Is there an echo?

Warning bells were ringing again in the Board of Education’s meeting room Tuesday, sounding a lot like the scathing audit of the student transportation system that school officials heard last year.

Lack of oversight. Limited accountability. Unclear policies. Outdated technology. Wasted taxpayer dollars.

The board had to hire a consultant to figure out how to handle the school bus program’s deep-rooted problems. Bills are moving through the Legislature as a result and changes are slowly but surely being implemented.

Although that issue is still far from fixed, district officials are now turning their attention to the $92 million school food services program. An internal state Department of Education audit released this week says operations are functioning at an “unacceptable” level.

“I am ecstatic we’re taking this proactive approach and it is my perception management is embracing the audit and the findings,” Board member Wesley Lo said. “On the other hand, it’s a pretty scathing report.”

The audit identified several areas where board members said savings could be realized — possibly millions of dollars.

Here are the highlights, which DOE auditor Amy Surratt presented to the board:

  • Ownership of the food purchasing and meal payment collection processes is unclear

  • Lack of oversight, monitoring and accountability of purchases

  • Insufficient controls in the payment collection process

  • Lack of current and comprehensive purchasing policies and procedures

  • Lack of technology in menu planning, ordering and inventory

  • Required forms and supporting documents are not always completed and/or retained and procedures are not always followed

  • The method of staffing school kitchens is not clearly defined and is prone to manipulation

The school food services program is a big budget item like student transportation services, which costs roughly $75 million a year. The school food services branch helps 256 schools feed some 100,000 students and staff daily.

The district needs to look at fixing the program from an organizational standpoint, Lo said.

“We had the same discussion about student transportation,” he said. “These are systemic problems that we’re facing.”

Board Chair Don Horner, who also saw the correlation between the problems the two programs face, took ownership.

“We have very good employees, so this is not a reflections on the individuals,” he said of the food services audit. “It’s a reflection of the management. It’s the board’s fault and it’s management. We’ve basically allowed this to happen to our folks in the field.”

Horner said a consultant may be necessary to retool the food services program, which he believes is costing taxpayers money through inefficiencies, redundancies and lack of accountability.

“I don’t know that we have the internal resources to run the operations and at the same time fix it,” Horner said.

Board member Jim Williams said there’s plenty of low-hanging fruit the department can pick without needing a consultant. He added that millions of dollars could be siphoned out the district if the district hired less honest people.

“The dedication and honesty of the employees is the only thing that stands between what we’ve got and massive amounts of corruption,” he said. “There’s no controls.”

For instance, the department can find out how much it paid to serve hamburgers at lunch. But it can’t go back and find out how the hamburger was used or how much of it was leftover.

“Ten pounds of hamburger is cash,” Horner said. “But there’s no more control over that inventory than a 3×5 card.”

The DOE audit on the food services program doesn’t say how much money the district might be losing. But Horner said in his experience, whenever consolidation can happen, savings can be found.

The cost of school lunches in Hawaii has been rising, especially for hot dogs. Civil Beat recently reported that the state paid 22 cents per frankfurter in 2009; in 2012, that price jumped to 40 cents a dog.

The school food services program was rated as a high-risk area 18 months ago, Horner said, adding that the audit is the first step in identifying the problems so the district can address them.

“I’d say to our board and management, we’ve been served,” Lo said.

Issues with the student transportation program were first red-flagged in Civil Beat’s Taken for a Ride investigative series in 2011. The series found that in 2008, bus companies suddenly stopped bidding against each other as contract prices skyrocketed.

A state audit slammed the bus program a year later. And now the department is working through its consultant’s report on how to fix student transportation services.

Read the DOE audit of its food services program here:

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