TOPEKA, KAN. — Financial problems and alleged violations of federal law were found in the state office that provides information technology services for state agencies, according to an audit released Tuesday.
The audit focused on the Office of Information Technology Services, an agency with 120 employees and a $36 million budget that is funded through charges paid by other state agencies.
The improprieties cited in the report went back as far as 2004.
Anthony Schlinsog, who was appointed by Gov. Sam Brownback as permanent chief information technology officer in January 2012 and is the head of OITS, said OITS had embarked on a series of changes, starting in early 2012, to address problems highlighted by the audit.
“OITS was taking action to resolve almost every one of the issues raised prior to the beginning of the audit,” Schlinsog told members of the Legislative Post-Audit Committee.
Several members of the committee, however, said the agency needs to be brought under the legislative appropriations process for oversight.
“We should have some accountability of how these dollars are spent,” said state Rep. Tom Burroughs, D-Kansas City, Kan.
The committee ordered that a presentation of the audit be made to the legislative budget committees when the 2014 legislative session starts in January.
The audit found that since fiscal year 2009, OITS and its predecessor agency, the Division of Information Systems and Communication, made approximately $6 million in accounting adjustments to avoid reporting profits.
State auditors said that appears to violate federal regulations and estimated that the state will owe the federal government $1.2 million. Under federal law, state agencies can use federal funds to pay for information technology services, but OITS is prohibited from generating profits from those services.
Auditors said DISC and OITS have also improperly used losses from prior years to offset current year profits; which likely will cost the state $1.4 million.
The audit also found that some agencies were paying less than the costs of services while others were paying more. The governor’s office was not charged for IT services for the past nine years, and the Legislature received services at a substantial discount, the audit said. These costs were then passed on to other agencies in the form of higher rates for unrelated services.
In response, Schlinsog said, “While we don’t deny that in the past there have been transfers of overages from some rates to make up for deficits in other rates, we don’t believe it was done to avoid reporting profits in those rates, but rather to solve the more immediate problem of having to balance the budget of DISC and OITS.”
In addition, OITS has had to borrow money and pay penalties to address short-term cash-flow problems, the audit said.