State Auditor Crit Luallen is at this very moment holding a press conference to discuss her office’s latest audit of the Blue Grass Airport. Over the past several weeks, Luallen’s office has reviewed more than $755,000 in expenses from the past three years (spanning the period January 2006 to December 2008) from now former airport big dogs and has determined that more than $500,000 of expenses are, how should we put it… total bullshiz wastes of both state and federal tax dollars. Heads will roll.

The audit determines that there has been a culture of “shameful” and excessive spending by the airport management team (director of administration and finance, director of operations, director of planning and development, and the director of marketing and community relations along with the manager of administration, who served as the former ED’s assistant). It documents how the former executive director established said culture that provided lavish personal benefits for him and others. The culture flourished as management broke rules and ran circles around airport policies, falsified spending records, received big time salary increases and banked tens (hundreds?) of thousands on airport credit cards.

92% of former executive Michael Gobb’s credit card transactions had no receipts and zero supporting documentation. And a ton of the management team’s expenses lacked documentation or a business purpose, thousands of dollars of which were in direct payments or cash advances.

The audit makes 22 findings and provides 100+ recommendations for improvement. It has been referred to the Office of the Attorney General, the FBI and the United States Attorney’s Office for the Eastern District of Kentucky. And there are likely major IRS implications.

“With the release of this audit, we are confirming and quantifying earlier reports of shameful and excessive spending by the airport’s former executive director and his management team that did not properly serve the mission of the airport,” Luallen said. “With our recommendations, we are giving the airport board the necessary tools to strengthen its oversight and restore accountability.”

Specific examples of the craziness included $14,000+ for holiday hams, $2,300+ for four shotguns, a rifle and accessories, $1,962 for limousine service in New York City, $7,400 for a 2005 NASCAR Richard Petty “Driving Experience” for staff, $4,000+ at Hobbytown USA and $4,700+ for an overnight Atlanta trip.

The audit also uncovered a $168 charge to Club Venus, a Northern Kentucky “gentlemen’s club” (aka Hookers n Blow Central) and a $702 purchase for champagne (Radio Queen Francene and I have attempted to figure out WTF kind of bubbly that was because neither of us have seen anything above $350, ever) at Pure Las Vegas, a Nevada bar. The audit notes a 2004 purchase totaling $4,400 at a Dallas “strip club” (hookers? blow?) that was earlier reported by the Lexington Herald-Leader.

Some key audit findings noted in Luallen’s press release:

• The former executive director was involved in an accident resulting in property damage while driving an airport vehicle. No accident report was completed despite the requirement of airport policy.
• Airport funds were used to purchase more than 400 DVDs - with 69 missing. The former executive director initiated the DVD library.
• Several years of financial records are missing from the airport and no action was taken to report the loss to law enforcement.
• The airport nepotism policy was violated on at least three occasions.
• Two members of the management team were made public safety officers and were issued handguns though not in compliance with airport policy or a requirement of the job descriptions.

CLICK HERE (9mb PDF) for a copy of the audit, which is hundreds of pages long.

See the audit’s findings along with highlights of our favorite expenditures after the jump…

The 22 findings:

1. Insufficient controls resulted in questionable purchases and reimbursements
2. Reimbursements for personal expenses were not required to be made in a timely manner
3. Duplicate reimbursements were made to employees
4. The Board did not implement a process to receive information from independent sources
5. The Board has used the same auditing firm for approximately 20 years
6. The Board meeting minutes did not sufficiently document Board actions
7. BGA policies were not followed after a vehicle accident involving the former Executive Director
8. Financial records are missing and no action was taken
9. The Board failed to ensure that travel and related expenditures were justified
10. An annual marketing strategic plan was not developed to evaluate the cost and effectiveness of BGA marketing expenditures
11. The Board did not establish a policy to identify or account for additional benefits or memberships provided to BGA Directors
12. BGA former Executive Director’s salary was substantially higher than other airports surveyed; other Directors’ salaries increased significantly
13. Excessive spending occurred for BGA employees and tenants’ parties and gifts
14. BGA funds were used to purchase over 400 DVDs, many of which are not accounted for
15. Management spent excessively on team-building events, including one outing costing over $7,400
16. Bonuses and vacation pay were made to certain employees at the discretion of the Executive Director
17. Timing of payroll and sick leave payouts not in compliance with Board policies
18. The BGA Nepotism Policy was violated on three occasions
19. BGA control and oversight of Directors use of fuel was insufficient
20. BGA had not developed comprehensive information technology policies
21. BGA computer equipment inventory listing did not capture essential information to adequately identify computer equipment
22. Two Directors were made public safety officers and were issued handguns though not in compliance with BGA policy nor a requirement of the job descriptions

We spent all night going through a hardcopy of the document and figure it’d be wise to share some highlights of our favorite expenditures. Yeah, we stayed up all night looking at this mess. Crit’s staff is on a mission to ruin our personal life by always giving us Felner-esque material. Hoo boy.

