The House and Senate are scheduled to meet in a joint session on Friday to consider HCR 207 which would appoint the state auditor, the ombudsman, and the director of the Legislative Reference Bureau.
I’m interested in the choice of Les Kondo to take over as the auditor. Marion Higa, who served as auditor for two decades, retired in 2012. The position has been filled on an interim basis since that time.
I’ve been a supporter of Kondo during his tenure at the State Ethics Commission, where he has come under fire from legislators, some powerful interest groups, and from the commission itself. The former litigator has been a stickler for detail and strict interpretation of provisions of the ethics law, pushing harder than previous directors, and getting push-back as a result.
If Kondo is approved, I know he will dive into his new position and do a good job.
But I have to wonder what legislators see as the most important qualifications that Kondo, an attorney and former litigator, will bring to the top job in the state auditor’s office.
There is nothing in HCR 207 regarding the qualifications of those being appointed, so neither the public nor most legislators apparently have any basis for evaluating the nominees.
According to an article by Kevin Dayton in the Star-Advertiser:
When asked about Kondo’s appointment Friday, Souki said lawmakers had an internal agreement that Souki would choose the state ombudsman, Senate President Ron Kouchi would select the auditor and they would make a joint decision on hiring the head of the Legislative Reference Bureau.
Souki said he reviewed Kondo’s background and concurred with his appointment, and “I believe he has the capability. I have no problem. I’ve met with him a few times even prior to this appointment, and think we reached some understanding.”
Likewise, Article VII, Section 10, of the State Constitution, which establishes the auditor position, doesn’t provide much guidance. Like most state constitutions, it is silent on the minimum qualifications to serve as auditor.
The legislature, by a majority vote of each house in joint session, shall appoint an auditor who shall serve for a period of eight years and thereafter until a successor shall have been appointed. The legislature, by a two-thirds vote of the members in joint session, may remove the auditor from office at any time for cause. It shall be the duty of the auditor to conduct post-audits of the transactions, accounts, programs and performance of all departments, offices and agencies of the State and its political subdivisions, to certify to the accuracy of all financial statements issued by the respective accounting officers and to report the auditor’s findings and recommendations to the governor and to the legislature at such times as shall be provided by law. The auditor shall also make such additional reports and conduct such other investigations as may be directed by the legislature.
However, the duties of the auditor are established by statute.
§23-4 Duties. (a) The auditor shall conduct postaudits of the transactions, accounts, programs, and performance of all departments, offices, and agencies of the State and its political subdivisions. The postaudits and all examinations to discover evidence of any unauthorized, illegal, irregular, improper, or unsafe handling or expenditure of state funds or other improper practice of financial administration shall be conducted at least once in every two years after the close of a fiscal year, and at any other time or times during the fiscal year as the auditor deems necessary or as may be required by the legislature for the purpose of certifying to the accuracy of all financial statements issued by the respective accounting officers and of determining the validity of expenditures of state or public funds.
(b) Each department, office, or agency of the State or political subdivision thereof that is the subject of an audit performed pursuant to this chapter shall provide updates on its progress in implementing the recommendations made by the auditor, at intervals prescribed by the auditor.
(c) The auditor, in conducting postaudits, to the extent practicable and applicable to the audit scope and objectives, shall review and assess the audited agency’s rules as defined in section 91-1.
According to the auditor’s website:
The 1978 Constitutional Convention clarified these duties, making clear that the office’s post-auditing functions are not limited to financial audits, but also include program and performance audits of government agencies. While financial audits attest to the accuracy of financial statements and adequacy of financial records and internal control systems of agencies, program and performance audits assess the performance, management, and effectiveness of government agencies and programs providing information to improve operations, facilitate decision-making, and increase public accountability. Click here for a more complete discussion.
The Auditor also undertakes other studies and investigations as may be directed by the Legislature. In addition, Hawai?i Revised Statutes, Chapter 23, gives the Auditor broad powers to examine all books, records, files, papers, and documents, to summon persons to produce records and answer questions under oath, to hold working papers confidential, and to conduct post-audits as the Auditor deems necessary. These powers in their totality support the principles of objectivity and independence that the 1950 constitutional drafters envisioned for a fearless watchdog of public spending.
Like Kondo, Marion Higa did not have a background in auditing when she joined the auditor’s office. Higa graduated from the University of Hawaii, earned a Masters Degree in Illinois, and worked briefly as a teacher before landing a job in the auditor’s office. But unlike Kondo, she had twenty years experience working on audits before being named auditor in 1992, after a short interim appointment.
In a PBS Hawaii interview, Higa stressed the importance of the need to get to the source of problems that have been identified.
When you start looking at the problem that’s brought to you, and when you do program or performance audits, you have to get to the cause of the problem. You can’t make a good recommendation until you identify the cause of the problem. And so, much of the time, when you start peeling the onion to see what caused this problem, where should the problem be traced to, it’s not necessarily staff incompetence or recalcitrance. It’s very often at the management levels; and higher and higher you go, and then very often it’s at the governing level. So, it’s at your board, your board of trustees, your board of regents; your boards, whoever is setting the policy, which trickles down to the operational level. So, we tried not to get mired in the operational level, because you couldn’t very often find the cause of the problem at that level.
Q: You could probably find a lot going wrong, but not why.
Yes; not the why. And if you don’t get to the why, you can’t help them solve the problem.
In his ethics position, Kondo has taken a very different approach, focusing on a literal interpretation of the requirements of the ethics law, and declining to delve into the way agencies deal with practical problems of coming into compliance.
He and the commission were criticized by the Department of Education and teachers union officials for failing to provide more practical guidance and assistance as they struggled to comply with a commission ruling that at least temporarily has blocked educational tours organized by public school teachers for students and parents.
I know from past experience that there are professional auditors who say state audits are too often “gotcha” reports that focus on problems rather than working to guide agencies to solutions, although I don’t know how widely those reservations are shared.
In any case, after administering both the ethics commission and the Office of Information Practices, Kondo is well versed in tackling politically sensitive situations while maintaining independence from external political demands, skills that will serve him well as auditor.
But knowing more about why the Senate selected Kondo for the auditor’s post, and what parts of his experience and past performance were considered most important, will also serve to illuminate the legislature’s view of what the auditor’s office should be doing in the future.
And now the search begins for a new executive director of the State Ethics Commission.