MINUTES

Legislative Post Audit Committee

November 13, 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 Derek Schmidt Senator Chris Steineger

Representative Tom Burroughs Representative Peggy Mast Representative Bill McCreary Representative Tom Sawyer

Approval of Minutes

            Senator Steineger moved to approve the minutes of the October 17, 2006, meeting.  Senator Schmidt seconded the motion; motion carried.

Completed Performance Audit

K-12 Education: Reviewing Free-Lunch Student Counts Used as the Basis for At-Risk Funding, Part I.  This audit was presented by Katrin Osterhaus, Senior Auditor.  Based on our Statewide random sample, about 23,000 (17%) of the approximately 135,000 free-lunch students counted for at-risk funding in 2005-06 weren’t eligible for free lunches.  As a result, the State overpaid nearly $19 million in at-risk funds.  At the same time, according to survey responses from district officials, about 3,500 students may have been eligible for free lunches but their families didn’t apply.  The free-lunch count used for at-risk funding also may include a number of students the Legislature didn’t intend to fully fund, such as adults attending alternative education schools, and free-lunch students who don’t attend full-time.  We also identified problems with the Department of Education’s free-lunch reviews that, if addressed, could produce a more accurate count.

In 2003-04, Kansas had 54,000 more free-lunch students Statewide than comparable U.S. Census Bureau estimates would suggest.  Ineligible students would account for almost half that difference.  However, the Census Bureau’s district-level poverty estimates also have several limitations, including difficulties in accurately measuring important populations, significant lag time in publishing figures, and decreasing accuracy as the estimates get further away from the 10-year Census count.

            Ms. Osterhaus answered questions from the Committee and members of the 2010 Commission.  Also present to answer questions were Dale Dennis, Deputy Commissioner of Fiscal Services, and Jodi Mackey, Director of Child Nutrition and Wellness, Department of Education.   

            Representative Mast moved the report be accepted.  Senator Steineger seconded the motion; motion passed.  The report will be distributed to the House and Senate Educations Committees, the House Select Committee on Education Finance, and the Legislative Education Planning Committee.   

Completed Financial and Compliance Audit

Kansas Lottery.  This audit of the Kansas Lottery for fiscal year 2006 is required by State law.  The work was done by Berberich Trahan & Co., a certified public accounting firm under contract with Legislative Post Audit.    This audit was presented by Karen Linn, Berberich Trahan & Co.  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.  The report made no recommendations.  Ms. Linn answered members’ questions.

            Carolyn Brock, Kansas Lottery Comptroller, and Keith Kocher, Assistant Attorney General, were available for questions. 

            The report will be distributed to the House and Senate Federal and State Affairs  Committees, the House General Government and Commerce Budget Committee, and the Senate Ways and Means Subcommittee on Lottery/Racing and Gaming.

Legislative Post Audit Committee Operations

            Evaluation of the Post Auditor.  Chair Donovan made the following motion:  “I  move that the open meeting of the Legislative Post Audit Committee in Room 519-S of the Statehouse be recessed for a closed, executive meeting to commence immediately in Room 519-S of the Statehouse pursuant to subsection (b)(1) of K.S.A. 2004 Supp. 75-4319, as amended by chapter 126 of the 2005 Session Laws of Kansas, for a discussion of personnel matters of  non-elected personnel relating to the annual evaluation of the Legislative Post Auditor which is under consideration by the Legislative Post Audit Committee, to protect the privacy interest of the individual, that the Legislative Post Audit Committee resume the open meeting in Room 519-S of the Statehouse at 11:45 a.m., and that this motion, if adopted, be recorded in the minutes of the Legislative Post Audit Committee and be maintained as a part of the permanent records of the Committee.” 

            Representative Mast seconded the motion.  Motion carried; adopted at 11:15 a.m. on November 13, 2006.

            Open meeting resumed at 11:30 a.m.

Legislative Post Audit Operations

Status of follow-up items.  Rick Riggs, Administrative Auditor, brought the Committee up to date on the status of follow-up items related to previous audit reports or recommendations.

Budget update.  Barb Hinton, Post Auditor, 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

            Ms. Hinton presented staff member Jill Shelley with a 10-year pin for her years of service to Kansas.

Date of Next Meeting

            The Chair set the next meeting date for Thursday, December 14, 2006.  The meeting adjourned at 11:45 a.m.

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