The Rundown with Kansas Legislative Division of Post Audit

The Department of Commerce evaluated BASE 1.0 grant program applicants using a standardized scoring rubric, but it didn't consistently follow its process or document the Secretary's final award decisions. The Building a Stronger Economy 1.0 grant program (or BASE 1.0) awarded almost $100 million in federal funds to Kansas entities for infrastructure development. Commerce received 445 BASE 1.0 grant applications requesting a total of about $1.7 billion. Of the $99 million Commerce awarded to 35 recipients, about half went to 10 projects in Butler and Johnson counties. Commerce reviewed applications to the BASE 1.0 grant program and determined which applicants would receive funding using 3 main steps: eligibility review, application scoring, and final selection. Commerce completed an eligibility review for all 10 applications we reviewed and eliminated 1 that wasn't eligible. Commerce didn't consistently follow its application scoring process for the 9 eligible applications we reviewed. We couldn't review the Secretary of Commerce's final award decisions because this process wasn't documented.

The Kansas Department of Transportation created the Cost Share Program in 2019 to help fund transportation projects in local communities. In Fall 2019, KDOT awarded $1.19 million in Cost Share Project funds to the City of Great Bend to reconstruct the historic dragstrip and shutdown area (this includes both the track and the portion of the racetrack after the finish line where cars slow down). The dragstrip project was completed in May 2021, but within a couple months, stakeholders raised concerns with the quality of the track such as "high spots" and later reported chipping and flaking of the track's surface. As a result of the dragstrip's quality issues, the track was closed for the 2023 racing season and it has not been reopened since. Under the Cost Share program contract, the city had the responsibility of overseeing the dragstrip project. KDOT was authorized to enforce penalties if the city didn't use the project as it was intended by contract. KDOT was authorized to recapture up to 90% of the Cost Share project funds based on the track closure in 2023, but they did not enforce this penalty. KDOT officials told us this was because they wanted the city to get the dragstrip back into racing condition, and they were satisfied with the city's efforts to do so. KDOT officials told us that moving forward, they would consider enforcing the claw-back penalty if Great Bend didn't get the dragstrip reconstructed in a reasonable time, but KDOT didn't set a specific timeframe for this possibility. 

The Kansas Office of Veterans Services allowed participating Veteran Service Organizations to take fundamentally different approaches in reporting VCAP matching obligations, which may or may not comply with state law. The state's Veterans Claims Assistance Program (VCAP) is meant to provide claims assistance to veterans in Kansas through congressionally chartered veteran service organizations. The Legislature appropriates annual funds for VCAP which is administered by the Kansas Office of Veterans Services. The VCAP grant program operates under a reimbursement model that's overseen by KOVS. To participate in VCAP, veteran service organizations must also meet annual matching obligations. The veteran service organizations reported using VCAP funds primarily for VCAP-related salaries and wages for fiscal years 2022 to 2024. During this time, the American Legion reported between 28% and 34% in matching support related to the VCAP program. Most (76%) of the matching support we reviewed in more detail for the American Legion appeared to be related to VCAP, but we couldn't verify the rest. The VFW reported that it greatly exceeded its matching obligations between fiscal year 2022 and 2024. More than half (55%) of our sample of VFW matching support was not related to the VCAP program, and we couldn't verify the rest. We found that KOVS hasn't provided sufficient guidance to participating veteran service organizations to ensure they understand the requirements related to matching support. KOVS's oversight may be inadequate to ensure the veteran service organizations are meeting their matching obligations. Lax KOVS oversight in other areas may cause additional misunderstandings between KOVS and the veteran service organizations and their supporters. It was also unclear whether statute allows veteran service organizations to use the estimated rental values of the offices provided by the U.S. Department of Veterans Affairs as their own in-kind matching support.

The Ford County election office administers elections in Ford County, Kansas. This audit was a follow up to a 2024 audit that reviewed Ford County's ballot reconciliation process for the 2024 primary election. In that audit, we found poll workers at 1 polling site did not follow the proper processes by allowing a poll worker to vote without signing the poll book as required by state law. For this audit we reviewed Ford County's ballot reconciliation process for the 2024 general election and found that Ford County's ballot reconciliation process ensured the number of voted ballots reconciled with the number of voters in the 2024 general election. However, the county did not ensure all poll books were signed and ballots were sealed as state law requires. Ford County's poll book logs, ballot reconciliation sheets, and result tapes reconciled with each other for regular voters and provisional voters in the 2024 general election, but 2 provisional voters did not sign the provisional poll book before voting as state law requires. We also found a voted provisional ballot that wasn't sealed as statutorily required. However, we think the ballot was counted in the election results because the ballots cast reconciled with poll book signatures and ballot reconciliation sheets.

The Ford County election office administers elections in Ford County, Kansas. We previously reviewed Ford County's tabulation machine testing practices during the 2022 general election and found their practices were inadequate because they didn't use pre-audited test ballots with predetermined outcomes that tested for overvote rejection. This audit is a follow up to that review. For this audit, we reviewed Ford County's tabulation machine testing process for the 2024 general election and found it was generally adequate to ensure the accuracy of tabulation machines before and after the 2024 general election. However, it wasn't completed within statutory timelines. Ford County performed 3 separate tests on their voting equipment for the 2024 general election using pre-audited test ballots that tested for overvote rejection. Ford County conducted a limited pre-election public test for the 2024 general election within the statutory timeline but didn't include all tabulation machines. Ford County also conducted 2 comprehensive tabulation machine tests on all tabulation machines before and after the 2024 general election that included the required elements, but they didn't conduct either test within statutory timelines. We also identified 1 error during the comprehensive post-election test that wasn't resolved by the county election officer.

