A six-month investigation into Kentucky’s special districts shows that billions of dollars are flowing through local government entities with little oversight.
The Kentucky Auditors website just launched a new interactive database showing the special districts in Kentucky. After an extensive process, Auditor Adam Edelen was able to get a better idea of the special districts across the state, including here in Perry County.
When Edelen took office it was unclear how many special districts there were in Kentucky, or how much money was flowing through them. One of Edelen’s first tasks was to determine where this money was going and how much taxpayer money was actually making it to the places it was supposed to go. He sent surveys to all of the special districts he could find through research.
After all of the data was collected, it was determined that there are more than 1,200 special districts through which billions of dollars flows every year. They hold over a billion dollars in contingency.
Edelen has chosen to refer to these entities as “ghost government” since they are not run by elected officials, and live outside of the normal governmental elections, control, and regulations.
A special report on special districts in Kentucky was released Nov. 14 and listed several findings that show the severe lack of control over these districts. For instance, these districts are supposed to certify their existence with the county clerk’s office, yet there is no way to enforce this mandate. There is also no enforcement for conducting regular audits or submitting budgets.
Along with no ability for enforce rules, there is also no ability for enforce ethics codes. Special districts and their board members do not have to follow county government ethics codes since they are not government.
The auditor’s report also found that there is no comprehensive list of special districts. This means that there is no way to accurately tell how much money is going through them. While Edelen’s office has created an extensive database, it is still unclear how accurate it is.
According to information collected through surveys sent to all of the special districts in the state, Perry County has 12 special districts. These districts range anywhere from the library to sanitation, and while not all of them have the ability to tax, they all serve a public purpose and include a budget.
The districts in Perry County are: Coal Fields Industrial Authority, Hazard/Perry County Airport Board, Housing Authority of Hazard, Kentucky River Area Development District, LKLP Community Action Council, Perry County Soil and Water Conservation District, Perry County Extension Office, Perry County Health Department, Perry County Library, Perry County Sanitation District One, Perry County Solid Waste, and the Perry County Tourism Commission.
In Perry County, only one of the 12 districts did not return the survey to the auditor’s office, The Perry County Solid Waste District. The other 11 can be found on the auditor’s website at auditor.ky.gov, then click on the link on the right for the Citizen Auditor Initiative.
Several different options allow for the viewing of the budgets and actual expenditures for each of the special districts.
The budgets are broken down into revenues, receipts, and expenditures. Revenue is any money made during a given year from the sale of permits or license, charges for services, interest on investments, or taxes collected. Receipts can be money carried over from the previous year, or loans on top of the revenue. Expenditures are money used during the year.
Of the special districts in Perry County, seven levy taxes. This information plus information about the counties that the organizations work and who are on the boards is also available.