Post Audit finds Overland Park, Manhattan and Wichita mostly used guest taxes appropriately but flags ordinance‑law mismatch risk

Auditors from Legislative Post Audit told the committee that the three cities reviewed—Overland Park, Manhattan and Wichita—generally used transient guest tax revenue appropriately for 2021–2023 based on each city’s ordinance and charter.

Macy Smith, presenting the transient guest tax audit, said the review covered how each city allowed the revenue to be used and whether spending followed those local rules. Smith said the cities mostly limited transient guest tax spending to tourism‑related expenses and bond repayment, which the auditors judged appropriate under each city's ordinance. She noted some cities expanded or clarified allowable uses (for example, adding economic development language) but still remained within tourism‑related purposes permitted by local charters.

However, Smith reported some expenditures in Wichita and Manhattan the auditors flagged as either inappropriate or unclear in their appropriateness; those specific items are detailed in the audit report. The audit also found a risk when city ordinances differ from state law: the Kansas Department of Revenue’s collection rules may not align with a city's charter ordinance and, as a result, KDOR (identified in the auditor’s presentation) may have collected revenue from guests at some lodgings that were not authorized under Wichita’s charter ordinance. Smith said auditors do not know the dollar amount involved and recommended process changes to reduce that risk.

Wichita’s finance director told auditors the city council passed a new transient guest tax charter ordinance intended to fix the issue; the ordinance was in a protest period at the time of the presentation and expected to take effect in February.

Auditors listed additional recommendations in the report (starting on page 16) to help cities and KDOR address conflicts and improve review processes. The audit covered only the three cities and the 2021–2023 period; auditors reminded the committee that results are not necessarily generalizable beyond the sample and time frame.