Kansas Paid $2.8 Million and Plans to Return to the Old System

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In January 2024 the Kansas Department of Health and Environment signed a $4.3 million software-as-a-service contract to replace the aging system it and the Department for Children and Families use to license child care and foster care facilities. In April 2026 the state terminated the contract, effective May 13. By then it had spent nearly $3.2 million on the project, most of it federal pandemic recovery money, including $2.8 million in payments for 16 deliverables.

The state’s Legislative Division of Post Audit closed out its monitoring in a memo dated May 18. It says the two departments “plan to revert to the old CLARIS computer system.”

The closeout memo also records why the contract was terminated. In a memo to stakeholders, department officials attributed the decision to a lack of transparency about how much work was getting done and when deliverables would be completed, along with poor-quality deliverables and inconsistent technical assistance. The department places that problem with the vendor. My own reading is that it also describes something a buyer has to protect on its own side, which is being able to say at any point how far the work has come.

What The Monitors Reported Over The Winter

The Kansas Information Technology Office receives the project’s status documents, and the Legislative Division of Post Audit monitors the project and reports to legislators. Its memo covering mid-October 2025 through January 2026, dated February 19, found that “the project appears satisfactory for Scope, but Cost, Schedule, and Quality were in Alert status,” in part, it said, because of weak governance processes.

The memo describes what changed on the state’s side. The department’s project manager announced a transfer to another state agency; the parties agreed the manager would stay on until completion, and the manager was asked to take a more passive approach with the contractor’s staff. The Secretary asked the Assistant Secretary to take a more active role and, through the state’s chief information technology officer, enlisted the state’s chief information technology architect to help turn the project around. According to stakeholder interviews, “the personnel changes lacked a written governance structure to revise lines of authority,” and the memo says that likely contributed to project documents stagnating. The state IT office reported that the agencies did not submit the required status documents for the period ending December 31, and the auditors asked for updated project information several times without success. The project manager’s status reports, which had run for about a month, stopped in mid-December. The Secretary said that was deliberate, because the parties knew the information was not accurate and producing it took unreasonable effort. Weekly reporting later restarted, and the memo says leadership clarified roles and responsibilities, though the parties had not agreed on a revised schedule by the end of January.

The memo read the defect count as a quality problem: nearly 640 items logged in the first two weeks of user acceptance testing in October, and 2,245 by the end of January. The two sides read that number differently. The contractor said the project’s components turned out to differ more than initially described, acknowledged design errors of its own, said it had addressed 1,000 of 1,400 problems at the time, and called the state’s staff very professional and dedicated, which it thought contributed to the count; state stakeholders thought the contractor had not tested the system enough before handing it over for testing.

As of January 7, “the state accepted and fully paid $2.5 million for 14 of the 25 deliverables.” By closeout the count was 16. The closeout memo adds that on February 25 the department’s chief counsel sent the vendor a notice to cure, demanding project management information and a transparent change request process, and rejecting two change requests for missing justifications.

The February memo had carried a warning about the federal deadline. If officials decided “to pay the vendor for deliverables prematurely to use the available federal funding,” the state would lose leverage over the vendor. Neither memo says that happened.

Michigan Found The Handoff Gap In Writing

In April, Michigan’s Office of the Auditor General published a performance audit of IT contracting at the Department of Technology, Management, and Budget. Its central procurement office, which handles IT contracts over $500,000, had about 276 of them with a total value of $6.6 billion as of January 2026. The auditors concluded that the department’s monitoring of IT contracts was not sufficient.

The department requires a contract monitoring plan, which it calls a CMP, for each new contract. The auditors found plans missing for 2 of 17 sampled contracts, and the more telling finding was about people. New program managers who took over an existing contract “were not listed in the CMPs nor required to sign off on them.” The auditors concluded the department was “unable to ensure new contract program managers were aware of their responsibilities in the monitoring plan.” Elsewhere the report found that “156 (54%) of 287 expected contract monitoring reports were not completed for 20 (83%) of 24 sampled IT contracts,” and that “143 (50%) of 286 program managers did not complete all or part of the training.” The audit generally covered October 2020 through September 2024. The department disputed the assertion that it had not provided sufficient oversight, saying vendor oversight is a responsibility it shares with the state agencies, and partially agreed with each of the findings cited here. On the handoff point it agreed outright; in the auditors’ summary of its response, newly assigned program managers “were not always informed of CMP requirements when transitioning onto contracts,” and it committed to strengthen its onboarding practices by July 2027. It also told the auditors that a new contract management system put in place in May 2024 had reinstated automated reminders for monitoring reports.

Oversight Is Something The Buyer Has To Staff

A buyer can write a sound contract, with deliverables, acceptance criteria and a monitoring plan, and still lose track of whether the purchase is moving toward what it was bought for. The Value Standard treats the buyer’s governance as something that runs through the whole life of a purchase, and these two records show one of the points where it thins out. In Michigan the people changed and the plan did not reliably follow them. Kansas is a different shape: the parties agreed the project manager would stay on, senior leaders stepped in over the problem, the people the auditors interviewed said the personnel changes came without a written structure for the new lines of authority, and the record of where the project stood went quiet for weeks before leadership restarted reporting and clarified roles. Either way, acceptance can drift toward checking that the work product arrived on schedule.

People transfer, and senior leaders step in, and they should be able to. What has to stay put is a written record the buyer owns: what the purchase is supposed to change, the measures that would show it, and what each accepted deliverable proved toward that result. Whoever is watching the contract next week should be able to open it on the first day and know where things stand. A Request for Value is one way to get the vendor’s own claims into that record before signing. Keeping it current after signing is the buyer’s job, and it is the part most likely to be dropped when the watchers change. Two earlier posts here looked at a contract that paid for hours and set no measure for what they produced and at oversight as a duty rather than a seat. This is the gap between them: a buyer that knew what it wanted and lost the means to see whether it was arriving.

What A Vendor That Delivers Gets From This

The closeout memo describes “continued difficulties between the parties in reconciling the status on remediating the large number of bugs.” A vendor doing good work has the same interest the buyer does in a shared, written account of how much is done and what it has proved. Without one, two parties can look at the same project and honestly disagree about where it stands, and the vendor that delivered has nothing on the buyer’s side to point to.

According to the closeout memo, the federal funds were set to expire by November 30, 2026, and officials said that played a role in the decision to terminate. The department expects to use the remaining $2 million of the grant to stabilize CLARIS, the system the contract was meant to replace.

References: Kansas Legislative Division of Post Audit, IT project monitoring memo, KDHE Early Childhood Data Integration and System Enhancement, monitoring period October 15, 2025 through January 31, 2026, February 19, 2026, and closeout memo, May 18, 2026; Michigan Office of the Auditor General, Performance Audit Report 171-0510-24, IT Contracting, Department of Technology, Management, and Budget, April 2026.

Keep reading: ACT II · Chapter 8: The Buyer Lifecycle Is Progressive Governance