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The vendor used funds for entertainment: Report



A review by Kentucky Employers Mutual Insurance Co. has revealed improper contract reporting, lack of surveillance in competitive bidding and failure to properly account for the use of funds for barriers, golf excursions, and sporting events, released on Tuesday by State Attorney Mike Harmon's office.

KEMI is a non-profit municipal company and the state's largest supplier of compensation insurance for employees covering 23,000 policyholders. About 16 % of their premiums are paid by public entities.

The auditor initiated a review of the company on April 3, 2018, review of policies and payments starting January 1, 2016. The auditor's 57 report revealed that more than one-third of the expenses and remuneration lacked documentation and detailed violations of the company's procurement policy. In one case, KEMI paid more than $ 1

00,000 for non-budget marketing, although the policy requires the board's approval for unpaid expenses in excess of $ 50,000. The auditor also found that the company acquired land through a non-competitive process and paid the broker almost $ 40,000 more than agreed in the contract, failed to properly code the expense, e.g. marking about SEK 200,000 in employee parking each year as rent and misleading Employee incentive program is a salary cost. The company also coded golf trips as meals or seminars / conventions in five cases, marking the employees 'valuation door prices and gift cards totaling more than $ 800 as advertising and quoted tabs as meals, according to the auditors' office.

The report found that many KEMI expenses seemed unreasonable or personal in nature, such as a lunch and dinner for a manager totaling $ 735, a three-day $ 600 trip to Florida for a three-hour presentation and a dinner for one. KEMI board member and manager to discuss "Modernization" that included more than $ 100 in spirits and $ 97 in food. The auditor also noted that employees routinely used sports event cards that were identified as purchased for development purposes. The report noted that, in 2017, the Director of Communications was reimbursed for more than $ 3,000 for the purchase of season tickets to the University of Kentucky football game, although the tickets were awarded to KEMI executives without the presence of agents, employers or policyholders.

The report also outlines recommendations for tightening spending, re-evaluating policies and requiring four of KEMI's board members to be elected by policyholders.

"I am my hope KEMI's management and board will implement the recommendations in our report, which will improve the transparency and monitoring of their business," says Harmon.

                    


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