Hundreds of people have asked the state to give them millions of dollars over the past year to cover claims such as potholes damaging cars, students suffering from food poisoning, prison guards assaulting inmates and public employees sexually harassing co-workers.

But unlike larger claims that first go through the Attorney General’s Office and then to the Legislature where final approval is given during public hearings, claims settled for smaller amounts are quietly handled within the Department of Accounting and General Services.

The process lets the state comptroller write checks for up to $10,000, limiting the public’s ability to see where their tax dollars are going until the money appears in an annual report that merely itemizes the expenses.

1151 Punchbowl Street location of Risk Management Offices 111b.  27 jan 2015. photograph Cory Lum/Civil Beat

Officials with the Risk Management Office inside the Kalanimoku Building, pictured here, decide which small claims get paid.

Cory Lum/Civil Beat

In fiscal year 2014, which ended June 30, DAGS paid $200,840 to settle 187 claims and nine lawsuits, less than half of what was demanded.

There were 338 other claims filed last year — seeking $26.67 million in all — that DAGS denied. The bulk of the cases closed without payment came from two inmates, one who wanted $10 million for not receiving proper medical treatment and another who sought $12 million for injuries allegedly suffered at the Hawaii Community Correctional Center.

The state risk management office under DAGS decides on a case-by-case basis which claims should be approved. Tracy Kitaoka, who heads the office, told Civil Beat that it’s all about proving negligence on the part of the state.

He said his office goes to the agency that’s allegedly responsible, asks all the pertinent questions and then sorts out fact from fiction.

1151 Punchbowl Street 111b Risk Management offices2

The Risk Management Office handles hundreds of claims filed against the state each year.

Cory Lum/Civil Beat

If there’s enough evidence to show the state was at least partially at fault, Kitaoka said his office will work out just how much money the claimant should receive and send a recommendation to the comptroller for final approval.

There are exceptions though. He said if the case goes to court the AG’s office handles it. If the settlement or judgment comes in under $10,000, it goes back to DAGS to foot the bill and the claim stays out of the AG’s annual request for legislative approval to pay claims.

The AG’s request — in the form of House Bill 896 this session — will go before the House Judiciary Committee, then the Finance Committee and the full House before crossing over to the Senate for a similar series of approvals. The request totals nearly $1.7 million, but that figure usually grows substantially over the course of the legislative session as more claims come in.

Two claims account for the bulk of the settlements contained in the AG’s request. The bill provides $1.04 million in the case of Gregory Slingluff, who became infertile as an inmate at Halawa Correctional Facility after prison doctors failed to properly treat a scrotum infection. The other big one is $462,594 in the case of Stacey Costales, who claimed she was sexually assaulted by Hawaii Youth Correctional Facility officer Scott Rosete.

Most Common Claims Involve Potholes, Weed Whackers

The AG’s office handled a few cases last year that DAGS’ risk management office paid.

One person claimed she was born a hermaphrodite and was put into a male prison, Halawa Correctional Facility, where she was assaulted. The state paid her $10,000.

The state also paid $10,000 to settle a case involving a minor who suffered emotional distress as a result of how an investigation was handled by Mountain View Elementary. That was one of several claims involving students.

The state paid out $1,175 and $412 to settle two claims after children got food poisoning at Waipahu Elementary School one day in December 2013. The case of a student who was allegedly injured by an unsupervised student at Makawao Elementary ended in a $233 payment. Those three claims were handled by DAGS internally.

In some instances, DAGS gave final approval to payments for claims exclusively involving state employees. Such was the case when a Department of Human Services MedQuest employee was sexually harassed by a co-worker, resulting in a $7,500 settlement.

While those are the most egregious examples, the vast majority of taxpayer money that DAGS approves for claims goes toward damages caused by potholes and weed whacking.

Potholes on state roads cost taxpayers $42,610 in claims last year. Weed whackers and mowers slinging rocks into vehicles cost $21,991 in claims for 2014.

One of the next highest categories for small claims was state hospitals — especially Maui Memorial — losing or damaging patients’ dentures. Those cost the state $10,917 last year.

State lawmakers are considering legislation that could raise the $10,000 limit on certain claims paid by DAGS. Bills are moving through the House and Senate that would require the comptroller to adjust for inflation the maximum amount that may be paid from the state risk management revolving fund for claims arbitrated, compromised or settled by the attorney general.

Here’s the complete report for 2014.

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