Legislative Audit reveals invalid KPERS payments

Friday, September 4th, 2015 @ 2:27PM

TOPEKA–A legislative audit released Friday showed erroneous benefits accumulated by Kansas Public Employees Retirement System (KPERS) beneficiaries, who earned service credits while they were not employed by the state.

Specifically, the audit, which was conducted by the Legislative Division of the Post Audit, found that out of a random sample of 34 teachers from large school districts, seven were earning retirement benefits while working solely for the Kansas National Education Association (KNEA) or other education associations, not in the classroom or directly employed by the state or a school district.

“For six of the seven teachers, the districts were reimbursed all or part of the teacher’s salary by the education associations. Because each of the former teachers remained on the districts’ payroll, the teachers continued to accumulate retirement benefits,” according to the audit.

The audit was requested by House Education Chair Rep. Ron Highland (R-Wamego), who said the findings will be valuable as lawmakers construct a new system for funding education in the 2016 legislative session.

“This audit validated our concerns; in the future we need to take more interest and a closer look at all funding for every state government organization, to include their accounting practices. A uniform accounting system used by all school districts statewide would help legislators, school board members, and parents ensure financial accountability,” Highland said.

The audit’s scope encompassed an evaluation of controls to detect and prevent fraud and abuse in KPERS. The audit also found that KPERS could strengthen its efforts to identify recipients of disability benefits who are not eligible for the benefits.  The audit identified at least 16 KPERS disability recipients who earned substantial income while also receiving disability benefits, which is not authorized.

The auditors also suggested that savings could be realized by changing the number of days of vacation a beneficiary could use for calculating final retirement benefits. The discussion centered around two House Bills under consideration.

KPERS Executive Director Alan Conroy indicated to the Legislative Post Audit Committee that his agency will immediately begin evaluating all school districts and all recipients of disability payments to put controls in place to prevent future errors.

The Kansas Public Employees Retirement System manages approximately $16 billion in assets for 295,000 active, inactive, and retired members, which include employees from the state, counties, cities, school districts, and other governmental entities.

The audit can be found at the Legislative Division of Post Audit’s homepage.

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