Five HealthSouth Corp. executives pleaded guilty Thursday to accounting fraud charges in federal court, bringing the total to eight executives charged in an investigation examining improperly inflated profits at the nation’s largest for-profit hospital chain.

Separately on Thursday, HealthSouth said it would eliminate 165 employees at its corporate headquarters. The company employs some 3,500 people in Birmingham, Ala., including 830 at its headquarters.

The job cuts were the first since federal regulators charged HealthSouth and Scrushy on March 19 with civil accounting fraud for allegedly overstating earnings by $1.4 billion since 1999. The company’s assets also were overstated by at least $800 million by the third quarter of last year, the Securities and Exchange Commission said.

HealthSouth declined to say how much money the job cuts would save the company.

“As the company gets back to the basic business of healthcare, it continues to assess resources and expenditures that do not directly impact patient care,” it said in a statement.

Meanwhile, U.S. Attorney Alice H. Martin said Ken Livesay, 42, who is HealthSouth’s chief information officer, was charged with conspiring with senior officers to artificially inflate the company’s earnings and the value of its assets.

Charges were also filed against vice presidents Angela C. Ayers, 33, and Cathy C. Edwards, 39, as well as group vice president Rebecca Kay Morgan, 35, and assistant vice president Virginia B. Valentine, 33.

The executives pleaded guilty to fraud and other charges in Birmingham federal court and will agree to cooperate with the government, Martin said.

“These accounting executives carried out the orders of superiors in the accounting department at HealthSouth,” she said. “Today they face the consequences of these illegal actions.”

HealthSouth spokesman Andy Brimmer told United Press International when employees enter their guilty pleas they are terminated.

Former chief financial officers Weston Smith and William Owens, and former assistant controller Emery Harris recently pleaded guilty to similar charges.

Scrushy, who was fired Monday as chairman and chief executive officer, has not been charged with any crime. But Martin said indictments would likely go beyond the accounting department.

All five executives were charged with overbooking reserve accounts, which could later be bled out into revenue; creating fictitious entries in the fixed assets system, and overstating intangible assets, or goodwill.

Martin said Ayers, Edwards, Morgan and Valentine were each charged with participating in the conspiracy, and with making false reports on the company’s financial condition. The charges filed Thursday also allege that a conspiracy existed from 1994 until this year.

On Wednesday, Standard & Poor’s cut its long-term debt ratings on HealthSouth to default, citing the company’s failure to pay off $345 million of the convertible bonds due on Tuesday.

S&P cut HealthSouth’s corporate credit and senior unsecured ratings to default from “CCC-minus” and its subordinated debt rating to default from “CC.”

The company said on Thursday National City Bank informed holders of two series of senior notes that HealthSouth failed to make a $21.2 million interest payment due April 1.

In a filing with the Securities and Exchange Commission, failure to make the payment within a 30-day grace period on the 7-3/8 percent senior notes due 2006 and our 8-3/8 percent senior note due 2011 will lead to an event of default.

HealthSouth had also failed to repay about $350 million of convertible bonds that were due April 1 after the company’s $1.25 billion credit line was frozen.

The company was founded in 1984, and went public as a result of an initial public offering in 1986. The company’s common stock was previously listed on the New York Stock Exchange under the symbol “HRC.”

Shares of HealthSouth gained 1 cent, or 9.09 percent, to close Thursday at 12 cents per share on moderate volume of 177,937 shares in over-the-counter trading.

HealthSouth is the nation’s largest provider of outpatient surgery, diagnostic and rehabilitative service. The company operated approximately 1,700 locations in 50 states, Puerto Rico, the United Kingdom, Canada and Australia.

Copyright 2003 by United Press International. All rights reserved.

“Dick Rowland Image”

”Shoots (News, Views and Quotes)”

– Union Membership Trends in States Vary

Last week’s Department of Labor report showed union membership reduced
to its lowest recorded level — 13.2 percent of the American salaried
work force. Numbers like that beg some sort of response from organized
labor, but the noises that came out of the AFL-CIO executive council
meeting can’t be too encouraging to union activists.

