State Law requires the Kanas Department of Health and Environment (KDHE) to provide newborn screening services to detect certain genetic diseases, including Phenylketonuria (PKU). For individuals with PKU, treatment is lifelong and involves a restrictive diet and specialized nutritional products to mitigate increasing damage from the disease. KDHE provides financial assistance to income-eligible individuals to help them purchase a variety of nutritional treatment products and services. We interviewed eight individuals receiving financial assistance through the program and found that most appeared to have no problems purchasing the nutritional formula they needed. However, a couple of individuals reported some difficulty affording low-protein food items and several individuals told us the application and renewal process for the program can be redundant and that it can sometimes be difficult to provide proof of income.
Statewide Single Audit: State of Kansas, Fiscal Year 2016
State law calls for an annual financial-compliance audit of the general purpose financial statements and “the financial affairs and transactions of a state agency required to comply with federal government audit requirements…” CliftonLarsonAllen, under contract with Legislative Post Audit, conducted this two-part audit. The first part was the report on the state’s Comprehensive Annual Financial Report (report R-16-016, released in December 2016). This second part, the Report on Federal Awards Required by the Uniform Grant Guidance, reports on compliance with laws, regulations, and provisions of contracts and grant agreements.
The auditors concluded that the state complied, in all material respects, with the requirements applicable to each of the federal programs audited. The auditors reported 15 deficiencies in internal control, of which 13 were significant deficiencies and two were material weaknesses. The auditors also identified questioned costs for two federal programs. Six of the findings were repeated from prior years.
K-12 Health Insurance: Evaluating the Financial Impact of Establishing a Consolidated K-12 Health Insurance Plan
Depending on the plan design, consolidating K-12 health insurance plans for the 101 districts in our sample could save an estimated $63 million a year. Specifically, consolidation would generate an estimated $38 million in annual savings through increased plan efficiencies regardless of plan design. Additionally, consolidation would also generate $25 million a year in savings for districts by shifting costs to employees. Also, we found that joining the state employee health plan is just one of several consolidation options available and that any savings from consolidation would be realized by school districts unless a mechanism is developed to transfer them to the state. The Legislature has several decisions to make regarding the implementation and savings associated with consolidating K-12 health insurance statewide. For example, the Legislature would need to decide whether the state or school districts keep the potential savings from consolidation and would need to make several other key decisions that could affect how much is saved. We also noted that the time needed to implement a consolidated K-12 health insurance plan and several other factors will make it difficult for the state to achieve savings outlined in the Governor’s Budget. Finally, we identified two other issues that should be considered if the state decides to consolidate K-12 health insurance.
KanCare: Reviewing the Timeliness of Medicaid Eligibility Determinations
In July 2015, the state launched the Kansas Eligibility Enforcement System (KEES)—a web-based application intended to help streamline eligibility determination for state medical and social service benefits, including Medicaid. As of June 2016, the state of Kansas had a backlog of 14,000 Medicaid applications. KDHE officials told us implementing the new KEES system and an influx of applications related to the federal Affordable Care Act contributed to the backlog. KDHE has tried to address the backlog by increasing staffing resources and modifying KEES to fix technical glitches. According to KEES’ reports, KDHE has reduced the backlog by thousands in recent months and hopes to have it resolved by October 2016. In its efforts to address the backlog, KDHE has stopped reviewing renewal applications. Further, Kansas is not in compliance with federal law related to timely eligibility determinations.
Federal Funds: Evaluating State Spending Required by Federally Funded Programs
In recent years, Kansas agencies spent about $5 billion annually in monetary and nonmonetary support from federally funded programs. Federally funded programs will require Kansas agencies to spend an estimated $2 billion on cost-sharing obligations in fiscal year 2016. Beyond that, we did not identify any significant unfunded mandates, although there are restrictions tied to the use of federal funds. Federally funded programs typically impose administrative requirements on state agencies, although most of these costs can be paid for with program funds. They also often include conditions on how state agencies can spend federal funds. Most programs have penalty or repayment clauses if state agencies fail to meet these conditions or program requirements. In addition, we found examples where the federal government has tied some national policy objectives to federal funds and states’ efforts to challenge those policies have had mixed results.
The Kansas Eligibility Enforcement System:
Evaluating Delays in the System’s Implementation
In August 2011, Kansas signed a contract with Accenture to design a new eligibility determination system for medical and social service benefits. Known as the Kansas Eligibility Enforcement System (KEES), the project was originally estimated to take about two years to complete and cost about $138 million to build and $50 million to maintain for five years. Although it appears the main functionality of the KEES project will work as planned, the project has suffered from significant delays, additional costs, and reductions in both savings and functionality. Specifically, as of November 2015, the core of the KEES project was approximately two and a half years behind the original schedule. Further, if completed by August 2016 (as is currently expected), KEES will likely have exceeded the original budget to build, maintain, and operate the system by at least $46 million. In addition, although it appears the main functionality of KEES will work as planned, some important components have been significantly postponed or reduced. The state is also unlikely to realize all the estimated savings expected from KEES because the original estimates of those savings were based on faulty assumptions. It appears that project management issues early in the KEES project and other changes led to many of the current problems we identified. Finally, state oversight bodies do not always receive complete information about IT projects like KEES.
State of Kansas: OMB Circular A-133 Audit of Fiscal Year 2014
State law calls for an annual financial-compliance audit of the general purpose financial statements and “the financial affairs and transactions of a state agency required to comply with federal government audit requirements…” CliftonLarsonAllen, under contract with Legislative Post Audit, conducted this two-part audit. The first part was the report on the state’s Comprehensive Annual Financial Report (report R-14-018, released in December 2014). This second part, the Report on Federal Awards in Accordance with OMB Circular A-133, reports on compliance with laws, regulations, and provisions of contracts and grant agreements.
The auditors concluded that, except for the Foster Care program, the state complied, in all material respects, with the requirements applicable to each of the federal programs audited. The auditors found material non-compliance in the requirements regarding subrecipient monitoring in the Foster Care program. The auditors reported 27 deficiencies in internal control, including five material weaknesses. The auditors also identified questioned costs for a number of programs. Five of the findings were repeated from prior years.
Kansas State Employee Health Plan: Evaluating the State's Pharmacy Benefits Management System
Since 2006, the Kansas State Employees Health Care Commission has contracted with Caremark to provide pharmacy benefit management services for the prescription drug portion of the Kansas State Employee Health Plan. Because a pharmacy benefit manager controls many aspects of a prescription drug plan, there is a risk that it may not manage the program in the state’s best interest. To mitigate this risk, the commission has negotiated numerous contractual provisions to reduce the risks associated with using a pharmacy benefit manager. However, the Kansas Department of Health and Environment (KDHE) does not routinely take the steps needed to verify that Caremark is complying with the contractual provisions. Specifically, KDHE does not adequately check claims data for spread pricing, does little to ensure it receives its share of drug rebates, and does little to independently verify how the drug formulary is managed. In addition, KDHE does not take steps to ensure it receives all claim recoupments that Caremark collected from pharmacies. We also found that the state’s contract with Caremark includes few controls related to mail-order prescriptions; however state spending for mail-order is minimal. Finally, we found that although specialty drugs comprise 32% of total prescription drug costs for the State Employee Health Plan, we could not verify whether KDHE is proactively monitoring this area.
State Agency Information Systems: Sensitive Datasets and IT Security Resources
Overall, we identified most state agencies maintain computer systems which hold a variety of sensitive data or process payments that must be protected. Although the state is responsible for these sensitive data or payment systems, it lacks an enterprise-level approach to IT security. We also found that 17 of 45 agencies (38%) that process payments or maintain large amounts of highly sensitive data have not had an independent evaluation of their security measures in the past three years. In addition, we learned the state lacks a complete set of three-year IT Plans as required by law, and that agencies’ submitted plans have been made public despite containing sensitive security information.
We also reviewed IT security resources at 10 selected agencies. As part of that review, we found the reporting structures at seven agencies created a risk that important security issues may not be communicated to top management. Additionally, three agencies’ lead IT security positions were not filled with sufficiently qualified staff, and two agencies lacked enough staff to perform necessary IT security tasks. Lastly, IT security software products agencies reported using in five security categories appeared to be adequate except for one agency, which lacked software to back up its system databases and electronic files stored on its network since November 2013.
State of Kansas: OMB Circular A-133 Audit of Fiscal Year 2013
State law calls for an annual financial-compliance audit of the general purpose financial statements and “the financial affairs and transactions of a state agency required to comply with federal government audit requirements…” RubinBrown, under contract with Legislative Post Audit, conducted this two-part audit. The first part was the report on the state’s Comprehensive Annual Financial Report (report R-13-016, released in December 2013). This second part, the Report on Federal Awards in Accordance with OMB Circular A-133, reports on compliance with laws, regulations, and provisions of contracts and grant agreements.
The auditors concluded that the state complied, in all material respects, with the requirements applicable to each of the federal programs audited. However, the auditors reported 26 deficiencies in internal control. The auditors also identified questioned costs for a number of programs. Six of the findings were repeated from prior years.
CDDOs: Reviewing Issues Related to Community Services Provided for Individuals with Disabilities
The Kansas Department for Aging and Disability Services (KDADS) is responsible for administering the developmental disability waiver system. This includes providing oversight of the state’s 27 community developmental disability organizations (CDDOs). CDDOs act as gatekeepers because they are the single point of entry, eligibility determination, and referral for any individual seeking developmental disability waiver services.
In addition to the gatekeeping function, 21 of 27 CDDOs also provide direct services through their own community service provider, which creates an inherent conflict of interest. CDDOs have made some efforts to mitigate this inherent conflict of interest, but stakeholders still cite unfair advantages. For the areas we assessed, we found no direct evidence that CDDOs are taking advantage of this inherent conflict. We did find that the Kansas Department for Aging and Disability Services provides weak oversight for CDDOs in several areas. A bill currently pending would prohibit CDDOs from providing direct services, which could eliminate the inherent conflict of interest. Lastly, the newly implemented KanCare system has added an additional layer to the developmental disability system, but on its own will not address the inherent conflict of interest.
In fiscal year 2014, CDDO regions will receive about $360 million to provide services to about 8,700 individuals with developmental disabilities. We found that consolidating CDDOs could reduce administrative costs by about $500,000 to $800,000 a year. Kansas also could increase federal revenues by up to $6.5 million a year by redirecting $5 million in state aid. However, this policy choice would have significant impact on many Kansans. We found that several CDDOs spend funds on lobbying-related activities, which appears to violate federal and contractual requirements. Finally, KDADS does little to monitor CDDOs’ administrative expenditures for the developmental disability waiver.
State Agency Information Systems: Reviewing Security Controls in Selected State Agencies (CY2013)
Agency staff continue to struggle with two key areas we have audited before: ensuring servers and workstations are patched to prevent vulnerabilities, and having an adequate plan in place to be able to continue operations in the event of an emergency. Overall, we reviewed seven IT security processes across eight agencies and saw that some agencies are more committed to IT security than others. While all agencies could make improvements to their processes to help ensure confidential information is protected, agencies most committed to IT security were the agencies more likely to have strong IT security processes in place protect their confidential information.
