Opinion
Opinion By: Chris Gorman, Attorney General; Amye B. Majors, Assistant Attorney General
OPEN RECORDS DECISION
This appeal originated in a request for records submitted by Ms. Nina Walfoort to Ms. Susan McDonald, Marketing Director for the Transit Authority of River City (TARC), on September 15, 1993. Ms. Walfoort, a reporter for The Courier-Journal, asked "to inspect and copy the Coopers & Lybrand audit for Yellow Cab and any other providers of TARC 3 services that were included in the audit. "
In response to her request, Ms. Walfoort received a copy of a document styled "legal opinion" drafted by Mr. David Gittleman, General Counsel for TARC, and directed to Ms. McDonald. The entire text of that opinion, dated September 20, follows:
This is in response to your request for legal opinion regarding Nina Walfort's [sic] September 15, 1993 Open Records Request. Specifically, whether 'the Cooper [sic] & Lybrand audit of Yellow Cab and any other providers of TARC 3 services' are subject to inspection under the KY Open Records Act.
It is our opinion that the draft report of Coopers & Lybrand to David Gittleman relating to Yellow Cab (Yellow Enterprises) is not subject to open records inspection. The report is exempt from inspection because it is not an audit, is designated by the accountants as a preliminary report and TARC has made no final decision regarding its subject matter.
Mr. Gittleman did not cite a specific exception to the Open Records Law authorizing nondisclosure of the document, nor did he offer any explanation of how the exception applies.
On behalf of his clients, the Courier-Journal and Louisville Times Company and Ms. Walfoort, Mr. Jon L. Fleischaker submitted an appeal to the Attorney General, arguing that the document requested by Ms. Walfoort is subject to public inspection and taking "strong exception to this public agency's blatant disregard for both the procedural and substantive requisites of the Open Records Act." He objected to the public agency's failure to directly notify Ms. Walfoort of its decision, to cite the specific exception authorizing nondisclosure, and to explain how the exception applies to the record withheld. Mr. Fleischaker observed:
One might argue that the above stated violations are simply technical deficiencies on the part of TARC. Technicalities, however, do as much to thwart the Legislature's open access mandate as substantive violations. For that reason, the Act requires that agencies respond quickly, decisively and thoroughly to every public record request. TARC's failure to do so places it at odds with the law here.
(Emphasis in original.)
Mr. Fleischaker also objected to TARC's decision to withhold the record on substantive grounds. In his view, TARC "has not, and clearly cannot," meet the statutorily imposed burden of proving that a particular exemption allows it to withhold the requested record. Noting that the Attorney General's Office has consistently recognized that final audit reports are public documents, and must be made available for public inspection unless there is a possibility of prospective law enforcement action or administrative adjudication, he indicated that it is the applicants' understanding that the document in question is a final audit by Coopers & Lybrand, and asserted that "the effort to label it 'preliminary' is nothing more than a transparent attempt to avoid the mandate of the Open Records Law. " Although Mr. Gittleman stated that the record is not an audit, Mr. Fleischaker maintained that he "fails to explain what it is about the record that makes it not an audit. " (Emphasis in original.) Citing OAG 91-72, in which this Office stated that an audit is a systematic inspection of accounting records reflecting income and expenses of an operation, Mr. Fleischaker noted that "this is generally the type of report that Coopers & Lybrand provides for its customers," and that it is assumed "that this is exactly what was presented to TARC by the accounting firm here."
Moreover, Mr. Fleischaker argued, even if the document is not technically an audit, it must be released because it does not fall within any of the exceptions to the Open Records Law. In his view, it is not exempt pursuant to KRS 61.878(1)(h) and (i), for two reasons. Because there is no indication that Coopers & Lybrand intends to do additional work on the report, it must be treated as their final product. In addition, the preliminary documents exceptions apply only to internal preliminary investigative materials, and do not operate "to deny the public access to reports generated from outside the agency." Relying on
Kentucky State Board of Medical Licensure v. Courier-Journal, Ky.App., 663 S.W.2d 953 (1983), OAG 91-97, and authorities cited therein, Mr. Fleischaker asserted that it is "immaterial . . . that [TARC] has made 'no final decisions regarding [the record's] subject matter. ' This fact would only be relevant if the requested record was an internally generated document."
