The state of Kansas is canceling a contract that administered an elementary-school reading program because of what state officials call inappropriate spending on travel and salaries.
The contractor disputes any mishandling of the money, which in recent years amounted to nearly $10 million routed from a program meant to serve needy families.
The Kansas Department for Children and Families announced Friday that it is canceling the contract with Hysell & Wagner LLC to run the Reading Roadmap, which provides literacy programs for students at 30 school districts.
In 2013, then-Republican Gov. Sam Brownback created the Reading Roadmap to advance his goal of improving reading scores. He funded it with $9 million from the Temporary Assistance for Needy Families welfare program.
An audit started during Brownback’s tenure, DCF Secretary Laura Howard said, and an additional investigation after Democratic Gov. Laura Kelly took office showed the money isn’t being spent efficiently. The audit found more than $2 million that DCF said was incorrectly paid to Hysell & Wagner.
“After reviewing the results of a DCF audit and despite heightened oversight during the first six months of 2019, it’s clear that Hysell & Wagner is falling short of this basic standard,” she said.
The audit initiated during Brownback’s administration was never finalized and published. Howard said she didn’t know why.
Further review from the agency found Hysell & Wagner spent money on 38 trips between Kansas and the homes of company executives on the east and west coasts. In addition, Howard said hundreds of thousands of dollars went to the owners of the group, through direct and indirect payments.
Howard said the TANF dollars are meant to help the most vulnerable, and the spending by the administrators was inappropriate.
“To see TANF dollars,” she said, “going at that high of a level essentially to subsidize two individuals, (it was) very frustrating to me.”
The agency said there were unsuccessful efforts to correct issues with Hysell & Wagner.
The cancelation comes as Kelly’s administration reviews the performance of existing state contracts. Her administration canceled more than $100 million in IT contracts earlier this year.
The spending meant administrative costs were higher than the 15 percent target set for federal grants, Howard said. But Andrew Hysell, one of the company’s executives, disputes that. In an interview, he said the group had been through federal audits and administrative costs were below targets.
“I don’t understand why this became a political issue,” he said. “It’s a kids’ reading program. It’s unfortunate.”
The administrators changed accounting procedures in 2015 in response to requests from DCF. Hysell said it’s not easy administering a grant of that size, but his group took steps to manage the money properly.
“We really worked very, very hard,” he said. “We’ve literally reconciled it down to the penny.”
The state will continue the Reading Roadmap programs, although they will be funded directly by the state instead of through an administrator.
“We’re really happy that they’ll continue to fund the program,” Hysell said. “We want these families and these kids to get these services.”