The Associated Press reported that “labor leaders’ discussions and plans
are focusing on 2004 this week earlier than ever before.” The council
agreed to spend at least $20 million to unseat President Bush. That’s
their business, but union membership declined during the eight years of
the Clinton administration, and at the rate they’re going, there may not
be enough members left in 2004 to cough up $20 million.

The overall numbers are depressing, but an examination of the
state-by-state figures show that some places are doing much, much worse
than others, lowering the national average as a result. In fact, in 14
states union membership outperformed the growth (or decline) of the
total labor force in the state. For example, in Tennessee the work force
grew by 2.2 percent, but the number of union members grew by 20 percent.
The other states where unions had a relatively good 2002 were Alaska,
California, Connecticut, Illinois, Louisiana, Maine, Maryland,
Mississippi, Montana, Nebraska, Oklahoma, South Carolina and Virginia.

On the other hand, 11 states and DC had percentage losses in union
membership in double digits — some of them while the state’s labor force
grew. They were Delaware (-10.9%), DC (-14.3%), Florida (-10.6%),
Georgia (-15.8%), Iowa (-11.4%), Kansas (-10.8%), Kentucky (-13.2%), New
Mexico (-15.8%), North Carolina (-14.0%), Vermont (-12.9%), West
Virginia (-12.4%), and Wyoming (-15.0%).

Above article is quoted from the Education Intelligence Agency
Communique March 3, 2003

– Prescription Drug Price Fixing

By Edward G. Rogoff, Associate Professor of Management, Baruch College,
Cuny and Hany S. Guirguis, Assistant Professor of Economics, Manhattan
College

Price-fixing is a crime — unless the government establishes it as law,
supervises it, helps maintain its secrecy, punished companies that
undercut prices and then becomes the biggest customer. This is precisely
the system that exists for drug price regulation. The government calls
it a drug price reduction program, yet it is a major culprit in causing
price increases.

Above is quoted from Forbes 12/9/02

– Some Publications and Research Projects

*”Lesson for States — Economic Freedom Means Prosperity” is a study by
the National Center for Policy Analysis (NCPA) and the Fraser Institute
(Canada). Hawaii ranked 35th with our average output per capita $1331
less than the average state (New Jersey) see study at
https://www.ncpa.org

*Goldwater Institute released Arizona Issue Analysis 174 by Jordan R.
Rose, Land Use and Zoning Attorney on August 16, 2002. The title tells
us why we in Hawaii should be interested “Eminent Domain Abuse in
Arizona: The Growing Threat to Private Property.” See study at
www.goldwaterinstitute.org

”Roots (Food for Thought)”

– Don’t Abandon One-way Streets!

In Cambridge, Chattanooga, and other cities, traffic engineers have
become outspoken opponents of one-way to two-way conversions By Randal
O’Toole

Published: The Heartland Institute 02/01/2003

The latest fad among urban planners is to convert one-way streets to
two-way streets. The goal, they say, is to slow down traffic and make
streets more pedestrian-friendly.

One-way to two-way conversions are being planned or implemented in
Austin, Berkeley, Cambridge, Chattanooga, Cincinnati, Louisville, Palo
Alto, Sacramento, San Jose, Seattle, St. Petersburg, and Tampa, among
other cities. These proposals have become a major source of controversy
in at least some of these cities, especially Austin, Cincinnati, and
Chattanooga.

By almost any measurable criteria–safety, pollution, congestion, and
effects on most local businesses–one-way streets are superior to
two-way streets. The idea that two-way streets are superior because they
are more pedestrian-friendly is just a planner’s fantasy that disguises
the real intent: to create an auto-hostile environment.

Why One-Way Streets?

Most one-way streets in this country were first created between the
1930s and 1950s from two-way streets. Those conversions took place in
areas built before the automobile became the prevalent form of
transportation. Such areas tend to have narrower streets and smaller
blocks than post-auto cities. One-way streets were thus an attempt to
accommodate auto traffic in areas not built for the auto. The wider
streets and longer blocks typical of post-auto areas often allow
improved traffic flows without one-way streets.

