State records show the Hawaii Department of Health has spent just a fraction of its federal grant money for COVID-19 detection and prevention, prompting calls from lawmakers for the department to act faster to strengthen the state’s pandemic response.

Health officials say their plans to spend the money are on track — there are just bureaucratic hurdles and other factors that make it a slow process.

According to data published by the Hawaii Data Collaborative, the department has spent less than 1% and obligated less than 8% of its largest $57 million federal award, which is intended to help states with coronavirus testing, contact tracing and protecting high-risk populations.

State Microbiologist Mark Nagata gives a demonstration of extracting Nucleic acid at the Department of Health, Public Health and Environmental Laboratories located at Waimano Home Road.
State microbiologist Mark Nagata demonstrates part of the COVID-19 testing process at the State Laboratories Division. The DOH has spent only a fraction of federal funds meant to boost the state’s COVID-19 response. Cory Lum/Civil Beat/2020

Deputy State Epidemiologist Dr. Sarah Kemble said the department’s budget is on target, since the awards span 24 to 30 months.

Nearly half the money was allocated to the State Laboratories Division, and the division’s administrator, Edward Desmond, said his office has a budget plan for spending it all, but agency officials have run into some issues when it comes to getting qualified staff and the most efficient coronavirus testing machines.

An expenditure breakdown provided by the DOH aligned with the Hawaii Data Collaborative’s records, showing 0.46% spent and about 7.6% earmarked for unspecified purposes.

Jill Tokuda, a former state legislator and current adviser to the Hawaii Data Collaborative, said the lack of movement is concerning.

“You need to show you can use the funds with fidelity, and actively utilize it,” she said. “Money staying in the bank wouldn’t give any confidence to any funder, public or private, that they should continue to put money and resources in your direction.”

In its June application for its largest federal COVID-19 award, called the Epidemiology and Laboratory Capacity for Infectious Diseases grant, the department asked for $50 million for the year to hire people and ramp up testing capacity and its ability to monitor the disease.

The department received $57 million in CARES Act funds directly from the U.S. Department of Health and Human Services and the Centers for Disease Control and Prevention, and is free to spend that money over the next two and a half years.

Tokuda, who reviewed the department’s grant application, said the level of expenditures does not reflect the urgency that the agency clearly recognized was needed.

“They set these deadlines when they applied for the grant, and now it’s incumbent on them to meet those deadlines they set for themselves,” she said. “The new DOH director really needs to be the tip of the spear to make sure that all of these deliverables are met.”

What’s The Hold Up?

There are currently nearly 7,000 people with active COVID-19 infections monitored by state officials in the islands. More people were diagnosed with COVID-19 in Hawaii during August than all prior months of 2020 combined.

Kemble said the department is actively spending money on personal protective equipment for field investigation staff and swab teams, and to contract employees conducting administrative tasks, like data entry. Department of Health disease investigators, epidemiologists, laboratory personnel and data scientists have also accrued overtime pay, she said.

Overall, she said the department is “largely on target for obligating funds” and much of the money will be distributed over time. Monthly salaries of current and future hires are planned and not yet logged as expenditures, she said. The CDC holds the DOH grant money in an account that is drawn on as money is spent.

“These funds require state approvals to spend and must clear state accounting processes before they are shown as drawn down, so this also contributes to the apparent lag in spending,” she said.

Desmond said the government isn’t typically built to spend money quickly. The grants with upcoming deadlines are prioritized first, he said.

“There are reasons state service is slow; it’s intended to be a fair process and it’s very systematic,” he said. “We are stewards of public taxes and we must be very even handed and not at all biased or have self interest in who we buy things from. In some circumstances, we’re required to get competitive bids.”

Lab Director, Edward Desmond, Ph.D. at the Dept of Health Public Health Environmental Laboratories. Dr. Desmond shared about the process of testing for COVID-19 Coronavirus.
State Laboratories Division Administrator Edward Desmond said mainland competition for COVID-19 testing equipment, supplies and even laboratory staff has hindered the state’s ability to scale up as quickly as he wants. Cory Lum/Civil Beat/2020

Major changes have occurred among leadership in the health department this month. State Epidemiologist Dr. Sarah Park, who co-authored the grant application and led the department’s Disease Outbreak Control Division, is on a paid leave of absence. Health Director Bruce Anderson is retiring next week.

The department has faced intense public criticism about its failure to scale up staffing, as officials repeatedly stated they could over the past several months. Now, officials have said the rate of disease transmission has surpassed the ability of contact tracing staff to keep up.

The department and state laboratory outlined plans to hire new staff, like specialized epidemiologists, infection prevention experts to help nursing facilities, data specialists, educators and community health workers. DOH wants to form a new Data Science Branch and hire almost a dozen data scientists by December. Hiring goals cover the rest of the year and into 2021.

Still, the fate of millions of dollars is unclear. And hiring people as planned could prove difficult, as the State Laboratory has found.

