(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.
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