House Speaker Scott Saiki is proposing deep cuts to the budget for the state Auditor’s office, a watchdog agency that is tasked with holding state agencies accountable for their performance and use of taxpayer dollars.

State Auditor Les Kondo said the cuts would halve the budget for his office — from $3.2 million down to $1.52 million — and would force him to take steps such as laying off analysts or converting full-time workers to part time. Personnel costs alone for the office are $2.2 million, he said.

“It will really impair our ability to do really important work,” said Kondo, who is nearly five years into an eight-year term as auditor. “It will impact our ability to do our work substantially, and we have a lot of work.”

The proposed budget reductions for the auditor in House Bill 1 come days after Saiki circulated a memo announcing he is launching a review of the auditor’s office, citing what Saiki described as missed deadlines and “unnecessary litigation.”

“If the speaker believes that the auditor is not doing his job, that I’m not doing my job, and that I am doing things that he feels are such that he should remove me for cause, there’s a process in the statute to remove the auditor,” Kondo said. “The process isn’t to basically gut the office through a severe restriction or reduction in the office’s budget.”

House Speaker Scott Saiki at podium with mask dangling on ear before session begins during COVID-19 pandemic. June 22, 2020
House Speaker Scott Saiki in a floor session last year. Saiki has proposed cutting more than 50% from the state auditor’s budget after faulting Auditor Les Kondo for producing late reports and triggering “unnecessary litigation.” Cory Lum/Civil Beat

Since the proposed auditor cuts are much larger as a percentage than cuts proposed for other state agencies, they immediately fueled speculation Saiki is targeting Kondo personally for criticizing the performance of one or more state agencies.

Kondo said he does not know if Saiki is using the proposed budget cuts to pressure Kondo to resign, but said he believes his office is doing a “good job.”

Saiki did not respond to a request for comment Friday afternoon.

Former state Sen. Gary Hooser issued an email blast Friday afternoon floating the idea that Saiki might be punishing Kondo for a highly critical recent audit of the Agribusiness Development Corp.

“It is shocking really,” Hooser wrote. “The State Auditor comes out with what is arguably the strongest and most important audit of the year. Within 7 days, the Speaker of the House Scott Saiki calls for his head and for good measure chops his budget in half. What’s going on here?”

Hooser said in an interview he has no specific information linking the budget cuts and Saiki’s public criticisms of Kondo to the ADC audit, but said he concluded there may be a connection because of the timing. Hooser endorsed Saiki’s primary opponent last year, and has been a vocal critic of some of Saiki’s policies.

The auditor’s office is a legislative agency established in the Hawaii state constitution, meaning it answers directly to state lawmakers.

The House and Senate dictate tasks to the auditor’s office, including ordering up audits of various state agencies to help provide oversight. The auditor can be removed for cause, but firing the auditor requires a two-thirds vote by the House and Senate.

“My office provides independent, objective assessments of state programs. We provide transparency. We assess whether a program is operating efficiently, effectively, ethically, and we help provide accountability,” Kondo said. With the current budget crisis, “in my opinion, the need for transparency and accountability is heightened.”

State Auditor Les Kondo speaks about the first HART Audit.
State Auditor Les Kondo briefs the media in 2019 on an audit of the Honolulu Authority for Rapid Transportation. The proposed budget cuts would “basically gut” the auditor’s office, he said. Cory Lum/Civil Beat

Kondo said his office is doing “a solid job,” and the reports it generates provide lawmakers and the public with information about state operations they otherwise wouldn’t have.

“We all believe that we’re here to help government be better, and that is our job,” Kondo said. “There’s no politics in anything.”

Saiki and Senate President Ron Kouchi asked the auditor’s office to develop budget cutting scenarios describing how a 10% or 20% budget reductions would affect operations, which Kondo said he provided.

Gov. David Ige’s administration launched a similar process last year, asking state departments to develop scenarios for budget cuts of 10%, 15% and 20%.

But to impose the much larger cuts of 50% that Saiki proposed for the auditor “cuts to the core of our staffing,” Kondo said. “Once you cut the staffing, we will not be able to do much of our work.”

That would result in reports that are either late, or “not nearly as thorough and complete as they need to be,” he said.

By comparison, other agencies that fall under the Legislature such as the Legislative Reference Bureau, the Office of the State Ombudsman and the state Ethics Commission would each take 20% cuts under Saiki’s proposed budget.

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