State of Kansas: OMB Circular A-133 Audit of Fiscal Year 2012
State law calls for an annual financial-compliance audit of the general purpose financial statements and “the financial affairs and transactions of a state agency required to comply with federal government audit requirements…” RubinBrown, under contract with Legislative Post Audit, conducted this two-part audit. The first part was the report on the state’s Comprehensive Annual Financial Report (report R-13-005, released in March 2013). This second part, the Report on Federal Awards in Accordance with OMB Circular A-133, reports on compliance with laws, regulations, and provisions of contracts and grant agreements.
The auditors concluded that, except for the Unemployment Insurance program, the state complied, in all material respects, with the requirements applicable to each of the federal programs audited. However, the auditors reported 28 deficiencies in internal control, two of which were material weaknesses. The auditors also projected up to $73.4 million in questioned costs ($65,000 in known questioned costs). Six of the findings were repeated from prior years.
State Agency Information Systems: Reviewing Selected Systems Operation Controls in State Agencies
State agencies make enticing targets for hackers because of the wide range of sensitive information they maintain. A significant threat to securing agency data is failure to comply with basic security procedures such as installing software patches and controlling the software on computers. We looked for unpatched or unauthorized software in five agencies, and found that three of the five agencies had significant vulnerabilities because of inadequate workstation patching processes—vulnerabilities that potentially could be exploited to gain access to sensitive data. Those agencies had few problems with unauthorized software, but two still need to improve their process for managing software.
State Benefit Programs: Identifying Disincentives for Marriage
Most of the benefit programs we reviewed have income-based eligibility criteria that could discourage marriage in some situations, or have no effect at all. That’s because programs vary in how household income is defined. Some programs don’t distinguish between the income of married and cohabitating couples. Other programs may consider two unmarried people living together to be two separate households. Very few of the frontline program staff we interviewed think program eligibility rules have a significant effect on clients’ decision to marry. Further, the majority of clients we spoke with told us eligibility criteria have little to no effect on their decision to marry. Lastly, literature acknowledges that programs with income-based eligibility rules have built-in disincentives, but there’s little information about whether those disincentives actually cause people to avoid getting married.
Health-Care Related Services: Reviewing Opportunities for Better Coordinating the State's Health-Care Related Programs
By changing Medicaid billing practices, the State could save money spent on inpatient care for Department of Correction’s inmates. Although State agencies could also better coordinate a number of other health-care related programs, service gap issues such as lack of affordable health insurance for low-income single adults can only be addressed through State-level policy decisions. Of more importance is the upcoming federal health care reform, which will greatly affect how health-care related services are provided in Kansas. Its primary goals are to reduce the number of uninsured, slow increases in health care costs, and increase access to health care services and providers. Implementing those reforms will require significant coordination among State agencies. Some State agencies that traditionally have provided health care services will have added responsibilities, while other State agencies—such as the Kansas Insurance Department—will start having a role. At this point, it is too early to know whether State agencies are on track to implement the various provisions of federal health care reform.
Water-Related Agencies: Determining Whether the State Could Achieve Efficiencies and Reduce Costs by Combining the Operations of Its Water-Related Agencies
Although Kansas has several agencies involved in water management, the organizational structure isn’t out of line compared to other western states. In addition, we found very few problems with the current structure, and State and local officials told us the system doesn’t need significant changes. State officials went on to cite the Natural Resources Sub-Cabinet as a major reason for better coordination among water-related agencies. We estimated that creating a single State water agency may yield between $300,000 and $7 million in administrative savings, with the actual savings likely to be on the lower end of that estimate. We also identified a few opportunities for State agencies to improve their coordination and make their programs more efficient without consolidating. Those opportunities include having field staff from different agencies collaborate, improve the monitoring of Watershed Restoration and Protection Strategies (WRAPS) projects and taking steps to share water data more efficiently among themselves and with the public.
Agency Data Centers: A K-GOAL Audit Assessing the Potential Savings of Consolidation
As of 2007, at least 27 states were pursuing data center consolidation, and 22 states had completed or were partially done with consolidation. Kansas and four other states were proposing data center consolidation in 2007, and Kansas currently is still in the planning stage. The 2010 Legislature directed the Division of Information Systems and Communications (DISC) to complete an information technology consolidation study by the 2011 legislative session. Data center consolidation is an expensive and difficult process, but server virtualization—replacing several physical servers with a single host server that simulates several—is a relatively new step agencies can take to save money and prepare for future data center consolidation. We selected five large agencies that have about half the physical servers in the State, and found those agencies already had virtualized many servers, saving an estimated $600,000 to date. We estimate these five agencies could save an additional $400,000 to $1 million over three years by virtualizing their remaining servers. Additionally, we estimate the State potentially could save about $1.3 million over three years if smaller and mid-sized agencies leased virtualized servers from DISC, rather than maintaining their own physical servers. However, these savings depend on agencies’ willingness to participate, and agency officials have expressed concerns with DISC’s costs and customer service.
American Recovery and Reinvestment Act: A Preliminary Assessment of the Risk That Recovery Act Moneys Won’t Be Appropriately Accounted for or Spent
The $787 billion American Recovery and Reinvestment Act of 2009 (ARRA) requires unprecedented accountability and oversight of federal moneys being spent at the State and local levels. State agencies in Kansas will receive more than $2 billion in formula grants under the Act through 2011. The 2008 Statewide Single Audit had identified procedural or control weaknesses in four State programs that will be receiving ARRA moneys. Correction of those weaknesses, which related to things like reconciling records, improving eligibility determinations, and implementing computer edits to prevent improper payments, will be checked during the 2009 Single Audit. In eight other programs reviewed for this audit, the risk that agencies won’t comply with the requirements of ARRA appears to be relatively small. We found no weaknesses in the way that agencies are accounting for the ARRA moneys. However, in areas of monitoring and quarterly reporting, we found that officials from several of the programs needed to commit their procedures to writing to ensure consistency and, in a few cases, needed to further develop procedures or hire additional staff to ensure that monitoring or reporting functions could be carried out effectively. In separate work, we found that the Department of Transportation’s process for selecting highway projects to fund appears to comply with Recovery Act requirements.
