Honorable Calvin K.Y. Say

Speaker, House of Representatives

Twenty-First State Legislature

Regular Session of 2001

State of Hawaii

Sir:

Your Committee on Education, to which was referred H.B. No. 487 entitled:

begs leave to report as follows:

The purpose of this bill is to require the Department of Education to conduct the financial analysis of school-by-school expenditures. The expenditure report will contain the following analyses:

(1) trends;

(2) deviation from the norm or average;

(3) school-by-school comparison;

(4) costs; and

(5) benefits.

The State Auditor supported the bill. The Department of Education opposed the bill.

Following the public hearing on February 6, 2001, the Department of Education and the Office of the State Auditor met on the recommendation of your committee. The purpose of this meeting was for the auditor to review the department's new Hawaii School Expenditure Reporting System (HSERS). Although the auditor found HSERS to comply with most of the recommended elements of the expenditure report, it excludes:

(1) Capital Improvement Projects (CIP);

(2) Debt service; and

(3) trend analyses.

Your committee recommends that the suggestions of the auditor be followed.

As affirmed by the record of votes of the members of your Committee on Education that is attached to this report, your Committee is in accord with the intent and purpose of H.B. No. 487 and recommends that it pass Second Reading and be referred to the Committee on Finance.