Before the 1990s, transportation policy was firmly in the hands of
traffic engineers, whose primary goal was safety, with a secondary goal
of the movement of people and goods. Cities that converted two-way
streets to one-way streets noted a significant decline in accidents.

One-way streets have the obvious advantage that pedestrians and drivers
need look only one way when watching for traffic. How many times have
you looked both ways when crossing a two-way street, only to be nearly
hit by a car coming from the first direction you looked?

One-way streets also permitted higher average speeds because signals on
a one-way grid could be synchronized to allow drivers in all directions
to proceed indefinitely at a fixed rate of speed. A semblance of
synchronization can be approached on a two-way grid only if signals are
more than a half-mile apart, and even then it is less than perfect.
Traffic on two-way streets, for example, is often delayed by special
left-turn signals, which are not needed on one-way grids.

Faster speeds on signal-synchronized one-way streets increased road
capacities without laying more pavement. Since the increase was in the
average rate of speed, not the top speed, increased speeds posed no loss
in safety. One-way streets not only have greater capacity than two-way
streets, they save the space two-way streets require for left-turn
lanes.

In the 1970s a new goal–reduced air pollution–led to more conversions
of two-way streets to one-way. The smooth flow of traffic allowed by
signal synchronization meant less auto emissions. Since cars pollute
more at slower speeds and in stop-and-go traffic, one-way streets can
generate significantly less pollution than two-way streets.

Proposals to Convert Back

Today, transportation policy is in the hands of urban planners who claim
their goal is to make cities more livable by designing them for people,
not cars. That people in most American cities do 85 to 95 percent of
their travel by car does not deter planners from making this artificial
dichotomy.

“A pedestrian-oriented hierarchy of transportation promotes density,
safety, economic viability, and sustainability,” say Austin’s Downtown
Design Guidelines. In transportation planning, “sustainable” has become
a code word for “anything but automobiles.” Beyond this, Austin does not
say why density is an appropriate goal, nor have planners shown how a
pedestrian orientation is more economically viable than an auto
orientation.

Austin goes on to say, “The safety and comfort of pedestrians is of
greater concern than the convenience of a driver.” This statement
assumes pedestrian safety and comfort is incompatible with the
convenience of drivers. In fact, the two need not be incompatible.

Planners only sometimes admit their real goal is to discourage driving
by creating auto-hostile environments. Since every single car on the
road has at least one person in it who is trying to get somewhere, being
anti-auto is hardly a people-friendly attitude. More important, in their
single-minded opposition to the auto, planners have forgotten about
safety, environmental, and social concerns.

Two Kinds of One-Way Streets

The controversy over converting streets back to two-way involves two
different kinds of one-way streets. First is the downtown grid, which
typically has traffic signals at every intersection set for speeds of 15
to 20 miles per hour. Second is the one-way couplet–two parallel
streets that feed traffic in opposite directions in downtowns or other
busy areas. These typically have traffic signals only at major
intersections which, if they are synchronized, are typically set for
speeds of 25 to 40 miles per hour.

Conversion of part of a downtown grid to two-way means a significant
loss of both safety and traffic flow. Such conversions produce no
positive results. They are likely to contribute to downtown decay as
they reduce the capacity of streets to carry traffic into and through
downtowns.

Converting one-way couplets to two-way could reduce flow capacities by
nearly half. “You need seven lanes of a two-way arterial to achieve the
same capacity as four lanes of a one-way couplet,” says transportation
planning expert Michael Cunneen. However, planners usually want to
reduce traffic flows by even more than this amount. Their proposals
often call for:

*reducing the number of lanes of auto traffic;

*narrowing lane widths;

*removing right- and/or left-turn lanes;

*adding median strips or other barriers to streets: and

*other traffic-calming (i.e., congestion-building) actions.

In Chattanooga, for example, McCallie and ML King avenues form a one-way
couplet of four broad lanes in each direction. The city plans to convert
both to two-way. ML King would have two lanes in each direction, but
McCallie would be reduced to one lane in each direction plus an
intermittent left-turn lane. The two lost lanes would be turned into
on-street parking. The result would be a net loss of two lanes, and the
remaining lanes would be slower (meaning less capacity) than the current
lanes. Planners say these steps will make streets more
pedestrian-friendly and that the resulting reduction in speeds will make
up for the reduced safety of two-way streets. Their real goal is to
reduce roadway capacities.

