State auditor calls for overhaul of laws governing state contracts
Source: By Beth Musgrave, HERALD-LEADER (KY), Thu, Oct. 19, 2006
The state's top auditor is calling for an overhaul of laws that exempt about $1 billion of state contracts from strict oversight. State Auditor Crit Luallen, in a third and final report on the state's contracting laws, said the state's privatization statute is ineffective. Almost all privatization contracts are exempt from strict scrutiny, meaning thousands of contracts to private vendors do not have to go through a cost-benefit analysis before a deal is signed.
.......To illustrate her point, Luallen cited the state's handling of contracts at the Communities at Oakwood, the Somerset home for the mentally handicapped. The Cabinet for Health and Family Services, which oversees Oakwood, entered into a contract that eventually totaled $17 million for Liberty Healthcare, a private Pennsylvania company, to provide management and staff at Oakwood last year. But those contracts were not covered under the privatization law because the Liberty contract did not call for the replacement of more than 10 state workers.
Instead, Liberty replaced state workers as they left.
Kentucky Auditor press release: State Auditor Crit Luallen Releases Assessment of Kentucky’s Privatization Efforts
Report: Assessment of Kentucky's Privatization Efforts (.pdf), October 2006