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1 SENATE/HOUSE OF REPRESENTATIVES
2 THE 21ST LEGISLATURE
3 INTERIM OF 2001
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7 JOINT SENATE-HOUSE INVESTIGATIVE COMMITTEE HEARING
8 OCTOBER 12, 2001
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12 Taken at the State Capitol, 415 South Beretania,
13 Conference Room 325, Honolulu, Hawaii, commencing at
14 1:09 p.m. on Friday, October 12, 2001.
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19 BEFORE: JESSICA R. PERRY, CSR No. 404
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1 APPEARANCES:
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3 Senate-House Investigative Committee:
4 Co-Chair Senator Colleen Hanabusa
5 Co-Chair Representative Scott Saiki
6 Vice-Chair Senator Russell Kokubun
7 Vice-Chair Representative Blake Oshiro
8 Senator Jan Yagi Buen
9 Representative Ken Ito
10 Representative Bertha Kawakami
11 Representative Bertha Leong
12 Representative Barbara Marumoto
13 Senator Norman Sakamoto
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15 Also Present:
16 Special Counsel James Kawashima
17 Perry W. Confalone, Esq.
18 Richard Chun, Esq.
19 Gary M. Slovin, Esq.
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1 I N D E X
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3 WITNESS: DR. RICHARD KRAVETZ
4 EXAMINATION BY: PAGE
5 SPECIAL COUNSEL KAWASHIMA............. 7
6 VICE-CHAIR REPRESENTATIVE OSHIRO...... 37
7 VICE-CHAIR SENATOR KOKUBUN............ 43
8 REPRESENTATIVE ITO.................... 48
9 SENATOR BUEN.......................... 51
10 REPRESENTATIVE KAWAKAMI............... 54
11 REPRESENTATIVE LEONG.................. 62
12 SENATOR SAKAMOTO...................... 66
13 REPRESENTATIVE MARUMOTO............... 71
14 SENATOR SLOM.......................... 76
15 CO-CHAIR SENATOR HANABUSA............. 81
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17 WITNESS: RONALD HIGASHI
18 EXAMINATION BY:
19 SPECIAL COUNSEL KAWASHIMA............. 90
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21 WITNESS: DON BURGER
22 EXAMINATION BY:
23 SPECIAL COUNSEL KAWASHIMA............. 94
24 VICE-CHAIR SENATOR KOKUBUN............ 122
25 VICE-CHAIR REPRESENTATIVE OSHIRO...... 126
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1 I N D E X, (Continued)
2 SENATOR BUEN.......................... 129
3 REPRESENTATIVE ITO.................... 132
4 SENATOR BUEN.......................... 135
5 REPRESENTATIVE KAWAKAMI............... 139
6 REPRESENTATIVE LEONG.................. 143
7 CO-CHAIR REPRESENTATIVE SAIKI......... 147
8 CO-CHAIR SENATOR HANABUSA............. 150
9 REPRESENTATIVE MARUMOTO............... 160
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1 P R O C E E D I N G S
2 CO-CHAIR REPRESENTATIVE SAIKI: Good
3 afternoon. I'd like to convene our investigative committee
4 on the state's efforts to comply with the Felix consent
5 decree. We apologize for running late today. We would like
6 to start with roll call.
7 CO-CHAIR SENATOR HANABUSA: Co-Chair Saiki?
8 CO-CHAIR REPRESENTATIVE SAIKI: Present.
9 CO-CHAIR SENATOR HANABUSA: Vice-Chair
10 Kokubun?
11 VICE-CHAIR SENATOR KOKUBUN: Here.
12 CO-CHAIR SENATOR HANABUSA: Vice-Chair Oshiro?
13 VICE-CHAIR REPRESENTATIVE OSHIRO: Here.
14 CO-CHAIR SENATOR HANABUSA: Senator Buen?
15 SENATOR BUEN: Here.
16 CO-CHAIR SENATOR HANABUSA: Representative
17 Ito?
18 REPRESENTATIVE ITO: Here.
19 CO-CHAIR SENATOR HANABUSA: Representative
20 Kawakami?
21 REPRESENTATIVE KAWAKAMI: Here.
22 CO-CHAIR SENATOR HANABUSA: Representative
23 Leong?
24 REPRESENTATIVE LEONG: Here.
25 CO-CHAIR SENATOR HANABUSA: Representative
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1 Marumoto?
2 REPRESENTATIVE MARUMOTO: Here.
3 CO-CHAIR SENATOR HANABUSA: Senator Matsuura
4 is excused. Senator Sakamoto is excused. Senator Slom?
5 SENATOR SLOM: Here.
6 CO-CHAIR SENATOR HANABUSA: Senator Hanabusa
7 is here. We have quorum.
8 CO-CHAIR REPRESENTATIVE SAIKI: Thank you very
9 much. Members, our first witness today is Mr. Richard
10 Kravetz.
11 Mr. Kravetz, please be seated at the witness table.
12 We'd like to note that Mr. Kravetz is accompanied by counsel.
13 At this time we'd like to administer the oath.
14 CO-CHAIR SENATOR HANABUSA: Mr. Kravetz, do
15 you solemnly swear or affirm that the testimony you're about
16 to give will be the truth, the whole truth, and nothing but
17 the truth?
18 RICHARD KRAVETZ: I do.
19 CO-CHAIR SENATOR HANABUSA: Thank you very
20 much. Members, as we have in the past, we will begin with
21 questioning by the legal counsel, who is Mr. Kawashima. And
22 members, due to the number of witnesses we have scheduled
23 today, the co-chairs have instituted a five-minute rule in
24 your questioning.
25 Mr. Kawashima.
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1 SPECIAL COUNSEL KAWASHIMA: Thank you, Madam
2 Chair.
3 EXAMINATION
4 BY SPECIAL COUNSEL KAWASHIMA:
5 Q. Please state your name and business address.
6 A. Richard J. Kravetz, Ph.D., 1100 Ward Avenue,
7 Honolulu, Hawaii.
8 Q. And what business or association is located at
9 1100 -- I'm sorry, would you --
10 A. Ward.
11 Q. Ward Avenue.
12 A. Alaka'i Na Keiki.
13 Q. And what is your position with Alaka'i Na Keiki,
14 sir?
15 A. President.
16 Q. I notice you have exercised your right to have your
17 counsel here.
18 May we have your name, please?
19 MR. CONFALONE: My name is Perry Confalone.
20 SPECIAL COUNSEL KAWASHIMA: Mr. Confalone,
21 welcome.
22 MR. CONFALONE: Thank you.
23 Q. Now, how long have you held the position of
24 president of Alaka'i Na Keiki, sir?
25 A. Since January of 1999.
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1 Q. Now, you were served with a subpoena to appear and
2 to bring documents with you. Do you have those documents,
3 sir?
4 A. Yes, I do, with the exception of contracts for six
5 individuals who did not return them. These were independent
6 contractors. We offered them the contract, but they didn't
7 return it and did not -- they just worked with us for a short
8 time.
9 Q. In other words, the time by which they should have
10 returned their contract has expired?
11 A. No, it's just that they just worked with us for a
12 short time and decided not to work with us and didn't -- we
13 were -- they were transitioning cases from another company
14 and they were -- I guess decided not to go with our company.
15 Q. All right. The other documents, though, responsive
16 to Exhibit A on the subpoena duces tecum served on you, you
17 have all of them here, sir?
18 A. Yes, I do.
19 Q. And they include contracts you may have with the
20 State of Hawaii or any department or subdivision thereof?
21 A. Yes.
22 Q. A list of all independent contractors hired by your
23 organization to provide educational, therapeutic, or mental
24 health services related to Felix versus Cayetano?
25 A. Yes.
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1 Q. A list of employees who have provided educational,
2 therapeutic, and/or mental health services?
3 A. Yes.
4 Q. All contracts between Alaka'i Na Keiki, Inc. and
5 these independent contractors identified above in Item 2?
6 A. Yes.
7 Q. And a list of your current officers and directors?
8 A. Yes.
9 Q. They are all here in the box you have before you?
10 A. Yes.
11 Q. All right, thank you. You were primarily summoned
12 here, sir, to bring the documents, but I will question you
13 just for a bit in a few areas. When was Alaka'i Na Keiki
14 formed?
15 A. January 1999.
16 Q. And was it known by any other name prior to that?
17 A. No.
18 Q. And what types of services does Alaka'i Na Keiki
19 perform -- or provide, I should say?
20 A. We provide mental health services to primarily
21 children and youth.
22 Q. To children?
23 A. And youth.
24 Q. Youth. When you say children and youth, what age
25 ranges are we talking about?
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1 A. Zero through 20.
2 Q. And how many people are on your staff, sir?
3 A. Well, we -- could you clarify what you mean by
4 staff?
5 Q. Maybe what you ought to do, that might be easier,
6 if you would explain to me the organizational structure you
7 have there?
8 A. Okay. Basically we have independent contractors
9 and we have hourly employees, and then we have our primary
10 supervisors and our executive director, Dr. Linda Hufano, and
11 myself, who's associate director. We have a clinical
12 director and we have clinical supervisors.
13 Q. In those categories, I'll start backwards, clinical
14 supervisors, how many of those do you have?
15 A. We have, let's see, full-time equivalent, would
16 that help?
17 Q. Yes.
18 A. Full-time equivalent?
19 Q. Yes.
20 A. Okay. Let's see, we have two full-time equivalent
21 people in addition to myself, and I also serve as clinical
22 supervisor.
23 Q. All right. I know we have that information, sir,
24 but it might assist us. Which state agencies do you
25 currently have contracts with?
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1 A. The department -- Child and Adolescent Mental
2 Health, the Zero-to-Three Program, and the Department of
3 Education.
4 Q. All right. And what about private providers that
5 you currently have contracts with?
6 A. How many private -- are you asking --
7 Q. Which ones, sir? If there are many, then just tell
8 me that.
9 A. There's about 50, 50 or more.
10 Q. Are a list of those providers contained within --
11 A. Yes.
12 Q. All right, I won't belabor that. How does -- will
13 you describe how Alaka'i Na Keiki bills the state, whichever
14 agency or subdivision thereof it is that it has contracted
15 with, starting from the time a service is authorized to the
16 time that Alaka'i Na Keiki actually receives payment?
17 A. That's not an area in which I normally function.
18 There are -- we could get you that information, but I don't
19 normally --
20 Q. Who would know that information?
21 A. Dr. Linda Hufano.
22 Q. All right. Now, you described yourself earlier as
23 the president of Alaka'i Na Keiki, and I think you also
24 testified that you were the assistant clinical director; is
25 that the right term?
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1 A. I'm associate director.
2 Q. Clinical director?
3 A. No, associate director.
4 Q. Is there a clinical director?
5 A. Yes.
6 Q. Who is that?
7 A. Dr. Becky Pedua.
8 Q. And how do you spell that last name?
9 A. P-E-D-U-A, Pedua.
10 Q. Who would be the person to give us this billing
11 information, then, Linda Hufano?
12 A. Yes.
13 Q. Am I to understand, then, that you don't get
14 involved in any way in the financial aspects of the business?
15 A. That's incorrect.
16 Q. What aspects of the business -- financial aspects
17 of the business do you deal with?
18 A. I deal with the budgets, I interact with our CPA
19 firm, and deal with banking duties.
20 Q. What type of organization is Alaka'i Na Keiki in
21 terms of being a profit, not-for-profit?
22 A. It's a for-profit professional corporation.
23 Q. And who owns that corporation?
24 A. Myself and Dr. Linda Hufano.
25 Q. And you own it in equal shares?
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1 A. No.
2 Q. What are the shares?
3 A. She owns 51 percent.
4 Q. Now, does Alaka'i Na Keiki provide therapeutic aide
5 services?
6 A. Yes, we do.
7 Q. And are these provided -- these services provided
8 by aides who are independent contractors or full-time
9 employees or both or what?
10 A. Therapeutic aide services are provided only by
11 hourly employees.
12 Q. Why is that? Is there any reason why?
13 A. Could you -- could you explain your question a
14 little further?
15 Q. I may have confused you, sir. What I'm asking you
16 is you say these therapeutic aides who provide those services
17 are only hourly employees, not salaried employees; is that
18 correct?
19 A. Correct.
20 Q. Is there any -- there may not be. Is there any
21 particular reason why they are hourly versus salary people?
22 A. Yes.
23 Q. What is that?
24 A. By having hourly employees, we can expand or
25 contract the number of people very quickly. We can be very
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1 responsive to the market.
2 Q. I see. And what are the minimum qualifications for
3 these aides?
4 A. Well, we use the clinical standards of Child and
5 Adolescent Mental Health, and I can provide you with those.
6 There are several types -- it would take quite a bit of time
7 to go through the various different ones. It's not just one
8 standard. There's at least three different categories of
9 people that would be qualified.
10 Q. Do you have those somewhere in writing --
11 A. Yes.
12 Q. -- rather than having you --
13 A. Yes, we can provide that to you.
14 Q. Say within -- today is Friday. Maybe by next
15 Wednesday?
16 A. Yes.
17 Q. Thank you. Now, and it may be varied, but at what
18 hourly rates are the therapeutic aides billed out to the
19 State of Hawaii?
20 A. They are billed out -- well, the actual -- again,
21 the billing information, Dr. Hufano has that information, but
22 it's variable.
23 Q. But you have knowledge of that information, though,
24 don't you? I don't mean specific, but you have a knowledge
25 of the range of the hourly rates that the state is billed out
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1 at, don't you?
2 A. I don't have the full range. I know some of it,
3 but I don't have complete information.
4 Q. I understand, sir. Just to the best of your
5 ability, tell us what knowledge you do have as to the ranges
6 of these hourly rates that's billed out to the state. As
7 long as you're not guessing. I'm not asking to you guess,
8 sir. I think you have basic knowledge to answer that.
9 MR. CONFALONE: Unfortunately, the witness
10 doesn't have specific knowledge or even enough knowledge to
11 give you an accurate range at this time.
12 Q. Is that correct, sir?
13 A. Yes.
14 Q. How about the hourly rate that these therapeutic
15 aides are actually paid by Alaka'i Na Keiki?
16 A. It's my understanding that the maximum that we pay
17 the aides is $15 an hour and it may be as low as $9 or $10 an
18 hour, but I might -- again, I do not know this totally and
19 accurately. There are different levels of aides. There's
20 level 1, level 2, and level 3. The state -- I do know the
21 state reimburses services for a level 1 at a different rate
22 than a level 2, et cetera, so the rate that the person gets
23 is both dependent on how much the state reimburses us and
24 also there is some kind of a merit -- we look at it in terms
25 of merit, in terms of quality of their service, and if they
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1 deserve a raise and so forth. So there are various things
2 that are factored in to how much they actually get paid.
3 Q. For example, when you talk about merit raises, are
4 these based on, for example, educational qualifications?
5 A. It's -- merit is something where we believe they
6 are doing a good job.
7 Q. And how do you -- how do you judge how they are
8 doing a good job? What factors do you look at?
9 A. We basically -- we rely a lot on the supervisor's
10 recommendation, but, again, Dr. Hufano is the person who
11 knows more about that and makes that decision.
12 Q. What do you do as associate director?
13 A. As associate director I am in charge of training,
14 I'm in charge of the -- our intensive -- and I'm in charge of
15 our intensive in-home program and our autism program. Also,
16 I provide clinical supervision, and there are various other
17 tasks as assigned by the executive director.
18 Q. You have a Ph.D., I understand, sir?
19 A. Yes, I do.
20 Q. From whom do you have a Ph.D.?
21 A. UCLA.
22 Q. When did you receive that Ph.D. and in what area?
23 A. I received it in 1979 in the area of educational
24 psychology with a specialization in the handicapped, in
25 particular special education students.
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1 Q. Now -- oh, getting back to the question about --
2 and I understand you may not have all of the information, but
3 to the extent you can answer this, sir, are these therapeutic
4 aides given merit increases and merit bonuses or whatever it
5 might be based on the number of hours that they bill?
6 A. No.
7 Q. Not at all?
8 A. No.
9 Q. There's no --
10 A. Not that I'm aware of.
11 Q. All right. Now, how many clients does a
12 therapeutic aide typically serve?
13 A. Well, there's no typical because there may be -- it
14 depends on the number of hours that the aide wishes to work,
15 it depends on the number of hours that had been authorized by
16 the family guidance center. There are a lot of factors that
17 go into determining how many they work with.
18 Q. It could be one, it could be six?
19 A. Correct.
20 Q. And when you say there are a lot of factors that go
21 into determining how many they work with, who, I guess,
22 determines what the factors are that should be considered in
23 deciding how many clients a specific therapeutic aide might
24 service at one time?
25 A. It usually starts with the aides themselves, and
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1 then they work with their individual supervisor to determine
2 if it's appropriate for them to be working -- you know, if
3 they take on too many, they would say that sounds like too
4 many or it's an inappropriate case, but in general they may
5 determine how many they would like to work with and they
6 would seek out -- they typically seek out their own
7 assignments from the assignments that our intake coordinator
8 has available.
9 Q. By the way, how does your organization -- how does
10 this intake coordinator get the referrals of potential
11 clients?
12 A. They come from the family guidance center.
13 Q. I see. They refer them to you?
14 A. Right.
15 Q. Do you know if there is a process by which they
16 parcel out the work to different organizations, if you know?
17 A. I don't know. There are so many family guidance
18 centers on Oahu that they each may have different procedures.
19 My understanding is that we're on a list -- an authorized
20 list and they would go down the list and make a choice based
21 on other -- many factors.
22 Q. All right. Am I to understand, sir, a therapeutic
23 aide, for example, with one client might spend three hours
24 with that client a day, for example, doing varied things?
25 A. They -- three hours would not be unusual at all.
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1 As far as varied things go, it's very specific as to what
2 they do.
3 Q. Well, perhaps you might give me a range of things
4 that a therapeutic aide might do with a client of your
5 organization?
6 A. There's a treatment plan that's been agreed upon by
7 the primary therapist, the parent, the IEP team, and
8 typically the Department of Health care coordinator. They've
9 all agreed on these things that shall be worked on, and out
10 of those, all the things on the treatment plan, the TA does
11 not work on everything, but they only work on things that are
12 basically ancillary types of things that the therapist thinks
13 would be appropriate. It's typically skill building.
14 Q. Give us some examples of some specific types of
15 tasks that a therapeutic aide might have.
16 A. Social skills training, language training.
17 Q. Social skills training how?
18 A. Well, there are so many different diagnostic
19 categories, it's rather difficult to know, but let's say an
20 autistic child would need to know how to respond, just simply
21 respond. Many of these children do not respond socially at
22 all to anybody, not even their parent. So they might start
23 out teaching them how to respond to another human being,
24 period.
25 Q. How about recreational activities, are those -- are
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1 there recreational activities that these therapeutic aides
2 participate in with their clients, movies, for example?
3 A. Movie behavior -- movie --
4 Q. Going to --
5 A. Going to movie behavior?
6 Q. Taking a client to a movie.
7 A. In -- I think that would be rather rare.
8 Q. You've seen it happen?
9 A. It could happen, but it would be rather rare.
10 Typically they might teach them how to buy a ticket and --
11 but actually teaching them how to watch a movie, that would
12 be rather rare.
13 Q. Not necessarily teaching them how to watch it so
14 much as being with them at a movie, chaperoning them.
15 A. There are some aides that do -- that are more in
16 the respite or custodial area, but we don't have any aides in
17 our agency that does that type of thing. We don't accept
18 those assignments.
19 Q. You know that there are such assignments?
20 A. I don't know for sure because we don't really
21 entertain those. We only work on more high level, chronic
22 problems. We don't deal with custodial type problems.
23 Q. I see. Now, is one of -- strike that.
24 Is a therapeutic aide that works for Alaka'i Na
25 Keiki required to have a minimum billing amount of hours per
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1 day, per week, per month?
2 A. We tell people -- there's no such thing as a
3 minimum amount of billing. There is such a thing as a
4 minimum number of hours per week that we are looking for when
5 we hire people. Now, that is not a total requirement, but we
6 tell them when they come to work for us that we have found --
7 we have taken on employees that work less than 15 hours a
8 week, but with the supervision requirements and the training
9 requirements and the education requirements, it doesn't seem
10 feasible for somebody to work for us for less than 15 hours a
11 week. It doesn't -- they seem to not be able to keep up with
12 the requirements that our job takes, so we just advise them
13 it would be better not to work for us if they are only going
14 to work less than 15 hours a week.
15 Q. Is that really the only criteria you recite to
16 them, that it should not be less than 15 hours?
17 A. Yes.
18 Q. You do not tell them on the other end of the
19 spectrum that we expect you to work 20 or 30 or 40 hours?
20 A. No, we tell them you can work as many as you
21 physically can work. We don't say that they have to work
22 more or there has to be a dollar amount or anything like
23 that.
24 Q. So these hourly employees, if you were to estimate
25 the average amount of hours they work a day, what would you
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1 say?
2 A. It's going to be variable. There are some people
3 that work almost full time and there are some people that
4 work the minimum, let's say three hours a day, so there's a
5 big range.
6 Q. Are there some who work 18 hours a day?
7 A. There are some people that work for more than one
8 agency, and I don't know what other hours they work.
9 Q. All right. Well, what I'm asking, though, is when
10 a therapeutic aide takes a client somewhere, wherever it
11 might be in accordance with the plan as you talked about,
12 they would bill the total number of hours they spent with
13 that child, right?
14 A. Yes.
15 Q. That's how it works?
16 A. Yes.
17 Q. What if they had two children who essentially had
18 the same type of plan, at least an aspect of it was to do the
19 same activity, and they take two students there for three
20 hours, for example, what would that therapeutic aide charge?
