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The Honolulu Advertiser
Posted on: Saturday, February 11, 2006

Board wary of Lingle's proposal

By Beverly Creamer
Advertiser Education Writer

ABOUT THE COMMISSION

The 25-member Commission on Financial Transparency and Accountability for the Department of Education, under consideration by Gov. Lingle, would include representatives from:

  • The Hawai'i Business Roundtable.

  • The University of Hawai'i School of Business.

  • Three representatives from accounting and auditing firms, one to come from a nationally recognized firm, and one to be knowledgeable in government accounting standards.

  • A member of the Board of Education.

  • The schools superintendent.

  • A representative from the state Department of Accounting and General Services.

  • An expert in automated financial accounting systems.

  • The legislative auditor or a designee.

  • The chairmen and ranking minority members of the House and Senate committees that oversee DOE.

  • A representative from the state Department of Budget and Finance.

  • Three school principals, one from an elementary, one from a middle and one from a high school.

  • Three teachers, one each from an elementary, a middle and a high school.

  • A complex area superintendent.

  • Three members of the general public with an interest in the fiscal accountability of Hawai'i public schools.

    As envisioned at this point, the governor would appoint all members, as well as name the chairman. Members would be unpaid.

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    Gov. Linda Lingle is considering appointing a 25-member commission to analyze the Department of Education's finances and recommend a "comprehensive, detailed and understandable" accounting system for the state's largest department — a proposal that is raising concern within the Board of Education.

    Linda Smith, Lingle's senior policy adviser, said the new initiative for an oversight commission is "a constructive" approach by the governor to offer assistance to the department to manage a budget worth more than half of the state's general fund.

    But Board of Education Budget Committee Chairman Garrett Toguchi asks why the governor didn't just sit down with the board and talk frankly about any concerns she might have.

    "We don't argue there's a need to look at the financial accountability," said Toguchi, "but the crux of my concern has been that the governor has chosen not to work cooperatively with the board.

    "Instead of coming to us and saying, 'Hey, look, these are my concerns and I would like you to look into them' ... then if we said no, she has every reason to form this outside commission," Toguchi said. "But she's never done that."

    The debate comes on the heels of a public skirmish between the department and the governor's budget director in the past few weeks, with the administration charging that the DOE is sitting on more than $500 million for capital improvements and school repairs, and the DOE arguing that every dollar has been spent or is in the pipeline.

    Toguchi already has called for stepped-up board oversight of the department's fiscal management, including public input on the annual budget and a five-year review of all programs and their effectiveness. His Budget Committee will discuss the suggestions on Wednesday.

    Smith said she has met with board Chairman Randall Yee and board member Cec Heftel to discuss the proposed commission and expected the chairman to bring the matter to the board.

    Meanwhile, Smith said, she also has asked for feedback from schools Superintendent Pat Ha-mamoto. DOE spokesman Greg Knudsen said Hamamoto asked staff to analyze the proposal.

    "The levels of systems you need are beyond what the department currently has in place," said Smith, adding that several audits have pointed out deficiencies in the DOE's fiscal and accounting systems, with the Hawai'i Business Roundtable supporting the department's clear need for a chief financial officer.

    A bill is moving through the Legislature to establish a new CFO position for the department. Hamamoto supports the proposal. At present, the DOE budget director oversees creation of the annual budget but not expenditures.

    While the Board of Education will discuss Lingle's proposal at its meeting next week, Yee said he isn't opposed to any help the board can get in its oversight of the department and its responsibility for overseeing the state's public schools, but he said he does worry about such a commission mandating changes.

    "If the intent of this commission is really to provide recommendations to the board and the department as to what might work better, I don't have any problem with that," said Yee. "To the extent that there are external people looking at how to improve the system, we can all benefit.

    "But if it comes up with recommendations to the Legislature, and then the Legislature mandates what the system will be, then we'll have concerns. The governor would be circumventing the role of the board."

    Smith said that by contrast, the commission could be of great assistance to a new CFO.

    "That officer is going to need some tools," Smith said. "Right now, the focus is on the DOE because of the very large magnitude of the expenditures the department undertakes and a sense from the community we need to get a handle on the expenditures and a measure of the results."

    The governor raised the issue in her State of the State message.

    "Before we give the DOE a blank check," she said, "we must be certain we are getting our money's worth for the more than $2 billion we are already spending each year on K-12 operations, and the $570 million already approved to construct, repair and maintain our schools."

    A "fact sheet" prepared by Lingle's staff and released that same day spoke of the administration's call for "increased transparency" in identifying, documenting and reporting on the DOE appropriations. It also mentioned Lingle's desire to establish a nonpartisan commission to design the steps necessary to implement a clearer budgeting system.

    Reach Beverly Creamer at bcreamer@honoluluadvertiser.com.