Some Potential Insurance Fraud In Montgomery Co?

Or at least something close to it?

You’ll likely recall that the Montgomery County Board of Education voted some time ago to ditch superintendent Joshua Powell’s private personal attorney — a guy they’ve paid tens upon tens of thousands of dollars this year alone. All to represent Powell and his inner circle. Instead of using the already paid school board attorney.

But guess what?

Neither Powell nor the board chair have notified the Montgomery County Schools’ legal insurance carrier:

And it’s in his own writing.

Still wondering why Montgomery County can’t have nice things?

There you go.

State House Dems Spending Unbelievably Freely

What the hell is going on in the State House?

Everyone knows state legislators can receive $188.22 per day for interim pay (leadership amounts are higher). But has everyone taken a look at just how much cash people are pocketing for little to nothing to show for it?

Let’s take a look at interim pay for legislators — people in good with Greg Stumbo:

  1. Dennis Horlander made$12,422 for 66 Days
  2. Derick Graham made $11,161 for 59 Days
  3. Mary Lou Marzian made $10,542 for 56 Days
  4. Jim Gooch made $9,617 for 51 Days
  5. Joni Jenkins made $8,846 for 47 Days
  6. Dennis Keene made $8,676 for 46 Days
  7. Arnold Simpson made $8,658 for 46 Days
  8. Susan Westrom made $8,658 for 46 Days
  9. Tom Burch made $8,337 for 44 Days
  10. Ruth Ann Palumbo made $7,717 for 41 Days
  11. Terry Mills made $7,717 for 41 Days

Jenkins and Marzian used to be the people who complained the most about legislators taking home the bacon like that. Looks like they’ve figured out how to jump on board the cash train.

In the senate? Just look:

  1. Whitney Westerfield made $8,149 for 43 Days
  2. Ernie Harris made $7,735 for 41 Days
  3. Jimmy Higdon made $7,735 for 41 Days
  4. Mike Wilson made $6,606 for 35 days
  5. Joe Bowen made $6,474 for 34 Days
  6. David Givens made $4,329 for 23 Days
  7. Tom Buford made $3,952 for 21 Days
  8. John Schickel made $3,801 for 20 Days
  9. Alice Kerr made $3,255 for 17 Days
  10. Chris McDaniel made $3,199 for 17 days

The number 1 recipient of cash in the senate barely scratches the top ten when compared to the house.

$102,351 for the house and $55,235 for the senate.

But nothing to see here, puppies and rainbows, move along.

Edelen Released The Fayette Co. Schools Audit

State Auditor of Public Accounts Adam Edelen just released his review of Fayette County Public Schools and it’s not a great situation.

Take a look at some excerpts from his accompanying press release:

Auditor Adam Edelen on Wednesday released a special examination of Fayette County Public Schools, finding chronic mismanagement of the district’s budget and finances that have contributed to its financial instability.

Auditors did not find any evidence of alleged criminal activity; however, they determined that poor financial management, weak policies and failed communications culminated in a weakened financial position for the district.


Auditors identified salary and perk disparities between administrative and educational staff, excessive travel and training within one department, violations of the procurement process and other board policies, potential conflicts of interest, and other concerns.


Auditors found that the budget director did not become aware of certain financial transactions in a timely manner, which led to her establishing a budget that reflected $20 million more than the district actually had to spend. The financial transactions made by the finance director were not illegal, but auditors question whether the availability of the money was purposely hidden from the school board and public.


Auditors found a lack of transparency when management altered the district’s salary schedules. Unlike in past years, for the 2013-14 school year management did not highlight significant changes to administrative pay when it presented the schedules for board approval. The administrative additive was increased from $36,726 to $63,299. Auditors noted that over a four-year period, the average pay increase for high-ranking administrators was 24.7 percent, while the average teacher pay increase was 9.88 percent.


Auditor Edelen noted that there are currently 11 FCPS teachers asking for money to buy basic supplies for the classrooms – most of which are in high poverty schools – on a national crowd-funding website.


Auditor Edelen is particularly troubled by the use of a trust fund left to the district by a deceased FCPS teacher for the “enhancement and enrichment of the educational program.” The district can use the interest and up to 10 percent of the principal each year. The fund balance was over $1.1 million as of June 30, 2014.


The district paid for the director of financial services to receive his superintendent certification. Subsequent to this examination, he refunded the full amount to the district.


