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.
Verifying Information Provided by the Department of Social and Rehabilitation Services on Its Compliance With the Terms of the Foster Care Lawsuit Settlement Agreement: Monitoring Report #14
For the six-month period generally covered by this audit (July-December 2000), 25 requirements were monitored. Of those, SRS was in compliance with 6 (24%), and wasn't in compliance with 19 (76%). SRS met about one-third of the requirements specifically related to investigating reports of abuse and neglect and managing foster care cases. However, it continued to be out of compliance with 6 requirements related to maintaining data and systems that contribute to the good management of the foster care system.
School District Budgets: Determining Why Kansas School Districts Tend to Spend a Smaller Percentage Of Their Budget on Instruction Than School Districts in Other States
In 1998, Kansas spent less than the average of 4 comparison states (Iowa, Missouri, Nebraska, Oklahoma) on Instruction costs, primarily because the amount Kansas paid for teacher benefits was lower than the average of what these other states had paid. Kansas districts spent a higher percentage of each educational dollar on Non-Instruction activities primarily because Kansas employed approximately 2,100 more Non-Instruction staff than the 4-state average. About 400 of those additional employees were in district-level administration, but more than 1,700 of them were categorized as @Other@" Non-Instruction staff
Bingo Tax Laws: Reviewing the Department of Revenue’s Implementation and Enforcement of Those Laws
Since the Bingo Act was amended in 2000, the Department of Revenue has focused its efforts on setting up new automated systems for handling bingo tax payments and information. However, no audits of distributors or cross-matching of reported bingo face purchases and sales have been done to determine whether all bingo taxes have been paid. Bingo tax revenues in Kansas continue to decline, primarily because of competition from other gaming activities and fewer people playing bingo. The steeper-than-usual drop in bingo tax receipts during fiscal year 2001 also may have been caused by the tax on call bingo being set too low when the Bingo Act was amended.
Department of Agriculture: A K-GOAL Audit of the Kansas Pesticide and Fertilizer Program
Most Kansas laws and regulations for pesticides and fertilizers are in line with those in Iowa, Nebraska, and Oklahoma. Kansas has 4 requirements these other states don't have: government agencies that apply restricted-use pesticides to the property of others must be registered, certified pesticide applicators must be at least 18 years old, mobile fertilizer containers must be made from the same materials and have the same equipment as stationary containers, and people who violate chemigation laws must cease chemigation immediately. However, Kansas doesn't require some types of safety equipment for anhydrous ammonia facilities that are required in Iowa and Nebraska. It also doesn't require signs on fields that are being chemigated with restricted-use pesticides or that chemigation equipment be inspected before initial use, as Nebraska does. Most fees Kansas charges are similar to those in the other states. Kansas isn't consistently more lenient or more harsh than other states in its criminal or civil penalties. However, officials told us that having civil penalties for violations of fertilizer law would help them enforce that law.
Special Education: Determining Whether School Districts Are Accountable for Meeting Goals Contained in Students’ Individual Education Programs
Overall, we concluded that 413 of the 434 goals listed in the Individualized Education Programs (IEPs) we reviewed (95%) were clearly defined and measurable. Only about one-third of the children in our sample had achieved at least one goal on their most recently completed IEP, but 69% of the children had made progress toward meeting their goals. State regulations require districts to make a “good faith effort” to help children achieve their special education goals, but don’t hold districts “accountable” if children don’t meet those goals. Both the Department and the school districts in our sample could improve their efforts to ensure that special education services actually were provided. Statewide, an average of 7% of the children enrolled in special education left the program each year because they achieved their goals. Based on available comparative statistics, it appeared Kansas’ rate compared favorably to other states’ rates. It was uncertain whether districts’ and the Department’s increased focus on measurable goals and student outcomes will result in children leaving special education programs at a faster rate than in the past--for many children there’s no expectation they’ll ever leave special education services.
The State Health Benefits Program, Part 2: Reviewing the Staffing and Structure of the Current Program
Currently the State Health Benefits Program's structure is appropriate since 98% of the Program's members are active or retired State employees. However, considering the program may be expanded to include other public entities, such as cities and counties, the Legislature and Commission should address how the Program is to be managed in the future. Other states we contacted that, like Kansas, serve only or predominately state employees tend to be located in a multi-function state agency, and are equally likely to be governed either by the head of the agency or by a commission. It also appears that given the new positions added for 2002, the Health Benefits Program has enough staff to handle most of its current workload. Commission staff identified several important responsibilities, such as reconciling insurance carriers' bills, they thought they weren't able to adequately address with their existing staffing levels, but the new positions will help fill these needs. Lastly, we found that Kansas already has enough participants in its health insurance plans to benefit from economies of scale, and lower costs would be unlikely if a plan was eliminated. While Kansas is using most of the strategies that experts mentioned are important in controlling the cost of health insurance, the Commission will have to make tough choices if it is to minimize cost increases in the future because it can no longer rely on money in the reserve fund.
