Kansas committee reviews audit finding EDIF spending not consistently aligned with statute, discusses interim review

Members of the Kansas House Committee on Agriculture and Natural Resources on an appropriations-related review discussed findings from a 2019 Legislative Post Audit (LPA) report that questioned how the Economic Development Initiatives Fund (EDIF) had been spent and whether spending matched legislative intent.

The committee heard from Andy Brienzo, a principal auditor at LPA, who told lawmakers the audit found a significant share of EDIF expenditures were not clearly tied to economic development as narrowly defined in statute. "That was the one expenditure from this fund at the time of our audit that was clearly not related to economic development," Brienzo said, referring to a general fund sweep the audit flagged. Brienzo summarized the audit—s FY2018 review as showing roughly $7.8 million (about 18%) of spending aligned with the three specific accounts identified in statute, $14.4 million (34%) was related to economic development more generally, and $20.1 million (48%) had gone to the general fund and was not related to economic development.

The discussion focused on whether current practice matches the statute that governs EDIF, geographic distribution of funds, and possible remedies. Representative Curtis urged statutory or procedural fixes to ensure the fund—s use matches legislative intent and asked for better tracking of geographic distribution across Kansas's four congressional districts. "Either needs to be changes made to the statute so that we're funding things correctly or look at what we're funding out of EDIF and try to make some adjustments there so that we're in compliance with our statute," Representative Curtis said.

Committee staff and members reviewed budget worksheet changes and noted several appropriation adjustments for fiscal year 2026: some items the House Committee on Appropriations retained, and other items were deleted or moved to other agencies. Shardae (committee staff) explained that appropriations deleted a $1,000,000 Commerce line for a health-care upskilling training program and that the funding was moved into a social services budget at KDADS; she also said $2,000,000 had been placed in the State Water Plan Fund on the EDIF schedule. Dylan (staff) reported that Luke Drury confirmed FY2023 "was the first time the full $2,200,000 was transferred from EDIF to the State Water Plan Fund going back to 2014." That transfer history raised additional questions about how consistently transfers were made in prior years.

Lawmakers discussed options rather than taking a vote. Staff described two paths: asking appropriations to add language (a proviso) requiring further study or creating an interim committee via appropriations bill language — the committee had recently used appropriations language to create an interim committee on another topic. Dylan told members an interim committee could request agencies to appear and explain how they use EDIF allocations and whether changes since the audit have addressed the LPA findings. Representative Long and others noted the audit covers FY2018 with review of FY2014–2017 for context and that agencies generally agreed with the audit findings when LPA issued the draft report.

No formal motion or vote to form a study panel or to add a proviso was recorded in the transcript. Several members volunteered to serve if an interim committee is organized. Representative Carlin said he was not proposing changes to the current year's green-sheet budget but supported an interim review that could recommend statutory or procedural changes for future budgets.

The committee also discussed broader questions about the statutory definition of "economic development," with members noting the term can be interpreted broadly. Representative White said the statute—s broad language makes it possible to argue many programs qualify as economic development and recommended a focused review of the statute and priorities for the fund.

The committee closed after asking staff to follow up with research on whether agencies have modified practices since the 2019 audit and to advise on options for a proviso or interim study. No formal directive or vote was recorded on the record.