Planners in Chattanooga and certain other cities, such as St.
Petersburg, argue the decline of downtown areas since streets were
converted to one-way has reduced the need for roadway capacity, so the
reduction in capacity is not a problem. However, limited capacity would
inhibit the downtown revitalization planners also say is their goal.

Above is quoted from Heartland Institute, Environment & Climate News
February 2003 https://www.heartland.org

”Evergreen (Today’s Quote)”

“When a private individual meditates an undertaking, however connected
it may be with the welfare of society, he never thinks of soliciting the
co-operation of the government; but he publishes his plan, offers to
execute it, courts the assistance of other individuals, and struggles
manfully against all obstacles. Undoubtedly he is often less successful
than the state might have been in his position; but in the end, the sum
of these private undertakings far exceeds all that the government could
have done.” — Alexis de Todqueville, Democracy in America [1835]

”’Edited by Richard O. Rowland, president of Grassroot Institute of Hawaii. He can be reached at (808) 487-4959 or by email at:”’ mailto:grassroot@hawaii.rr.com ”’For more information, see its Web site at:”’ https://www.grassrootinstitute.org/

“Suzanne Gelb Image”

”Classroom Defiance – Why Won’t My Child Behave?”

Dear Dr. Gelb:

My 10-year-old daughter is getting into trouble in school because she passes notes and whispers to her friends in class. So I have restricted her twice from watching her favorite TV program, but it hasn’t helped. What else can I do?

Smart Kid’s Mom

Dear Mom:

Television restriction is one form of discipline, and if that doesn’t work obviously it is not a stiff enough consequence because your daughter appears to be willing to give that up to continue the behavior.

Consequences must be in proportion to the improper behavior. That being said, some parents in your position may choose to withdraw their child’s allowance, if the child has one, for a week or two, or until the behavior changes.

Parents should keep in mind that their own behavior must be consistent also (e.g., make the bed, wash dishes) because children tend to emulate caregivers. Parents need to remember as well that they are the authorities in the house and in the family, that they must have final say, and be firm and consistent with it.

”Homework – Why Does My Kid Fib About It?”

Dear Dr. Gelb:

On several occasions my 9-year-old has come home from school and told me he had no homework. Later I find out from the teacher that there was homework. I have worked hard to teach my child good values, especially about not lying. Why would my son override my moral teachings?

Truthful

Dear Truthful:

So often when children have not learned or mastered the mechanics of how to study, then when they open their books everything becomes Greek to them. As a result, it is not uncommon for them to avoid homework, even if it means fibbing to get out of it.

Such children need support and direction. They need someone that they can ask the many, many questions that they no doubt have. They need to be able to ask, “Why — What does this mean?” If they have no one to communicate with about how to learn, then when they go to school so much of what the teacher says tends to be a bunch of words without meaning. And when they get home and try to study or to figure something out, there is no one to help them with the answers; no one to discuss it with. It is not hard to appreciate what a nightmare this must be, and why they would avoid this experience.

Parents must prioritize spending time with their children, learning and growing together. Then studying, and even homework, can be a fun activity, not a nightmare. Keeping in mind that ignorance is invariably the aspect of learning that many children fear, parents should impress upon their children that ignorance is nothing to be ashamed of. All it means is that there are things have not yet been learned. All too often lies, such as those you describe, are intended to hide ignorance.

”’Suzanne J. Gelb, Ph.D., J.D. authors this daily column, Dr. Gelb Says, which answers questions about daily living and behavior issues. Dr. Gelb is a licensed psychologist in private practice in Honolulu. She holds a Ph.D. in Psychology and a Ph.D. in Human Services. Dr. Gelb is also a published author of a book on Overcoming Addictions and a book on Relationships.”’

