By Ben Farkash
The Honolulu Advertiser recently reported that the Hawaii Department of Education may receive federal stimulus monies after all. Governor Lingle has previously said she planned to use those funds to balance looming budget deficits, in lieu of less appealing options such as raising taxes.
Education is rightly one of the highest priorities of modern society. Our collective future depends on the youth of today receiving an education that will prepare them to be good stewards of tomorrow. Consequently, the state legislature wishes to use the federal stimulus funds to supplement Hawaii’s education budget, rather than free up state funds that would have gone to the DOE .
Alleviating budget shortfalls in other areas of state government is good public policy. However, the audit of the Department of Education released in February of this year raises serious questions about the competence of the DOE to manage the funds already under its control, much less wisely administer a federal windfall.
The audit revealed a “culture of indifference towards procurement rules” at DOE, resulting in “numerous instances of non-compliance.” The entrenched culture of waste at the Department resulted in the procurement of several contracts found to be potentially fraudulent. These questionable contracts ranged in value from tens of thousands upwards to millions of taxpayer dollars. Many audited contracts were significantly over budget. Contracts were also found to be routinely executed for whatever amount the vendor asked for, instead of being based upon budgets per state law.
Disturbingly, many of the violations were attributed by the audit to “a general lack of awareness and concern for procurement rules and procedures.” It is impossible for one to follow the rules if one has no idea what the rules are. That Department personnel routinely violated and lacked awareness of procurement rules designed to protect taxpayers from the waste of their money is unsurprising in light of the Assistant Superintendent for School Facilities comment, that “If everybody followed the rules, the world would stop.”
At 23.1%t, the Department of Education has the highest percentage of Hawaii’s annual state budget. This amounted to 2.4 billion taxpayer funded dollars for the fiscal year that ended June 30, 2007. The Department lobbied hard for the passage of the Hawai’i Reinventing Education Act, which took effect July 1, 2005. This act, among other reforms, transferred responsibility for the procurement of certain services from the Department of Accounting and General Services to the DOE itself. In lobbying for this additional responsibility, the Department argued that efficiencies could be achieved by streamlining the procurement process and placing purchasing responsibility with individual schools.
It is hard to see how these reforms have benefited taxpayers, considering the Department still has no procedure in place to address procurement violations and deter repeat behavior. There are too many examples of the DOE’s wasteful habits to list them all here, but the $20,964,000 in contracts discovered by the audit that had “no scope, no deliverables, and no timetables” are indicative of the Department’s general disregard for the value of the taxpayers’ money it is entrusted with spending wisely.
To grant federal stimulus funds for education to the Department, in addition to the state funds that are already budgeted for the agency, is to send exactly the wrong message: Public monies can continue to be squandered with impunity. Rather than raising taxes on the already overburdened citizens of Hawaii to balance the budget, state lawmakers should demand accountability from the DOE for the numerous improprieties publicized by the recent audit to follow the recommendation of Gov. Linda Lingle by using the federal stimulus money to balance the state budget.
A graduate of the University of Chicago, Ben Farkash is a former policy intern with the Grassroot Institute of Hawaii.