A financial review that turned up "excessive and questionable spending" at the Kentucky League of Cities has been turned over to state and federal law enforcement agencies.

State Auditor Crit Luallen said Thursday she forwarded the report to law enforcement "because of the nature and complexity of the exam's findings."

Those findings included high pay for executives of the quasi-governmental organization that is primarily funded by public money, conflicts of interest in spending, undocumented credit card expenses and gifts from vendors, including admission to a Las Vegas strip club for three League staff members.

The audit team of state financial experts found 19 positions in the organization paid more than $100,000 _ some far more, thanks to raises over the past seven years.

Auditors noted that the executive director's salary had risen since 2002 from $170,000 to $331,000, and that the deputy executive director's pay rose over the same period from $141,00 to $255,000. They also noted a raise that took the chief insurance services officer salary from $124,000 to nearly $239,000.

League of Cities President Michael D. Miller acknowledged in a statement Thursday that "in many ways, we had become complacent in assessing and managing some of our own internal operations."

Miller said the board of directors has appointed a task force to address concerns raised by state auditors.

"We have also established new policies for KLC travel and expense reimbursement that clearly define allowable costs related to lodging, meals, entertainment, rental cars and airfare," he said. "And strict rules and limitations are now in place regarding spouse travel."

Besides law enforcement, Luallen said findings from the financial review also have been sent to the Internal Revenue Service, the Kentucky Department of Revenue and the Kentucky Department of Insurance.

Luallen told a news conference that the organization's board of directors needs to improve policies governing ethical conduct and spending by staffers. The main function of the organization is to provide insurance coverage for Kentucky cities and to do research and training for city officials.

"If KLC is to continue providing valuable services to our cities, many of which are struggling, its board must strengthen its financial oversight," Luallen said Thursday.

The organization's longtime executive director, Sylvia Lovely, resigned in August after the Lexington Herald-Leader published articles detailing questionable spending.