Actual cost figures for death penalty and non-death penalty cases in Kansas don't exist. Considering all costs through execution or the end of imprisonment, we estimate the median death penalty case that has gone to trial so far in Kansas would cost an estimated $1.2 million, or about 60% more than the estimated cost of the median case in a small sample of non-death penalty cases used for comparison. The trial stage accounts for nearly $475,000 of the higher projected costs, and the appeal-related stages accounts for another $382,000. Death penalty trial costs tend to be higher because the trials are lengthier, a separate trial is held for sentencing, more jurors are called, and there's generally a greater use of expensive expert witnesses. Appeal costs are higher because, with the defendant's life at stake, there tend to be more appeals and more issues raised each time an appeal is made. Because much of the process involved in trying a death penalty case is prescribed by law or the U.S. Supreme Court, we found little variation between Kansas and a sample of other states, and no real opportunity for eliminating steps in the process. Opportunities to save costs need to be focused on other areas, such as providing for a true life sentence without the possibility of parole to possibly reduce the number of appeals, possibly creating a specialized group of judges or law clerks who may be able to more efficiently handle death penalty cases because of research and expertise, and ensuring that the State Board of Indigents' Defense Services can handle as many death penalty cases as possible rather than hiring contract attorneys at much higher cost.
Highway Construction Change Orders: Reviewing Costs Associated with Construction on Highway 36 Near Marysville (100-hour audit)
After construction began on a replacement bridge on US-36 over the Big Blue River, KDOT learned that 10 of 29 bridge support shafts needed to be a total of 29 feet deeper than the 1,252 feet of drilling originally planned. The additional work involved drilling large shafts into rock as hard as some granites. KDOT negotiated with the company and paid $5,000-$7,000 per foot for the additional drilling. There's no good information about how much similar work has cost other states. However, when these additional costs are averaged over the entire length drilled, KDOT paid $731 per foot, which is mid-range of what KDOT and several other states have paid for somewhat comparable projects, and less than what any other contractor bid on this project. KDOT has and followed reasonable change order procedures, and it has clear justification for how it arrived at prices in this case. However, there is no written guidance for determining fair and reasonable prices for change order items.
Department of Transportation: Reviewing Wage Payments to Equipment Operators (100-hour audit)
KDOT equipment operators on 4 of 5 crews in the Topeka area were overpaid when KDOT sent them home early to rest up for night duty on the first day of snowstorms. The overpayments occurred because crew supervisors failed to follow Department policy that specifies when rest time can be compensated, and because the area superintendent didn't ensure the supervisors were recording time properly. While no one knows for sure, these overpayments likely went on for at least 15 years, with about $12,000 in overpayments over the last 5 years. KDOT has decided not to recoup the overpaid wages from the equipment operators, which seems reasonable given the difficulty in determining exactly who was overpaid and by how much. KDOT's efforts to correct the problem have focused on educating its supervisors, but further steps need to be taken to ensure that supervisors are following the correct timekeeping policies.
Kansas Sentencing Commission: Reviewing Organizational and Funding Issues (100-hour audit)
The Kansas Sentencing Commission is responsible for developing and monitoring the implementation of sentencing guidelines, researching how changes to those guidelines could impact prison populations, and projecting prison populations. It has recently been given additional duties related to treatment for drug offenders, called for in Senate Bill 123. Its structure appears to be appropriate for those duties. The membership of the Commission is similar to commissions in other states. Of 18 states that have ongoing sentencing commissions, 13 have established them as free-standing agencies. Kansas' Commission compared favorably with 8 other states contacted in terms of number of employees, budgeted expenditures per employee, office space per employee, and the percent of expenditures going for employee salaries and fringe benefits. States that don't have ongoing sentencing commissions tend to convene commissions on an "as needed" basis, and then disband them when their work was complete.