Crazy Expenditures of Former Executive Director Gobb
01/10/2006 Waipip Vlly Artworks LLC $926.95
02/20/2006 Sierra Trading Post.Com $$313.95
03/20/2006 Liquor Barn $251.48
05/11/2006 Liquor Barn $619.88
07/31/2006 Liquor Barn $859.69
08/24/2006 Dicks Sporting Goods $426.70
02/19/2007 Hobbytown USA $4,140.79
03/11/2008 Liquor Barn $1,331.43
04/04/2008 Test Medical Systems $320.03 — 3 Breathalyzer Kits (it’s obvious why they’d need those with all that booze)
05/11/2008 Michael’s $1,084.01

Expenses of note: $586 laptop bag, $425 cigar lighter, hundreds of Liquor Barn trips, $740 for Bose headphones, $708 one-night hotel stay, thousands and thousands on limo service, crazy amount of visits to Max & Erma’s, thousands in home internet reimbursements, $670 tuxedo, tens of thousands at Godiva.

Basically everything the guy ever bought was obtained with a BGA credit card.

Crazy Expenditures of Former Director of Operations
06/14/2006 Liquor Barn $178.19 Cigars
09/01/2006 Liquor Barn $239.54 Cigars
09/22/2006 Liquor Barn $129.01 Cigars
01/27/2007 Kauai Coffee Company $831.40
07/25/2007 Kinkeads in Washington D.C. $603.80 for Dinner
Thousands and thousands on random event tickets and meals
$806 worth of American Airlines Frequent Flyer Miles
$1,440 on Yankees tickets
Thousands in advanced per diem
$4,400 for HI hotel room

Crazy Expenditures of Former Director of Administration and Finance
04/29/2006 Outback $240.39
05/26/2006 Applebee’s $232.24
09/04/2006 Cracker Barrel $71.56 children’s meals
09/07/2007 Applian $49.95 software that allows one to “record” material from YouTube and swipe audio and such from various websites
09/18/2007 www.element5.info $19.95 PORN!!
12/31/2006 National City Bank $650.36 Finance Charges and Fees
Thousands in golf fees
Thousands at Max & Erma’s around the country
11/09/2007 Walmart.com $663 Wii supplies
11/04/2008 Amazon.com $1,692.14 for a telephoto camera lens
Thousands in home internet fees

Crazy Expenditures of Former Director of Planning and Development
Thousands in golf fees
12/01/2006 The Chef @ Labrot $220
12/15/2006 The Chef @ Labrot $190
10/29/2007 Sportsman Warehouse $230.30 Ammunition
01/29/2008 Thoroughbred Club $78
Thousands in other restaurant bills
10/30/2007 BSGL Skeet and Sporting $60
11/30/2007 The Home Depot $230.74 Christmas Gifts
07/16/2008 Azure Restaurant $200
Late fees galore

Crazy Expenditures of Former Director of Marketing and Community Relations
Thousands at Liquor Barn
10/16/2006 Atlanta Bread Co $202.76 for a meal
02/15/2007 The Village Vineyard $261.97 alcohol
03/07/2007 Rum Runners $222.81
04/13/2007 The Paradies Shopes $126.07 Candy
04/15/2007 Proof on Main $289.06
06/27/2007 Liquor Barn $476.43
07/31/2007 Braves Chophouse $465.25
11/08/2007 Stubhub $729.75 Hanna Montana (2) tickets
12/17/2007 Godiva $2,227.44 Godiva - and hundreds more the following days

Crazy Expenditures of Manager of Administration/Assistant
01/10/2006 NA’ALAPA Stables - Kohala $468.78
02/07/2006 Malones $410.12
02/17/2006 Target $76.08 toothpaste and beauty products
11/22/2006 USEF Holiday Cards $720.95 for 30 cards that were sold to the ED
12/06/2006 Golds Gym $739 membership for “MAG”
Thousands at Kroger, Starbucks, Target, Papa Johns, Honey Baked Ham
05/08/2007 Amazon.com $257.87 for DVDs like Planet Earth
05/20/2007 LA-Z-Boy $652.94 Cloth Wall Recliner and Fabric Protector
Hundreds on clothing, dresses
Thousands on fast food galore

The biggest horse crap expense from the BGA hacks? A “team building” excursion at the Richard Petty Driving Experience, photographed below:

Long story short: The Blue Grass Airport is screwed up and these people will do all kinds of time.