Brig. Gen. John Heltzel resigned as director of Kentucky Emergency Management in light of an audit showing the agency misspent thousands on conferences, altered documents to conceal suspect expenditures and threatened staff who cooperated with auditors.
Gov. Steve Beshear said he accepted Heltzel’s resignation Thursday morning.
“The findings in the recent Auditor’s report made it clear that new leadership was needed in the agency, given the numerous questions and grave concerns it raised about the proper handling of funds, reliable and transparent accounting, and appropriate work environment under the general’s direction,” Beshear said in a statement.
“… The public’s trust is a sacred investment that we all must safeguard, and this change in leadership will help to restore accountability and transparency to this critical agency.”
Mike Jones, executive director of the Office of Management and Administration for the Kentucky Department for Military Affairs, has been named acting director of Kentucky Emergency Management.
Jones’ first task as head of the agency will be implementing a plan to correct matters that were raised in the audit, which showed Kentucky Emergency Management “nurtured a culture of waste and abuse,” Beshear said.
Auditor Adam Edelen, who released his findings Tuesday, welcomed the change in leadership, saying Heltzel’s resignation was “the proper course of action.”
“Today’s action begins a process of renewal,” Edelen said in a statement. “It is my hope that these incidents of waste and abuse do not tarnish the reputations of the vast majority of public employees who conduct the peoples’ business with integrity and commitment.”
Kentucky Emergency Management deferred a request for comment to Beshear’s office.
Edelen’s audit was triggered by prior financial statement audits conducted between fiscal years 2007 and 2012 that revealed nearly $5.6 million in questionable expenses by the agency.
The audit details $122,386 in excessive spending related to the Governor’s Emergency Management Workshop at the Galt House Hotel and Suites in Louisville from 2010 through 2012.
Edelen said Tuesday the agency collected vendor and registration fees and deposited them into the state treasury, but spent more on the conferences than the amount deposited. The report details thousands of tax dollars spent on receptions, alcohol, meals, gifts and door prizes.
The report further questioned $113,497 spent on working lunches at Capital Plaza Hotel from 2009 through 2013 and $69,875 paid to a software company Heltzel had worked with numerous times as the Kentucky National Guard’s chief information officer.
The audit also uncovered invoices doctored to hide the questionable expenditures. In one instance, a 2010 invoice listed 63 New York strip steak dinners at $15 each when the price was actually $41 per meal — $26 per person higher than the state per diem limit.
A number of employees at Kentucky Emergency Management were reluctant to speak with auditors during the examination, fearing their phone calls and emails were being monitored, Edelen said Tuesday. In a staff meeting, Heltzel and others in administrative roles threatened those who shared information with auditors, Edelen said.
Kentucky Emergency Management disputed many of the auditor’s findings in its response to the report.
The report was forwarded to Attorney General Jack Conway, the U.S. Department of Homeland Security and the Executive Branch Ethics Commission.
Beshear appointed Heltzel to the leadership post in 2008. He earned $79,527 annually.
Edelen’s report prompted the Kentucky Emergency Management Association to call for Heltzel’s immediate dismissal.
Steve Robertson, chairman of the Kentucky Republican Party, said Beshear should have fired Heltzel as soon as the audit’s findings were released.
“Gov. Beshear pledged in his 2007 inaugural address to ‘strengthen protections for whistleblowers,’” Robertson said in a statement. “I hope he will send a clear message to the employees of (Kentucky Emergency Management) that they have no fear whatsoever of retaliation by any of his political appointees who remain in that office.”