Reviewing the Operations of the State Treasurer's Office-Fiscal Year 2003
This audit was conducted by the joint venture of Allen Gibbs & Houlik and Berberich Trahan & Co., audit firms under contract with Legislative Post AuditThe audit addresses 10 questions about selected financial management responsibilities of the Treasurer's Office, mainly those involving that Office's custodial responsibilities for State moneys. In general, the audit found no significant deficiencies. The audit makes one recommendation to finalize and implement revised unclaimed property procedures. The Treasurer's Office agreed with this recommendation.
Reviewing the Operations of the Pooled Money Investment Board-Fiscal Year 2003
This audit of the Pooled Money Investment Board is required by the Legislative Post Audit Act. It was conducted by the joint venture of Allen Gibbs & Houlik and Berberich Trahan & Co., audit firms under contract with Legislative Post Audit. The audit addresses 4 questions about selected financial management responsibilities of the Pooled Money Investment Board, mainly those involving the Board's fiscal accountability for moneys. The audit found no deficiencies.
Kansas Public Employees Retirement System: Financial Audit of Fiscal Year 2003
This financial-compliance audit of the Kansas Public Employees Retirement System, covering fiscal year 2003, is required by State law. The work was done by Berberich Trahan & Co., a certified public accounting firm under contract with Legislative Post Audit. The audit found that the System fairly presented its financial statements, met applicable legal requirements, and had no significant weaknesses in its financial management procedures.
Kansas Lottery: Financial Audit of Fiscal Year 2003
This audit of the Kansas Lottery for fiscal year 2003 is required by State law. The work was done by Berberich Trahan & Co., a certified public accounting firm under contract with Legislative Post Audit. The audit found that the Lottery fairly presented its financial statements, met applicable legal requirements, and had no significant weaknesses in its financial management procedures.
Kansas Department of Health and Environment Information Systems: Reviewing the Department’s Management of Those Systems
This report focuses on 2 areas of KDHE's computer security: managing security, and planning for business continuity in the event of a disaster. KDHE had adopted many of the necessary security policies, but its staff hadn't followed many of them. In particular, KDHE was using a fundamentally flawed method of handling passwords, had allowed infections of serious viruses to be ignored, and its firewall allowed unneeded access to the network. As a result, the Department's operations were at a very high risk of fraud, misuse, or disruption. It appeared that a lack of security planning and monitoring allowed the Department's problems to go uncorrected. Because of the high level of risk, the unusual step of making interim recommendations for immediate action was taken during the middle of the audit. The Department took prompt action to address the problems identified. Finally, KDHE hadn't conducted any business continuity planning since 1999, increasing the risk that it wouldn't be able to respond adequately in the event of a disaster.
Food Safety Programs in Kansas: Evaluating Possible Costs and Efficiencies of Combining Them
Primary responsibility for ensuring food safety in Kansas is divided between the Departments of Agriculture (in the meat and poultry, dairy, and egg inspection programs) and Health and Environment (in the food protection program); together, they spend about $3.2 million for inspection staff. This system is inefficient in some ways, because inspectors from more than one agency or program inspect the same businesses, some businesses are inspected more frequently than they need to be, and similar businesses are regulated inconsistently. In addition, coordination can be improved in situations where the agencies' regulatory authority overlaps. Combining food safety inspection programs could make it more likely similar food businesses and processes would be regulated consistently and that communications would improve. We estimate Kansas can generate about $680,000 in annual savings and improve food safety if certain inspections are combined and if inspections are changed to a risk-based approach. In addition to restructuring the routine food safety inspection system, Kansas needs to continue taking steps to become prepared for intentional threats to food safety.
