Officials in the Department of Social and Rehabilitation Services have made strides in correcting the numerous, major deficiencies identified in our 1989 audit of the Youth Center at Topeka. However, many of those same issues remain as problems in 1994. The existence of a perimeter fence has significantly reduced the number of escapes from the Youth Center, but many other security weaknesses (including staffing shortages) continue to present risks of harm to the staff and students. The Youth Center has given violent offenders various kinds of off-campus passes, a practice that presents undue risks to the public. Our survey of Youth Center staff indicated little confidence in the upper management of the Center. Management officials need to correct problems with criminal record checks on new employees, evaluations of employees, and recordkeeping. We found the Department has not adequately managed a four-year federal grant to ensure that federal moneys were spent properly and that the grant’s objectives would be met. Finally, other states have tried various new programs for rehabilitating juvenile offenders, but their effectiveness has not yet been proven.
Reviewing the Operations of the Kansas Parole Board
The amount of work the Parole Board will have to accomplish under the sentencing guidelines will not change significantly, but the nature of the work will. In the next few years, the Board will conduct fewer parole hearings to decide whether criminals should be paroled, and will conduct more file reviews to determine appropriate post-release conditions for inmates sentenced under guidelines. These types of reviews could be done by lower-paid professionals which could allow the size of the Parole Board to be reduced. The Board has not established procedures to ensure that it operates efficiently and effectively. It has overspent its budget in each of the past two years and has not followed travel regulations which would have saved the Board enough money to more than cover its operating deficits. Also, the Board needs to ensure that new members are trained and that procedures are established to assign work to staff and board members.
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 #1
We concluded the Department had complied with 13 of the 17 areas reviewed during this monitoring period. The areas of non-compliance included maintaining specified levels of funding for an emergency shelter grant program, for a flexible dollars fund, and for various family services. In these cases, the documentation the Department provided either was insufficient to determine whether these programs and services were being maintained at the levels required by the settlement agreement, or it showed the Department had fallen short of meeting those specified minimums. The Department also was not in compliance with the case-handling requirements related to one of the plaintiffs named in the lawsuit. All of these areas will be followed up on in the next monitoring report.
Assessing the Department of Wildlife and Parks’ Compliance With Certain Federal Requirements Related to Fish and Wildlife Programs
In March 1994, the U.S. Fish and Wildlife Service suspended all federal payments to the Kansas Department of Wildlife and Parks for diverting as much as $4.4 million in hunting and fishing license fees to unallowed purposes during fiscal years 1989 through 1992, for not meeting $3.5 million in State spending requirements for fisheries, and for other financial control weaknesses. We found the Department ended up diverting $1.7 million of license fees and related federal reimbursements to unallowed purposes -- primarily parks. Significant financial management problems led to this situation, including overriding existing financial controls and ignoring internal staff warnings that the Department was diverting restricted moneys to unallowed purposes. Finally, the U.S. Fish and Wildlife Service’s conclusion that the Department fell short of meeting federal requirements for minimum State spending on fisheries was accurate.
Reviewing International Trade Activities Within The Department of Commerce and Housing (100-hour audit)
The Department of Commerce and Housing spent more on international travel during 1993 and 1994 than the Governor originally recommended each year. The Division of Industrial Development’s National Marketing Program encompasses most of the activities aimed at attracting out-of-State businesses to Kansas. Although the Division spent more than it budgeted on its National Marketing program during fiscal years 1993 and 1994, there was a slight decrease in actual expenditures for the program during between 1993 and 1994. We could not determine whether increases in expenditures for international travel had any impact on the small decrease in expenditures in this area. The Department has established controls to ensure that trade representatives comply with their contracts, but those controls could be strengthened.