21 A. We don't do that.
22 Q. You do not?
23 A. No.
24 Q. Why is that?
25 A. We didn't -- it was not in our proposal, so we
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1 didn't propose to do that.
2 Q. Are you aware --
3 A. We're not supposed to do any group work. We just
4 do individual work.
5 Q. You are aware that there is group work that goes
6 on?
7 A. There's other programs. We don't have that
8 program.
9 Q. I understand.
10 A. But there may be some other programs. I'm not
11 familiar with the other programs. I don't talk with the
12 other agencies about their program. You know, this business
13 is very competitive and sometimes we talk and sometimes we
14 don't. That's one area we don't talk.
15 Q. But you are aware of that concept, though, are you
16 not?
17 A. No.
18 Q. Group therapy?
19 A. No. Group therapy for therapists but not for TAs.
20 We have group therapy for therapists but not for TAs.
21 Q. TAs, you've never seen a situation where -- you
22 have not heard of a situation where one TA may take out
23 multiple clients and charge multiples of the numbers that
24 they've taken out?
25 A. If that comes to our attention, and I'm not aware
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1 that that's ever been done, we would put a stop to that.
2 Q. That would not be proper?
3 A. No, not under our contract.
4 Q. Well, as far as your TAs, then, someone at Alaka'i
5 Na Keiki monitors their billing, do they not?
6 A. Yes, we do.
7 Q. And who is that? Who would that person be that
8 monitors the billing, or persons?
9 A. We have a very extensive procedure. The major
10 group is our quality assurance committee. We are nationally
11 accredited by CARF and we have been given a three-year
12 accreditation and they have reviewed our quality assurance
13 procedures and they are very extensive. Dr. Hufano is the
14 one who is in charge of that and would be able to best answer
15 those questions regarding that.
16 Q. What does that acronym stand for, sir? I thought
17 you gave me an acronym.
18 A. CARF, Council on the Accreditation of
19 Rehabilitation Facilities.
20 Q. And what type of organization is that?
21 A. It's an accreditation organization.
22 Q. Is it a national accreditation?
23 A. National.
24 Q. Is it nationally recognized?
25 A. Yes.
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1 Q. Now, do you also monitor the bills of mental health
2 professionals that your organization works in conjunction
3 with, if you do?
4 A. I don't understand.
5 Q. Does your organization work in conjunction with
6 mental health professionals, those with advanced degrees, MAs
7 or Ph.D.s?
8 A. We have contracts with mental health professionals,
9 yes.
10 Q. And the contracts provide for what types of
11 service?
12 A. Typically it's therapy.
13 Q. Therapy for clients of Alaka'i Na Keiki?
14 A. Yes.
15 Q. I see. And who decides which professionals become
16 involved in that treatment?
17 A. Well, we review their qualifications. They
18 request -- you know, they will come to us and request to be a
19 provider for us and we have an application and we review
20 their application and we review their credentials and it's a
21 rather extensive procedure, and this is proscribed by the
22 Child and Adolescent Mental Health Division, including
23 criminal checks, et cetera.
24 Q. Now, these mental health professionals, though, I
25 assume accept them into your service and they treat your
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1 clients. Do they bill the clients directly or do they bill
2 you, you meaning Alaka'i Na Keiki?
3 A. They bill Alaka'i Na Keiki.
4 Q. So that these documents you have before you in that
5 box should include those types of information? I think Item
6 2 says --
7 A. I'm not sure if the contract -- we do have a
8 handbook that instructs them where to send the bills. I'm
9 not sure if the contract includes that information.
10 Q. I'm sorry, what I meant was the amounts that are
11 being charged and who provides those services and then
12 charges for them should be within the documents you have
13 there, sir?
14 A. The documents include an appendix which states how
15 much Alaka'i Na Keiki will pay the therapist for every hour
16 of therapy.
17 Q. But as far as the therapists who provided the
18 service, are there documents that would give us information
19 about that, who these therapists are, what type of services
20 they performed, for how many hours, for example?
21 A. We have -- we responded to your request for
22 information, which just states how many hours they work per
23 month, but not exactly what service they provided. There's a
24 variety of services they can provide.
25 Q. By the way, in being responsive to our subpoena you
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1 have not withheld anything, have you? I'm not suggesting you
2 have. I'm just asking.
3 A. No, we just said that there were six people that we
4 couldn't find contracts -- no.
5 Q. Have you redacted any information from the
6 documents that you brought with you today?
7 A. What was that word?
8 Q. Did you block out any information that you felt --
9 for whatever reason there might be, right to privacy,
10 whatever?
11 A. No.
12 Q. You have not blocked out any information?
13 A. No.
14 Q. Now, has any state agency, sir, raised any concerns
15 with Alaka'i Na Keiki relating to the cost of services that
16 they charge?
17 A. Concerns? Could you -- I mean, we bid on these --
18 we bid on the contracts and they either give us a contract or
19 they don't give us a contract and they don't tell why they
20 gave it to us or why they didn't give it to us. They review
21 it and they tell us it's a quality proposal or it's not a
22 quality proposal, and if they don't want to give us the
23 contract, they don't give us the contract based on our bid.
24 Q. I understand what you're saying. Nonetheless, once
25 you get the contract and start performing the services to the
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1 point where you feel you've completed what was required of
2 you under the contract, under those circumstances have there
3 been any complaints from any state agency about the services
4 that have been provided by Alaka'i Na Keiki? I'm not
5 suggesting, again, there have been. I'm just asking.
6 A. You mean the quality?
7 Q. Well, let's start with quality.
8 A. Oh, yes, definitely. You know, it's expected that
9 there would be some complaints from time to time, yes. Very
10 few complaints, but we do get them.
11 Q. From who?
12 A. We get them -- we might get it from a parent, we
13 might get it from an agency person, we might get it from a
14 teacher.
15 Q. When you say a few, so within the realm of the last
16 three years, for example, two --
17 A. Well, we've only been in business for two years.
18 Q. Two years.
19 A. I'm not a -- on the QA committee. I couldn't tell
20 you, but I think Dr. Hufano would have better statistics.
21 Q. Who's on the QA committee?
22 A. There are various doctoral level people within our
23 organization.
24 Q. Including Dr. Hufano?
25 A. Yes.
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1 Q. And she is a Ph.D. also?
2 A. Yes.
3 Q. Where did she receive that Ph.D.?
4 A. University of Hawaii.
5 Q. In clinical psychology?
6 A. Educational psychology.
7 Q. Now, when you say complaints, give me a range. How
8 many are we talking about? I may ask you to provide them,
9 depending on how many there are. Are you saying there are
10 like a couple within the last couple years of complaints
11 about your services, whether it be from parents or others?
12 A. Well, again, I don't have the specifics. I'd say
13 if you would give me a range, a couple versus 10,000, I mean,
14 what are you asking?
15 Q. Well, I think you testified a few minutes ago that
16 Dr. Hufano would be the better person to answer that?
17 A. Right.
18 Q. Now, did CAMHD ever raise a concern over one of
19 your service providers billing for 285 plus hours in
20 September of '99?
21 A. Well, I do know that there was a concern over a
22 provider's billing that came up during an audit, and I
23 believe that was resolved.
24 Q. It was only one issue there? One person, one
25 issue?
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1 A. Well, you just said there was one provider that
2 billed for two -- I do know -- I don't know the specifics of
3 this, but I do know that there was an issue raised about one
4 provider and I believe that the issue was resolved
5 satisfactorily.
6 Q. What was the issue?
7 A. Again, I think -- well, I don't know if that is the
8 issue -- I don't know if this is the provider. You're giving
9 me a number, and I don't have a name or anything. It's very
10 difficult for me to answer that. I do know they had asked us
11 about a provider and they thought that they billed for too
12 many hours and we investigated it and I think we were
13 satisfied with the answer and they were satisfied with the
14 answer. We didn't have to give any money back.
15 Q. Last name I think is Armitage. Sound familiar?
16 A. Yes.
17 Q. Is that the person?
18 A. Yes.
19 Q. And so you say that CAMHD did not ask for any of
20 this time to be cut?
21 A. No.
22 Q. Now -- oh, there obviously is a difference in the
23 amount -- going back a bit -- in the amount that you pay a
24 service provider on an hourly basis and the amount you bill
25 out that service provider to the agency, which might be
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1 CAMHD, might be DOE, whoever it might be. There is such a
2 difference?
3 A. Between the amount we pay the provider and the
4 amount we bill CAMHD, yes, definitely.
5 Q. How do you determine how much that difference will
6 be?
7 A. Well, there's a lot of factors that go into that,
8 just like anybody in any business would have to figure out
9 their overhead and also what the going rate was for the
10 service. So there's a community standard, there's other
11 agencies that are hiring these people, so you have to pay a
12 rate that is, you know, comparable to other agencies,
13 otherwise, you're not going to get anybody to work for you,
14 and then there are fixed costs, there's insurance, there's
15 rent, there's various staff and supervisors, people like
16 myself, Dr. Hufano, clerical people, Xerox machines, et
17 cetera, et cetera. There are just a lot of factors that go
18 into it.
19 Q. As a for-profit corporation, you, I assume, intend
20 to make a profit?
21 A. Yes.
22 Q. Is there a certain percentage that Alaka'i Na Keiki
23 targets as a percentage of profit?
24 A. We want to at least break even.
25 Q. Of course, but is there a percentage of profit that
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1 you have as a goal?
2 A. No.
3 Q. Before -- well, strike that.
4 Am I to understand that Alaka'i Na Keiki was
5 organized by yourself and Dr. Hufano, among others?
6 A. Yes.
7 Q. Were there any others who organized the company?
8 A. Well, we're the -- we're all the officers, just the
9 two of us.
10 Q. I see. And where did -- I'll start with you.
11 Where were you employed prior to starting Alaka'i Na Keiki
12 and becoming its president and associate director?
13 A. I was president of Hoahana Institute.
14 Q. I'm sorry?
15 A. Hoahana Institute.
16 Q. What is Hoahana Institute?
17 A. It was another similar type of company providing
18 mental health services for children and also contracted with
19 the state.
20 Q. And who owned Hoahana Institute?
21 A. Myself, Dr. Hufano, Dr. Dennis McLaughlin and
22 Dr. Tina McLaughlin.
23 Q. I see. Am I to understand what essentially
24 happened is the four of you split into two different
25 companies?
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1 A. Yes.
2 Q. And was Dr. Hufano then also working with Hoahana
3 Institute prior to when you started Alaka'i Na Keiki in 1999?
4 A. Yes, she was executive director of Hoahana
5 Institute.
6 Q. And how long were you with Hoahana Institute, both
7 of you?
8 A. Two years or two and a half years, something like
9 that.
10 Q. And prior to that where were you employed?
11 A. State of Hawaii.
12 Q. Which department?
13 A. Child and Adolescent Mental Health Division.
14 Q. Did you have contracts with that division after you
15 started Hoahana Institute?
16 A. This is a -- are you asking me about Hoahana
17 Institute business?
18 Q. Maybe I'm not. What was the position you had prior
19 to Hoahana Institute?
20 A. I was head of the adolescent day treatment program
21 Diamond Head -- out of Diamond Head Family Guidance Center.
22 Q. In other words, you were employed by the Department
23 of Health?
24 A. Yes.
25 Q. Once you started Hoahana Institute -- and I assume
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1 the four of you started it, organized and started Hoahana
2 Institute?
3 A. Are you asking me questions about Hoahana
4 Institute?
5 Q. Yes.
6 A. Well, I would like to -- I may have to get
7 different counsel if you're going to ask me questions about
8 Hoahana Institute. My subpoena today -- my understanding is
9 I was going to talk about Alaka'i Na Keiki.
10 Q. No, you're right. That's what the subpoena says.
11 Are you refusing to answer questions about Hoahana Institute?
12 MR. CONFALONE: If I may interject, Counsel.
13 The subpoena does ask to address questions related to this
14 particular entity and related questions, of course we're
15 perfectly prepared to do that, but with respect -- it does
16 seem that your questions seem to exceed the scope of that.
17 SPECIAL COUNSEL KAWASHIMA: All right. I'll
18 respect that. We'll ask you that on another day.
19 Q. Now, did Alaka'i Na Keiki ever refund money to
20 CAMHD for disallowed billings?
21 A. I wouldn't know -- I wouldn't have a specific
22 answer to that. I do think if it was it would be very small
23 amount, but --
24 Q. When you say very small amount, Mr. Kravetz, within
25 what range are you talking about?
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1 A. I myself do not have that knowledge, but it's my
2 impression that we have not refunded any money to CAMHD.
3 Q. In the last two years?
4 A. Right.
5 Q. You don't recall CAMHD requesting a refund of
6 $2,490.50 for payments made to Dr. Herman Gill and
7 Ms. Virginia Hatfield and this complaint being made by a
8 parent?
9 A. Well, I don't have -- I don't have that
10 information.
11 Q. It doesn't ring a bell with you?
12 A. No. I know the names of the providers, but --
13 Q. They were providers for Alaka'i Na Keiki?
14 A. Yes.
15 Q. And still are providers?
16 A. One of them is.
17 Q. Which one?
18 A. Hatfield.
19 Q. And where is Dr. Gill now?
20 A. I don't know.
21 Q. You don't recall such a complaint being made as to
22 whether or not services were actually provided by Dr. Gill
23 and Ms. Hatfield?
24 A. I myself don't remember.
25 Q. When you say I myself, you're qualifying it.
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1 A. Well, I don't remember it. I don't remember the
2 details.
3 Q. All right. Has CAMHD ever imposed any billing
4 controls on Alaka'i Na Keiki?
5 A. I -- I've never heard that term used, billing
6 controls. We do have various procedures we must follow.
7 Q. But these are standard procedures, from what I
8 heard you testify earlier. Are these standard procedures
9 that are provided to any provider to the -- to CAMHD, for
10 example?
11 A. As far as I know.
12 Q. There are no special -- what I'm asking is there
13 are no special controls as far as you know that have been
14 imposed on Alaka'i Na Keiki by CAMHD or any other division of
15 the state?
16 A. No.
17 SPECIAL COUNSEL KAWASHIMA: That's all I have.
18 Thank you.
19 CO-CHAIR REPRESENTATIVE SAIKI: Thank you very
20 much. Members, at this time we'd like to proceed with
21 questions by members, and we'd like to reiterate that the
22 co-chairs are recommending that we allot five minutes per
23 member for questioning. So we'll begin with Vice-Chair
24 Oshiro followed by Vice-Chair Kokubun, and again, members,
25 the scope of questions should be limited to the
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1 authentication of the documents produced this afternoon.
2 Vice-Chair Oshiro.
3 EXAMINATION
4 BY VICE-CHAIR REPRESENTATIVE OSHIRO:
5 Q. Mr. Kravetz, I just wanted to get a little bit more
6 clarification on what Mr. Kawashima was asking you about.
7 When you had said that you -- Alaka'i Na Keiki provides
8 mental health services to children and youth, are there any
9 other services besides therapeutic aides that you folks
10 provide?
11 A. We provide individual therapy and group therapy.
12 We provide assessment services. We provide therapeutic aide
13 services, and we provide intensive in-home services.
14 CO-CHAIR REPRESENTATIVE SAIKI: I'm sorry,
15 Vice-Chair Oshiro. I stand corrected. The scope of
16 questioning is actually much broader than just
17 authentication. Questioning may also go into the issues
18 attached as Exhibit B to the subpoena. Thank you.
19 VICE-CHAIR REPRESENTATIVE OSHIRO: Thank you.
20 Q. Mr. Kravetz, based on the categories that you
21 listed, would you be able in any way to provide us an
22 estimation on how much each of those various services
23 comprised? Would it be primarily -- would TAs be a large
24 majority, half, a small majority? Can you give us any
25 estimate?
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1 A. Right now? Today?
2 Q. Yeah.
3 A. With the school-based services being provided by
4 the Department of Education, most of our services now are
5 intensive in-home services and TA services.
6 Q. Okay. And then how about previously when it was
7 being primarily done by Department of Health, was it
8 different?
9 A. I'd say about a third of the services were therapy,
10 what we call individual therapy, and two-thirds of the
11 services were intensive in-home services and therapeutic aide
12 services.
13 Q. And previously I recall Mr. Kawashima asking you
14 about the -- some -- I guess he had heard or maybe there were
15 previous allegations of people doing what's called group
16 therapy or taking two children out and maybe doing some kind
17 of double billing, and you had said that's something that's
18 not proper within your contract; is that correct?
19 A. Correct.
20 Q. But overall, based on your experience and your
21 education, is there times where it is appropriate for that
22 kind of activity to be going on? Besides just your contract,
23 I'm talking about based on --
24 A. Just in general as a principle of psychology?
25 Q. Correct.
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1 A. Providing psychological services?
2 Q. Correct.
3 A. Yes.
4 Q. What kind of instances would that be?
5 A. Well, it has to do with socialization. I think if
6 you have more than one child, then they can learn social
7 behavior and how to get along with each other.
8 Q. And are there any other particular conditions that
9 you would say have more of an affinity towards this need for
10 socialization rather than other conditions?
11 A. Oh, yes.
12 Q. What's an example of some that do and some that
13 don't?
14 A. Well, there could be autistic kids who rarely have
15 an opportunity to socialize with other children, but our
16 philosophy is they should socialize with normally functioning
17 children rather than a group of autistic children. If they
18 were conduct disorders or anti-social children, they should
19 learn how to get along with other children, but it may not
20 always be best to be working with a group of -- putting a
21 whole bunch of conduct disorder kids together or a whole
22 bunch of ADHD kids together may not be as beneficial as
23 putting an ADHD child together with a normally functioning
24 child. So I don't know -- so there may not be that many
25 reasons to put a bunch of children with social dysfunctions
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1 together, except economics.
2 Q. Okay. And I also want to ask you about some of
3 the -- I think you had talked about it being a competitive
4 marketplace. You had particularly talked about the fact that
5 there were times when Alaka'i Na Keiki had bid on a contract
6 but wasn't necessarily awarded it. Do you know how often
7 that would be?
8 A. It's only been once or twice that I'm aware of.
9 Q. Because we had also heard from previous --
10 A. In terms -- well, I'm sorry. When I was referring
11 to competitive, was there times when we've bid on contracts
12 and haven't been awarded -- we've bid on other contracts
13 besides the ones we have now. We've bid on contracts with
14 the Department of Human Services and so forth, not only with
15 the Department of Health or the Department of Education.
16 Q. But just limited to the Department of Education and
17 Department of Health and in attempting to implement the
18 mandates under the Felix consent decree, have -- has it been
19 often that you folks haven't been awarded contracts or has it
20 been rare? What's been your experience?
21 A. Well, the way the Department of Health had their
22 request for proposals is kind of bundle a lot of different
23 services under one submission of a proposal. So the RFP
24 could say intensive in-home services, outpatient services,
25 biopsychosocial services with -- in the same RFP and you kind
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1 of just pick and choose which ones you bid on and you may get
2 one and you may not get another. So we have submitted
3 proposals which we have not been awarded the contract,
4 specifically the MST proposal we didn't get. We bid on it
5 and we didn't get it. We bid on -- we wanted to have a day
6 treatment program for autistic children and we did not get
7 that bid. We did not receive that, but we got other things
8 on that same proposal.
9 Q. And I just seem to recall you saying something
10 about -- that you were on an authorized list and that's how
11 you got referred for services or you would be able to bid on
12 the contract; is that correct? Can you clarify that for me?
13 A. Well, once you get a rating on the proposal, then
14 you are put on, I believe, a list of agencies to which the
15 family guidance centers could refer clients.
16 Q. Okay.
17 A. And this is also true in our contract with the DOE.
18 There are certain districts under -- where we're on a list
19 and there are certain districts where we're not on a list.
20 Q. Because I guess previously we had heard testimony
21 that I guess in certain areas there is sort of a shortage of
22 therapeutic aides, such that there's not really a lot of
23 choice in terms of where the agency can go. Do you find that
24 to be your experience or not?
25 A. We have 80 unfilled requests for therapeutic aides
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1 right now, so yes, there is a shortage of therapeutic aides.
2 Q. And lastly, you said that as part of your duties of
3 being an associate director it included training. Can you
4 describe or detail for us what you meant by training?
5 A. Well, every provider that comes into our agency has
6 to go through a 32-hour training program to orient them to
7 our agency and to the contract in providing services. Now,
8 those that are therapeutic aides and paraprofessionals, many
9 of them, since there is no real training program in Hawaii to
10 training people to do this service, we have to do a lot of
11 the training. There is another requirement by our contract
12 that they have to go through a three-day TA training.
13 Now, they could go through the TA training through
14 the Felix Training Institute, but our agency got an
15 authorization to do our own training for TAs. We submitted a
16 curriculum and we submitted the names of the people that
17 would do the training and now we're an authorized trainer so
18 we can do our own training of TAs. That's just as an
19 example.
20 We do a yearly symposium where we present the state
21 of the art trainings to all our providers. We bring in guest
22 speakers. We've brought in Dr. Ivar Lovaas to do training.
23 We do a lot of training, and my job is to either actually do
24 the training -- give the lectures and do the training and
25 also organize to bring in the professionals to do the
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1 training.
2 VICE-CHAIR REPRESENTATIVE OSHIRO: Thank you
3 very much.