Auditors also found that management circumvented controls and violated its procurement process to contract with a vendor that provides college preparation services. (Finding 4) The contract is a potential conflict of interest, but auditors were unable to determine that the superintendent benefits directly from his relationship with the vendor’s CEO. Auditors identified other possible conflicts of interest in the district during the examination. (Finding 7)

As you can see, some rough stuff. But nothing nearly as terrible as Edelen attempted to hype up. Time for some major changes in Fayette county, though.

The findings:

  1. Weaknesses In Budget And Financial Management Processes Led To Significant Errors In The District’s Working Budgets
  2. The FCPS Working Environment Is Not Conducive to Efficient And Effective Operations
  3. Administrative And Management Salary Increases Outpace Other District Employees, Some Without Appropriate Transparency
  4. FCPS Circumvented District Controls And Did Not Follow Procurement Guidelines
  5. The Mary K. Stoner Trust Fund Is Not Being Used In Accordance With Its Charter
  6. Travel And Professional Development In The Department of Financial Services is Excessive And Often Unnecessary
  7. Conflicts of Interest: Vendors are providing perks to district personnel which could compromise the procurement process.
  8. Monthly Financial Reports To The Board Lack Significant Information
  9. Accounting Weaknesses Within the Department of Financial Services
  10. The Current FCPS Internal Audit Structure Needs Improvement

Can you imagine what would have happened in Montgomery County if Edelen had done his job there instead of ignoring major impropriety, hundreds of thousands in no-bid contracts, nepotism galore, misuse of funds, Title IX violations, illegal financial arrangements, yadda yadda…? Can you imagine?

It’s a shame he and his staff willfully ignored what was handed to them. Instead, he’s focused on Fayette and Jefferson Counties because he wants to drive up his name ID and get in front of as many future voters as possible.

So, when you’re reading this audit — click here (Warning: PDF Link) for a copy of it — just remember that this is merely one of many school districts that are in turmoil. While the audit was necessary, it’s just a mess of picking and choosing and other scandals involving just as much money have gone ignored because they’re in small towns.

And if you’re in Lexington? Time to start kicking ass at school board meetings like they’re doing in Montgomery County.

There's A Kid In Need & Maybe You Can Help

Two men vying for Lexington’s top job traveled more frequently than the men who previously held their jobs, an analysis of travel records shows. [H-L]

The proportion of coal miners who suffer from an advanced form of black lung disease has skyrocketed in central Appalachia in recent years, according to experts with the National Institute for Occupational Safety and Health. [HuffPo]

While Kentucky Sen. Rand Paul is mulling his options for 2016 on the run, he’s been including healthy doses of Iowa and New Hampshire stops in his schedule just in case – seven in all since last year. [C-J/AKN]

A federal judge has ordered Arizona to recognize one same-sex marriage, determining Friday that the state must formally acknowledge that Fred McQuire and George Martinez were married. [WaPo]

Rowan Fiscal Court held a special meeting Tuesday for architects to present ideas on a new county detention center. [The Morehead News]

What was that, again, about the judicial system not being rigged to work against the poor? [Mother Jones]

Churchill Downs Incorporated announced Churchill Downs, its namesake racetrack, and Yum! Brands, Inc., have signed a five-year agreement that extends Yum!’s role as the presenting sponsor of the $2 million-guaranteed Kentucky Derby, one of America’s most legendary sports and entertainment events. [Press Release]

A major report by the global body responsible for energy analysis finds the total benefits from energy efficiency upgrades equals — and often exceeds — the energy savings. [Think Progress]

A group of seniors at Henry Clay High School have been carrying around donation buckets for two weeks, asking classmates and parents to help raise money for a dog that was branded with profanity. [WKYT]

For the first time in decades there are calls within the House Republican conference to lift the ban on crude oil exports, signaling what could become a sweeping shift in U.S. policy. [The Hill]

It could be the most important thing you do this week. A Louisville high school sophomore desperately needs a bone marrow match to win the fight he’s battled for three years. [WAVE3]

Funding levels for city and county pension plans rose almost 6 percent in 2013 from the previous year, according to a report released by Wilshire Consulting on Monday. You know Louisville and Kentucky are screwed, though. [Reuters]

If Republicans hope to take over the Kentucky House this fall for the first time since 1921, they’ll probably need to win most — if not all — of the eight contested districts that don’t have an incumbent seeking re-election. [H-L]

This past August was the warmest since records began in 1881, according to new data released by NASA. [HuffPo]

Some Montgomery County Schools Friday Tidbits

We hear through the grapevine that Montgomery County Schools superintendent Joshua Powell’s trial could start around January 12. It’s expected to last as long as nine (9!) days.

