Kentucky's Capitol(Kittugwiki (via Wikimedia Commons))Cities and counties across Kentucky are getting an influx of money from the lawsuits settled with manufacturers, distributors and pharmacies accused of contributing to the nation’s boom in opioid use and the ensuing overdose crisis.Across Kentucky, local governments will share at least $450 million in settlement funds that will be paid in installments through 2038. To date, 270 cities and counties collectively received more than $108 million, according to a Kentucky Center for Investigative Reporting analysis of payment data from BrownGreer, the administrator for more than $45 billion of opioid settlement funds.State law requires cities and counties to detail how they spend the money in annual reports to the Kentucky Opioid Abatement Advisory Commission.But two years after the funds started flowing into local coffers, public records show less than a dozen governments have actually provided that information.The failure to comply with state law stems mostly from confusion about what they should disclose, according to local government advocates. State officials know about the lack of compliance, but would not detail their plans to resolve the issue.Opioid overdoses killed more than 700,000 people nationwide, including some 16,000 people in the commonwealth, since 1999. The settlement payouts are “blood money,” said Kentucky Attorney General Russell Coleman at a recent symposium.Governments are supposed to use most of the settlement money to help remedy the opioid crisis — such as by supporting addiction treatment and prevention programs.Experts and community advocates say strategic spending can save lives. And transparency is vital to ensure oversight, said Christine Minhee, the founder of a national opioid settlement tracker.“The fact that hundreds of thousands of people had to die for states and localities to get their millions [in settlement funds] makes it kind of obvious that they ought to be expressing how they're spending it … you know, speaking it loudly into the mic,” Minhee said in an interview with KyCIR. “And yet we have states dragging their heels when it comes to reporting.”Minhee said databases that detail spending in North Carolina and Colorado are good examples of how officials should disclose what gets bought with settlement money.There’s added scrutiny over the use of opioid settlement funds because of what happened with an even bigger batch of settlements with tobacco companies, said Sara Whaley, senior practice associate at the Johns Hopkins Bloomberg School of Public Health. That 1998 deal yielded over $240 billion and counting in payouts, but governments spent little of it on initiatives to help people either quit smoking or avoid picking up the addiction.“We didn’t want what happened with Big Tobacco to happen here, which was that the money was spent on whatever,” Whaley said.Rules for trust Local governments are also supposed to file a quarterly form promising they didn’t misspend their opioid settlement funds. But there’s scattershot compliance with this rule, too, KyCIR found.Since early 2023, 25 local governments that received payouts have yet to file a single form. Nearly 250 cities and counties sent in at least one certification, but the frequency varied widely.For example, neary 100 governments filed just one form, while others filed six or more. Some governments signed multiple certification forms on the same date and indicated they’d done so to backfile after missing earlier deadlines.Chris Evans, the executive director of the Kentucky Opioid Abatement Advisory Commission, said they’re working to improve the reporting process.“We all want to make sure the money has gone to the place it needs to go,” he said in an interview with KyCIR. “People are trying to make sure that they move forward in the right way and understand how the process needs to go, moving forward.”The attorney general’s office, which assists the commission, declined to specify what changes they may make to the settlement reporting process.The Kentucky Association of Counties is collaborating with Kentucky’s opioid commission to “develop a standardized reporting system for counties,” said Jennifer Burnett, the director of strategic operations for KACo.Burnett suggested the future changes could let Kentuckians more easily review details of counties' settlement spending."Transparency is a priority, and counties recognize the tremendous potential these funds have to deliver substantial, long-term benefits to their communities,” she said in an email to KyCIR.The settlement payouts come with strict rules about how the money can be spent. Breaking the rules could lead to a loss of some funds, and state oversight is designed to ensure that doesn’t happen, said Bryan Hubbard, the opioid commission’s former executive director.In town hall meetings about how the funds would be used, Hubbard said he heard “a tremendous amount of skepticism and cynicism from average Kentuckians toward government systems that they didn't trust to do things with competency or honesty.”The reporting process he helped design was intended to give Kentuckians confidence in the system, he said.