4 CO-CHAIR REPRESENTATIVE SAIKI: Thank you.
5 Vice-Chair Kokubun followed by Representative Ito.
6 VICE-CHAIR SENATOR KOKUBUN: Thank you.
7 EXAMINATION
8 BY VICE-CHAIR SENATOR KOKUBUN:
9 Q. I wanted to focus on the contract. We haven't had
10 a chance to review the contracts submitted through the
11 subpoena, but you mentioned your contractual relationship
12 with CAMHD, the early intervention program, the
13 Zero-to-Three, and DOE.
14 A. Yes.
15 Q. Are those the only state contracts that Alaka'i Na
16 Keiki has?
17 A. Currently, yes.
18 Q. Because you had mentioned submitting bids to
19 Department of Human Services. You don't have any current
20 contracts with them?
21 A. Actually, when I said Department of Human Services,
22 I just want to make a correction, we did that through another
23 agency. This current company never submitted a proposal to
24 DHS, but I have personally worked with another entity that
25 did submit proposals to DHS and I'm familiar with that and we
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1 did get that contract, but not -- this particular entity did
2 not submit proposals to DHS.
3 Q. So the three state agencies that you do have
4 contracts with now make up -- are the only state agencies
5 that you have contracts with?
6 A. Right.
7 Q. Now, for the entire work that Alaka'i Na Keiki
8 does, what would these -- would these three contracts make up
9 the majority of the work that you have?
10 A. A hundred percent of our work.
11 Q. And within those three different agencies, could
12 you give me an idea about which agency might have the larger
13 contract?
14 A. Child and Adolescent Mental Health Division.
15 Q. Approximately what percentage, any idea?
16 A. Right now about two-thirds.
17 Q. How about early intervention?
18 A. It's a very small contract. In terms of
19 percentage, I couldn't tell you right now, but it's just a
20 few -- maybe $10,000 or something like that. It's a very --
21 or maybe 25,000. It's a very small amount compared to the
22 others.
23 Q. Can you quantify the CAMHD contract? You said
24 two-thirds, what is that?
25 A. Well, we don't have a contract -- it's a
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1 fee-for-service contract, so we don't have a contract for any
2 set amount, and the contract for Zero-to-Three is a
3 fee-for-service contract. I was just saying about how much
4 income could it potentially generate. Potentially the
5 Zero-to-Three said that they were going to cap it at about
6 25,000. That's what they said in their informational
7 briefing. So we haven't -- we don't know how much they were
8 go to pay us.
9 Q. Is there a cap for the CAMHD?
10 A. No, not that I'm aware of.
11 Q. How about the DOE contract, can you quantify that
12 in terms of --
13 A. We have no idea -- all we know is there's been a
14 significant reduction in referrals since DOE took it over, so
15 I would say that would be much lower than it had been in the
16 past for the same type of cases. They took over the low end
17 cases that DOH was servicing, and since they did and have
18 hired some of their own therapists, our referrals have gone
19 down very significantly.
20 Q. With respect to the CAMHD clientele, you indicated
21 that those clients were referred by the family guidance
22 center?
23 A. Yes.
24 Q. Different family guidance centers or one in
25 particular?
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1 A. Well, we're -- we service the whole island of Oahu,
2 so anybody -- and we also are currently seeing some clients
3 on the Big Island, and we are referred those clients --
4 basically we have contracts on Oahu and because they don't
5 have enough providers on the Big Island they are using our
6 people by -- I think they use a procurement procedure. I'm
7 not sure of the exact term, but they don't have enough
8 contracted agencies over there so they are having our people
9 fly in.
10 Q. How many clients do you have on Oahu that were
11 referred by family guidance center?
12 A. Currently or in the past? In the past we --
13 through our two years of working with CAMHD we've had
14 probably around 2,200 clients, and typically we served about
15 1,200 at any one time, and now we have shrunk down to 500
16 clients.
17 Q. Let's take the 1,200 client figure. Can you tell
18 me out of that number how many, say, the Diamond Head Family
19 Guidance Center referred to you?
20 A. I don't know. I couldn't tell you. Our biggest
21 referral source has been the Leeward coast, so I don't really
22 know the percentage of Diamond Head.
23 Q. Would that information be in the contracts that --
24 the documents that you're providing?
25 A. No.
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1 Q. Is that something that could be provided if we
2 asked for that?
3 A. I'm not sure if -- I'm not sure how we'd get at
4 that. I'd have to ask our office staff to see if there's a
5 way to separate that out. We could -- well, again, I'm not
6 sure right now off the top of my head.
7 Q. I don't think the committee would be interested in
8 specific clients, but I think the quantitative, the number of
9 clients being referred to you would be of interest and where
10 they were referred from, so perhaps the chairs can consider
11 asking for that information at some point. I have one last
12 question, and that's with regard -- you said you submitted a
13 bid but were unsuccessful in terms of the day treatment for
14 autistic children?
15 A. Yes.
16 Q. Is that -- did you feel that you qualified or that
17 Alaka'i Na Keiki qualified to provide that service? Did you
18 meet the criteria the Department of Health --
19 A. Most definitely.
20 Q. And were you given a reason why -- when you're
21 unsuccessful in a bid, are you given a reason why you're
22 unsuccessful?
23 A. Well, they give you a rating.
24 Q. It was represented to us earlier that there was
25 really only one institute here in the state that could
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1 provide this day treatment for autistic children. Are you
2 aware of that?
3 MR. CONFALONE: Were we aware that that was
4 represented?
5 Q. Yes.
6 A. Yes, I saw it. I saw the video in which that was
7 stated.
8 Q. Do you agree with that?
9 A. By one of the family -- by one of the social
10 workers from Diamond Head Family Guidance Center said that
11 and Dr. Gardiner said that.
12 Q. And you don't feel like -- you feel Alaka'i Na
13 Keiki could provide these services?
14 A. Yes.
15 VICE-CHAIR SENATOR KOKUBUN: Thank you very
16 much.
17 CO-CHAIR REPRESENTATIVE SAIKI: Thank you,
18 Vice-Chair Kokubun.
19 Representative Ito, followed by Senator Buen.
20 REPRESENTATIVE ITO: Thank you, Co-Chair.
21 EXAMINATION
22 BY REPRESENTATIVE ITO:
23 Q. This is just for clarification, Doctor. You
24 mentioned that you were a former, what, DOH employee?
25 A. Yes.
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1 Q. And how long were you with the DOH?
2 A. Over ten years.
3 Q. And what division were you working at?
4 A. Child and Adolescent Mental Health and also I
5 worked at state hospital, which was separate, but I was the
6 head of the adolescent unit, and that was a separate
7 division. It was actually associated with adult mental
8 health.
9 Q. Okay. What kind of training -- you mentioned
10 training you folks provide. Can you elaborate on that a
11 little bit?
12 A. Well, there's two kinds of training. There's
13 classroom training and there's actual hands-on training.
14 What we try to do -- it's very difficult when you're dealing
15 with actual clients that you're being paid for to use them as
16 a training vehicle, so what we have been doing is most of it
17 we try to do in the classroom and we use videotapes with
18 children -- where children and working with children are
19 shown in the videotapes. And then we have them shadow a
20 person actually doing the work, and that's voluntary. We
21 can't require them to do that, and we have to get permission
22 from the parents and teachers and so forth to have them
23 shadow people, but we try to do that as much as possible.
24 Then we have workshops in which parents voluntarily
25 bring in their children and they work with the children, but
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1 typically it's not the most difficult children, because the
2 parents with the most difficult children typically don't
3 volunteer to bring them in. So it's a little bit unrealistic
4 sometimes, but that is a big challenge we have right now is
5 training. And there is no actual training program at the
6 university, and Dr. -- one professor up there left that was
7 doing quite a bit of the training at UH, so it's a big
8 challenge for us to train people who have never worked with
9 children that much. In hiring people, we do require them to
10 have experience in working with children, but it may be rare
11 that they worked with children like the autistic children and
12 some of the severe conduct disorder children, the more
13 chronic children they don't work with, have as much
14 experience, so we have to try to give them experience and
15 it's a very difficult thing to do, but we're trying our best
16 and hopefully we'll have contracts in the future that will
17 allow us to spend more time and money on training.
18 Q. So the training -- do you presently perform or
19 provide -- you provide this to, what, Department of Health
20 personnel or DOE personnel?
21 A. No, to our own personnel. It's in-service training
22 to the people -- to our own employees and contractors.
23 Q. But you folks don't do -- you folks don't do any
24 type of training for Department of Education?
25 A. We've offered to do it free of charge, but nobody's
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1 taken us up on it.
2 REPRESENTATIVE ITO: Thank you very much.
3 CO-CHAIR REPRESENTATIVE SAIKI: Thank you.
4 Senator Buen, followed by Representative Kawakami.
5 SENATOR BUEN: Thank you, Co-Chair Saiki.
6 EXAMINATION
7 BY SENATOR BUEN:
8 Q. Dr. Kravetz, you talked about authorized -- the
9 agencies that are authorized to train TAs. When did your
10 agency qualify to provide that training?
11 A. I don't know exactly, probably around a year ago.
12 Q. About a year ago. And who pays for that training?
13 A. We do.
14 Q. So your agency paid for that training and do you
15 get any funds from -- any state funds or anything, federal
16 funds to pay for that training?
17 A. Well, I believe the Child and Adolescent Mental
18 Health Division believes that we should include that cost
19 when we bid for the contract. In other words, that's part of
20 our overhead. That's what they are telling us. We have --
21 it isn't sufficient. The maximum amount that they give for
22 therapy or TA service, they put a cap on it, so we can't go
23 beyond that. So if we believe to give better training we're
24 going to have to charge the state more, we don't get a
25 contract. So it's kind of a catch 22, the -- we did go after
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1 Department of Labor funds and we did get some funds to do
2 some training at Kapiolani College, which we bid on, but in
3 general we do not get any funds from any other entity to do
4 the training.
5 Q. Now, you say you were qualified to provide training
6 about a year ago. About how many people did you train?
7 A. Well, we -- well, first of all, we train every new
8 employee that's going to do therapeutic aide services. The
9 therapists are generally believed to be trained by their
10 degrees and practice history and so forth. We do give
11 additional training to update them on best practices in the
12 field. So we train -- if we have 150 employees, we train 150
13 employees.
14 Q. So can you give me some kind of numbers? Do you
15 have any idea? Can you -- how many were trained?
16 A. I'd have to look that up based on people -- you
17 know, people's attendance at the trainings, but every aide
18 would be trained, so that would be at least 50 to 60 to 70
19 every year.
20 Q. So --
21 A. And there's a high turnover of TAs too, so that
22 means we're doing a lot of training.
23 Q. So the state does provide some kind of funding for
24 this kind of training?
25 A. Well, I understood that they set up the Felix
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1 Institute and they were supposed to provide some training
2 through the Felix Institute, but I don't -- the only funding
3 that we get is through our contract. We're supposed to
4 budget that in when we make a bid. That was my
5 understanding.
6 Q. I see. I have one more question. Have parents or
7 individuals come to you for the services that you provide
8 other than -- other than what was provided for by the family
9 guidance centers? Did others come asking you for services,
10 parents or individuals?
11 A. They have from time to time.
12 Q. Have you provided that service for them?
13 A. Well, we try to make them aware -- if their child
14 fits into the Felix class, we let them know that they are
15 eligible for the services through their family guidance
16 center or through their school, and we typically would refer
17 them back, because if we were to charge them what it costs,
18 it would -- it would be very, very expensive and they would
19 use up their lifetime insurance cap. Lifetime insurance -- I
20 don't know if the word is cap, but there is a cap to how much
21 they can spend on their child, and we would rather have them
22 go to the -- get the services that were offered free of
23 charge rather than use up their insurance, because once they
24 use it up, they can't ever get that money again and they may
25 have a very needy child. So we encourage them to get the
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1 money from the state.
2 Q. Now, in explaining that to the parents, what were
3 their reasons -- did they tell you what their reasons were
4 when they came to you and did they tell you that they were
5 not able to get services?
6 A. Sometimes they -- sometimes they tell us they are
7 not able to get services. Sometimes -- I've heard from --
8 just recently from a provider a parent was suing the state
9 and they couldn't get services, would we provide the services
10 and then bill them and they plan on billing the state later.
11 SENATOR BUEN: Thank you.
12 CO-CHAIR REPRESENTATIVE SAIKI: Thank you,
13 Senator Buen.
14 Representative Kawakami, followed by Senator
15 Sakamoto.
16 REPRESENTATIVE KAWAKAMI: Thank you very much,
17 Co-Chair Saiki.
18 EXAMINATION
19 BY REPRESENTATIVE KAWAKAMI:
20 Q. I'd like to ask, Dr. Kravetz, you said you're an
21 authorized trainer. Who authorized you?
22 A. Child and Adolescent Mental Health Division, or
23 actually the Felix Training Institute, which is connected to
24 Child and Adolescent Mental Health. I'm not exactly sure how
25 they are connected, but there seems to be some connection.
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1 Q. Is it the -- our department that's doing it?
2 A. Pardon?
3 Q. Is it done by our department, the training by the
4 Department of Health school?
5 A. Well, they do do some training.
6 Q. But the general training that has to be done is
7 done by exactly whom? Who handles it? Is it university
8 personnel working with them or somebody who comes in?
9 A. When Felix Training Institute provides training,
10 who are the people that are the instructors?
11 Q. Who is the core group that presents this.
12 A. Well, they organize it. The administrators of the
13 Felix Training Institute, I believe they organize -- they
14 hire the people.
15 Q. Yeah, who's the Felix Training Institute? That's
16 what I want to know. Is that Department of Health with --
17 A. They're connected with the Department of Health
18 Child and Adolescent Mental Health Division, but I don't know
19 their exact administrative authority or who pays their
20 salaries or anything like that.
21 REPRESENTATIVE KAWAKAMI: Chair, can we find
22 out how this training is provided for them?
23 CO-CHAIR REPRESENTATIVE SAIKI: Okay.
24 Q. The other question is you said you handle children
25 from zero to 20, am I correct?
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1 A. Yeah, through 20, up to their 21st birthday.
2 Q. Up to 21st birthday?
3 A. Uh-huh.
4 Q. What kind of disorders does this group have? In
5 other words, what are the kinds of things you're seeing? A
6 lot of autistic, a lot of ADHD, et cetera? What does it look
7 like, that group with mental disorders? Where is the
8 concentration, in other words?
9 A. Well, it changes depending on what contracts we
10 have. So in the beginning we worked with conduct disorder,
11 ADHD, depression, major depression, bipolar, every -- eating
12 disorders, sexually abused children, juvenile sexual
13 offenders, autistic kids, mentally retarded kids with mental
14 health needs, everybody in the spectrum, and as school-based
15 services started taking over, we started working more with
16 what they call the high end kids, which is more the conduct
17 disorders and autistic group.
18 Q. So in other words, you provide a gamut of services.
19 You can do the whole spectrum; is that correct?
20 A. Yes.
21 Q. Is that what you're saying?
22 A. We have providers for every diagnosis, yes.
23 Q. Would you say that is what would be the highlight
24 of the kind of services you can do that others cannot do?
25 A. Yeah, we're proud of that.
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1 Q. Right?
2 A. We're proud of that, yes.
3 Q. I wanted to find out -- you have never had a
4 complaint from a parent, a teacher, an association, et cetera
5 on the types of services you have provided?
6 A. I didn't say that. I said that we've had very few
7 complaints, but I don't know exactly the specifics of the
8 complaints because that's the domain of our QA committee.
9 Q. So you know of some?
10 A. Yes. I mean, I know they exist, yes.
11 Q. The complaints go to whom?
12 A. They go to Dr. Linda Hufano, who is the head of the
13 QA committee.
14 Q. I see.
15 A. And we have very specific procedures we follow in
16 investigating any complaint. We do investigate all
17 complaints that we get, and there is a resolution.
18 Q. You're not privy to that information?
19 A. Oh, I could -- I could get that information, but I
20 don't have it right now, of the cases -- I mean all the
21 specifics of the cases.
22 Q. Do you know generally where these complaints come
23 from, parents or is it coming from groups of parents?
24 A. Typically it comes from a parent or a teacher, and
25 we welcome the complaints. We -- you know, we want everybody
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1 to -- sometimes we'll hear a complaint, you know, they'll
2 say, well, there's somebody who's doing something and it
3 wasn't exactly right, and we'll say what's the name of the
4 person or can you give us some more information so we can do
5 some research? And many times they won't give us the name of
6 the person, so it's very hard for us to research it, but we
7 will try to research it if we -- it's, well, we know the
8 person lives in Honolulu and they work at such and such a
9 school, we'll try to do some detective work, but we would
10 appreciate it if people would give us specific names and
11 specific instances so that we can actually investigate it and
12 do something about it because we do not want those things
13 going on.
14 Q. So you have multiple contracts, am I correct?
15 A. Yes.
16 Q. Like how many?
17 A. Well, as I told you before, the RFP has -- asks for
18 proposals in multiple areas, so it may be one contract but
19 covers maybe two or three or four areas.
20 Q. I see. So you've narrowed it down, you said,
21 one-third in individual therapy and about --
22 A. Previously.
23 Q. And you said about two-thirds were in in-house?
24 A. Intensive services.
25 Q. Intensive services.
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1 A. Including TA services and intensive in-home
2 services.
3 Q. So in the intensive home services, the services are
4 provided with the parents in the home and the children?
5 A. We require the parent to be in the home or some --
6 Q. At the same time it's being given?
7 A. We require that. So there is always a witness to
8 the fact that our person was there. They would know if our
9 person was there or not because we require a caretaker to be
10 there.
11 Q. Is there any expectations for parents on the carry
12 over that you expect them to do that follows up?
13 A. There's always an expectation. With some parents
14 it's difficult to get them to, you know, pick up the ball,
15 but you must understand that everybody has different
16 capabilities, so we are always trying, but we don't expect
17 every parent to be capable of carrying on the treatment that
18 we provide, but we would hope that they would learn as much
19 as they can and we take every opportunity to teach them.
20 Q. Would you say that it's successful, working with
21 the parents in that manner?
22 A. Well, as I say, there's a range of parents.
23 Q. They follow up?
24 A. Some parents you can hand the book to and they can
25 learn the techniques and there are some people that you could
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1 model the technique and they would learn and there's some
2 parents that have difficulty learning under any circumstance,
3 so it's -- there's a range of abilities among parents.
4 Q. Okay. Now, you said you've worked like two years
5 in this, am I correct, this company?
6 A. In this company, yes.
7 Q. Alaka'i. But you've done other kind of work?
8 A. I've been in the field for 30 years.
9 Q. In your 30 years' experience, what kind of exiting
10 do you see out of programs such as this of youngsters?
11 A. Well, all I can say is we're working with the
12 most -- as I told you, I hope you gather, we work with the
13 most chronic cases. I would say that we are all amazed on
14 what can be done. We feel that our program has been very
15 successful. These are not cases that are easily exited. We
16 don't work with the low end kids that much. We work with the
17 high end kids mostly. The low end kids are exiting the
18 system because they are taking them away from us. They are
19 saying, you know, they don't need such intensive services, so
20 a lot of them are being transitioned into the DOE. I assume
21 that means that they don't need the services at such a degree
22 any longer.
23 Q. You said the DOE --
24 A. We are seeing tremendous results.
25 Q. So the DOE are taking off those that are -- how do
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1 they get into this picture now? If you're providing the
2 services, at what point do they exit if they need to be
3 exited?
4 A. Well, either they don't need the service anymore
5 and their behavior has significantly improved or the
6 Department of Education is taking over the case because they
7 now have providers to do that. As I said, we have -- usually
8 have 1,200 case. We only have 500. So they've taken 700.
9 Q. I'm just trying to wonder in my mind, are they
10 evaluating also, DOE?
11 A. Evaluating, meaning like doing an assessment or --
12 Q. Yes, assessment to be able to --
13 A. We're not sure what they are doing.
14 Q. You're not sure?
15 A. No.
16 Q. Why not?
17 A. Some areas have told us they are not going to do
18 assessments any longer.
19 Q. So you just let the kid go when they ask you for
20 them?
21 A. We have no choice.
22 Q. Is that right? Is that what you're saying?
23 A. We have no choice.
24 REPRESENTATIVE KAWAKAMI: Thank you very much.
25 Thank you, Chair.
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1 CO-CHAIR REPRESENTATIVE SAIKI: Thank you,
2 Representative Kawakami.
3 Members, we've been going for over an hour, so we'd
4 like to give our court reporter a break. Since we're on a
5 short time schedule, please return in five minutes. Recess.
6 (Recess taken.)
7 CO-CHAIR REPRESENTATIVE SAIKI: We'll proceed
8 with questioning by Representative Leong.
9 EXAMINATION
10 BY REPRESENTATIVE LEONG:
11 Q. Dr. Kravetz, I was listening to your testimony and
12 I had a question about your technical aides and how they were
13 paid. They were paid according to -- I guess paid by the
14 merit, is that the word you used, merit? And how did you --
15 that's what I want to know about, merit.
16 A. Well, raises were given by merit, but there is a
17 pretty set schedule in terms of when they are hired in.
18 Q. Oh, I see, uh-huh. And also I want to know where
19 was this work done with the children? Was it done in the
20 school or where, in which location?
21 A. According to our contract, we do services in the
22 home, in the community, and in school for therapeutic aide
23 services.
24 Q. But not at your place, because your place is just a
25 name; is that correct? So wherever the children were, you
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1 went to them?
2 A. We always go -- there's only a very small
3 percentage of clients that are ever seen in an office
4 setting. That's only if confidentiality --
5 Q. I see.
6 A. -- cannot be assured, we may see somebody there,
7 like in a child abuse kind of a situation in our office, but
8 typically, therapeutic aide services are done in the home or
9 in the school or in a community setting. Maybe with an
10 adolescent we may take them to a park or something to do
11 something with them.
