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Kansas Legislative Division of Post Audit

Agency Responses to Audit Recommendations

Previous Audit Recommendations Agency Updates as of January 2026
Audit Report ID Recommendation Current Status Description of Current Status
Department of Commerce
Evaluating the Angel Investor Tax Credit Program (2024) 1 The Department of Commerce should develop processes to regularly and systematically review its Angel Investor Tax Credit program data and correct inaccuracies. Have Implemented KAITC quarterly reports are completed by the Innovation division. This report provides a summary of program activities and outcomes including metrics related to qualified businesses, tax credits issued and capital raised. The program manager and staff also are conducting site visits on a regular basis.
2 Commerce should continue with its plan to make its monitoring processes more efficient. This may include the new survey process Commerce officials described to us. After implementing its plan, Commerce should evaluate whether it helped them provide all the oversight functions required by state law. Have Implemented The new monitoring process has been fully implemented and now includes quarterly reviews, an enhanced survey process, and regular check-ins with participating companies. This approach ensures that companies are effectively leveraging their credits to raise capital or releasing tax credits that will not be utilized within the current tax year. At the conclusion of the 2025 tax year, the monitoring system will undergo a comprehensive review to identify and address any gaps and to strengthen opportunities discovered throughout the year.
Evaluating the STAR Bonds Financing Program (2024) 1 The Department of Commerce should define its quality-of-life goals for STAR bond districts and measure whether districts meet these goals. In Progress Commerce views STAR Bond projects through several “quality of life” perspectives. Large urban projects will have different goals than smaller more rural projects. There won’t be a “one size fits all” definition or model for this important objective. As the agency gains experience with additional rural projects. we will refine this objective for these projects. This will be an ongoing process.
Evaluating Whether the Department of Commerce’s Economic Development Transparency Database Includes the Required Information and Functionality (2024) 1 The Department of Commerce should ensure that the transparency database contains all statutorily required programs and information. If there is any information that cannot be measured or included, the department should include an explanation on the database for why that information does not appear. Will Not Implement N/A
Evaluating the Adequacy of the Department of Commerce’s Pre-Employment Screening (2024) 1 Commerce should strengthen their process for checking the backgrounds of applicants applying for jobs that oversee financial matters in accordance with EEOC best practices. In Progress The agency worked with the KBI and legislature to pass a bill to give the department the authority to conduct background checks. The bill went into effect July 1. On October 21, KBI shared that the FBI did not approve some of the language used in the statute, because it is too broad. We are working with the KBI to draft an amendment to the statute and ask the legislature to pass the new language in the 2026 session. Until a new version of the bill is passed, Commerce has only KSA 75-7263-7243 to rely on for criminal background checks. That language does not meet the agency’s needs as it’s limited in application.
2 Commerce should use their available templates to create interview notes, reference check summaries, and internet search summaries and retain those documents in accordance with the state’s retention policy for personnel files to ensure Commerce can justify hiring decisions if they’re questioned in the future. In Progress The agency is utilizing templates to create interview notes, reference check summaries and internet searches. Those documents are digital and being stored in the online archive system. Commerce is updating our retention policies to ensure our retention timelines align with the state’s retention policy.
Evaluating the Alternative Fuel and Community Service Tax Credits (2024) 1 The Department of Commerce should clearly and completely document how it determines the basic eligibility of proposed projects as well as how it determines the final list of projects to award community service tax credits. Have Implemented Commerce now follows a standardize operating procedure to ensure transparency in awarding grants, including Community Service Program (CSP) tax credits. Project eligibility is confirmed and documented by the program manager before the review process. Eligibility determinations are based on statutory requirements and clearly stated in the program guidelines. The Department requires all reviewers to disclose and avoid conflicts of interest and maintains records of reviewer comments and scores. Final project selections are based on documented evaluation criteria, reviewer assessments, and a thorough review process led by the program manager to verify accuracy and consistency in scoring.
