Overall, the Department complied with 21 of the 31 requirements assessed this 9th monitoring period, and didnít comply with 10. Monitoring of an additional 33 requirements related to Case Review #2 (covering the management of foster care cases) was delayed because the Departmentís new information system wasnít accurate enough to identify the cases applicable to these requirements. The Department complied with most requirements related to investigating reports of abuse and neglect and adoption. It also was in compliance with nine long-outstanding requirements related to worker caseloads, the use of paraprofessional staff, and the development and implementation of needed services. However, the Department wasnít in compliance with two important requirements related to ensuring the safety of children, and it continued to be out of compliance with many requirements related to maintaining data and systems that contribute to the good management of the foster care system. A follow-up will be done on these requirements in the next period. In addition, the parties to the settlement agreement agreed to drop formal monitoring for 13 other long-outstanding requirements related to staffing levels, assessments of placement and service needs, case planning, and records of visitation.
Assessing How Well the Foster Care Program in Kansas is Working, Part II: Funding, Staffing, and Monitoring Issues
Original rates paid to the foster care contractors were insufficient because they were based on incomplete information about costs and unrealistic estimates about how long children would remain in foster care. The rates also didnít provide for start-up and ongoing monitoring costs. Since foster care was privatized the Department has provided the contractors with an additional $45.2 million to address funding shortfalls. Limited funding has caused contractors to look for more economical ways to provide services, and has restricted the rates they can pay service providers, which could affect the availability of those services. Some survey respondents complained that services were withheld to save money and that the quality of services provided by the contractorsí staff werenít as good as those provided in the community. Staff werenít able to assess the quality of services, but didnít find any evidence of services being withheld purely for financial reasons. Limited funding also can affect conditions in residential facilities where foster children are placed, and could result in some homes going out of business or refusing to serve foster care clients. Also, thereís a severe shortage of foster homes, and many foster parents complained that the reimbursements they received werenít sufficient to cover their costs. Contractor staff shortages and turnover appear to have stabilized, but those shortages likely were the reasons for delays in services, poor documentation, and other problems noted in the first part of this audit. The Department has designed a comprehensive system to monitor foster care. However, some of the internal reports it produces to assess contractorís achievement of outcomes arenít reliable. Also, it needs to do more to ensure that it doesnít miss out on several million dollars worth of federal reimbursements for services provided to children in foster care. Finally, we found that both the Departments of Social and Rehabilitation Services and Health and Environment needed to better document actions facilities take to address complaints and regulatory violations.
This audit of the Kansas Health Care Data Base is required by statute to look at the programís 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 programís inventory of the Stateís health care resources isnít current.
Assessing How Well the Foster Care Program in Kansas is Working, Part I: Services and Placements
Most foster children and their families in our sample were receiving adequate and timely assessments of their needs. Initially the timeliness of assessments was poor, but it has dramatically improved since the early months of privatization. We found that about 10% of the initial assessments didnít include recommendations for needed services for children or their families, such as sex abuse counseling or parenting training. In addition, the people responsible for making decisions about foster children werenít always involved to the extent they needed to be, and didnít always receive or provide the information they needed. Children received most services recommended for them, but there often were delays in these services starting. Families received only about half the services recommended, generally because they refused to participate. Survey respondents had mixed opinions about the quality of services provided. Children in our sample didnít have a lot of stability. On average, they had been moved every 2-3 months, and had been in 3-4 different placements. Often they were moved because of their behavior. In addition, they sometimes werenít placed in the type of facility they needed to be in, mainly because the right type of facility wasnít available. Few of the children in our sample were abused while in custody, but we did find some safety issues with the system that need to be addressed.
Reviewing Issues Related to Funding for Special Education
In fiscal year 1997, the Legislature appropriated enough State categorical aid to finance 80% of the Statewide ďexcessĒ costs of special education. However, for our sample school districts categorical aid didnít uniformly fund 80% of their individual ďexcessĒ costs of special education. That percent ranged from 69% to 137%. The amount of ďexcessĒ costs funded was different from the 80% Statewide figure because the method used to distribute categorical aidóas set out in lawóhas no relationship to the way excess costs are funded. The amount of ďexcessĒ costs funded varied so much among districts primarily because some districts spent more than others; the more a district spends per student, the lower its percent of ďexcessĒ costs funded. Some districts spent more than others for several reasons, including having more teachers per student and higher teacher salaries. Looking at other aspects of special education, we found that more than 96% of the students whose files we reviewed met the criteria for being placed in special education programs. Students also were getting the special education services prescribed for them. In addition, most students in our sample made some progress toward meeting their annual goals and objectives.