Reviewing the Operations of the Board of Indigents’ Defense Services
The State could save more than $540,000 a year by adding attorneys to existing public defender offices, opening a public defender office in Wyandotte County, and contracting with private attorneys. The Board and its staff need to be more proactive in such areas as establishing systems to produce reliable information, helping public defender offices with budgeting, setting standards for staffing levels, and ensuring that public defender offices have the resources they need. In about half of 192 cases we reviewed, the judge had insufficient information to declare a defendant indigent, and about 10% of the cases should have been investigated further. Other states we surveyed used public defenders, private attorneys, and contract counsel to provide indigents’ defense services, although most of the other states also provide services to juveniles and to adults charged with misdemeanors. Kansas’ private attorney rates were among the highest of the sample states. Several things have contributed to a backlog of unpaid assigned counsel claims at the end of each year: inaccurate estimates by the Board, tight fiscal conditions in the State, and the Legislature appropriating less than the Board estimated it would need. Finally, the financial impact of the death penalty and other legislation is likely to be between $1.4 million and $3.2 million, about half the Board’s estimate. The Legislature appropriated about $1.2 million to pay for the legislation, but the Governor vetoed $900,000 that was associated with the death penalty.
Reviewing Potential Duplication of Water Regulation Activities--A K-GOAL Audit of the Kansas Water Office, the Kansas Water Authority, and the Division of Water Resources
Although State law gives the agencies shared responsibility for three water-related programs, we found no significant duplication of effort. In a few areas where the agencies’ activities overlap, they have entered into agreements to help minimize the possibility of duplication. Both agencies have been working on issues related to the Republican River. The Division of Water Resources is focusing on water use in Nebraska to determine whether Nebraska has violated it compact with Kansas. The Water Office is assessing how lowered streamflows on the Republican River may affect water levels in Milford Reservoir. Our contacts with 12 other states showed that Kansas had a more decentralized organizational structure for regulating water and Kansas was the only state where the water permitting process is placed within an agricultural agency.
Reviewing the Workers’ Compensation Claim By Former Insurance Commissioner Fletcher Bell
Mr. Bell’s workers' compensation claim was not handled appropriately by either the State Self-Insurance Fund or the Division of Workers’ Compensation. Self-Insurance Fund staff failed to investigate the claim’s compensability, did not ask doctors whether Mr. Bell’s preexisting back condition contributed to the injury, used an unfamiliar doctor to obtain a second opinion on Mr. Bell’s injury, and failed to seek assistance from the Workers’ Compensation Fund in paying the claim. The administrative law judge responsible for Mr. Bell’s award did not order an independent medical evaluation of Mr. Bell even though the law allowed him to do so. Changes made in 1993 to the Worker’s Compensation statutes would have reduced Mr. Bell’s $94,000 award to no more than $50,000 and possibly less.
Reviewing the Racing Commission’s Use of its Subpoena Powers (100-hour audit)
The Racing Commission has not unnecessarily used the subpoena powers the Legislature has granted it to aid in gathering information. During fiscal year 1994, the Commission issued investigative subpoenas on only one occasion––when it believed a licensee may have withheld essential information the licensee was required to report. When it issued the subpoenas, the Commission appeared to have followed unwritten procedures it uses to ensure that subpoenas are issued when the Commission thinks they are needed.
Reviewing the Department of Social and Rehabilitation Services’ Procedures for Handling Complaints Against Foster Homes
The Department has not established adequate checks to ensure that licenses are not issued to applicants with past criminal records or other problems that might present risks to foster children. Nearly 20% of the licensing files we reviewed did not contain required assessments of the applicant and his or her family, and many had inadequate character reference checks. About 30% of the abuse and neglect complaints against foster homes we reviewed were not adequately investigated. The most common shortcomings were delays in getting investigations started and failure to interview all appropriate persons. The Department did not always follow up to ensure that foster parents completed additional training or made corrections they agreed to make following an abuse investigation. In nearly half the cases we reviewed, the Department did not take adequate steps to determine whether foster parents’ natural or adopted children were safe. The problems we found stemmed from inadequate Department policies, failure to follow existing policies, and failure to document some actions.
