesn’t necessarily give the stamp of approval that all of an agency’s practices are sound.
“As we’ve repeatedly explained to Ms. Holsclaw, just because past auditors didn’t find those accounts does not mean the office approved of that activity,” Edelen spokeswoman Stephenie Steitzer tells LEO.
In addition, Holsclaw’s response also misrepresents several facts in the report. Though the 501(c)(3) run out of the office is clearly private, she insisted it was a “public charity.” And despite the Christmas bonuses going out to every employee in the same amount — in a uniform letter referring to it as a “gift” — Holsclaw insists it was “incentive based,” thus legal. No documentation was provided as to what criteria employees met in order to deserve the supposedly performance-based award.
Despite the audit’s findings, Holsclaw stated that she would continue many of the practices in question. It’s clear her strategy is to loudly denounce the audit as a faulty political witch hunt — which may or may not work — but one has to wonder if quietly accepting and implementing the recommended changes brought to her attention might have been the smartest course of action.
Ripped from the headlines
The Kentucky State Fair Board voted to hire Las Vegas-based trade show and convention company CEO “Rip” Rippetoe — yes, that’s his real name — as their new president and CEO last week, replacing the embattled Harold Workman once he retires at the end of this year.
Despite rumors that Gov. Steve Beshear — who wanted Workman to resign as early as last year — was grooming Secretary of Economic Development Larry Hayes for the position, search committee chairman Tom Schifano told media after the vote that all four final candidates were from out of state. Board chairman Ron Carmicle further stated Beshear had no input on the decision.
Rippetoe’s previous company specialized in increasing productivity and profitability, and if there’s any state agency that needs help in those areas, it’s the Fair Board. Going into the red in recent years and requesting an $8.5 million bailout from the General Assembly this year, the Fair Board is already projecting a $5.4 million deficit for the 2013 fiscal year.
And though the Fair Board continues to lose potential revenue from the long-vacant Kentucky Kingdom amusement park, Carmicle told reporters last week that he would not characterize the reopening of the park as “job one” for Rippetoe.
Operators interested in running the dormant park must respond to the Finance Cabinet’s “request for proposals” by Oct. 19. Considering a decision may be made before the end of the year — and with Beshear hinting that the state may decide to use the land for purposes other than a park — this issue may in fact be decided before Rippetoe even takes over.