• Tue. Aug 9th, 2022

BREAKING NEWS: Special examination by City of London auditor London Tourism Commission shows several issues ranging from nepotism to paying vendors without written contracts | News

ByChad J. Johnson

Apr 5, 2022

FRANKFORT, Ky. – Auditor Mike Harmon on Tuesday released the special examination report conducted by his City of London office and the City of London Convention and Visitors Bureau into the financial management activity of the 1st July 2019 to June 30, 2021. The review report contains 12 findings and three observations, two of which were referred to the City Ethics Board for further review and possible action.

“Our auditors identified several issues within the city and the tourism commission, ranging from a mayor’s family member being hired at a higher salary level than originally established without city council approval, to payments paid to sellers without any written contract. Simply put, the tourism commission did not exercise proper oversight over how its public funds were used, rather decisions were made by the city,” Auditor Harmon said. “Our review refers the issues identified in two findings to the city’s ethics committee, but given that the committee has not met in nearly a decade and there is no record of appointments to the ethics committee since 2016, this makes the current operating atmosphere all the more troubling.

The Harmon Auditor’s Office Review Report includes the following findings:

· The tourism commission approved a payment of $45,000 for a concert without a written contract in place, and the event did not take place. The commission approved annual payments in its budget for an item titled “Bowling Family Music” and prepaid the band for concerts in 2019 and 2020. The 2020 event did not take place due to the COVID-19 pandemic, and as of February 23, 2022, the funds paid by the commission to the group have not been reimbursed.

· There is no written expense reimbursement agreement between the city and the commission. Between July 1, 2019 and July 30, 2021, the commission reimbursed the city over $2.7 million for the cost of shared resources and expenses made by the city on behalf of the commission. Of this amount, there were four cases totaling more than $465,000 in reimbursements where the chair of the commission did not signify his approval in writing and the checks for payment were not signed by any member of the commission. In these four cases, the checks were signed by the clerk and the deputy clerk. Additionally, the city did not submit reimbursement claims to the commission consistently and did not regularly include enough detail to determine what was being reimbursed.

· The Mayor of London authorized a city employee to provide cleaning services to both the city and the tourism commission without City Council approval or proper disclosure. From January 2013 to December 2021, the city employee’s company was paid over $131,000. Between February and October 2021, more than $9,700 in commission funds appears to have flowed to the city employee’s company. Prior to February 2021, the amount paid with Commission funds could not be determined. The mayor told listeners that city council was verbally notified but did not approve the company’s hiring of the city employee.

Although it spent more than $1.5 million to operate the Levi Jackson Wilderness Park, the tourism commission had little or no oversight or control, including hiring staff, setting salaries or park operations planning. The funds came from the city’s restaurant tax, the proceeds of which are to be paid to the commission according to KRS 91A.400. But the commissioners said they did not have full control of the funds used to operate Levi Jackson. In interviews with listeners, most current and former members of the commission said the mayor was the person leading what amounted to the $1.5 million spent in fiscal years 2020 and 2021.

· A city maintenance employee received special privileges from the mayor, who allowed a city-owned vehicle to be used by the employee for a private HVAC company. In 2019, when the tourism commission approved the purchase of vehicles, tourism commission funds were used to purchase a van which was assigned to the city maintenance worker. The cost of the van was $23,500. The commission chairman was informed at the time that the purchase of the van was to benefit Levi Jackson Wilderness Park. The mayor told verifiers that he allowed the employee to use a city vehicle for personal business in exchange for the city’s use of the employee’s tools. There was no written agreement, but the maintenance worker confirmed the arrangement with the auditors. This question will be referred to the City’s Ethics Council.

London does not have an updated and consistent staff classification and compensation plan or pay scale for employees, and the mayor’s daughter-in-law has been hired at a higher pay level than that established by ordinance . In January 2016, the Mayor’s daughter-in-law was hired as Deputy Director of City Center London at a salary level higher than that set by the City Council when the position was created. Although the mayor indicated that the position’s pay grade was mistakenly labeled at a lower level, no corrections were made to the city’s salary classification plan and the city council did not approve the change in pay grade. pay level. This question will be referred to the City’s Ethics Council.

Auditors found that of the 202 current and former London employees, elected officials and commissioners active during their review period, 50 had some form of family relationship with at least one other person in the city. The city adopted a new code of ethics effective June 9, 2021, which included a more restrictive nepotism policy, but it preserved all existing family relationships and did not establish restrictions on the supervision or management of family members.

· Between December 2019 and December 2021, the mayor spent over $114,000 awarding bonuses to city and commission employees. These amounts were not part of the city’s compensation and classification plan or a benefit approved by the city council. Awarding bounties from public funds generally violates Section 3 of the Kentucky Constitution, and the practice of awarding bounties should be discontinued.

“It is imperative, if only for the people they serve, that City and London tourism officials review the issues we have identified and implement the recommendations made by our audit staff” , said listener Harmon. “The city’s goal should be to achieve good government through better accountability and transparency, and our review provides the roadmap to that path.”

You can view the full report, Examination of Certain Financial Operations and Internal Policies and Controls of the City of London and the City of London Tourism and Convention Commission, which includes responses from City officials and the Tourism Commission, to this address link.

This story will be updated.