1 SENATE/HOUSE OF REPRESENTATIVES
2 THE 21ST LEGISLATURE
3 INTERIM OF 2001
4
5
6
7
8
9 JOINT SENATE-HOUSE INVESTIGATIVE COMMITTEE HEARING
10 NOVEMBER 9, 2001
11
12
13
14 Taken at the State Capitol, 415 South Beretania,
15 Conference Room 325, Honolulu, Hawaii, commencing at
16 1:13 p.m. on Friday, November 9, 2001.
17
18
19
20 BEFORE: SHIRLEY L. KEYS, RPR, CM, CSR 383
21 Notary Public, State of Hawaii
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23
24
25
Page 1
1 APPEARANCES:
2
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
14 Senator Sam Slom
15
16 Also Present:
17 Special Counsel James Kawashima
18 Ms. Laurel Johnston
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20
21
22
23
24
25
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1 I N D E X
2
3 WITNESS: LAUREL JOHNSTON
4
5 EXAMINATION BY: PAGE
6 Special Counsel Kawashima 6
7 Co-Chair Senator Hanabusa 35
8 Vice-Chair Representative Oshiro 44
9 Co-Chair Senator Hanabusa 49
10 Vice-Chair Senator Kokubun 52
11 Representative Ito 56
12 Senator Slom 60
13 Representative Kawakami 65
14 Senator Buen 69
15 Representative Leong 71
16 Senator Sakamoto 74
17 Representative Marumoto 79
18 Co-Chair Representative Saiki 83
19 Senator Buen 89
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22
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25
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1 CO-CHAIR REPRESENTATIVE SAIKI:
2 Members, we'd like to convene our investigative committee
3 to investigate the State's efforts to comply with the
4 Felix Consent Decree. We'll begin with the roll call.
5 CO-CHAIR SENATOR HANABUSA: Co-Chair
6 Saiki?
7 CO-CHAIR REPRESENTATIVE SAIKI:
8 Present.
9 CO-CHAIR SENATOR HANABUSA: Vice-Chair
10 Kokubun?
11 VICE-CHAIR SENATOR KOKUBUN: Here.
12 CO-CHAIR SENATOR HANABUSA: Vice-Chair
13 Oshiro?
14 VICE-CHAIR REPRESENTATIVE OSHIRO:
15 Here.
16 CO-CHAIR SENATOR HANABUSA: Senator
17 Buen?
18 SENATOR BUEN: Here.
19 CO-CHAIR SENATOR HANABUSA:
20 Representative Ito?
21 REPRESENTATIVE ITO: Here.
22 CO-CHAIR SENATOR HANABUSA:
23 Representative Kawakami?
24 REPRESENTATIVE KAWAKAMI: Here.
25 CO-CHAIR SENATOR HANABUSA:
Page 4
1 Representative Leong?
2 REPRESENTATIVE LEONG: Here.
3 CO-CHAIR SENATOR HANABUSA:
4 Representative Marumoto?
5 REPRESENTATIVE MARUMOTO: Here.
6 CO-CHAIR SENATOR HANABUSA: Senator
7 Matsuura is excused. Senator Sakamoto is excused.
8 Senator Slom?
9 SENATOR SLOM: Here.
10 CO-CHAIR SENATOR HANABUSA: We have
11 quorum.
12 CO-CHAIR REPRESENTATIVE SAIKI: Thank
13 you. Members, our first witness is Laurel Johnston.
14 We'll administer the oath at this time.
15 CO-CHAIR SENATOR HANABUSA: Miss
16 Johnston, do you solemnly swear or affirm that the
17 testimony you're about to give will be the truth, the
18 whole truth and nothing but the truth?
19 MS. JOHNSTON: Yes, I do.
20 CO-CHAIR SENATOR HANABUSA: Thank you
21 very much. Members, we'll follow our usual protocol.
22 We'll begin with Mr. Kawashima.
23 SPECIAL COUNSEL KAWASHIMA: Thank you,
24 Madam Chair.
25 E X A M I N A T I O N
Page 5
1 BY SPECIAL COUNSEL KAWASHIMA:
2 Q. Please state your name and business address.
3 A. Laurel Johnston. My business address is 1390
4 Miller Street, Room 414, Honolulu, Hawaii, 96813.
5 Q. And that is the Department of Education for the
6 State of Hawaii, is it not?
7 A. That's correct.
8 Q. Now, Ms. Johnston, what is your position with
9 the department?