CDDOs: Reviewing Issues Related to the Funding of Community Services
Public funding for the State's developmental disabilities system has increased 15% over the last 4 years, 82% of which is distributed based on client severity. Over the last 4 years, community service providers' share of the Medicaid waiver increased from 61% to 64%, and the amount of "discretionary" funds CDDOs pass on to them has increased from 21% to 28%. The 2001 Legislature directed SRS to maximize the amount of new federal funds that could be drawn down to help fund direct services. In 2002, 91% of these new moneys were distributed based on client severity; under a new method for 2003, that figure was 22%. CDDOs also got a larger share of these new funds in 2003, mostly because the distribution plans they designed were more favorable to them.Over the last 4 years, CDDO Administration costs have increased by about 17%, and the majority of the funding has shifted from State to federal sources. Although CDDO Administration expenditures have grown faster than spending on direct services, that's due at least in part to CDDOs categorizing more of their expenditures as CDDO Administration, and to the fact that reimbursement rates for Medicaid services weren't increased. CDDO Administration costs vary widely by client. The structure of the current CDDO system creates an inherent conflict of interest for the 22 CDDOs that provide services in competition with the community service providers they contract with. Potential conflicts can arise in the areas of client referrals, contract terms, funding distributions, and quality assurance. Prohibiting CDDOs from providing direct services would address most of these issues. In addition, the discretionary State aid CDDOs receive could be distributed on a different basis, and CDDOs could be made sole providers of targeted case management services. All 3 areas would need further study.
A number of factors make additional mergers of whole governments, as occurred with Kansas City and Wyandotte County, unlikely. However, many opportunities do exist for streamlining city and county governments by consolidating city and county departments; sharing staff, facilities, equipment, or other resources between departments; and purchasing items through cooperative agreements. Decisions to enter into these arrangements are local ones, and are often driven by the needs and attitudes of officials in individual cities and counties. In many cases, local officials are discouraged by a number of factors in pursuing these opportunities, most commonly the fear of losing control over how services are provided. Amending some State laws and taking certain actions other states have considered could encourage more consolidation and cooperation among local governments. However, significant changes won't come about unless local circumstances, such as tighter fiscal constraints, force a change. The same is true for other types of local governments we looked at, specifically townships, cemetery districts, and drainage districts. Kansas may not need all of these local units of government, mainly because their functions could be performed by county governments. But even if the objections of local officials in eliminating these units could be overcome, the cost savings would be minimal.
Governmental Ethics Commission: Reviewing Organizational and Funding Issues (100-hour audit)
The Governmental Ethics Commission is the main ethics enforcement agency in Kansas. The Commission's structure appears to be appropriate for its mission and is similar to the structures established by 4 of 6 other states in the region. Compared to 4 other nearby states, Kansas ranked in the middle to low end for expenditures per employee, office space per employee, and percent of total expenditures spent on salaries. Although Kansas relies more heavily on fees for its funding than the 4 states we contacted, it's unlikely that the Commission can become entirely fee-funded. That would require a four-fold increase in the level of registration and filing fees currently being charged to lobbyists, candidates for office, and others.
Low-Birthweight and Premature Babies: Reviewing Programs Aimed at Reducing Their Incidence and Associated Costs
Low-birthweight babies cost the State's Medicaid Program about 5 times as much as normal-birthweight babies during their first year of life—$16,704 compared with just $3,180. They account for only about 10% of all births, but more than one-third of all payments made. Lack of prenatal care is one of many risk factors that can increase the chance of having a low-birthweight or premature baby. Overall, 72% of Medicaid mothers reported getting adequate or better medical prenatal care. Those who reported getting no or inadequate care generally had a much higher incidence of low-birthweight babies than women who got adequate care. The research on the effectiveness of prenatal care is mixed, but babies whose mothers had no such care cost Medicaid significantly more than those babies whose mothers got even minimal care. Women who had low-birthweight babies also had a higher prevalence of many of the other risk factors associated with poor birth outcomes— including smoking, substance abuse, and low weight gain during pregnancy. Outside of Medicaid, the State spends very little on prenatal care programs. The State's share of the cost for funding prenatal services through Medicaid was almost $15 million in fiscal year 2002. The State also spent $1.4 million on KDHE's Maternal and Infant Program, the State's only program focused primarily on prenatal care. Local health departments cited financial barriers as the primary reason why low-income women don't get prenatal care services, and pointed to a critical gap in the availability of medical services for these women. Neither KDHE nor SRS is doing all it can to educate women about the benefits and availability of prenatal care. KDHE also doesn't collect any information that would allow it to connect the services clients receive with their birth outcomes, but more could be done with existing data.