The state provides funding to school districts for adult students earning a high school diploma through a virtual program. KSDE established a process for districts to submit adult virtual student credits for funding. We reviewed about 5,900 credits that 9 school districts submitted for funding across 2 years to determine if those credits complied with state statute. Nearly all (99%) the credits the districts submitted appeared to comply with the criteria set in state law, but there were a few exceptions. In total, districts submitted about 55 credits (out of nearly 5,900) that did not comply with statute.KSDE audits the credits that districts submit for adult virtual school funding each year. For half of the districts we reviewed, KSDE did not approve the number of adult virtual credits that were statutorily compliant. KSDE lacked adequate written policies and procedures to help auditors review adult virtual school credits consistently. The department does not consistently follow some of the written policies they do have. The department also lacks written policies for some important audit best practices such as policies to require supervisory review of audit work.The Central Plains school district raised concerns with the results of KSDE's audit of the adult virtual credits they submitted for the 2021-22 school year. We noted a couple problems with how Central Plains creates and monitors transcripts that contributed to some of the issues with the district's audit. Based on our review of Central Plains 2021-22 credits, we determined there were about 500 credits that appeared statutorily compliant that the department did not fund. The difference in our results and the department's is largely because we took different approaches. 

The Building a Stronger Economy 1.0 grant program (or BASE 1.0 grant program) awarded almost $100 million in federal funds to Kansas businesses for infrastructure development. The Department of Commerce awarded SOFTwarfare a BASE 1.0 grant in April 2022 to build a data center in Great Bend, Kansas. SOFTwarfare's grant agreement allowed them to use grant funds for construction and equipment costs and matching funds for permitting, inspection, and administrative costs. As of September 30, 2024, SOFTwarfare spent grant funds and matching contributions on the types of items allowed in the award agreement. Some of the expenditures differed from the specifics in the award agreement but Commerce staff accepted the deviations. However, SOFTwarfare didn't spend all the grant funds by July 6, 2024 as the contract required and Commerce officials did not proactively adjust the deadline.

In Kansas, state law requires that all water supply systems and wastewater treatment facilities are supervised by a certified water operator. Kansas Department of Health and Environment is responsible for administering Water Supply and Wastewater Treatment Operator certifications, which include certifying examinations. Within both certification programs, operators can be certified at five different classes: Small Systems (“base level”), Class 1, Class 2, Class 3, and Class 4. Kansas regulations require that KDHE administers certification exams at least twice annually, which it does. Between calendar years 2022 and 2024, only about half of individuals passed their Water Supply or Wastewater Treatment Operator examinations. Those taking the Small Systems exams in either program had higher pass rates. KDHE officials think low pass rates are largely due to examinees not adequately preparing for the exam, but don't indicate poor exam quality. Although the contents of the exams have not changed much over time, KDHE does look for ways to improve them. 

The alternative fuel tax credit has rarely been used since 2007 because of statutory changes that limited its usefulness. The credit provides credits to corporations for 40% of the incremental cost of alternative fuel vehicles or 40% of fueling stations' installation cost. The most notable amendments made to the credit since 1995 eliminated both electricity as an eligible fuel and individuals as eligible recipients. The credit's goal appears to be to encourage alternative fuel vehicle use for economic and environmental purposes. Taxpayers have claimed the credit 612 total times for $2.2 million since 1996, but fewer than 5 total corporations have claimed it since 2014. Eliminating electricity as an eligible alternative fuel in 2007 limited the credit's usefulness as the alternative fuel vehicle market evolved in the following years. Further, eliminating individual taxpayers' eligibility in 2012 significantly reduced the pool of potential claimants. No other state has a credit designed as restrictively as the alternative fuel tax credit, and no literature about it exists.  Commerce awarded $8.2 million in community service tax credits during 2023 and 2024 but didn't fully document their selection decisions. The credit provides credits to individuals, corporations, banks, and insurance companies for donating to certain community service projects. Each year, Commerce awards credits to non-profit and governmental entities to distribute to project donors. The credit's goal appears to be to encourage donations to certain types of community service projects. Since 1994, Commerce has awarded $130 million in total credits to support 811 projects. Since 2010, 10,523 total donors to selected projects have received $48 million in credits. During 2023 and 2024, Commerce awarded $8.2 million in total credits to 62 projects in 33 counties. During these years, Commerce reviewed proposed projects based on a scoring process including application materials and reviewers' professional judgment. Commerce followed its process for scoring applications but didn't document its eligibility checks for the 6 proposed projects from 2023 and 2024 we reviewed. We identified a few risk areas in Commerce's application review process, but they wouldn't have changed the award outcomes we reviewed. However, we couldn't review how Commerce decided which of the 6 proposed projects to award credits because it didn't document these decisions. 12 states have credits similar to the community service tax credit. Some studies we reviewed said community service tax credits increase donations and allow states to target specific needs.

In 2019, state law mandated the creation of an online "transparency database" for the purpose of providing the public with information about economic development programs and recipients. The law also requires the transparency database to have certain functional features. The Department of Commerce is responsible for developing and maintaining the transparency database. The Department of Commerce's transparency database does not contain some required economic development programs and is missing certain program and recipient-level information. 13 of 60 incentive programs we expected to find were missing from the transparency database. The transparency database also lacked about half of the 11 statutorily required program-level pieces of information for 5 incentive programs we reviewed. Further, the transparency database contained most statutory information for 24 recipient records we reviewed, but benchmark information was inadequate. The transparency database contained all 3 statutorily required functionalities.

We reviewed Department of Commerce's hiring policies and procedures to determine if they were adequate for staff overseeing financial matters. This was because Commerce hired a staff member in 2020 who pleaded guilty to felonies in Pennsylvania before being hired by Commerce. Commerce officials told us they were not aware of the staff member's crimnal history. We found that Commerce's hiring policies and procedures were not adequate to mitigate the risks associated with hiring applicants with a criminal history. This is because Commerce's hiring policies and procedures don't include any type of criminal history check for any jobs other than the 1 in statute. Commerce officials told us they don't perform state-level criminal history checks on applicants because they don't think they have the authority to perform them through the KBI. However, an alternative to KBI would be to use a Consumer Reporting Agency to perform criminal history checks. These companies may provide employment screening services that include credit checks, license verification, and criminal history information from state and federal databases. We also found that Commerce didn't adequately document their hiring procedures for 3 of the 5 staff we reviewed. reference check summaries weren't available for 3 of the 5 employees we reviewed, and interview notes were missing for 1 of the 5 employees we reviewed. This means we can't determine if Commerce is following their processes consistently. State retention policies require agencies to retain hiring documentation in the full personnel file for the length of the employee's tenure plus 3 years. However, Commerce officials told us that they don't retain some hiring records past 3 years from the date of hire.