10 A. Assistant superintendent for planning, budget
11 and resource development.
12 Q. All right. Before I go on, ma'am, would you
13 briefly recount for us your formal education after
14 secondary?
15 A. Yes. I have a Bachelors degree 1979, a Masters
16 degree in 1981. Both of those were conferred from
17 Florida State University. Do you need subjects or --
18 Q. If you --
19 A. Okay. The Bachelors degree is in criminology
20 with a minor in statistics. The Masters degree is in
21 public administration with an emphasis in program
22 evaluation and budget.
23 Q. If you might recount for us your employment
24 history as it would pertain to the testimony you're going
25 to give?
Page 6
1 A. Okay. I arrived in Hawaii in 1985, was
2 employed briefly in the 1986 session here in the State
3 Senate. From 1986 to '91 I was employed with the Office
4 of the Auditor. From 1992 to 2000, again with the State
5 Senate and from 2000 to present in my current position.
6 Q. When you were with the legislature, which
7 office or which offices did you work?
8 A. From 1992 through '96 with the Senate Majority
9 Office. From '97 through mid 2000 with the Senate
10 Judiciary Committee.
11 Q. And then you've been with the department since
12 the year 2000 then?
13 A. Mid 2000, yes, sir.
14 Q. All right. And when you joined the Department
15 of Education, was it in the current position that you now
16 occupy?
17 A. Yes. That's correct.
18 Q. All right. Perhaps you can explain for us,
19 Ms. Johnston, what the duties of your position are as the
20 assistant superintendent for planning, budget and
21 resource?
22 A. Okay, thank you. Essentially I'm to assist the
23 superintendent of education and the deputy superintendent
24 of education, advising them and managing staff that
25 implement things such as the strategic plan for standards
Page 7
1 based reform, obviously the statewide budget under budget
2 and resource development is a newer piece that was added
3 to look at how we could better bring funds into the State
4 and use the funds that we have.
5 Q. All right. Is it resourse or resource --
6 A. Resource development.
7 Q. All right. And am I to understand then it is
8 to look at places from out of state hopefully to obtain
9 funds to bring in state for the Department of Education,
10 however?
11 A. That's correct. Both Federal funds, perhaps
12 even private funds, if necessary.
13 Q. Was there someone occupying that position
14 before you occupied it, Miss Johnston?
15 A. No.
16 Q. Assistant superintendent for planning, budget
17 and resource development?
18 A. No, my understanding when I was hired, this was
19 a new position that had been created through a
20 reorganization of the department at that time.
21 Q. There may have been someone or others in
22 planning and budget perhaps before you, but they had not
23 had that office where they combined planning, budget and
24 resource development?
25 A. That's correct. The functions had already been
Page 8
1 in the department. That's correct.
2 Q. Now, if I might just focus on the area of
3 budget for a bit, Miss Johnston. You have made your
4 responsibility in putting together the budget for the
5 department, do you?
6 A. I would say that I have authority to supervise
7 and advise the superintendent on the budget, yes.
8 Q. Sure. I understand. You don't necessarily do
9 the basic work but you do supervise the work that is done
10 in putting together a budget for the department?
11 A. That's correct, yes.
12 Q. All right. Now, if I might ask, what kinds of
13 input does the department seek in creating your budgets?
14 In other words, from what parts of the department, how it
15 is sought, what kinds of things are sought?
16 A. Okay, I'll describe the budget preparation
17 process.
18 Q. That's a good idea.
19 A. Hopefully that will help. Earlier -- let me
20 start with I guess the -- I'm trying to delineate between
21 the bi-annual budget and the supplemental budget. We
22 just went through the supplemental budget, so maybe I'll
23 start there. Earlier in the year, around February,
24 March, we send out information to the different program
25 managers and actually to the school level asking them
Page 9
1 what needs they think they might have for the next budget
2 cycle. It takes several months. We do that
3 electronically, we've just gone on line with our request
4 and so people submit those electronically to us now. Our
5 budget preparation staff does evaluate those, look at
6 them and compile them. They then are reviewed by first
7 the superintendent and the leadership team, which is
8 considered the district superintendents, the assistant
9 superintendents, the deputy and the superintendent.
