Team Kentucky tornado, flooding relief funds to be audited at lawmakers’ instruction

The Auditor of Public Accounts will conduct a special examination of two state-run disaster relief funds at the direction of Kentucky lawmakers, who have raised concerns about how the multimillion-dollar funds were established and operated.

The Team Western Kentucky Tornado Relief Fund and Team Eastern Kentucky Flood Relief fund, each established by executive order of Gov. Andy Beshear in the wake of natural disasters, are managed by the Public Protection Cabinet. Together, they raised tens of millions of dollars from donors seeking to help Kentuckians impacted by the weather events.

The audit will look at the cabinet’s “acceptance, administration and expenditure of monies associated with, and pertaining to,” both funds for a period beginning Dec. 11, 2021, when the tornado fund was established, through June 30, 2022, according to the auditor’s office.

The request for the audit comes from co-chairs of the Legislative Oversight and Investigations Committee, Rep. Adam Bowling, R-Middlesboro, and Sen. Brandon Storm, R-London, in a letter to Auditor Mike Harmon sent Monday. The Thursday response to lawmakers and copied to Ray Perry, secretary of the Public Protection Cabinet, was signed by Assistant Auditor of Public Accounts Farrah Petter.

As his weekly press conference Thursday afternoon, Beshear called the audit “grossly political” and said the funds — and his administration’s handling of them — are fully transparent. He also drew a connection between the announcement and the November election.

“Listen, the state auditor has a conflict here. He was at Daniel Cameron’s announcement of his lieutenant governor yesterday. I believe that their audit would not meet the auditing standards that are out there that require that you are impartial. We don’t see that here, but listen, we’ll provide the documents to anybody. Absolutely anyone,” Beshear said.

Harmon, the second-term Republican auditor, announced his own run for governor in 2021. Since then, Harmon has been barred by prevailing executive ethics guidelines from investigating any potential rival, he previously told The Herald-Leader.

But it was Cameron, the first-term attorney general, who emerged from the 12-way May primary with the GOP nomination. On Wednesday, Cameron announced State Sen. Robby Mills, R-Henderson, as his running mate. Mills, whose district includes hard-hit parts of Western Kentucky, has also previously been critical of the relief funds.

A Monday email, provided by the auditor’s office, shows deputy counsel for the lawmakers acknowledging to Petter that “Auditor Harmon may have an impairment/conflict and that you are the appropriate person” to receive the request for the audit.

Beshear said attacking the funds “for politics is really wrong.”

“It’s paid for the funeral of every family we lost in tornadoes and floods. It provided millions of dollars to people in their time of greatest need. It’s rebuilding hundreds of homes that otherwise wouldn’t have the funding to rebuild. It helped out farmers in Western Kentucky that lost their granary,” Beshear said. “These are not tax dollars, yet we were able to ask for them and through the generosity of people all over the country and the world. We were able to provide services for our people that otherwise would not have been there.”

In February, Herald-Leader reporting revealed that thousands of dollars donated to the tornado relief fund were sent to people unaffected by the tornadoes.

The office of Treasurer Allison Ball told the Herald-Leader that “within days” of issuing more than 10,000 checks for $1,000 each from the Team Western Kentucky fund in December 2022, they began receiving calls from people who had gotten money even though they weren’t affected by the tornadoes.

“As a result, the Committee has serious concerns about the due diligence and general oversight of the funds,” Bowling and Storm wrote in their letter. “There is a lack of transparency surrounding the solicitation, administration and procurement rules regarding these funds, including but not limited to the establishment of objective criteria for the disbursement and subsequent disbursement.”

The lawmakers also took issue with the funds being established by Beshear’s order without first seeking a formal opinion from the Executive Branch Ethics Commission.

“Given the large sums of monies at issue, we believe that an independent review is both necessary and appropriate,” they wrote.

The Team Eastern Kentucky fund has raised more than $13 million since the July 2022 flooding, and the Team Western Kentucky fund has brought in more than $52 million since the December 2021 tornadoes. The money for these funds was not from the state’s general fund, but instead came from tens of thousands of donors, including individuals and organizations alike.

At the time of the initial Herald-Leader report, the Public Protection Cabinet would not say how many checks may have gone to the wrong people or were returned for that reason.

Soon after, Beshear defended his administration’s handling of the funds, calling them “an open book.” He said of the almost 200 canceled checks, just 19 were the result of possible fraud, and 26 were returned with an explanation that didn’t necessarily indicate fraud; all of these instances were referred to FEMA for follow-up. More canceled checks were attributed to things like clerical errors or mail delays.

“There’s nothing to investigate. It’s all right there,” Beshear said at the time. “But in terms of oversight or reporting, we’re happy to do regular reports and if people want to put that into law, that’s fine. We’re not concerned at all about more people wanting to know where it goes — but they already do.”

According to the Treasury, the number of canceled checks stands at 218 as of Thursday.