Examining the Use of Bingo Tax Revenues by State and Local Units of Government (100-hour audit)
This audit compared revenues from bingo taxes to the amount spent enforcing bingo regulations. State and local governments are required by law to spend bingo tax moneys on the enforcement of bingo regulations. We found that, although the Department of Revenue spends all the moneys it receives from bingo taxes, those moneys arenít spent specifically on bingo enforcement. Further, officials of 9 of the 10 local governments we contacted told us that even though they received bingo tax revenues, they didnít do any bingo regulation enforcement. Officials of the tenth locality we contacted told us that localityís police department did some bingo regulation enforcement as part of its regular duties, but they couldnít estimate the cost of that enforcement. For the most part, then, bingo revenues arenít being spent as required by law.
Reviewing Issues Related to the Highway Patrolís Staffing, Salaries, and Scheduling
With a few exceptions, the Patrol's salaries and benefits are comparable to those of other law enforcement agencies. One major exception is the overtime thresholdótroopers must work 86 hours in a two-week period before receiving overtime, compared with 80 hours for other Patrol staff. The Patrol's scheduling practices are less favorable than those of other agencies, in particular the practice of changing shifts in mid-week. The Patrol has kept up its level of activity, and increased the number of services it renders to motorists, even with reductions in the number of road troopers. However, with more motorists driving more miles, the Patrol would need 93 additional troopers to meet its coverage goals. Although the Patrol is involved in several activities that don't tie directly to its basic traffic-related mission, those activities generally seem to be the most cost-effective way of providing services to local law enforcement agencies and other State agencies. We didnít see any overt signs that nepotism was occurring; however, that possibility exists because of the number of related people working for the Patrol. Finally, thereís been a serious breakdown in the relationship between management and troopers which, if not resolved, could make it impossible for the Patrol to run smoothly.
Reviewing Substance Abuse Programs in Kansas, Part II: Assessing the Department of Social and Rehabilitation Servicesí Contracted Managed-Care Program for Substance Abuse Treatment and Prevention
The Commission hasnít adequately monitored substance abuse programs since it implemented managed care for alcohol and drug abuse services. Thatís partly because of bitter disagreements with the management organization it selected to implement the program. Some of those disagreements might have been avoided if the grant agreement had been more carefully reviewed and had clearly spelled out each partyís responsibilities. The Commission planned to resume some monitoring in July 1998, but it has done little to evaluate the success of the program on a Statewide basis, and hasnít used available information to identify areas where additional services are needed. The Commission generally has established adequate procedures for monitoring the programís finances, but it hasnít always made timely payments to the management organization. Thereís little objective data available to assess the effectiveness of managed care because the Commission doesnít have consistent and comparable information about the programís effects on clients. Based on the limited information available, it appears that expenditures for client services are down while administrative costs are up. Fewer clients are being treated on an inpatient basis, and theyíre receiving treatment for shorter periods of time. Also, the number of providers and treatment beds has increased. Treatment providers had mixed views about the system. Some praised it for its accountability, while others didnít think patients were receiving services for long enough periods of time. In addition, treatment providers complained about a poorly functioning computer system, and told us there were shortages of treatment services for adolescents and for mentally ill clients with substance abuse problems.
Reviewing Issues Related to Community Collegesí Customized Employee Training Courses
In fiscal year 1997, 16 of 19 community colleges offered customized training courses to business employees for college credit. Dodge City Community College offered most of that training, primarily for two meat-processing plants. Most customized training classes are taught by company employees, and at the companiesí own facilities using their equipment. Because the colleges and businesses generally have agreed the businesses would pay tuition while the college would pay them back for instructorsí fees and ďrent,Ē most customized classes were provided at no cost to the requesting businesses. Some businesses even made money on these classes. For example, the two meat-processing plants in Dodge City received almost $600,000 more than they paid in tuition. In this case, Dodge City Community College also came out ahead financially because it received almost $1.6 million in State aid for these classes. Altogether, community colleges got nearly $2.1 million in State credit-hour aid for customized training courses. Because the total amount of credit-hour aid is fixed and is distributed in proportion to the credit hours each college generates, Dodge City got much more of the available aid than it would have if it didnít have such an extensive customized training program.
Like most other states we contacted, the Kansas Corporation Commission has adopted a reactive approach to administering and enforcing the Kansas Underground Utility Damage Prevention Act. The Commission doesnít have routine reporting requirements or other means to monitor whether utilities and excavators are meeting their responsibilities under the law. Users of the system indicated they were happy with the amount of oversight provided by the Commission, and indicated they thought the system was effective. Although line locators donít have training requirements, from the information thatís available it appears that underground lines are damaged relatively infrequently. Two areas of the law could be amended to make the system even better: not allowing excavators to dig if the buried utility lines havenít been marked, and making more utilities subject to one-call.
