Possible fraud extends probe into special ed

By Robbie Dingeman
Advertiser Capitol Bureau

State Auditor Marion Higa told a legislative committee yesterday that she had found questionable billing in state spending on special education, including a therapist's bill for 127 hours of services in one day.

Higa was to be the last witness for the House-Senate probe, but leaders of the committee called for the investigation to continue for another year. "The committee's work is far from completed," said Sen. Colleen Hanabusa, D-21st (Barbers Point, Makaha), who is co-chairwoman of the panel.

Meanwhile, former Schools Superintendent Paul LeMahieu complained that the committee had not heard from him on key matters.

"Without hearing from me, any conclusions about matters that involve me are so flawed to even the most casual observer as to warrant their complete disregard," LeMahieu said.

Hanabusa called his statement "extremely self-serving." She said the committee had offered LeMahieu the opportunity to speak. "Dr. LeMahieu has never wanted to appear under oath," she said.

LeMahieu resigned last month and admitted he had "crossed the line" in a relationship with the owner of Hilo-based company Na Laukoa, which was awarded a special-education contract.

Higa said at yesterday's hearing that her staff had conducted a computer analysis of billing that turned up a pattern of problems and what appears to be fraudulent billing.

"We found, for instance, in one month there was a therapist who was paid for 1,765 hours and billed the state almost $60,000 for that month," she said. The therapist claimed to have provided seven hours of individual therapy, five hours of group therapy and 115 hours of rehabilitation in one day.

Higa said cracking down on abuse or inefficiency should free money for services to children.

"If you had tighter controls, you might be able to uncover the cheaters and the exorbitant prices the state is paying unnecessarily, and thereby the dishonest folks might be driven out of the system and you'd have more money for the legitimate needs," she said.

She said the investigation had been hampered by the Department of Education's refusal to allow auditors to look at student records. And she said she was not able to get appropriate information about spending.

She estimated the state's Felix cost last year at close to $400 million: $328 million in the budget and $60 million or more for fringe-benefit costs, transportation and services to children ages 3 and under.

Hanabusa expects the committee to meet again on the draft recommendations in time to have a final report available for comment before the legislative session begins in January.

She asked Higa if she could say whether children were getting the services they need.

"We know they're being serviced," Higa responded. "We don't know how effective those services are."

Hanabusa also said the committee is challenging federal Judge David Ezra's quashing of a key witness' subpoena, and has told its attorneys to seek enforcement of a legal summons of Judith Schrag, member of a technical assistance panel set up by Ezra to set criteria for special-education compliance.

Reach Robbie Dingeman at rdingeman@honoluluadvertiser.com or 525-8070.