“I would often say, ‘Look, we don't want — 10 years from now — for a Frontline documentary to be made about how Kentucky completely and totally squandered away this very precious and one-time opportunity to get this right,’” he said.Confusion rulesSo what’s driving the mixed compliance? Through analysis and interviews, KyCIR learned confusion is a major factor.Whitley County Fiscal Court, for example, sent a certification in April 2023 but no subsequent forms. Project coordinator Amber Owens said the county understood another report wasn’t due until it actually spent some settlement money.Owens said Whitley County didn't spend any funds until recently, when it hired an opioid response coordinator, and will file a new certification due to that expense. She said they hadn’t heard from state officials about missing deadlines.Meanwhile, some cities confused the forms they’re supposed to send the state with reports they’re supposed to submit to BrownGreer, the administrator of the national opioid settlements, said Morgain Patterson, the director of municipal law for the Kentucky League of Cities.“That’s where the confusion lies and why there wasn’t quite the compliance level that we should have been able to expect out of cities in providing those quarterly certifications,” Patterson said. “Because they thought they were complying when they sent those [other reports] to BrownGreer.”Another potential confusion point: Whether Kentucky’s main reporting rules for local governments conflict with each other.The state law requires local governments to submit a certification form annually. It also says they should describe how they spend the funds and list the recipients.An associated administrative regulation tells local governments to submit notarized certification forms every quarter, pledging that they’ve used the funds appropriately. They’re not asked for spending details but are told to maintain related financial records for five years.Patterson said the regulation’s quarterly certification rule could be interpreted as replacing, rather than supplementing, the law’s annual reporting requirement. Meaning local governments may think they only have to file four certifications per year, rather than four quarterly reports plus an annual certification accompanied by specifics on their expenses.Patterson said asking for four or five reports per year can be a “heavy lift,” especially in places where “you have one city clerk that pretty much does everything.”The mixed compliance — with nearly 100 cities and counties filing just one certification in more than 18 months — indicate many localities haven’t met either interpretation of the requirements.Hubbard, the opioid commission’s former director, said they intended for local governments to submit quarterly certifications in addition to annual spending reports.The quarterly forms were meant to consistently remind local governments to spend the money in accordance with the settlement agreements’ criteria, he said.“So when they sign it, they best know that everything that was done was on the up-and-up, as evidenced by records that they are expected to keep for the commission to inspect at any time,” Hubbard said.Hubbard served under former Attorney General Daniel Cameron. Coleman succeeded Cameron and selected Evans in December to replace Hubbard as head of the commission.Russell Coleman( Provided)The attorney general’s spokesperson declined to provide an assessment to KyCIR of whether quarterly certifications are required instead of or in addition to annual reports. Instead, they said the opioid commission is committed to improving all processes related to the use and monitoring of settlement funds.State regulation requires Kentucky’s opioid commission to report noncompliance with reporting rules to the attorney general’s office, which can decide if further action is necessary.Coleman’s office declined to tell KyCIR if it’s taken any action for noncompliance by local governments.‘States are struggling’State governments decide how much, or little, local governments must disclose about opioid settlement spending. They similarly control what they tell the public about their own settlement spending.Kentucky’s opioid commission posted information online about who received the roughly $55 million in grants it awarded to date from the state government’s share.Louisville Metro Government — which gets bigger settlement payouts than the state’s other local governments — also posts details of settlement spending online. This level of disclosure from a local government isn’t common, experts said. In most cases, determining how settlement funds get spent at the local level requires the arduous task of contacting individual governments to find out where the money goes.Minhee, the national opioid settlement watchdog, has empathy for the patchwork reporting by Kentucky’s local governments because she ”noticed, nationwide, that a lot of states are struggling with getting that up and running.”Whaley, from Johns Hopkins, worked on nationally recognized principles for managing opioid settlement funds. She said the foundation Kentucky laid, by requiring some reporting from local governments, is a “good first step.”To get broad compliance, local governments need reliable processes to complete forms accurately and on time, while states need routine methods for checking reports, Whaley said.Across the country, Whaley said she sees public officials being thoughtful about the potential for mismanaging the opioid settlement funds and about how to use the money in ways that best support their communities.She thinks that’s a good sign and suggests giving a little grace to every level of government.“Building the plane as we’re flying it, there are going to be some hiccups. And I think what is going to make-or-break this for a government is the ability to reflect and grow as we go,” she said. “The ones that are able to admit when they have flaws and adapt and change are the ones that are going to be the most successful.”