Osawatomie State Hospital does not adequately ensure the safety and security of its staff. In terms of physical security, OSH does not have adequate processes to ensure physical security. Security staff patrols of the OSH campus are incomplete and inadequate and there are not enough fire-trained security staff to respond to campus fires. OSH doesn't ensure staff carry required personal safety alarms and doesn't check if staff respond to alarms timely. Facilities' staff key tracking does not include a complete and accurate accounting of all keys. OSH does not follow their process to monitor for safety risks and noncompliance with policies. Management lacks effective policies over these physical security measures, and staff have allowed issues to persist. In terms of personnel, OSH and AAC had enough nursing staff on patient units to meet their minimum staffing requirements on the sample of shifts we reviewed, and a sample of OSH and AAC staff generally received training on the select topics we reviewed. However, the facility depends on large numbers of contract nursing staff and overtime to meet minimum staffing requirements due to high turnover and vacancy rates. High reliance on contract staff and overtime result in increased state costs and risks for staff safety. In terms of working culture and environment, OSH management has not promoted a culture that prioritizes professional boundaries, following guidelines, or ensuring a safe workplace. OSH management has not set clear expectations for how safety and security processes should work and hasn't collected and used data to proactively identify and fix safety and security problems.

This audit includes information about Ford County's policies and practices to ensure the security of storage units, ballots, and devices used to tabulate votes in the 2022 general election. It is a follow up to an election security audit that we completed in 2023 of 15 Kansas counties' election offices. We evaluated Ford County's security practices using 55 best practices from the US. Election Assistance Commission and state law. Ford County generally had adequate practices in the area of overall process security which was like the other counties we reviewed in the 2023 audit. Ford County had a mix of adequate and inadequate practices in the areas of ballot security and voting and tabulation machine security. This was also like other counties we reviewed. But Ford County's election management computer security and transfer and movement security practices were generally inadequate and were Ford County's weakest areas. This is different than other counties we reviewed because most of the other counties we reviewed in 2023 had adequate election management computer security practices. Additionally, most of the other counties we reviewed had a mix of adequate and inadequate transfer and movement security practices. Ford County also didn't have adequate written security policies during the 2022 general election, but this was like the other counties we reviewed in 2023. Overall, Ford County's results don't change our overarching conclusions from the 2023 audit.

State law requires that poll book check-ins balance with cast ballot totals when the polls close on election night. The supervising poll worker at the polling site is responsible for ensuring these totals balance. If they don't, the discrepancy must be explained to the election office in writing. We reviewed Ford County's election records from the 2024 primary election to evaluate Ford County's ballot reconciliation process. We determined that at 4 of the 5 polling sites, poll book check-ins and the number of votes cast balanced. However, at 1 polling site, voted ballots exceeded poll book check-ins by 1 ballot. This was because poll workers at that polling site did not follow the proper processes. We were also asked to check if Ford County's poll books contained a declaration on each signature page as required by state law. We found that Ford County's poll books had a declaration on the signature page, but they did not have the specific language required by state law.

The STAR bonds program allows local governments to use future sales tax revenue for development or redevelopment projects. Commerce officials expect STAR bond districts to improve local quality of life, but they haven't defined or measured this. We gathered the data to evaluate districts' affects on local quality of life and found that the 6 districts we reviewed grew in quality-of-life industries survey respondents said they value. However, the numbers and types of industries varied by district. To evaluate the program's effects, we first determined how 6 districts changed over time in 109 quality-of-life industries. We then compared the 6 districts' industry changes in these 109 quality-of-life industries to what college graduates told us affected their quality of life. Survey respondents said social and economic factors other than amenities have more influence on where they want to live. However, about half of respondents or more said amenities in all 10 quality-of-life industry groups we asked them about were important to their quality of life. All 6 districts we reviewed added jobs in quality-of-life industries from the time the district was approved to 2023. The 6 districts grew most often in industries that most survey respondents (81%-85%) said were important to their quality of life. They grew similarly in industries that only about half of respondents said were important. However, the 6 districts grew in few of the industries that the largest percentages of survey respondents (86%+) said were important. Finally, they grew very little in a few industries that most respondents (68%-80%) said were important. The 6 districts varied widely in the numbers and types of industries with job density growth. We don't know for sure how the STAR bonds program affected these districts, but the infrastructure it financed likely contributed to the patterns we observed.

Tax Increment Financing (TIF) districts are a type of economic development tool in which cities use a property tax increment to help finance development projects. A property tax increment is the amount of property tax generated above a base level, which is established when the city creates the district. We contacted the 10 largest cities in Kansas to generate a list of past and present TIF districts. From this list, we selected 6 districts to evaluate their economic costs and benefits. We selected 2 districts from Wichita, and 1 district each from Kansas City, Olathe, Topeka, and Salina. For each of these districts, we estimated the impacts they had on property values, taxes, development, employment, and crime. We also evaluated whether the costs to the city were recovered timely for these districts. We found that 3 of 6 districts did not recover their costs timely. Further, we found that most of these TIF districts likely experienced economic benefits from increased property values and taxes, increased development, or increased jobs. However, we were unable to directly compare these benefits to the costs because they could not be readily quantified. Whether a TIF district was worth its financial costs is often subjective and project-dependent. We also evaluated the school districts where these 6 TIF districts were located to determine what financial costs they may have imposed on those school districts. We found that all 6 TIF districts were too small in scale to have a significant negative impact on school district funding.