Reviewing District Courts’ Handling of Appearance Bonds for Persons Charged with Crimes
During the five-year period from 1989 through 1993, the 3rd, 11th, and 20th judicial districts had nearly $170,000 available from their court bond programs for discretionary spending. These courts spent about $98,000 of that amount. The Shawnee County judicial district contributed its discretionary moneys--about $54,000--to the County Treasurer, while the other judicial districts spent their moneys mainly for equipment and supplies related to court operations. Generally, the district courts have properly accounted for court bond moneys, but we noted several areas where improvements are needed. These improvements would help ensure that discretionary moneys are spent appropriately, State laws regarding unclaimed property and forfeited bond moneys are complied with, and court accounting records and reports are complete and accurate. The standard actions for the court to take when a defendant does not appear in court as required is to forfeit the appearance bond and issue a warrant for the defendant’s arrest. The courts took this action in all of the sample cases we reviewed. However, we noted that in some cases the Shawnee County district court may not be delivering arrest warrants to the Sheriff’s Office in a timely manner. In addition, although the Shawnee County district court has ordered that court bonds be paid in full when a defendant missed a required court appearance, in actual practice they are rarely paid in full.
Compliance and Control Audit: Kansas State University Fiscal Year 1993
The Department of Revenue’s procedures do not ensure that all motor fuels taxes due the State are paid. The Department also is not enforcing statutory reporting requirements for transporters of motor fuels, and cannot uncover fraud with the information and reports currently received from taxpayers and other involved parties. Staff resources committed to auditing and investigating compliance with motor fuels tax laws are not adequate to meet the statutory mandates placed on the department. The Highway Patrol and the Board of Agriculture provide periodic assistance in enforcing motor fuels tax laws, but these resources are not available to the Department on a consistent basis. The Department could improve its tax collection procedures by adopting some of the methods used by the federal government or other states.
Compliance and Control Audit: Pittsburg State University
The State has established goals to reduce mental retardation hospital resident populations and staffing levels. Although the State has limited admissions and transferred more than 250 hospitals residents to community settings since fiscal year 1991, hospital populations remain higher than planned. One reason is that the State’s placement approach depends on developing individualized community services and placements, many of which are not readily available. Community centers primarily cite resource inadequacies as the reason why services and placements are not being developed rapidly. Finally, per-person costs for community placements appear to be less than per-person hospital costs. However, even though people are being transferred from hospitals to community settings, total State hospital costs are not going down. In fact, the State will not realize any significant cost savings from transferring individuals to community settings until a hospital is closed.
Examining the Corporation Commission’s Management and Use of Its Conservation Fee Fund (100-hour audit)
In February 1994, the Kansas Corporation Commission informed the Legislature that oil and gas fee revenues coming into the Conservation Fee Fund might be inadequate to cover expenses. Commission officials were concerned that fluctuating revenues in any one month might jeopardize the Commission’s ability to meet payroll expenses. In an attempt to manage its cash flow problems, the Corporation Commission raised fees and cut costs, including cutting back on well-plugging activities and developing a plan to furlough Conservation Division employees. However, the Commission could have avoided these problems altogether if it had acted on a more timely basis to raise fees to meet rising costs. In conducting this audit, we also reviewed expenditures to-date in fiscal year 1994 and found them to be appropriate in light of the expected revenue shortfall. However, we did note that cutting back on well-plugging activities diminished the Commission’s ability to carry out its regulatory responsibilities.
Compliance and Control Audit: Emporia State University Fiscal Year 1993
The audit shows that the original CAMA software and hardware cost nearly $5 million. Since 1988, the State has spent about $850,000 on CAMA software enhancements. In addition, the State and counties have spent more than $600,000 on hardware improvements. The CAMA System is capable of generating the sophisticated mathematical analyses necessary to value properties annually. The vast majority of county appraisers think the CAMA System generally works well, but could be improved. The types of problems county appraisers identified with the CAMA software and hardware do not appear to prevent the computer from producing good values, but they do make the System harder for some county appraisers to use. However, a number of information-related problems appear to be hindering the effectiveness of the CAMA System. Those include problems related to the valuation of both commercial and residential properties, appraisers’ education and training, and communication. The Department of Revenue has assembled a task force to evaluate the current Kansas CAMA System and make recommendations regarding its future.
