April 8, 2013

CSEPP under fire from state

Auditors question expenses on June 2011 training trip

By Nita Johnson
Staff Writer

LAUREL COUNTY, Ky. — The Laurel County CSEPP program, which underwent extensive audits several years ago, is once again under fire from the State Auditor’s office.

The recently released 2011-2012 fiscal year audit from State Auditor Adam Edelen’s office names several incidences in which the Laurel CSEPP (Chemical Stockpile Emergency Preparedness Program) had questionable expenses.

The audit cited “a lack of oversight of federal stockpile emergency preparedness funds by the Department of Military Affairs.” Ten Kentucky counties receive federal funds for the CSEPP program, including Madison, Clark, Estill, Jackson, Rockcastle, Garrard, Fayette, Jessamine and Laurel.

The following expenses were specifically questioned in the audit:

• $39 in coffee and coffee stirs for reimbursement. Food related items are only allowed for volunteers of exercises and documentation was not provided to support that the expenses are allowable.

• $3,439 was reimbursed to one employee for expenses to pay for two Laurel County employees to attend a CSEPP training in Portland, Ore.  from Monday, June 20, 2011 to Thursday, June 23, 2011.

Auditors questioned the following receipts from that trip:

• $30 on an undated restaurant receipt in Gresham, Ore., which was 16 miles from the CSEPP conference

• $15 from an undated and unitemized receipt labeled as “Guest Receipt”

• $3 receipt for sunflower seeds, lemon-lime soda, and an orange soda on June 20, from a store in Banks, Ore., which is 27 miles from the CSEPP conference

• $16 from a restaurant in Lincoln City, Ore. on June 20, which is 93 miles form the conference site

• $3 for a bottled soda from the hotel in Portland, Ore. on June 21

• $20 for fuel from a gas station in Cascade Lock, Ore. on June 21, 41 miles from the conference

• $2 for a beverage from a gas station in Cascade Locks, Ore., 41 miles from the conference site

• $48 from a Portland, Ore. restaurant in Portland, two miles from the hotel site, on June 22

• $57 reimbursement request for fuel, corn nuts, rolos, and beverages from a gas station in Creswell, Ore., 121 miles from the conference site, on June 23

• $6 from a Crescent City, Calif. restaurant on June 24, which is 331 miles from the conference site

• $57 for fuel from a gas station in Grants Pass, Ore. on June 24, which is 251 miles from the CSEPP conference

The audit states the Laurel employees left Kentucky on Sunday, June 19 and returned on Saturday, June 25, according to airline tickets. The CSEPP conference began on June 20 but ended on Thursday, June 23, and the employees checked out of the hotel on June 23 but still claimed expenses for that day and June 24. The audit also noted the hotel invoices also included $71 reimbursed for the hotel restaurant during the conference dates. Hotel receipts from Crescent City, Calif. indicated the employees reserved a room on June 23 and checked out on June 24, for a total of $185 for which they were reimbursed. The employees then drove back to Portland to catch their flight home, according to statements in the audit.

Because some of the expenses claimed were outside of the Portland conference site, the state auditor’s office is questioning the entire reimbursement and if “the use of a rental car and fuel expense was strictly for personal purposes,” which is not allowable under the reimbursement policies.

“KYDEM (Kentucky Department of Emergency Management) does not have authorization or approval by the Judge or Fiscal Court that the need to travel such distances from the hotel for meals, the need of a rental car, or the trip to California after the conference was needed per the local travel policy.”

However, the justification for these expenses stated the extra night’s stay saved $200 per airline ticket, the hotel in Crescent City saved $34.73 per room and the free breakfast saved $14.30 per employee. The audit, however, disputes these claims, which does not include the cost of the rental car from Portland to Crescent City.

Another questionable cost in the audit is a bid in the name of an individual labeled “Bid Only.” Only when questioned was the auditor’s office supplied with the actual invoice.

“The reimbursement to Laurel County was approved based upon inadequate supporting documentation,” the audit states.

Stephanie Steitzer, communications director for the State Auditor’s office, said problems with CSEPP monies have been noted in all 10 counties that receive federal money for the programs. Steitzer said the audit, which is performed by the state, could only make recommendations for remedial action. She could not estimate whether audits would affect further funding for the CSEPP programs, as it is administered through federal grants.

“That would be up to the federal government,” Steitzer stated. “These problems with CSEPP monies have been ongoing since 2008. There have been similar issues in other counties, not just Laurel.”

Last week, Laurel County Judge Executive David Westerfield said he did not wish to comment on the audit results and recently declined a second request for comment on the issue.

The Laurel County CSEPP program came under fire during a 2008 audit that continued into 2009 while the program was being established under then-CSEPP Director Brian Reams.

Reams pled guilty to federal charges that he misused monies from CSEPP grants over a two-year period. A total of $70,000 of misuse of funds was found during an 2009 audit and further investigation unveiled $670,000 in funds misused during 2007. Reams and his then-girlfriend, Melody Vess, established a false business named PREP, from which he purchased lesser quality items equipment and supplies for the local CSEPP program while invoicing a higher reimbursement price.

Reams and Vess both served federal sentences for their actions and were ordered to pay restitution for the expenditures.