”’This column is intended for entertainment use only and is not intended for the purpose of psychological diagnosis, treatment or personalized advice. For more about the column’s purpose, see”’ “An Online Intro to Dr. Gelb Says”

”’Email your questions to mailto:DrGelbSays@hawaiireporter.com More information on Dr. Gelb’s services and related resources available at”’ https://www.DrGelbSays.com

“Malia Lt Blue top Image”

Hawaii made national news today.

Not because the state got the worst or nearly the worst ranking in the business climate, government education, drug use, tax rates, poorly maintained roads, unbearable regulations, or the highest rate of property crime — all which the state has been credited with.

No, this time it was because the Democrats in the House of Representatives, with the exception of two, introduced a resolution to send “Aloha to Saddam.” The same Saddam who has been compared to Hilter, because he is a dictator credited with killing not 6 million Jews, but 1 million of his own people.

They did so under the guise of “promoting peace.”

House Democrats then took it a step further and promised to send certified copies of the Resolution to the President of the United States.

Imagine that — they had the nerve, the gall, the arrogance, in a time of war, to purport to the President of the United States that the people of Hawaii, including me, are opposed to him.

They had the incredible gall to represent that Hawaii, the state with a tremendous amount of military and dependents helping to keep the economy afloat, does not support the U.S. troops.

They had the self-importance, the ego, to say we in Hawaii do not like the way the President and the troops from Hawaii and other states are defending our freedom and destroying a dictator who is a major threat to me, my child, my family, and people throughout the country.

How humiliating. How despicable. How embarrassing. How utterly destructive. How dare they.

Let me just make one thing perfectly clear for the record. They don’t represent me, they don’t represent the majority view of the people of Hawaii or the nation.

House Republicans all adamantly opposed the Democrat resolution HR 164 that asked the U.S. Military to show “Aloha” or “love” to Saddam Hussein and spoke out against the resolution on the floor. Democrat Reps. Cindy Evans and Tulsi Gabbard Tamayo also voted no to the resolution.

“In order to give Aloha, it must be reciprocated, and I don’t think Saddam Hussein has aloha for us,” says Rep. Kika Bukoski, R-Maui.

HR 164 called the “penchant for making war” as “succumbing to the dark side of humanity” and one that does not strive to achieve the ideals of Aloha.

Rep. Bud Stonebraker, R-Hawaii Kai, called the resolution “shameful.”

“This kind of vitriolic speech makes Neville Chamberlain, the English Prime Minister who befriended Hitler during his rise to power, a courageous leader and Prime Minister Winston Churchill, who stood up against Hitler, somebody who has succumbed to the darker side of humanity,” he says.

Republicans say the Democrats’ resolution labels King Kamehameha, who engaged in war to unite the Hawaiian people, President Abraham Lincoln, who engaged in war to free slaves, and all the Americans who fought England to create the United States of America, as having “succumbed to the darker side of humanity.”

Other House Republicans were shocked by the lack of respect Hawaii Democrat lawmakers showed for the American and allied troops putting their lives on the line for the freedom Americans all enjoy.

Rep. Cynthia Thielen, R-Kailua, who represents the windward district including the Kaneohe Marine Base, told the Speaker of the House she “deeply supports the military troops” and says “this resolution does exactly the opposite.”

But it wasn’t just the Democrats in the House who blatantly bashed the president of the United States and freedom loving people in Hawaii and around the world.

Yesterday the Democrats in the state Senate also passed a controversial set of resolutions. These asked the U.S. Congress to repeal the U.S.A. Patriot Act through SCR 18 and the Homeland Security Act through SR 8 under the resolution title of “reaffirming the state of Hawaii’s commitment to civil liberties and the bill of rights.”

Three of five Republicans in the Senate voted against the resolutions. House Minority Leader Fred Hemmings was absent from the floor and Sen. Gordon Trimble voted for the resolutions.

Sen. Sam Slom, R-Hawaii Kai, who voted against the resolution, says the nation has been at war since the terrorist attack of 9-11.

He maintains Hawaii legislators should strongly support the American troops risking their lives to maintain the freedoms all Americans enjoy and who are fighting to help prevent future attacks on this great nation and the President of the United States.