10 After that review, we then come up with basically a
11 recommendation to the Board of Education committee, which
12 is the committee on budget and fiscal accountability.
13 That committee does review the budget, makes whatever
14 modifications and then that is then presented to the full
15 board for their approval. Actually, the budget is the
16 board's budget. It's not the department's budget.
17 Q. I see. So that budget and finance, the budget
18 and finance office of the State of Hawaii does not play a
19 part in this process?
20 A. Oh, no, it does, absolutely. The department of
21 budget and finance does. But what I was trying to
22 delineate is the budget submission to the governor
23 through the department of budget and finance is the
24 board, not the department.
25 Q. I see. I see. So information is gathered then
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1 from the schools themselves, from the program managers
2 and then reviewed by district offices along with the
3 superintendents?
4 A. That's correct.
5 Q. Ultimately coming up with a proposal through
6 the Board of Education who then through their committee
7 on budget and fiscal responsibility make changes or not
8 and then passes it on to the governor?
9 A. To the full board and then --
10 Q. I'm sorry, full board and then through the
11 governor?
12 A. It's submitted to the department of budget and
13 finance, yes, that's correct.
14 Q. All right. Now, what's -- let me ask -- move a
15 little bit ahead, Ms. Johnston. Once funds are
16 appropriated by the legislature to the department, how
17 are these funds disseminated within the department? In
18 other words, what is the process that the department
19 follows in actually getting the funds to the various
20 sectors of the department that need to spend it?
21 A. We have a program budget structure that is
22 required by State government, all -- since the Department
23 of Education is also a State agency besides being a
24 school system, we do have to follow program budget
25 structure, so we have various program IDs that are
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1 attached to our various programs. The funds are attached
2 to those and allocated out to what we call the program
3 managers. Now, in some cases that will be persons at a
4 State or district level or in some cases that is directly
5 down to the schools.
6 Q. You, just in your last answer, you used the
7 phrase that I was going to ask you a question about
8 anyway, so let me do it now.
9 A. Uh huh.
10 Q. And I think you used the phrase allocated?
11 A. Uh huh.
12 Q. We've heard testimony, I think you were here
13 when the internal auditor for the department, Mr. Koyama,
14 testified that in his opinion allocation meant the same
15 thing as allotment. Is that a correct statement as far
16 as you're concerned?
17 A. That's probably correct, yes.
18 Q. You seem hesitant.
19 A. Well, I'm not an accountant, I have to be
20 honest with you, so people might differ on that. I would
21 say my understanding is that it's the same thing.
22 Q. All right. So do these allotments or
23 allocations come first from the department to you,
24 department of budget and finance to the Department of
25 Education?
Page 12
1 A. We're a lump sum budget agency, so I think
2 we're a little bit different than normal -- or excuse me,
3 other State agencies, in that we get lump sum allocations
4 in the department of budget and finance.
5 Q. Now, in your budget, let's assume there is a
6 line item in your budget and it is approved all the way
7 up and is appropriated. Would the allocated amount or
8 the allotment that is given ultimately to whichever
9 division or section of the department that is to get it,
10 would that number always be the same?
11 A. It could change depending on I guess a couple
12 factors immediately, whether there's a restriction from
13 the governor, obviously if the governor restricts our
14 budget and we would need to somehow restrict funds or if
15 we take internal restrictions, which we do, the board
16 again approves those. If we feel like that there were
17 areas that needed to have funding for which we did not
18 receive additional funds, for instance, a good example
19 would be the charter schools. We have -- now have 25
20 charter schools for which we have not been given any
21 additional funds, so we did have to take some internal
22 restrictions in order to pay for those.
23 Q. I'm sorry, some internal what?
24 A. Restrictions.
25 Q. I see. So --
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1 A. That could change an allocation because a
2 program is appropriated, let's say one dollar and then if
3 we need five cents from that dollar to help pay for the
4 charter schools, then they will receive 95 cents instead
5 of one dollar.
6 Q. I see. I see. But that is done before the
7 allocation is actually made?
8 A. Hopefully, yes.
9 Q. Actually once the allocation is made,
10 technically the money can be spent by whoever receives
11 it?
