BOE audit questions charter schools' management of public funds
by Nancy Cook Lauer
Stephens Media Capitol Bureau
nclauer@stephensmedia.com
Tuesday, February 27, 2007 8:04 AM HST
HONOLULU -- A key committee of the Board of Education, distraught over an audit that showed an apparently free-wheeling and free-spending Charter School Administrative Office, on Monday recommended the findings be turned over to both the state Ethics Commission and the Department of Labor.Stephens Media Capitol Bureau
nclauer@stephensmedia.com
Tuesday, February 27, 2007 8:04 AM HST
Members of the BOE Audit Committee were especially concerned over undocumented luncheon meetings totaling $618 and staff celebrations and farewell parities totaling $1,110 during the almost 21/2-year period covered by the audit. They also questioned why the charter office paid expenses for two charter school directors to travel from the Big Island to attend a BOE general meeting.
The internal audit covered spending at the office from Sept. 1, 2004, to Jan. 12 of this year. The undocumented spending on meals and parties came during the tenure of former Executive Director Jim Shon, whom the board fired last summer. The office has had four "permanent" or interim directors in its three-year existence.
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BOE auditor Chris Lee said the primary weakness at the office was the lack of formal policies and procedures and a strategic plan. If those two weaknesses were corrected, the other 11 problems he found should go away by themselves, he said.
"This one looks a lot worse than it really is," Lee said.
State law allows charter schools and the administrative office to operate outside conventional state laws but requires the office to have formal policies and procedures.
Interim Executive Director Maunalei Love said the office would follow the audit recommendations and get the formal strategic plan and policies and procedures completed as soon as possible -- perhaps even by next month. She said employees had started working on them when she came on board about four months ago, but the project had to take a back seat to other urgent business in the short-staffed office.
The audit could, however, help torpedo a bill moving through the Legislature that will take some oversight of charter schools away from the BOE and give it to a recently formed charter school review panel. After being heard in the House Finance Committee last week, the bill is being kept from a full floor vote while the committee awaits the audit report.
While some of the newer board members, such as Kim Coco Iwamoto, told the board "I think we can take the high road," many on the committee spent the good part of an hour and a half grilling Love and Chief Financial Officer Bob Roberts on the audit's findings.
Board member Garrett Toguchi pushed for the involvement of the Ethics Commission on the travel and meals expenses and the Department of Labor on a contract employee whose position was being turned into that of a full-time employee.
"It begs the question of stewardship of public funds," Toguchi said.
Steve Hirakami, president of the Hawaii Charter Schools Network, and John Thatcher, the former president, were the two Big Island charter school directors who flew to a BOE meeting at the request and expense of the charter school office.
Hirakami said the office paid because the two were asked to lend their expertise to an issue before the board, but he didn't recall what it was.
"The kind of things they are finding is real nit-picky," Hirakami said, recommending the office get an independent audit done to help them better understand the issues.
"We have six or seven of the schools getting audited annually and it's a real good tool," Hirakami said.
But after repeated grilling of her CFO and herself, Love's patience was wearing thin.
"I was hoping that this would be something advantageous," Love said, "particularly something to help us move on and not to justify what had happened in the past but as a way to move forward."
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Reality Check wrote on Feb 28, 2007 8:31 AM: