The State Auditor’s office will be zeroing in on potential problems in the way the Hawaii Department of Education contracts with school bus companies and how the agency monitors the service once it’s in place.

At issue is skyrocketing costs of bus services over the past few years. The auditor plans to review the transportation program since the 2009 school year.

The auditor also will be “assessing the DOE’s planning efforts for School Transportation Services,” according to a letter sent Thursday to Education Superintendent Kathryn Matayoshi.

State Auditor Marion Higa initiated the audit in January. After completing the planning phase, the next step was developing these objectives.

“We hope to complete the audit by summer 2012,” Deputy Auditor Jan Yamane told Civil Beat Thursday.

Civil Beat has been examining runaway bus costs in its series, Taken for a Ride. The investigation revealed that transportation costs doubled over five years after a sudden drop-off in competition among bus contractors.

The Legislature has been trying to force the department to get costs under control.

“I’m pleased that they’re moving forward to the next phase of the audit,” House Finance Committee Chair Marcus Oshiro said Thursday evening. “I think these three points are very relevant and germane to us uncovering where we are right now with these contracts and where the department intends to take us in the next several months and years in changing a system that is obviously broken.”

Hawaii lawmakers are considering a significant reduction in the amount of money the state gives the DOE to provide school bus transportation services. Education officials in turn have said any cuts will just have to be made up elsewhere in the department’s budget.

The House and Senate are in the process of deciding just how much to provide. The House version of the budget bill is now in the Senate’s hands.

In his committee report earlier this month, Oshiro highlighted the “continuously increasing budgetary demands of student transportation services.”

The school district anticipates spending $73 million in general funds on student bus transportation in Fiscal Year 2012, increasing to $79.2 million in FY13, the report says.

“The Administration and Legislature, under heavy budgetary constraints, were forced to make the difficult decision of continuing to fund a program with out-of-control costs,” Oshiro wrote, noting that the committee cut the funding to $20 million.

The Senate Ways and Means Committee has scheduled a public hearing on the budget bill at 9:30 a.m., April 2.

Board of Education members briefly discussed the developing situation at their meeting Tuesday.

Chair Don Horner said the roughly $53 million the Legislature is looking to slot for school transportation services would fall “far short” of the estimated $75 million needed. The concern, he said, is there will be insufficient funds between now and next fiscal year to cover the gap and maintain service.

Horner did not respond to messages seeking comment by deadline Thursday. BOE member Keith Amemiya, who noted his concerns over the bus issue at Tuesday’s meeting, deferred comment to Horner.

The auditor’s letter notes the principal review period will cover the 2009 school year to the present. Additionally, the auditor’s office will be contacting six schools for specific information on the use of bus services for extracurricular activities. Those schools are: Honokaa High & Intermediate, Keonepoko Elementary, Kalama Intermediate, Leilehua High, Mililani High and Waianae Intermediate.

A message left at the superintendent’s office seeking comment from Matayoshi was not returned by deadline Thursday.

“The Department is not in receipt of the subject document and therefore I am unable to provide comment at this time,” DOE spokeswoman Sandy Goya said. “However, the Department always welcomes suggestions on how it could improve its processes, procedures, and programs.”

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