As Amended by House Committee of the Whole


H.B. 2612, as amended, would change several statutes pertaining to audits of state agencies, specifically the Legislative Post Audit Committee, the Kansas Public Employees Retirement System (KPERS), the State Treasurer, and the Pooled Money Investment Board (PMIB).

The bill would eliminate the current requirement that KPERS be subject to an annual performance audit. The bill would allow less frequent performance audits as directed by the Legislative Post Audit Committee. It also would allow performance audits to be combined with the annual financial compliance audits. The frequency of financial audits is not changed by this bill. The new legislation also would require KPERS to pay the cost of any performance audits. Currently, only financial-compliance audits are paid by KPERS and the performance audits are the responsibility of the Legislative Division of Post Audit.

The bill also would change the auditing requirements for the Office of the State Treasurer and for the PMIB. A requirement for annual written audit reports on the financial management practices of both agencies would be added to the statutes. The cost of the work would be paid by two agencies and the reports would address the adequacy of financial management practices and compliance with applicable state laws by each agency.

In addition, the bill would add another requirement that by June 30, 1999, and at least every two years, a comparative investment performance review and audit of the investment program of the PMIB shall be conducted. The cost of this work would be paid by the agency.

Current statutory requirements would be deleted that the PMIB must provide for an audit of the investment program at least every two years and for a comparative investment performance review periodically.

The bill would be effective upon publication in the Kansas Register.


The KPERS provisions were part of the bill as introduced. The other provisions pertaining to the State Treasurer and the PMIB were added as House floor amendments.

As an initiative of the KPERS reform legislation in the early 1990s, after discovery of significant KPERS investment losses, the annual performance audits were authorized before the establishment of the Joint Committee on Pensions, Investments, and Benefits. That Committee can request, as can the Legislative Post Audit Committee, audits at any time. The Legislative Post Auditor appeared in support of the bill as introduced.

The fiscal note on the bill as introduced indicates minor savings by reducing the frequency of performance audits. The cost of performance audits is shifted from the legislative agency to the KPERS budget for future work. The savings attributed to the Legislative Division of Post Audit would be in staff time, rather than monetary amounts, since future performance audits would be contracted out, according to the fiscal note.

No fiscal note was available on the House floor amendments.

1. *Supplemental notes are prepared by the Legislative Research Department and do not express legislative intent. The supplemental note and fiscal note for this bill may be accessed on the Internet at