Business Procurement Cards: Expanding Their Use To Increase Cash Rebates to the State
For fiscal year 2008, we estimated that $27 million of the non-procurement-card purchases agencies made from the 37 highest-volume vendors potentially could have been charged to a procurement card. Charging all those purchases would have generated more than $380,000 in cash-back rebates. Agencies also made $327 million of similar non-procurement-card purchases from the thousands of other vendors we didn’t analyze. If just 20% of these purchases could have been charged, agencies would have generated $940,000 in additional cash-back rebates, for a total of $1.3 million. Among other things, agency officials told us they didn’t always use their procurement cards when they could because of concerns about the complexity of tracking such purchases, and the perceived lack of thorough controls over procurement card purchases.
State Inspection Functions: A K-GOAL Audit Determining the Cost Savings or Efficiencies from Automating Inspection Processes
In general, automating an agency’s processes for preparing, storing, sharing, and retrieving inspection reports can increase an agency’s efficiency levels through both cost and time savings. Only two of the seven inspection programs we reviewed within the Department of Health and Environment--Confined Animal Feeding Operations and Drinking Water--were fully automated. By fully automating the other programs in our sample, KDHE could achieve annual net savings of about $28,600 in staff and postage costs. About $6,800 of the savings would be State General Fund moneys. In addition to being able to eliminate a half-time position within the Wastewater Program, KDHE also could eliminate an estimated 1,770 hours of staff work currently performed in other unautomated programs. Once those inspection programs are automated, that time could be spent on other needed work. Even greater efficiencies--and cost and time savings--could be gained by fully automating the entire regulatory processes for these programs. Finally, automating KDHE’s inspection processes also could improve its data integrity and use of management information.
Department of Health and Environment: Reviewing Issues Related to the Permitting Process in the Bureau of Air and Radiation
Entities that emit specified levels of pollutants into the air must obtain an air-quality permit from the Kansas Department of Health and Environment. The only significant change the Department has made to the air-quality construction permit process in the last year has been the addition of a carbon dioxide emission estimate for every application. This addition has not lengthened the time it takes to approve a construction permit. In recent years, the Department has implemented a number of streamlining activities to reduce permit processing times. These changes have resulted in a decrease in construction permit approval time by 51% (from an average of 63 days in fiscal year 2003 to an average of 31 days in fiscal year 2008). The basic construction permitting process Kansas uses is similar to the process five other states use, although there are a few differences. For example, most of the other states don’t calculate a carbon dioxide estimate for every construction permit application.Calendar year 2008 had more upper-management turnover than any of the past 10 years. As of July 2008, five upper-management positions had turned over in 2008; the next highest number of positions that turned over in any year was four, back in 1999 and 2000. This increase is agency-wide, and much of the increase can be attributed to retirements.
Children’s Programs: Reviewing Whether They Are Coordinated To Avoid Duplication and Maximize the Use of Resources
Out of about 220 children’s programs in Kansas, 20 State-funded and three federally administered programs focus primarily on serving children age five and under. Those 23 programs reported serving more than 500,000 children and spending almost $310 million in fiscal year 2006. At the State level, the risk of duplication comes from having multiple programs offering similar types of services. This risk appears highest in three categories–preschool services for children, home-based education services to parents of young children, and child-care services to low-income clients. Having multiple agencies involved in administering programs can create administrative duplication. We identified six education-related programs administered by agencies other than the Department of Education and three social services/child safety programs administered by agencies other than SRS. At the local level, where most services actually are provided, the same types of administrative duplication can exist when multiple local agencies administer programs. Efforts to coordinate children’s programs at both the State and local levels primarily consist of coordinating groups and interagency agreements. A primary example is the Kansas Early Childhood Comprehensive Systems Plan Stakeholders Group, which has worked to develop Statewide strategies for serving young children. Legislation passed in 2007 mandated a plan to bring early childhood education services under a single office in the future, which could have a number of benefits, but issues involving funding and the definition of “education” will be need to resolved. At the local level, issues such as community size and competition for funding can affect the extent of coordination that occurs. Finally, consolidating Kansas’ programs won’t increase federal funding coming into the State because most federal funding is either fixed or based on formulas.
Health-Care Related Programs in Kansas: Determining What Funding Kansas Receives and Who Administers It
Our inventory focused on three types of government-funded health-care related programs in Kansas--State administered, federally administered, and research--and on programs that were clearly medical in nature or related to substance abuse and mental health. Health-care related programs administered by seven State agencies accounted for about $2.5 billion of the nearly $6 billion in spending we identified for 2006, including $1.6 billion on health care programs and $.8 billion on long-term care. Federally administered health-care related programs accounted for $3.3 billion in spending, nearly all of which was for Medicare. Health-care related research spending totaled about $131 million, with most of that being spent by the University of Kansas.
Regulation of Child Care Facilities and Foster Homes: Determining Whether KDHE Is Providing Effective Oversight and Whether KDHE and SRS Provide Duplicate Regulation of These Facilities
Since our 1997 audit, KDHE has made some improvements regarding its oversight of child care providers, but many of the same types of problems persist. This audit identified a number of issues, including: the Department hasn't performed all required background checks, some inspections and complaint investigations weren't conducted in a timely and thorough manner, and it failed to oversee the inspection work performed by child-placing agencies. Also, the Department isn't taking stronger enforcement actions partly because of limitations it perceives in the State's child-care laws and its high threshold for evidence of non-compliance. Kansas generally regulates the same types of child care facilities as the comparison states. Ways that KDHE could increase the efficiency of its regulation include implementing a risk-based inspection system, extending its annual license renewal cycle, and reducing the frequency of background checks. Duplication of regulatory responsibilities is occurring in three areas–initial inspections of family foster homes, investigation of child abuse and neglect complaints at child care facilities, and inspections of community mental health centers that provide child care services. SRS and KDHE have formed a working group to reduce the number of conflicting and duplicate regulations affecting mental health centers. Duplication in the other two areas could be eliminated by having KDHE rely on the inspections conducted by child-placing agencies, and by cross-training SRS inspectors to inspect child care facilities.
