Possible misuse of education money found
By Scott Ishikawa
Advertiser Staff Writer
A legislative committee investigating the use of public money in the state's attempt to fix the special-education system questioned yesterday whether money designated for regular education may have been used to pay for special-education contracts.
A Department of Education expenditures report examined by the committee yesterday showed that more than $4 million designated for regular education was used for projects that may have been related to the Felix consent decree for special-education services.
One $2.8 million allocation in the report was earmarked for "school-based technical services assistance, Felix."
"We suspect that $2.8 million amount may have gone to the Na Laukoa Felix contract on the Big Island, which was a minimum value of $2.3 million," said Sen. Colleen Hanabusa, joint investigative committee co-chairwoman. "If they used it for Na Laukoa, they fudged the numbers because the DOE was not authorized by the governor to use that money."
Paul LeMahieu resigned last month as state schools superindendent, having admitted that he was involved in an affair with Na Laukoa's owner after the awarding of the special-ed contract. LeMahieu had been granted sweeping powers to help the school system comply with the consent decree.
During yesterday's hearing, Chris Ito, DOE accounting division director, confirmed that money designated for regular education was used for special-education projects.
Sen. Norman Sakamoto responded angrily: "My frustration is you guys are the bean counters, and you're supposed to put the beans in the right boxes. That's your job."
The legislative committee said it is also looking into whether Ivor Groves, appointed by U.S. District Judge David Ezra to monitor the state's progress in improving special-education services as outlined by the Felix decree, hired his own Florida-based company to provide some Felix-related work.
Rep. Scott Saiki, committee co-chairman, said a report provided to the Legislature on Friday by DOE internal auditor Edwin Koyama shows that Groves' company, Human Systems and Outcome Inc., was hired to help design the Felix service testing for Hawai'i schools.
Groves, who was on the Mainland, could not be reached for comment yesterday.
When Groves was appointed by the court to oversee the process implementing the Felix consent decree, he formed the Felix Monitoring Project. Saiki said the DOE report shows that $50,000 went to Groves' business partner Ray Foster. The committee wants to look at another $35,000 in per-diem and travel costs that may have been spent by Grove's company.
Yesterday's daylong legislative hearing ended a week in which Judge Ezra and the legislative committee traded barbs over the federal handling of the Felix implementation process.
Ezra has scheduled a Nov. 30 hearing to determine whether the state has done enough to improve special-education services.
Ezra last week heavily criticized the Legislature's investigation. He has quashed a subpoena issued by the legislative committee to question federal court-appointed officials about the Felix process.
