Even though the Hawaii State Legislature has not yet convened for the 2004 session, the process and debate can be inferred from transcripts of past sessions. The following is a likely discussion on local school boards:

Chairman Tanaguchi:

First, we will consider Senate Bill 1335, which proposes an amendment to Article X, sections 2 and 3 of the State Constitution to replace the current single district school system with locally elected school boards. Ms. Higa, would you tell us what the fiscal ramifications of local school boards would be?

State Auditor Marion Higa:

The Legislature and the public may want to look at the 58 audits our department has done on lower education since 1990 to determine if expenditures for local oversight might be warranted. These may be found at http://www.state.hi.us/auditor/Categories/EDU.htm These audits detail how the Department of Education is not compliant with statutory requirements for performance based budgeting. Some highlights from these audits include:

$2.2 million in expenditures out of $13.8 for special education equipment that cannot be accounted for in 2003 due to the state DOE’s lax management. The security of the department’s $373 million in fixed assets cannot be assured due to lack of monitoring and enforcement;

$16 million spent on the Integrated Special Education Database (ISPED) information system required under the Felix Consent Decree. Each member of the ISPED project team reports to two or three supervisors, there is no tracking of expenditures and contracts have been increased by millions without any justifying documentation.
Implementation of the Comprehensive Student Support system, a multimillion-dollar system that lacks accountability and effectiveness measures.

Sen. Hooser:

Let me interrupt here, Ms. Higa, but aren’t Hawaii’s public schools under funded?

State Auditor:

Our office does not make judgments on the adequacy of funding; instead, we examine performance and fiscal accountability within the scope specified by the Legislature. These are just examples from past audits of the millions of dollars that the DOE has not been able to account for due to poor accounting practices, lack of appropriate oversight and monitoring of contracts.

Sen. Sakamoto:

But wouldn’t we be able to solve these problems if we just raise taxes to get more money into the public schools?

State Auditor:

Even if you raise taxes, the Department of Education still does not have the infrastructure in place to monitor the efficient expenditure of education funding. The problems outlined in our audits generally have not yet been corrected by the Department of Education.

Sen. Taniguchi:

But Ms. Higa, you still haven’t answered my question about the cost of local school boards. If we don’t raise taxes, how are we going to get money?

State Auditor:

Our office has not been asked by the Legislature to report on that; however, in my opinion, the physical costs of operating local school boards would logically be more than offset by savings if their function included external monitoring and accounting for education expenditures.

Sen. Slom:

Ms. Higa, didn’t one of your audits recommend that the DOE implement a financial analysis program that would allow reporting of expenditures by school and program?

State Auditor:

In 1998, our office recommended that the DOE use In$ite — a financial analysis software that they currently own. This would allow for trend, deviation, comparison and cost/outcome analyses.

Sen. Slom:

Would use of that software assist local communities in monitoring how education funds were being used?

State Auditor:


Sen. Slom:

So, ideally, you are saying that we have the ability to see just how education funds are being spent, which would be a logical step before we throw more public money at the DOE?

State Auditor:

Yes, our office has essentially recommended that.

Sen. Kawamoto:

But if we don’t raise taxes, how will we ever get U.H. West?


Chair Taniguchi:

Thank you for your testimony today, Ms. Higa. Adjourned.

”’Laura Brown is the education reporter and researcher for HawaiiReporter.com and the education policy analyst for the Grassroot Institute of Hawaii. She can be reached via email at”’ mailto:laurabrown@hawaii.rr.com