Verifying Information Provided by the Department of Social and Rehabilitation Serviceson its Compliance With the Terms of the Foster Care Lawsuit Settlement Agreement, Monitoring Report #8
Overall, the Department complied with 8 of the 85 requirements due for assessment this 8th monitoring period, and didnít comply with 61. For the 16 remaining requirements, the parties to the settlement agreement suspended monitoring until a future period because they havenít yet agreed on what the Department must do to comply. More specifically, the Department conceded noncompliance again this period with all requirements related to determining the safety and status of children who reportedly have been abused or neglected, and to appropriately managing the cases of children in its custody. The Department complied with most requirements related to adoption, but inappropriately screened out some bona fide reports of abuse and neglect, which meant those allegations weren't investigated as required. It also was out of compliance with several training requirements, and continued to be out of compliance with many requirements related to maintaining data and systems that contribute to the good management of the foster care system. We'll follow up on these areas in our next report.
Reviewing Substance Abuse Programs in Kansas, Part I: Identifying State Agencies That Receive Substance Abuse Funding, and Reviewing Program Coordination Options
The audit showed that more than 20 State agencies receive funding for substance abuse related programs, most of which are operated at the local level. In 1997, more than $35 million was spent to operate and administer these programs. A few substance abuse programs fund similar services, but there seemed to be good reasons for keeping them separate. Generally these programs were directed at different audiences, or their funding was earmarked only for a specific agency. Although other options exist, a Statewide policy council might be the best way to increase policy coordination among all these agencies.
Compliance and Control Audit: Department of Transportation
The Authority was created as an independent instrumentality of the State in 1987 to gain access to capital markets. As such, it isnít subject to State competitive selection requirements. Nevertheless, the Authority has chosen to use a competitive process to select bond counsel. Some of the Authorityís bond counsel selection procedures increase the opportunity for manipulating the process, and subject the Authority to charges of favoritism. Further, parts of the selection process seem to be unduly restrictive, and give an advantage to one firm. The Authority also isnít subject to the travel expense limits imposed on State agencies. However, we identified numerous instances where the Authority charged expenses that were beyond reasonable and necessary. These included making more bond rating trips to New York City than necessary, taking more people on the trips than necessary, and spending more than reasonable and customary in New York. Finally, the President appears to have violated the Stateís ethics laws while on three business trips to New York by accepting free lodging in a private hotel suite owned by a company he regulates as Consumer Credit Commissioner. The President also requested and received a total of $1,200 in reimbursements for lodging costs he never actually incurred while staying in the private suite.
Reviewing Financial Transactions of the Board of Cosmetology (100-hour audit)
The Board of Cosmetology has worked with the Division of Accounts and Reports to improve its accounting system in recent months. Nonetheless, additional improvements are needed. The Board needs to deposit the licensing fees it receives on a more timely basis, provide for better and more timely reconciliations of receipt records, and develop written procedures for handling receipts. The majority of the Boardís expenditures for fiscal year 1998 were for legitimate purposes, but several thousand dollars in expenses were unnecessary and could have been avoided. The Board also needs to provide the Division of Accounts and Reports with updated information about the contents of its capital equipment inventory.
Examining the Statutory Requirements and Funding Sources for Background Investigations in Kansas
At least 25 new statutory provisions for records checks and background investigations have been enacted in the past decade. Most deal with the racing and gaming industries. These new provisions have had little impact on the number of criminal history records checks performed by the Kansas Bureau of Investigation, but theyíve nearly quadrupled the number of background investigations performed by State agencies. About 29 more people work on records checks and background investigations than five years ago. Most State agencies that request a significant number of records checks or background investigations budget and pay for themótwo notable exceptions are the Governorís Office and the Kansas Department of Health and Environment. As of March 1, 1998, more than 800 requests for background investigations were pending, and about 10,000 requests for criminal history records checks were backlogged. Other than a few optional background investigations which the Governor can request, there doesnít appear to be much opportunity for scaling back records checks and background investigations.