Plumb Thicket Landfill Application: Determining Whether KDHE’s Review Complied with Applicable Laws and Regulations (limited-scope audit)
The Plumb Thicket landfill, proposed for a 950-acre site in northern Harper County, has been controversial from the beginning. Citizens concerned about potential environmental impacts have sued over the County’s decision to grant zoning for the project, and KDHE has stopped all review of the landfill application pending the court’s ruling. Local citizens have questioned whether KDHE followed all applicable laws and regulations in reviewing the application. We found that the application materials Waste Connections submitted to KDHE met the requirements in effect at the time the application was submitted. In addition, KDHE’s review appeared to be reasonably thorough. We did note several weaknesses in KDHE’s review: it didn’t follow a State law that calls for it to seek advice and counsel from local health authorities, and it didn’t question several representations made by the company applying for the landfill permit that we thought should have been questioned. The Department needs to develop uniform guidance for its staff to follow in reviewing landfill applications, but we saw nothing in the documents we reviewed that would cause us to question KDHE’s independence.
West Nile Virus: Reviewing the Department of Health and Environment’s Case Reporting (limited-scope audit)
As of November 2003, the Department of Health and Environment had reported, to the public and to the Centers for Disease Control and Prevention, 90 severe cases of West Nile Virus infection that were confirmed by the State laboratory or the CDC. These were the only types of cases KDHE reported until October 2003, when it decided to add commercial laboratory results to its public reporting of West Nile Virus cases. As of November 2003, KDHE had reported to the public 731 cases that tested positive at commercial laboratories in 2003. The Department hadn't reported 20 unconfirmed but "probable" cases of severe West Nile Virus infection, because Department officials didn't realize the CDC expected them to do so. The number and types of cases reported by Kansas and nearby states varied significantly, due to differences in what types cases are gathered, tested, and reported, and due to differences in the overall presence of West Nile Virus in each state.
Kansas Department of Health and Environment Information Systems: Reviewing the Department’s Management of Those Systems
This report focuses on 2 areas of KDHE's computer security: managing security, and planning for business continuity in the event of a disaster. KDHE had adopted many of the necessary security policies, but its staff hadn't followed many of them. In particular, KDHE was using a fundamentally flawed method of handling passwords, had allowed infections of serious viruses to be ignored, and its firewall allowed unneeded access to the network. As a result, the Department's operations were at a very high risk of fraud, misuse, or disruption. It appeared that a lack of security planning and monitoring allowed the Department's problems to go uncorrected. Because of the high level of risk, the unusual step of making interim recommendations for immediate action was taken during the middle of the audit. The Department took prompt action to address the problems identified. Finally, KDHE hadn't conducted any business continuity planning since 1999, increasing the risk that it wouldn't be able to respond adequately in the event of a disaster.
Food Safety Programs in Kansas: Evaluating Possible Costs and Efficiencies of Combining Them
Primary responsibility for ensuring food safety in Kansas is divided between the Departments of Agriculture (in the meat and poultry, dairy, and egg inspection programs) and Health and Environment (in the food protection program); together, they spend about $3.2 million for inspection staff. This system is inefficient in some ways, because inspectors from more than one agency or program inspect the same businesses, some businesses are inspected more frequently than they need to be, and similar businesses are regulated inconsistently. In addition, coordination can be improved in situations where the agencies' regulatory authority overlaps. Combining food safety inspection programs could make it more likely similar food businesses and processes would be regulated consistently and that communications would improve. We estimate Kansas can generate about $680,000 in annual savings and improve food safety if certain inspections are combined and if inspections are changed to a risk-based approach. In addition to restructuring the routine food safety inspection system, Kansas needs to continue taking steps to become prepared for intentional threats to food safety.
Low-Birthweight and Premature Babies: Reviewing Programs Aimed at Reducing Their Incidence and Associated Costs
Low-birthweight babies cost the State's Medicaid Program about 5 times as much as normal-birthweight babies during their first year of life—$16,704 compared with just $3,180. They account for only about 10% of all births, but more than one-third of all payments made. Lack of prenatal care is one of many risk factors that can increase the chance of having a low-birthweight or premature baby. Overall, 72% of Medicaid mothers reported getting adequate or better medical prenatal care. Those who reported getting no or inadequate care generally had a much higher incidence of low-birthweight babies than women who got adequate care. The research on the effectiveness of prenatal care is mixed, but babies whose mothers had no such care cost Medicaid significantly more than those babies whose mothers got even minimal care. Women who had low-birthweight babies also had a higher prevalence of many of the other risk factors associated with poor birth outcomes— including smoking, substance abuse, and low weight gain during pregnancy. Outside of Medicaid, the State spends very little on prenatal care programs. The State's share of the cost for funding prenatal services through Medicaid was almost $15 million in fiscal year 2002. The State also spent $1.4 million on KDHE's Maternal and Infant Program, the State's only program focused primarily on prenatal care. Local health departments cited financial barriers as the primary reason why low-income women don't get prenatal care services, and pointed to a critical gap in the availability of medical services for these women. Neither KDHE nor SRS is doing all it can to educate women about the benefits and availability of prenatal care. KDHE also doesn't collect any information that would allow it to connect the services clients receive with their birth outcomes, but more could be done with existing data.
