Topeka ? Kansas legislators plan hearings into a decision on social services funding by the administration of Gov. Kathleen Sebelius, the president’s choice for health and human services secretary.

The decision increased payments last year to a group that has the state Democratic Party’s chairman as a director. One critic says it represents a misuse of federal funds.

The Republican chairwoman of the House and Senate budget subcommittees on social services spending said Wednesday that they plan to have hearings. They also said they may ask for a legislative audit.

The decision last fall by Sebelius’ secretary of social and rehabilitation services is worth almost $713,000 a year to Community Living Opportunities. The nonprofit Lenexa group provides services to the developmentally disabled.

Its board includes Larry Gates, an Overland Park attorney and Sebelius friend who’s served as Democratic chairman for six years. It also includes a Gates law partner, Dan Biles, recently appointed by Sebelius to the Kansas Supreme Court. A third director is Lew Perkins, University of Kansas athletic director.

SRS Secretary Don Jordan said Wednesday that he briefed Sebelius about issues involving the group before he made the decision and had several conversations with Gates. But he said his decision was based on the severe disabilities of some of the group’s clients, which warranted larger payments.

Sebelius said there was nothing improper about Jordan’s decision. She also confirmed she was briefed beforehand but said, “I was not involved.”

The decision has been strongly criticized by Interhab, a group representing other groups that provide services to the disabled and manage their cases under state contracts. Tom Laing, its executive director, said the decision was “extraordinary and highly improper.”

“Have you lost your mind?” Laing wrote in a Nov. 6 e-mail to Jordan, a copy of which his group provided to The Associated Press. “My freeking phone is ringing off the wall.”

State documents show that Community Living had sought additional funding for its services since September 2007 because it found existing payments inadequate. The documents were obtained by Interhab through a Kansas Open Records request and provided to AP.

Ultimately, after a review by SRS staff, Jordan determined that 43 of its clients were severely disabled enough that the group should be paid at higher rates.

“I believe it’s important that the people who serve our clients have viable, thriving organizations,” Jordan said during an interview. “Are we paying them what we should be paying them, is what we came down to.”

Laing said decisions about whether services for clients are eligible for higher rates normally are made by regional organizations under contract with the state. That process is spelled out in their contracts, he said.

Laing said the money is being used “in a manner in which it wasn’t intended.” Payments for such services fall under Medicaid, funded jointly by the federal government and states.

“The entire system for people with disabilities is underfunded,” Laing said. “To then see apparently influential people be able to serve the needs of their organization is a slap in the face of every other organization.”