Motor Fuel Tax Refunds: Determining Whether Adjustments Made to Refund Claims Were Handled Correctly (100-hour audit)
Of the sample of motor fuel refund claims we reviewed, 37% of the claims (21 of 57) were paid incorrectly. The amounts paid incorrectly ranged from a few cents to several hundred dollars; some taxpayers were overpaid, and others underpaid. Most errors were caused by Department staff making mistakes while trying to correct refund claims using cards with outdated tax rates. Other errors were caused by staff simply not updating the outdated rates on those cards. For 2 claims involving substantial refunds the documentation submitted by taxpayers didn't support their claim, but the Department paid the full refund anyway. This included one claim submitted by a large corporation requesting a refund of nearly $59,000 without providing any original invoices to support its claim, as required by law. We noted numerous problems with this claim and the Department's handling of it.
Compliance and Control Audit: Kansas Correctional Industries
The Department of Revenue doesn't have adequate procedures in place to ensure that vehicle dealers remit all the vehicle sales taxes they collect from customers. The Department's Divisions of Taxation and Motor Vehicles aren't coordinating and using information the Department already has available. This could help identify dealers who collect but don't remit vehicle sales taxes. Although requiring dealers to submit additional information would further strengthen the Department's collections system, having county treasurers–rather than vehicle dealers–collect the sales tax might be more effective and efficient. During testwork, 5 large vehicle dealers appeared to be remitting tax correctly, but 4 of 7 small dealers that Department staff suspected of problems weren't remitting all the taxes they'd collected from customers. In addition, 3 of these 4 dealers had long histories of not remitting, but the Department allowed them to continue to operate. In addition, nearly half the private sales of vehicles reviewed had reported sale prices that appeared to be significantly lower than fair market value, making it likely that the State could collect millions in additional sales taxes on these transactions. Finally, about 10% of the rebates reviewed on new vehicles purchased out-of-State weren't taxed as required. We estimate the annual tax loss on these rebates at slightly more than $200,000.
Federal Funds: Determining Whether Opportunities May Exist To Leverage State Spending To Draw Down More Federal Funds
This audit involved a fairly high-level review of opportunities that may exist for the State to draw down additional federal funds. We identified 6 opportunities that appeared to have a high potential for generating as much as $20 million in additional federal revenues. Most of these opportunities involved federal reimbursements through the Medicaid program that could be claimed by school districts or community developmental disability organizations. We also identified 8 additional opportunities in social services areas (such as increasing targeted Medicaid rates and auditing agencies' cost allocation plans) that warrant further investigation to determine whether additional federal revenues could be generated. Finally, we observed that Kansas could benefit from a more coordinated effort to identify and secure more federal funds. One possibility would be a centralized office to coordinate federal funding and develop an overall strategy to maximize federal moneys.
Information Network of Kansas: Reviewing Its Revenues, Expenditures, and Administrative Structure (100-hour audit)
In the past 5 years, the INK Board has received about $1.3 million from State website operations, generated $128,000 in interest income, and spent about $480,000. Almost half of those expenditures occurred in the most recent year, and included expenses related to the hiring of an Executive Director and consulting and legal costs associated with re-bidding the contract to operate the State's web portal. All expenditures reviewed conformed to the Board's broad statutory charge. As of March 2003, the INK Board had about $1.1 million in available cash, approximately $740,000 of which it had earmarked for contingencies or special projects. Some of the Board's practices related to executive sessions don't appear to conform to the Open Meetings Act. While there is no best structure for overseeing a state's website, the most common approach among the states reviewed was to have an independent single-purpose board that is staffed part-time by an existing state agency. Each of the 4 options reviewed had both positive and negative aspects. If change is desired, the Legislature will need to review the pros and cons, and pick the structure that is most likely to accomplish the Legislature's goals.