Rep. Scott Saiki, who co-chairs the House Select Committee on COVID-19 Economic and Financial Preparedness, has been critical of the department.

“My concern is that DOH uses these funds to build up their own facilities and staffing, but what DOH should have done first was to build up the capacity for testing, screening, contact tracing and quarantine,” Saiki said. “That was the basic foundation that DOH needed to establish early on. Because they did not do that we’re now seeing heightened numbers and having to go through a second shut down.”

More Money Than It Requested

The department has been awarded several grants with different spending deadlines.

Before the larger ELC grant was awarded, the DOH was awarded approximately $6.3 million in rapid crisis funding in March to get a head start on paying for emergency coronavirus needs within a year.

Those crisis funds were split among three health department divisions: the Disease Outbreak Control Division, State Laboratories Division, and Office of Public Health Preparedness, each with its own spending objectives.

Yet as of mid-August, the three health department divisions combined had only spent $2 million, according to state budget data published by the Hawaii Data Collaborative.

Officials with the Office of Public Health Preparedness, which received about a fifth of the $6.3 million crisis funds, said they’ve spent slightly more than half of their allotment on personal protective equipment, supplies, media and print public service announcements, phones and computers, and quarantine facility rent, security and cleaning, as well as their associated wrap-around service costs for people who elect to use the space. The state currently has 293 isolation rooms, mostly contracted hotel space, and about half are currently occupied.

Other major expenses have included storage, handling and delivery of supplies from the Strategic National Stockpile, support for the Aloha United Way Call Center, and Medical Reserve Corps coordinators, according to Program Chief Judy Kern. The health department also used some of its funds for a contact tracer training program at the University of Hawaii.

Dr. Sarah Kemble, DOH deputy state epidemiologist, said Hawaii is actively spending federal grant awards, but records show very few expenditures. Eleni Avendaño/Civil Beat/2020

Desmond said the state laboratory has budgeted $19 million of its allotted $25 million in ELC funding for testing equipment and supplies, with the remainder dedicated to future personnel. First, it plans on spending its allotted emergency funds on new lab staff positions, real time molecular test machines, extraction instruments and other supplies, like freezers, refrigerators, chemicals and protective wear.

The State Laboratories Division tests those who the health department deems to be high-priority, such as essential workers or people tested at public health outreach events, but private laboratories that have more manpower have conducted the bulk of testing in the state to date.

Testing capacity goals the state set for itself are still far off.

The State Laboratories Testing Division has faced delays in purchasing some equipment during the pandemic. Courtesy: State Laboratories Division

As it stated in the grant application, the goal is to increase the capacity of the State Laboratories Division from 200 tests per day to 800 to 1,000 tests per day. The division is not there yet — it can process about 500 specimens per day as of Wednesday, but it still needs the special supplies to be shipped in for two of its most recently acquired high-capacity machines.

Desmond said he expects the state lab will reach its 1,000 daily test capacity by the end of the year.

Coronavirus testing supplies are pricey as companies charge what the market will bear, and national demand exceeds supply, he said.

Some machines and equipment the laboratory staff had hoped to acquire by now are still not in their hands, amidst national competition, like the rapid testing machines Desmond hoped to purchase for neighbor island district laboratories.

“We let the company know we wanted to buy them but they have a set of priorities that apparently the federal government is dictating,” he said.

Those sorts of national bidding wars also affect availability of personal protective equipment, and other testing supplies and cause months-long delays in shipments. Reagents — the critical chemicals needed to complete diagnostic tests — have a shelf life, so the laboratory buys them in installments to avoid purchasing goods that could expire by the time they receive them.

The laboratory has met some of its initial goals, though, such as upgrading from physical paperwork and faxes to an electronic laboratory test reporting system, and purchasing some testing equipment.

Then there’s the slow process of hiring new staff — two microbiologists both declined job offers recently, for instance.

The division wants to hire about 21 more staff by November to alleviate its staff’s current workload. Existing laboratory staff have worked longer hours for months to complete coronavirus testing on top of their typical job obligations, most recently processing specimens collected from the Oahu Community Correctional Center, which was the location of the state’s largest outbreak to date.

“We’ve not been able to hire additional staff to handle this work,” Desmond said. “It’s not sustainable.”

The department’s grant application highlights other activities and staff it hopes to hire to monitor and prevent COVID-19 from spreading. Another epidemiologist would be dedicated to “health equity,” according to the  application.

The department wants to create a COVID-19 Community Surveillance and Outbreak Response Unit by December, modeled after something similar in Florida. It would include a mobile team to offer on-site specimen collection. The Hawaii National Guard is filling that role until DOH finds another vendor to “help facilitate testing vulnerable populations,” Kemble said.

The Hawaii Data Collaborative is a project of The Hawaii Leadership Forum, founded by The Omidyar Group. Pierre Omidyar is a co-founder of The Omidyar Group and is also CEO and publisher of Civil Beat.

Hawaii Department of Health Expenditures As Of September 2020:

Hawaii ELC Grant Application (Submitted in June):

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