Investigating Quasi-Public Agencies by John Cheves

Inves&ga&ng  quasi-­‐public  agencies  

John  Cheves  Lexington  (Ky.)  Herald-­‐Leader  jcheves@herald-­‐leader.com  

What  is  a  “quasi-­‐public  agency”?  

•  It  gets  public  money,  performs  a  public  func&on  and  some&mes  can  raise  taxes  

•  But  it’s  run  by  its  own  appointed  board,  not  by  elected  poli&cians  answerable  to  voters,  and  it  might  not  consider  itself  a  government  en&ty  

•  Examples  include  airports,  libraries,  health  departments,  water  districts,  community  ac&on  councils,  housing  authori&es,  area  development  districts  and  bus  systems  

If  it’s  our  money,  it’s  our  business.  

“Ghost  government”  

•  In  2012,  State  Auditor  Adam  Edelen  es&mated  that  $2.7  billion  passed  through  Kentucky’s  quasi-­‐public  agencies  every  year,  oUen  with  liVle  oversight  by  elected  poli&cians  or  the  news  media  in  their  communi&es.  

“Ghost  government”  

•  The  governing  boards  at  these  agencies  do  not  always  comply  with  ethics  rules,  spend  money  wisely,  conduct  independent  financial  audits,  keep  a  proper  budget  or  welcome  scru&ny.  

Photo:  Tax  Credits  

Finding  my  local  quasis  

•  Database  at  Kentucky  state  auditor’s  website  lets  you  check  for  them  by  county:  hVp://apps.auditor.ky.gov/public/theregistry/cai.html  

•  Also,  think  about  your  community  and  your  news  coverage.  Who  runs  public  housing  in  your  town?  The  bus  system?  The  Head  Start  program  for  toddlers?  The  industrial  park?  The  volunteer  fire  departments?  The  library?  

Owsley  County,  Ky.  •  Booneville/Owsley  Fire  

District,  Island  City  Fire  District,  Vincent  Fire  District,  Owsley  County  Extension  Service,  Owsley  County  Public  Library,  Owsley  County  Health  Department,  Owsley  County  Soil  &  Water  Conserva&on  District,  Pine  Ridge  Industrial  Authority,  Owsley  County  Ac&on  Team  

Lexington  Public  Library  

Lexington  Public  Library  

•  $134,000  in  credit  card  spending  by  library  CEO  and  $350,000  in  credit  card  spending  by  others  at  library  at  CEO’s  direc&on  

•  Paid  $3  million  for  a  $1  million  parking  garage  •  Red  flags  were  raised  by  auditors  and  chief  financial  officer,  all  of  whom  were  ousted  

•  AUer  our  stories  published,  new  spending  controls  enacted,  CEO  fired  and  Lexington  mayor  replaced  library  board  members  

What  tools  can  I  use?  

•  Open  Records/Open  Mee&ngs  laws  

•  Guidestar.org  •  hVp://www.ci&zenaudit.org/  

•  Lawsuits  •  Human  sources  

Open  Records  and  Mee&ngs  

•  Ky  Open  Records  Act  covers  an  agency  if  it  gets  at  least  25%  of  its  funds  from  state  or  local  gov’t;  or  if  it’s  created  by  state  or  local  law;  or  a  majority  of  its  board  is  appointed  by  a  public  en&ty.  

•  Ky  Open  Mee&ngs  Act  covers  an  agency  if  it’s  created  by  state  or  local  law;  or  established  by  state  or  local  gov’t;  or  a  majority  of  its  board  is  appointed  by  a  public  en&ty.  

What  records  do  I  request  

•  Budgets  (including  supplementary  material)  •  Audits  (and  there  had  beVer  be  audits)  •  Mee&ng  minutes  of  governing  board  (don’t  forget  special  commiVees  if  there  are  any)  

•  Also  could  be  useful:  contracts,  wriVen  and  electronic  correspondence  (but  be  specific),  payroll  database,  spending  records  about  your  agency  from  the  government  that  funds  it  

Guidestar.org  

Lawsuits  

Human  sources  

•  Execu&ves  in  charge,  board  leaders,  the  agency’s  aVorneys  

•  Find  the  maverick  -­‐  the  one  clear-­‐eyed  board  member  who  demanded  more  informa&on  or  the  chief  financial  officer  or  auditor  who  was  fired  for  asking  too  many  ques&ons  

•  Employees  (past  and  present)  and  clients  •  Officials  at  the  government  that  funds  it    

What  am  I  looking  for?  

•  How  does  it  spend  its  money?  Excessive  pay  at  the  top?  Poverty  wages  at  the  boVom?  Big  credit  card  bills  for  travel,  meals  and  giUs?  Costly  real  estate?  Inside  deals?  Nepo&sm?  Poor  management  that  leads  to  deficits?  

•  How  does  it  do  its  job?  Are  the  community  and  its  client  base  sa&sfied?  Is  it  rated  well  by  any  oversight  agency  responsible  for  that?