Regulation of Food Service Establishments: Determining Whether the Department of Health and Environment Is Providing Sufficient Regulatory Oversight
Improvements were needed in many aspects of the State's food service regulatory program. The Department licensed some food service establishments before they'd corrected serious and multiple violations. In calender year 2001, about 30% of the establishments required to be inspected weren't, and complaint and follow-up inspections sometimes weren't timely or weren't done. The Department had limited resources to conduct all the inspections required–the number of inspections conducted per inspector exceeded FDA standards–but areas were identified where current staff resources could be used more efficiently and effectively. The Department's annual monitoring of county health agencies it contracts with to conduct inspections focused almost exclusively on the number of inspections completed, and in-depth evaluations of these programs were too infrequent to be effective. Also, the Department didn't take appropriate actions against establishments that repeatedly or seriously violated its regulations. It hadn't established clear guidelines for its inspectors as to when enforcement actions should be taken, and left most decisions about initiating actions up to inspectors. Finally, program managers didn't systematically receive or track information about problem establishments to determine whether appropriate actions were being taken.
Kansas’ Nursing Home Inspections: A K-GOAL Audit Determining Whether They’re Carried Out In a Reasonable Manner
For the 16-month period through June 30, 2001, Department inspectors cited more than 5,000 deficiencies in Kansas nursing homes. We saw little evidence indicating Department inspectors were classifying serious deficiencies incorrectly –more than 95% of the serious deficiencies we reviewed appeared to be classified correctly. Although most nursing home administrators think serious deficiencies are classified incorrectly, relatively few appeal the Department's findings. Only about 6% of the deficiencies cited during a recent 8-month period were appealed, and about one-fifth of those were either reduced or dropped altogether. Significant regional differences exist in the number of deficiencies cited at nursing homes, but there's little solid evidence to explain why. Some Department practices may contribute to inconsistencies among inspection teams, or could be changed to better identify and address the inconsistencies that do exist.
Evaluating Certain Personnel and Financial Practices at the Kansas Department of Health and Environment (100-hour audit)
For a sample of bills paid in May 1999, about a fourth were paid late, but in many cases the delays were caused by the vendor, not the Department. Based on the same sample, the Department appeared to be purchasing from State contracts when appropriate. In awarding employee bonuses under three different bonus programs, the Department complied with applicable State laws and regulations. However, in the case of the Kansas Savings Incentive Program it didn't follow good management practices in making the awards. Hires and transfers of classified administrative personnel in the last two years were done in accordance with State laws and regulations. Although unclassified positions aren't required to have formal job descriptions, and although qualifications necessary to hold an unclassified job aren't spelled out in State law, unclassified administrative employees hired in the last two years appeared to be qualified for the positions they held.
This audit of the Kansas Health Care Data Base is required by statute to look at the program’s cost and benefits. The report shows annual costs to the State of about $130,000 to maintain the data base, and estimated annual costs of between $0 and $3,400 for a sample of those who provide data to the program. In addition, the report lists a number of benefits of the program to both the State and to others who use the data compiled. Finally, the report points out that the program’s inventory of the State’s health care resources isn’t current.
Reviewing the Department of Health and Environment’s Regulation of Child Care Facilities and Family Day Care Homes
Many of the regulatory activities relating to child care in the State aren’t being adequately carried out by the local health departments and private contractors to whom the work has been delegated by the Department. Inadequate staffing and training apparently have contributed to these problems. At the State level, backlogged information within the Department is causing significant delays in getting criminal background checks for staff in larger facilities. The Department’s enforcement efforts haven’t been adequate to ensure that children are sufficiently protected once regulatory violations have been identified. The Departments of Social and Rehabilitation Services and Health and Environment seem to be working together to meet possible demands placed on the State’s child care system because of welfare reform. However, the Department of Health and Environment (as well as local health departments) may not be positioned to effectively handle any additional work load resulting from welfare reform because of staffing inadequacies. Current child care openings across the State may be adequate to meet the estimated 2,700 additional welfare children who could need child care over the next three years, but those slots may not be available in the right places, or for the types of children who need care.
Reviewing the Department of Health and Environment’s Efforts To Protect Water from Pollution Caused by Confined Livestock Feeding Operations
The Department’s actions haven’t been sufficient to minimize the risk of water pollution. The standards it adopted for the design and location of sewage lagoons are less stringent than comparison states in two key areas. Although the Department has adopted many good regulatory practices, its staff didn’t follow all those practices or other Department requirements in 93% of the 41 cases we reviewed. It often issued permits to facilities that didn’t meet all the requirements, let facilities operate for years with expired permits, didn’t perform the required inspections, and rarely followed up to make sure violations were corrected. It appears the Department needs additional staff to carry out all the activities it should be doing to adequately protect the State’s water. Finally, the Department’s regulatory authority generally is adequate, but regulation of dust and odors is difficult without some objective way to measure odors or to isolate the amount of dust caused by a certain source.
Reviewing the Department of Health and Environment’s Regulation of Nursing Homes
The Department’s system for handling complaints is well designed. However, we thought about 10% of the complaints we reviewed were more serious, and the Department’s staff should have given them a higher investigation priority. Given the priorities assigned, the Department’s staff investigated most complaints on time, and those investigations appeared to be thorough. However, a recent decision to rely on nursing homes’ own investigations of certain complaints may not comply with State law. The Department’s nursing home inspection system also is well designed and should uncover significant violations of laws and regulations. All but a handful of homes were inspected as often as required, and inspections for homes that weren’t timely were only a few days late. Inspections we looked at appeared to be complete and comprehensive. The Health Care Financing Administration’s 1995 review of Kansas’s inspection program generally was positive, but it noted the Department needed to improve its identification of regulatory violations. The Department’s efforts to get problem homes to correct deficiencies weren’t always effective, in part because it didn’t always issue correction orders when it should have, it didn’t make full use of the fining authority it has, and it didn’t appear to have appropriate remedies to deal with less-serious infractions.
