Bill to bring transparency and accountability to area development districts filed in House

Legislation to bring more oversight and transparency to state’s area development districts was filed by Rep. Susan Westrom Friday.

Westrom’s bill, House Bill 438, seeks to place more scrutiny on the spending and programs of the state’s 15 area development districts (ADDs) and require more financial reporting. The bill also brings the ADDs under the same oversight rules that have long governed other state agencies and local governments.

“The amount of funds that flow through area development districts has expanded over the years so that now the area development districts are true powerhouses and are responsible for the management and expenditure of millions and millions of state and federal dollars,” Westrom said, adding that she believes many members of the General Assembly do not know what area development districts are.

“The ADDs were originally created to serve as regional planning entities and as such it was not anticipated the large amount of money that would be flowing through the years. Over the years, as they’ve added programs and taken on responsibilities as varied as providing meals on wheels and workforce development services—which is what we’re basically talking about today—along with continuing the planning function for which they were originally created…our statutes have not progressed as ADDs have moved forward and become responsible for more and more,” Westrom said.

In a press conference about the bill Friday, Westrom highlighted that the bill:

• Bans bonuses or any other one-time payments to any ADD employee.
• Protects “whistleblowers” in accordance with state law.
• Requires advertising of an open executive director position with adequate notice and sufficient time for interested candidates to apply.
• Requires the ADDs to follow federal and state procurement statutes and regulations.
• Examines all 15 ADDs within the next four years, to determine if their policies and internal controls are adequate.  Further examinations would follow if necessary.

Area development districts currently use state and federal dollars given to them on aging programs and employment services. ADDs are run by the county judge executives of each represented county.

Westrom’s bill comes after major questions over spending by the Bluegrass Area Development District in her region were raised following an audit by former state Auditor Adam Edelen which found “numerous conflicts of interest and questionable financial activity.”

The Lexington representative said she believes more transparency will help the ADDs continue to do good work in their communities while addressing the issues within the system.

“Whether we like it or not, the job in the General Assembly is to make certain that every tax dollar is being spent appropriately and for what it was meant to be spent for whether it is federal or state tax. And that’s what our citizens expect us to do,” Westrom said. “I hope [ADDs] can look at this as an additional means to strengthen where they work and the communities in which they serve.”

The bill also calls for a review of the area development districts every four years with follow up reviews if problems are found and requires the Cabinet for Health and Family Services as well as the Education and Workforce Development Cabinet to prepare and submit a detailed financial report of the area development districts to the Legislative Research Commission and others.

Watch video of the press conference below: