MINUTES

 

Legislative Post Audit Committee

October 17, 2006

 

            The meeting was called to order by Chairman Donovan at 10:10 p.m. in Room

519-S of the Statehouse.  Committee members present:

 

Senator Les Donovan, Chair

Senator Nick Jordan

 

Representative John Edmonds, Vice-Chair

Representative Tom Burroughs

Representative Peggy Mast

Representative Bill McCreary

Representative Tom Sawyer

 

Approval of Minutes

 

            Representative Edmonds moved to approve the minutes of the September 9, 2006, meeting.  Representative Sawyer seconded the motion; motion carried.

 

 

Completed Performance Audits

 

            Kansas Technology Enterprise Corporation: Reviewing Bonuses Paid to Employees of KTEC and Its Subsidiaries (limited-scope audit).  This audit was presented by Melissa Doeblin, Associate Auditor.  KTEC will have paid its employees more than $550,000 in additional compensation from 2004 to 2006, including nearly $333,000 in annual bonuses and up to $224,000 in supplemental payments for work done for the Kansas Bioscience Authority.  All additional compensation was paid from KTEC Holdings, Inc., a wholly owned subsidiary of KTEC.  Parts of the 2006 bonuses paid to three KTEC employees–about $3,000 in total–appear to be contrary to State law because the bonuses were based on work done for a subsidiary of KTEC, which is prohibited.  KTEC pays bonuses for achieving performance goals and to make compensation more competitive with the private sector.  Although records aren’t routinely kept, the 2006 records show that employees who received bonuses achieved 93% or more of the performance goals established for them.  KTEC also provided two studies which officials said show the need for enhanced salaries to be competitive.  The Mid-America Manufacturing Technology Center, a KTEC subsidiary, also paid about $437,500 in bonuses to its employees.  None of those bonuses were prohibited by law.  MAMTC pays bonuses to reward employees for achieving corporate and individual performance goals.  Because those goals were not met, only minimal bonuses were paid to four employees.

 

            Ms. Doeblin answered members’ questions.  Doug Brush, Chairman, KTEC Board of Directors, made brief remarks and answered members’ questions.  Also available to answer questions were Tracy Taylor, KTEC President and CEO; Kevin Carr, KTEC Chief Operating Officer; and Sandy Johnson, CEO, MAMTC. 

 

            Representative Edmonds moved the report be accepted.  Representative Sawyer seconded the motion; motion passed.  The report will be distributed to the Joint Committee on Economic Development, the House Economic Development Committee, the Senate Commerce Committee, and the House Appropriations and Senate Ways & Means Committees.

 

            Foster Care: Reviewing Decisions To Remove Children From Their Homes.  This audit was presented by Joe Lawhon, Principal Auditor.  Legislators have heard numerous complaints from families who thought there wasn’t sufficient reason to remove their children and place them in foster care, or to keep them away once removed.  In a review of a small sample of those cases, staff concluded that removal and reunification decisions generally were handled reasonably.  There were some problems with other aspects of the cases.  Some examples include SRS’s contractors not following court orders to obtain drug tests for family members, and not always documenting the results of those tests. Also, in two cases SRS didn’t interview individuals who may have been able to provide relevant information about a case.  Within the court system, there were several problems or potential problems with the handling of cases in Montgomery County, including the appearance of potential bias in one case, faulty recording devices in a courtroom, and adoption being used as a case goal far more frequently than for all foster care cases Statewide.  Finally, there were several instances where there appeared to be deficiencies in the level or quality of legal representation provided to parents.  Given everything else that was going on in these cases, for the most part it is unlikely that any of these individual problems would have affected the removal and reunification decisions made about these children.

 

            Mr. Lawhon answered members’ questions.  Sandra Hazlett, SRS Director of Children & Family Services, SRS, and Jamie Corkhill, Senior Attorney, SRS Child Support Enforcement, were available for questions.  Kathy Porter, Assistant to the Judicial Administrator, made brief remarks and answered members’ questions.

 

            Representative Edmonds moved the report be accepted.  Representative Mast seconded the motion; motion passed.  The report will be distributed to the House and Senate Judiciary Committees, the House Health and Human Services Committee, the Senate Public Health and Welfare Committee, and the Joint Committee on Children’s Issues.

 

            Board of Healing Arts: Reviewing Issues Related to Complaint and Background Investigations, and Composition of the Board.  Chris Clarke, Principal Auditor, presented the audit.  The Board of Healing Arts has some elements of a good complaint-handling system, but staff identified significant weaknesses in several areas.  For example, by policy the Board’s staff don’t investigate all allegations of substandard patient care.  Board staff also have inadequate processes for tracking and monitoring the progress of complaint investigations, and of investigated cases that have been forwarded to the Board’s Review Committee.  In two long-open cases, Board staff failed to obtain expert opinions, which had been recommended, and those cases have languished for years while the doctors in question remain licensed.  Disciplinary outcomes for the 30 closed cases reviewed seemed reasonable.  The Board generally collects and verifies the appropriate amount and type of information for medical doctors and osteopaths, but staff don’t verify all they could for chiropractors and podiatrists, and aren’t authorized to conduct FBI criminal history checks on applicants.  The Board’s composition is set in statute and hasn’t changed in 20 years, even though many allied health professions– such as physical therapists– have come under its regulatory authority since then.  Of 14 professions it regulates, 10 don’t have a seat on the Board, but most are represented on advisory councils to the Board.  Although other states’ regulatory structures vary in the number of professions regulated or members on the board, their boards’ make-up typically is limited to doctors and members of the public.

 

            Larry Buening, Executive Director, Board of Healing Arts, made brief remarks and answered questions.  Mark Stafford, General Counsel, and Shelly Wakeman, Disciplinary Counsel, also were present to answer members’ questions. 

 

            Senator Jordan moved the report be accepted.  Representative Mast seconded the motion; motion passed.  Representative Edmonds abstained.  The report will be distributed to the House Health and Human Services Committee, the Senate Public Health and Welfare Committee, the House Education Budget Committee, and the Senate Ways and Means Subcommittee on Fee Boards.

 

            Animal Health Department: Reviewing Issues Related to a Recent Animal Tracking Technology Project.  Brenda Heafey, Associate Auditor, presented the audit.  State law requires agencies to report all information technology (IT) projects costing more than $250,000 to the Chief Information Technology Officer (CITO), but officials from the Animal Health Department didn’t report a 2004 research and development project for the USDA because they didn’t think they were developing a system for agency operations.  The CITO has determined that this project, along with two other Department projects, are covered by the law.  Bringing research projects such as these under the IT approval and monitoring system could result in a major increase in the number of agency and university projects monitored.  About $750,000 of the project’s $1.5 million budget was spent before the project was terminated–about $500,000 of federal funds and $250,000 of in-kind efforts.  Although the project didn’t achieve the desired outcomes, USDA officials say the project proved that this technology could work.  As a result it’s unlikely USDA will ask that any of the spent federal funds be returned.  USDA officials did tell us they will ask the Department to return the $38,000 in unspent federal funds.

 

            Representative Mast moved the report be accepted.  Representative Sawyer seconded the motion; motion passed.  The report will be distributed to the House and Senate Agriculture Committees, and the Joint Committee on Information Technology.

 

           

Legislative Post Audit Committee Operations

 

            Report of the Subcommittee on the Division’s FY 2008 Budget Request. 

At the Committee’s September 9th meeting, the Chair appointed a 3-member subcommittee to review and made recommendations on the Division’s budget request:  Senator Jordan and Representatives Edmonds and Sawyer.  The Subcommittee met on September 27th. 

 

            Senator Jordan, Subcommittee Chair, reported to the Committee and recommended the budget be approved.  Representative Mast moved the Committee approved the budget request.  Representative McCreary seconded the motion; motion passed.  The Division’s request will be forwarded to the Legislative Coordinating Council for its review and approval.  It will be taken up with the other legislative agency budget requests at the LCC’s October 25th meeting. 

 

 

Legislative Post Audit Operations

 

Status of follow-up items.  Barbara J. Hinton, Legislative Post Auditor, brought the Committee up to date on the status of follow-up items related to previous audit reports or recommendations.

Budget update.  Ms. Hinton briefed members on the Division’s expenditures to-date for FY 2007. 

 

Audits in process.  Ms. Hinton reviewed the standard schedule showing the status of the performance audits under way.

 

Status of audits requested and approved.  Ms. Hinton reviewed the standard table showing the sources of the audits that have been requested and approved over time.

 

 

Old/New Business

 

            Committee Approval of Fiscal Year 2006 Annual and Follow-Up Reports.  Committee members reviewed the Annual and Follow-Up Reports at the September 6 meeting.  Those reports needed to be approved before being released.

                                                                                               

            Representative Mast moved the reports be approved.  Representative Burroughs seconded the motion; motion passed

 

 

Date of Next Meeting

 

            The Chair said the next Committee meeting likely will be in mid-November, but no firm meeting date was set.  The meeting adjourned at 12:20 p.m.

 

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