Compliance and Control Audit: Department of Social and Rehabilitation Services
To accommodate other responsibilities Department officials have assigned to them, ABC agents are spending less than half the time they spent five years ago enforcing the Stateís liquor laws. With fewer resources available for liquor enforcement, Division officials have tried to focus on catching sales of liquor to minors, which means some administrative requirements of the Liquor Control Act arenít being as vigorously enforced. In addition, for safety and liability reasons the Division has told its agents to stop pursuing vehicles transporting open containers of alcohol. Because a high percentage of liquor establishments still appear to be selling to minors, additional enforcement efforts should be taken to catch violators. In addition, serious efforts need to be made to improve the system for imposing and tracking fines and penalties. Enforcement agents in Kansas come into the job with fewer qualifications than people doing similar work in other states. Even though the Department tries to make up for this by providing appropriate training, some agents told us they thought they needed more. The Division followed applicable personnel laws and regulations when it hired and promoted staff. However, we couldnít tell whether employee reallocations met all guidelines because these actions generally werenít well documented. Finally, no one can tell whether the State is receiving all the bingo tax revenue thatís due because the Department doesnít require bingo licensees to keep the necessary information to make that determination.
Assessing Whether State Regulation of Meat Processing Plants is More Stringent and Costly than Federal Regulations Require
New federal regulations adopted in July 1996 are less stringent on meat and poultry plant operators than the draft regulations initially proposed in 1995, and appeared to take small plantsí concerns into account. These new regulations, which the Department of Agriculture incorporated by reference into the Kansas Administrative Regulations, required plant owners to implement sanitary operating procedures and testing requirements by September 1997, and will require them to develop food safety systems by January 2000. A number of factors contributed to the anxiety and uncertainty about these new requirements, including inaccurate and conflicting information about the impact of those new requirements on Kansasí small plants, uncertainty about implementation dates, and meat inspectorsí inability to answer plant ownersí basic questions about some of the new requirements. Itís still difficult to know how these new requirements will affect Kansasí small meat plants. Plant owners will incur some additional costs, and some may choose to go out of business, but the nature and number of such changes is likely to be less significant than the Legislature initially was led to believe. Finally, most plant owners we surveyed said they generally were satisfied with the fairness of their inspectors, but some expressed concerns about inspections being inconsistent across State regions or between inspectors.
Reviewing the Vehicle Information Processing System and the Computer-Assisted Mass Appraisal System after Changes in State Law
This audit, conducted by Berberich, Trahan & Co. under contract with Legislative Post Audit, found that during fiscal year 1997 revenues of the VIPS/CAMA Technology Hardware Fund totaled about $1.3 million, and revenues of the Electronic Databases Fee Fund totaled about $2.7 million. Both amounts exceeded the original revenue estimates of the Department of Revenue. During that same fiscal year, expenditures of about $380,000 from the Technology Hardware Fund mainly funded computer hardware upgrades for counties with older equipment. Expenditures from the Databases Fee Fund totalled only about $15,000, mainly to assess needs and develop specifications, because the Department found that acceptable software doesnít seem to be available at this time.
Because the Corporation Commission's Conservation Division and its staff donít have or retain all the information they need, the Division canít be sure that it and the well operators it regulates are doing all thatís required by State law and Commission regulations. For example, staff in the Division canít be sure whether a lease has been inspected, whether a complaint was investigated in a timely manner, whether operators corrected problems within a specified time, whether operators in prorated oil and gas fields consistently follow Commission orders on production, or whether wells were plugged at the lowest cost to the State. When violations are found, a bottleneck in the legal section slows actions against operators, thereby weakening the Divisionís enforcement efforts. Weak enforcement increases risk to the environment, and could increase State costs for plugging wells abandoned in the future. New financial assurance requirements have been put in place to limit these costs, but because of their newness and some ambiguities in the law, itís unclear how effective those assurances will be. The Division is making progress on plugging the already abandoned wells that are most likely to contaminate fresh water or cause other problems. However, it will take until 2008 at the earliest to plug the most dangerous wells.
Reviewing the Department of Wildlife and Parksí Management of Lands Leased for Farming and Grazing (100-hour audit)
For State-owned lands the Department of Wildlife and Parks leases, the agreements require the farmer or rancher to ďpayĒ the Department through ďin-kindĒ servicesósuch as paying vendors for items purchased by the Department, paying contract laborers for work done on Department lands, or performing services for the Department at a set hourly rate. The revenues and payments from this activity arenít included in the usual budgeting processes. Department officials cite a number of benefits from this practice, including providing them with greater flexibility in how to spend the moneys on improvements within their areas. Although the Department generally has established and followed some good practices regarding the management of these leases, we also found a number of problems with the way these leases or lease payments were handled. This included allowing the amount tenants ďholdĒ for the Department to grow to unacceptably high amounts. We saw one case where the tenant was holding more than $25,000. The Department has since recovered that money in cash.