Kansas Department for Children and Families (DCF) administers the Temporary Assistance for Needy Families (TANF) program in Kansas. Kansas receives about $102 million in federal TANF block grants annually. This amount has generally remained stable since 1996, but that means this amount has lost an estimated 49% of its purchasing power since 1996 because of inflation. One of the programs DCF funds with the TANF block grant is cash assistance. TANF cash assistance serves Kansas families with very low incomes. In Kansas, a family is eligible for TANF cash assistance if they have insufficient income or resources to support themselves. Funds must be granted to families that live in Kansas. The family must include a child or expectant mother who is a U.S. citizen, legal immigrant, or qualified immigrant. The state's 2015 Hope, Opportunity, and Prosperity for Everyone (HOPE) Act changed eligibility requirements for TANF cash assistance in Kansas. This included things like capping lifetime assistance to a total of 24 months and reducing the amount of time single caregivers could be exempt from work activity to 3 months. TANF cash assistance benefit amounts in Kansas haven't been updated since 1997. Spending on TANF cash assistance in Kansas has decreased from about 15% of block grant spending (about $15.2 million) to about 9% ($9.4 million) of block grant spending from FY 2009 through FY 2023, while spending on other TANF programs has increased. The purchasing power of TANF cash assistance also decreased by about 30% from FY 2009 to FY 2023 because of inflation. One reason for the decrease in cash assistance spending in Kansas is the decreasing caseloads. All cash assistance caseloads in Kansas decreased from about 12,600 average monthly cases in FY 2009 to about 2,900 average monthly cases in FY 2023; about a 77% decrease. Other reasons may include eligibility changes, wage increases, and inflation. The research we reviewed suggested TANF rules like those in Kansas lead to mostly negative program outcomes for TANF families, while stakeholders held mixed opinions about the impacts of Kansas's TANF rule changes.

The Kansas Housing Resources Corporation (KHRC) administers state and federal housing programs in Kansas, including the Low-Income Housing Tax Credit. The Low-Income Housing Tax Credit (LIHTC) is a federal program meant to encourage the development of rental housing for low-income individuals. The federal government requires KHRC to monitor housing developments that have been awarded LIHTC to ensure they comply with applicable rules. KHRC has a detailed compliance monitoring process to ensure that development owners comply with federal and state rules and meet all of the requirements they agreed to when they received LIHTC. Although KHRC's compliance monitoring process is extensive, most of the process is required by federal rules or is otherwise necessary for them to appropriately oversee the program. However, we did find two minor areas where KHRC's requirements are not necessary to meet a state or federal rules, a best practice, or an internal control. Additionally, developers who responded to our survey generally reported that KHRC's compliance monitoring process was easy to complete. Last, we found that KHRC's reserve amounts and land use restrictive covenant terms were applied consistently across the 16 projects we reviewed.

In the 2022-23 school year, the Louisburg school district spent a little more than $31 million. Generally, state law allows districts broad discretion in how they spend their state and local funding, but there are some exceptions. We selected 57 expenditures (representing $1.2 million) across 6 funds to determine whether the district spent them in accordance with state law.  We selected funds that have a mix of broad and specific spending rules sets in state law.  We chose expenditures that represented a good cross-section of different types of expenditures.  Because we did not choose the sample randomly, we cannot project the results to all expenditures. Of the 57 expenditures we reviewed, we identified 12 (about $63,000) related to at-risk and capital outlay that did not comply with state laws related to those funds.  This included expenditures such as seating, salaries for interpreters, and a contract to operate light and sound equipment.

In Kansas, individuals must pay a 6.5% sales or use tax when purchasing any vehicle that is primarily stored or used in the state. This is paid either at the dealership or at a county treasurer's office. Ultimately, KDOR is responsible for collecting motor vehicle sales and use tax from dealerships and counties. The Kansas Department of Revenue had procedures to help ensure dealerships remit vehicle tax but was missing several key procedures related to county tax remittance.  We saw evidence that KDOR had several procedures related to training and guidance for counties and dealerships as well as procedures related to the  monitoring and enforcement of dealerships. However, KDOR was missing several procedures related to the monitoring and enforcement of counties. One county didn't remit taxes for 15 months, resulting in about $11 million in delinquent taxes. Additionally, KDOR's lack of written procedures means efforts to ensure that individual buyers and dealerships are remitting aren't as effective as they could be. And KDOR's MOVRS database had significant errors, preventing us or them from doing a state-wide analysis.

The Angel Investor Tax Credit (AITC) program incents investors to invest in Kansas start-up businesses. In exchange for investing in a participating start-up businesses, an investor can receive a tax credit equal to up to 50% of their investment. As part of this audit, we surveyed investors and businesses that participated in the AITC program. The purpose of the surveys was to learn how the program influenced investors' and businesses' behaviors. Investors who responded to our survey told us the program caused them to invest more or sooner in participating businesses. Businesses who responded to our survey told us the program helped them do more than they otherwise would have been able to (e.g., hiring more staff or offering more products). As part of this audit, we also evaluated whether Commerce implemented a process to make sure participating businesses stayed in Kansas as required by state law. We determined Commerce had implemented a process, but the process has room for improvement.

The 6 state universities did not have a shared definition of what diversity, equity, and inclusion activities are, but there were some common themes. The universities provide a variety of DEI-related services and activities such as food pantries, support groups, and tutoring services to a wide range of students.  To determine how much universities spent on DEI-related activities, we asked the universities to report expenditures related to common DEI themes shared across the universities.  In the 2022-23 school year, universities reported spending about $45 million in DEI-related activities, of which, about $9 million was paid for with state funding. Nearly all of the $9 million universities reported spending in state funding was spent on salary and benefits for faculty and staff who engaged in DEI-related activities. Universities reported spending a small amount of state funding on DEI-related training and other non-personnel expenses like travel, software, and outreach programs. The universities DEI-related expenditures are self-reported and we have a limited ability to determine if they are accurate and complete. Last, the universities do not have consistent measures for determining whether DEI-related activities are effective for achieving their DEI goals.Universities receive money from foreign sources for a few reasons including tuition and fees, gifts, and contractual services. In 2022-23, state universities reported receiving about $116 million in foreign contributions, but most ($111 million) was for tuition and fees. In the 2022-23 school year, universities reported receiving contributions from 170 countries but about half was from India and China. The universities foreign contributions are self-reported and we have a limited ability to determine if they are accurate and complete. 

