A general view of CVG airport in Northern Kentucky.
Auditing the auditor: Airport board to hire yet another auditor in light of questions about its members' spending and practices. But what's that going to cost you?
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HEBRON, Ky. – The Cincinnati/Northern Kentucky International Airport’s board has decided to hire another independent auditing firm in light of the state auditor’s investigation into board spending.
And ultimately, the cost will be passed along to those who fly out of CVG.
The Kenton County Airport Board has yet to hire a firm or approve a budget for the work, said board spokesman Pat Crowley.
“They wanted a new outside independent firm to put an independent stamp on this audit. Someone who hasn’t been involved before… it will be an independent eye on things,” said Crowley.
“We don’t think the expenses are out of line,” he said. “The board wants to defend itself from the auditor’s office.”
That defense is premature -- at best, said Stephenie Hoelscher, State Auditor Adam Edelen’s spokeswoman.
It’s not uncommon for an agency to hire a consultant after the state auditor’s work is completed to assist in implementation or corrective actions as a result of findings and recommendations, but not simultaneously, she said.
Currently, the airport board has a contract with an outside auditing agency, Blue & Co., LLC. According to their contract, which started in 2007 and runs through Dec. 31, 2016, the board pays the firm a fixed fee of $98,800 annually.
The airport board also has two internal auditors on its staff. Their combined salary is $166,617 annually.
The board has not approved how much it will pay for the third auditor, but a similar investigation by the state auditor prompted the Lexington Blue Grass Airport to do the same thing in 2009 at a cost of more than $40,000.
That consultant performed an audit simultaneously to his special investigation, Hoelscher said. The end result reflected the same recommendations as those of the state auditor’s report.
Hoelscher said those thousands of dollars spent on more audits will hit the public’s pocketbook.
“Taxpayers foot the bill of the regular audit, they’ll be footing the bill of our investigation and the third report will be passed along to the flying public,” she said.
When more money is spent on outside expenses, like a third auditor, she said airlines’ landing fees escalate to make up the difference in the budget, and that lands on your ticket expense.
“The flying public will be paying for this every time they buy a ticket,” she said.
She insisted that the board's audit is unnecessary at this point.
“Neither our examination or a third auditor would’ve been needed had they initially heeded the advice of their CPA firm,” said Hoelscher.
“Our experience is that those who welcome the work of our professional auditors are more serious about organizational improvement than those who do not.”
The decision to hire another ‘independent eye’ on the board’s spending came after last week’s announcement that Edelen would be conducting a special examination into the spending and travel by the airport board.
Edelen said his office will focus on board polices and the airport's governance structures and 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.
He sited one expense by board chairman James Huff in particular.
“When you see $20,000 spent by the board chairman to take a round-trip trip to a conference in Italy, certainly that raises the question on whether those are legitimate expenses or not,” said Edelen, adding that he wants the airport and its board to get back on track, since they key Northern Kentucky's development.
"CVG serves a metropolitan area of 2.1 million people and is critical to the economic vitality of Northern Kentucky and Cincinnati,” said Edelen. “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.”
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 pumps $92 million a year into Ohio and Kentucky coffers, he said.
“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,” said Edelen.