Report: 'Disorganized and unchecked leadership' at Administrative Office of the Courts

FRANKFORT, Ky. (WDKY) - The Kentucky Auditor of Public Accounts has released a report revealing several instances of wrongdoing at the Administrative Office of the Courts (AOC).

"In a number of areas, our auditors found disorganized and unchecked leadership in AOC operations," Auditor Mike Harmon said in a news release, "Essentially, AOC failed to follow many of its own policies and often simply didn't have sufficient policies in place to provide transparency and oversight. This resulted in a weak internal control structure and overall lack of accountability at AOC. Our report makes dozens of recommendations to AOC to improve operations, including rewriting all internal policies and procedures."

The examination of AOC operations spanned from July 2015 - June 2017, and auditors listed several "concerns" in their list of 20 findings.

Some of the findings include employee-only surplus property sales, tax violations and former employees maintaining access to the office's case management system.

Another one of the auditors' findings says two Supreme Court justices purchased surplus property using private transactions not part of employee-only sales. This policy was revised following media reports.

The AOC Director was also found to have instructed a staff member to purchase personalized mint julep cups for State Justice Institute board members by the request of the chief justice's spouse.

Harmon says the office has had a "dismissive attitude" toward ethics recommendations after it rejected several of them. This includes legislation requiring AOC to undergo an annual audit.

The AOC responded to the auditor's report shortly after it was released Thursday morning.

“I want to express my sincere appreciation to Auditor Harmon and his staff for conducting such a professional and thorough examination of the AOC,” Director Laurie K. Dudgeon said. “Completing a third-party exam has been one of the most valuable exercises the AOC has undertaken during my tenure as director. We sought an external audit to help us identify areas that needed improvement, particularly around policies related to our administrative functions. We anticipated many of the findings and have already begun implementing changes to strengthen our operations.”

Some of the changes the office has taken includes waste, fraud and abuse reporting mechanisms. The Supreme Court has also made reforms including how it handles surplus property procedures.

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