Second Opinion
Felix reports disheartening

By Cliff Slater

As more students qualify for Felix, disturbing reports show gross overspending, lack of management and inconsistent accounting.

Having read the two reports on the Felix issue by State Auditor Marion Higa together with rebuttals from the Administration, I decided to sit in on the recent joint House/Senate Committee Felix hearing.

You need a sense of humor for government hearings. For example, shortly after we were told by the co-chair that state spending on Felix had passed the billion dollar mark one of the House Committee members somewhat plaintively asked, "Shouldn't we have had a plan?"

Even more amusing was that, on closer examination , the spending turned out to be not the $1 billion they told us, but actually closer to $2 billion but—hey!—who's counting?

Then there was the interchange where legislators were trying to find out who was really in charge of the Felix affair. The Department heads of Health and Education together with both Judge Ezra's Court Monitor and his Special Master all seemed to have a role. So did the Felix Operational Manager—whoever that is—and let us not forget the Board of Education.

Then Sen. Hanabusa asked our state auditor whom she considered to be the one person in charge of Felix matters. There was a great deal of hesitation about this but after some discussion they finally settled on—the Governor. That there had to be hesitation and discussion to decide who was running things tells the rest of us all we need to know about the management of Felix.

In this context it is not surprising to hear the state auditor claim that getting information and cooperation from the various departments that are the subject of her two Felix reports was the most difficult of the more-than-200 she has done in the last nine years.

The Felix problem is familiar: Lack of management, lack of adequate and consistent accounting, inadequate management reports, etc. Pick your government department; none are any different.

But Felix is, I sense, more out of control than most. Take the number of children qualifying as Felix class members. The auditor's first report in 1998 found that there were then, according to the Health and Education Departments, 4,100 students who qualified for the Felix class. In the auditor's second report in 2000 that 1998 figure had somehow been restated to 9,600 students. Now we are warned that the eventual total of all Felix children might well climb to over 30,000—more than triple the current number.

Considering that we spend $25,000 per Felix child (also climbing steadily) this could way more than triple the current spending of $350 million annually.

However, we do not know whether the $25,000 figure is correct. For example, in her first report, the auditor found that the DOE's "practice for reporting Felix-related expenditures results in over-inflated and unreliable figures." Interestingly, the administration's lengthy rebuttal did not bother to address this issue. Subsequently, the auditor's second report found a "lack of clear and consistent budgets and expenditures reporting" that made it impossible to determine Felix costs.

What has driven up costs? One indicator is that, in many cases, independent fee-paid psychologists are both evaluating and recommending treatment for Felix children and then administering (and getting paid for) the treatment that they recommend. Another is that fees paid to Felix mental health professionals appear to be excessive when compared to similar payments elsewhere in Hawai'i.

Why is it out of control? One example is that despite the state agreeing in 1994 to develop a management information system for Felix cases, seven years later they still have not produced it—seven years!

To know more, we are going to have to wait for revelations from the ongoing House/Senate investigation. For one thing we may get told who pays, and how much, for the Felix plaintiffs' attorneys; that will be an interesting number.

Whatever the outcome, Gov. Cayetano must take a more active role to get Felix under control with better management. The current situation is a tragic joke.

Cliff Slater is a regular columnist whose footnoted columns are available online.