Kentucky State Auditor Edelen to investigate CVG's airport board spending

Spending, financial practices to be examined

HEBRON, Ky. – Kentucky State Auditor Adam Edelen formally announced Wednesday morning his office will conduct a special examination into the spending and travel by the board of the Cincinnati/Northern Kentucky International Airport.

Edelen said his office will focus on board polices and the airport's governance structures during the morning press conference at Gateway Community and Technical College Boone Campus in Florence. He will also look into the collective spending and travel by the CVG board and administrators.

"Excessive travel and spending is an all-too-common theme in these exams," said Edelen, whose office performs 600 audits each year of county and state governmental agencies.

The press conference came days after media reports outlined questionable spending activity by CVG's board. The reports prompted the auditor to look into financial activities and policies, said Stephenie Hoelscher, the auditor’s director of communications.

Kenton County Airport Board President Jim Huff says he and the CVG administration “openly welcome” the investigation.

Huff said the board has both an internal auditor and an external auditor, Blue and Company in Lexington, Ky.   He also said he doesn’t really think anything is out of order.

“No, I really don’t. I think the travel over a three-year period is down and has reduced over the last three years. We don’t want to do anything that’s not kosher,” said Huff.

The Kenton County Airport Board released a statement Wednesday:

"The Kenton County Air Board welcomes and promotes transparency. It is important to point out that in the last three years, overall spending by the board is down, including a 60-percent reduction in travel costs compared to the prior three years. We continue to work on improving efficiencies and welcome any recommendations that can help achieve that goal."

Edelen says CVG has lost 500 daily flights and some 17 million passengers since 2005, some of which can be attributed to the fact it’s the second most expensive airport in the United States.

Despite the loss of flights, the airport remains an important “economic engine” for the region and the Commonwealth of Kentucky as a whole.

“The airport’s impact on Northern Kentucky and the Commonwealth cannot be overstated,” Edelen said. “This region has seen significant economic growth recently in comparison to areas like Austin, Texas; Columbus, Ohio; and Charlotte and Raleigh, N.C. Vital to that continued and sustainable growth is a healthy airport."

According to the auditor’s office, the airport generates more than 16,000 direct and direct jobs and $2.7 billion in spending by CVG operations, construction and visitors annually.

It also pumps $92 million a year into Ohio and Kentucky coffers, according to Edelen.

Despite any shortcomings it may have, the airport is the 12th largest cargo airport and considered one of the top regional airports in the country.

Frontier and Allegiant airlines have also announced they will begin expanding service through the Hebron, Ky. airport.

"CVG serves a metropolitan area of 2.1 million people and is critical to the economic vitality of Northern Kentucky and Cincinnati,” he said. “Making sure this asset is run efficiently and effectively is a necessary step toward attracting businesses, adding jobs and growing the economy of the region.”

Edelen says the airport is at an “important crossroads” and he wants to play a role in ensuring its success.

“The airport is at an important crossroads in its 65-year history. My goal is to provide a roadmap for improving operations and fostering growth,” he said.

No Stranger To The Northern Kentucky Region

Edelen is no stranger to Northern Kentucky.

He has made his way north more than a half a dozen times this year. His office is currently investigating city of Covington’s finances during ex-finance director Bob Due's tenure with the city.

Investigations totaling more than $1 million in misuse of public money in Northern Kentucky has the state auditor so concerned he headed to the region for a meeting with local officials last month during a accountability seminar.

“I love the region, but I’m spending a lot more time professionally there than I prefer," said Edelen who has family in the region. "Significant public corruption is a cause for alarm. Certainly Northern Kentuckians deserve better than they’re getting right now.”

Over the past year, Edelen, has also investigated three school districts, two cities and a county water district in Northern Kentucky.

Now, he can add regional airport board to that list.

“Despite the repetitive nature of our findings, we continue to see public officials justify wasting public money. Taxpayers are tired of it and, frankly, I’m tired of it. We must strive to become better stewards of our precious public resources.”

Recent Northern Kentucky cases investigated include:

  • Mason County Schools  superintendent, board members and some employees spent $212,110 on items they did not document. The case was referred to the Internal Revenue
    • Service.
    • Dayton Independent Schools'  now retired superintendent was investigated on allegations he took  $224,000 in unauthorized benefits and payments over an eight-year period. The FBI is currently investigating this case and the school has a civil suit pending against Rye for full restitution.
    • In April, a Walton city employee  was found to have spent more than $6,000 in city funds to buy gifts for employees, city council members and the mayor. The city, which did not have policies in place about some spending, has since tightened its procedures. No crimes were committed and no one was sued.
    • Walton Mayor Phil Trzop  pleaded guilty in August to pocketing more than $30,000 from the Boone County Water District -- money that was made from the selling of scrap metal acquired during water line repairs. He repaid the district $29,000.
    • Northern Kentucky Athletic Director Scott Eaton  was charged with taking $311,000 over six years from athletic department funds. He was fired. His criminal case is pending. The auditor is not involved with NKU’s affair at this time, but NKU handed over information about its findings to Attorney General Jack Conway and federal prosecutors.
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