State auditors have raised concerns about the lack of transparency in a Kansas Department of Commerce program distributing $4 million annually in income tax credits to encourage donations for community service projects. The audit revealed that the agency doesn’t fully document its rationale when selecting recipients, making it impossible to determine how projects were chosen or whether decisions were fair. The goal of the program is to boost fundraising efforts for nonprofits and government organizations across the state.
Auditors recommended that the Department of Commerce improve documentation of the deliberation process for tax-credit applicants and awards. Lt. Gov. David Toland defended the program’s evaluation process but acknowledged the need for better documentation. The program has faced significant demand, with interest exceeding available state funding. Despite the challenges, the program has awarded $130 million in community tax credits over the past three decades.
The audit also noted that 12 other states have similar tax credit programs, highlighting the need for increased transparency and accountability in the distribution of community service tax credits.
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