The first part of a major audit of Louisville Metro Police Department spending shows the process of billing and documenting overtime for special events lacked consistency and controls.
It was the result of a late 2018 Metro Council request for an audit of all LMPD overtime spending. The year before, WDRB reported a pattern among officers reporting unusual hours, including 17- and 21-hour days. Then, in 2019, three officers pleaded guilty to federal wire fraud charges.
Those abuses were not related to special events. The second part of the audit, covering general overtime usage, will be published separately. Both reports include the period when the overtime fraud took place.
LMPD spent more than $17 million on special events overtime from Dec. 2016 through Aug. 2018, most of which came from the Louisville Metro’s general fund. But the audit found those services were at times rendered without written contracts, other departments didn’t have processes for verifying hours worked and billing for these events, and LMPD did not have a “reliable record of which officers worked an event and the quantity of hours the officer worked.”
The report didn’t specify which events were examined, but the category could include the Kentucky Derby and St. James Art Fair, for example.
Jessie Halladay, a spokeswoman for LMPD, said the department cooperated with the audit and is making changes in response. The department agreed with auditors’ recommended changes including a standard documenting procedure for special events overtime hours and policies for ensuring compliance with requirements for grants.
“These are good suggestions to help us tighten up the system,” she said.
The audit also raised concerns about the cost of special events, in particular the fact that overtime costs were higher than what was billed to third parties for seven of the 16 events examined. The excess was about $300,000. The auditors suggested changes such as periodic reviews of estimates and of agreements for recurring events to identify potential improvements.
Some suggestions extended to two other Metro departments: the Office of Management and Budget and the Office of Special Events. For example, OMB has created a spreadsheet to better track reimbursable and special events. The auditors found no such mechanism was previously in place. In the case of OSE, they found an absence of policies and procedures related to billing for special events and waiving fees. The Emergency Management Agency responded that it would develop policies and procedures for OSE.
In all, those departments and LMPD agreed with most of the auditors’ 22 recommendations and agreed to implement 18 of them.
Daniel Frockt, the city’s chief financial officer and head of OMB, said there are mechanisms in the audit to ensure the accepted recommendations are implemented.
“The audit process works because it requires you to evaluate your process and procedures and then act on those recommendations, and then to report on what you acted on,” he said. “So I think it has a way to close the loop effectively.”
Frockt said he thinks the changes will make it harder for future abuse to take place.
Halladay, of LMPD, concurred, although she said no system is foolproof.
“If someone wants to break into your garage, they’re going to find a way. If you’ve put an alarm system on your garage, they may not get away with it,” she said.
Metro Council president and former police officer David James (D-6) said he’s seen some improvement due to the audit, but that he was concerned by the lack of controls. He sponsored the resolution requesting the audit in 2018.
Now, James is hoping the second part of his request will be fulfilled this month.
“We know that there have been problems, extensive problems, and that they need to get corrected,” James said. “And so I’m going to be very interested to see what the auditor recommends to fix those, and what actions the police department has taken to make sure that taxpayer dollars are not being wasted or stolen.”
He said that what council members learn from the general overtime audit could impact how much funding lawmakers allocate for overtime. The audit report could say council has allocated more funding than needed for overtime, or that LMPD should be using its overtime funding in a different way, he said.
Council is in the early stages of revising the continuation budget proposed by Mayor Greg Fischer last month. Fischer and Frockt have said the city is likely to experience a $115 million revenue shortfall this fiscal year and next.
James said that the budget conversation will also have to include officer pay. LMPD has been losing officers to neighboring police departments that offer better pay. The city will need to consider how to keep its police officers and improve public safety as part of its COVID-19 recovery plan, he said.
As for potentially cutting a shrunken force’s overtime, James said, “It’s not a matter of if they need it or not. It’s if it’s being used appropriately.”