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Published: March, 2021

Evaluating County Government Procurement and Contracting Practices

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Evaluating County Government Procurement and Contracting Practices

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County governments purchase a variety of goods and services in multiple ways. Individuals who participate in the purchasing process should avoid conflicts of interest. For the 11 counties we reviewed, larger counties appeared to have adequate policies and procedures to manage conflict of interest for purchases and contracts, but smaller counties did not. State law has two requirements and best practices suggest additional ways counties can identify and manage conflict of interest problems. Although good policies are important, counties must rely on the honesty of their employees to detect most conflicts. The larger counties we evaluated typically had policies that addressed state law and best practices but the smaller counties did not. However, larger counties use a variety of purchasing processes and certain purchases receive little scrutiny for conflict of interests.

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Published: February, 2021

Evaluating the Kansas Department of Labor’s Response to COVID-19 Unemployment Claims (Part 1)

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Evaluating the Kansas Department of Labor’s Response to COVID-19 Unemployment Claims (Part 1)

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The Kansas Department of Labor’s fraud detection process was not designed to detect the large-scale, nationwide fraud campaign that occurred during the COVID-19 pandemic. The Regular Unemployment Insurance program is administered by the Kansas Department of Labor (KDOL) and gives financial aid to unemployed individuals. In 2020, the federal government created six temporary unemployment insurance programs to help individuals who lost their jobs due to COVID-19. There were two main types of unemployment fraud alleged nationally and in Kansas during the pandemic. Nationally, fraudsters targeted the new Pandemic Unemployment Assistance (PUA) program because of weaknesses in its application process. Many of KDOL’s existing processes were manual and not effective to identify PUA fraud. KDOL officials told us they are in the process of upgrading their fraud detection process to better identify PUA and other unemployment fraud. Fraudsters also targeted the state’s Regular Unemployment program beginning in late 2020. The state’s unemployment trust fund balance has declined 75% in one year. Of the roughly $2.6 billion in state and federal unemployment benefits paid in Kansas in 2020, we estimated about $600 million (24%) could have been fraudulent. However, our fraud estimate is subject to some key assumptions and limitations. As far as impacts, if not reported, Kansas employees could owe taxes on benefits they never filed or received because of fraudulent claims. Further, if not appealed, private and public employers could be financially responsible for fraudulent claims filed under the state’s Regular Unemployment program. KDOL has not yet started criminal investigations into the potentially fraudulent claims it identified during the pandemic.

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Published: January, 2021

Kansas Bureau of Investigation ABIS Project (Quarter Ending December 31, 2020)

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Kansas Bureau of Investigation ABIS Project (Quarter Ending December 31, 2020)

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Abstract not available.

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Published: December, 2020

Seaman School District-Security Audit

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Seaman School District-Security Audit

Audit Statement

Under the provisions of K.S.A. 46-1135, the Legislative Division of Post Audit conducts information technology security audits of state agencies. Every three years, we conduct a risk assessment which we then use to select agencies for review. The audits compare the selected agency’s security practices to a number of the IT security standards adopted by the state’s Information Technology Executive Council, as well as a handful of best practices for emerging technology issues. This report is kept permanently confidential under K.S.A. 45-221(a)(12)&(45) because release of the information could jeopardize the agency’s IT security. No corresponding public report has been issued.

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Published: December, 2020

Kansas Public Employees Retirement System-Security Audit

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Kansas Public Employees Retirement System-Security Audit

Audit Statement

Under the provisions of K.S.A. 46-1135, the Legislative Division of Post Audit conducts information technology security audits of state agencies. Every three years, we conduct a risk assessment which we then use to select agencies for review. The audits compare the selected agency’s security practices to a number of the IT security standards adopted by the state’s Information Technology Executive Council, as well as a handful of best practices for emerging technology issues. This report is kept permanently confidential under K.S.A. 45-221(a)(12)&(45) because release of the information could jeopardize the agency’s IT security. No corresponding public report has been issued.

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Published: December, 2020

Kansas State University-Security Audit

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Kansas State University-Security Audit

Audit Statement

Under the provisions of K.S.A. 46-1135, the Legislative Division of Post Audit conducts information technology security audits of state agencies. Every three years, we conduct a risk assessment which we then use to select agencies for review. The audits compare the selected agency’s security practices to a number of the IT security standards adopted by the state’s Information Technology Executive Council, as well as a handful of best practices for emerging technology issues. This report is kept permanently confidential under K.S.A. 45-221(a)(12)&(45) because release of the information could jeopardize the agency’s IT security. No corresponding public report has been issued.

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Published: December, 2020

Kansas Board of Healing Arts-Security Audit

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Kansas Board of Healing Arts-Security Audit

Audit Statement

Under the provisions of K.S.A. 46-1135, the Legislative Division of Post Audit conducts information technology security audits of state agencies. Every three years, we conduct a risk assessment which we then use to select agencies for review. The audits compare the selected agency’s security practices to a number of the IT security standards adopted by the state’s Information Technology Executive Council, as well as a handful of best practices for emerging technology issues. This report is kept permanently confidential under K.S.A. 45-221(a)(12)&(45) because release of the information could jeopardize the agency’s IT security. No corresponding public report has been issued.