On September 30, this Office requested additional information from TARC pursuant to KRS 61.880(2). In response, Mr. Gittleman reiterated that the document is not an audit, but is instead a preliminary report submitted to TARC's counsel as "a fraction of the preliminary information which may assist the staff and board in reaching a decision" relative to an apparent billing dispute between TARC and Yellow Enterprises. Under a contract with TARC, Yellow provides transportation services to the elderly and disabled. The final decision, to which Coopers & Lybrand's report is preliminary, is the proper amount Yellow has earned for services rendered. Mr. Gittleman therefore maintains that the document "certainly falls within KRS 61.878(h) and (i) [sic] being preliminary drafts, notes, correspondence, and even less than preliminary recommendations and preliminary memoranda, and certainly not intended to give notice of final action of a public agency. " To facilitate our review of TARC's action, Mr. Gittleman provided this Office with a copy of the document at issue in this appeal.
We are asked to determine if TARC properly denied Ms. Walfoort's request for the document identified as "the Coopers & Lybrand audit for Yellow Cab" in her September 15 request. For the reasons set forth below, we conclude that although its response was procedurally deficient, TARC acted consistently with the Open Records Law in denying her request.
As Mr. Fleischaker correctly notes, KRS 61.880(1) imposes certain duties and obligations on a public agency which has received a request for records. That statute provides:
Each public agency, upon any request for records made under KRS 61.870 to 61.884, shall determine within three (3) days, excepting Saturdays, Sundays, and legal holidays, after the receipt of any such request whether to comply with the request and shall notify in writing the person making the request, within the three (3) day period, of its decision. An agency response denying, in whole or in part, inspection of any record shall include a statement of the specific exception authorizing the withholding of the record and a brief explanation of how the exception applies to the record withheld. The response shall be issued by the official custodian or under his authority, and it shall constitute final action.
Ms. McDonald's response to Ms. Walfoort's request was procedurally deficient to the extent that she failed to directly notify "the person making the request," Ms. Walfoort, of TARC's decision. While Mr. Gittleman's legal opinion can be construed as a denial, it does not contain an express statement to that effect, nor is it clear that it was issued by the official custodian of the record or under his or her authority. We concur with Mr. Fleischaker in his view that forwarding a copy of a very brief and cursory internal memo to Ms. Walfoort does not satisfy the public agency's procedural obligation under KRS 61.880(1).
Additionally, we find that TARC violated the Open Records Law in its initial "response" by failing to cite the specific exception authorizing nondisclosure and briefly explain how it applies to the record withheld. Simply stated, a vague reference to the preliminary character of the report and the fact that the public agency has made no final decision regarding its subject matter is not sufficient under the clear mandate of the law. As Mr. Fleischaker correctly observes, these procedural requirements are not mere formalities but are an essential part of the prompt and orderly processing of an open records request. We urge Ms. McDonald and Mr. Gittleman to review the relevant provisions to insure that future responses conform to the Open Records Law.
Nevertheless, we believe that the substantive arguments advanced by TARC in support of its decision to withhold the disputed document are sound. Mr. Gittleman invokes KRS 61.878(1)(h) and (i). Those exceptions authorize the nondisclosure of:
(h) Preliminary drafts, notes, correspondence with private individuals, other than correspondence which is intended to give notice of final action of a public agency;
(i) Preliminary recommendations, and preliminary memoranda in which opinions are expressed or policies formulated or recommended[.]
While there can be little doubt that a final audit of a public agency is a public record within the contemplation of the Open Records Law, and not exempt from disclosure under these provisions, 1 we do not believe that the document to which Ms. Walfoort requested access can be properly characterized as an audit, nor do we believe that it can be said to represent final action of a public agency.
The record at issue in this appeal is a six page narrative, with attachments, addressed to Mr. Gittleman in which Coopers & Lybrand documents the transactions of the TARC 3 Program for a four day period, under an August 17, 1992, agreement between TARC and Yellow Enterprises, and evaluates Yellow's performance under that agreement. The record, which is styled "Exhibit A," bears a stamped notation on each page designating it a "Draft for Discussion Purposes Only-Subject to Revision." The record contains a number of disclaimers relative to the sufficiency of the procedures employed, but can in general be described as a preliminary memorandum aimed at uncovering discrepancies in billing procedures. A copy of the record which Mr. Gittleman provided to this Office was not disclosed to other parties, and has now been destroyed. KRS 61.880(2).
The record to which Ms. Walfoort seeks access is not an audit. It does not consist of "a systematic inspection of accounting records . . . reflecting income and expenses of an operation." OAG 91-72. It was not generated pursuant to KRS 96A.190 or other statutory authority. Accordingly, we believe that the line of authority mandating disclosure of audits which is cited by Mr. Fleischaker is inapposite. In our view, the line of authority affirming the nondisclosure of draft reports prepared by outside agencies is dispositive of the present appeal.
