Honolulu Authority for Rapid Transportation officials briefed the board in advance Thursday on the Hawaii State Auditor’s fourth audit on the financially challenged transit project.

The briefing comes before that audit has been released, and it provides a glimpse of what’s to come. HART did not provide a draft copy of the audit prior to the board’s briefing.

HART rail guideway construction near Airport side Makalapa Entrance.
The rail guideway takes shape near the Honolulu airport. The state auditor’s final report on the project is slated to be released Friday. Cory Lum/Civil Beat

Here are some of the dozen or so issues that the state audit, conducted by private firm Baker Tilly, are expected to cover, based on HART interim Chief Financial Officer Ruth Lohr’s report to the board:

  1. Incorrect billing with rail consultant HDR, which has staff embedded within HART to help manage much of the project. HART says it’s now seeking reimbursement from the firm.
  2. HART uses undocumented procedures for verifying costs. During the briefing, Lohr said that HART acknowledged these procedures need to be updated.
  3. HART does not require Hawaiian Electric Co. and other utility companies to provide sufficient documentation for their overhead costs related to the project.
  4. HART does not verify that contractors pay their subcontractors within 10 days of being paid by HART. (HART responded that its contractors are required to do that under contract.)

The report, according to Lohr, also flags HART for not requiring certificates of insurance from its contractors but the agency said it does indeed require that. The report also raised concerns about construction-related lien-wavers that HART officials said wouldn’t apply to the infrastructure project.

“Some of these observations strike me as off-base,” board Vice Chairman Terrence Lee said. 

HART officials said they could not release the report ahead of the auditor.

The final version of the report is expected to be released Friday.

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