- Associated Press - Wednesday, March 5, 2014

LEXINGTON, Ky. (AP) - Kentucky State Auditor Adam Edelen has released a scathing report that questions spending and oversight at the Bluegrass Area Development District.

The Lexington-based agency, whose former director was forced out last year, serves 17 counties in central Kentucky by helping them with regional planning for economic growth. It gets more than 90 percent of its annual budget of more than $24 million from federal and state grants.

The Lexington Herald-Leader (https://bit.ly/1nc7UAY) reports the audit describes the agency as having “rogue” management that didn’t properly oversee spending and misspent federal grants.

“For over a decade, the former administration of the Bluegrass ADD took advantage of the fact that the average citizen wasn’t paying close attention to its activities and may not even understand exactly what a development district does,” Edelen said. “It strayed far from its mission and seemingly convinced itself that because it doesn’t receive direct payments from taxpayers, it doesn’t have to be accountable.”

Edelen said the findings would be referred to agencies including the attorney general, the Kentucky State Police and the FBI.

Edelen’s office questioned $513,770 worth of credit card expenditures from 2010 to 2013 that either lacked supporting documentation or appeared unnecessary or excessive.

The agency asked Edelen’s office to investigate last summer after the former director was forced out and several issues arose with a felon re-entry program the agency had started.

The district’s current director, David Duttlinger, didn’t dispute the allegations, but said auditor’s investigation has “provided our agency with the necessary demarcation to begin a new era.”

Lexington Mayor Jim Gray, who used to serve on Bluegrass ADD’s executive board, said in a statement Tuesday that he “saw symptoms of mismanagement” in 2011 and told the board about it.

“Fortunately … we succeeded in making a change in Bluegrass ADD’s top leadership,” Gray said.

Duttlinger said questionable programs have been eliminated, some federal funds have been returned and internal bylaws and policies are being reviewed and reformed.

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Information from: Lexington Herald-Leader, https://www.kentucky.com

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