Legislative auditors flag inconsistent scoring, sparse documentation in Base 1 ARPA grant awards

Legislative Post Audit staff reported that the Kansas Department of Commerce did not consistently follow its scoring procedures for the Base 1 grant program and did not document the secretary’s final award deliberations, potentially limiting transparency over about $99 million in awards.

Kristen, a Legislative Post Audit auditor, presented the report and told the committee the Base 1 program awarded “almost a hundred million dollars in federal ARPA funds to Kansas entities for infrastructure development associated with economic development projects.” She said Commerce accepted applications during a roughly one‑month window in early 2022 and made awards in mid‑April of that year.

The auditors reviewed Commerce’s three‑step process: an eligibility review performed by a third‑party vendor, a two‑reviewer scoring step using a 55‑point rubric, and a final decision by the secretary of commerce. Of 445 applications received, Commerce awarded about $99 million to 35 recipients in 24 counties, the report shows.

The audit team examined a sample of 10 applications in depth. For those 10, a third‑party vendor completed eligibility checks and one application was ruled ineligible. But in the scoring step the auditors found inconsistent application of Commerce’s process: one of the sampled applications was scored by only a single reviewer (Commerce described that as a mistake), and for 14 of 17 expected reviewer forms an important question — the “expected impact of the project,” worth up to 20 points — was left blank. “It’s possible that staff intended a score of zero, or they skipped the question,” the report says, and auditors noted they could not determine which occurred from the forms.

Kristen told the committee auditors could not review the secretary’s final award determinations because Commerce did not document that phase. “Staff told us the secretary considered application scores and then other factors — geographic location, project type, risk and amount of funding — and that those discussions were verbal,” she said. Without written records, auditors said they could not verify how those factors influenced final awards.

Committee members pressed Commerce staff about the missing scores and about how letters of community support and matching funds were counted in scoring. Senator Tyson asked for copies of supporting documents and for whether the third‑party eligibility vendor was competitively selected. Rachel, a Department of Commerce representative, said she would check the vendor procurement details and consult legal counsel on whether supporters’ letters are open records.

The audit made no recommendations because the Base 1 program is no longer active, the auditors told members. The committee accepted the performance audit as part of its consent calendar later in the meeting by voice vote with no objections.

The report appendices list all applications and show several projects that scored the same as or higher than funded projects but did not receive awards; auditors said those decisions could not be reconstructed without documentation of the secretary’s deliberations.

The committee asked Legislative Post Audit to provide supplemental information when available — including whether missing scores affected awarded projects, whether awardees have spent the funds, and whether Commerce has documentation of matching funds and post‑award monitoring.

Ending: Members signaled interest in follow‑up work to check how disbursements and matches were verified and whether awarded projects have met their reported milestones; Commerce staff said the agency collects quarterly reports and site visits and will provide additional information on request.