Louisburg School District
Reviewing the Louisburg School District’s Expenditures (2024) 1 The district has taken steps to ensure all expenditures are coded correctly. These expenditures are currently coded at the function and object level. Have Implemented The district has taken steps to ensure all expenditures are coded correctly. These expenditures are currently coded at the function and object level.
2 The district has reviewed state law regarding at-risk expenditures. All at-risk expenditures are in alignment with current at-risk laws. Have Implemented The district has reviewed state law regarding at-risk expenditures. All at-risk expenditures are in alignment with current at-risk laws.
3 The district has reviewed KSDE guidance regarding capital outlay equipment. All capital outlay expenditures fall under the current capital outlay statute. Have Implemented The district has reviewed KSDE guidance regarding capital outlay equipment. All capital outlay expenditures fall under the current capital outlay statute.
Department of Revenue
Reviewing the Department of Revenue’s Procedures to Ensure Correct Payment of Sales and Compensating Use Taxes on Motor Vehicle Sales (2024) 1 KDOR should create and implement the missing procedures we pointed out under the heading KDOR was missing 2 procedures related to the monitoring and enforcement of counties. Have Implemented Beginning in April 2024, a report has been generated on the 10th of every month that is distributed to the individuals in the positions listed in the response. This report enables the Department to contact those local governments that may be delinquent in filing sales tax returns or in submitting payments and to work with these local governments to ensure compliance with statutory sales tax reporting requirements.

The Department is exploring the possibility of utilizing the county registration data to identify questionable sales prices or tax exemptions. It is currently beginning a pilot project by reviewing commercial vehicle transactions and whether exemption certificates that have been presented are valid or appropriate. Once, this project is completed, staff will explore the utilization of county data for personal vehicle transactions to determine the feasibility of verifying the validity of sales prices and exemptions.
2 KDOR should develop and implement a process to improve the accuracy of existing and ongoing vehicle registration data submitted through MOVRS. Have Implemented The Department believes the vehicle registration data submitted through MOVRS is accurate. The comment provided by LPA may be due to a misunderstanding related to a request for information for this audit. The issue arose from formatting issues with the report provided which created multiple entries per transaction rather than a properly formatted report easily viewable by transaction. The Department has worked with IT resources and refined the vehicle registration report. This report is now in production. In addition, KDOR is constantly working with county treasurers to develop system enhancements for MOVRS; that process is always ongoing.
3 KDOR should provide the current, up-to-date sales tax guidance document to the dealership portal. They should also provide tax guidance updates in the portal as those are made. They should consider if there are points in time where they should offer dealerships a chance to retake KDOR training. Have Implemented The link to Publication KS-1526, Business Taxes for Motor Vehicle Transactions was added to the Dealer Portal on April 5, 2024. Additionally, the Department has published to the Dealer Portal, notification for any dealer needing additional training on sales tax to contact the Department. The Dealer Portal also now provides reminders that sales tax returns are due on the 25th day of each month. As guidance is developed or updated, the Department will publish to the Dealer Portal. As way of example, the Department recently published the following to the Dealer Portal: Notice 24-19, Used Motor Vehicle Sales Transactions; Frequently Asked Questions About the Sale of a Used Motor Vehicle within 120 Days of the Purchase of a New or Used Motor Vehicle; and Form ST-21VT, Request for Sales Tax Refund of a Motor Vehicle Sold within 120 Days of a New or Used Motor Vehicle Purchase. These three documents were developed based on legislation (2024 House Bill 2098) passed during the 2024 legislative session.
4 KDOR should formally document all existing and new procedures related to motor vehicle training, guidance, monitoring, and enforcement. Have Implemented The Sales Tax area within the Department has a PowerPoint document on the processes for verifying and processing returns of all county sales tax/compensating use tax accounts. Enforcement procedures in place for all sales tax/compensating use tax accounts may be imposed for county accounts if needed.

The dealer sales tax/compensating use tax accounts are not treated any differently than any other sales tax/compensating use tax accounts. There are multiple documents for training, guidance, monitoring and enforcement for these accounts. These documents are updated with any legislative, policy or procedural changes as soon as reasonably possible.
Ford County
Reviewing Ford County’s Ballot Reconciliation Process During the 2024 Primary Election (2024) 1 The Ford County election officer should ensure that poll workers follow procedures for reconciling the number of ballots cast with poll books check-ins on election day according to statute. Have Implemented The county updated training manuals and went over check-in sheets with workers.
Reviewing Ford County’s Ballot Reconciliation Process During the 2022 General Election (2024) 1 The Ford County election officer should continue working with the Secretary of State s office to revise and develop forms and policies to improve election security processes. Have Implemented The county always follows SOS updates and relays that information to board workers.
Reviewing Ford County’s Ballot Reconciliation Process During the 2024 General Election (2025) 1 The Ford County election officer should strengthen poll working training about the importance of obtaining all voters’ signatures in the poll books. In Progress The county is going over training poll workers again.
2 The Ford County election officer should develop a process or checklist to ensure election workers check tabulation machines for ballots after election day and the final canvass. In Progress The county is working with poll workers to check lists to check-ins and to let the clerk know as soon as possible if they are off.
Reviewing Ford County’s Tabulation Machine Testing Process During the 2024 General Election (2025) 1 The Ford County election officer should develop a process or checklist and strengthen its training to ensure they identify and resolve errors found during pre-election testing and post-election testing of its tabulation machines. In Progress Poll workers should let the Clerk know as soon as they notice any differences. They know not to wait.
Osawatomie State Hospital
Evaluating Staff Safety at Osawatomie State Hospital (2024) 1 To ensure staff have clear expectations regarding physical security and processes, Osawatomie State Hospital management should develop and regularly review, update, and clarify policies. This includes areas we noted in the report such as: Security staff patrol processes and documentation, Security staff fire training, Key return for departing staff, and Progressive Discipline. In Progress New Cores for our locks were ordered on 05/07/2025 with a 22-week lead time. Cores were received week of October 20th and the full system improvement should be completed by January 1. Policies and safety staff patrol documentation have been updated according to the revised policies implemented on March 1, 2025. Fire response has been transferred to the City of Osawatomie Fire Department removing the responsibility from OSH safety and security. The key return process for staff and the implementation of progressive discipline are currently in progress.
2 Osawatomie State Hospital should regularly review, update, and clarify existing policies to ensure policies and practices align. This includes areas we noted in the report such as: Personal security alarm checks, Communication of safety assessment reports, and Safety concerns form. Have Implemented Policies are reviewed by the policy owner annually to ensure the practice and policy align. Policies are reviewed and approved by committees every two years unless otherwise noted. Personal alarm checks are conducted monthly by our Safety Coordinator. The Safety Concern Form was implemented and updated in May 2025. Any comments submitted are reported quarterly to the Administrative Executive Committee.
3 As part of Osawatomie State Hospital’s policy review and updating, management should develop data systems and tracking to inform the updates. This includes important areas we identified such as: Use of personal security alarms, Overtime, and Disciplinary action. Have Implemented An audit of all policies was completed in April 2025, and archived policies have been removed from PowerDMS. The Personal Security Alarm Policy was updated April 7th, 2025. The Chief Financial Officer is monitoring employee overtime then sends a monthly report to the Superintendent to review and then discuss with Department Heads. Human Resources is monitoring disciplinary actions and reporting quarterly to the Administrative Executive Committee and Governing Body.
4 Osawatomie State Hospital should use newly created and already existing data to monitor safety issues to include: Environment of Care Committee results, Trends in personal security alarms (i.e., by area, staff member, and patient), Overtime by staff member, Trends in disciplinary action (i.e., by area and staff member). Have Implemented Monthly audits are conducted on each rotation and unit by the Safety Coordinator, to ensure all staff members have their personal alarms. Any instances of noncompliance are reported to the appropriate supervisors and is shared with Administrative Executive Committee. Also our Safety Coordinator sends out Monthly Safety Update campus wide and has included information about personal safety alarms every month.
5 To improve morale and working conditions, Osawatomie State Hospital management should work on communication and setting clear expectations. Management should develop processes to ensure all staff are held to expectations consistently. In Progress An HR investigator has been hired to assist with employee investigations. Competency worksheets have been developed to accompany employee position descriptions and will be implemented in January 2026 with new evaluations . An Employee Executive Committee was established on May 5th 2025, with a representative from each department attending monthly meetings with the Superintendent to receive updates and communicate any concerns or questions back to their respective teams
Kansas Department of Education
Evaluating Adult Virtual School Funding (2025) 1 The Central Plains school district should review all transcripts each year with Graduation Alliance to ensure accurate transcripts. Have Implemented At the beginning of every month our team at USD 112 meet to go through transcripts. We make sure that they meet all requirements to receive a USD 112 diploma. During this time we well communicate/meet with graduation alliance to make sure all classes and transcripts are accurate. We are currently planning end of the year meetings to discuss all the yearly transcripts moving forward.
2 KSDE officials should create a written policy and procedure manual that incorporates the rules the department intends to apply when reviewing adult virtual education credits. The department should ensure those policies do not inadvertently restrict or limit statutorily compliant credits from being funded. Have Implemented KSDE has written policies and procedures for auditing adult virtual education credits. The KSDE Enrollment Handbook is the written policy manual adopted by the state board and it includes the rules that KSDE applies when auditing virtual credits claimed for students aged 20 and older.
3 KSDE should incorporate general audit practices such as supervisory review and appropriate audit documentation into their written policies for adult virtual school funding audits. Have Implemented KSDE has a process for supervisory review of audits with documentation.
4 Once the department has created a written policy and procedure manual for adult virtual school funding audits, officials should train all audit staff to ensure that department policies are consistently followed. Have Implemented All KSDE auditors are thoroughly trained in all KSDE audit polices and procedures.
Kansas Office of Veterans Services
Reviewing Veterans’ Claims Assistance Program Matching Requirements (2025) 1 KOVS should provide written guidance to the veteran service organizations that define what activities or costs are allowable as matching support of the VCAP program. This should include how to estimate and report on shared office staff and resources (i.e., state headquarters) Have Implemented The Kansas Office of Veterans Services has amended Attachment G, Scope of Work, Billing Procedures section to the standard business contract to reflect the LPA requirements Calculating Grant Match in Kind Payments . Both service organizations acknowledged and signed the contract for FY26. KOVS has updated K.A.R. 97-6-6 to reflect the changes to attachment G and it is in the process of being approved.
2 KOVS should require the organizations to provide documentation with their match summary reports that’s sufficiently detailed to allow officials to determine what the amounts are and how they support the VCAP program directly. Have Implemented Per the current annual contract with each participating VSO, the VSOs are required to submit monthly invoices reflecting their operational expenses and how they support the VCAP program.
3 KOVS officials should review this documentation and request clarifications or additional information as needed prior to approving grant reimbursements or future grant applications. Have Implemented Each VSO participating in the program provides detailed invoices that reflect operational expenses related to assistance services occurring at both their field offices and organizational headquarters. The KOVS Deputy Director reviews the submitted documentation and requests clarification as necessary prior to approving grant reimbursements.
4 KOVS should ensure that they understand what their annual VCAP allocations are and extend grant contracts that are correct when they are signed. Furthermore, KOVS should follow proper state contract procedures when changes are needed and make sure that any changes to the contracts are properly documented. Have Implemented The Division of Budget issues direction on the annual VCAP allocation and KOVS has a clear understanding of the funding available for the program. KOVS coordinates with DoB to ensure it follows proper state procedures when any changes are necessary. In FY25 unused grant amounts for each VSO were unencumbered in a timely manner and were reappropriated in FY26 budget allocations for the VCAP program. Both VSOs are tracking the funding available to them for services provided.