The exact costs of fighting methamphetamine in Kansas are difficult to determine because no hard data are available. However, we estimate that various agencies spent at least $21 million in Kansas last year to combat meth. More than half that money comes from local sources, with most of it being used to fund salaries for local law enforcement and prosecution. In addition to the direct costs of enforcement, a number of indirect or social costs are associated with using and manufacturing meth, and although difficult to quantify, 3 out of 5 law enforcement officials responding to our survey told us that more than 10% of the crime committed in their jurisdiction is meth-related. Law enforcement agencies' failure to report all labs they find to the KBI could reduce the amount of grant funds Kansas receives to fight the meth problem. Despite the explosive growth in number of reported labs, the majority of law enforcement officials responding to our survey told us they though that moderate or substantial progress is being made against meth. In addition, although most officials told us it's too soon to measure the impact of the Chemical Control Act, we noted that delays in processing evidence through the KBI lab and lack of staff to follow up on reports required by the Act were among the things that weaken the law's effectiveness. Law enforcement officials cited more staff, greater public awareness, and training and equipment as things they thought would aid in meth enforcement efforts.
Early Retirement Incentive Programs in Kansas School Districts: Reviewing Their Funding and Effects on the Supply of Teachers
School districts fund their early retirement incentive programs on an annual basis because they aren't authorized to set aside and invest moneys as KPERS is. The districts’ 1999 actuarial valuations showed these programs had large actuarial liabilities, but those figures weren't indicative of whether these programs were adequately funded. The portion of school district budgets used to fund these programs has increased slightly over the past 5 years, but the amounts still are not large in most cases. Because these programs aren't mandated by State law, districts have the option of changing or eliminating them as part of the negotiation process. Even if a school district wasn't able to afford its program, the State would have no liability to provide the funding. Our statistical analysis showed a very slight relationship between early retirement incentive programs and teacher vacancies, but school officials cited other factors as causing shortages of teachers. These factors included low pay and competition from outside sources. However, early retirement programs may play an increasing role in the level of teacher vacancies in the future. Finally, methods other states have used to help fill teacher vacancies include recruitment bonuses, job fairs, and alternative certification programs.
Child Support Workload of the Offices of the Clerk of the District Court: Assessing the Effect of Moving Certain Duties to the Kansas Payment Center (100-hour audit)
Although they no longer process child support payments, the clerks' offices remain responsible for a number of child support activities, such as scheduling hearings, updating court records, and issuing subpoenas and garnishments. In addition, they picked up new duties because of the Payment Center. The 3 largest courts in the State estimated they freed up about 10 employees when the Kansas Payment Center started processing child support payments. They've eliminated about half those positions, and assigned the rest to other duties in the court, such as reducing backlogs and working on new court initiatives. The 4 trustees' offices that previously handled child support payments in Kansas have not eliminated any positions.
School District Credit Cards: Determining Whether School Districts Exercise Adequate Oversight Over the Use of Those Cards (100-hour audit)
The former superintendent of the Haysville school district was able to misuse the District's credit card because he wasn't required to submit receipts, his purchases weren't reviewed by someone with authority over him, and the school board didn't review detailed enough information to really know what he was purchasing. Sixteen other school districts we surveyed commonly used credit cards and most also lacked adequate procedures to guard against the misuse of those cards. Most districts' procedures weren’t written, and only 1 district had taken steps to adequately review its superintendent's purchases. The 3 school districts we visited didn't always have receipts for their credit card purchases or hadn't retained some credit card statements, even though such things were required by their policies. However, with the exception of the purchases already brought to light in Haysville, none of the purchases we reviewed appeared to be inappropriate.
Compliance and Control Audit: Juvenile Correctional Facilities
For the six-month period generally covered by this audit (January-June 2000), 42 requirements were monitored. Of those, SRS was in compliance with 25 (60%), and wasn't in compliance with 17 (40%). SRS met about two-thirds of the requirements specifically related to investigating reports of abuse and neglect, managing foster care cases, and handling adoptions. In addition, SRS was in compliance with 1 of 2 requirements related to ensuring the safety of children. However, it continued to be out of compliance with 5 requirements related to maintaining data and systems that contribute to the good management of the foster care system. We'll follow-up on these requirements next period.