12 A. Right, that's correct.
13 Q. So that -- but in a great majority of the cases
14 though, would then the budgeted amount be the same as the
15 allocated amount?
16 A. Not --
17 Q. Ultimately now?
18 A. Help me understand at what point in the budget
19 you're talking, sir.
20 Q. Actually, I'm trying to understand myself.
21 A. Okay. Sorry.
22 Q. As the budget program plays itself out
23 ultimately to the money being spent?
24 A. After appropriation, you mean?
25 Q. After appropriation.
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1 A. Okay. Okay. After appropriation, again, we
2 would allocate out the funds that have been approved by
3 the board for us to distribute, and if there was an
4 internal restriction, there might be a reduction in the
5 appropriation for that particular program and for a
6 number of programs in order to take care of other things
7 that perhaps we didn't receive funding for.
8 Q. Okay, that's the only instance you can think of
9 when they would be different perhaps?
10 A. I mean we do have the ability again as a lump
11 sum agency to move funding around, if we need again, it
12 would have to go through a process.
13 Q. Sure.
14 A. In which the board would have to --
15 Q. Now -- strike that. Do you or your department,
16 your division, section, do you actually analyze the
17 budgeted amounts and compare it with actual expenditures?
18 A. I have asked that that be done.
19 Q. I see.
20 A. Is that a regular occurrence, I couldn't really
21 speak to it being done before I arrived. I know that
22 I've asked that that be done particularly in EDN 150
23 because of some of the questions that have been raised.
24 Q. That's exactly what I was going to ask you.
25 Fortunately you raised that issue. That is something you
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1 saw that probably needed to be done?
2 A. Yes. Well, we had been asked by numbers of
3 different groups to do that.
4 Q. Sure. I understand. When the department came
5 in for emergency appropriations, those questions were
6 asked?
7 A. That's correct.
8 Q. I imagine honestly they couldn't give the
9 answer because those figures weren't kept, but am I to
10 understand then that a mechanism is being put into place
11 so that in the future perhaps, once it's in place and
12 working well, that you would be able to make that type of
13 analysis between budgeted amounts and the actual
14 expenditures for a specific area or item?
15 A. I can tell you that it has been done for this
16 current budget cycle. I would hope it would be
17 institutionalized. I think we would want to work with
18 the superintendent to insure that that happens.
19 Q. All right. So that -- well, am I to understand
20 then as far as the EDN 150 as you described it, is the
21 Felix related expenditures, is it not, or special
22 education?
23 A. We call EDN 150 the comprehensive student
24 support system that includes special ed and Felix
25 expenditures, yes.
Page 16
1 Q. Okay. Now, that program number, under that
2 program number, for example, can one distinguish out how
3 much was spent for special ed on the one hand and how
4 much was spent on Felix students on the other?
5 A. To a certain extent, yes, that's true. We do
6 have program IDs again that are typically marked as Felix
7 only expenses or expenditures because we have been asked
8 again to delineate that particularly when we came up with
9 the Felix response plan of this last fiscal year, so we
10 have tried to keep a separate -- I say the word
11 accounting, identification for those. But I have to tell
12 you to a certain degree they blend because for instance,
13 for a teaching position we wouldn't account for it as
14 spending so much time with the Felix kid versus a special
15 ed kid versus a regular ed kid, especially if they're all
16 mixed up in one classroom.
17 Q. Sure, I think I might have asked someone else
18 questions about that and I understand the predicament it
19 poses, but I guess what I'm asking you is is there being
20 an attempt to be made to allocate, for example, and I
21 understand it may have to be done on an average over a
22 period of time, whether it be a month or quarter or what,
23 but in that same class, you would have a range, you would
24 have regular education students, you may have special ed
25 students, you may in addition to those other two
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1 categories have Felix students, right?
2 A. That's correct, uh huh.
3 Q. So that right now anyway, it's difficult in
4 that area for a teacher, for example, to apportion out
5 which would go to which category?
6 A. Uh huh.
7 Q. Is that correct?
8 A. Yeah. I think this speaks to a larger issue,
9 which is we don't assign funds to a child necessarily.