Compliance and Control Audit: Department of Health and Environment
Reviewing the Department of Health and Environment’s System for Assessing the Impact of Rules and Regulations Mandated by the Federal Government: A K-GOAL Audit of the Department of Health and Environment
In general, the Department did not always accurately and completely assess the economic impact of new regulations. The sample of economic impact statements we reviewed did not always contain the information required by law. For example, the economic impact statement prepared for underground storage tank regulations excluded about $40 million in costs for the federally mandated portion of the regulations. The economic impact statement related to clean water regulations underestimated the impact on industries by at least $10 million. These problems can be attributed to the agency’s lack of standardized procedures, its policy of excluding certain costs from the impact statements, and its failure to involve all those affected by the regulations in the process.
Reviewing the Implementation of Kansas’ Waste Tire Disposal Program: A K-GOAL Audit of the Department of Health and Environment
The Department of Health and Environment has established adequate regulations for the Waste Tire Disposal Program. However, the Department issues permits to operators who haven’t met all the State’s requirements, issues permits without inspecting waste tire facilities, allows some facilities to continue operating in apparent violation of State laws and regulations, doesn’t routinely inspect facilities or conduct follow-up inspections when problems are identified, and makes no attempt to inspect out-of-State transporters who hold Kansas permits. In addition, the Department needs to improve its handling of permit fees collected from waste tire operators. The Department also provides grant moneys to local units of government to help clean up, dispose of, or recycle waste tires in Kansas. However, the Department has not adequately monitored grants to ensure that grant moneys are being spent according to grant agreements and regulations.
Reviewing the Department of Social and Rehabilitation Services’ Procedures for Handling Complaints Against Foster Homes
The Department has not established adequate checks to ensure that licenses are not issued to applicants with past criminal records or other problems that might present risks to foster children. Nearly 20% of the licensing files we reviewed did not contain required assessments of the applicant and his or her family, and many had inadequate character reference checks. About 30% of the abuse and neglect complaints against foster homes we reviewed were not adequately investigated. The most common shortcomings were delays in getting investigations started and failure to interview all appropriate persons. The Department did not always follow up to ensure that foster parents completed additional training or made corrections they agreed to make following an abuse investigation. In nearly half the cases we reviewed, the Department did not take adequate steps to determine whether foster parents’ natural or adopted children were safe. The problems we found stemmed from inadequate Department policies, failure to follow existing policies, and failure to document some actions.
Examining Potential Duplication and Overlap in Programs for Kansas’ Aging Population
The Department on Aging and the Department of Social and Rehabilitation Services fund or provide essentially the same long-term-care services, but offer their programs to different groups of elderly individuals. When more than one agency provides or funds essentially the same services, there is considerable duplication of administrative effort, which can result in client confusion, clients falling through the cracks if coordination is inadequate, and in money being spent for administrative activities that otherwise could be spent for direct services. The State might gain some cost efficiencies from consolidating all its long-term-care programs in one agency, as two comparison states have done, but some disadvantages also would result. For an individual client, the State generally can provide home and community-based long-term-care services at a lower cost than nursing home services. However, the total cost to the State of providing those services may not decrease significantly, particularly in the short-run, because states’ new long-term-care programs tend to expand the number of people eligible for services, and because the Medicaid-Waiver Programs may be serving elderly individuals who would not be getting services in the absence of such Programs.
Reviewing the Process for Providing Health Insurance Benefits for State Employees
Premiums for State employee health insurance in Kansas were generally higher than in nearby states we reviewed. Variations in deductibles and co-insurance amounts employees must pay make it difficult to make blanket statements about how our benefits compare, but generally Kansas' benefits compare favorably. Also, Kansas had the lowest annual maximum out-of-pocket costs for employees who use health insurance a lot. Steps the State Employees Health Care Commission has taken to obtain benefits at the lowest cost include things like soliciting multi-year bids and negotiating rates before signing health insurance contracts. All State employees do not have equal access to the same insurance plans across the State. But employees covered under the State's conventional health insurance plan have access to most general practice doctors, dentists and hospitals in their cities. Finally, if the Regents' employees had been a separate group within the 1993 State employee health insurance plan, that group's claims experience would have resulted in 18 percent lower premiums for that group and 14 percent higher premiums for other employees. When such differences have occurred in the past the Health Care Commission has acted to equalize premiums for all employees.
Reimbursement for Services Provided by the Kansas Bureau of Investigation
In fiscal year 1992, the Bureau provided record checks and laboratory services to local law enforcement and other criminal justice agencies at a cost to the State of about $2.2 million. Like other states, the Bureau has a policy of providing services to these agencies at no charge. The Bureau also provided about 120,000 record checks to non-criminal-justice agencies at a cost of about $650,000. Like other states, the Bureau charges a fee for these services. Because the Department of Health and Environment refuses to pay for its record checks, other agencies end up paying higher fees than necessary and the Bureau still does not collect enough money to fully recover its costs.
Reviewing Potential Overlap in State Agencies’ Responsibilities for Protecting Groundwater and Regulating Transportation
The Corporation Commission and the Department of Health and Environment do not duplicate each other's efforts on the same pollution problems, but inefficiencies and confusion result from having two agencies involved. Because each agency follows essentially the same steps to ensure that pollution is cleaned up, there is no benefit to the State from having both involved. Other oil- and gas-producing states have placed pollution clean up from oil and gas with one agency. Having several agencies involved with motor carrier regulation also has not resulted in significant overlap in agency responsibilities. However, motor carriers would be better served, and the State could potentially reduce some administrative inefficiencies, if there were a greater degree of coordination in the regulatory system. Although there are no easy solutions to the inherent conflict regulatory agencies face in balancing the interests of the public and the regulated industry, restrictions on staff involvement with a regulated industry could help improve staff independence. Other oil-producing states generally have not enacted such restriction on their staffs.
