Local governments can employ lobbyists or belong to associations that employ lobbyists. The most direct way local governments pay for lobbying services is by hiring or contracting with a lobbyist. Local governments may also pay fees and dues to associations with lobbyists, although they often join such associations for other benefits they provide (e.g. training and professional development). It is possible such associations may not lobby on behalf of local governments. We selected a sample of the three largest counties, cities, and school districts in Kansas and asked them to report how much they paid for lobbying services. The nine local governments we reviewed reported paying $427,000 to lobbyists and $1,324,000 in fees and dues to associations with lobbyists in calendar year 2017. Finally, lobbyists have discretion in determining what services constitute lobbying, which creates a risk lobbyists may report different information to the Secretary of State.
Department on Aging: Evaluating the Effect of Increasing Minimum Nursing Hours on Resident Care and State Costs
Although the results are mixed, the most thorough research generally shows a positive relationship between staffing levels and quality of care outcomes in nursing facilities. Further, according to the federal Centers for Medicare and Medicaid Services (CMS), increasing staffing levels up to 4.1 hours of nursing care per resident day improved health outcomes. In addition to staffing levels, researchers also identified a number of other staff-related factors that are important in improving quality of care, such as staffing levels on different shifts or units and staff training. We were unable to detect a clear relationship between nursing hours and quality of care outcomes for Kansas’ nursing facilities, though this may be due to limitations in the data we were able to use.
Senate Bill 184, which was introduced but not passed during the 2011 legislative session, would have increased minimum nursing staff requirements in Kansas nursing facilities over a three-year period. However, the bill’s third year staff level requirements of 4.44 nursing hours per resident day are beyond the level the Centers for Medicare and Medicaid Services identified as leading to improved quality of care. We estimated it would cost the state up to $43 million annually to fully implement Senate Bill 184’s requirements. Although increasing staffing levels may improve health outcomes, better outcomes are unlikely to result in meaningful savings for the state. This is because the most significant costs associated with negative health outcomes are paid for with federal funds. As a result, most savings achieved through better outcomes will benefit the federal government, but not the state.
Foster Care: Reviewing Selected Issues Related to Compensation and Oversight of Foster Care Contractors
In December 2007, the Department of Social and Rehabilitation Services (SRS) changed the way it structured foster care contracts to provide more financial stability to contractors. In general, each month, foster care contractors’ costs are less than the monthly payments they receive. However, the payment structure doesn’t appear to have affected children’s length of stay in foster care. We identified many other factors that do seem to affect the length of stay including, judicial discretion and the mental health and behavior problems of the child or the child’s family. We also found that increasing the adoption subsidy rate potentially could increase the number of children adopted. Overall, SRS has established a good structure that can help it oversee foster care contractors. However, staff don’t always act to correct the problems found while monitoring because the agency has a hands-off approach to overseeing contractors. We also noted that, regardless of SRS’ oversight efforts, hundreds of children remain in foster care for a long time. Nevertheless, in taking a hands-off approach following up on problems, SRS increases the risk that children could unnecessarily languish in foster care. Finally, we noted that Kansas’ performance on national standards related to length of stay in foster care appears to be about average.
State Prescription Drug Plan: Reviewing the Accuracy of Payments Made Under the Program
In 2003, the State prescription drug plan paid 1.5 million claims totaling $55 million. For the most part, payments made to Kansas' pharmacy benefits manager, AdvancePCS, appeared to be accurate and in accordance with the terms of the contract. However, we identified some problems relating to payments for claims for ineligible people and inaccurate dispensing fees, which may result in AdvancePCS not meeting the accuracy standard of 99.9% required by its contract with the State. The most significant problem (paying claims for ineligible people) also was identified in a 2001 audit as a problem area. Even though we found relatively few problems, we recommend that the State improve its routine oversight and monitoring of the claims payments. Given the amount of money involved, better monitoring reduces the likelihood that the State will lose significant amounts to inappropriate claims payments.
Financing Local Governments: Determining How to Avoid Future Problems Caused by State Revenue Shortfalls (100-hour audit)
Proposals to withhold State transfers to cities and counties from 3 revenue-sharing funds for the second half of fiscal year 2003 and all of fiscal year 2004 would amount to about 2% of their calendar year 2003 total budgets and about 5% of their general fund budgets. Even before these proposals, transfers from these 3 funds weren't entirely predictable--the Legislature hadn't appropriated the full amounts called for by statute for more than a decade. Options legislators may wish to consider to help cities and counties reduce their dependence on payments from the State fall into 4 broad categories: removing or raising caps on existing taxes or fees, allowing local units to redirect the use of taxes currently dedicated to specific purposes, allowing local units to institute new taxes, or repealing statutory requirements that result in increased expenses for local units. The audit lists pros and cons of these actions for a variety of taxes and fees.