Firefighters Relief Fund: Reviewing the Use of Fire Insurance Premium Taxes Distributed to Local Firefighters Relief Associations (100-hour audit)
A 2% tax collected on fire and lightning insurance premiums in Kansas goes to the Firefighters Relief Fund and is distributed to local firefighter relief associations for benefits to firefighters. In July 2002, about $6.3 million was available for distribution to the associations. That was 22% more money than in the previous year, primarily because of increased insurance rates. Most of the money the associations receive was spent on life insurance premiums, relief payments to firemen who were injured on the job, pensions and annuities. All of those uses are allowed by law. In a few cases, there was insufficient documentation of expenditures or money was used to pay for unallowable things like equipment or conference registration fees. Usually, but not always, the Insurance Department's procedures caught those items and, if necessary, recoupments were being sought. Also, there were a number of payments for salaries to relief association treasurers or for computer equipment that didn't have required approvals. The Department needs to update its firefighters relief handbook to provide clearer guidance on the approval process for salaries and computers, to include some statutory changes, and to give examples of the types of documentation it wants for expenditures.
Medicaid: Assessing the Cost-Effectiveness of Current Procedures for Transporting Medicaid Consumers to the Services They Need (100-hour audit)
SRS' transportation program for Medicaid consumers isn't structured to effectively control costs. For example, there's no incentive for consumers to use lower-cost methods of transportation, providers have an inherent financial conflict of interest when screening consumers' eligibility and determining the necessity of trips, and claims are processed with few controls in place. Kansas has a number of options for setting up a more cost-effective program, including making changes to address the problems identified and carefully considering a different structure to deliver Medicaid-paid transportation, such as a brokerage system adopted by neighboring states. Finally, SRS's new reporting requirements for commercial transportation providers do duplicate information required by the KCC, but only 3 of the 106 commercial transportation providers SRS uses are certified by the KCC and are faced with providing the same information to both agencies.
Medicaid: Reviewing the Compensation of Payroll Agents for Home and Community-Based Waiver Programs (100-hour audit)
Medicaid clients who choose to direct their own attendant care services under the home and community-based service waivers must select a payroll agent (a home health agency or a center for independent living) to process their Medicaid claims. Records reviewed at 5 payroll agents in Kansas showed that they retained an average of $2.14 per hour of service billed, or 18% of the total amounts they bill to Medicaid on the clients behalf. Other states reviewed appear to obtain these services at significantly less cost. In the small sample of other states reviewed, the highest percentage retained by a payroll agent was 12%. A representative from a private company that provides Medicaid billing services in 11 states said that generally 6-10% of the amount billed could be considered a reasonable fee for payroll-related services. Two factors appear to be contributing to Kansas' higher costs. Kansas requires the payroll agents to assume some responsibilities other states don't require and it doesn't solicit competitive bids for these services.
General Fund Cash Balance: Reviewing the Projected Fiscal Year 2003 Ending Cash Balance for the State’s General Fund (100-hour audit)
Based on the most recent estimates of revenues and expenses, the projected ending cash balance in the State General Fund for fiscal year 2003 would be a negative $111.5 million. Because the General Fund can't have a negative cash balance, something will need to be done to increase revenues or decrease expenditures. Before the end of the fiscal year, the General Fund will have to repay the $450 million certificate of indebtedness it currently owes to other funds. Not doing so would violate State law, and because of the way such certificates are accounted for, would result in the State's year-end financial statements showing more cash balances than the State actually has.
Juvenile Justice Authority Information Systems: Reviewing the Authority’s Management of Those Systems
This report focuses on four areas of the Authority's computer security: managing security, limiting access to computer systems, managing changes to critical software, and planning for business continuity in the event of a disaster. The Authority's security planning process lacked two important steps: conducting vulnerability assessments and monitoring the effectiveness of the security controls. In addition, it lacked policies on responding to security incidents, collecting audit trails inside the network, and creating strong passwords. In many respects the Authority had good access controls to manage who is allowed into its computer systems. However, we found weaknesses that put the agency at risk, such as inadequate password requirements and not being current with security patches for its database software. The Authority had many of the policies we were looking for on controlling changes to important software, but needed a more formal process for managing and tracking changes. Finally, we found that the Authority hadn't conducted any business continuity planning, increasing the risk that it wouldn't be able to respond adequately in the event of a disaster.