12 Q. And I believe you stated you had about 500 clients
13 right now; is that correct?
14 A. Currently.
15 Q. Currently. Do you have enough -- do you have
16 enough people to go out and service them? Because like when
17 we asked you the question of how many employees you have, do
18 you have enough people to go out to reach these clients?
19 A. We have enough therapists, but we don't have enough
20 therapeutic aides.
21 Q. So the role of the aide is, of course, different
22 from the therapist, so who is paid less, the aide, right?
23 A. Correct.
24 Q. And I was wondering, too, when you talked about the
25 hours, that you wanted them to work not less than 15 hours?
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1 A. Correct.
2 Q. And if they couldn't work less than 15 hours, you
3 didn't want them; is that correct?
4 A. Correct.
5 Q. I was just wondering which is more important or how
6 did you see it as quantity of work or quality of work?
7 A. Well, through our experience we found that people
8 who work less than 15 hours found it difficult to get their
9 supervision, and supervision and training may equal the
10 amount of time they work. So it was an imbalance for many of
11 them. So we just found through experience that we chose 15
12 hours a week and typically somebody who worked 15 hours a
13 week took the job very seriously and was more consistent in
14 showing up to the homes and so forth and more consistent in
15 coming to supervision and more consistent in coming to the
16 trainings.
17 Q. And as they showed more consciousness, was that a
18 method of evaluating their type of work?
19 A. Consciousness is very important. It's very
20 important to us as an agency and it's very important
21 particularly to the parents that depend on them.
22 Q. So was it in the form of a written report also?
23 A. Do we do a written report on each employee?
24 Q. On the case, on the patients he's working with, on
25 the child, on the student.
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1 A. The therapeutic aide has to do very much like any
2 other worker in our agency or therapist, they have to do a
3 clinical note for every -- they have to account for every
4 minute that they are with the child.
5 Q. I see.
6 A. And they have to say the start and stop time and
7 they have to say what goal they're working on. They to say
8 what they did during the session, and they have to assess how
9 much progress they made and they have to put down their plan
10 for the work that they are going to do for the next time they
11 are going to see the client, and this is reviewed by a mental
12 health professional who's always on the case with them. We
13 don't have a TA on a case without a mental health
14 professional or therapist overseeing the work.
15 Q. I guess one question is that why the DOE didn't
16 take them up on the free workshop training?
17 A. I have no idea. I do know that they have to pay
18 their people to go to workshops. It may be a budget problem.
19 I have no other -- I don't know their reasoning.
20 Q. And whom did you speak with in the DOE?
21 A. Well, we contacted individual schools.
22 Q. I see. Thank you.
23 REPRESENTATIVE LEONG: Thank you, Chair Saiki.
24 CO-CHAIR REPRESENTATIVE SAIKI: Thank you,
25 Senator Leong.
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1 Senator Sakamoto, followed by Representative
2 Marumoto.
3 SENATOR SAKAMOTO: Thank you, Chair.
4 EXAMINATION
5 BY SENATOR SAKAMOTO:
6 Q. I apologize in advance if I ask some similar
7 questions or same as before, but I want to help reframe the
8 whole picture. So fee for service, your firm proposes to the
9 CAMHD -- I guess that's your bigger contracts -- fee for
10 service, is that an annual contract? Those are annual --
11 A. Well, typically it's for one year, renewable for
12 two.
13 Q. So two years ago -- a little over two years ago you
14 were awarded fee for service to provide a whole basket of
15 services and a year later you were authorized to continue?
16 A. On some of the contracts.
17 Q. On some, okay. And then July 1st, as Department of
18 Education assumed many of the lower end services, then they
19 authorized you to continue to be on their list?
20 A. Some of the districts did.
21 Q. Okay. And at the same fee schedule or do you
22 resubmit a revised fee schedule for the list of services?
23 A. Well, the procedure was that we submitted a fee
24 schedule in general and then each district renegotiated with
25 us. So different districts pay different amounts.
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1 Q. So you may have said therapeutic aide $65 and
2 some -- or what would be a ballpark number so we're not
3 talking out of school, therapeutic aide per hour?
4 A. The Department of Education contract was basically
5 for assessment, therapy, and psychiatric services and did not
6 include therapeutic aide services.
7 Q. Therapy, what kind of ballpark number would be --
8 120 or -- I'm not in your profession, so I just need a number
9 for example, therapy.
10 A. A number that they would pay us?
11 Q. Yeah, per hour.
12 A. That's a tough one. In the ballpark of -- for a --
13 each different profession gets a different amount of money.
14 There are psychologists. Ph.D. licensed psychologists would
15 get a certain amount, a master's level person would get
16 another amount, post doctoral person, et cetera, et cetera.
17 Q. So licensed psychologist, for example.
18 A. The amount that the agency would be paid?
19 Q. DOE would pay you or your company if an hour of
20 service were performed. I just want a ballpark number.
21 A. Well, some would pay -- for a Ph.D. licensed
22 psychologist through our agency, they may pay -- some
23 districts may pay as much as $90 an hour.
24 Q. And for your company, these therapists or Ph.D.s,
25 they would be your employees?
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1 A. Somebody with that classification as a licensed
2 clinical psychologist would be a subcontractor.
3 Q. As opposed to -- not an independent contractor?
4 A. Well, independent.
5 Q. Individual and independent contractor or if they
6 are a partnership or a firm then they may be a subcontractor?
7 A. All our people are independent contractors.
8 Q. Okay. Including the -- for the therapists and the
9 other -- therapeutic aides, they would be employees?
10 A. Hourly employees.
11 Q. Okay. About how many people do you currently have?
12 Well, let me say how many employees do you currently have,
13 about?
14 A. We were just reevaluating that. I think it's --
15 the hourly employees would be around 60.
16 Q. And independent contractors that are at your call?
17 A. Around the same number.
18 Q. And at the peak of the intensity when you had the
19 1,200 plus and with the 2,200 shifting back and forth, about
20 what was the peak period employment?
21 A. Well, I didn't -- I wasn't separating them into
22 employees and independent contractors. The number that was
23 floating around our agency was around 170 combination of
24 independent contractors and employees.
25 Q. Okay. So at that time it wasn't individual school
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1 districts. That all would be through CAMHD, you bill them
2 this many hours performed. Is it monthly billing?
3 A. Yes, monthly.
4 Q. And have they reached -- so kind of you said didn't
5 have complaints, so they never rejected any monthly billing?
6 For the most part, you bill, the check comes?
7 A. For the most part. If there was a -- if we bill
8 for a service and the family guidance center did not submit
9 the authorization to the MIS system, then they would kick it
10 out and not pay it and we would have to go back and remind
11 the family guidance center to put it into the system and then
12 we'd resubmit it, but if there were any errors or we missed a
13 letter on the child's name or there was anything wrong, they
14 would kick it out and not pay us.
15 Q. Along with the hourly billing, were there any
16 measurable outcomes that were part of the service contract,
17 say, in addition to these hours, these are some measurable
18 outcomes that you're seeing, that quality or outcome type of
19 reporting, was there any of that?
20 A. They ask us to collect that kind of data, yes.
21 Q. Did it go in with your monthly billing?
22 A. It would go in -- periodically we would submit data
23 to them.
24 Q. Or would that be to the next IEP, whenever that
25 would be, and that would be part of the discussion?
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1 A. It wasn't -- well, there's like gross data, I mean,
2 for the whole agency. It sounds like you're asking did we
3 submit data to determine if the child was getting better to
4 the IEP committee, an individual child?
5 Q. I guess I -- at first I asked if it was monthly and
6 the answer was no and you said periodically, so then I was
7 wondering if it was whenever the IEP was coming that such
8 data would be compiled?
9 A. There's all kinds of data, there's -- if you're
10 asking about an individual child, that's -- there is a
11 monthly report submitted to the Department of Health care
12 coordinator by every therapist. If you're talking about all
13 the children, then we have summary data that goes in.
14 Q. That's okay. We're getting off the street. Last
15 question. Besides your organization, were there two others
16 of the same size or you're the largest and there are others
17 doing smaller, some doing autism, some doing MST? How
18 many -- what part of the marketplace was your organization?
19 You did two-thirds of the work, half of the work, ten percent
20 of the work?
21 A. Well, there are 78 agencies that have contracts or
22 something like that. I'm not sure of the exact number. That
23 was my understanding. So we don't know if we're -- you know,
24 where we -- the other agencies have not shared with us their
25 data on how many clients they see, so it's hard for us to
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1 know. I'd say we were up there somewhere, but -- on Oahu. I
2 don't know exactly. I couldn't give you exactly where we
3 rank.
4 Q. So the 1,200 were Felix class or special -- Felix
5 class for the most part, mental health?
6 A. They were all Felix class. That was my understand.
7 Q. So if we had 10,000 clients and you had 1,200, you
8 would have over ten percent, possibly not 20 percent?
9 A. All I know is the numbers we had.
10 Q. Okay, thank you.
11 SENATOR SAKAMOTO: Thank you, Chair.
12 CO-CHAIR REPRESENTATIVE SAIKI: Thank you,
13 Senator Sakamoto.
14 Representative Marumoto, followed by Senator Slom.
15 REPRESENTATIVE MARUMOTO: Thank you,
16 Mr. Chairman.
17 EXAMINATION
18 BY REPRESENTATIVE MARUMOTO:
19 Q. Dr. Kravetz, I'd like to ask you about the TAs. Is
20 that short for therapeutic aides?
21 A. Correct.
22 Q. And you said that they made between $9 and $15 an
23 hour. Was that correct?
24 A. I'm not sure. That was my understanding. I'm not
25 the person that has the exact information, but I was just
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1 trying to help the committee by giving some general idea of
2 what they get paid. I'm always told by my people not to
3 quote those amounts because I'm always wrong, so I'm -- I
4 should defer to the people that know.
5 Q. And then your agency charges the state a higher
6 amount?
7 A. Correct.
8 Q. And how do you figure that amount? Is there a
9 percentage or how is it done?
10 A. We take a risk. We're a private company and we
11 take a risk. We budget, we look at our fixed costs, and we
12 try to come up with a rate and we look at our labor costs or
13 what the market is. Initially, our first year of operation
14 we went to a CPA firm. The CPA works up at UH and teaches up
15 at UH and has access to certain computer programs, and we
16 made projections based on how many clients we see and what we
17 pay our people. And he projected that we would go broke the
18 first year and don't even submit a proposal based on the
19 numbers that we gave him that we thought that we were going
20 to have, and by the way, we did just about go broke the first
21 year. We kind of broke even. I don't know if that's going
22 broke, but we kind of broke even the first year. The second
23 year we did make a profit.
24 We have to anticipate what the fixed costs are in
25 order to provide continuity of service for children, because
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1 we're not selling oranges or it's not a manufacturing thing.
2 We have to believe we're going to be in business to serve the
3 children we start to work with, and so we have to use a fair
4 number to cover our costs, and there are a lot of things that
5 go into that.
6 Q. So you charge for the TAs based on your being able
7 to make a profit?
8 A. First -- could I correct that statement? We first
9 want to break even so that we can continue being in business.
10 If we make a profit, that's great.
11 Q. What kind of profits have you been making the past
12 year or two?
13 MR. CONFALONE: That could be a term of art.
14 If the committee wanted some type of accounting, I think
15 there would be no objection to that.
16 Q. I guess I'm really looking for the amount that is
17 charged to the state and how it's figured, and so I guess
18 I've got an answer to how it's sort of figured, it's based
19 on, you know, your ability to break even and then make a
20 little profit. But let me -- I have no idea how much is
21 charged, but who would then okay the appropriateness of the
22 charges? Would it be you, Dr. Kravetz?
23 A. Within our agency when we submitted our proposal.
24 Q. Okay, within your agency.
25 A. Well, it would be myself and Dr. Hufano, we would
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1 make a bid based on what we thought would cover our expenses
2 and so forth. It's just our experience in the field.
3 We've -- you know, we've been doing it for a while, so we
4 figure, well, this is what it costs us in the past. Again,
5 we did use projections and they are pretty accurate that the
6 CPA did that we saw that if we didn't have so many clients,
7 we were going to go bust, so we have to -- we have to
8 anticipate what our costs will be to continue providing
9 services.
10 Q. Well, don't you bill on whether -- you have a class
11 one, two, or three therapist and depending on how many hours
12 they work and what they've done and then figure out how much
13 that is and then submit that bill, you know, then to the
14 state? Isn't it an ongoing thing? Or do you have a set rate
15 for these therapists?
16 A. From your question it sounds like you're talking
17 about therapeutic aide services. We have other services. We
18 have psychiatric services. We have therapist services,
19 and --
20 Q. Let me just stick to the TAs, then. But I'm just
21 wondering how -- who determines whether the -- the
22 appropriateness of the amount and you said within the agency
23 it would be you and Dr. Hufano?
24 A. Yes.
25 Q. And do you submit it further on to the state or
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1 another agency for approval?
2 A. Oh, the state -- the budget is part of the bid, the
3 proposal.
4 Q. But do you have an ongoing bill, like a monthly
5 bill that you present?
6 A. We present -- for every hour that we do a service,
7 we submit a bill for each hour. Just like your doctor, like
8 if you have your teeth cleaned, it costs $75 and they bill
9 HMSA and then HMSA pays them.
10 Q. Do you then present the bill to the state on a
11 monthly basis?
12 A. Correct.
13 Q. Directly to the state?
14 A. Yes.
15 Q. So the appropriateness of the rate is totally up to
16 you and Dr. Hufano?
17 A. Oh, no. The state has a rate that they will pay
18 us. They already determined that when we submitted our
19 proposal. Let's say we're going to pay a therapist $40
20 dollars an hour, when we submit a bill for one hour of
21 therapy, they'll pay us $40 for that one hour.
22 REPRESENTATIVE MARUMOTO: Thank you very much.
23 I think my time is up.
24 CO-CHAIR REPRESENTATIVE SAIKI: We are trying
25 to be subtle.
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1 REPRESENTATIVE MARUMOTO: Thank you,
2 Mr. Chairman.
3 CO-CHAIR REPRESENTATIVE SAIKI: Senator Slom.
4 SENATOR SLOM: Subtlety has never been a suit
5 of this committee. Thank you, Co-Chair.
6 EXAMINATION
7 BY SENATOR SLOM:
8 Q. Dr. Kravetz, you testified earlier that you really
9 don't have any direct knowledge about the Felix Training
10 Institute?
11 A. Correct.
12 Q. And you've never had any direct communication from
13 anyone from the institute itself?
14 A. That's not correct. I've talked to some of those
15 people.
16 Q. Who were those people you talked to?
17 A. I can't remember their names. There was an
18 individual by the name of John Donkervoet that when we
19 initially submitted a proposal back in 1999 we had to get him
20 to approve some of our training procedures, and I talked to
21 him and I've talked to people about various matters. I've
22 talked to people about getting an authorization to provide
23 our own training for TAs, and intensive in-home personnel.
24 So we've communicated to get various authorizations.
25 Q. When you formed the company, you said it started in
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1 January '99?
2 A. Yes.
3 Q. Was the primary purpose of your company to deal
4 with Felix-related issues or general mental health issues?
5 A. Felix.
6 Q. Felix. And Senator Buen had asked earlier about if
7 you do accept outside individuals, for example, and I believe
8 your testimony was that they would find it too costly to pay
9 the actual expenses and they would soon use up their lifetime
10 cap so you suggested that they go to the state; is that a
11 fair statement of what you said?
12 A. Generally. We don't get that many questions, but
13 for the few that we do get, many times we ask -- I would say
14 that's what I would do. I'm not the only one that might get
15 a question. I'll say that's what I personally say. I don't
16 instruct my people to say anything in particular, but if they
17 ask to talk to me, that's what I would tell them.
18 Q. What would be the costs, for example, that an
19 individual would incur?
20 A. Well, it's typically that the ones -- since I'm the
21 head -- I head up the autism program, or that's my area --
22 one of my areas of expertise, for an autistic child -- I
23 haven't actually calculated the exact amount, but let's say
24 if -- I wouldn't know exactly what -- how severe their child
25 was, but if they had a TA in their home, let's say, three
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1 hours each day, that would be a lot of money right there,
2 plus a therapist.
3 Q. A lot of money being -- could you give us a
4 ballpark figure, just an estimated figure?
5 A. If the -- if the child was a severe -- a very
6 severe autistic child and a particular agency was charging
7 $25 dollars an hour for a TA, then that's $75 a day.
8 Q. And if that --
9 A. And that's not even including the therapist, which
10 might be another $75.
11 Q. So about $150 a day?
12 A. Well, no. Excuse me. $75 for the TA plus the
13 therapist may be once a week.
14 Q. I see. And if that person then went through the
15 state, what would the amount be?
16 A. Oh, you're asking me what our agency would charge?
17 Q. Yes.
18 A. I don't know. We've never done it.
19 Q. So anyone that you refer to the state, they never
20 came back as a client after that?
21 A. Not to my knowledge.
22 Q. Not to your knowledge, okay. You had testified
23 earlier that you are president of the organization and also
24 associate director; is that correct?
25 A. Correct.
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1 Q. And the other principal in the organization is?
2 A. Dr. Linda Hufano.
3 Q. And is she related to you in any way?
4 A. She's my wife.
5 Q. She's your wife. You also testified that at one
6 point you did seek funds from the state Department of Labor
7 for training?
8 A. Correct.
9 Q. How much money was that that was received?
10 A. Well, I don't really know because it was managed
11 through a person who does this kind of thing for Kapiolani
12 Community College, so it was kind of -- she worked it out and
13 we didn't actually get the money. All we know is we were
14 able to put on the training and they paid for the instructor,
15 so actually they administered the money.
16 Q. Do you know if those funds came from the Employers'
17 Training Fund?
18 A. Sounds like it might have, yes. That sounds
19 familiar.
20 Q. And you're saying you didn't get the funds
21 directly?
22 A. No. We had -- we took advantage of it.
23 Q. Was that a one-time --
24 A. Yes.
25 Q. -- one-time expenditure?
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1 A. Well, the sessions were, I think, four different
2 days, but it was one time.
3 Q. One time as far as an appropriation or whatever?
4 A. Right.
5 Q. And then finally, some questions have been asked
6 about complaints and so forth, and you did acknowledge that
7 there were some complaints that you were aware of?
8 A. Yes.
9 Q. Was there any disciplinary action taken as a result
10 of these complaints?
11 A. Well, our agency will do different things. If it's
12 an independent contractor, we can immediately suspend them,
13 and if they are an employee, they are at will so we can let
14 them go immediately, if it comes to that. Sometimes people
15 will decide to quit.
16 Q. So my question --
17 A. Or we counsel them as to the error that they've
18 made and then they remedy it.
19 Q. So my question is did your agency actually take any
20 disciplinary action?
21 A. On any provider?
22 Q. Yes.
23 A. Yes.
24 Q. And at any time was any money refunded as a result
25 of the complaints that were lodged?
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1 A. I don't have that data. If it was, it would have
2 been very rare, you know, an instance where it was an issue
3 of requiring a refund.
4 Q. And if there were --
5 A. Sometimes we catch these things -- by the way, it's
6 important for the committee to understand that we can catch
7 the error before the bill is sent in. So if somebody bills
8 incorrectly, we have various procedures when the person
9 submits their bill before we even submit the bill to the
10 state. We can catch these things -- we hope we can catch all
11 of them. We're working very hard to catch it before it ever
12 gets to the state, so I think we've been pretty effective.
13 Q. And you have in fact caught some errors in the
14 past?
15 A. Yes. Oh, yes.
16 Q. Thank you, Dr. Kravetz.
17 SENATOR SLOM: Thank you, Co-Chair.
18 CO-CHAIR SAIKI: Thank you, Senator Slom.
19 Co-Chair Hanabusa.
20 EXAMINATION
21 BY CO-CHAIR SENATOR HANABUSA:
22 Q. You mentioned that you have about three contracts.
23 I just skimmed through this, and I want your confirmation.
24 By the way, you did review this set of documents that's been
25 produced, did you not?
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1 A. Yes.
2 Q. So you have an agreement with the Department of
3 Health dated July 1, 1999, you have an agreement with the
4 Department of Education which is dated sometime in the year
5 2001, and you have a July 2001 agreement with the Early
6 Intervention Section of the Children with Special Health
7 Needs branch of the Department of Health; is that correct?
8 A. Well, there's various -- there's several agreements
9 with the Department of Education for different school
10 districts, and I don't remember exactly which school
11 districts have been finalized in terms of signing on their
12 side, but we in general have contracts with Child and
13 Adolescent Mental Health, a major contract, some of the
14 districts in the Department of Education, and the Early
15 Intervention Section.
16 Q. Are you saying that your production is not
17 complete? Because your request that we sent to you was that
18 of all the contracts with the state, these are the three that
19 we have right here.
20 MR. CONFALONE: Senator, it's our
21 understanding that all the signed contracts in the possession
22 of Dr. Kravetz and his agency have been produced.
23 Q. So those are the three contracts?
24 A. Yes.
25 Q. Now, Representative Marumoto was asking you
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1 questions about -- as in Exhibit B 1, for example, your
2 Department of Health contract, you have a rates schedule here
3 for payments for assessment and diagnostic services,
4 outpatient services, intensive support, and day treatment
5 services, three categories. I notice that there is some kind
6 of amendment but the three categories remain the same. Is
7 that also correct?