The State Health Benefits Program, Part 1: Reviewing Issues Relating to Premium Costs and Management
Premiums for the Kansas employee health care program are somewhat higher than average when compared to the surrounding states and Iowa, Sedgwick and Shawnee counties, and the Topeka and Wichita school districts, but usually fell well within the middle of the range. Kansas' premiums may be higher than average because Kansas employees pay far less out of pocket for their health care costs than employees in most of those other groups surveyed. No problems were found stemming from specific concerns that the State's self-funded program isn't being properly managed and overseen. The most recent Health Benefits Administrator appeared to be well qualified for the job; the Program's funds are being properly deposited into the State Treasury and the interest being earned on them stays with the Program; and the use of the @incurred cost@" method when projecting future program costs is reasonable. In addition
Medicaid for Long-Term Care: Reviewing the Department of Social and Rehabilitation Services’ Efforts to Identify Inappropriate Means of Sheltering Assets to Qualify for Medicaid
Kansas' eligibility requirements fall within federal guidelines, but give applicants more opportunities to shelter their assets than neighboring states do. As a result, Kansas applicants could become eligible for Medicaid sooner, and the State could end up paying more for their care. In addition, federal regulations have generous provisions which allow applicants to transfer assets to others without incurring meaningful penalties. These same regulations also would allow an applicant's surviving spouse to permanently shelter certain assets. Finally, although SRS follows a number of best practices to ensure that applicants are eligible, the agency could be doing more to ensure that applicants haven't inappropriately sheltered assets before applying for assistance.
Retailer Sales Taxes: Assessing Whether the Amounts Distributed to Localities Have Been Computed Correctly
Most of the localities we looked at eventually received the correct amount of sales taxes collected while the Department was converting to its new computer system, but there were some problems. The Department initially sent out incorrect amounts to localities. It later corrected its calculations, but didn't explain its adjustments very well to local officials. Even after all the adjustments were made, at least one city appeared to have gotten about $31,000 too much. Our tests of returns the Department received in October 2000 showed that when a payment was received with a fully completed sales tax return, it was generally distributed to localities without error. However, payments that come in without a sales tax return or other needed documentation may experience long delays in getting to localities because the Department didn’t systematically identify and resolve them. The $19.5 million transfer from State General and Highway Funds to several local tax funds in October 2000 was needed primarily because a glitch in the Department of Revenue's sales tax computer system caused money from utility sales tax payments to be credited to the State funds when it should have gone to the local funds. Although this glitch didn't result in any localities being underpaid, it caused a temporary shortage of money in the fund the locals are paid from. This error was scheduled to be fixed in April 2001. In the meantime, Department staff were making manual monthly adjustments to avoid the need for similar large transfers in the future.
Centralized Administrative Hearings: Reviewing the Advantages and Disadvantages
Transferring the Department of Social and Rehabilitation Services' administrative hearings to the newly created Office of Administrative Hearings in the Department of Administration eliminated the conflict of interest that existed when the hearing officers worked for and were answerable to the Secretary of SRS. Hearings are being conducted in a timely manner, and most people we surveyed had a favorable opinion of the Office. The transfer has not resulted in any cost savings, but the Office needs to improve its budgeting and billing practices. Centralizing more agencies' hearings is the best way for the State to eliminate the inherent conflict of interest that occurs when the agencies select their own hearing officers. Officials in 8 states with centralized hearing agencies said eliminating conflict of interest was the primary benefit of centralizing, but they also cited time and cost efficiencies, as well as increased professionalism of hearing officers. If the Legislature wants to increase centralization of administrative hearings, it will need to consider such issues as which agencies and which types of hearings to bring under the Office, and how best to fund the centralized function.
Private-Sector Input: Ways to Foster Such Input If the Kansas Performance Review Board Is Abolished
If the Kansas Performance Review Board is abolished, as proposed by Senate Bill 180, options for fostering private-sector input into improving the efficiency and cost-effectiveness of State agency operations include contracting directly with private-sector consulting firms, requiring agency heads to identify activities that the private sector could do better and at lower cost, developing specific goals for each agency for improving efficiency and cost-effectiveness, or incorporating some of the Board's functions into the Legislative Division of Post Audit. To be successful, any initiative would require political backing, independence of function, and sufficient funding. If the Performance Review Board isn't abolished, the Legislature may wish to have the Board report directly to the Governor or expand the Board's membership to include stakeholders from the legislative and executive branches.
The Kansas Real Estate Commission: Determining Its Sources of Funding, and How Those Moneys Are Being Spent
The Real Estate Commission is entirely funded from the licensing fees and fines it collects from the salespeople and brokers it regulates. As with all fee-funded agencies, 20% of that money goes into the State General Fund to cover the cost of central services such as purchasing and accounting. The vast majority of the Commission's expenditures for fiscal year 2000 were for the salaries of its 13 staff. Other large expenditures were for travel costs, central service charges such as printing and telecommunications, building and equipment rental, and attorney fees. The Commission needs to deposit all moneys it collects on a more timely basis to be in compliance with State requirements. Also, it needs to recoup about $85 the former executive director inappropriately spent on a pizza lunch.