State of Kansas: OMB Circular A-133 Audit of Fiscal Year 2002
State law calls for an annual financial-compliance audit of the general purpose financial statements and “the financial affairs and transactions of a state agency required to comply with federal government audit requirements…” The audit was conducted by the joint venture of Allen, Gibbs & Houlik, L.C. and Berberich Trahan & Co., P.A. under contract with Legislative Post Audit. The results of the Statewide audit are presented in two parts. The first part was the report on the Division of Accounts and Reports CAFR for fiscal year 2002.
This second part, the Report on Federal Awards in Accordance with OMB Circular A-133, reports on compliance with laws and regulations and provisions of contracts and grant agreements. The State complied, in all material respects, with the requirements applicable to each of the federal programs audited. Nine findings are reported.
Life-Cycle Analyses of Kansas Highway Projects: Evaluating the Process Followed by the Kansas Department of Transportation
Essentially the same proportions of asphalt and concrete are being used under the current highway program as were used under the previous highway program. However, far fewer lane miles of road are scheduled to be rehabilitated under the current program, and that's the reason less asphalt is being used overall under the current program. KDOT's life-cycle cost analysis is appropriate and reasonable in many respects, but several improvements are needed to help ensure that the most cost-effective pavement alternatives are designed and selected. Our review did show that some things about the formula could favor asphalt over concrete. Both revenue and expenditure estimates for the Comprehensive Transportation Program have increased since May 1999, but expenditures have grown more than revenues. Overall, as of January 2003, KDOT projected that revenues for the Program would be about $417 million less than needed, and the amount of outstanding bonds would be almost $2.2 billion.
Diversion Agreements: Reviewing Their Impact on State Revenues (100-hour audit)
When traffic fines were raised by the 2001 Legislature, revenues were expected to increase by about $15.5 million in fiscal year 2002. Instead, revenues only increased by a little over $5 million. Although there's been a significant increase in the number of diversions Statewide in recent years, the increase that occurred in fiscal year 2002 (the first year after traffic fines were increased) likely only accounted for about $73,000 of the $10 million revenue shortfall. Problems with projections used in the fiscal note may have made those projections too high by millions of dollars. Other factors such as an increase in dismissed traffic cases and prosecutors allowing defendants to plead to lesser charges also appear to have had more of an impact than diversions.
Reviewing the Projections Presented by the Kansas Public Employees Retirement System Regarding the Need for a Long-Term Funding Plan
In August 2002, the Kansas Public Employees Retirement System issued a report that contained funding projections for the System based on current policies and practices and selected alternatives. This performance audit assesses the reasonableness of those projections and of the underlying assumptions and methodologies used by the Retirement System in developing those projections. The audit notes the limitations inherent in making such long-term projections, but concludes that the assumptions and methodologies used and the resulting projections are reasonable to assist in reviewing the System’s outlook to develop a long-term funding plan.
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.
Each year since 1999, the Legislature has provided money to the Juvenile Justice Authority to allocate to each of the State's 31 judicial districts for juvenile offender prevention programs. The law requires those programs to have measurable outcomes and baseline data to benchmark their performance. Only 6 of 31 programs we reviewed had acceptable outcomes and baseline data. About one-third of the 111 outcomes for the other 25 programs either weren't measurable or didn't have good baseline data. Although the Juvenile Justice Authority has developed good standards in this area, those standards haven't been consistently enforced at either the State or local levels. The report questions almost $5,500 worth of expenditures made for staff lunches, memberships to organizations, newspaper subscriptions, and the like. The Authority relies on the local officials to ensure that expenditures are appropriate, but it hasn't done enough to ensure that reliance is justified. Program documentation needs to be improved to show results rather than just program activities, if anyone is going to be able to make sound judgments about whether only successful programs are being funded.