Friday, April 6, 2007

Blatantly Obvious Failure

From the Lexington Herald-Leader:

State agencies spent thousands of dollars in federal funds, some from the Department of Homeland Security, on Kentucky's "Unbridled Spirit" marketing campaign, according to an audit released yesterday. Seven government agencies, ranging from the Education Cabinet to the Justice and Public Safety Cabinet, combined to spend more than $75,000 in federal grant money toward the campaign, the audit said.

Money came from different grants that the federal government intended to fund things such as a summer food service program for children and a state domestic preparedness equipment support program, the report said. "Payments made by these agencies using federal dollars were not appropriately accounted for," the report said.

The conclusion came as part of a wide-ranging annual audit by the state auditor's office for the federal government on the state's spending practices. Auditors had more than 69 "reportable findings" outlined in the report. State Auditor Crit Luallen said the findings are sent to a national clearinghouse where federal agencies would review whether the state was spending money appropriately.

Last year, a review by the state Finance and Administration Cabinet found that state agencies had overpaid more than $611,000 toward the "Unbridled Spirit" campaign, according to the report. Of that amount, $75,132 came from federal grants. It happened because of a change in state government's policy on how different agencies pay for their advertising, Luallen said. Agencies paid into a "central agency pool" for advertising but did not necessarily get a discount, Luallen said. "It does not appear to be fraud. It just appears to be administrative mistakes that were made," Luallen said.

Federal funding in future years could be at risk, she said. Chris Gilligan, a spokesman for the Commerce Cabinet, said all the agencies that were owed money have already been "paid in full." Other findings included: The Finance and Administration Cabinet had not verified on paper whether Pepsi has been fulfilling its part of an exclusive contract with the state. The Health and Family Services Cabinet paid Artemetrix, a health care-related company, $1 million before it fulfilled its state contract. The Department of Revenue failed to properly secure Kentucky's cigarette tax stamps.

In one case, the department mistakenly mailed six rolls of stamps -- each worth $9,000 -- to the wrong address. Only five rolls were returned, the report found. Cigarette stamps took in more than $165 million in the 2006 fiscal year, according to the report. However, different locations that sell the stamps don't keep track of them and sell them out of order, the report found. "We didn't feel that they had adequate controls," Luallen said.

Officials were developing a plan to better protect the cigarette stamps, according to the agency's written response.

Federal Funds for advertising? Children’s summer food service program forsaken for advertising? Future funds jeopardized for advertising? This blunder would be laughable. However, those three stated questions are true. Another Fletcher folly has embarrassed and endangered Kentucky. Are we disgusted?

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