A legislative report on the state auditor and whether the office is following its constitutionally mandated duty faulted the office for appointing executives without proper experience and said the move contributed to “delays and untimely reports.”
The office, currently led by State Auditor Les Kondo, was “inconsistent” in its application of auditing standards, leading to a years-long project by the staff to revise the office’s own operating and standards manual.
The report, released Thursday by the Hawaii House of Representatives, concluded that the State Auditor has “not been in complete compliance” with article VII, section 10 of the Hawaii State Constitution, which could pave the way for Kondo’s removal.
House Speaker Scott Saiki launched the working group in January to review the operations of Kondo’s office, an investigation considered by many to be the start of an effort to get rid of Kondo. Saiki said the review was triggered by “unnecessary litigation” that involved the auditor as well as missed deadlines for some audit reports.
At the same time, Saiki introduced a bill to slash the auditor’s annual budget by more than 50%, a proposal Kondo said would “basically gut” the office. That proposed budget cut later was significantly reduced.
Saiki named three prominent people to the group — it was led by former City Auditor Edwin Young and included former U.S. Rep. Colleen Hanabusa and former state Director of Finance Wes Machida.
In the 79-page report made nine recommendations, including that the state auditor as well as executive level managers and leaders in the office have at least five years of governmental audit experience.
The report said the group reviewed information going back to the inception of the state auditor’s office and that it interviewed former employees of the office.
But, the report said, Kondo declined to meet with the investigators, and refused to respond to questions sent by the group.
The group also accused Kondo of “weaponizing the media with inaccurate information and mischaracterized the Working Group’s requests for information.”
Kondo has been outspoken and vocal about his opposition to the speaker’s efforts to, in essence, audit the auditor’s office. He has contended that Saiki is trying to get control over the auditor’s office for political purposes, arguing that the office must remain free from political influence.
He’s pointed out that Saiki and other legislative leaders have tried but so far failed to push through other measures aimed at undermining independent oversight, including the salary cuts for his office and a measure that would have put the state’s watchdog agencies — the Office of the Auditor, Office of the Ombudsman, Office of Information Practices, Hawaii State Ethics Commission and the Campaign Spending Commission — under one roof, a new Office of Public Accountability.
That proposal was widely criticized and is now dead. So is the salary bill.
And on Thursday, he called the process that led to the working group report “sneaky and underhanded.” He said the conclusions of the report were “not a surprise,” describing it as a solution in search of a problem.
“I think that the conclusions and the recommendations were all predetermined,” he said.
He disputed that the investigators ever tried to meet or speak with him.
“To say that I did not cooperate is absolutely false,” he said, adding that he sent three letters to the working group seeking clarity and more information on the investigation.
Saiki on Thursday deferred questions about the report to Majority Leader Della Au Belatti.
Belatti on Thursday said she was “disappointed but not surprised” by Kondo’s reaction to the report.
“I am going to let it speak for itself,” she said. “I believe anyone who takes the time to read it will see that was not predetermined, and neither is the next step we will take.”
She said the investigation was led by people with extensive experience in auditing and governing.
As for what comes next, Belatti said there would likely be public briefings on the report.
“I know there are a number of recommendations and findings, and I need to look at them,” she said. “I want to understand what opportunities there are to make the office of legislative auditor stronger.”
The constitution says the Legislature may remove the State Auditor from office for cause at any time by a two-thirds vote of the members in joint session.
The report also found that oversight of the office is needed “to preclude violations of laws and statutory requirements,” such as the deadlines established by the Legislature.
Without that oversight, the report warned, a myriad of problems will continue.
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