Slom and other Republicans in the state Legislature say, unfortunately Democrats in both Houses are instead speaking out against America’s leaders, including the President and the majority in Congress, and the brave soldiers on the front lines in Iraq and other hot terrorism spots around the world.

Hawaii voters should be outraged, embarrassed and humiliated by Democrats who voted for these resolutions and then boldly sent them on to the President of the United States as if everyone in the state supports their view.

Imagine how history will look upon these legislators and the people of Hawaii who voted them into office:

*When the full extent of the chemical and biological weapons Hussein possesses, some found as early as yesterday, are revealed to the world;

*When the facts are exposed that Hussein was indeed planning an attack on America, possibly even Pearl Harbor, with the help of other terrorists groups around the world;

*When the truth is revealed about the 1 million people Hussein murdered, tortured, raped, terrorized and ultimately destroyed with the help of his sons and his cabinet members.

*When the facts are uncovered that Hussein was no better than Hitler, who mercilessly murdered 6 million of the best and brightest Jews in Germany and throughout Europe in the early 1900s and ruined the lives of millions more.

And the sad part is how few Democrats in the House and Senate who voted against the president, the troops, and the people of America, will understand they are condemning the freedom, safety and basic rights of all Americans, including the very people of Hawaii they represent.

Rep. Guy Ontai, R-Millilani, a former Army Major and West Point graduate, said it best yesterday: “You cannot say peace and not be willing to fight for it.”

A total of 27 Representatives voted YES to HR 164 HD1, including: Felipe Abinsay, Dennis Arakaki, Jerry Chang, Hel

Republicans and community activists will rally today at 2 p.m. at the state Capitol against a number of tax increase proposals put forth by the Democrat majority during the 2003 Legislative session that will raise Hawaii’s taxes by an estimated $400 million.

KHVH Radio talk show host Rick Hamada encouraged his listeners to join the rally this afternoon with “no new taxes” signs and red, white and blue clothing.

Republicans also extended an invitation to the public to attend what started as a press conference and morphed this morning into a protest rally thanks to Hamada’s war cry on the air.

Hamada says he will plan another “no new taxes” rally to send a message to lawmakers that raising taxes in Hawaii is not acceptable to the majority of the people in Hawaii, who already pay the fourth highest taxes in the nation.

The main opponents to the tax increase proposals are the small business owners and free-market advocates who stress the economy and businesses continue to suffer under the state’s and city’s repressive tax and spend policies, and that raising taxes only makes the situation worse.

Hawaii, once again, stands alone with its unusual strategy by Democrats to “help” the people of the state.

Hawaii is the only state in the nation to propose a new tax during these tough economic times, according to Gov. Linda Lingle, who says lawmakers are doing just the opposite of what they should be doing to help the economy — cut taxes.

Lingle signed a “No new tax pledge” with the Americans for Tax Reform before she was elected to office and has maintained she will veto any tax increases.

But that is not stopping Democrats who are already counting their votes to see if they have enough to veto her override.

Here are some of the tax proposals alive and likely to pass unless there is tremendous public outcry today and throughout the 13 remaining days of the session.

*The state Senate passed a measure to increase the general excise tax by 12.5 percent, from 4 percent to 4.5 percent, and now the measure is before the state House. The House leadership says the measure will not pass, but those who know how the Legislature operates say no issue is dead until the close of the Legislative session at midnight, May 1, 2003.

*The state House proposed a measure to allow the Honolulu county to impose an additional sales tax of an undetermined amount. Gov. Linda Lingle has said she will approve the bill to give the county more autonomy. Opponents say the city already has taxing powers on property and substantial revenue from fees charged for services and vehicles, and that the city should not be given additional taxing powers because the mayor has not been responsible with the money he already has.

*House and Senate Democrats say they want to pass a $10 per person per month tax on everyone from ages 25 to 99 to create a state-subsidized long-term health-care fund to care for the aging population in Hawaii. The $10 will increase to $25 per month and continue to rise under the Democrats’ plan. Opponents say the “progressive tax” will not work because there will not be enough money to pay for the long-term care of the people who are forced to pay into it. They say it is better for the community if people are given tax credits and other benefits for investing in their own long-term care private options, and let the truly poor rely on the state and federal government should they need long-term care.