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Published: November, 2020

Evaluating the Department of Agriculture’s Price Verification Inspection Process

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Evaluating the Department of Agriculture’s Price Verification Inspection Process

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The Kansas Department of Agriculture (KDA) conducts price verification inspections to check the accuracy of businesses’ pricing systems across the state. Businesses fail inspections when more than 2% of items inspectors check are mispriced. KDA may respond to failed inspections by conducting follow-up inspections or taking legal action. In fiscal years 2018 through 2020, KDA conducted a total of about 1,800 price verification inspections. The inspections covered a small percentage of all Kansas retail businesses and did not cover certain parts of the state. Businesses failed more than half (about 60%) of price verification inspections during that time. KDA didn’t conduct timely follow ups on about 75% of the failed inspections we reviewed and it issued legal orders later than it could have. Finally, it issued only small fines for repeated failed inspections. We interviewed officials in 5 other states and reviewed industry standards to learn how other states determine adequate coverage for price verification inspections. Like Kansas, other states we reviewed don’t make price verification inspections their top priority. Neither those states nor industry standards have specific criteria to determine adequate inspection coverage. Doing more price verification inspections would take additional funding or require KDA to do fewer scale or package inspections.

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Published: November, 2020

LPA Guide to Economic Development Incentive Evaluations

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LPA Guide to Economic Development Incentive Evaluations

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This is a guide to help readers understand the economic development incentive evaluations required by K.S.A. 46-1137. It provides important context to supplement those separate evaluations.

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Published: November, 2020

Angel Investor Tax Credit Program

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Angel Investor Tax Credit Program

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This is an economic development incentive evaluation that satisfies the requirements in K.S.A. 46-1137. We focused our analysis on the angel investor tax credit program’s general goals rather than economic or fiscal impact because of data limitations and the program's focus on investors instead of businesses. The angel investor tax credit program gives investors a tax credit for investing in certain Kansas startup businesses. During 2015-2018, investors received $20.2 million in income tax credits for investing $51.5 million in Kansas businesses. The program’s goal is to increase investment in innovative businesses. Department of Commerce officials said they consider how long businesses operate and whether they've created jobs to determine if the program is successful. State law does not define innovative businesses, but we think the businesses that participated in the program from 2015-2018 generally appeared to be in reasonable industries. Further, the participating businesses we reviewed from 2009-2019 stayed in business for 3-to-5 years about as often as non-participants but created fewer average jobs. However, we couldn’t determine whether participating businesses stayed in business or created jobs because of the program or something else.

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Published: November, 2020

Follow up Audit: Reviewing Agencies’ Implementation of Selected Performance Audit Recommendations

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Follow up Audit: Reviewing Agencies’ Implementation of Selected Performance Audit Recommendations

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The audit reviewed 10 recommendations from 3 prior LPA audits. It involved the Kansas Department of Agriculture and the Kansas Department of Health and Environment. The 2 agencies implemented 9 of 10 recommendations we reviewed for this audit. In April 2018, we published 2 audits with several recommendations for KDHE related to improving the state’s Medicaid program. As of October 2020, KDHE fully implemented 4 of 5 recommendations we evaluated. We were unable to determine the status of the last recommendation. In December 2018, we published an audit with several recommendations for KDA related to the animal facility inspections program. As of September 2020, KDA fully implemented all 5 recommendations we evaluated.

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Published: November, 2020

Evaluating School Districts’ Unencumbered Cash Balances

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Evaluating School Districts’ Unencumbered Cash Balances

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Districts account for the local, state, and federal money they receive using various funds. A fund can have a cash balance if the district transfers more funding into it than it spends. Districts maintain unencumbered cash balances for several reasons but receive little guidance about how much balance to maintain. After adjusting for inflation, total unencumbered cash balances statewide grew 35% from $1.56 billion to $2.11 billion in school years 2009 to 2019. Almost all the growth in unencumbered cash balances over the last 10 years has occurred in just 10 funds. Further, during the 10 years we evaluated, most unencumbered cash balances were in restricted funds which limits districts’ spending flexibility. In school years 2009 to 2019, the 25 districts we reviewed spent most of their unencumbered cash balances on purchases related to construction or maintenance of school buildings. Finally, at the beginning of the 2019 school year, many of the districts we reviewed had cash balances that met or exceeded best practice suggested minimum amounts, but the levels varied significantly. The Government Finance Officers Association (GFOA) recommends districts maintain a total cash balance of at least two months of operating expenditures.

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Evaluating County Government Procurement and Contracting Practices

Evaluating County Government Procurement and Contracting Practices

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Evaluating the Kansas Department of Labor’s Response to COVID-19 Unemployment Claims (Part 1)

Evaluating the Kansas Department of Labor’s Response to COVID-19 Unemployment Claims (Part 1)

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Kansas Bureau of Investigation ABIS Project (Quarter Ending December 31, 2020)

Kansas Bureau of Investigation ABIS Project (Quarter Ending December 31, 2020)

Report Abstract

Seaman School District-Security Audit

Seaman School District-Security Audit

Audit Statement

Kansas Public Employees Retirement System-Security Audit

Kansas Public Employees Retirement System-Security Audit

Audit Statement

Kansas State University-Security Audit

Kansas State University-Security Audit

Audit Statement

Kansas Board of Healing Arts-Security Audit

Kansas Board of Healing Arts-Security Audit

Audit Statement

Evaluating the Department of Agriculture’s Price Verification Inspection Process

Evaluating the Department of Agriculture’s Price Verification Inspection Process

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LPA Guide to Economic Development Incentive Evaluations

LPA Guide to Economic Development Incentive Evaluations

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Angel Investor Tax Credit Program

Angel Investor Tax Credit Program

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Follow up Audit: Reviewing Agencies’ Implementation of Selected Performance Audit Recommendations

Follow up Audit: Reviewing Agencies’ Implementation of Selected Performance Audit Recommendations

Report Abstract

Evaluating School Districts’ Unencumbered Cash Balances

Evaluating School Districts’ Unencumbered Cash Balances

Report Abstract