8 MR. CONFALONE: Senator, can you refer to
9 the -- again state the contract you're referring to and
10 what --
11 CO-CHAIR SENATOR HANABUSA: This is Department
12 of Health. There is really no page. It's Exhibit B-1, page
13 1, but I can't tell you where in your stack it is. There's
14 no Bates stamp.
15 Q. Dr. Kravetz, you can't just tell me whether or not
16 those are the three different sections of services that you
17 get paid for?
18 A. We don't get paid for day treatment. We don't have
19 any -- we don't have any day treatment.
20 Q. But the category is intensive support and day
21 treatment services. That's what's on your contract.
22 A. Oh, okay. We do get paid for intensive support.
23 We submit a proposal and we submit a rate. For some reason,
24 they've included this rate schedule, but, again, we only get
25 paid if we provide the service. So it's a little bit
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1 confusing, your question.
2 Q. So my question was simply whether these were the
3 three categories the Department of Health in essence
4 contracted you for in terms of rate schedules? I'm just
5 reading off of this document, and you're telling me that
6 there is no day treatment services that you're providing.
7 MR. CONFALONE: We're having a little
8 difficulty in referencing your page, and that may be my fault
9 because I didn't Bates stamp all this, but if I could try to
10 get an idea of what you're referring to.
11 CO-CHAIR SENATOR HANABUSA: It's a rate
12 schedule attached to the Department of Health agreement of
13 July 1, 1999 and it's identified as Exhibit B-1.
14 MR. CONFALONE: July 1, 2001?
15 CO-CHAIR SENATOR HANABUSA: Well, as you're
16 looking for that, Mr. Confalone, let me ask your client some
17 more questions.
18 Q. There's a listing here for various rates, intensive
19 in-home services hourly unit rate $70 an hour; therapeutic
20 aide level 1, $15 an hour; therapeutic aide level 2, $22 an
21 hour; therapeutic aide level 3, $29 an hour. I'm just
22 reading it. I'll represent to you that's what it says. So
23 in reference to Representative Marumoto's question about how
24 much you charge, would it be correct to -- I'm assuming that
25 if you have people who perform services in these respective
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1 areas, that that's what you would charge the state?
2 A. Correct.
3 Q. And I believe Representative Marumoto said that she
4 heard and it's part of your testimony that you pay the
5 therapeutic aides between 9 to $15 an hour?
6 A. Correct.
7 Q. So would the 9 be probably therapeutic aide level 1
8 and would the 15 be therapeutic aide level 3?
9 A. Not necessarily.
10 Q. What would be the difference?
11 A. Dr. Hufano would have -- she rates people in and
12 she would have more understanding of how we pay.
13 Q. You also said something else in your testimony that
14 I'm trying to understand. You said that you service about
15 500 clients at this given period of time; is that correct?
16 A. Correct.
17 Q. When you say clients, are you referring to
18 primarily Felix-identified children?
19 A. Yes.
20 Q. Then you said you have 60 therapeutic aides as your
21 employees, and I believe in response to Senator Sakamoto you
22 said therapists are independent contractors and therapeutic
23 aides are your employees?
24 A. Hourly employees.
25 Q. Hourly employees, correct?
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1 A. Yes.
2 Q. So if you have 60 therapeutic aides who are your
3 hourly employees and you have 500 Felix clients, does that
4 mean that one therapeutic aide serves more than one Felix
5 client or does it mean only 60 of your 500 have therapeutic
6 aides?
7 A. It could be any combination.
8 Q. Do most of your 500 clients that you service, are
9 they entitled to and receive therapeutic aides?
10 A. No.
11 Q. You said two-thirds of your -- I guess the services
12 you provide the state is in the area of therapeutic aides?
13 A. Two-thirds of our services is in the area of
14 intensive services and including TAs.
15 Q. Does that mean that it's something less than
16 two-thirds that have TAs?
17 A. Oh, yes, most definitely.
18 Q. Is it like 50 percent?
19 A. I don't know at this time. Again, our population
20 has changed so quickly, I haven't actually had an opportunity
21 to really look at those statistics.
22 Q. So of the 500 that you are presently servicing, in
23 which category do they fall, assessment and diagnostic
24 services, outpatient services, or intensive support services?
25 A. All of those.
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1 Q. All of them?
2 A. But the -- we're not doing much assessment right
3 now.
4 Q. So is it outpatient services and intensive support
5 is where most of your clients are?
6 A. Yes.
7 Q. And in outpatient services is there any particular
8 category that they are being serviced in, like, for example,
9 intensive case management, case aide services, individual
10 therapy, group therapy, family therapy, medication
11 management, family court testimony, treatment/service
12 planning conference, education planning conference, school
13 consultation? Those are your major categories.
14 A. The Child and Adolescent Mental Health -- now,
15 which contract is this for, what year?
16 Q. This is Department of Health.
17 A. Which year?
18 Q. It starts in 1999 and my understanding is you said
19 that it extended. There's no other contract except for a --
20 A. Well, they haven't been giving us any case
21 management work. Mostly individual and family when you talk
22 about outpatient, some case conference work.
23 Q. And between outpatient services and intensive
24 support, the two-thirds are in intensive support?
25 A. Approximately, but, again, these are just kind of
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1 off the top of my head. I wouldn't really know for sure.
2 Q. I understand that, but you are president, so I
3 assume you have some background other than just none at all.
4 In the intensive support services category you have intensive
5 in-home services and therapeutic aide. Those are your two
6 categories. Between those two categories, which area do the
7 bulk of your clients fall in, both?
8 A. I'd say both.
9 Q. So then going back, if that's the case,
10 Dr. Kravetz, that the bulk of your services now are intensive
11 support and they are both in intensive in-home services and
12 therapeutic aides, wouldn't the bulk of your clients then be
13 with therapeutic aides?
14 A. In numbers of people -- in numbers of children?
15 Q. Yes.
16 A. I don't -- I couldn't tell you that.
17 Q. Dr. Hufano would be able to?
18 A. Yes.
19 Q. Your organization has taken a reduction in terms of
20 numbers referred to you from 2,200 to 500, correct? You said
21 2,200 was what it was originally and then you were 1,200 and
22 now shrunk to 500?
23 A. 2,200 is the total number of clients, 1,200 is the
24 number -- let's say an average number per month, and 500 is
25 the number we have total now. So it's a little bit different
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1 emphasis. I'm looking at representing it more as a monthly
2 average, 1,200 prior and now a monthly average of about 500.
3 CO-CHAIR SENATOR HANABUSA: Thank you.
4 CO-CHAIR REPRESENTATIVE SAIKI: Okay, members.
5 Co-Chair Hanabusa exceeded her time limit, so I yielded my
6 time.
7 CO-CHAIR SENATOR HANABUSA: Oh, thank you.
8 CO-CHAIR REPRESENTATIVE SAIKI: So at this
9 point we'll take follow-up questions, first by Special
10 Counsel.
11 SPECIAL COUNSEL KAWASHIMA: I have no
12 questions.
13 CO-CHAIR REPRESENTATIVE SAIKI: Members, any
14 follow-up questions?
15 If not, Mr. Kravetz, thank you very much for your
16 testimony.
17 Members, our second witness this afternoon is
18 Mr. Ronald Higashi. We'd like to administer the oath at this
19 time.
20 CO-CHAIR SENATOR HANABUSA: Mr. Higashi, do
21 you swear that the testimony you're about to give is the
22 truth, the whole truth, and nothing but the truth?
23 THE WITNESS: I do.
24 CO-CHAIR SENATOR HANABUSA: Thank you very
25 much.
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1 Members, we'll start with our usual procedure.
2 Mr. Kawashima.
3 SPECIAL COUNSEL KAWASHIMA: Thank you, Madam
4 Chair.
5 EXAMINATION
6 BY SPECIAL COUNSEL KAWASHIMA:
7 Q. Please state your name and business address.
8 A. Ronald Higashi. 1117 Kaili Street.
9 Q. And you are the executive director of Susannah
10 Wesley Center?
11 A. Correct, community center.
12 Q. Community center. How long have you served in that
13 capacity, sir?
14 A. I've been there 28 years. I've been executive
15 director for about 17 or 18 years.
16 Q. And so the total association with the center is 20
17 years?
18 A. It's closer to 30.
19 Q. Now, Mr. Higashi, you were -- excuse me, I didn't
20 introduce -- have your counsel introduce himself.
21 MR. CHUN: My name is Richard Chun. I
22 represent Susannah Wesley.
23 SPECIAL COUNSEL KAWASHIMA: Mr. Chun, welcome.
24 Q. You were subpoenaed to bring documents with you,
25 were you not, sir?
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1 A. Yes, I was.
2 Q. And have you brought those documents with you
3 today?
4 A. Yes, I have.
5 Q. I believe at the beginning of the session both you
6 and your counsel were kind enough to give us all the
7 documents in a big banker's box. Is it your understanding
8 that those documents in the banker's box would be responsive
9 to the subpoena duces tecum upon which you were served?
10 A. To the best of my knowledge, with a qualification
11 in terms of what we are missing. We do have a list in there.
12 Q. I'm sorry, what qualification --
13 MR. CHUN: There's an itemization in the
14 documents of the documents they couldn't find. We just
15 itemized it that they are not available.
16 SPECIAL COUNSEL KAWASHIMA: I see. Are you
17 going to turn that over to us, Richard?
18 THE WITNESS: It's actually in the --
19 MR. CHUN: It's in the binder, a list of what
20 they couldn't find, what they thought they had but it's not
21 in their records.
22 SPECIAL COUNSEL KAWASHIMA: Do we have the
23 list?
24 MR. CHUN: Yes, it's part of the exhibits.
25 SPECIAL COUNSEL KAWASHIMA: I see. You are
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1 going to give us that when you leave, then?
2 MR. CHUN: It's part of the exhibits.
3 SPECIAL COUNSEL KAWASHIMA: Oh, I see.
4 Q. When you say what documents you couldn't find,
5 could you characterize what kinds of documents they were?
6 A. A couple dealt with a subcontractor -- I'm sorry,
7 independent contractor, and one was a psychiatrist who was
8 also an independent contractor.
9 Q. You're talking some selected items, not -- it seems
10 that you have the great majority of these contracts?
11 A. Yes.
12 Q. So just a few selected ones you don't have, it
13 appears?
14 A. Yes.
15 Q. And did you in any way withhold any documents? I'm
16 not suggesting you did.
17 A. Not to my knowledge.
18 Q. Have you in any way redacted, modified the
19 documents that have been produced?
20 A. No.
21 Q. And to your understanding, the documents you
22 brought are totally responsive to the subpoena duces tecum
23 served on you?
24 A. Yes, the documents were prepared for me by my
25 staff.
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1 Q. Mr. Higashi, you lucked out today. Because of the
2 shortness of time and we have another witness, we've decided
3 and the chairs have decided that we were going to only
4 authenticate the documents with you and let you go. You may
5 be called back. I have no idea whether or not you will, but
6 for today we'll let you go. Thank you very much.
7 CO-CHAIR SENATOR HANABUSA: Next witness is
8 Mr. Don Burger. Come forward, please. Mr. Burger, you're
9 appearing here pursuant to a subpoena and we will now place
10 you under oath.
11 CO-CHAIR REPRESENTATIVE SAIKI: Mr. Burger, do
12 solemnly swear or affirm that the testimony you're about to
13 give will be the truth, the whole truth, and nothing but the
14 truth?
15 MR. BURGER: I do.
16 CO-CHAIR REPRESENTATIVE SAIKI: Thank you.
17 MR. SLOVIN: At this time I'd like to make an
18 introduction that Mr. Burger has prepared a statement that we
19 would request be submitted for the record that clarify some
20 of the issues being discussed as part of these contracts.
21 CO-CHAIR REPRESENTATIVE SAIKI: Okay. It's a
22 written statement?
23 MR. SLOVIN: Yes.
24 CO-CHAIR SENATOR HANABUSA: Members, pursuant
25 to the rules of the committee, we need the consent of the
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1 majority of the committee before such a written statement is
2 accepted. In light of the fact that no one has had the
3 opportunity to review the statement and the fact that it does
4 not in any way waive or excuse the subpoena, we will simply
5 receive it and pass it out to you for your review and at our
6 next scheduled meeting we will make a decision as to whether
7 we will accept the statement.
8 Thank you very much, Mr. Slovin.
9 SPECIAL COUNSEL KAWASHIMA: Thank you, Madam
10 Chair.
11 EXAMINATION
12 BY SPECIAL COUNSEL KAWASHIMA:
13 Q. Please state your name and business address.
14 A. My name is Don Burger. I work for the Pacific
15 Resources for Educational Learning, 1099 Alakea Street, 25th
16 floor, Honolulu, Hawaii.
17 Q. And the acronym PREL is something we're all
18 familiar with. We'll use that. What is your position with
19 PREL, sir?
20 A. I'm the director of the Pacific Assessment Systems
21 and Services and I'm program manager on this Felix contract.
22 Q. Program manager, program director, I've heard that
23 phrase too. Does it -- can we use those interchangeably?
24 A. Yes.
25 Q. On this Felix contract, are you talking about the
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1 one that involves the Department of Education and Na Laukoa,
2 that one?
3 A. Yes, and the TACs, the technical assistance
4 coordinators.
5 Q. Of course. The technical assistance coordinators
6 were hired by PREL, were they not?
7 A. They were hired by PREL as independent contractors,
8 yes.
9 Q. So actually, the contractees in this contract would
10 have been PREL and the Department of Education, contract --
11 the actual contractees in the main contract?
12 A. Yes.
13 Q. We'll get to that. We'll get to the subcontract in
14 a bit. Now, in your position, sir, as director of Pacific
15 Assessment Systems and Services, what are your duties and
16 responsibilities, briefly?
17 A. I work with schools, districts, and states on
18 developing assessment and accountability systems.
19 Q. How about your duties and responsibilities as the
20 program director for the Felix contract?
21 A. My position with this contract is to head the
22 management of this project along with three other colleagues
23 at PREL that formed our Felix team, and my job was to make
24 sure that the documents that were required that justified
25 what we did, that recorded what we did, all got done,
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1 followed the elements that are listed as deliverables in our
2 contract and Na Laukoa's contract, make sure that those
3 things were completed.
4 Q. Were you, sir, the person essentially in charge of
5 this contract, the Felix contract?
6 A. I was the program manager, and we had really set
7 this up as a teamwork setting with Na Laukoa and the TACs
8 involved. We worked all of that together. We set up our
9 communication systems to work that way. To do a project of
10 this magnitude required that type of working environment.
11 Q. I understand that, but someone had to be in charge,
12 though?
13 A. That was me.
14 Q. That was you. And you are representing PREL,
15 essentially?
16 A. Yes.
17 Q. Now, would you in your position as director of
18 Pacific Assessment Systems and Services at PREL, are you
19 considered an officer of PREL?
20 A. I am not a cabinet member.
21 Q. As far as your position, I'm not suggesting
22 anybody's thinking about firing you, but if someone were to
23 terminate you, would it be the board of directors or would it
24 be someone in a position higher than you?
25 A. Someone in a position higher than me.
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1 Q. So you do not interface directly with the board?
2 A. Only when invited.
3 Q. But you have a general understanding of how the
4 board of PREL operates, do you not?
5 A. Yes, I do.
6 Q. And you attend meetings from to time?
7 A. Occasionally, yes, when invited.
8 Q. And the -- in essence, the members of the board of
9 directors select the CEO, do they not?
10 A. I can't say that for sure because the one -- the
11 CEO at PREL has been here the whole time.
12 Q. Longer than you, you mean?
13 A. Longer than me, yes.
14 Q. You don't have an understanding as to who has the
15 responsibility of hiring and firing the CEO?
16 A. I'm sure it's the board. I worked in another
17 regional laboratory as well and they worked the same way.
18 Q. How was it that you were assigned the job of being
19 in charge of this Felix contract?
20 A. I have lots of experience -- work experience and
21 educational experience with the issues that are involved
22 here. I've worked with special ed kids since 1973 in some
23 capacity or another. I've worked with schools under
24 different types of federal mandates. I've worked with
25 schools who are trying to improve themselves in a systems
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1 atmosphere, and I've worked with schools through schools
2 change processes, and that's what was needed here in this
3 instance.
4 Q. Was that experience here in Hawaii or in other
5 states?
6 A. In other states. I've worked for five years at the
7 Mid-Continent Resources for Education and Learning in Denver.
8 We served all of the states in the middle of the United
9 States from that lab. The major school district that I
10 worked with as we worked under federal mandate was the
11 St. Louis City School District, and they just had a very
12 difficult time.
13 Q. By the way, based on the time that you've been at
14 PREL, any historical knowledge you might have about the types
15 of contracts that they have entered into prior to your
16 getting there, do you know if they've had any other contracts
17 related to the Felix consent decree other than this one?
18 A. The only one I have knowledge about is one that I
19 did here, and this had to do with meeting part of the consent
20 decree that required special needs kids to have reading test
21 scores in their IEPs by a certain time. The Department of Ed
22 had purchased hand-scored SRT documents and CSAT 1 and 2 and
23 when they got to the end, nearing the benchmark time, they
24 needed some assistance in getting those handwritten scores
25 loaded into software so they could be analyzed and plugged in
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1 and we provided that had service for them.
2 Q. Now, do you know, though, if PREL has any other
3 contracts with the DOE -- Department of Education State of
4 Hawaii or the Department of Health related to Felix?
5 A. As far as I know, they do not.
6 Q. This was the first Felix contract that you were
7 aware of that PREL had?
8 A. Yes.
9 Q. Are you aware as to any reason why there were not
10 any prior contracts -- Felix contracts at PREL before this
11 one?
12 A. No, I don't have that knowledge.
13 Q. All right. Now, was it your understanding that
14 part of the role that PREL would play in this Felix contract
15 was to supervise and to train personnel from Na Laukoa?
16 A. My understanding was that we would provide -- PREL
17 would provide assistance primarily around the financial side
18 of this contract. In my conversations with people from Na
19 Laukoa, it was very clear to me that they had the other
20 skills and knowledge that we needed to pair with us to be
21 successful in this contract and the data shows that very
22 clearly.
23 Q. The other skills meaning what, sir?
24 A. The other skills that we would provide Na Laukoa?
25 Q. Yes.
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1 A. Around the financial side.
2 Q. No, I'm sorry, excuse me. You miss read me. What
3 other skills did Na Laukoa have that PREL did not?
4 A. They had some really in-depth knowledge about how
5 the DOE worked, especially with regard to special ed kids.
6 Dr. Alameda had been a special ed teacher in the DOE for
7 sometime, had a great deal of experience on how that worked.
8 They also had a great deal of background in DOH matters.
9 Dr. Alameda, again, had his doctorate in that area and
10 experience in that area. As a team, the Na Laukoa staff
11 brought in-depth knowledge about Hawaiian culture, Hawaiian
12 values, especially in the 15 complexes that we were assigned
13 to work with, those that did the least well on the service
14 testings in the year 2000, and they brought a great deal of
15 expertise in working with people, kapunas, especially on
16 Molokai, that we needed that type of assistance I would not
17 have to do the job that we needed to do within the time
18 frame.
19 Q. Obviously, though, from what you saw, Na Laukoa
20 didn't have the background to handle the financial aspects of
21 the contract?
22 A. That's -- yes, I would believe that's true.
23 Q. And as far as the financial aspects of the
24 contract, that was going to be at least one of PREL's roles;
25 is that correct?
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1 A. Yeah, uh-huh.
2 Q. And as far as recruiting, selecting, and hiring the
3 TACs, you were going to do that also, were you not?
4 A. Actually, in the contract itself that
5 responsibility fell on the executive management team.
6 Q. My understanding -- I was looking at your statement
7 here. It says recruit, select, and match qualified TACs with
8 complexes.
9 A. We wound up doing that.
10 Q. I see. Why was that, sir?
11 A. I came into this project in late August, and we
12 started September 1 and looked at the recruitment list and
13 there were 17 people on it. When we went down that list, we
14 got one TAC. Now, we had complexes coming up for service
15 testing for the second time in January, two of them, Kaiser
16 complex, Lelehua, and we needed to get people on the ground
17 and get them going quickly. We needed people who were
18 competent who were already trained who could step into this
19 and do the task, especially as they were outlined in the
20 contract for the needs for each of the complexes were stated.
21 That's who we were looking for.
22 Q. Did these complexes in fact go through their
23 service testing, Kaiser and Lelehua in January?
24 A. Yes, yes.
25 Q. Did they achieve substantial compliance?
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1 A. I am so proud of Kaiser. My goodness. They scored
2 a score of one hundred on both portions.
3 Q. In January?
4 A. In January. My hat's off to them. They had so
5 many -- they really did this thing right. They created a
6 document that had every single special needs kid on it in the
7 district, in the complex, and they went down and checked
8 every single service that was supposed to be delivered by an
9 IEP, and they made sure that the IEP was written correctly,
10 documented correctly, and that the kid got those services.
11 They did it right. Our TAC's role there was to bring in
12 family -- family matters into this complex, so that's what
13 was listed in the contract.
14 Q. Now, let me go back to a series of questions I was
15 asking you a few minutes ago. Is it not your understanding
16 that part of PREL's role was to supervise and train the Na
17 Laukoa personnel?
18 A. That's -- what they really needed was primarily in
19 the financial area. There were -- I always like to create
20 learning teams, and I learned as much from doing this work as
21 anybody else, and I think that's an honor. I like that.
22 That's my challenge, and Na Laukoa did the same. We fit
23 together just like a hand in glove, and our partnership --
24 the partnership with the TAC and how these 15 complexes --
25 those that really could collaborate with us, how that worked
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1 out, was extremely -- it worked out extremely well.