Since Powell gets to decide whether or not it’s closed to the public, you can bet it will be closed to the public.

But that doesn’t mean people can’t be waiting outside to interview every person who shows up to take the stand.

We recently hinted at a “rumor” (*cough*) that… well… just read what we said:

We hear through the KDE grapevine that the construction company handling the project employs the father of one of the finance employees hired from Menifee County. And multiple (as in multiple, not one, singular person) board members tell us they heard Powell mention his child was hired in an attempt to get close to him for construction projects. (He’s got another kid working as a teacher in the district, as well, but that’s probably unrelated.)

This guy is a former school board member, of course, and is currently running for another political office.

Isn’t it odd?

The guy’s daughter gets hired out of a nasty financial and legal scandal in Menifee County and then his company scores a big project with the district that ends in controversy.

But it’s all just rumor and innuendo. Nothing to see here, move along, puppies and rainbows.

One of that guy’s daughters made false claims against Jim Dusso. Remember that mess?

One of his daughters was also on Powell’s site-based decision making council that hired Dusso’s replacement.

He’s also a (recent) former state school board member. Think that may be one of the reasons no one is taking action?

We hear that while that Montgomery County Schools finance officer was in Menifee County, Andy Barr sent one of his people (Tyler White?) unannounced to several school board meetings. When questioned, Barr’s folks denied it.

When Barr ran the first time, he showed up at church with the guy we’re hinting about nearly every time he was in town to campaign.

So now we all allegedly know how Powell gained access to Barr.

The finance officer in question?

Let’s take a look at Adam Edelen’s special examination of Menifee County that was released in July. Click here (Warning: External PDF Link) for that.

Turns out she was the finance officer for Menifee County Schools at the time of a big mess, some serious allegations were made regarding … wait for it… tornado recovery funds!

Tornado recovery funds were mismanaged.

There were huge conflicts of interest.

Mega problems.

And one of the key figures responsible was hired by Powell.

Imagine that.

People Continue To Fluff Lil Randy's Giant Ego

The American Heart Association has awarded $1.26 million in grants to the University of Kentucky for cardiovascular research. [H-L]

Large churches in the South tend to pay their senior pastors the highest salaries, a new survey finds. That’s right, poorer states have the highest-paid megachurch pastors. [HuffPo]

As he mulls a presidential campaign in 2016, Kentucky Sen. Rand Paul has been trying to broaden his appeal inside and outside the Republican Party. But a liberal comedian on HBO – who knew? [C-J/AKN]

More carbon dioxide was emitted into our atmosphere between 2012 and 2013 than in any other year since 1984, putting humans on the fast track toward irreversible global warming. [Think Progress]

With the the Nov. 4 general election less than two months away, more than 250 people and Democratic candidates at the federal, state and local levels came to the Madison County fairgrounds Monday evening. [Richmond Register]

The 2015 government funding proposal from the House will offer extra money to help combat the growing Ebola crisis in West Africa and allow federal departments new flexibility to manage undocumented minors at the U.S. border. [Politico]

Boyd Circuit Court judge candidates aired out the issues of this year’s battle for the bench in a public forum at the Elks Lodge Tuesday night. [Ashland Independent]

Bad news for Obama: fracking may be worse than burning coal. New science shows that thanks to methane leaks, gas won’t work as a “bridge fuel.” [Mother Jones]

The candidates for the 23rd District Kentucky House of Representatives seat found a few points of common ground during a forum Tuesday, but not many. [Glasgow Daily Times]

Central bankers have been attacked, justifiably, for having done little to quash the great credit bubble that led to the 2008 financial crisis. [ProPublica]

A recent investigation by a state agency found that a number of nurses at Appalachian Regional Healthcare (ARH) in Harlan were obtaining prescriptions for amphetamine-like pills, even though they had no legitimate medical condition for taking them and were not examined by a doctor. [Harlan Daily Enterprise]

Tensions are rising among members of the Consumer Financial Protection Bureau’s union as a growing faction, dissatisfied with how the bureau handles employee grievances, push for the ouster of the chapter’s president. [Politico]

The federal government has approved a $24 million grant that will speed up part of the project to widen and extend the Mountain Parkway. [H-L]

For a change, the cost of the health insurance you get at work didn’t go up much this year. [HuffPo]

Montgomery's Lawyer Mess Probably Isn't Over

A few weeks ago the Montgomery County Board of Education killed superintendent Joshua Powell’s ability to use his personal friend/attorney at board expense. The vote was 3-2 but the community felt empowered after that.

