Mike Harmon

Kentucky State Auditor Mike Harmon

LOUISVILLE, Ky. (WDRB) -- Kentucky State Auditor Mike Harmon has questions about how the state spent more than $1.5 billion in federal coronavirus relief funds.

Harmon released a report called a “data bulletin” on the spending. It is not an audit but preliminary findings based on information provided by the state budget office.

“Obviously, any time we see this much money coming through, it's always important to take a really close look at it,” Harmon said. “Because the larger the dollar, the larger the possibility of either waste or potential fraud.”

Harmon said he found no evidence of fraud.

“Not that I'm aware of," he said. "All we're trying to do is just present the facts."

But Harmon pointed out that 28% of the dollars went to a broad area called "qualified state government expenditures."

“Initially, when we received that information, it really wasn't very specific,” he said.

Harmon said the budget office did later provide more details, but he still has questions about the large amount set aside for state payroll expenses.

“We just want to know specifically what areas of payroll that it went to,” he said. “Because state government is big. We want to make sure it's specific.”

Harmon said he is concerned that Gov. Andy Beshear and his staff made the decisions about where the money should be spent because the legislature was not in session at the time.

“It's generally the role of the General Assembly to appropriate and expend funds,” Harmon said. “Certainly, I think it would have been more advantageous if he had called them back into special session.”

The governor's office, through State Budget Director John Hicks, released a statement on funds Wednesday:

"The administration has been fully transparent about how each dollar of the federal coronavirus relief fund has been spent. I have personally testified on the uses in front of state lawmakers and worked with various budget chairs and their staff, particularly when it comes to state government expenses. The auditor’s report fails to include the extensive testimony and documentation I have provided to the General Assembly. I have provided the auditor’s office with agency-by-agency amounts for the 'Qualified Government Expenditures' referenced in the bulletin. The auditor has not requested materials for auditing purposes since the fiscal year 2020 audit. Part of the money has already been audited and the administration worked with lawmakers on the 28 percent portion of the funding for 'Qualified Government Expenditures', and included the impacts of that spending in the fiscal year 2021 budget revisions passed by the General Assembly in the 2021 session. Those impacts are publicly expressed in the budget documents displayed on the Office of State Budget Director’s website."

Harmon pointed out that the Beshear administration allocated 21% of the funds for county and city governments.

“County and city officials have been thankful that the governor took roughly 20% and sent it out to the counties and the cities," Harmon said. "Not every state did that.”

Here is how the auditor's report broke down the expenditures:

  • 28% for “qualified government expenditures”
  • 21% to counties and cities
  • 14% to the unemployment insurance trust fund
  • 12% to PPE, testing, contact tracing, and public awareness
  • 7% for a category called “unemployment insurance-individuals” which the report said was “for the purpose of providing a state match to federal unemployment funds."
  • 7% went to long-term care facilities
  • 11% to “all other categories” which included local health departments, restaurant and bar relief assistance, eviction prevention, meals for seniors, and utility relief

Harmon said he will release a full audit of the coronavirus relief spending next fall.

The full data bulletin is available here.

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