10 Most of our funds are tied up in teaching positions or
11 positions that are assigned to the classroom and so our
12 budget is actually driven more by personnel expenses than
13 it is expenses attached to a particular child.
14 Q. Sure. But you see -- you see the value though
15 because of what has developed over the years of at least
16 attempting to distinguish out Felix related expenditures
17 from others just because of the amount that it has grown
18 over the years?
19 A. And I think to a certain extent we have tried
20 to do that. I know particularly in this past fiscal year
21 I think we probably did better than others.
22 Q. So that when the time comes to come to
23 legislature for appropriations again next year, you would
24 be able to have those types of breakdowns?
25 A. I think for the past fiscal year and perhaps
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1 the year prior to that, I think basically where the nexus
2 of this becomes an issue is prior to having an EDN 150
3 wherein EDN 100 was the only program budget ID that we
4 had for everything and I think that's when it gets a
5 little bit more difficult.
6 Q. Okay. And I think I asked you this, Miss
7 Johnston, but again, you have recently put into place the
8 mechanism that will ultimately result in the department
9 being able to track what has been budgeted for an item
10 and how much is actually being spent for it?
11 A. What I asked to be done is I asked for some
12 folks in our budget office to be able to crosswalk the
13 existing budget structure in EDN 150 with the Felix
14 costs, and they have done that. I guess the issue
15 becomes is this an EDN 150 comprehensive student support
16 system budget or is it a Felix budget. I guess our
17 intent would be that we hope in the long run this is a
18 comprehensive student support services budget. So
19 keeping it separate in some ways prevents us from
20 integrating and making it the system, I think, that we're
21 striving for. So we can -- yes, we can continue to do it
22 that way. Will it be the most efficient, effective way
23 of reflecting how we spent our monies, I guess that
24 depends on how you want to display it.
25 Q. You can see the need for the legislature to
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1 have those types of --
2 A. I can understand why you want to know about
3 expenditures.
4 Q. Actually though, the question I asked you
5 didn't necessarily only -- wasn't restricted to EDN 150
6 and/or special ed or Felix. It had to do with in general
7 the budget and whether or not there was a mechanism in
8 place to be able to compare what had been budgeted for an
9 item for service and how much had actually been expended
10 on it.
11 A. Okay. I can only tell you that the analysis
12 that was done was within EDN 150 right now and it was at
13 the same time that the internal audit was going on. I
14 can't speak to the larger budget, I would say that I
15 agree with you in theory that it needs to be done. It
16 has not yet been done. Hopefully in discussions with the
17 superintendent, I think she understands, at least in the
18 discussions I've had, why that would be an important
19 thing to do.
20 Q. All right. If I may ask, were you part of the
21 decision making process that resulted in internal auditor
22 Koyama doing the audit that he did recently?
23 A. I was asked whether I thought it was a good
24 idea and I said yes, I thought it was.
25 Q. By Deputy Superintendent Hamamoto?
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1 A. Yes.
2 Q. Did the superintendent, former superintendent
3 LeMahieu have anything to do with that decision and the
4 process?
5 A. I couldn't tell -- I couldn't tell you. I
6 don't know.
7 Q. Okay. But as far as you were concerned, the
8 decision was made by Deputy Superintendent Hamamoto and
9 supported by you?
10 A. Yeah. Yes.
11 Q. All right. Now, this past session the
12 department came to the legislature for emergency
13 appropriations. You were part of the process that
14 prepared the request?
15 A. That's correct.
16 Q. And the original request was for how much, do
17 you recall?
18 A. The original request, of course I had all this
19 highlighted somewhere.
20 Q. The best of your recollection?
21 A. I think it was in the -- maybe 62 million or
22 something.
23 Q. 62 million?
24 A. Something like that.
25 Q. All right. I think it was 61 something, I
Page 21
1 can't recall.
2 A. Yeah.
3 Q. But 62 will work for this. How did the
4 department arrive at that 62 million dollar figure?
5 A. At the time, this is a very interesting process
6 actually because we were trying to make projections based
7 on what we saw as 100 percent completion of our
8 benchmarks that the court had ordered that we meet. We
9 felt like we could not project except to try to meet
10 those, and so pretty much when the Felix response plan
11 was put together, we projected out compliance to 100
12 percent, and certainly that would make the figure large.