Reviewing the Kansas Public Employees’ Deferred Compensation Program
The State exercises limited oversight of the Deferred Compensation Program, with essentially no monitoring of Aetna Investment Services. This level of oversight is significantly less than that provided by other states we contacted. However, our reviews showed that customer services were adequate, that investment performance was comparable to the general market, and that costs were comparable to other similar programs we reviewed. Also, State employees we surveyed generally were satisfied with the services provided under the Program and the performance of their investments, but need more information about the Program’s fees, limitations, and restrictions. Finally, according to State law, the State isn’t liable for any loss incurred by an employee under the Program, including losses from insolvency or mismanagement of funds. However, we think State law is unclear as to whether participants’ moneys in fixed-return accounts are covered by the Kansas Life and Health Insurance Guaranty Association if Aetna were to become insolvent. Aetna operates in a highly regulated industry with controls in place to monitor its operations, which should minimize the likelihood of insolvency or mismanagement.
Determining Whether Kansas’ Medicaid Program Makes Maximum Use of Third-Party Insurers
The Medicaid computer system has a number of good edits built into the system. Out of about $875 million in claims processed during calendar year 1995, those edits reportedly identified more than $69 million worth of claims that needed to be billed first to other insurance. We looked at a sample of claim where the Medicaid client had other insurance, but the other insurance didn’t pay any of the claim. We found a significant number of cases were the health-care providers didn’t bill other insurance companies because they weren’t aware other coverage existed. In other cases, the providers didn’t handle claims according to program regulations. Based on our sample, if other insurance paid only 5% of the estimated number of problem claims, Medicaid might save $10,000-$460,000 during fiscal year 1996. One reason so many claims hadn’t been billed to other insurance was that the Department didn’t have adequate procedures to identify when Medicaid recipients have other insurance, and didn’t always enter insurance information onto the computer system on a timely basis. We also found that EDS hadn’t done some of the reviews it was required to do to make sure claims were handled appropriately, and that EDS and the Department haven’t aggressively followed up to collect potential overpayments. Finally, we found that Blue Cross and Blue Shield could have a conflict of interest when it takes over as the Department’s fiscal agent later in 1996.
Reviewing U.S. Army Corps of Engineers Records Supporting the State’s Share of Development Costs for El Dorado State Park
The Corps of Engineers has said the State owes $8.5 million for its share of the development of El Dorado State Park. The amount increased significantly over the years because of changes to original design plans and inflation. We found that the Corps’ worksheets and accounting records generally support its final cost figures. Some cost issues still need to be resolved, but the effect of these on the amount owed by the State is relatively minor. Although original supporting documents such as contracts and invoices may no longer be available, the Park Authority (later the Department of Wildlife and Parks) provided oversight throughout the project, and was actively involved in planning the Park, making changes to those plans, monitoring construction, and reviewing contracts. If the State makes annual payments to the Corps for the next 32 years, total payments with interest will amount to about $15 million.
Reviewing the Process for Issuing Bonds in Wyandotte County and Kansas City, Kansas
Both the City and the County have followed State law regarding the selection of bond professionals, but they have not consistently followed a number of good business practices suggested in the bond literature we reviewed. Our review of bond issuance costs was hampered by incomplete data and proved inconclusive--issuance costs were lower about as often as they were higher. For a sample of negotiated bonds we reviewed, the City appeared to have paid an estimated $2 million in additional interest because the interest rates were set high relative to the market. The City saved about $6.6 million and the County $1 million for the sample of bond refundings we reviewed, but the City has postponed large amounts of debt into the future. Over the past decade the municipalities have spent more than $6 million on bond insurance. The City more than recovered the amount of the insurance premium through lower interest rates on one of the bonds it insured. For the other bonds, information was not available to determine whether the premiums were recovered through lower interest rates. However, the premiums generally were not recovered through other means available to the municipalities. We found that it was fairly commonplace for bond professionals to make political contributions to elected officials. Although we did not find any interrelationships between the bond professionals and the elected officials, we noted that three former City employees work for firms that have served in a lead role on many of the City’s negotiated bond deals.
Reviewing the Regulatory Activities of the Emergency Medical Services Board
The audit shows that, although its licensing actions could lead to consolidation of ambulance territories, the Emergency Medical Services Board does not have formal policies for consulting with parties affected by its actions. The Board provides assistance to communities that request it, and the level of assistance provided to the City of Pittsburg was similar to what it provided to other communities. The Board appeared to have erred by not notifying or involving Crawford County officials when it signed an agreement with the City of Pittsburg requiring the City and County to take certain actions.
Reviewing Fee-Funded Regulatory Agencies’ Programs for Impaired Licensees
Total expenditures for the programs we reviewed have more than tripled since 1988, primarily because of increases in programs, participants, and in staffing levels and salaries. The licensing boards generally did not have adequate controls to ensure that program funds were spent for the intended purposes. For nearly 80 percent of the cases we reviewed, we determined that the programs were effective. But a significant number of cases, particularly in the physicians’ program, lacked the documentation for us to determine whether they were effective. We found only six cases where we determined that program staff did not take appropriate action. Also, in a few cases, the licensing boards should have taken some action but did not. Finally, the programs that appeared most cost-effective made heavy use of volunteers and did not charge the licensing boards for administrative expenses.
