Audits released Wednesday show Gov. Mark Parkinson and state Senate leaders are missing millions of wasted tax dollars when they claim they must raise taxes to balance the budget because spending cuts are exhausted.

Auditors presented two reports to the Legislative Post Audit (LPA) Committe. One found potential savings of $537,200 per year in the $4 million Ellinwood school district, USD355, budget. Another found $6 million to $8 million annual savings by reducing the number of judicial districts in Kansas.

These changes wouldn’t come in time to save the fiscal year 2010 budget but do indicate further efficiencies could have been enacted earlier and are still possible. Audits of just two of the state’s 293 school districts found $1.5 million in potential annual savings. An LPA statistical analysis of district spending indicates there’s more savings to be found.

Ellinwood Audit

The largest savings at USD355 would come from closing an under-used elementary school according to the LPA audit. Elementary students and most teachers would relocate to a similarly under-used middle/high school just a few blocks away.

Ellinwood could also save money by collapsing low-enrollment high school classes. “If the district filled its high school classes to capacity, it would need fewer sections and could replace three full-time teachers with part-time teachers, saving the district more than $120,000 annually,” the report said.

Auditors recommended the district share several full-time teachers with neighboring district schools about 10 minutes away. Superintendent Richard Goodschmidt told the committee that would be a challenge because Ellinwood is on a block schedule while neighboring districts are not. He also said moving away from a block schedule is under consideration and would offer additional savings.

Total USD355 district enrollment for 2009-10 is 393 students, down almost 30 percent from 563 students in 2001-02. The report said staff reductions did not keep pace with the decline in enrollment.

LPA’s Laurel Murdie told committee members that compared to its peers, Ellinwood has fewer district-level staff per pupil, but it spends much more per pupil on those administrators because of higher salary and benefit costs per pupil. Conversely total spending per student is lower than its peers even though “staffing levels were much higher than its peers.”

Sen. Chris Steinegar, D-Kansas City, reminded Superintendent Goodschmidt that USD354 Claflin and USD328 Lorraine are working on a merger and perhaps Ellinwood should consider joining. Goodschmidt said his district has already made inquiries. Smaller districts, like Ellinwood, typically spend a disproportionate amount on district-level administration because the costs are spread over a much smaller number of students.

The Ellinwood audit, as with previous K-12 audits by LPA, also stressed the importance of following standardized accounting practices and properly categorizing spending. “Before we could make meaningful comparisons, we first had to re-categorize the district’s 2008-09 expenditures, using detailed records from the district’s accounting system,” the report said.

Ellinwood was the second of seven districts to request a district efficiency audit. The 2010 Commission, in its June 29, 2009, meeting, voted to cancel the second half of an efficiency audit of all 293 districts ordered in 2008 and allow districts to voluntarily complete the audit. Commission chair Rochelle Chronister said district administrators were too busy dealing with budget cuts to complete the audit.

In December an audit of USD260 Derby, the first to volunteer for the full audit, found about $1 million in potential savings annually.

The first half of LPA’s statewide school district audit compared peer districts and found significant differences in per-pupil non-instructional spending, an indication of potential savings across the state. But the report said those savings could not be realized without completing audits of individual districts.

Judicial Districts Audit

In a separate report LPA said the state’s 31 existing judicial districts could be consolidated into 13 or seven districts saving about $6 million to $8 million annually.  The audit found that the annual average non-traffic caseloads ranged from 356 to 2,393 per judge.

The disparity is caused primarily by a Kansas law requiring one judge per county regardless of caseload. “As a result, a county with only 98 cases filed in 2008 (Wallace County) must have at least one judge, as does a county with 1.100 cases (Grant County) or a county with 57,000 cases (Sedgwick County).”

Since 1986 legislators have offered 10 bills in seven legislative sessions to amend the 1963 one judge per county law, but none have passed. The Kansas Bar Association opposes the change.

The audit’s proposals would eliminate as many as 19 judge positions and 123 non-judicial full-time staff positions. In 2008 state district courts spent about $114 million. About $102 million of that amount was for salaries and benefits; $101 million came from state funds.

Unlike Minnesota and Iowa, two comparable states, Kansas also has a municipal court system with 385 courts and 265 judges.  Additional savings from Municipal court changes were not evaluated in the audit report.

The report recommends the Legislature, “request the Chief Justice of the Supreme Court appoint a judicial advisory committee to study issues cited in our audit related to one judge per county, judicial redistricting, equalizing caseloads and the like. Also, the Legislature should consider providing funding to allow the Office of Judicial Administration to contract for a workload study.”

The timing and lack of media attention to the LPA Committee’s work in the school and judicial audits will limit public exposure to these potential savings as some elected officials claim further cuts are not available.

According to a Kansas Health Institute report published Jan. 22, Senate President Steve Morris, R-Hugoton, said further cuts to schools are off the table.

Morris said education and Medicaid spending account for most of the state budget, and those areas have been cut as much as possible without violating federal restrictions.

“So there’s 85 percent of the budget sort of off the table right off the bat,” Morris said.

Trying to cut $400 million out of the remaining 15 percent of state services, “is just not fair,” he said.

K-12 spending consumes about 52 percent of the state general fund. Completed audits show significant potential savings, but so far only seven districts have volunteered to find out. Both completed LPA school district efficiency audits concluded districts statewide could benefit from a systematic efficiency management process.

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Judicial Districts Audit

Full audit here (pdf)

LPA School District Audits

Completed:

• USD 260 – Derby. Full audit report here (pdf)
• USD 355 – Ellinwood (January 2010). Full audit report here (pdf)

Starting in January 2010

• USD 267 – Renwick
• USD 465 – Winfield

Requested but no start date

• USD 333 – Concordia
• USD 378 – Riley County
• USD 293 – Quinter