KRS 210.440: Allocation of funds -- Withdrawal of funds or board recognition -- Action

by secretary when emergency exists -- Appeal and hearing.

(1) At the beginning of each fiscal year, the secretary of the Cabinet for Health and

Family Services shal l allocate available funds to the boards for mental health or

individuals with an intellectual disability or nonprofit organizations for

disbursement during the fiscal year in accordance with approved plans and budgets.

The secretary shall, from time to ti me during the fiscal year, review the operations,

budgets, and expenditures of the various programs; and if funds are not needed for a

program to which they were allocated or if the board has failed to pay employer

contributions for which it is liable by i ts participation in the Kentucky Employees

Retirement System, he or she may, after reasonable notice and opportunity for

hearing, withdraw any funds that are unencumbered and reallocate them to other

programs. He may withdraw funds from any program, or component part thereof:

(a) Which is not being operated and administered in accordance with its approved

plan and budget, and the policies and administrative regulations of the cabinet

promulgated pursuant to KRS 210.370 to 210.480; or

(b) If the board has fa iled to pay employer contributions for which it is liable by

its participation in the Kentucky Employees Retirement System.

(2) If the secretary finds at any time that a board for mental health or individuals with

an intellectual disability or nonprofit or ganization to which funds have been

allocated for the operation of a regional community program for mental health or

individuals with an intellectual disability is not operating and administering its

program in compliance and accordance with the approved p lan and budget and the

policies and administrative regulations of the cabinet, or if the board has failed to

pay employer contributions for which it is liable by its participation in the Kentucky

Employees Retirement System or if the board has filed for ba nkruptcy, he or she

may withdraw his or her recognition of that board or organization as the local

authority for the receipt of funds and the operation and administration of regional

community programs for mental health or individuals with an intellectual disability.

(3) If the secretary finds at any time that an emergency situation exists with regard to

the financial stability of any regional board for mental health or individuals with an

intellectual disability or nonprofit organization, including a regio nal board's

inability to pay employer contributions to the Kentucky Employees Retirement

System or a regional board's actions to file for bankruptcy, which jeopardizes the

continuation of programs and provision of services in the area served by that board

or nonprofit organization, he or she may, other statutes to the contrary

notwithstanding:

(a) Appoint a caretaker administrator who shall be authorized to direct the

operation and administration of the board or nonprofit organization's

community programs f or mental health or individuals with an intellectual

disability including, but not limited to, their financial record keeping, their

personnel management operations, and their financial and program reporting;

and

(b) Make personnel changes deemed necessary to insure the continued operation

of the board or nonprofit organization in compliance with its plan and budget

and the policies and regulations of the cabinet.

(4) Any community board for mental health or individuals with an intellectual

disability to be affected by the provisions of subsections (2) and (3) of this section

shall be notified by the secretary of the Cabinet for Health and Family Services

thirty (30) days prior to the anticipated action by the secretary. The notification

shall be by means of a letter from the secretary to the chairman of the board for

mental health or individuals with an intellectual disability in question and shall state

the reasons for the anticipated action. Following the notification, the board for

mental health or individuals with an intellectual disability may:

(a) Comply with the secretary's action without contesting it; or

(b) Request an administrative hearing before a hearing officer appointed by the

Office of Administrative Hearings within the Department of Law to sh ow

cause why the action should not stand. The application shall be made within

seven (7) days of the receipt of the letter from the secretary, and the hearing

shall be conducted in accordance with KRS Chapter 13B.