This Office has consistently recognized that reports and analyses prepared by outside agencies, as well as private organizations, may properly be withheld pursuant to KRS 61.878(1)(h) and (i). Thus, in OAG 82-450, we held that a "Development Potential Analysis" prepared for Jefferson County by the Real Estate Research Corporation was exempt from public inspection under KRS 61.878(1)(i). At page 2 of that opinion we held:
This particular document is almost entirely opinion and recommendations. While it is probably a final report of the corporation employed by Jefferson County to analyze the potential of the Ormsby Village property, it is preliminary in that the county, if it chose to do so, could have other analyses made for its consideration.
Similarly, in OAG 84-337, we held that a completed report of SRI International of Menlo Park, California, on plans for future economic development in Louisville was excluded from public inspection because it contained opinion and recommendations which the public agency could accept or disregard in taking final action. In OAG 85-96, we reached the same conclusion, holding that a feasibility report on the construction of a high-rise office building prepared by Coldwell Realty under a contract with the City of Louisville could properly be withheld pursuant to KRS 61.878(1) (i) since it was preliminary in nature, "setting forth opinions and recommendations for review and consideration by the city." OAG 85-96, at p. 3. Finally, in OAG 88-60, we held that a public official properly denied a request to inspect a draft audit prepared by the E.P.A. and sent to the City of Owensboro, pursuant to KRS 61.878(1)(h) and (i), insofar as the audit was a preliminary report containing opinions and observations.
As these opinions amply demonstrate, KRS 61.878(1)(h) and (i) have been interpreted to authorize the nondisclosure of both interagency and intra-agency drafts and memoranda, and are designed to encourage frank discussion of matters of concern to the public agency or agencies. Contrary to Mr. Fleischaker's assertion that the courts and this Office have applied these exceptions only to internal preliminary investigative materials, this Office has recognized that the rationale underlying the exceptions is equally compelling regardless of whether the communications are within an agency or between agencies. While we acknowledge that the exceptions to the Open Records Law must be strictly construed to facilitate the widest possible dissemination of public records, we believe that Mr. Fleischaker's construction of KRS 61.878(1)(h) and (i) is unduly narrow, and inconsistent with a long line of opinions issued by this Office. 2
We also reject Mr. Fleischaker's assertion that the record cannot be characterized as "preliminary" because "there is no indication that Coopers & Lybrand intends to do any further work on the report. . . ." In OAG 90-97, we observed that the fact that the recommendations made, or memoranda prepared, are final as to the person making or preparing them is irrelevant. Most recommendations and memoranda are final in the sense that the person making or preparing them does not intend to make or prepare subsequent recommendations or memoranda. "The word 'preliminary' as used in KRS 67.878(1) [(i)] obviously refers to recommendations made [and memoranda prepared] by a person prior to a final decision or action being made by a state agency. It does not matter whether the recommendation [or memorandum] is the first, second or last recommendation [or memorandum] if the state agency has not yet taken final action. " OAG 90-97, at p. 4. See also, OAG 82-450, at p. 2.
Moreover, in the instant appeal it is clear that the disputed document is subject to revision and discussion. Although the notation which appears on the document designating it a "Draft" is not dispositive, we believe that the document's contents reflect its preliminary character. So too does Mr. Gittleman's assertion that "the 'preliminary report' to TARC's counsel is a fraction of the information which may assist the staff and board in reaching a decision." It is questionable whether the record is final as to Coopers & Lybrand. It is unquestionably not final as to TARC, the public agency whose obligation to make disclosure is at issue in this appeal.
Accordingly, we find that although TARC's initial response to Ms. Walfoort's request was procedurally deficient, the agency has met the burden of proof imposed on it by KRS 61.880(2) relative to its invocation of KRS 67.878(1)(h) and (i). If, upon resolution of the issue which prompted its preparation, TARC adopts or otherwise incorporates the report as part of its final action, its preliminary characterization will be forfeited and it will become a public record.
Mr. Fleischaker may challenge this decision by initiating action in the appropriate circuit court pursuant to KRS 61.880(5) and 61.882. Although the Attorney General should be notified of any actions filed against TARC in circuit court pursuant to KRS 61.880(3), he should not be named as a party in that action or in any subsequent proceedings.
Footnotes
Footnotes
1 See e.g., OAG 76-633; OAG 82-340; OAG 83-326; OAG 84-225; OAG 91-72; 93-ORD-104.
2 We concede that the authorities cited by Mr. Fleischaker deal exclusively with internal investigative materials. In our view, however, this does not represent an attempt to limit the scope of KRS 61.878(1)(h) and (i) generally, but merely reflects the fact that the court and this Office were presented with issues relating to intra-agency materials as opposed to interagency materials in those cases.