Reviewing State-Funded Medical Scholarships in Kansas
Since the inception of the Kansas Medical Scholarship Program, requirements have become more restrictive regarding designated areas of practice, types of medical specialties, and repayment provisions. In 1986, the emphasis of the Program changed from distributing physicians to underserved areas to placing primary-care physicians into rural areas. Since 1978, more than $36 million in medical scholarships has been awarded to 1,476 students. Approximately 46 percent of those recipients have fulfilled their service obligations. Many graduates are fulfilling their obligations under provisions of the law that allow them to practice in urban areas. The Program appears to be achieving the goals of retaining more Medical Center graduates in Kansas and distributing more doctors to underserved areas. In future years, because fewer than 35 new scholarships are being awarded annually, significantly fewer doctors will be distributed to underserved or rural areas as a result of the Program.
Examining Differences in Costs for Issuing Bonds in Kansas
Although State law does not require bond professionals to be competitively selected for State-issued bonds, the Kansas Development Finance Authority has competitively selected such professionals for all State bonds issued for at least the past three years. Kansas municipalities generally are not required to competitively select bond professionals, but most we contacted had some elements of competition for selecting bond counsel and underwriters for general obligation and revenue bonds. This was not true for mortgage revenue bonds and industrial revenue bonds. Because bond professionals have been competitively selected for all State bonds issued in recent years, we were unable to provide meaningful information about differences in issuance costs for bonds with competitively selected professionals and those without.
Review of State Grants to the Pittsburg Family Planning Clinic (100-hour audit)
Although State grant moneys were spent for the purposes provided for in the grant contracts, the Clinic's arrangement with Crawford County for the County to process and pay its payroll and other bills resulted in considerable confusion and in a lack of adherence to two provisions of the grant contract. One provision calls for establishing and maintaining an accounting system that records and reports specific financial information, and the other calls for single audit coverage of the organization in accordance with federal requirements. The report recommends that the Department of Health and Environment work with the federal granting agency to ensure that any deficiencies regarding previous audit coverage of grants made to the Family Planning Clinic in Pittsburg are resolved.
Criteria for Awarding Venture Capital Moneys Through Kansas Venture Capital, Inc.
Federal and State laws, and Kansas Venture Capital, Inc., Board policies place certain limits on the types and amounts of investments the firm can make. In addition, the firm's staff have numerous unwritten guidelines they consider in evaluating potential investments. In general, Kansas Venture Capital, Inc., appeared to follow the specific federal, State, and Board requirements. We were unable to fully assess whether the firm adhered to all its unwritten guidelines; in many instances, the firm did not keep documentation showing the kinds of analyses and determinations called for by those guidelines. Many of the basic criteria other state programs used in making investment decisions were similar to the criteria used in Kansas.
Reviewing the Health Care Plan for State Employees, Part II: Controls and Use
State employees covered by the traditional plan had higher use rates than all Blue Cross subscribers State wide, but when all State employees were recombined into one group (to include those covered by both the traditional plan and a health maintenance organization), their use rate was about the same as all Blue Cross subscribers Statewide. Blue Cross and Blue Shield’s 1987 controls were adequate to ensure that employee claims were processed and paid accurately.
Reviewing the Health Care Plan for State Employees, Part I
Because Blue Cross and Blue Shield’s initial bid for the State employees’ health care plan would have increased the traditional Blue Cross premiums by 40 percent, the Health Care Commission negotiated a different type of plan with Blue Cross. The new Blue Select plan requires employees to choose a primary care physician to coordinate their health care needs. For the first time, State employees will also be required to pay for a portion of their health care coverage. A monthly smoker’s charge was also instituted. The Blue Select primary care physicians, selected by Blue Cross, were initially required to serve in HMO Kansas, but that requirement has been dropped. They must still meet the same criteria as HMO Kansas doctors, however. Kansas’ State employee health benefits will cost more in 1988 than in 1986, and will cost more than other employers’ health benefits.
Regulation and Operation of Cowley County Developmental Services
The Department of Social and Rehabilitation Services generally enforced its regulations consistently at the six agencies visited. Cowley County Developmental Services’ handling of client funds was similar to other agencies’, but the auditors did find several weaknesses. The agency also charged significantly more for vocational services than other agencies. Cowley County Developmental Services had several problems with its financial management procedures, including violations of agency policies and failure to report all unpaid bills. Finally, the auditors investigated numerous complaints concerning the agency; some were apparently true, while others were not substantiated.
Vehicle Rental Agencies: Reviewing Compliance with Vehicle Registration and Insurance Laws
Not all vehicle rental companies operating on an interstate basis are registering the required number of vehicles in Kansas or paying the appropriate amount of property taxes. In addition, uninsured rental vehicles registered in other states could be operating on Kansas highways. Ensuring that all rental companies register some of their vehicles in Kansas, which subjects them to Kansas’ insurance verfication, procedures at registration time, appears to be the best control over this system.
Management Audit of State Funded Pharmacies and Drug Rooms