The 3 community colleges we reviewed (Butler, Garden City, and Hutchinson) spent an average of $2.8 million annually in college funds such as student tuition, fees, public sources of funding, and other income on athletic departments from fiscal years 2018 to 2022. Most athletic department spending was for coaching salaries and the sports of football and basketball. The 3 community colleges also spent an average of $1.2 million annually in student fees and private funds on athletic scholarships during these 5 years. The total athletic department and athletic scholarship spending was similar to expenditures at the other colleges competing in the Kansas Jayhawk Community College Conference in fiscal year 2021. We also reviewed student-level data for 8 sports at the same 3 community colleges from fiscal years 2018 to 2022 and found that most student athletes are from outside of Kansas. Further, most athletic scholarships are awarded to student athletes from outside of Kansas. Other colleges participating in the Kansas Jayhawk Community College Conference also generally drew in athletes from outside of Kansas in fiscal year 2022. 

The KPERS 3 retirement plan was created by the Legislature to help improve the long-term sustainability of the KPERS trust fund. KPERS 3 is a cash balance plan. There are other types of retirement plans, including defined benefit, defined contribution, and hybrid plans. We compared KPERS 3 to other plans on key plan metrics. These plans included KPERS 2, Thrift Savings, Nebraska's cash balance plan, Oklahoma's defined contribution plan, Indiana's hybrid plan, and Utah's hybrid plan. We found that KPERS 3 gives employees less flexibility, requires them to share some financial risk, and generally provides lower benefits than other plans we evaluated. Further, we found that employees of defined benefit plans (such as KPERS 1 and 2) are generally more satisfied and more likely to remain at their job compared to employees of other plan types (such as KPERS 3).

Overall, we found that changes made to bills after fiscal notes were submitted resulted in most of the inaccuracies we saw. But a few fiscal notes were unreasonable because of agencies' methods. Statute requires the Division of the Budget (Budget) to provide fiscal notes for original bills but outlines only a few requirements for them. Budget works with agencies to create estimates for all original bills, but not amendments. We reviewed 10 fiscal notes from enacted bills to determine fiscal notes' accuracy and 10 fiscal notes from bills that died to determine the reasonableness of agencies' methods and estimates. 7 of 10 fiscal notes for enacted bills differed significantly from their actual fiscal effects, mostly due to bill amendments or other changes made after the fiscal notes were submitted. Most other states update fiscal notes after bill amendments to account for this, but Kansas doesn't. 3 of 10 fiscal notes for bills that died appeared to be unreasonable because they didn't include complete or correct information. Of these, 2 were unreasonable because agencies used questionable data and assumptions, and 1 was unreasonable because Budget left out a potentially large cost to the state. Finally, we didn't see evidence Budget coordinated with agencies on fiscal notes like we would've expected.

In 2022, Kansas school districts received $7.9 billion in funding from state, local, and federal sources, up 12% from 2017.  Since 2017, public school enrollment has decreased while staffing and spending have increased. Only about 1/3 of students met state standards in the 3 subjects we evaluated, and the numbers have been declining since 2017. It is unlikely that any amount of additional spending will result in all students meeting state standards. We used a logistic regression model to predict how increases in regular education spending might affect student outcomes. Across-the-board spending increases were associated with almost no increase in the percentage of students who met state standards. Targeted increases in spending were associated with improvements in the number of students who met state standards, but significant numbers of students would still be unlikely to meet state standards.  Targeted increases in spending were associated with improvements in the number of students who met state standards, but significant numbers of students would still be unlikely to meet state standards.  We identified several factors, such as teacher pay and administrative spending, that were also associated with whether students met state standards. Much like our own model, the research we reviewed found a positive relationship between spending and outcomes but it was not strong in all circumstances. Research also suggests spending on teacher pay, books, and time in class may improve student outcomes. We estimated how much it would cost to provide special education services in Kansas. In the 2021-22 school year, Kansas school districts provided special education services to nearly 89,000 children. We estimated it would cost between $1.2 billion and $1.5 billion to provide special education services that would allow students to meet their IEP goals. Our special education estimate has a few important caveats related to staffing and efficiency.

The Kansas African American Affairs Commission is a liaison office within the Governor's Office and its fiscal year 2022 expenditures were about $130,000. It is comprised of 7 commissioners and an executive director. In this audit, we reviewed the commission and executive director's statutory compliance and expenditure approvals. The commission and its executive director are required to meet various statutory requirements and bylaws to accomplish their mission. The commission did not comply with 2 of 6 meeting-related duties and 1 of 3 staff-related duties outlined in law or bylaws in the timeframe we reviewed. The executive director complied with her statutory duties to serve the commission in 2022 and the first half of 2023. The commissioners who responded to our survey generally had positive reviews of the executive director's performance, but some thought she wasn't as effective or responsive as she should be. With regard to its expenditures, the commission's fiscal year 2023 expenditures seemed reasonable to accomplishing its duties at a high level. However, about half of the 11 individual expenditures we reviewed in detail did not receive written approval to ensure they were appropriate. Commissioners told us they had insufficient financial awareness and oversight, in part because the executive director has not shared relevant information.

As of Spring 2023, the State of Kansas currently employs about 18,000 employees across 81 state executive branch agencies, boards, or commissions. State agencies have discretion to create their own work-from-home policies. State agencies reported about 30% of state employees currently work from home all or part of the time. They also estimated that an additional 15% of state employees could also work from home going forward. Some state jobs are better suited for working from home than others. Permanent work-from-home options could help the state hire and retain staff, have limited impact on productivity, and have a mixed impact on costs. Cost increases could be offset by reducing office space, but this has yet to occur in Kansas.

The Rural Opportunity Zones (ROZ) program incents individuals to move to rural Kansas counties. Currently, 95 of the state's 105 counties qualify as rural opportunity zones. The program incents individuals to move by providing up to 2 benefits: up to $15,000 in student loan repayment assistance over 5 years and, for individuals who relocate from out-of-state, a 100% state income tax credit for up to 5 years.As part of this audit, we used program data to estimate how often the ROZ program incented program participants to move to rural counties. We also used data from the U.S. Census Bureau to help estimate to extent to which the ROZ program counteracted rural depopulation. Based on our estimates, the ROZ program had limited effects on rural depopulation on a statewide basis. However, the program had more significant effects on the extent to which 19 counties gained or lost population.

