"KLC: A Mess Of Conflicts, Excess".

KLC: a mess of conflicts, excess

Where to begin reacting to the audit of the Kentucky League of Cities?

With the way the salaries of the former executive director, the deputy director and chief insurance services officer ballooned by up to 95 percent over the last seven years?

With the more than $533,000 in forgiveable loans KLC officials used to buy retirement credit with the County Employees Retirement System?

With the blatant conflicts of interest involved when KLC officials let companies they were doing business with pick up housing costs and other expenses when they and their families traveled to Florida; Munich, Germany; and the Dutch Caribbean island of Bonaire?

With the $1.4 million the KLC spent for legal services provided by a firm where former executive director Sylvia Lovely's husband, Bernie Lovely, is a partner?

With the $28,000 the KLC spent at Azur, a restaurant co-owned by Bernie Lovely?

With the Volvo SUV Deputy Director Neil Hackworth bought from the KLC's vehicle pool for $9,000 even though the actual value was more than $15,000?

With the children of William Hamilton, the chief insurance services officer, having been employed by KLC vendors?

With companies KLC does business with and solicits donations from paying for the $9,600 Christmas party scheduled for Friday night?

Or with the fact that much of this activity — including the size of top executives' salaries — was unknown by many of the KLC's board members?

Yes, let's start there, because board members no longer can claim ignorance. Yet some members of the board apparently see no reason for anyone to stop "living large." The Christmas party attests to that.

So did their response to the report produced by state Auditor Crit Luallen's office. "I don't think the official response (from KLC) adequately addresses the magnitude of the problem they have and the waste that has occurred," Luallen said Thursday.

The audit came in response to Herald-Leader stories about the high salaries and wasteful spending at the KLC.

In some ways, the report echoes state audits of the Kentucky Association of Counties and Blue Grass Airport, both of which also followed up on Herald-Leader stories. In each instance, the audit revealed weak board oversight and inadequate policies covering everything from ethics to compensation.

KLC and KACo are kindred organizations, so you might expect the audits to reflect kindred wasteful practices. And there were similarities in the spending on travel and entertainment.

But there were distinctions as well. The KACo audit suggested one long on-going party for good ol' boys, including strip clubs and escort services. The KLC audit is more suggestive of greed with the rapid escalation of salaries, the exorbitant bonuses, the business directed to executives' family members, the sweetheart deal on a car and the freebie trips accepted from vendors.

But the bottom line remains the same: Executives of non-profit organizations funded largely with tax dollars left free to run amok because their boards failed to perform the fundamental role of providing oversight.