2 Q. Let me go back, sir. I forgot to ask you some
3 foundational questions. Have you had any -- prior to coming
4 here today, any discussions with any personnel at DOE or
5 their counsel or any representative of DOE relating to the
6 testimony that you're giving here today?
7 A. I was in the commonwealth of the Northern Marianas
8 for two weeks, I think, when my subpoena was supposed to have
9 been served, sir. I'm sorry I wasn't here. When I got back,
10 there was a phone call message on my voice mail from
11 Dr. LeMahieu expressing his deep regrets for having to do
12 this testimony. That's all the conversation I had.
13 Q. Nothing else since -- nothing other than your
14 attorney -- any other intermediary relating to your
15 testimony?
16 A. No.
17 Q. Why was he apologizing?
18 A. I think he was honestly sorry after all of us doing
19 such hard work and such good work that we were in this fix,
20 in this mess.
21 Q. Now, how about Ms. Ehrhorn who testified here
22 today, have you spoken with her?
23 A. I've spoken with her after the testimony. She
24 seemed to come through it fine.
25 Q. Did you discuss what she testified about?
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1 A. I didn't do that. I had looked at notes prepared
2 by counsel about her testimony, which listed some of the
3 questions that were asked.
4 Q. Now, Ms. Ehrhorn promised to bring some documents.
5 I think she's already given some, if not all of them.
6 MR. SLOVIN: I think all of the documents you
7 requested.
8 SPECIAL COUNSEL KAWASHIMA: Thank you.
9 Q. Whose decision was it to subcontract with Na Laukoa
10 in entering into this contract?
11 A. When I joined in late August, the contract had
12 pretty much been completed. I don't think it was signed by
13 that, but the budget work had been done and all the
14 particulars of the contract were done. When I came in, I
15 came in to manage the program.
16 Q. You signed the subcontract, though, did you not?
17 A. I did.
18 Q. And the main contract with the Department of
19 Education is signed by Mr. Kovo?
20 A. Yes.
21 Q. CEO of PREL?
22 A. Yes.
23 Q. And it was signed, I believe, on or about August
24 15th, thereabouts?
25 A. Uh-huh.
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1 MR. SLOVIN: August 15, 2000.
2 Q. August 29, 2000, the signature. You had just come
3 aboard then, you say?
4 A. Yes.
5 Q. That's why you didn't -- you may have been the
6 person to sign it or would you not sign these?
7 A. As a program manager, I would sign the contract
8 work sheet.
9 Q. And as a program manager, you signed the
10 subcontract with Na Laukoa?
11 A. Yes.
12 Q. You hesitated?
13 A. I'm not sure that's the title of that document.
14 Q. What is the title?
15 A. I'm remembering the contract work sheet for Na
16 Laukoa.
17 Q. All right. I think you're correct. I stand
18 corrected, but this was a subcontract, though, was it not?
19 A. Yes, sir.
20 Q. So that -- well, I am sure before you became
21 involved to manage the project that you familiarized yourself
22 with the historical background?
23 A. All labs have a process when they are using
24 subcontractors. I believe here they call it due diligence,
25 and you can't just go out and hire anybody you want to do
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1 something like this. There's a process you have to go
2 through. There's documentation. There's vitaes, and all of
3 those things had been completed and certified that due
4 diligence had been completed before I entered it.
5 Q. Well, you familiarized yourself with the historical
6 background?
7 A. Yes.
8 Q. And to your understanding, all of these
9 requirements that you just set forth for us were successfully
10 completed?
11 A. Yes, as they are listed in the contract, it's my
12 understanding and my feeling that Na Laukoa met all of those
13 pieces.
14 Q. Including the requirement to get a tax clearance
15 certificate?
16 A. That's my understanding. That part went through
17 Ms. Ehrhorn, the financial people.
18 Q. Ms. Ehrhorn?
19 A. Uh-huh, yes.
20 Q. Have you seen that tax clearance certificate?
21 A. I don't think I -- I don't know that I have or
22 haven't. I don't have that knowledge.
23 Q. Well, all the other requirements in the contract,
24 to your understanding, were satisfied?
25 A. Yes.
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1 Q. But do you know how it was that Na Laukoa became
2 the subcontractee in this contract?
3 A. That happened before I started as project manager
4 on this contract.
5 Q. You have an understanding of it, don't you? I'm
6 sure you have an understanding as to how Na Laukoa became
7 involved, don't you?
8 A. All I know is it was done before I got there. I
9 was satisfied looking at their materials that their expertise
10 was there. It was time to move forward and start working on
11 the task.
12 Q. Do you know if a due diligence as you described was
13 actually completed in this case?
14 A. Yes, I -- that's right, it had been.
15 Q. Are there documents to evidence that?
16 A. The conversation that I had about this work was
17 with the chief operating officer.
18 Q. And who would that be?
19 A. Dr. Tom Barlow.
20 Q. But to your knowledge, sir, are there documents
21 evidencing this due diligence investigation?
22 A. I have not seen them personally. I've just been
23 told that they were done.
24 Q. You knew that Na Laukoa before it became the
25 subcontractee on this job -- the subcontractor on this job
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1 worked for the Department of Health, do you remember
2 testifying to that?
3 A. Do I remember testifying to that?
4 Q. Just a few minutes ago, that they had knowledge in
5 DOH matters?
6 A. Yes.
7 Q. Do you know, then, as a part of this due diligence
8 whether or not the people at DOH with whom Na Laukoa
9 contracted were contacted and asked about the performance
10 that Na Laukoa had within these contracts with DOH?
11 MR. SLOVIN: Just -- to me, what he indicated
12 in his testimony was that they had knowledge of DOH. He
13 didn't testify that they had contracts. You may want to
14 cover that.
15 Q. Well, are you aware that Na Laukoa previous to this
16 contract had contracts with DOH?
17 A. That's what I understood from our chief operating
18 officer.
19 Q. The question, then, is are you aware as to whether
20 or not anyone asked the people at DOH who would have the
21 knowledge whether or not Na Laukoa successfully performed the
22 obligations under their contract?
23 A. I don't have that knowledge.
24 Q. If they had not successfully performed those
25 obligations, I guess you would have to reconsider
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1 subcontracting with Na Laukoa, wouldn't you?
2 A. Absolutely. We would not enter into a contract
3 like this with a subcontractee that couldn't do the work.
4 Q. Now, you understood, though, that DOH matters with
5 which Na Laukoa had previously been involved had to do with
6 Felix?
7 A. I don't know that.
8 Q. Had to do with special education at least, if you
9 know, sir?
10 A. I don't know that.
11 Q. I'm not asking you to guess. But you also know,
12 though, that the negotiating of this contract on the
13 agency -- on the state's -- on the Department of Education's
14 part was Superintendent LeMahieu?
15 A. I believe that's true.
16 Q. You see his name -- his signature on the agreement
17 as the person signing on behalf of the agency, the
18 department?
19 A. Yes.
20 Q. The DOE, right?
21 A. Uh-huh, yes.
22 Q. And to your knowledge, based upon what you learned
23 subsequent to your becoming program director, it was Mr. --
24 Dr. LeMahieu and Dr. LeMahieu himself who negotiated with
25 PREL to enter into this contract?
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1 A. I believe that's correct.
2 Q. Now, do you know -- do you have a basis to testify
3 as to why Superintendent LeMahieu suggested or required,
4 whatever it might have been, that Na Laukoa be subcontractor
5 under this agreement?
6 A. I don't know the basis for that. If he had
7 required it, PREL still has a choice not to accept the
8 contractor if they have found that they are not able to do
9 the work.
10 Q. Certainly. If PREL had -- if PREL had found out
11 that Na Laukoa hadn't performed satisfactorily in prior
12 contracts with other agencies, such as the Department of
13 Health, it definitely would not have allowed Na Laukoa to be
14 a subcontractor in this agreement, right?
15 A. I don't have that information, that anybody --
16 Q. I understand. I'm not saying you possess that
17 information. All I'm saying is if that information were to
18 be correct, that based on your knowledge of the policies and
19 practices at PREL that they would not have allowed themselves
20 to have Na Laukoa be a subcontractor in this contract?
21 A. If we believed that they couldn't do the work, we
22 would not have entered into that agreement with them.
23 Q. Didn't believe that they could do the work would
24 include not having satisfactorily performed other contracts
25 with other state agencies, right?
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1 A. I would guess so.
2 Q. Now, do you know, though, if in fact an independent
3 investigation of Na Laukoa was done? Do you yourself know?
4 A. Outside of PREL?
5 Q. No, I'm sorry, that PREL itself conducted an
6 independent due diligence investigation?
7 A. I understand it did.
8 Q. That's the one you learned from the COO?
9 A. Yes.
10 Q. Now, this contract, you understand, as you see -- I
11 assume from time to time as program director you reference
12 the contract?
13 A. Yes.
14 Q. And you go back and look at certain requirements
15 and obligations just to make sure you're performing properly,
16 right?
17 A. Yes.
18 Q. And you notice that the contract we're talking
19 about has a standards of conduct declaration?
20 A. Yes, I believe it does.
21 Q. And you understood this declaration to apply to
22 anybody who entered into this contract?
23 A. I would -- yes, I would believe it does.
24 Q. Now, at the time, sir, that this contract was
25 entered into by PREL and the Department of Education,
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1 Dr. LeMahieu was a member of the board of directors of PREL,
2 was he not?
3 A. Yes. As they are for all labs. All the chief
4 state school officers are on the board.
5 Q. Of where?
6 A. All ten labs. All ten labs have their -- the
7 region they serve, the chief state school officer's on the
8 board. That's the way it's constructed.
9 Q. Have you -- strike that.
10 To your knowledge, has PREL ever contracted
11 directly with any other region other than Hawaii?
12 A. Yes, we serve nine other entities in the Pacific.
13 Q. I understand you serve them, but my understanding
14 also, correct me if I'm wrong, you are federally funded?
15 A. Yes.
16 Q. You are not state funded, in other words?
17 A. We do maybe -- I'm going to get a percentage wrong.
18 A portion of our business is federally funded. All of the
19 contracts that I do under the Pacific Assessment Systems and
20 Services are contracts with local entities, school districts,
21 schools, states, republics, commonwealths.
22 Q. So that -- tell me, in other contracts other than
23 this Felix one with other regions, do you on behalf of PREL
24 negotiate directly with a member of your board of
25 directors --
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1 A. Yes.
2 Q. -- to enter into a contract?
3 A. Yes.
4 Q. And tell me who does the member of the board of
5 directors represent in that -- in those negotiations?
6 A. They are the chief state school officer for their
7 entity.
8 Q. No, but as a member of the board, though, they have
9 certain fiduciary duties to PREL, don't they?
10 A. I would guess the answer is yes.
11 Q. So that, again, who would -- whose interest would
12 they be representing, then, if that person who is a member of
13 the board of PREL having direct fiduciary obligations to PREL
14 but also being a head education officer of a region, which
15 interest would this person be representing in those
16 negotiations, to your understanding?
17 A. My understanding is the region, when I go out to
18 work on a contract and we start talking about how this is
19 going to work and what their needs are, I'll talk with the
20 chief state school officer to find out what the needs are and
21 they are representing their entity as a chief.
22 Q. And not PREL?
23 A. And not PREL.
24 Q. Do you find it uncomfortable to be negotiating
25 directly across the table with a member of the board of
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1 directors?
2 A. No, that's really --
3 Q. Who have the right to -- or at least to direct your
4 termination?
5 A. No.
6 Q. I'm not saying it's going to happen.
7 A. It really doesn't work that way.
8 Q. These contracts have contract amounts, don't they?
9 A. Sure.
10 Q. And shouldn't PREL get as much as they can for the
11 services they perform?
12 A. We typically bid projects on cost, and we try as
13 close as we can to come out at -- at real cost.
14 Q. Well, you are a nonprofit, though?
15 A. Yes.
16 Q. And you should cost these out at cost?
17 A. Yes.
18 Q. Not at a profit, right?
19 A. Uh-huh.
20 Q. That's the nature of your business?
21 A. So we're not trying to get as much money as we can.
22 We're just trying to cover the cost.
23 Q. I understand that. But depending upon -- strike
24 that.
25 Reasonable minds can differ as to what is a
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1 reasonable amount or the amount of the costs in a contract,
2 right?
3 A. When we do this, especially -- in many of these we
4 charge the actual cost.
5 Q. I understand that, but on the side of the
6 department, the agency, for example, wouldn't that person be
7 wanting to have the contract done at the most economical
8 level possible?
9 A. I think that they are -- the chief state school
10 officers have a really good understanding of what kind of
11 services they need and what it will take to do the work
12 there, and we reach an agreement about that.
13 Q. When you say you reach an agreement, it's something
14 that you need to discuss, though, right?
15 A. Sure.
16 Q. And the point I was making, sir, is as the chief
17 education officer of a region, they would want to get a
18 contract at the most economic price for their region?
19 A. Yeah, I wouldn't blame them for not wanting to ask
20 more -- or pay more than was deserved, but that has not been
21 my experience, I'll tell you.
22 Q. I understand what your experience might be. I'm
23 just trying to figure out the situation where you have this
24 person with two hats. He should be representing the interest
25 of PREL because he has fiduciary duties to PREL as a trustee.
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1 MR. SLOVIN: Mr. Kawashima, he's answered the
2 question. In a way, he's working on this program, what he's
3 indicated is this is how it's done all over the country, and
4 you're arguing with him on a policy he doesn't have anything
5 to do with.
6 SPECIAL COUNSEL KAWASHIMA: Mr. Slovin, I
7 doubt if all over the country there's a member of the board
8 of directors of this organization negotiating directly with
9 the organization. I doubt that. They may have these
10 individuals on their board, but I can't imagine that they
11 would negotiate directly. Which hat are they wearing?
12 MR. SLOVIN: Well, I think this is a unique
13 organization. I think your assumption is probably incorrect.
14 Q. But there is a contract price and I assume that
15 contract price was negotiated, wasn't it?
16 A. Yes. Sometimes our costs are greater than the
17 contract price.
18 Q. It wasn't in this case, was it?
19 A. No. I have some other ones, though, where we've
20 eaten it.
21 Q. So in this case, in any case, the contract amount
22 was negotiated, Department of Education of Hawaii got the
23 best price possible and PREL got the best price possible,
24 they believed, to your knowledge?
25 A. I believe that's correct, and as this has played
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1 out, since we're only -- we're just charging what the actual
2 work was, we are under budget and allowed us to go the two
3 extra months.
4 Q. This standards of conduct declaration, sir, there
5 is a provision, though, that directly impacts on the
6 situation I've been discussing with you. Are you aware of
7 that?
8 A. Explain.
9 Q. I'm talking about on -- under the page entitled
10 standards of conduct declaration, paragraph numbered 4, it
11 says, Contractor, which is PREL, has not been represented or
12 assisted personally on matters related to the agreement by a
13 person who has been an employee of the agency, meaning DOE,
14 within the preceding two years and who participated while in
15 state office or employment on the matter with which the
16 agreement is directly concerned, the Felix consent decree.
17 Does not what happened in this case appear to be in direct
18 violation of that provision?
19 MR. SLOVIN: You're asking him for a legal
20 judgment on the document, Mr. Kawashima.
21 Q. Does that not appear to be a direct violation of
22 that provision, sir?
23 A. I don't know how to answer your question.
24 Q. Why not?
25 A. I just can't answer that.
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1 MR. SLOVIN: In this case the contractor is
2 PREL; is that correct, Mr. Kawakami?
3 SPECIAL COUNSEL KAWASHIMA: That's how I read
4 it. You might read it differently.
5 MR. SLOVIN: You're asking if PREL was
6 represented in this matter by someone who's in state
7 employment?
8 SPECIAL COUNSEL KAWASHIMA: No, assisted
9 personally, Gary. I'm talking about assisted personally on
10 matters. LeMahieu was there negotiating directly. We don't
11 know for whom. That's the point I'm trying to make.
12 Q. Did you know, sir, that the superintendent
13 initially attempted to have Na Laukoa and Na Laukoa alone be
14 the party with which the department contracted for these very
15 same services?
16 A. I believe that's true. I think I did hear that.
17 Q. And from whom did you hear that?
18 A. I honestly can't remember. I do not remember.
19 Q. In the course of this contract, do you recall an
20 issue being raised about a fairly high administrative person
21 in the Department of Education being directed by the
22 superintendent to assist in training Na Laukoa to do the job
23 they were being paid to do?
24 A. I have extremely detailed logs of everyone who
25 participated in our orientation by day, hour, and topic, and
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1 all of those trainings, maybe five or six of them, were one
2 or two hours each. Those were what I would -- I would not
3 call them trainings. Every time I've worked for a company, I
4 made a change to come here, there's an orientation period,
5 and that's precisely what those things were. There were two
6 trainings that we did do for all of us. One of them was a
7 two-day session on service testing and Ray Foster did that.
8 I was not in that session.
9 Q. I'm going to ask you about that shortly, but I'm
10 talking about Debra Farmer. Do you know Ms. Farmer?
11 A. Yes, I do.
12 Q. Do you know whether or not she was involved in
13 training Na Laukoa personnel to do the work they were
14 supposed to do under the contract?
15 A. Under the logs that I have, which are complete and
16 detailed, and the one session that she did that I was in was
17 meant for other DOE personnel and we were allowed to sit in
18 and we sat there for about two hours, that was it.
19 Q. You're not suggesting that Ms. Farmer was not
20 telling the truth when she said that she was asked by the
21 superintendent to train the Na Laukoa people to do the job
22 that Na Laukoa was supposed to do under this contract?
23 A. I'm not aware of that conversation.
24 Q. And as to whether or not she did any of that
25 training, aside from where you may have been involved or you
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1 may have been present, you don't know about that, do you?
2 A. I have complete records of all of the trainings or
3 orientations that were done with PREL, Na Laukoa, or the
4 TACs.
5 Q. Are you aware that Ms. Farmer submitted a complaint
6 in writing to the superintendent that she didn't have the
7 time to do this work?
8 A. I'm not aware of that.
9 Q. Are you aware of the fact that Ms. Farmer was no
10 longer asked by the superintendent to train Na Laukoa? Are
11 you aware of that?
12 MR. SLOVIN: Could you repeat that,
13 Mr. Kawashima.
14 Q. I'm asking if he is aware that Ms. Farmer was no
15 longer asked to do any training of Na Laukoa after she had
16 that communication with the superintendent?
17 A. I'm not aware of that either.
18 Q. You mentioned Mr. Foster. What did you just
19 testify to about Mr. Foster?
20 A. That we have records of a two-day training session
21 that was provided on exactly how service testing works, and
22 our -- we needed to know all aspects of that so that we might
23 assist the complexes to be compliant on both aspects of the
24 service testing and their presentation.
25 Q. If you know, sir, why was -- is it Dr. Foster,
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1 Mr. Foster, do you know?
2 A. I have not seen him, don't know him.
3 Q. Was Mr. Foster -- well, do you have knowledge as to
4 why Mr. Foster was retained to do that training?
5 A. No, no, I don't. We were allowed to add our people
6 to it.
7 Q. I see, and you yourself did not participate?
8 A. I did not.
9 Q. Did your people who attended report to you what
10 transpired during that training session or sessions?
11 A. Yes, uh-huh.
12 Q. And based on that, do you have an understanding as
13 to why Mr. Foster was the person conducting that training?
14 A. No.
15 Q. And what -- do you know what background Mr. Foster
16 had in service testing?
17 A. No, I don't.
18 Q. The service testing instrument in this case, in the
19 Felix case, do you know who designed that?
20 A. I believe it came from Dr. Groves. I think I've
21 heard that. I don't know that for sure.
22 Q. All right.
23 SPECIAL COUNSEL KAWASHIMA: That's all I have,
24 Madam Chair.
25 CO-CHAIR SENATOR HANABUSA: Thank you very
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1 much.
2 Members, we've let the poor court reporter go
3 without her hourly break, so we will recess, and again,
4 please be back in five minutes and at that time we'll begin
5 with Vice-Chair Kokubun. So, members, recess five minutes,
6 back. Thanks.
7 CO-CHAIR SENATOR HANABUSA: Members, we're
8 back. We're beginning with Vice-Chair Kokubun, followed by
9 Vice-Chair Oshiro.
10 EXAMINATION
11 BY VICE-CHAIR SENATOR KOKUBUN:
12 Q. Mr. Burger, I'd like to ask you a little bit more
13 about your statement regarding the -- because the contract is
14 under budget or because the work has been under budgeted that
15 you're able to extend it for two months; is that correct?
16 A. Yes.
17 Q. So basically is that the -- in terms of the
18 resources for PREL or the resources for Na Laukoa?
19 A. For both.
20 Q. So at this current time, in terms of the
21 subcontract for Na Laukoa, I believe it was in excess of
22 $600,000, that has not been reached?
23 A. No.
24 Q. What is the amount that has been expended with
25 respect to the subcontract?
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1 A. The exact amounts would be part of Ms. Ehrhorn's
2 testimony. I personally don't know exactly what the dollars
3 are. I do know that we're under, and that's what I watch
4 monthly very closely.
5 Q. We meaning both PREL and --
6 A. Yes.
7 Q. The amount of money that's available to expend for
8 either contract or subcontract?
9 A. For PREL's part for our independent contractors,
10 TACs, and for the subcontractor Na Laukoa.
11 Q. But you don't know what the exact numbers are?
12 A. I don't know the dollars and cents.
13 Q. Were you involved in terms of the extension at all,
14 the extension request? I'm assuming the request is coming
15 from PREL?
