MINUTES

Legislative Post Audit Committee

February 20, 2006

The meeting was called to order by Chairman Donovan at 12:05 p.m. in Room

423-S of the Statehouse.  Committee members present:

Senator Les Donovan, Chair Senator Nick Jordan

Representative John Edmonds, Vice-Chair Representative Peggy Mast Representative Bill McCreary

Approval of Minutes

            There being no quorum present, approval of the January 30, 2006, minutes was tabled until the next meeting.

Completed Performance Audits

VIPS and CAMA: Reviewing the Availability and Use of Funding Earmarked To Improve These Computer Systems (limited-scope audit).  This audit was presented by Jill Shelley, Senior Auditor.              The Legislature created the VIPS/CAMA Hardware Fund and the Electronic Databases Fee Fund to provide funding for computer systems in the Department of Revenue.  Originally, moneys from both funds could be spent only for specific purposes.  Since 2003, the Legislature has allowed money in the funds to be used for the operation and administration of the Department of Revenue. 

            During the past five years, more than $36 million has been deposited into these funds and $40.8 million has been spent or transferred out of the funds.  Most of the money has been spent for Department salaries, telecommunications charges, consulting fees, and equipment, which are allowed by law.  About $57,000 was spent during fiscal years 2001 and 2002 for travel and advertising—items that weren’t allowable at the time. 

            Finally, concerns have been expressed that VIPS doesn’t compute the tax due on salvage vehicles based on true market value.  Changing VIPS to do that would cost about $30,000, and would reduce tax collections to counties by as much as $7 million.  However, State law doesn’t currently allow an adjustment for salvage vehicles. 

            Ms. Shelley answered members’ questions.  Jim Conant, Director, Resource Management, Department of Revenue, also answered members’ questions. 

            The report will be distributed to the House Appropriations and Senate Ways and Means Committees, and the House and Senate Taxation Committees.

The Wireless Enhanced 911 Act: Reviewing the Use of Revenues Generated To Fund the State Grants (limited scope audit).  This audit was presented by Amy Thompson, Auditor.             Of the $6.3 million in Wireless Enhanced 911 grant revenues generated since July 2004, about $130,000 or 2% has been spent on administration.  That’s less than the 5% allowed by law.  About 80% of the money spent on administration has been for salaries for the 1.5 full-time-equivalent staff involved in administering the grant program. 

            Although provisos to the appropriations bills allow spending on conferences and hospitality, very little money was spent on conferences, and of the $313 spent on food, only a small portion could be considered hospitality.  Administrative expenses appeared to be reasonable and made in accordance with the Wireless Enhanced 911 Act. 

            Ms. Thompson answered members’ questions.  Marilyn Jacobson, Department of Administration was available to answer questions, and Julene Maske, Governor’s Grants Program, answered members’ questions. 

            The report will be distributed to the House and Senate Utilities Committees, and House Commerce and Labor and Senate Commerce Committees.

Completed Financial-Compliance Audits

Statewide Single Audit.  This audit is required by State law.  It was conducted by the joint venture of Berberich Trahan & Co., and Allen, Gibbs, & Houlik under contract with the Division.  Presenting the audit was Mark Dick, of Allen, Gibbs, & Houlik.  Mr. Dick answered members’ questions. 

            Bob Mackey, Director of Accounts and Reports, answered members’ questions.  Martin Echkardt and Mike Lovich with the Department of Administration were also available for questions.

            Theresa Klinkenberg, Chief Business & Financial Planning Officer for the University of Kansas, and Diane Goddard, also from the University, answered members’ questions.

            The report will be distributed to the House Appropriations and Senate Ways and Means Committees.

Legislative Post Audit Operations

            Out-of-State travel requests.  There being no quorum present, this item was passed over until the next meeting.

Old/New Business

            None.

Date of Next Meeting

            Staff were directed to canvass members for the next available date sometime in early March. 

            The meeting adjourned at 12:48 p.m.

(All handouts and other documents referred to in these minutes are on file with Legislative Post Audit.)