The Jessamine County Public Library was the only special district in the county found to be in compliance with state requirements in an audit report released earlier this month by state auditor Adam Edelen.
According to the report, there are nine such special districts operating in Jessamine County: the Jessamine County Conservation District, the Jessamine County Extension District, Jessamine County Fire Protection District, Jessamine County Library, Jessamine County Public Health, Jessamine County Water District No. 1, Jessamine/South Elkhorn Water District, Nicholasville Tourism and the North Jessamine Fire Protection District.
“The study conducted by the state auditor clearly demonstrates that public libraries are operating in a fiscally responsible manner and in compliance with state laws and regulations,” said JCPL director Ron Critchfield. “On the JCPL website, we have all of our policies, recent audits, recent budgets and recent board minutes posted.”
In addition, the library also files extensive reports on all aspects of its operation each year with the Kentucky Department for Libraries and Archives, Critchfield said.
According to the report, the budgeted revenues for the entities were $33,117 for the conservation district, $235,085 for the extension district, $1,269,600 for the fire district, $2,295,000 for the library, $737,000 for the health district, 1,113,000 for water district No. 1 and $2,109,929 for the Jessamine/South Elkhorn district. Figures for Nicholasville Tourism and the North Jessamine Fire Protection District were not provided, according to the state auditor.
Special districts include taxing districts — those with the statutory authority to levy their own ad valorem (property) taxes — and non-taxing districts — those that have the statutory authority to assess fees, according to the report.
Of Jessamine County’s nine entities, three — tourism and the respective water districts — are non-taxing districts.
Eight of the nine entities did not submit budgets to the Department of Local Government, and four — the conservation district, county fire protection district, tourism and north Jessamine Fire Protection District — did not submit audits.
Jessamine County fire chief Mike Rupard and Nicholasville Tourism treasurer Roberta Warren disputed the report.
“We couldn’t do it online because their system was so overwhelmed,” Rupard said. “So we ended up sending in hard copies; Leta Mattingly (with Fain Mattingly & Associates) called them and talked to them because they were so overwhelmed because every taxing district had to do it. So their state (website) got screwed up. Our stuff got sent in.”
Warren said she never heard from the state auditor’s office.
“I never got anything; we do have a budget, and we’re audited every year,” Warren said, adding that those documents are on file for public inspection.
State-auditor communications director Stephenie Steitzer said the audit information was gathered from the surveys that office sent out, and it is possible that some turned in surveys without completing that portion.
“If somebody didn’t complete our survey, then we don’t know if they had their audits done. The audit info came based on answers in our survey,” she said. “It is possible they left that portion blank in the survey.”
The report, which was released Nov. 14, indicated that local taxing districts across Kentucky rake in more than $1.5 billion in tax and fee revenue, but they do so without strict oversight and with few laws to make sure those districts are operated properly. The report also found that the special taxing districts spend more than $2.7 billion annually.
The auditor’s office has identified more than 1,200 special districts — unelected entities such as libraries, sanitation districts and public health departments that have the ability to fee and tax but operate with little oversight and accountability.
“It is a scandal that for generations no Kentuckian has been able to determine how many special districts exist, how much money flows through them, where they are located and whether they are compliant with state law,” Edelen said in a news release.
The Citizen Auditor Initiative database and “Ghost Government: A Report on Special Districts in Kentucky” are the end-results of a six-month long effort to survey known special districts and local elected officials and examine more than 1,000 statutes that govern the most prevalent form of government in the Commonwealth.
The $2.7 billion a year spent by special districts is about $5 less per capita than the state spends on primary and secondary education. And they are holding another $1.3 billion in reserves — twice the contingency funds of all 174 school districts combined, according to the report.
“To be sure, there is a difference between the districts themselves and the scandalous lack of system-wide oversight of them,” Edelen said. “Their work is critical to the communities they serve; many board members put in considerable hours on a voluntary basis, and the vast majority are honest stewards of the tax dollars they spend.”
The report also found that 40 percent of the special districts that should have submitted budgets to their fiscal courts did not; 15 percent that should have submitted Uniform Financial Information Reports (UFIRs) did not. All Jessamine County taxing districts submitted UFIRs.
The report includes legislative recommendations aimed at cleaning up the statutes that govern special districts, adding teeth to compel compliance with reporting requirements, creating an online centralized registry for special districts to report their financials and establishing education and ethics for special-district board members and staff.
“In short, the system is broken and in need of big change,” Edelen said. “A reformed and modernized system will make this ghost government more accountable to the public it serves.”
For access to the online database, visit the Kentucky Auditor of Public Accounts website at auditor.ky.gov and click on the Citizen Auditor Initiative icon.