The Kansas State Treasurer’s Office looked into whether the state treasurer Jake LaTurner could refuse to issue school funding he knows is unlawful. The answer is no.
At the request of some lawmakers, treasury officials had an attorney do some research.
“We essentially operate as the state bank. As long as the account holder has money in the bank, and we’re authorized to distribute those funds, our obligation is to distribute those funds,” says Assistant State Treasurer Peter Northcott.
A legislative post audit revealed transportation funding was unlawfully authorized to public schools for the last 5 years, and possibly for as many as 40 years.
Attorney General Derek Schmidt has requested that the Kansas Legislature and the Kansas State Board of Education work together on an audit of school financing, but to date, neither party has made plans to conduct a more comprehensive state audit of school funding.
Although everyone appears to agree the calculations directed unauthorized funding to schools, the treasurer can’t simply stop payment on a portion of funds without legislative approval.
“Even if we wanted to go through and stop that payment, the transportation payment is lumped in with everything else,” Northcott said. “There’s no line item for transportation. If we were going to really force the thing, you’d have to stop the entire payment.”
Dale Dennis, deputy commissioner of education, told legislative auditors that he based the misallocated funding on a lawmakers’ instructions years ago. That lawmaker has since died, but legislators stripped the transportation weighting from the school finance formula in the 1970s. Over the course of 5 years, the misallocations resulted in overpayments of $45 million, but auditors estimated the state may have distributed more than $400 million in unlawful payments to schools in the last 40 years.
Northcott says the treasurer’s office looked at simply withholding those transportation funds when it’s time to write the next check to public schools, but statute doesn’t allow that.
“We looked at it pretty hard,” he said. “If the Legislature wants to give us authority to stop payments, that’s a different story.” He stressed the treasurer’s office is not advocating to have that authority.
For now, that doesn’t appear to be the case. Nearly half of the legislature signed a letter declaring their support of Dennis, and now there are legislative proposals to codify Dennis’ calculations in state law.