The Rundown with Kansas Legislative Division of Post Audit

This audit includes information about Ford County’s policies and practices to ensure the security of storage units, ballots, and devices used to tabulate votes in the 2022 general election. It is a follow up to an election security audit that we completed in 2023 of 15 Kansas counties' election offices. We evaluated Ford County's security practices using 55 best practices from the US. Election Assistance Commission and state law. Ford County generally had adequate practices in the area of overall process security which was like the other counties we reviewed in the 2023 audit. Ford County had a mix of adequate and inadequate practices in the areas of ballot security and voting and tabulation machine security. This was also like other counties we reviewed. But Ford County’s election management computer security and transfer and movement security practices were generally inadequate and were Ford County’s weakest areas. This is different than other counties we reviewed because most of the other counties we reviewed in 2023 had adequate election management computer security practices. Additionally, most of the other counties we reviewed had a mix of adequate and inadequate transfer and movement security practices. Ford County also didn’t have adequate written security policies during the 2022 general election, but this was like the other counties we reviewed in 2023. Overall, Ford County’s results don’t change our overarching conclusions from the 2023 audit.

State law requires that poll book check-ins balance with cast ballot totals when the polls close on election night. The supervising poll worker at the polling site is responsible for ensuring these totals balance. If they don’t, the discrepancy must be explained to the election office in writing. We reviewed Ford County’s election records from the 2024 primary election to evaluate Ford County’s ballot reconciliation process. We determined that at 4 of the 5 polling sites, poll book check-ins and the number of votes cast balanced. However, at 1 polling site, voted ballots exceeded poll book check-ins by 1 ballot. This was because poll workers at that polling site did not follow the proper processes. We were also asked to check if Ford County’s poll books contained a declaration on each signature page as required by state law. We found that Ford County’s poll books had a declaration on the signature page, but they did not have the specific language required by state law.

The STAR bonds program allows local governments to use future sales tax revenue for development or redevelopment projects. Commerce officials expect STAR bond districts to improve local quality of life, but they haven’t defined or measured this. We gathered the data to evaluate districts' affects on local quality of life and found that the 6 districts we reviewed grew in quality-of-life industries survey respondents said they value. However, the numbers and types of industries varied by district. To evaluate the program’s effects, we first determined how 6 districts changed over time in 109 quality-of-life industries. We then compared the 6 districts’ industry changes in these 109 quality-of-life industries to what college graduates told us affected their quality of life. Survey respondents said social and economic factors other than amenities have more influence on where they want to live. However, about half of respondents or more said amenities in all 10 quality-of-life industry groups we asked them about were important to their quality of life. All 6 districts we reviewed added jobs in quality-of-life industries from the time the district was approved to 2023. The 6 districts grew most often in industries that most survey respondents (81%-85%) said were important to their quality of life. They grew similarly in industries that only about half of respondents said were important. However, the 6 districts grew in few of the industries that the largest percentages of survey respondents (86%+) said were important. Finally, they grew very little in a few industries that most respondents (68%-80%) said were important. The 6 districts varied widely in the numbers and types of industries with job density growth. We don’t know for sure how the STAR bonds program affected these districts, but the infrastructure it financed likely contributed to the patterns we observed.

Tax Increment Financing (TIF) districts are a type of economic development tool in which cities use a property tax increment to help finance development projects. A property tax increment is the amount of property tax generated above a base level, which is established when the city creates the district. We contacted the 10 largest cities in Kansas to generate a list of past and present TIF districts. From this list, we selected 6 districts to evaluate their economic costs and benefits. We selected 2 districts from Wichita, and 1 district each from Kansas City, Olathe, Topeka, and Salina. For each of these districts, we estimated the impacts they had on property values, taxes, development, employment, and crime. We also evaluated whether the costs to the city were recovered timely for these districts. We found that 3 of 6 districts did not recover their costs timely. Further, we found that most of these TIF districts likely experienced economic benefits from increased property values and taxes, increased development, or increased jobs. However, we were unable to directly compare these benefits to the costs because they could not be readily quantified. Whether a TIF district was worth its financial costs is often subjective and project-dependent. We also evaluated the school districts where these 6 TIF districts were located to determine what financial costs they may have imposed on those school districts. We found that all 6 TIF districts were too small in scale to have a significant negative impact on school district funding.

Kansas Department for Children and Families (DCF) administers the Temporary Assistance for Needy Families (TANF) program in Kansas. Kansas receives about $102 million in federal TANF block grants annually. This amount has generally remained stable since 1996, but that means this amount has lost an estimated 49% of its purchasing power since 1996 because of inflation. One of the programs DCF funds with the TANF block grant is cash assistance. TANF cash assistance serves Kansas families with very low incomes. In Kansas, a family is eligible for TANF cash assistance if they have insufficient income or resources to support themselves. Funds must be granted to families that live in Kansas. The family must include a child or expectant mother who is a U.S. citizen, legal immigrant, or qualified immigrant. The state’s 2015 Hope, Opportunity, and Prosperity for Everyone (HOPE) Act changed eligibility requirements for TANF cash assistance in Kansas. This included things like capping lifetime assistance to a total of 24 months and reducing the amount of time single caregivers could be exempt from work activity to 3 months. TANF cash assistance benefit amounts in Kansas haven't been updated since 1997. Spending on TANF cash assistance in Kansas has decreased from about 15% of block grant spending (about $15.2 million) to about 9% ($9.4 million) of block grant spending from FY 2009 through FY 2023, while spending on other TANF programs has increased. The purchasing power of TANF cash assistance also decreased by about 30% from FY 2009 to FY 2023 because of inflation. One reason for the decrease in cash assistance spending in Kansas is the decreasing caseloads. All cash assistance caseloads in Kansas decreased from about 12,600 average monthly cases in FY 2009 to about 2,900 average monthly cases in FY 2023; about a 77% decrease. Other reasons may include eligibility changes, wage increases, and inflation. The research we reviewed suggested TANF rules like those in Kansas lead to mostly negative program outcomes for TANF families, while stakeholders held mixed opinions about the impacts of Kansas’s TANF rule changes.