16 A. The request is coming from PREL, Na Laukoa, our TAC
17 team, and we -- we're understanding where we were, that we're
18 in better shape as we went through May, June, and July and we
19 started making the request to go past the August 31 date
20 early. We were -- what we were asking is that we be able to
21 do a no-cost extension. We're invested in this work. The
22 TACs are extremely vested in their complexes, and we want to
23 see all these complexes pass.
24 Q. So in terms of needing the extension, was that
25 because certain benchmarks were not met as of the August 31st
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1 or simply because there's more money?
2 A. We hadn't expended all the funds. There's still
3 more work that was in our heart to do. This is a service for
4 kids. We were having a phenomenal success with the 15 most
5 difficult complexes, getting them past service testing. By
6 the end of August mark, five of the seven complexes who had
7 did the second testing had passed both sides. The SBSR, the
8 CSR side, and two other ones past one portion of each but
9 were very close on the others.
10 Q. So because this contract is on a reimbursable
11 basis, you could have ended it as of August 31st with a
12 balance that would remain in the contract amount?
13 A. That would remain in the DOE. We would bill what
14 we charge, yeah.
15 Q. Uh-huh.
16 A. We really didn't get our go ahead until, let's see,
17 August 30th, so we had two days to reenergize and move
18 forward again.
19 Q. And that was for just one -- initially was it a
20 one-month extension or two?
21 A. Two.
22 Q. The whole thing was a two-month extension?
23 A. Yeah, be from September 1 through October 31.
24 Q. My understanding was that initially it was just an
25 extension to the end of September. There were like two
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1 one-month extensions, am I incorrect?
2 A. My understanding is that it was one two-month
3 no-cost -- no-cost extension.
4 Q. Okay. And at the end of October, do you have any
5 idea what the balance may be or what more can be
6 accomplished?
7 A. My best hope is that we're under balance, and I
8 think we will be by then as well, as I watch with
9 Ms. Ehrhorn's assistance on how the money is being
10 reconciled. That's in her accounting department. We know
11 that we had another complex test this past week and we're
12 encouraged. We don't know the exact results yet. We know
13 that a complex that was previously scheduled for November has
14 been moved up into October now, another one of our 15, and
15 we're feeling reasonably confident about that one as well.
16 Q. Was there any discussion during the negotiations
17 with Dr. LeMahieu about the source of funding for this
18 particular contract?
19 A. I was not in the conversation. I do see on the
20 front of the contract there is a statement about -- I can't
21 remember exactly what it says.
22 Q. That's fine. You weren't directly intimately
23 involved in the negotiations?
24 A. No.
25 Q. You're aware of the -- some characteristic about
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1 the source of funding, though, based on what you saw in the
2 contract?
3 A. I saw the name of it, I think, on one of the cover
4 pages or title pages in the contract.
5 Q. In fact, you know, the funds that were used for
6 this are called impact aide funds or federal funds?
7 A. I think that's what was on the cover.
8 Q. And the implementing of the contract, did that make
9 any difference in terms of how PREL was to report on its
10 accomplishments and/or request for reimbursement?
11 A. The -- our accounting person, Ms. Ehrhorn, has a
12 process that that goes through and she determines based on
13 money sources, I believe, if there are any special
14 requirements or not. I didn't -- I don't know that there are
15 any one way or the other.
16 VICE-CHAIR SENATOR KOKUBUN: Thank you.
17 CO-CHAIR SENATOR HANABUSA: Thank you very
18 much.
19 Vice-Chair Oshiro, followed by Senator Buen.
20 VICE-CHAIR REPRESENTATIVE OSHIRO: Thank you,
21 Chair Hanabusa.
22 EXAMINATION
23 BY VICE-CHAIR REPRESENTATIVE OSHIRO:
24 Q. As I understood when Mr. Kawashima was asking you
25 questions that as part of your duties for being program
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1 manager for the Felix consent decree, part of it was to
2 monitor the contract with Na Laukoa; is that correct?
3 A. Yes.
4 Q. So specifically in terms of monitoring, what kind
5 of interaction or oversight did you have with Na Laukoa?
6 A. Yeah, we had set up some fairly intensive --
7 oversight is really the wrong word. This is a partnership.
8 We set up communication mechanisms that we use with all
9 contracts very well. One of these is called the PREL
10 Information Management System, and it is an Internet-based
11 documentation piece of software. By contract, all of the
12 TACs were required to log all of their daily entries, all of
13 their daily activities, the number of hours they worked with
14 people, and what they did into this system and we monitored
15 that very closely, as did Na Laukoa.
16 Q. So in terms of -- I think earlier you had said
17 something to the effect that you were very satisfied with
18 their extent of expertise?
19 A. Yes.
20 Q. So you -- based on what you saw from Na Laukoa, you
21 believe that they were qualified to perform the duties of
22 technical assistance coordination?
23 A. Not only just on what I saw, it's that day-to-day
24 working with people and see how they interact with people,
25 especially kids and teachers and administrators to make
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1 this -- these complexes compliant.
2 Q. But in terms of doing that, as part of being a
3 technical assistance coordinator, can you explain to me how
4 that -- not necessarily how to do so much with the
5 interaction with the actual children, but more in terms of
6 actually trying to meet compliance?
7 A. Yes.
8 Q. As I understand it, a technical assistance
9 coordinator has to do a lot in terms of the administrative
10 work in terms of the Chapter 56 proceedings or make sure it
11 complies with IDEA. Isn't that more in the realm of what the
12 TAC is supposed to be doing?
13 A. You're absolutely right. What this really is is a
14 school change process. There's a saying in assessment and it
15 goes like this: If you always do what you've always done,
16 you'll always get what you've always got. So if you sit back
17 and do absolutely nothing, don't change anything, you're
18 going to get the same service testing scores six months from
19 now that you have today. To change behavior and change
20 practice in the system, especially as it relates to kids,
21 takes school change. There's a huge body of literature on
22 that, and I've been working in school change since 1988.
23 Q. And in terms of this familiarity with the overall
24 concept on school change, you feel that -- you still felt
25 that Na Laukoa was very qualified to perform all of these
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1 services?
2 A. Yes, I did, and look up the data.
3 Q. And in any way does it surprise you that previous
4 testifiers have said in their experience they found that Na
5 Laukoa was really unqualified to provide these services
6 because they didn't have the basic knowledge as to what the
7 IDEA or Chapter 56 proceedings was involved with?
8 A. That does kind of surprise me for a couple of
9 reasons. One is that the executive management team that was
10 composed of both DOE and DOH personnel and we met on a
11 monthly basis and those types of things were never raised
12 with us.
13 Q. And when you said you met on a monthly basis, this
14 is as the contract was ongoing, throughout?
15 A. Uh-huh, yes.
16 VICE-CHAIR REPRESENTATIVE OSHIRO: I have no
17 further questions. Thank you.
18 CO-CHAIR SENATOR HANABUSA: Thank you.
19 Senator Buen, followed by Representative Ito.
20 SENATOR BUEN: Thank you, Co-Chair Hanabusa.
21 EXAMINATION
22 BY SENATOR BUEN:
23 Q. Mr. Burger, when Debra Farmer came before us she
24 told us that she was providing training to Na Laukoa in IDEA
25 and IEP, and I heard that you're saying that you had gone to
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1 just one orientation that was -- that Debra Farmer had
2 provided. Now, this puzzles me when Ms. Farmer is saying
3 that for three or four months she was providing training for
4 Na Laukoa and you're saying that it's just one orientation.
5 Can you tell me what -- I'm really puzzled. I'm hearing you
6 say one thing and then Debra Farmer is saying another thing.
7 So you don't know whether Debra Farmer had provided training
8 in IDEA and IEP?
9 A. We did some orientation training, and these are
10 usually one-hour sessions where we orient people to how
11 things are done here in Hawaii, but the people already
12 have -- IDEA is very complex, as is 504 and some of the other
13 pieces. You're not going to train somebody in that in an
14 hour. We had a representative from the special ed department
15 sit with us for an hour on how IEPs are done here, especially
16 when you get into ISPED and how they want it to look that
17 way. The TACs and Na Laukoa already knew about how you do
18 IEPs, they know about IDEA, and they know about 504, so --
19 Q. So you feel that they were qualified in this area?
20 A. Yes.
21 Q. And yet you know of Debra Farmer writing a letter
22 to Dr. LeMahieu?
23 A. I don't have that knowledge, I'm sorry.
24 Q. Okay, I have a question. In all the complexes
25 that's serviced by Na Laukoa, do you know if any of these
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1 complexes will be in compliance?
2 A. Can I ask for some clarification.
3 Q. Say, for instance, Molokai, you're saying that Na
4 Laukoa is providing services there with a kapuna there?
5 A. Yes, their service testing is scheduled for next
6 year.
7 Q. How is Molokai doing?
8 A. The conversations that I've had, feedback from
9 management team around how things are going with the kapunas
10 there is very satisfactory. So we're comfortable with that
11 part and I don't have good information about the school part.
12 Q. So is Na Laukoa paying the kapuna for their service
13 to the special needs children there or is this on a volunteer
14 basis?
15 A. I have no idea how that's working. I don't know of
16 any -- there's nothing that's coming through our contract.
17 Q. PREL, I understand, monitors the work that Na
18 Laukoa does?
19 A. Yes.
20 Q. Then can you tell me -- can you tell me -- can you
21 describe to me the services that Na Laukoa, in working with
22 the kapuna, what kind of services do they do? What kind of
23 services do the kapuna do?
24 A. These are detailed very clearly in the Molokai
25 reports, so I would direct you there to go through those at
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1 your leisure. My understanding in listening to them report
2 at our team meetings was that the Na Laukoa people were
3 working with them around school-related issues, how they
4 interact with schools, how services are provided for
5 children.
6 Q. Do you feel that in the reports that you're getting
7 that the parents or the students are getting -- they're
8 comfortable with the services -- that they are getting what
9 they are asking for through this program, through Na Laukoa
10 and the kapuna program?
11 A. My information is around what Na Laukoa is doing
12 with the kapunas is satisfactory.
13 Q. You don't know whether the kapuna are getting paid?
14 A. I do not.
15 SENATOR BUEN: Thank you. I have no further
16 questions.
17 CO-CHAIR SENATOR HANABUSA: Thank you.
18 Representative Ito, followed by Senator Slom.
19 REPRESENTATIVE ITO: Thank you, Madam
20 Co-Chair.
21 EXAMINATION
22 BY REPRESENTATIVE ITO:
23 Q. Mr. Burger, you know out of the 15 complexes, how
24 many schools did Na Laukoa service?
25 A. Na Laukoa's main duty was to supervise the 15 --
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1 the TACs that worked in those complexes. So if I understand
2 your question correctly, they provided direct assistance to
3 TACs, monitor TACs, works with TACs in all 15.
4 Q. Yeah, but what about PREL?
5 A. We had two people, full-time employed, one who was
6 monitoring and working with us in the office and one who was
7 out working with the same 15 complexes.
8 Q. What about Ka'u and Kohala, what about those two
9 schools, did PREL service those two schools as well as Na
10 Laukoa?
11 A. We have TACs in both of those complexes, yes, and
12 they were serviced by the whole contract. We have TACs
13 there, we have technical assistance coordinators there,
14 PREL -- excuse me, Na Laukoa supervised those TACs and we
15 provided assistance from our side as well.
16 Q. You mean to Ka'u and Kohala?
17 A. Yes.
18 Q. What about the charter schools, you know, what --
19 how many students you serviced in the four charter schools?
20 A. You know, in the contract there were four charter
21 schools listed. I'll have to say this, but I'm really not
22 exactly clear. It seemed what I understood was that they
23 were kind of placeholders in this contract because as of yet
24 the Board of Education had not formally approved their
25 charter. So they are in the contract. We were waiting for
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1 the green light for -- from the management team -- executive
2 management team to go ahead. You'll find notes in our
3 monthly progress reports that we asked those questions about
4 when is it appropriate to go and were never given the
5 direction to do that, so we did not provided services to
6 those.
7 Q. At the direction of the charter school?
8 A. At the direction of the management team.
9 Q. So why did you need a charter school coordinator?
10 A. Well, we thought initially we would, and we
11 prepared a coordinator in the eventuality that we would be
12 needing that service. We have lots of documentation on how
13 you work with charter schools at PREL. We planned for the
14 work.
15 Q. So you made -- so you folks have a position for a
16 charter school coordinator but you don't have a person?
17 A. It may have been in the budget that way. If there
18 was no work done that way, then it wouldn't be billed out.
19 Q. It says 28,000, so, you know, you folks --
20 A. It could be -- is that in the budget, sir?
21 Q. Yes, personnel.
22 A. It was probably budgeted that way because when this
23 contract was put together that was the intent, but since we
24 didn't get the green light, the start signal to go ahead and
25 work with them, we wouldn't spend dollars on doing that. We
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1 were prepared to do that.
2 REPRESENTATIVE ITO: Okay. Thank you very
3 much.
4 CO-CHAIR SENATOR HANABUSA: Senator Slom,
5 followed by Representative Kawakami.
6 SENATOR SLOM: Thank you, Madam Chair.
7 EXAMINATION
8 BY SENATOR SLOM:
9 Q. Mr. Burger, thank you for all those kind words
10 about Kaiser complex. I'm just as proud as you are since
11 Kaiser is my direct, but are you really saying that it was Na
12 Laukoa that is the primary reason for Kaiser's success?
13 A. No, I think that most of the credit goes to Kaiser
14 themselves. They were out ahead on this thing. There were
15 some things that they asked for our help through the TAC and
16 that we could provide, and with Na Laukoa's supervision we
17 did that work.
18 Q. Are you saying PREL provided it or Na Laukoa
19 provided it?
20 A. The TACs -- the TAC who worked in Kaiser complex is
21 an independent contractor of PREL supervised by Na Laukoa.
22 Q. And in the original contract which was in total of
23 about roughly $2.3 million, PREL's share of that was
24 approximately 1.6 million; is that an accurate figure?
25 A. I don't have it in front of me.
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1 Q. Did you have regular communications and
2 conversations with the chief financial officer, Ms. Ehrhorn?
3 A. Fairly regularly, yes.
4 Q. In terms of discussing the program and the success
5 or what the progress was with Na Laukoa?
6 A. Most of the conversations with Ms. Ehrhorn dealt
7 with the financial matters.
8 Q. Who would you have talked to, if anyone, about the
9 actual progress of Na Laukoa?
10 A. My two other colleagues, Dr. Barlow, the chief
11 operating officer, and Dr. Hammond.
12 Q. You signed the work sheet for preparation of
13 contracts on behalf of PREL, and your signature is dated
14 September 5th of 2000.
15 A. Yes.
16 Q. But there is no signature for Mr. Barlow on that
17 contract. Is there a reason for that?
18 A. I was the program manager.
19 Q. But he's listed as the chief program officer and
20 there is a line for his signature, and I'm just wondering why
21 he did not sign it?
22 A. I don't know. I can't speak to that.
23 Q. And it's your testimony that you did not hear any
24 questions or serious criticisms raised about Na Laukoa prior
25 to the signing of that contract?
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1 A. I did not, and we didn't hear those comments at any
2 of the executive management team meetings where both DOE and
3 DOH personnel were there as well.
4 Q. When you were talking at the beginning of your
5 testimony about due diligence, my note was here, and please
6 correct me if I'm incorrect, you said that you were told that
7 the due diligence was completed. Was that an accurate
8 statement of what you said?
9 A. That's correct.
10 Q. Who were you told by? Who told you that the due
11 diligence had been completed?
12 A. The chief operating officer.
13 Q. Of?
14 A. PREL.
15 Q. Of PREL, okay. And as far as, again, this issue
16 which had come up before about the superintendent of
17 education or the chief educational officer being on the
18 board, that wasn't mandated, was it, by the federal
19 government or anyone else?
20 A. I'm -- I believe it is. I think that's the way
21 that it's structured.
22 Q. Well, you testified and we heard previous testimony
23 that in fact that is the way that it is in most other
24 regions, but no one was able to submit any document or any
25 testimony to show that in fact that was required.
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1 A. I wouldn't have that type of document or
2 information either. It just -- I know it is that way for all
3 of them.
4 Q. When the superintendent, Dr. LeMahieu, resigned
5 from the PREL board, did he have any discussion with you
6 about that prior to his resignation?
7 A. No.
8 Q. Did you offer any comments at all about that?
9 A. To him?
10 Q. Yes.
11 A. I don't recall.
12 Q. And you did testify that it was -- it's customary
13 that in other states or in other regions that the chief
14 educational officer I think the term you used was tells their
15 needs?
16 A. Yes.
17 Q. But I guess an earlier question was trying to
18 differentiate between someone explaining their needs and
19 trying to actually offer a particular and specific program in
20 a contract. Did that happen in any other area that you're
21 aware of?
22 A. I --
23 Q. What I'm saying is if you ask me what my needs are,
24 what my problems are, I'll tell you one thing, but then for
25 me to go ahead and say here's how I would address those needs
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1 because I have someone that I would offer a contract to, does
2 that follow in the other areas or had that happened before,
3 to your knowledge?
4 A. I'm still confused by the question, I'm sorry.
5 Q. Okay, let's skip that. Final question. You
6 emphasized several times that you kept very good and very
7 complete notes, a log --
8 A. Yes.
9 Q. -- about people. Is that your nature? Are you
10 very fastidious and careful about that? Have you done that
11 in other areas as well?
12 A. Yes, that's our practice at PREL.
13 Q. And the reason for that specifically is?
14 A. We frequently work with many federal contracts that
15 require that type of documentation.
16 Q. Thank you, Mr. Burger.
17 SENATOR SLOM: Thank you, Madam Chair.
18 CO-CHAIR SENATOR HANABUSA: Representative
19 Kawakami, followed by Representative Leong.
20 REPRESENTATIVE KAWAKAMI: Thank you, Chair
21 Hanabusa.
22 EXAMINATION
23 BY REPRESENTATIVE KAWAKAMI:
24 Q. Just a couple of questions. It's kind of
25 confusing. When did you come on board PREL?
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1 A. Mid-January 2000.
2 Q. January 2000. So the contract was already -- all
3 the -- well, let me say the contract was made out and you
4 came on board, you knew nothing about this contract, am I
5 correct?
6 A. I didn't know about the contract really until late
7 August of 2000.
8 Q. So from January to August you had knowledge of it?
9 A. I have many other duties.
10 Q. You never heard anything, you didn't see anything
11 relating to this contract?
12 A. I don't recall anything.
13 Q. Okay. And no comments or anything that was
14 floating around the office, et cetera about this contract?
15 A. None.
16 Q. Absolutely not, okay. I wanted to ask, this
17 Dr. Alameda, why was he so important to this contract?
18 A. From the Na Laukoa side?
19 Q. Uh-huh.
20 A. What did he give to this project?
21 Q. Uh-huh.
22 A. Dr. Alameda had an in depth knowledge of how the
23 DOE worked with special ed. He had been a special ed teacher
24 in the Department of Education. He had a doctorate in
25 health-related services and had an in-depth knowledge on the
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1 DOH side as well.
2 Q. How long was he with DOE?
3 A. That I don't know.
4 Q. What I'm trying to get at is his expertise was used
5 for the reading component?
6 A. For the reading component?
7 Q. You know the reading assessment that was done for
8 the Molokai students you mentioned, did he have a part in
9 that?
10 A. No, that was a completely different contract.
11 Q. Different?
12 A. Yes.
13 Q. So you mentioned that he had knowledge about the
14 Hawaiian people, et cetera, et cetera?
15 A. Yes.
16 Q. So that importance was tied to what, the schools
17 that needed to be up to compliance and that's why he was
18 important?
19 A. Yes.
20 Q. So how did he work with those schools? Did he do
21 anything?
22 A. He worked directly with the TACs at those schools.
23 Q. Okay. So all of the schools -- and these were
24 mainly schools with Hawaiian children?
25 A. Well, they would be schools -- the 15 complexes
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1 were on Oahu, on Molokai, on Maui, and on the Big Island.
2 Q. Yeah, I guess out of those complexes, I'm thinking
3 the enrollments were probably -- except for Molokai, they
4 were not mainly Hawaiian students?
5 A. No, it would be all students, but it did include
6 Hawaiian students.
7 Q. So his expertise was because of this Hawaiian --
8 A. His expertise was due to his special ed background
9 as a teacher and his mental health background as well.
10 Q. I see.
11 A. And the connections and knowledge of Hawaiian
12 culture and values. All of those things helped greatly.
13 Q. I see, okay. I wanted to know do you know how that
14 working relationship was with like kapunas in the schools?
15 Do you have any idea?
16 A. Between Dr. Alameda and the kapunas?
17 Q. That's right.
18 A. I don't know that.
19 Q. You don't, okay. The service testing for Molokai
20 was done by whom?
21 A. Are you asking if it was the Department of
22 Education who did it?
23 Q. If they did it. You don't have any knowledge of
24 who did it?
25 A. I think the original testing was done probably in
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1 2000, but I don't know who did the original testing.
2 Q. Do you know who did the reading assessment?
3 A. On this other contract, the reading assessment is
4 really different from this -- we have two Felix contracts
5 we're talking about.
6 Q. I see, okay.
7 A. So the reading assessment was done on a totally
8 separate contract.
9 Q. And that had a deadline, I'm sure?
10 A. Yes.
11 Q. An early deadline for this school year?
12 A. Yes, and PREL's only role in that was to help get
13 those hand-scored tests entered into software so they could
14 be scored and put into the database.