This audit determined whether selected state agencies and school districts adequately complied with certain IT security standards and best practices. State agencies must follow state IT security standards to protect sensitive information against data loss and theft. Local entities are not required to follow the state's policies. 9 of 15 entities we audited did not substantively comply with IT standards and best practices in at least 2 of 3 subject areas we evaluated. Specifically, 8 of 15 entities did not substantively comply with selected security awareness training controls. 10 of 15 entities did not substantively comply with selected account security controls. Lastly, 8 of 15 did not substantively comply with selected incident response controls. The findings demonstrate a poor "tone at the top" at many entities--meaning lack of top management oversight and supervision.

In 2021-22, the state provided $406.3 million in dedicated funding for school districts to deliver additional services to students at-risk of academic failure. State law requires that district spend money from their at-risk fund only on programs approved by the State Board of Education. Kansas Department of Education (KSDE) officials told us the State Board has delegated the task of approving at-risk programs to the department. None of the KSDE-approved programs we reviewed met the statutory criteria necessary to be included on the list. Further, most of the approved programs we reviewed had little to no evidence of effectiveness. Additionally, many KSDE-approved programs did not appear to meet the purpose of at-risk programs, which is to provide above and beyond opportunities to at-risk students. The problems we identified with KSDE's approved at-risk list are the result of several factors.  This includes things such as, KSDE's process for approving at-risk programs does not include some statutorily required criteria, the department does not follow it's own process, and the board does not provide any oversight to the department. This audit showed the same problems as in our 2019 at-risk audit, and none of our recommendations have been adequately implemented.Most of the $176 million in at-risk expenditures we reviewed for 20 districts was spent on salaries and benefits. About 30% of the $5.2 million in expenditures we reviewed did not adhere to statutory spending rules. Further, it is unclear how much of the districts' at-risk spending targets at-risk students or provides them an "above and beyond" opportunity. Problems with the at-risk spending guidance KSDE provided to school districts may contribute to some of the unallowable spending we found. Over the last 6 years, students eligible for free lunch have consistently performed worse on state assessments than students who are not eligible for free lunches. All 3 cohort groups we evaluated performed worse over time, but this trend was more pronounced for students eligible for free lunch.  Additionally, the graduation rates and ACT scores of students eligible for free lunch were also lower than other students.

This audit reviewed a selection of county election offices' policies and practices to ensure the accuracy and security of voting machines, ballots, storage units, and tabulators.State law gives county election officials discretion over how to run elections in their counties, so election processes vary across counties. We identified and reviewed election security best practices from the U.S. Election Assistance Commission, the federal election agency. They fall into 5 general security categories: overall process, election management computer, ballot, voting and tabulation, and transfer and movement security. Kansas only has a few high-level election security-related laws and regulations related to these 5 best practice categories.We reviewed whether 13 counties had policies and practices that aligned with 55 best practices and state laws during the 2022 primary or general elections. These counties generally had adequate overall process and election management computer security practices. Ballot security practices were weaker overall, but county results varied. Most of the 13 counties we reviewed had inadequate voting and tabulation machine security practices except for physical security practices. And the 13 counties we reviewed had some adeqate transfer and movement security practices, but others that were generally inadequate. Overall, larger counties generally had stronger security practices than smaller counties because of their greater security needs and resources. But these results don't necessarily mean elections aren't secure.Finally, none of the counties we reviewed had adequate written election security policies or guidance.

We couldn't determine how effective or timely the state's child support services system is due to data limitations, but we saw several signs it's not working as well as it could. Federal law requires states to assist parents in collecting monthly childcare payments. In Kansas, the Department for Children and Families is the primary state agency responsible for administering the state's child support program.  Kansas court trustees also can provide child support services, but they generally only provide enforcement services. A small number of parents we talked to expressed frustration and a lack of communication, regardless of whether they were served through DCF or court trustees. Kansas's dual track child support system may create unequal costs for some Kansas parents. It also prevented us from evaluating the state's child support system as a whole. DCF's outdated computer system prevented us from determining how timely and effective its services are. We relied on 4 federal performance benchmarks as indicators of DCF's child support performance. In recent years, DCF performed well on federal requirements to establish child support cases, but not on requirements to enforce those cases. DCF officials told us the difficult nature of their cases and certain administrative hurdles make it difficult to enforce child support payments. DCF and its contractors don't have the tools to quickly identify and address delinquent payments. DCF's use of federal performance measures to monitor contractors' performance is too simplistic to identify poor performance.   Kansas's low national rankings in child support enforcement may be due to the state's unique system and outdated technology. Kansas's child support services through DCF and its contractors performed worse on federal enforcement benchmarks than most other states. Kansas's trustee option appears to be unique compared to other states, which may skew its national performance metrics. Kansas's DCF child support services did not have key computer system features and collection tools that some other states had.

This audit evaluated whether 3 agencies and the Board of Education had implemented 7 previous audit recommendations. The Kansas Department of Education (KSDE) fully implemented 1 of 3 recommendations from our 2019 audit evaluating at-risk student counts, weights and expenditures. KSDE partially implemented the other recommendation, and the Board of Education did not implement the third recommendation. The Kansas Department of Agriculture partially implemented all 3 recommendations from our 2020 audit evaluating the agency's price verification inspection process. We could not evaluate whether the Kansas Department of Commerce implemented a recommendation from our 2020 Angel Investor Tax Credit Program audit. 

In Kansas, groundwater is managed by multiple state and local agencies, including the Kansas Water Office, the Department of Agriculture, and groundwater management districts. In 1972, the legislature established the process by which local voters can form groundwater management districts. Local voters have established 5 districts in central and western Kansas. Groundwater management districts provide input but have little independent authority over many important state groundwater policies and actions. State law only requires groundwater management districts to do a few things, including having and reviewing a management program.  All 5 groundwater management districts had a management program as required by state law, but we identified a few concerns with how those programs are reviewed and revised. Groundwater management districts currently operate programs related to data collection, research, and public education which appear reasonable for the purposes of groundwater management districts. In 2021, the 5 districts spent a total of $6.1 million, mostly on salaries and benefits and professional services. Overall, an estimated 75% of districts' expenditures were for programs related to an area of concern the district identified. In the last 10 years, 3 of the 5 groundwater management districts experienced overall water level declines but we could not evaluate water quality. Last, we could not determine the impact district programs had on these trends but some research suggest some positive results.

