The State Auditor is conducting an audit of the state’s student transportation program, largely because of media coverage of runaway school bus costs.

State Auditor Marion Higa initiated the audit in January, auditor Rachel Hibbard said. The office has not settled on its specific objective and scope yet.

“There’s been, as you are aware, a spate of media attention on this issue recently, most of it yours,” she said.

Since October, Civil Beat has been examining skyrocketing school bus costs in its series, Taken for a Ride. The stories document how a sudden fall off in competition among bus contractors contributed to transportation costs doubling over five years.

Higa said in November that the strangely coincidental rising costs and absence of competition wouldn’t have shown up in the annual financial audits her office performs on the Hawaii Department of Education.

“The things that you’re asking about would have to be part of a management and performance audit,” she said then, explaining that such an audit had not been performed on the entire department since 1973.

While doing a comprehensive audit of the $2.5 billion Department of Education would take significant resources and time, Higa said she has the authority to conduct management audits of any offices or programs within the department at her own discretion.

“That might be something to think about,” she told us in November.

Student Transportation Services Director James Kauhi told Civil Beat that he has been dealing with numerous investigations that have started in the last few months. The auditor’s is just the latest.

“Never mind the fact that we’re having to answer everybody else’s questions on top of all of this,” he said.

Kauhi’s program has already been under scrutiny by lawmakers who last year threatened to zero out regular school bus funding unless district officials could provide a satisfactory explanation and a plan for lowering student transportation costs. It also caught the attention of the FBI, who last year began investigating possible collusion in setting prices.

Senate Ways and Means Chairman David Ige, who last year spearheaded the push for answers about school bus costs, said the Legislature has been trying to get a handle on this issue for a long time but did not officially request the audit.

The Hawaii State Board of Education is also discussing whether to launch its own investigation of the school bus costs via a special committee — while simultaneously performing an internal audit of the department’s procurement and contracting process.

Hibbard said she cannot predict when the audit will be completed, but will let us know after the office issues its audit objective letter.

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