Verifying Information Provided by the Department of Social and Rehabilitation Services on its Compliance With the Terms of the Foster Care Lawsuit Settlement Agreement: Report #7
We concluded the Department had complied with 12 of the 82 requirements reviewed during this 7th monitoring period, and hadnít complied with 66. For the 4 remaining requirements, we couldnít assess the Departmentís compliance because the parties involved in the settlement agreement were still negotiating issues related to these requirements. This period, the Department conceded noncompliance with all the requirements related to determining the safety and status of children who reportedly have been abused or neglected (Case Review 1), and to appropriately managing the cases of children in its custody (Case Review 2). The Department was in compliance with most of the requirements related to adoption (Case Review 3). The Department screened out some bona fide reports of abuse and neglect, which meant those allegations werenít investigated as required. It also continues to be out of compliance with many requirements related to maintaining data and systems that contribute to the good management of the foster care system. Weíll follow up on all these areas in our next report.
Reviewing the Stateís Investment in Venture Capital
The audit showed that, through the Ad Astra partnerships and the commercialization corporations, KTEC has invested about $6.7 million in high technology start-up companies. Indirectly the State has provided another $6.4 million through tax credits allowed for venture capital investments. In return, KTEC has received $363,000 in cash payments and has seen the value of the investments grow by an estimated $5.7 million. The State has seen 317 new jobs created. The basic statutory and contractual requirements for selectinginvestments were met, and we didnít find any indication of favoritism in the way investments were selected. We also didnít find other investors selling their investments in the companies while the Ad Astra partnerships were putting more money in, nor did we find a lot of common owners in the companies that received money from the Ad Astra funds. The firm of Campbell-Becker Inc. has received more than $1.7 million in total fees since the Ad Astra funds were started, and will receive 16% of any profits after all investors get back their original investments, and after $430,000 in start-up costs plus interest have been paid back to KTEC. Although somewhat higher than national averages, Campbell-Beckerís fees didnít appear out of line compared to managers of similar-sized funds. No private money was ever raised for Sunflower Technology Ventures, and the KTEC Board has returned the $3.3 million appropriated for that Fund to the State Treasury. At least nine other states have made public money available for venture capital, but most havenít mixed public and private moneys, and most donít allow investments in out of-state companies. Although there are a number of venture capital companies in Kansas, the Ad Astra funds (which have no more money to invest), the commercialization corporations, and Kansas City Equity Partners appear to be the main sources of capital for high-technology start-up firms.
Reviewing the Performance and Investment Practices of the Kansas Public Employees Retirement System
For fiscal year 1997, the Retirement System achieved an overall rate of return of 14.4%, which was lower than the six other states whose investment performance we compared. Kansasí rates of return for most individual classes of investments were lower than the comparison states for fiscal year 1997. However, on a longer-term basis, Kansasí overall five-year average rate of return was the second best. Also, on a five-year basis, Kansasí average rates of return for four of seven investment classes ranked first or second compared to these other states. About half the Retirement Systemís investment managersí portfolios matched or exceeded the benchmarks established by the Retirement System, both during fiscal year 1997 and on a longer-term basis.
Reviewing the Distribution of Sales and Transient Guest Taxes to Cities and Counties (100-hour audit)
The Department of Revenue is responsible for collecting and distributing local sales and transient guest taxes to cities and counties that have imposed those taxes. Legislative concerns had been raised that the Department might be distributing one local governmentís taxes to another local government. Our reviews showed that the Department is distributing those taxes accurately and on a timely basis. We saw one instance where taxes were distributed to the wrong local government because a retailer moved one of its retail stores from one jurisdiction to another without informing the Department of Revenue. However, the Department already had discovered that error and corrected it.
Reviewing the Highway Patrolís Motor Vehicle Program
This audit, conducted by McBride Lock & Associates under contract with Legislative Post Audit, found that the Patrolís current practice of retiring motor vehicles at about 49,5000 miles is most cost-effective. However, to be cost-effective the Patrol must sell enough of its retired vehicles at or near the estimated resale value. That didnít happen during fiscal year 1997. As a result, the Motor Vehicle Fund didnít have enough moneys to pay for new vehicles, and the Patrol had to pay for some of those purchases from other funds. The Patrolís fleet-management procedures generally continue to be effective and efficient. However, the Patrol needs to consider options for storing new vehicles before theyíre placed into service because the owner of the Patrolís storage space may sell that facility. Further, the data in the Patrolís computerized vehicle information system wasnít kept up to date.
Compliance and Control Audit: Kansas Department of Human Resources