Insurance Flap Leads to Audit of Kentucky City

The Kentucky state auditor’s office will conduct an independent exam after a controversy involving fraud allegations by a city employee in Lexington over the purchase of insurance coverages for the city.

Auditor Crit Luallen said in a statement Thursday that the review would analyze “the procurement process for the city’s insurance services” and the handling of fraud allegations made by a city employee.

She says the move comes after media coverage, information provided to her office and a request by Lexington’s internal auditor.

The Lexington Herald-Leader reports employee Patrick Johnston made fraud allegations in 2008 and 2009, which were dismissed as being without merit. City council members have questioned whether the allegations are related to a proposed elimination of Johnston’s job in a reorganization.