It was a big moment for the county — big enough to capture on video.

His free legal ride at taxpayer expense was over.

Or so it seemed.

Multiple sources on the school board tell us it was all smoke and mirrors. Even they were snowed thinking they’d ended Powell’s free ride.

Turns out? Powell’s friend/attorney — Mike Owsley/ELPO — is one of the lawyers listed on the district’s legal insurance policy. The board’s actual attorney? They’re not listed.

And board members tell us that they may be forced to hire him/reauthorize payment to him due to insurance policy requirements. Primarily because a major decision has to be made this week in a pending lawsuit.


We also hear, though cannot confirm, that Owsley has been billing the board for calls received not just from Powell but from Jacqui Johnston, Phil Rison, Shannon White, Kristi Carter, et al. Allegedly, they call him up for advice when they’re preparing to terminate one of the people (like Dusso, Hall, Reffitt, Henry, Wallace) they can’t get to play along, he tells them how to move the puzzle pieces. If that’s the case, it’s a sign that he could be pushing folks into difficult situations that make them prone to filing lawsuits — lawsuits he gets paid to fight.

If any of that’s true, it’s a big deal. The board has never voted to provide free legal counsel by anyone other than the actual board attorney to Powell’s circle of friends.

But those are just allegations from board members who’ve asked to remain nameless.

We already know, thanks to a report from the State Auditor of Public Accounts, that detailed board attorney billings aren’t reviewed or approved by the board.

Let’s flash back to State Auditor Adam Edelen’s 2013 examination:

Finding 2: Detailed Board Attorney billings are not routinely reviewed and approved by the Board.

While Board members approved the payment of attorney billings as an accounts payable item listed on the consent decree during monthly Board meetings, the billing statements containing details of the work performed by the Board attorneys are submitted to and maintained only by the Superintendent and are not examined by the Board, Board Chair, or Board committee. Concerning District Board attorneys’ billings, the Superintendent stated “[o]ur practice is to forward only the cover or summary sheet of the invoices to our accounts payable department to protect confidential and privileged information.” By following this process, the Superintendent is the only District representative to routinely examine the details of attorney billings. While the Superintendent is the chief officer of the District, the contracts for attorney services clearly document that the attorneys are engaged by the Board, and, as such, the Board should be aware of the services which the Board attorneys are providing.

In discussing this issue with current and former Board members, most believed that they would be provided with detailed statements if they made a request to the District to review the records; however, until recently Board members had not made such requests. According to one Board member who recently made such a request, the Superintendent did not provide the Board member with the information stating that the details associated with the billing statements were related to personnel matters. Upon auditor’s request, the Board Chair and Assistant Board Chair requested and reviewed unredacted Board attorney billing statements and indicated to auditors that all attorney activity recorded within the billings related to District business.

While legal strategy and details relating to personnel matters may not be issues in which the Board should be involved, Kentucky Revised Statute (KRS) 160.290 states that a Board “shall have control and management of all school funds.” The oversight process established by the Board must include routine monitoring of the superintendent’s use of funds. As such, it is reasonable to expect that Board members should be routinely provided documentation with sufficient detail to assure that the work performed and being paid for by the District is a legitimate expenditure of the District and not work performed to address a matter unrelated to the District.

One would think that after being called out by the State Auditor, the district would begin complying with the law. But one would be wrong. Because just about anything that occurs involving an attorney in Montgomery County is still easily swept under the rug.

Board members tell us they’re continuing to have difficulty accessing billing information.

Montgomery County Schools is still breaking the law.

P.S. Directed at Powell: Keep attacking me personally for reporting information sourced directly from multiple people within the school system. Keep attempting to defame me, Jake, for publishing government documents and open records obtained directly from you that are signed BY YOU. The more you attack me personally, the more motivation I have to follow your every move. I know who wins and it’s not you, hoss.