This audit reviewed three aspects of elections in Kansas, including training, electronic vote records, and policies and processes in long-term care facilities.   With regard to training, we couldn't tell whether county election officers received adequate training and we found most counties either didn't or coun't show they had trained all election workers before the 2022 general election. Each of Kansas's 105 counties has a county election officer responsible for overseeing all elections in the county. This includes appointing election workers who perform frontline election duties. But state law has almost no requirements related to training county election officers and workers, and no one tracks county election officers' training. However, county election officers we surveyed still reported feeling well prepared to oversee federal elections.  With regard to electronic vote records, we found that 6 Kansas counties we reviewed use scanners to record and tally voters' paper ballots that are also capable of producing digital copies of those ballots. But nothing requires county election officials in Kansas to create or use digital copies, which meant some counties created and used them and others didn't. None of the counties we reviewed made digital copies public. We compared Kansas to 5 other states. Those states generally used digital copies similar to Kansas. However, some other states made them public.   Finally, with regard to processes for protecting voting in long-term care facilities, facility and county election officials described having a few basic practices. The national literature on this topic is sparse and much of it dated, but it identified a few practices to address fraud and undue influence. Kansas has a few basic laws related to fraud and undue influence, but nothing specifically for long-term care. 

The Department of Commerce has 5 major incentive programs that it uses to incent economic development in Kansas. Those programs are the High Performance Incentive Program (HPIP), Job Creation Fund (JCF), Kansas Industrial Training (KIT), Kansas Industrial Retraining (KIR), and Promoting Employment Across Kansas (PEAK).  As part of this audit, we used a research-based model to estimate the economic impacts, tax effects, and total return on investment for 28 projects that we selected. Based on model results from those 28 projects, we estimate all 5 of Commerce's major economic development incentive programs will generate positive total returns on investment. However, we estimate they won't cover their own costs to the state through higher tax revenues. For example, all 5 programs appeared to generate economic impacts that are greater than their costs. But none of the programs appear to generate enough tax effects to cover their costs.

We completed 21 audits on 16 agencies and 4 school districts between CY 2020 and 2022 (1 entity was audited twice during this time period). This summary report shows 10 of the 21 entities did not substantially comply with applicable IT security standards and best practices. Entities struggled with properly scanning and patching their computers. Entities also had compliance problems because they did not create, maintain, or test incident response plans or continuity of operations plans. Other significant issues included poor security awareness training or failed social engineering tests. Almost half the entities had significant management, contract, or policy-related weaknesses. Additional security weaknesses included inadequate account security controls, poor encryption, back up, or destruction processes of sensitive data. We also noted several entities had inadequate network boundary protection or had poor access or environmental controls for their data centers. Lastly, we identified significant security issues within agencies' specific IT systems. The findings in this report are similar to those in previous summary IT reports. The main reasons for compliance problems across the 20 entities included insufficient top management attention and inadequate resources.

To increase connectivity in unserved and underserved areas in Kansas in response to the COVID-19 pandemic, the Kansas Department of Commerce (Commerce) and other stakeholders developed the Connectivity Emergency Response Grants program in 2020. The program received $50 million in funding from the Coronavirus Aid, Relief, and Economic Security Act. Commerce awarded about $48.5 million of that funding in connectivity grants to the internet service providers and Kansas communities that applied. 66 grants went to 39 entities across seven regions of Kansas. South Central Kansas received about $14 million. Southwest Kansas received about $11 million. Northeast Kansas received about $9 million. Southeast and East Central Kansas received just over $5 million each. North Central and Northwest Kansas received around $550,000 or less. The North Central and Northwest regions also requested the least in CERG funding.

In response to the COVID pandemic, the federal government enacted six major relief bills totaling over $5 trillion. The federal government allocated about $34 million to the state of Kansas.  Out of that, the state had discretion on how to spend about $2.6 billion. In May 2020, the governor established the Office of Recovery and created a taskforce to distribute and administer certain COVID relief funds. The state distributed CARES Act discretionary funding through a 3 round proess that involved the SPARK taskforce and the State Finance Council. About $1.6 billion in ARPA funds are currently being distributed thorugh legislative appropriation and the SPARK taskforce.The state's distribution of CARES Act funding appeared appropriate and reasonable.  Most of the CARES Act expenditures we reviewed were likey allowable under federal spending rules. However, some expenditures appeared wasteful or raised other concerns even though the expenditure may be allowable under federal rules. Federal rules likely contibuted to the problems we encountered.

Virtual school programs are an alternative to traditional brick-and-mortar schools. Most of the state-run virtual school programs we identified still allowed local districts to operate virtual school programs, but we could not compare student outcomes or expenditures between states. In Kansas, local school districts operate virtual school programs. 105 school districts out of the 286 Kansas school districts spent at least $50 million on virtual school programs in the 2020-21 school year. We reviewed 4 state-run models, 3 of which also offered district operated virtual school programs like Kansas. A lack of data limited our comparison of other states' virtual school program expenditures and outcomes. Data reliability issues prevented us from evaluating outcomes for virtual students in Kansas. 

Kansas's cryptocurrency tax policies generally aligned with federal policies, but some of those policies have been difficult to enforce in recent years. Federal tax policy is set up to tax cryptocurrency in several ways. Kansas's income tax code mirrors federal tax policy. As a result, the state should receive income tax revenue from cryptocurrency transactions. However, it's unlikely Kansas receives all income tax revenue from cryptocurrency transactions because of a lack of federal reporting guidelines. Finally, state governments have yet to agree on a set of best practices regarding the taxation of cryptocurrencies.

The 2018 Kansas Cybersecurity Act created the Kansas Information Security Office (KISO) to reduce state agencies' cybersecurity risk. KISO offers agencies 3 cybersecurity service levels--basic, intermediate, and advanced--that appear to align with the Cybersecurity Act requirements we could review. However, KISO's services may not have as many effects as the Legislature intended because few agencies use intermediate or advanced services. Agency officials we surveyed had mostly positive opinions about KISO's services but officials may not always know what their agencies' needs are or what KISO services they receive. That may be because KISO's communication with agencies isn't proactive enough.KISO is funded through fees it collects from agencies. Its revenues appeared to be less than its costs in fiscal years 2020-2021. But we don't know if KISO's services are cost-effective because of data limitations and neither do KISO officials or most of the 7 agencies we interviewed. KISO officials described steps they take to limit their costs, some of which may have unintended negative effects.

