State Auditor Facing a Whack Job?

by Tom Yamachika, President, Tax Foundation Hawaii

The House Speaker’s office recently released an unflattering report on the State Auditor. It faulted the Auditor’s Office for appointing executives without proper experience and said the move contributed to “delays and untimely reports,” and other actions that were “not in complete compliance” with the provisions of the Hawai’i Constitution governing that office. 

The House Speaker created the three-person working group that produced the report in a January 14, 2021, memo saying, “As you know, limited resources make it problematic for the State Auditor to address all outstanding issues and matters. Therefore, the findings of this group will assist the State Auditor in prioritizing its work and the scope of its work.”

But the findings of the working group didn’t seem to address prioritization and scope of work. Part of the report recounted interviews of disgruntled former employees, however, and apparently was calculated to give the impression that the current state auditor was personally argumentative and combative, was creating a toxic work environment, and was responsible for a sky-high personnel turnover rate.  Another part of the report gives the impression that the Auditor was less interested in finding out the truth and complying with generally accepted government accounting standards than he was interested in sensationalism, using his reports to create public spectacles.

Another part of the report spends lots of time reviewing the Auditor’s recent actions involving the Office of Hawaiian Affairs (OHA).  After some recent and less than rosy revelations about OHA’s internal workings, the Legislature’s 2019 budget made $3 million of state funding contingent upon the State Auditor completing a “financial and management audit” of OHA. When the Auditor’s staff began field work, they requested access to minutes of trustee meetings containing the details of legal advice sought and received by the trustees in those meetings. OHA said that these parts of the minutes were protected by attorney-client privilege. The Auditor replied by saying he couldn’t finish his report without them and stopped work. That put the brakes on the $3 million, and understandably generated some hard feelings. The report then slams the Auditor for not being impartial, for violating various auditing standards, and failing to comply with the law calling for the report.  (Some of these criticisms are very much debatable.)

The conclusion and recommendation section of the report then fault the Auditor for being non-productive for various reasons including those outlined above, and recommended that the Legislature should require the State Auditor to have at least five years of governmental audit experience (which the incumbent apparently lacks), that the same should be required of the office’s executive level managers and leaders, that the Legislature should take steps to “preclude the State Auditor from diverting from the specific issue and concerns of the Legislature,” that the Legislature should require the Auditor to terminate its litigation with OHA, and more.

It’s hard to see how these findings and recommendations lead to better prioritization and scope of work. Rather, the report looks more like a “whack job” — a collection of facts and arguments to justify someone’s dismissal or discharge from their position. Apparently, the Auditor did something to get under the Speaker’s skin, and it’s time to exact retribution. Our state constitution provides that the Auditor may be fired for cause by a two-thirds vote of the members of the House and Senate in joint session. Are these findings enough? Will they be sufficient to persuade the Senate to go along?

Over the years, I haven’t agreed with everything the Auditor has said and done. Far from it. But at least his office’s work has led to the discovery and exposure of many facts that the public needed to know and had a right to know. It’s understandable that those exposures would lead some to press legislative leadership to deliver a whack job. We would hope that cooler heads ultimately prevail, and that any decision on the State Auditor is made after due consideration of his service to the people of Hawaii.