Click here “Representatives at a Glance” and “Senators at a Glance” to get the list of all state Legislators and their contact information.

“Laura Brown Image”

It looked impressive. It sounded impressive.

Several dozen people took the state Capitol by storm yesterday, rallying in hopes their protest and shouts could echo to the fifth floor of the state Capitol, into the governor’s office, and somehow convince her to spare the Hawaii Department of Education’s Adult Education Program from budget cuts of $2.7 million from the Department’s more than $6.87 million.

Chanters shouted convincingly “SOS, save our schools” and held bold handmade signs to reinforce their message.

But behind the scenes, there was a much more to the story of what was really motivating many of those at the rally — money and credit. And the mainstream media missed the story all together.

Teachers interviewed at the rally told HawaiiReporter.com that Adult Education administrators paid them to attend the rally with state funds.

Teachers were compensated at the same rate they are paid for instructional time.

Even more shocking — students incurred course credits for participating in this rally under the guise that it was a lesson in “civics and democracy.”

Not one local media reported on this fact, rather focused on the outpouring of emotion by protestors that to “save the people of Hawaii,” the poor, the sick, the tired, the elderly, the non-citizens — the governor must restore funding to the adult education program.

Not one media looked at the facts of the program and they failed to mention the program’s serious flaws revealed in the state auditor’s latest report.

The 2001 Department of Education budget lists around 35 permanent employees, 17 temporary employees and costs of nearly $10 million to operate the adult education program. Each of the 11 schools has a principal, vice-principal, registrar and school administrative services assistant and other staff. Teachers are contracted out on an hourly basis.

The way the program works: eligible students are categorized as those with no schooling or primary level only, students needing a GED, adults requiring basic reading and writing instruction or requesting basic homemaking or parenting skills. Other services include naturalization training, “civics” and cultural opportunities.

Supporters of adult education say programs are “self-supporting.”

However, that does not appear to be true. According to the Department of Education’s own figures, a special fund of $1 million is allocated to cover expenditures for all programs, and the program also receives over $1.5 million in federal funding in addition to the general fund appropriations.

Oddly, some teachers aren’t even paid from the Department of Education’s budget, rather from the Department of Public Housing’s budget, according to one teacher interviewed at the rally who admitted that is where his salary came from. And this is not accounted for in the figures above, meaning even more government money is subsidizing this adult education program.

State Auditor Marion Higa hasn’t exactly given the program rave reviews either. In fact, her last audit of the Adult Education program in February 2002 reported the program failed on many accounts. The program:

*Failed to disburse federal funds through a competitive grant process;

*Used a process that violated the Hawaii Public Procurement Code;

*Double-counted students; i.e. if a student attended 3 classes, that student was counted three times;

*Assessment activities were counted as courses;

*Single classes segmented and counted as several;

*Classification and compensation of principals and vice-principals based on artificially-based student enrollment;

*Administrative staff also received part-time, temporary teacher pay up to $124,000 each;

*Teachers listed as students in the same classes they were supposedly teaching;

*Student assessment is nearly non-existent.

The State Auditor recommended allowing the University of Hawaii’s community college system and Outreach College to take over the program, rather than allow the Department of Education to continue to oversee it.

Meanwhile, reports from federal agencies reviewing Hawaii’s Adult Education program reveal the above listed problems to be unresolved and basically ignored by the Department of Education.

It seems the governor, in her own way, believes the department waste and bureaucracy can and should be cut. And in some sense, by cutting the budget, she says a necessary move in tough economic times, her emphasis will continue to be on money and resources for children first, in public school, rather than for bureaucracy.

The governor must do what she can to ensure the money grab by unethical bureaucrats does not continue — something she can do by taking the state auditor’s advice, including moving the responsibility for operations of the program to the University of Hawaii.

”’Laura Brown is the education reporter and researcher for HawaiiReporter.com. She can be reached via email at:”’ Laurabrown@hawaii.rr.com