By John L. Ross, Staff Writer
A state audit released last week questions more than $3,000 in reimbursed expenses incurred during a trip by Laurel County employees to Oregon for a Chemical Stockpile Emergency Preparedness Program (CSEPP) conference in 2011.
State Auditor of Accounts Adam H. Edelen released the second volume audit report of the Statewide Single Audit of the Commonwealth of Kentucky last week.
According to a letter sent by Edelen to Gov. Steve Beshear, cabinet secretaries, agency heads and state legislature members, this second volume contains the report on program compliance and control, federal award findings and questioned costs identified during the audit.
One section of the audit covers material weaknesses relating to internal controls and/or non-compliances.
One finding in that section concerns the Department of Military Affairs failures to strengthen controls over disbursements for the CSEPP.
Problems were discovered in counties statewide — including Laurel County.
“We noted $39 in coffee and coffee (stirrers) were requested for reimbursement,” the report states. “The CSEPP Cooperative Agreement states that food-related items are only allowable for volunteers of exercises.
“There was no information provided to document that these expenses were allowable.”
The largest portion of questioned expenses concerns a trip to a CSEPP conference in Portland, Ore.
According to the report, $3,439 was reimbursed to one employee for expenses covering two Laurel County employees attending the conference.
Four people attended, the report states — two employees and two guests.
“It appears that only expenses for the two employees were submitted for reimbursement and it appears that one guest stayed in the hotel rooms of each employee,” states the report. “According to flight tickets, they departed from Kentucky on Sunday, June 19, 2011 and arrived back in Kentucky on Saturday, June 25, 2011.”
The conference itself lasted from Monday, June 20, 2011 through Thursday, June 23, 2011.
The report states a memo was attached from the Laurel County employee that the branch manager extended permission to stay one night beyond the end of the conference because of limited return flights to Kentucky.
But there was a problem.
“However, as we reviewed the receipts submitted for reimbursement we found multiple questionable items,” the report states.
The more notable ones include the following:
—$30 requested on an undated receipt from a restaurant in Gresham, Ore., which was 16 miles from the conference site.
—$15 requested from an undated, unitemized receipt that says only “guest receipt.”
—$3 receipt for sunflower seeds, lemon-lime soda and an orange soda on June 20, 2011 from a grocery store in Banks, Ore., which is 27 miles from the conference.
—$16 requested from a restaurant in Lincoln City, Ore., on June 20, 2011, which is 93 miles from the conference.
—$3 for a bottled soda from the hotel in Portland on June 21, 2011, the site of the conference.
—$20 requested for fuel from a gas station in Cascade Lock, Ore. on June 21, 2011, 41 miles from the conference.
—$2 requested for a beverage from a gas station on June 22, 2011 in Cascade Lock, 41 miles from the conference.
—$48 requested from a restaurant in Portland on June 22, 2011, two miles from the conference.
—$57 requested for fuel, corn nuts, Rolos and beverages from a gas station in Creswell, Ore. on June 23, 2011, 121 miles away from the conference.
—$6 requested from a restaurant in Crescent City, Calif. on June 24, 2011, 331 miles from the conference.
—$57 for fuel from a gas station in Grants Pass, Ore. on June 24, 2011, 251 miles from the conference.
“We noted they checked into two rooms at the hotel in Portland, Oregon on June 19, 2011,” states the report. “They checked out of these rooms on June 23, 2011. We should note that the hotel invoices included $71 reimbursed for the hotel restaurant.
“They then checked into two rooms at another hotel, in Crescent City.”
Those two invoices were also submitted for reimbursement, totaling $185.
“The CSEPP Cooperative Agreement states that ‘Travel and per diem for all CSEPP purposes except medical’ are allowable,” Edelen’s report states. “It also states that ‘Travel to non-CSEPP events’ is unallowable.”
That’s leaving the state auditor to question this entire amount, according to the report.
“Laurel County should have only requested reimbursement for meals on a per diem basis as stipulated in the Cooperative Agreement,” states the report. “Also, when considering all the expenses and the distances for meal receipts it is questionable if these employees were attending the conference.”
Laurel County Fiscal Court also supplied additional information. Part of the Fiscal Court’s travel policy is a section that states, “Other necessary expenses which were unforeseeable prior to travel may be approved by the County Judge/Executive, with the approval of the fiscal court, upon presentation of documentation of the need for such expense.”
In reviewing the Laurel County’s own policies concerning travel, Edelen states in his report that the county’s policies, “further strengthen our position that these costs are both unallowable and excessive.
“The CSEPP conference was held at a single location, at the hotel in Portland,” the report adds. “Per Laurel County’s travel policy it would have been most economical to use a cab, shuttle, or public transportation. The use of the rental car and fuel expense was strictly for personal purposes.”
The state auditor’s office was also provided Laurel County’s justification by the Kentucky Department of Emergency Management.
“Laurel County states the one night beyond the end of the conference was approved because it saved $200 per airline ticket,” the report states. “They also stated that staying at the hotel in Crescent City, Calif., which was an ocean front hotel, saved $34.73 per room and the free breakfast saved $14.30 per employee.”
But the auditors did not agree.
“We disagree with this rationalization because it leaves out the rent for the car that the employees used and the fuel expenses for the estimated 662-mile round trip,” states the report. “This travel is unallowable for CSEPP because it is not a non-CSEPP related event and it violates the local travel policy.”
Laurel County was reimbursed $3,900 for a bid in the name of one individual even though the supporting documentation clearly stated “bid only,” according to the report.
“After we questioned this expense to KYDEM, we were provided the actual invoice for work performed,” states the report. “We still question this cost. KYDEM only obtained the invoice after we questioned the expense.
“The reimbursement to Laurel County was approved based on inadequate supporting documentation.”
The report explains that the KYDEM does not promote “professional skepticism” nor encourages compliance with applicable regulations.
Several recent audits of the CSEPP program prompted numerous memos and policies to be written by KYDEM management requiring additional oversight and documentation for the reimbursement process, according to the report.
“However, these policies do not seem to be effective and continue to fail to ensure compliance,” states Edelen’s report. “The cause year after year continues to be that KYDEM staff does not review (reimbursement paperwork) and the supporting documents.”
Messages were left with County Judge/Executive David Westerfield as well as CSEPP Coordinator Rob Lowe, neither of which was returned by press time.