While some audits are statutorily required, most are requested by legislators and approved by the Legislative Post Audit Committee. A legislator, legislative committee, or representative from the Governor's Office contacts our staff to let us know they are interested in an audit. In this Rundown episode, Chris Clarke, Legislative Post Auditor, and Kristen Rottinghaus, Deputy Post Auditor, discuss the audit proposal process and summarize the new audit proposals LPA staff will be working on in the coming months.

Overseen by the Kansas Department of Revenue, the Division of Vehicles is responsible for suspending and revoking driver's licenses. Suspended or revoked drivers must fulfill violation-specific criteria to have their license reinstated, and in some cases, they must also pay a fee. From 2019 to 2021, Kansas drivers paid about $18 million in fees to have their driver's licenses reinstated. The fee revenue was allocated to several different state agencies and programs. From 2019 to 2021, the Division of Vehicles issued 176,000 driver's license suspensions or revocations. Some Kansas drivers may have experienced financial or social hardships from their suspension or revocation. Fees and other financial obligations may have limited some drivers' ability to get their license reinstated for less-severe violations. Most of the academic research we reviewed also suggested that the loss of driving privileges had a negative financial and social impact on people. Stakeholders we spoke to agreed that the loss of driving privileges could have a negative impact on Kansans, but recent changes in state law could help lessen that impact.

The Kansas Legislature created the Mental Health Intervention Team Program in school year 2019 to increase students' access to mental health care resources. It has reauthorized and expanded the program in the following years. Kansas school districts employ licensed mental health care staff to provide several different services to students.  Districts reported a 13% increase in total licensed mental health staff FTE including a 29% increase in social worker staff FTE from school year 2019 to 2022. However, the FTE trends should be interpreted with caution because school districts don't report social worker FTE consistently to the Kansas State Department of Education (KSDE). The 5 community mental health centers (CMHCs) and 5 school districts we interviewed generally reported positive experiences with the program even though all 5 CMHCs reported losing staff to school districts.

Our January 2020 audit of the juvenile justice reforms (Senate Bill 367) had recommendations related to improving and sharing available juvenile offender data across several agencies and strengthening the Department of Correction's grant approval processes. In this follow up audit, we determined the 2 agencies implemented 4 of the 5 recommendations we made in the 2020 audit. Specifically, as of February 2022, the Kansas Department of Corrections implemented all 3 recommendations. The Office of Judicial Administration has implemented 1 and is currently implementing the other recommendation.  We also noted the Office of Judicial Administration's centralized case management system project is significantly behind schedule.  

The Tax Credit for Low Income Student Scholarship program helps eligible students to attend private schools of their choice. Kansas law requires that 90% of contributions be disbursed as scholarships within 36 months. During the period from 2015-2021, scholarship granting organizations disbursed just over $9 million in scholarships of the $15.5 million in contributions they received. All but 2 scholarship granting organizations met the 90% distribution requirement during that time. Both organizations mentioned that a lack of eligible students caused them to fall short of the requirement. KSDE monitors scholarship granting organizations' compliance with state law at a high level, but their processes lack information to track the 90% distribution requirement. 

In fiscal year 2021, 4 case management providers served about 7,000 children in foster care statewide. DCF monitors the foster care program at a high level, but case management providers determine how best to serve children in foster care. Although DCF generally has adequate written policies, DCF and case management providers' practices were not adequate to ensure the safety of children in foster care in several areas. DCF's policies appeared generally adequate to ensure children were placed in appropriate homes, but they could be stronger in one area.  However, case management providers did not meet key safety and well-being standards related to appropriate placements. Further, case management providers aren't always using comprehensive data for making placement decisions.  DCF policies were adequate regarding monthly visits between case management staff and children in foster care.  However, in practice case management providers did not follow DCF policy related to frequency of in-home visits. Further, case management providers did not sufficiently assess the safety of a child in all cases. DCF had adequate policies and grant requirements for responding to urgent matters. However, foster parents complained about slow responses to urgent situations and poor communication in general. DCF policies on foster parent training were adequate, and most foster parents report they have been provided with appropriate training. DCF had adequate policies to locate missing foster care children, and it appears case management providers and DCF followed took appropriate action for runaway or missing children.   High caseloads and data use likely caused many of the issues we found related to child placement and safety. DCF has not taken action to correct systemwide safety issues despite continued concerns about the safety of children in foster care. The state does not have the capacity to provide services to all children in foster care, especially those with specialized service needs. Most Kansas counties had enough foster home capacity to meet their demand in fiscal year 2021, but close to 40% of the state's counties might not have enough foster home capacity. Even when counties have enough licensed foster homes, stakeholders told us the state may not have enough homes to care for children with complex physical, emotional, and behavioral needs. DCF told us they are looking into options to address placements for children with complex physical, emotional, and behavioral needs children. Caseloads for case workers were higher across the state than best practices recommend. Case workers we surveyed told us high caseloads made it difficult for them to do their job.  Across the state, children may not have always received services they needed, especially specialized or acute services. Much like safety issues, service delivery and capacity issues are not new to DCF and suggest larger accessibility issues. 

Since 2008, state law required state agency officials to complete an economic impact statement for every new or amended Kansas Administrative Regulation. In 2018, amendments to state law significantly changed the economic impact statement process.  We found that most economic impact statements (84%) submitted from 2018 to 2020 did not have a cost estimate because agencies either believed there was no cost or did not report one. Additionally, several economic impact statements we reviewed had small errors or inconsistencies. We found the Division of the Budget's review appeared to have little effect on agencies' economic impact statements. The division's review process also did not include two requirements in state law. We also reviewed a state law requiring agencies to hold a public hearing for any economic impact statements that had two-year compliance costs exceeding $3 million. From 2018 to 2020, only two economic impact statements had a two-year cost that exceeded the $3 million threshold. However, were unable to fully evaluate the impact of adjusting the $3 million threshold because of how agencies reported costs.