Federal regulations require school districts to begin taking action to control asbestos-containing material in their buildings by July 1989. To comply with past and current federal regulations, school district’s estimate they will spend a total of $66 million by 1992. In some instances school districts have done more to control asbestos than required by federal regulations -- primarily by removing the asbestos material rather than requiring or maintaining it -- and thus spent more than necessary. Despite the large amount of money involved, the work performed and people involved are largely unregulated, so districts have little assurance that the asbestos control work performed is adequate and proper.
The Department of Health and Environment’s regulatory procedures comply with federal and State legal requirements, but several aspects of the program are not being managed adequately. The State does not have an established program to minimize production of hazardous waste, but the Department is using a federal grant to develop one. Kansas has adopted the federal requirements for monitoring the movement of hazardous waste, and the system appears to be working as intended. However, the Department has not had adequate procedures for tracking and resolving discrepancies in hazardous waste shipments.
State Agencies’ Handling of Water Contamination and Pollution Problems in Kansas
Water experts indicate that Kansas’ water quality is good overall, but instances of contamination exist throughout the State. Three State agencies have primary responsiblities for ensuring the quality of the State’s water. The system for maintaining water quality imposes many requirements on these agencies before contamination is identified, but allows substantial discretionary authority afterwards. An in-depth review of seven contaminated sites showed that State agencies generally did what they were required to do to minimize or prevent pollution at the sites, but that they generally did not use the discretionary authority they had for a number of reasons.
Regulation of Oil and Gas Wells, Part II: Enforcement of Injection Well Procedures
The Corporation Commission’s monitoring program is weakened because no one reviews reports submitted by injection well operators. Because of unclear testing guidelines, some similar wells are tested at inconsistent pressures, and some unsound wells pass the pressure tests. The audit recommends ways to strengthen the monitoring and testing program. Finally, the Environmental Protection Agency is likely to reimpose injection well testing requirements if the State imposes a testing moratorium.
Regulation of Oil and Gas Wells, Part I: Enforcement of Well Plugging
Most complaints or violations related to abandoned, unplugged wells rather than to improperly plugged wells. Abandoned, unplugged wells present a significant potential for polluting groundwater, but current inspection procedures do not ensure that such wells are identified and plugged on a timely basis. The lack of basic, centralized information about the number and status of all wells also hampers the field staff’s ability to detect unplugged wells through inspections. The audit recommends improvements in each area.
Reorganization had a significant effect on the staffing and organization of the bureaus within the Division. The Department generally tried to minimize any negative impact on persons displaced from their positions, and most actions were handled according to applicable personnel requirements. Although management thinks the reorganization goals have largely been achieved, most employees do not share this perception.
Although no federal or State laws require State agenices to correct asbestos problems, the Department of Human Resources voluntarily conducts asbestos inspections in public buildings. If the proposed Asbestos Control Program were funded, all asbestos duties would be transferred to the Department of Health and Environment through an agreement between the two agencies.
Regulation of hazardous materials transportation in Kansas has serious gaps. The most serious failing is a lack of adequate inspections. In their absence, insufficient data are collected to estimate the number and volume of shipments in the State. Other problems relate to training deficiencies, the designation of on-scene commanders at accidents, and accident reporting. Efforts are under way to improve the regularty program: the audit makes several additional recommendations.
A Preliminary Analysis of Costs and Charges at Kansas Adult Care Homes
The purpose of this audit was to answer several specific questions about the success and status of clean-up efforts at the Furley hazardous waste disposal site, the appropriateness of the Department’s regulatory actions, and the feasibility of reopening the site.
The audit showed that the regulatory program was a necessary undertaking for the State--some homes don’t of their own volition provide residents with a healthy and secure living environment. Moreover, even with regulation residents of a number of homes are not receiving the adequate care they need. The two most frequent problems found were a lack of independent verification of complaint allegations and a lack of final resolution of problems cited in the complaint. The report recommended that a public oversight board--equipped with an ombudsman to handle complaints and a quality control unit to review the entire program--should be established to oversee the program and to ensure that all phases are administered in the best interest of the residents and the public. In conclusion, since the Department may not be able to enforce nursing home regulations vigorously, the report recommended tht the Legislature transfer program responsibility and funding to another agency, such as the Department of Aging.
Department of Health and Environment: Food Service Regulatory Program
The auditors found that State inspectors didn’t identify and report as many violations of food service regulations as federal inspectors did when they evaluated the State’s food service regulatory program in 1978, even though regulations at both levels are identical. From a sample of 100 establishments, federal inspectors found 31 “inadequate” restaurants, indicating that the establishments posed significant health risks and should be closed. State inspectors put none of the 100 establishmens in that category. In the area of enforcement, auditors found that one-half of the violations noted during inspections hadn’t been corrected by the next inspection six months to a year later. To improve inspection and enforcement, the audit includes several recommendations addressing areas such as training, supervision, certification, and work-load management.
Management Audit of State Funded Pharmacies and Drug Rooms
Due to concerns that a number of the laboratories in the state are not operating to full capacity there is to be a review of the operations and fee schedules of state operated laboratories. Major state laboratories were identified from statutory and budget research prior audits, Budget Division, Legislative Research and other pertinent sources, including telephone interviews. The audit of the laboratories will follow the patterns of the audit of state operated pharmacies and drug rooms. This audit excluded such labs as those at state colleges and universities and labs operated by hospitals which serve the single institution’s needs.