Hawaii County officials are working against a Wednesday deadline to respond to findings of a draft audit into their use of county credit cards, known as pCards.
The audit is the first for county Legislative Auditor Bonnie Nims, who took over May 1, 2014.
It’s also likely to be the most-read audit in recent memory, following West Hawaii Today’s investigative report earlier this year that Mayor Billy Kenoi had routinely used his pCard for personal purchases that included tabs at Honolulu hostess bars and other drinking establishments, as well as for a pricey surfboard and bicycle.
The draft audit has not been released to the public, but the final audit report should be ready by next week.
Nims said she isn’t seeking formal responses from all the departments, just those showing questionable pCard use.
One of those is the Department of Liquor Control, where Director Gerald Takase’s $1,189 in personal charges were among the highest for a single official. He said Monday the charges were primarily for a corporate Hawaiian Airlines account, where he allowed others in his department to use his card as a way of accruing more frequent flyer miles. Those miles translated into benefits to the county such as free check-in bags, no-cost flight changes and standby preferences.
“It wasn’t a personal gain,” Takase said.
He also had some personal reimbursements for hotels and rental cars when he split business and personal trips, he said. The personal charges were always paid back before interest accrued, he said.
“When the pCard had first come out, we were encouraged to use it to speed up payments and have a better record,” Takase said. “However, with all of the flap lately, I’ve changed all of my accounts away from the pCard, which creates the added problem of having to do reimbursements for all expenses, which is adding to the accounting staff.”
State Attorney General Doug Chin announced a criminal investigation into Kenoi’s use of his card shortly after the newspaper articles drew statewide interest. Facts learned during the course of the investigation will determine whether the attorney general’s office pursues or recommends criminal charges, administrative discipline or no further action.
Nims, who had begun her audit before the newspaper stories came out, declined to say whether she’s been in discussions with Chin about her audit. Kenoi has not been charged with a crime.
Kenoi usually reimbursed the county for personal charges within a month or so, but he paid back another $7,500 of the almost $130,000 in charges on his pCard after the story broke in late March. In all, Kenoi has paid back about $30,000 of his pCard charges, some of which he used for campaign purposes.
County pCard policy prohibits personal use of the cards and allows alcohol purchases only with prior approval.
In addition to being investigated by the attorney general, Kenoi is also the subject of a county ethics complaint. His attorney Howard Luke did not return a telephone call seeking comment.
Further digging into other county officials’ pCard use by Big Island newspapers has revealed questionable purchases may be more widespread than first thought. Kenoi’s executive assistants charged almost $143,000 on their county-issued credit cards — including airfare for a local surfer, a helicopter ride for visiting dignitaries, and wine given as a gift during a trip to the state Capitol.
Deputy Managing Director Randy Kurohara, the pCard administrator for the mayor’s office, didn’t return a telephone call by press time Monday. But he had defended the purchases earlier.
“Any purchases that require more clarification are reviewed with the executive assistant, and charges determined not to be official expenses are reimbursed,” Kurohara told the Hawaii Tribune-Herald in an email in May.
County Council members have generally used their pCards according to the rules. The council, which oversees the auditor, has kept clear of Nims’ work on the pCard program, Council Chairman Dru Kanuha has said.
The $99,000 annual position had been vacant for 16 months before Nims took over. She’s the second auditor hired by the council after a 2008 charter amendment giving the auditor more freedom from political interference.
The charter amendment required the County Council to appoint an auditor who has free rein to inspect county records and require employees to be available for questioning as the auditor prepares performance and financial audits of administrative and legislative departments.
The auditor serves for six years unless removed for cause by a two-thirds vote of the council. The mayor has no say in the appointment or removal of the auditor.