I. T. E. M. (Incompetence Takes Everyone’s Money)

by Tom Yamachika, President Tax Foundation Hawaii

Our latest major government snafu comes to us courtesy of the Hawaii Department of Education (DOE).  Their teachers are underpaid enough as is, but through some mysterious turns of events, they wound up stiffing hundreds of teachers for multiple pay periods.

According to the Hawaii teachers’ union HSTA, 377 teachers who were supposed to receive paychecks on August 20th didn’t receive one.  Teachers who called into the DOE to ask about the problem were told that it was due to a staffing shortage.  When HSTA learned of the problem, they immediately asked for a list of the personnel affected.  The department initially refused to give them that list, saying that they needed to get advice from their Attorney General on whether they could release that information. 

In the meantime, DOE offered to give affected employees “placeholder checks.”  These were $2,000 checks, but they weren’t for the employees to keep; from some employee reports, the employees were required to go to their principal’s office and sign a promissory note for the money, pledging that they would return the money by September 30th. 

We wonder what the geniuses who came up with the placeholder check idea were thinking.  Yes, it perhaps provided a solution for folks who needed to pay the rent or the electric bill or the credit card bill or face nasty consequences in the short term, but it couldn’t have been comfortable for a teacher to sign a promise to repay an employer who had already stiffed one or two pay periods with no guarantee on when the paycheck that the teacher already had earned would materialize.

September 5, which is the next teacher payday, comes and goes.  Hundreds of teachers are skipped this time as well.  DOE said that the problem was caused by delays in “onboarding” new teachers, including verifying their credentials and performing criminal background checks.  But the math doesn’t add up.  There are only 330 new teachers, and 377 missed paychecks, so there are at a minimum 47 teachers who are missing paychecks and were not new.

On September 19, HSTA announced a settlement of the issue.  The affected teachers, numbering about 500, would be paid on September 20, including any previously owed salary.  Teachers whose paychecks were skipped would get damages of $400 for one missed paycheck or $800 for two.  Teachers who took the placeholder checks and owed the DOE $2,000 as a result would be given additional time to repay or would be able to repay the amount in installments over time.  The DOE also agreed to retain an independent entity to conduct an audit of the DOE’s preboarding and paycheck distribution procedures.

The promise of an independent audit sounds helpful but should be approached with caution.  It was only a few years ago that the State Auditor was asked to report on DOE’s current protocols for addressing the COVID-19 pandemic.  In Report No. 20-11, the Auditor reported that DOE “initially ignored and then declined multiple requests for information and meetings,” making the Auditor’s job impossible.  We have not heard reports of DOE being taken to the woodshed by the Legislature over this fiasco, and we just hope that DOE cooperates this time.

And, although this fiasco appears to have been dealt with for the moment, we need to remember that the real losers are us, the taxpayers of Hawaii, who ultimately have to pay the tab for the penalty payments made to the teachers, the cost of the independent audit.  We also have to stand the disruption in our school system and the effects on our keiki as a result.

I. T. E. M. (Incompetence Takes Everyone’s Money).  We need to see concrete fixes.  Or heads rolling.  Or both.