Lansing Correctional Facility: Reviewing Issues Related to Overtime and Staffing (100-hour audit)
Lansing Correctional Facility spent about $1 million on overtime in fiscal year 2000, about 40% of which officials consider to be excess overtime caused by a high number of vacancies. Prison officials said they've had a hard time filling vacant corrections officer positions because of low salaries. If all the money spent on excess overtime could have been spent instead on increasing base salaries to attract new officers, those salaries could have been raised by an average of about $800 to $900 per position. That increase would be far less if the salaries to fill any vacant positions were paid out of these same excess overtime moneys. Even if all the excess moneys were used together with the 7.5% raise in starting salaries that occurred in February 2001 when the bottom steps of the State pay plan were eliminated, starting salaries would still be 1.6% to 7.3% below what competing employers currently are paying for similar positions. If such a salary increase weren't enough to help fill vacant positions, Lansing could be faced with even higher overtime costs, because it still would need employees to work a lot of excess overtime, and that overtime would be based on higher salaries.
Employee Credits Against Premium Taxes: Reviewing Issues Related to Those Credits
The 1997 Legislature made a number of changes to the premium tax law, including “equalizing” tax rates at 2% of taxable premiums for in-State and out-of-State insurance companies, letting all companies with Kansas salaries claim a salary credit of up to 1.25% of their taxable premiums, and letting “affiliated” companies share each others' unused salary credits, whether or not they had Kansas employees. These changes reduced premium tax receipts by $12 million in 1999 and almost $25 million in 2000, compared with Insurance Department estimates of $3.7 million and $7.1 million, respectively. The drop was so much greater than expected because far more out-of-State companies were able to take the salary credit than the Department had projected. Some had operations in Kansas the Department was unaware of. In addition, many companies were able to claim a salary credit they otherwise wouldn't have been entitled to because of the affiliate provision in the law. A number of insurance companies reported higher salaries to the Insurance Department for salary credit purposes than they reported to the Department of Human Resources for unemployment tax purposes. But those discrepancies didn't appear to affect the amount of salary credits the companies were eligible for. The Insurance Department needs to improve its procedures for making sure that only eligible salaries are being claimed, and that companies sharing salaries meet the legal definition of affiliation.
Economic Development in Kansas: A K-GOAL Audit Reviewing Coordination and Effectiveness of Programs
The Department of Commerce and Housing and KTEC appeared to be fulfilling their statutory roles, but Kansas Inc. hadn't become the strong planning and evaluative agency originally envisioned, primarily due to a lack of statutory authority, lack of staff and funding, and potential conflicts in its roles. There's been almost no strategic-level coordination between the heads of the 3 economic development agencies; each agency is independent and had its own philosophy about economic development efforts, and all 3 were rivals for a share of a fixed amount of funding. Coordination among program staff was somewhat better, but no formal mechanisms existed to foster that coordination.Collectively, the Department and KTEC reported that their programs benefitted the Kansas economy by about $1.3 billion and impacted over 9,500 jobs during fiscal year 2000. Generally, there was sufficient accountability over the moneys coming back to the agencies from investments, loans, and grants, although there was some question about what type of information could be reported publicly. Since 1988, KTEC invested about $9.3 million in 66 start-up companies. The 43 companies that were still operating employed about 600 people. These investments earned about $1 million in returns and had a book value of $5.6 million.Kansas is one of only 3 states that used gaming revenues to fund economic development. Most of the 27 other states we contacted relied heavily on general fund appropriations for economic development. The cap on the Economic Development Initiatives Fund created a situation in which overall spending for economic development can't grow, and agencies were forced to compete against each other for those limited funds. This situation was aggravated by the use of EDIF moneys to fund other agencies' programs.
The State’s Adoption and Foster Care Contracts: Reviewing Selected Financial and Service Issues
The size of the State's adoption program and the number of children adopted grew significantly after the program was privatized, but the percent of available children who were adopted decreased from 37% to 26%. Overall, the State has funded a greater portion of agencies' foster care and adoption costs since privatization, but individual agencies' experiences have been very different: some had a greater portion of their costs paid by the State while others had less. On the whole, contractors fared better than subcontractors–the percentage of costs funded by the State for the 4 contractors increased from an average of 79% to 92%, while the percentage for a sample of 6 subcontractors increased from an average of 76% to 83%. For fiscal year 2001, 5 of 6 contractors were projecting that State funding would cover at least 95% of their costs for providing foster care or adoption services. In general, SRS had well-designed procedures for monitoring the financial viability of its contractors, and it also had good procedures for monitoring how well its contractors provide services.