Possible financial discrepancies within the accounts of the former Somerset-Pulaski County Development Foundation (SPCDF) are under investigation, according to statements made by officials connected to the board created to replace it, the Somerset-Pulaski Economic Development Authority (SPEDA).
SPEDA President and CEO Chris Girdler stated Friday that discrepancies and mismanagement were uncovered during the transition between the two boards, connected to staff involved with SPCDF.
Girdler said: "During our transition, it became apparent there was an overall case of mismanagement and similar issues by the staff, and some financial discrepancies existed within the old dissolving 'Foundation' (SPCDF). We made our concerns known immediately to the old Foundation's board of directors and with their cooperation we shared those issues with the appropriate authorities."
As of press time Friday, communication with the Kentucky State Police from the Commonwealth Journal attempting to confirm an investigation had not been returned.
No information has yet been released as to who may be under investigation or how many individuals are involved.
Members of the former SPCDF Board of Directors issued their own statement, saying, "In the course of the transition and eventual dissolution of the Somerset-Pulaski County Development Foundation (SPCDF), questions arose surrounding some financial transactions and activities involving the staff of SPCDF. As taxpayer funds were at stake, in coordination with SPEDA, we immediately made our concerns known to the appropriate authorities. The parties concerned no longer work in Pulaski County government, nor in economic development with SPCDF or SPEDA. We will provide more information when appropriate to do so, but for now we cannot comment further on these legal matters. All inquiries or questions should be directed to our legal counsel as appropriate: John G. Prather, Jr."
SPCDF's executive director was Martin Shearer. Shearer declined comment when reached by the Commonwealth Journal on Friday.
SPEDA's Girdler went on to say, "While working closely with the Foundation's board of directors and the appropriate authorities to get to the bottom of things, SPEDA will continue its mission to work diligently to promote our great community and demonstrate our economic model will improve the quality of life for all of our citizens while also continuing to abide by the charge given us by Mayor [Alan] Keck and Judge [Steve] Kelley to accomplish more with less, be transparent in all our actions and be able to quantify our work."
Somerset Mayor Keck and Pulaski Judge-Executive Kelley issued their own statements individually.
Kelley called the financial discrepancies "very alarming" and called for Pulaski County residents to "pull together to overcome the abuse and mismanagement of county tax dollars."
Judge Kelley said, "From day one of my administration, I recognized that our (old) development foundation had serious issues that needed fixed. The organization was loose and chaotic. The board was self-appointing, giving no accountability to our taxpayers, which funded the foundation. And we were not getting results that justified the investment the taxpayers were making. We immediately began implementing a plan to reorganize and replace the existing foundation. The resistance to change was apparent, so the Fiscal Court began cutting funding each year to force the change."
Kelley was referring to county government's "cutting off" funds from the organization in fiscal year 2017, freezing funding because of questions from state auditors regarding the use of public funds for an organization that was running as an independent agency.
Kelley continued: "We launched SPEDA in 2017, named the county's board selections, and were ready to move forward in a positive direction, only to see more resistance in the 11th hour. When Mayor Keck was elected, he and his council embraced the vision of SPEDA, and together we boldly went a new and better direction of accountability, transparency, and results."
"… The old development foundation did not begin in my administration, the wrongdoings did not begin in my administration, but the problem was certainly solved under my administration, and I take pride in knowing I was able to serve my county in such a time as this."
Mayor Keck added, "While this specific matter was unforeseen at the time the decision was made, it confirms and further supports my decision to take immediate action in the first month of this administration on the transition from SPCDF to SPEDA. Economic Development is a results-driven business, and I am incredibly proud of the work SPEDA has done in a short amount of time. We will continue to operate SPEDA with full transparency, be lean and seek the highest efficiency possible. Our finest days of growth and prosperity lie ahead. I'm excited to move past this challenge and focus on the great opportunities to improve our quality of place, enhance our workforce and recruit new industry."