Authorizing the secretary of administration to grant a monetary award to a state employee who reports activity that constitutes fraud, waste or abuse of funds in any program administered by a state agency.

As Amended by Senate Committee
Session of 2026
SENATE BILL No. 450
By Committee on Federal and State Affairs
2-3
AN ACT concerning state employees; authorizing the secretary of
administration to grant a monetary award to a state employee who
reports activity that constitutes fraud, waste or abuse of funds in any
program administered by a state agency; amending K.S.A. 75-37,105
and repealing the existing section.
Be it enacted by the Legislature of the State of Kansas:
Section 1. K.S.A. 75-37,105 is hereby amended to read as follows:
75-37,105. (a) As used in this section, "state agency" has the meaning
ascribed thereto by means the same as defined in K.S.A. 75-3701, and
amendments thereto, and. "State agency" includes the governor's
department, lieutenant governor, attorney general, secretary of state, state
treasurer, commissioner of insurance, each agency of the executive branch,
the legislature and each agency of the legislative branch, the judicial
branch and each agency of the judicial branch and any appointed state
council or state commission.
(b) (1) There is established an employee award and recognition
program for state employees. Under this program monetary or non-
monetary awards may be made to state employees. An appointing
authority may implement a program of award and recognition for
classified and unclassified employees or teams of employees for
distinguished accomplishment, meritorious service, innovations, Kansas
quality management, volunteerism or length of service. Under this
program monetary or non-monetary awards may be made to state
employees. Non-monetary awards may include, but are not limited to, a
medal, an annual award luncheon held by the employee's respective state
agency or public recognition by the Kansas house of representatives or the
Kansas senate.
(2) All awards and recognition provided under this section shall meet
the conditions for a discretionary bonus set out in 29 C.F.R. § 778.211.
(c) The total gross value of awards to any employee of the state
during a single fiscal year shall not exceed $3,500 except as provided in
subsection subsections (g) and (h). No award paid pursuant to this section
during the fiscal year shall be compensation, within the meaning of K.S.A.
74-4901 et seq., and amendments thereto, for any purpose under the
Kansas public employees retirement system and shall not be subject to
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SB 450—Am. by SC 2
deductions for employee contributions thereunder. Each taxable award
paid under this section shall be a discretionary bonus, as defined by 29
C.F.R. § 778, and shall be in addition to the regular earnings to which that
employee may be entitled or for which the employee may become eligible.
Monetary awards are subject to taxes in accordance with federal internal
revenue code regulations. The value of non-monetary awards shall be
reported by state agencies in accordance with sections 74 and 132 of the
federal internal revenue code and procedures prescribed by the director of
accounts and reports.
(d) The award and recognition program shall be paid from moneys
appropriated and available for operating expenditures of the state agency
or from other funding sources as appropriated. In the case of employee
suggestions, the award or recognition for each employee shall be paid or
provided by the state agency that benefited from and implemented the
suggestion.
(e) The regulations of the employee award board adopted pursuant to
K.S.A. 75-37,108, and amendments thereto, are hereby revoked.
(f) The secretary of administration shall adopt rules and regulations
that provide oversight and administrative review of state agency award and
recognition programs. The secretary of administration shall adopt rules and
regulations to provide safeguards to preclude opportunities for abuse
within the employee award and recognition program in each state agency
and to ensure objective decision-making procedures in award and
recognition determinations for all participating employees.
(g) (1) (A) The secretary of administration shall establish a state
employee suggestion program through which state employees may submit
suggestions for cost reductions to their respective state agency through
increased efficiencies or other economies or savings in the operations of
the state agency.
(B) Each employee making a suggestion for cost reduction shall be
awarded a monetary or non-monetary employee award or awards for
innovation pursuant to subsection (b) of this section upon adoption of the
suggestion by the state agency. Monetary awards for innovation shall be
nondiscretionary and shall be in the amount of 10% of the cost reduction,
accrued during the first 12 months after implementation of the suggestion,
as documented to the division of the budget, up to a maximum of $5,000.
Should multiple employees make similar suggestions for cost reduction, as
determined by the state agency, each employee shall submit to the head of
the state agency a list of each employee's percentage contribution to the
suggestion for cost reduction. Upon adoption of the suggestion by the state
agency, the head of the state agency shall make the final determination as
to each employee's percentage contribution. Such multiple employees shall
then share the documented cost reduction in such percentage shares as
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SB 450—Am. by SC 3
determined by the head of the state agency, up to a maximum of $5,000
per employee.
(C) The state agency shall retain 10% of the documented cost
reduction. Savings achieved through this cost reduction shall be placed in
a separate special revenue fund or funds for such purpose to be
administered by that state agency. The remaining balance of the savings
achieved through this cost reduction shall revert to the state general fund.
(2) Each state agency shall submit each suggestion it receives,
together with the state agency's estimated cost reduction, if any, and
dispensation of the suggestion to the division of the budget. The director of
the budget shall file copies with the director of the legislative research
department, who shall report annually on the information to members of
the legislative budget committee.
(3) Each state agency that has awarded an employee under the state
agency's employee suggestion program pursuant to this subsection shall
report all information related to the award to the secretary of
administration.
(4) At the beginning of each regular session of the legislature, the
secretary of administration shall provide all information received by state
agencies pursuant to subsection (g)(3) to the appropriate committees of the
legislature.
(5) The secretary of administration shall provide all information
regarding the state employee suggestion program to all state agencies by a
pamphlet, brochure or by publication on the official website of the
department of administration.
(h) (1) The secretary of administration may grant a monetary award
to a state employee who reports activity that constitutes fraud, waste or
abuse in any program administered by a state agency if the secretary of
administration, in consultation with the office of inspector general
established under K.S.A. 75-7427, and amendments thereto, or attorney
general, determines that such report results in the saving of state funds.
Unless the state employee is the original source of the information, the
secretary of administration shall not grant an award to such state
employee in connection with such report if the:
(A) Office of inspector general or attorney general had independent
knowledge of the activity;
(B) office of inspector general or attorney general had an open
complaint or investigation on the person or entity named in such report;
(C) state or any agent of the state was a party to civil or criminal
proceedings in which the allegations were disclosed;
(D) allegations were disclosed in a legislative or administrative
report, hearing, audit or investigation; or
(E) allegations were disclosed by the news media; or
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(F) state employee's information was derived from the investigating
or auditing of state agencies or the functions of state government as part
of such state employee's position or regular job duties.
(2) A state employee who makes a report under this subsection shall
declare at the time of making such report that such state employee is
reporting the potential fraud, waste or abuse in accordance with this
subsection.
(3) The award granted under this subsection shall be 10% of the
amount of the savings realized by the state that resulted from such state
employee's report of fraud, waste or abuse after deducting the costs of
investigation and recovery. Such award shall be granted only after the
secretary has collected the funds to be awarded.
(4) Any disciplinary action taken against an employee of a state
agency as defined under K.S.A. 75-2973, and amendments thereto, for
making a report under paragraph (1) shall be governed by the provisions
of K.S.A. 75-2973, and amendments thereto.
(i) Awards and incentives and other recognition pursuant to this
section shall not be deemed in violation of K.S.A. 46-237a, and
amendments thereto.
(i)(j) Any person elected or appointed to a state agency position shall
not be a recipient of a monetary award under this section.
Sec. 2. K.S.A. 75-37,105 is hereby repealed.
Sec. 3. This act shall take effect and be in force from and after its
publication in the statute book.
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