Compliance and Control Audit: Wichita State University Fiscal Year 1993
The Department of Commerce and Housing has established programs in line with its mission, and it can demonstrate economic results in accord with that mission. However, in many cases the Department has not established specific criteria or gathered the kinds of data it needs to determine whether specific programs are achieving the intended results. Creating the Division of Housing has had little effect on the economic development activities of other divisions. In one case we reviewed, Department officials legally reallocated State General Fund money from the Division of Housing to another division. For the most part, Kansas’ organizational structure for housing programs was similar to the structure in other nearby states. Finally, we found the Department did not give proper notice of a public hearing held to consider possible amendment of the State Community Development Block Grant plan.
Reviewing the Contract for the Medicaid Management Information System (100-hour audit)
The Department’s contract with EDS Federal does not attempt to define specific program modifications that are included within the price of the contract and those that will require additional payment. Any changes that were not agreed to at the time the contract was signed, or that could not be completed in the time available from the 11 on-site systems engineers, have been handled as contract amendments at an additional cost to the Department. The 22 amendments to the current contract have contributed $9.3 million of the total $53 million cost. Because the Department does not have good information about how the systems engineers spend their time, it cannot ensure it is getting what it pays for. Other states we contacted generally carry out more monitoring of their systems than Kansas does.
Reviewing the Operations of the Kansas Turnpike Authority
The Turnpike Authority had more staff per lane mile than the Department of Transportation, but fewer staff than two of three other turnpikes we reviewed. Its maintenance costs per mile of road were higher than the department’s costs. But when we compared the total cost of constructing and maintaining some similar stretches of road over a long period of time, the Turnpike Authority’s costs were lower. The Authority generally pays higher wages and provides better fringe benefits to its employees than the Department. The Authority generally had adequate operating plans and controls but could improve its controls in the areas of competitve bidding and documenting purchases with credit cards issued in the Authority’s name. If the State were to operate the Turnpike without tolls, it would have to pay off up to $162 million in Turnpike bonds, assume about $20 million in annual operating costs, and spend many millions more in capital costs to bring the road up to federal standards. Finally, we found that the Authority saved money on its recent bond issues and sold the bonds at very good interest rates. However, we concluded that the Authority coul strengthen its bond-issuance procedures by hiring an independent financial advisor and by soliciting proposals from more underwriters.
Reviewing Investments and Investment Practices of the Kansas Public Employees Retirement System
The Retirement System’s 14.7 percent rate of return for fiscal year 1993 was its highest rate in the past seven years. Only one of nine other retirement systems we contacted achieved a higher rate of return. Its return on individual classes of investments also compared favorably with other retirement systems, and its investment practices generally were similar to those found in other states. About two-thirds of the investment portfolios handled by individual investment managers achieved a rate of return that was higher than standard indices for their particular type of investment. The System paid investment managers about $16.7 million in fiscal 1993. Kansas had the highest total expense for external investment managers, and was second highest in fees paid to investment managers as a percent of the funds they managed.
Reviewing Personnel Services for Kansas’ State Employees: A K-GOAL Audit of the Department of Administration
To fulfill the requirements of the Kansas Governmental Accountability Law, we reviewed the operations of the Division of Personnel Services to determine whether its activities were carried out in an efficient and effective manner. In general, we found that many personnel functions provided by the Division of Personnel Services and personnel staff in State agencies were carried out efficiently and effectively. However, we found that the hiring process, the performance evaluation system, and the pay plan used by the State were not serving all of the State’s needs. We also found that the Division of Personnel Services approves several fairly routine personnel actions performed by the agencies. This means that such routine actions require more effort and involve more processing than should be necessary. Finally, the State pays its employees more overtime pay than required by law. The Division of Personnel Services estimates that the State spends about $2 million a year more than it needs to on overtime pay. While this estimate may be overstated, the amount involved still is likely to be substantial. We recommended that the State’s personnel practices could be made more efficient by increasing the flexibility and authority of the State agencies to take appropriate actions.
Compliance and Control Audit: University of Kansas