15 Q. So that's all you were paid for, that portion?
16 A. Yes, uh-huh.
17 Q. Thank you very much.
18 A. Thank you.
19 REPRESENTATIVE KAWAKAMI: Thank you, Chair.
20 CO-CHAIR SENATOR HANABUSA: Thank you.
21 Representative Leong, followed by Representative Marumoto.
22 REPRESENTATIVE LEONG: Thank you, Chair
23 Hanabusa.
24 EXAMINATION
25 BY REPRESENTATIVE LEONG:
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1 Q. I wanted to ask you who sent you to PREL to do your
2 job?
3 A. Why did I come here in the beginning?
4 Q. Yeah, what instilled you to be this director of
5 program management at PREL?
6 A. I had previously worked at the Mid-Continent
7 Resources for Education and Learning in Denver, Colorado for
8 five years. We had put together some really tremendous
9 programs on how you make assessments that really measure what
10 your standards are, what you want kids to know and do, and
11 that's primarily why I came here, but that work also includes
12 work with all special needs kids. So when we build
13 assessment tools, they are for all kids, not just for the
14 regular ed kids. Special ed kids are included in those as
15 well.
16 Q. Thank you. So my question is what did you do
17 before? You partially answered it. Were you like an
18 educator of special ed children? Was that your role?
19 A. I have -- I have a doctorate in education. I've
20 worked with all kinds of kids, especially special ed kids
21 since 1973. I've worked in back wards, I've worked in
22 institutions, in self-contained classroom buildings, in
23 physical therapy, all kinds.
24 Q. And as you stated, you saw the kapunas become
25 successful in the program and that Na Laukoa was the one that
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1 helped them along, right?
2 A. Yeah, Na Laukoa was instrumental in the work with
3 the kapunas in Molokai.
4 Q. What did they do to help them become so successful?
5 What was substance there?
6 A. A lot of it seemed to be really creating a forum
7 for people to have some conversations.
8 Q. Conversations?
9 A. There was some -- apparently some tension among the
10 kapunas there, and it took some time for people to put their
11 disagreement, perhaps, on the table and find solutions, ways
12 that they could work together, and that's what happened
13 there.
14 Q. And my last question is since you praise Na Laukoa
15 so greatly, what other evidence do you have to say they are a
16 great organization when a lot of people are speaking opposite
17 to that?
18 A. Yeah, I think what I would hold up as evidence is
19 the test documents that I prepared for you today as exhibits,
20 and if you'd look at Exhibit A when you have time, you will
21 see that five of the seven complexes of the 15 worst, the
22 ones that were struggling the most that we got, have passed
23 both sides of service testing.
24 Q. So was the testing as a result of your efforts or
25 was it the teaching efforts of Na Laukoa?
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1 A. Actually, it is a combination of the efforts of the
2 administrators in those complexes and the TACs who worked
3 with them supervised by Na Laukoa and PREL.
4 Q. And --
5 A. It's all of us together.
6 Q. And as Na Laukoa went into the schools, how many of
7 them were there?
8 A. Na Laukoa's partnership, Dr. Alameda was the chief
9 supervisor of the TACs, Aunty Kathy Palama was one of the
10 ladies who worked with the kapunas, Ms. Stocksdale is one of
11 the people that worked with the kapunas, and she was also
12 being prepared for the charter schools, I believe, if that
13 had happened. We had worked with her on the charter school
14 piece. They had an accountant, they had another person who
15 provided all the technical back up for them.
16 Q. And so the teaching in itself was performed by?
17 A. The kapunas.
18 Q. The kapunas essentially?
19 A. Okay, it would be Aunty Kathy and Ms. Stocksdale.
20 REPRESENTATIVE LEONG: Thank you, Chair
21 Hanabusa.
22 CO-CHAIR SENATOR HANABUSA: Representative
23 Marumoto, followed by Co-Chair Saiki.
24 REPRESENTATIVE MARUMOTO: No questions, Madam
25 Chair.
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1 CO-CHAIR SENATOR HANABUSA: Thank you.
2 Representative Co-Chair Saiki.
3 EXAMINATION
4 BY REPRESENTATIVE CO-CHAIR SAIKI:
5 Q. Mr. Burger, I just have a couple of questions. You
6 had mentioned that one of the responsibilities was to provide
7 financial assistance to -- financial assistance type services
8 to Na Laukoa?
9 A. Yes. What I mean there is that we have a lot of
10 expertise in measuring accounting practices for large
11 contracts.
12 Q. So was that -- were those services directed at the
13 entity Na Laukoa itself?
14 A. Were they directed at Na Laukoa?
15 Q. Those services were provided to Na Laukoa?
16 A. That's just part of our common practice that we do
17 every day, and we helped Na Laukoa build those skills as
18 well.
19 Q. What was Na Laukoa's financial condition like?
20 A. I don't know if -- I don't know what their
21 financial condition was. This is how you do accounting,
22 budgeting, how you prepare invoices, how you keep track of
23 what you're spending, how you bill. That's the kind of
24 services that we did. That's what we did.
25 Q. Is that because the PREL contract called for a
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1 specific type of accounting procedures?
2 A. That's our -- that's the practice that we do every
3 day. The contract was no different than what we do every
4 day.
5 Q. Did Na Laukoa incorporate those procedures?
6 A. It's taken some time for them to get there. I'm
7 really pleased with how their invoices look now.
8 Q. Who's -- under the contract with -- between PREL
9 and Na Laukoa there was a scope of services attached to the
10 contract. I'm not sure if you recall this, but one of the
11 responsibilities of PREL was to monitor the performance of
12 the TACs and Na Laukoa.
13 A. Yes.
14 Q. Do you recall that?
15 A. Yes, I do.
16 Q. Who's responsible for monitoring the performance of
17 Na Laukoa?
18 A. That would primarily be me. I had several ways to
19 do that. Fairly constant communication with Na Laukoa I've
20 had through emails and phone messages. We have the IMS
21 system. There are 3,800 entries in that log used both by Na
22 Laukoa and the TACs who were working in the complexes. We
23 have monthly reports submitted from Na Laukoa to us in detail
24 summarizing Na Laukoa's work and the work of each complex
25 TAC.
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1 Q. I'm sorry, what does IMS stand for?
2 A. It's PREL's information management system.
3 Q. And you said there are approximately 3,800 entries
4 in that system?
5 A. There are approximately 3,800 entries in that
6 accounting for over 26,000 individual contacts by TACs and
7 administrators or parents or teachers and it goes into over
8 100,000 contact hours.
9 Q. Are the monthly reports contained in the exhibits
10 that were provided to us today?
11 A. Yes, there are some in there, yes.
12 Q. So are those the progress reports that were
13 submitted, I think, on a monthly basis?
14 A. Yes, and you'll notice a couple different kinds in
15 there. One is the progress report of Na Laukoa to PREL,
16 another one is the progress report from the TAC about their
17 specific complex, and another one is the PREL progress report
18 to the executive management team.
19 Q. Did you have objective criteria to monitor the
20 progress of Na Laukoa?
21 A. It was to get the work done in the complexes so
22 that they would pass service testing.
23 Q. What were your objective criteria?
24 A. Measuring how complexes were proceeding to passing
25 service testing, and it worked usually with practice testing
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1 that we would assist the complex with. So we were -- our
2 measurement was were they making gains in those areas.
3 CO-CHAIR REPRESENTATIVE SAIKI: Okay, thank
4 you very much.
5 EXAMINATION
6 BY CO-CHAIR SENATOR HANABUSA:
7 Q. Mr. Burger, prior to coming here today, did you
8 review any tapes of these proceedings?
9 A. I did.
10 Q. Which tapes did you review?
11 A. I saw a portion of a tape. I don't know the
12 gentleman's name. I think I watched about ten minutes of a
13 tape. First name Bob, Robert.
14 Q. Golden?
15 A. I think that's it.
16 Q. Okay. Any one else's?
17 A. That's it.
18 Q. Let me follow up on a question asked by Senator
19 Buen. This is regarding any assistance which Ms. Farmer
20 testified to. Let me ask it to you this way.
21 A. Sure.
22 Q. Were you aware of every meeting Na Laukoa had
23 with -- that PREL or the PREL representative may not have
24 been present at that may have involved the Department of
25 Education personnel?
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1 A. I believe our records are accurate that all of the
2 meetings that Na Laukoa would have whether a PREL
3 representative or not have been recorded.
4 Q. And what would be the basis of your recollection of
5 such a meeting if you're not there?
6 A. We use the IMS system to verify. Both the TACs and
7 Na Laukoa are recorded -- are required to log their entities
8 into that system.
9 Q. So if they didn't log it in, it wouldn't be
10 recorded?
11 A. If they didn't log it in, it probably wouldn't be
12 reported in there, but we have no evidence that that ever
13 happened.
14 Q. Except that we do have the sworn testimony of
15 someone that said that she worked three to four months
16 getting them ready. So we have that to weigh with what you
17 said.
18 A. I understand.
19 Q. In addition to that, now, in looking at one of the
20 billings that you provided, there's $12,000 for computers for
21 Na Laukoa. Are you aware of that?
22 A. Yes.
23 Q. And was that for this IMS system?
24 A. Everyone needed to have computers to work, but I
25 think, as I understand from Ms. Ehrhorn, that -- I don't know
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1 if I can explain exactly how the accounting on that worked.
2 It came off something else.
3 Q. When you said came off something else, you mean it
4 didn't come off of this contract?
5 A. It -- I don't think I can explain it properly. I
6 think Ms. Ehrhorn is going to have to do that.
7 Q. Are you saying it's an expenditure of PREL's for Na
8 Laukoa?
9 A. I think Ms. Ehrhorn is going to have to answer.
10 Q. That's fine.
11 A. I'll say it wrong.
12 Q. Do you know someone called Gale Ozawa?
13 A. Yes.
14 Q. And Ms. Ozawa is a former DOE employee?
15 A. Yes.
16 Q. And she was at one time working for PREL; is that
17 correct?
18 A. Yes. She's awesome.
19 Q. And do you know if Ms. Ozawa was asked to assist
20 PREL with this contract?
21 A. Yes.
22 Q. There's a rumor floating that PREL has many either
23 retired or retiring DOE personnel on staff; is that true?
24 A. Let's see. For the Felix contract or --
25 Q. Let's start with the Felix contract --
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1 A. -- PREL wide?
2 Q. -- and PREL wide. Felix contract first.
3 A. Okay. I will tell you who I know about off the top
4 of my head.
5 Q. Sure.
6 A. Gale Ozawa. As far as I'm concerned, she walks on
7 water. Unfortunately, she injured her back badly and was
8 ordered to bed rest for months. We --
9 Q. I understand that.
10 A. We replaced her with Phyllis Shipman, who is an
11 ex-DOE employee. Gave us lots of insights, both Gale and
12 Phyllis, about how we were accepted and how we got into some
13 complexes that might be resistent. Let's see. Ed on the Big
14 Island.
15 Q. Ed?
16 A. Murai.
17 Q. Okay. Anyone else?
18 A. I don't recall any other.
19 Q. And those are the Felix related?
20 A. Uh-huh.
21 Q. How about PREL wide, other than Felix?
22 A. Ron Toma.
23 Q. Okay.
24 A. We have a person on loan who walks on water for me.
25 Her name is Monica Mann. Joe Laturno. Let's see. That's
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1 all I can think of.
2 Q. Gale Ozawa is on loan to you too, wasn't she?
3 A. No, I think she had retired from the DOE and we
4 asked her to come and assist us, and once she understood the
5 nature of the project she said yes, she would.
6 Q. Now, what percentage of your time in -- would you
7 say you spent on the PREL/Na Laukoa contract from August of
8 2000 to present? We understand this contract's been extended
9 through the end of October. What percentage of your time
10 would you say you spend on it?
11 A. If you take my day and divide it by -- make it a
12 hundred percent, and you said 40 percent or 50 percent,
13 that's what it would look like on paper, but that's only
14 because we get paid for eight hours a day, Monday through
15 Friday. It doesn't count all the rest of the time. We had
16 two other employees that were full-time then to assist me in
17 addition to my other colleagues, Dr. Hammond and Dr. Barlow.
18 Q. In a day, one day, is there a percentage of time
19 that you are physically at these various complexes?
20 A. Now, for me, I've only been personally to two of
21 them, and that's Maui and Molokai.
22 Q. And how many days is that?
23 A. One day for each one of those personally.
24 Q. So the observations that you've testified to
25 regarding the kapunas and the training that Na Laukoa gives
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1 that you are going to testify to from actual observations
2 would be based on these two trips?
3 A. For the observations, but we had a great deal of
4 feedback come through the executive management team about --
5 Q. I understand. I don't mean to be rude, but I've
6 got a limitation before they tell me I've overstepped my
7 bounds, so I have to move on.
8 A. I'm sorry.
9 Q. So physical observation, those two, correct?
10 A. Yes.
11 Q. Now, you also mentioned in response to
12 Mr. Kawashima about the fact that you've negotiated these
13 contracts with other organizations and it's not unusual what
14 you believe Superintendent LeMahieu did, correct?
15 A. Yes.
16 Q. And you just testified that you came on board in
17 January. If you look at the documents before you and if
18 you -- Mr. Slovin was kind enough to Bates stamp them, unlike
19 Mr. Confalone. So if you'll go to 0006. It should be
20 Pacific Resources for Education and Learning, schedule of new
21 contracts and grants pending proposals, July 1, 2000 to
22 September 30, 2002. Do you have it?
23 A. Yes.
24 Q. As you testified to earlier and as pending
25 proposals evidence, the bulk of the money for PREL comes from
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1 federal contracts, correct?
2 A. Yes, I believe that's true.
3 Q. 21 million pending and there's about 4 million some
4 odd?
5 A. Uh-huh.
6 Q. In this particular time frame under other we have
7 the Felix at 2,320,000 and you have 2.5 million total for
8 other, and I'm assuming the other may mean non-federal
9 related projects. Would that be correct, non-federal
10 projects?
11 A. I believe that's accurate.
12 Q. How many contracts from January to the time of this
13 August contract, from the time you went there, did you
14 negotiate in the other category?
15 A. Well, let's see, of those that are in that other
16 category, the last one is one that I worked on that I
17 negotiated.
18 Q. What is CNMIPSS?
19 A. Commonwealth of the Northern Mariana Islands Public
20 School System.
21 Q. Oh, okay. So how about something within the United
22 States, anything else?
23 A. On this list?
24 Q. Yeah. No, that you negotiated from January to
25 December -- to August.
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1 A. Several here in Hawaii.
2 Q. Besides -- just in Hawaii?
3 A. Yes.
4 Q. So the school system of the Northern Marianas,
5 would you say that that's different from the State of Hawaii?
6 A. Yes.
7 Q. In fact, aren't we very unique in terms of the
8 United States in that we are the only state-wide school
9 system?
10 A. Yes.
11 Q. So in a sense when you have a chief executive
12 officer of a, quote/unquote, state system throughout the
13 United States, their role is different from our
14 superintendent of education, wouldn't you agree with me on
15 that?
16 A. I think the Marianas are very similar in that
17 regard.
18 Q. Except they are not -- they are not covered by all
19 of our laws, are they?
20 A. Actually, they are very similar.
21 Q. But they are still not covered by all of our laws?
22 A. I can't say more than that.
23 Q. Okay, that's fine. That's fine. You have not
24 personally visited any of the other complexes, only those two
25 that you mentioned?
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1 A. Yes.
2 Q. You know, the testimony that I remember from
3 Ms. Ehrhorn, I remember specifically asking her how she knew
4 that everyone was doing whatever PREL was paying for, because
5 Na Laukoa is still your subcontractor.
6 A. Yes.
7 Q. She said the way she knew that was she relied upon
8 you. Is that a correct statement?
9 A. That's what I would -- that's what I would do.
10 Q. So you -- you relied upon your IMS system that had
11 all the reporting and the billing and what you -- from the
12 IMS system what you decided was done and then you would
13 verify to Ms. Ehrhorn that this can be paid?
14 A. That was only one of the ways that we documented
15 what was done.
16 Q. No, but in terms of verifying billing, what else
17 did you do?
18 A. In addition to verifying bills?
19 Q. Yeah.
20 A. The accounting -- all of that reconciliation was
21 done by the accounting people.
22 Q. Right.
23 A. What we used to measure if work was done or not was
24 the IMS system, our conversations with them, conversations
25 with the executive management team, reports from TACs, all of
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1 those things.
2 Q. Ms. Ehrhorn was kind enough to respond to some
3 questions that I had of her, and she said there's about
4 $583,000 still remaining on this contract. Does that sound
5 correct to you?
6 A. I couldn't say the dollar amount today.
7 Q. And when she also testified that Na Laukoa is still
8 working but she hadn't received any bills up until that point
9 of her testimony, have you received any subsequent to that
10 time?
11 A. Not to my knowledge. They would come through her.
12 Q. So she hasn't asked you for verification, then?
13 A. No.
14 Q. So you don't know if they have billed anything for
15 the months of August and September yet?
16 A. I don't know that.
17 CO-CHAIR SENATOR HANABUSA: Thank you very
18 much. Any follow-up questions, anyone?
19 SPECIAL COUNSEL KAWASHIMA: No questions,
20 Madam Chair.
21 CO-CHAIR SENATOR HANABUSA: Senator Slom has a
22 very intrigued look. No follow up, Senator Slom?
23 SENATOR SLOM: No follow up.
24 CO-CHAIR SENATOR HANABUSA: Anyone else?
25 Representative Marumoto.
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1 EXAMINATION
2 BY REPRESENTATIVE MARUMOTO:
3 Q. You talked about some of the people being very
4 qualified, including Mr. Alameda, but I don't know whether
5 we've asked you whether -- whether you thought Camille
6 Stockholm, is that the name, Stocksdale, was qualified? Have
7 you -- do you have an opinion there?
8 A. I think for what we asked them to do, as specified
9 in the contract, that she was qualified to do what we asked
10 her to do.
11 Q. Were there any complaints on that person?
12 A. I'm not aware of any.
13 Q. You had not heard of any?
14 A. No.
15 REPRESENTATIVE MARUMOTO: Thank you very much.
16 CO-CHAIR SENATOR HANABUSA: Thank you. Anyone
17 else with follow up? If not, thank you very much.
18 Members, at this time the co-chairs would like to
19 make a motion that we convene an executive session for the
20 following purposes: One is to review whether additional
21 subpoenas will have to be issued. Two is we have just
22 received some correspondence from various counsel and we
23 would like to have our attorneys address the request
24 contained therein, and we also have to discuss the issue of
25 the written statement. So -- and also, of course, the
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1 standard future testimony for tomorrow. Members, with that
2 is there any discussion? If not, Representative Saiki.
3 CO-CHAIR REPRESENTATIVE SAIKI: Co-Chair
4 Hanabusa?
5 CO-CHAIR SENATOR HANABUSA: Aye.
6 CO-CHAIR REPRESENTATIVE SAIKI: Vice-Chair
7 Kokubun?
8 VICE-CHAIR SENATOR KOKUBUN: Aye.
9 CO-CHAIR REPRESENTATIVE SAIKI: Vice-Chair
10 Oshiro?
11 CO-CHAIR REPRESENTATIVE OSHIRO: Aye.
12 CO-CHAIR REPRESENTATIVE SAIKI: Senator Buen?
13 SENATOR BUEN: Aye.
14 CO-CHAIR REPRESENTATIVE SAIKI: Representative
15 Ito?
16 REPRESENTATIVE ITO: Aye.
17 CO-CHAIR REPRESENTATIVE SAIKI: Representative
18 Kawakami?
19 REPRESENTATIVE KAWAKAMI: Aye.
20 CO-CHAIR REPRESENTATIVE SAIKI: Representative
21 Leong?
22 REPRESENTATIVE LEONG: Aye.
23 CO-CHAIR REPRESENTATIVE SAIKI: Representative
24 Marumoto?
25 REPRESENTATIVE MARUMOTO: Aye.
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1 CO-CHAIR REPRESENTATIVE SAIKI: Senator
2 Sakamoto? Senator Slom?
3 SENATOR SLOM: Aye.
4 CO-CHAIR REPRESENTATIVE SAIKI: We have ten
5 ayes and two excused.
6 CO-CHAIR SENATOR HANABUSA: Thank you.
7 Members, we will convene in executive session next door.
8 Members of the public, there will be -- whatever
9 decision that will have to be made we will reconvene here.
10 We are hoping executive session will take no longer than 15
11 minutes. So we anticipate reconvening. We're all laughing
12 because we haven't been able to do that yet, about 5:20.
13 (Recess taken.)
14 CO-CHAIR REPRESENTATIVE SAIKI: Members, I'd
15 like to reconvene. We have completed our executive session
16 and we will adjourn and we will have a hearing tomorrow
17 morning at 9:00 a.m. in this room. Thank you.
18
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1 State of Hawaii )
2 ) ss:
3 CITY & COUNTY OF HONOLULU )
4
5 I, JESSICA R. PERRY, do hereby certify:
6 That on October 12, 2001, at 1:08 p.m. the
7 foregoing proceedings were taken down by me in machine
8 shorthand and was thereafter reduced to typewritten form by
9 computer-aided transcription; that the foregoing represents,
10 to the best of my ability, a full, true and correct
11 transcript of the proceedings had in the foregoing matter.
12 I further certify that I am not attorney for
13 any of the parties hereto, nor in any way concerned with the
14 cause.
15
16 DATED this 26th day of October 2001, in
17 Honolulu, Hawaii.
18
19
20
21
22
23 Jessica R. Perry, CSR 404
Notary Public, State of Hawaii
24 My commission expires: 5/11/03
25
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