City auditor's final report reaffirms criticism of agency

By Johnny Brannon
Advertiser Staff Writer

The City Auditor's Office yesterday stood by most of its earlier criticisms of the Department of Enterprise Services, despite the department's complaint that a draft audit was misleading and contained errors.

A revised final audit notes the objections but maintains that the department's management and enforcement of concession contracts are "deficient" and lack long-term money-managing plans.

The revised audit clarifies a draft finding that the department improperly awarded a sole-source contract to operate a miniature train at the Honolulu Zoo.

The department initially characterized the contract as sole source, then later said it had been awarded as a "revocable permit," according to the audit. The permit award appears to be legal, but should have been competitively bid, the audit says.

The audit found that the train was started at the zoo at the behest of the city administration, rather than the zoo itself, and had failed to generate any revenue for the city. But the department said the train was intended to be an amenity that would attract people to the zoo and was not meant to earn money.

The audit found that the department failed to collect $202,000 owed by a Waikiki beach concessionaire, and said the inability to hire an attorney to pursue the debt was no excuse.

"Indicating that the department's plan is to seek legal remedies overlooks its own responsibilities for concession contracts," the audit says.

The report is the first produced by the City Auditor's Office since it was created by voters in 2002 through a City Charter amendment.

Reach Johnny Brannon at jbrannon@honoluluadvertiser.com or 525-8070.