The Kansas Housing Resources Corporation (KHRC) administers state and federal housing programs in Kansas, including the Low-Income Housing Tax Credit. The Low-Income Housing Tax Credit (LIHTC) is a federal program meant to encourage the development of rental housing for low-income individuals. The federal government requires KHRC to monitor housing developments that have been awarded LIHTC to ensure they comply with applicable rules. KHRC has a detailed compliance monitoring process to ensure that development owners comply with federal and state rules and meet all of the requirements they agreed to when they received LIHTC. Although KHRC's compliance monitoring process is extensive, most of the process is required by federal rules or is otherwise necessary for them to appropriately oversee the program. However, we did find two minor areas where KHRC's requirements are not necessary to meet a state or federal rules, a best practice, or an internal control. Additionally, developers who responded to our survey generally reported that KHRC's compliance monitoring process was easy to complete. Last, we found that KHRC's reserve amounts and land use restrictive covenant terms were applied consistently across the 16 projects we reviewed.

In the 2022-23 school year, the Louisburg school district spent a little more than $31 million. Generally, state law allows districts broad discretion in how they spend their state and local funding, but there are some exceptions. We selected 57 expenditures (representing $1.2 million) across 6 funds to determine whether the district spent them in accordance with state law.  We selected funds that have a mix of broad and specific spending rules sets in state law.  We chose expenditures that represented a good cross-section of different types of expenditures.  Because we did not choose the sample randomly, we cannot project the results to all expenditures. Of the 57 expenditures we reviewed, we identified 12 (about $63,000) related to at-risk and capital outlay that did not comply with state laws related to those funds.  This included expenditures such as seating, salaries for interpreters, and a contract to operate light and sound equipment.

In Kansas, individuals must pay a 6.5% sales or use tax when purchasing any vehicle that is primarily stored or used in the state. This is paid either at the dealership or at a county treasurer’s office. Ultimately, KDOR is responsible for collecting motor vehicle sales and use tax from dealerships and counties. The Kansas Department of Revenue had procedures to help ensure dealerships remit vehicle tax but was missing several key procedures related to county tax remittance.  We saw evidence that KDOR had several procedures related to training and guidance for counties and dealerships as well as procedures related to the  monitoring and enforcement of dealerships. However, KDOR was missing several procedures related to the monitoring and enforcement of counties. One county didn't remit taxes for 15 months, resulting in about $11 million in delinquent taxes. Additionally, KDOR's lack of written procedures means efforts to ensure that individual buyers and dealerships are remitting aren't as effective as they could be. And KDOR's MOVRS database had significant errors, preventing us or them from doing a state-wide analysis.

The Angel Investor Tax Credit (AITC) program incents investors to invest in Kansas start-up businesses. In exchange for investing in a participating start-up businesses, an investor can receive a tax credit equal to up to 50% of their investment. As part of this audit, we surveyed investors and businesses that participated in the AITC program. The purpose of the surveys was to learn how the program influenced investors' and businesses' behaviors. Investors who responded to our survey told us the program caused them to invest more or sooner in participating businesses. Businesses who responded to our survey told us the program helped them do more than they otherwise would have been able to (e.g., hiring more staff or offering more products). As part of this audit, we also evaluated whether Commerce implemented a process to make sure participating businesses stayed in Kansas as required by state law. We determined Commerce had implemented a process, but the process has room for improvement.

The 6 state universities did not have a shared definition of what diversity, equity, and inclusion activities are, but there were some common themes. The universities provide a variety of DEI-related services and activities such as food pantries, support groups, and tutoring services to a wide range of students.  To determine how much universities spent on DEI-related activities, we asked the universities to report expenditures related to common DEI themes shared across the universities.  In the 2022-23 school year, universities reported spending about $45 million in DEI-related activities, of which, about $9 million was paid for with state funding. Nearly all of the $9 million universities reported spending in state funding was spent on salary and benefits for faculty and staff who engaged in DEI-related activities. Universities reported spending a small amount of state funding on DEI-related training and other non-personnel expenses like travel, software, and outreach programs. The universities DEI-related expenditures are self-reported and we have a limited ability to determine if they are accurate and complete. Last, the universities do not have consistent measures for determining whether DEI-related activities are effective for achieving their DEI goals.

Universities receive money from foreign sources for a few reasons including tuition and fees, gifts, and contractual services. In 2022-23, state universities reported receiving about $116 million in foreign contributions, but most ($111 million) was for tuition and fees. In the 2022-23 school year, universities reported receiving contributions from 170 countries but about half was from India and China. The universities foreign contributions are self-reported and we have a limited ability to determine if they are accurate and complete.