Honorable Robert Bunda

President of the Senate

Twenty-Second State Legislature

Regular Session of 2003

State of Hawaii

Sir:

Your Committees on Judiciary and Hawaiian Affairs and Education, to which was referred S.B. No. 474 entitled:

beg leave to report as follows:

The purpose of this measure is to designate the Office of the Auditor as authorized representatives of the Departments of Education and Health for student and other record access in connection with any audit, evaluation, or enforcement of any federal or state supported educational program.

Your Committee received testimony in support of this measure from the State Auditor. The Department of Education supported the intent of this measure and suggested amendments. The Department of the Attorney General and the Department of Health opposed this measure.

Your Committee finds that the Auditor's Office has been tasked to investigate the State's compliance with the Felix consent decree. On occasion, the Department of Education and the Department of Health have denied access to their records upon advice of the Department of the Attorney General (AG). The denial was based on the AG's determination that the Auditor is not included in either the Family Education Rights and Privacy Act (FERPA), or Medicaid statutes as an individual or group that is allowed record access.

Your Committee further finds that section 401.134 of the Medicaid statute allows information to be released to employees of the agency administering the Medicaid program, and under FERPA, the "state educational authority" has open access to student files. Your Committee adds that the Auditor's scope of inquiry is limited to investigating service and provider compliance, and is not an investigation or evaluation of students.

Your Committee amended the bill as proposed by the Department of Education, to include a requirement that the Office of the Auditor development and train its employees in courtesy and confidentiality protocols.

As affirmed by the records of votes of the members of your Committees on Judiciary and Hawaiian Affairs and Education that are attached to this report, your Committees are in accord with the intent and purpose of S.B. No. 474, as amended herein, and recommend that it pass Second Reading in the form attached hereto as S.B. No. 474, S.D. 1, and be referred to the Committee on Ways and Means.