13 So that's how we came up with it. It was based more on --
14 Q. I see.
15 A. -- intent to comply with the benchmarks.
16 Q. All right. Was it, as far as you're concerned,
17 the department's position that a request for emergency
18 appropriations in essence was a request for funds to pay
19 for something that already had been spent or paid for?
20 A. I have to say that when I arrived at the
21 department, it seemed to me that the decision had already
22 been made to seek an emergency appropriation, so I'm not
23 really privy to what that preliminary discussion was, but
24 at that point basically I was told to help try to figure
25 out what the amount should be and how we would move
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1 forward on insuring that we receive the funding, but our
2 projections were that yes, we had to pay for programs for
3 which there was not a budget, for which there were no
4 funds.
5 Q. Just so I understand what you're saying, if --
6 strike that. It looks like what the department did then
7 to reach the amount of 62 million dollars, let's just say
8 if the department complied 100 percent with the
9 benchmarks, this is how much money we'd have to spend,
10 even though you had not yet spent it --
11 A. That's correct.
12 Q. -- you presuppose that you would spend it and
13 therefore it would cost that much?
14 A. We knew that, yes. We knew --
15 Q. I'm sorry, go ahead.
16 A. We knew we had X amount of monies appropriated
17 for that fiscal year, and obviously if we were going to
18 comply 100 percent with the benchmarks, which at that
19 time were June 30, we did not have sufficient funds. We
20 were going already into the second half of our fiscal
21 year to pay for things, you know, in the first half of
22 the fiscal year.
23 Q. In your mind, as far as coming to legislature,
24 was it made -- was it made known to legislature that this --
25 what was being done, in other words, the 62 million
Page 23
1 dollars represented not necessarily money that was spent
2 yet, but money that would be spent if in fact the
3 department were able to reach all of the benchmarks 100
4 percent?
5 A. I guess it would be my belief that was what we
6 were communicating, whether that was what was understood
7 would be I guess --
8 Q. Okay. And again, as you say, you probably
9 weren't here when they were putting the beginning -- at
10 least the beginning part of the appropriation, emergency
11 appropriation request together, but didn't it appear that
12 some of these items to say that you would reach or
13 complete the benchmark 100 percent was not really a
14 reasonable conclusion to reach?
15 A. I believe that the department was operating
16 from the position that they could not legally make
17 representations that they were not going to meet the
18 benchmarks, that that would not be good legal strategy or
19 that would not be something that -- a message that one
20 would want to send to a judge that we were not going to
21 try to meet the benchmark. The funding would not be I
22 guess a reason not to try to meet the benchmarks.
23 Q. All right. Now, the department though
24 ultimately reduced that amount, emergency appropriation
25 request amount, did it not?
Page 24
1 A. Right, that's correct.
2 Q. To what did it reduce it, do you recall?
3 A. I think we reduced it -- well, I can tell you
4 the final amount. It was 27.9 million dollars.
5 Q. All right. That was the amount that was
6 appropriated, 27.9 million dollars?
7 A. That's correct.
8 Q. Emergency appropriations, is that correct?
9 A. Yes. Yes.
10 Q. And what was the basis for the reductions down
11 to 27.9 from 62 million?
12 A. Well, from the second quarter of the fiscal
13 year, essentially when we were putting this together, to
14 the end of the third quarter, which is basically when
15 session would be winding down, obviously nine months had
16 elapsed in the fiscal year. What you alluded to earlier
17 was that obviously we hadn't expended funds at the rate
18 that we had projected we would expend them, so the amount
19 was reduced.
20 Q. All right.
21 A. The amount that we said we need was reduced.
22 Q. Time was one factor?
23 A. Yes.
24 Q. Now, there were -- there was three items
25 totalling a million dollars in the Felix response plan
Page 25
1 emergency appropriation for payments to the court
2 monitor. Do you know if these three items are in
3 addition to other items in the base budget?
4 A. I know that in the contempt order we were --
5 let's see. The contempt order it was said that we would
6 be paying at least $750,000 during that fiscal year. But
7 I guess I'm not real familiar with those three items.
8 Q. Okay. Well, let me ask you, one of the items
9 for which the department asked for emergency money was
10 about $575,000 to pay the court monitor for targeted
11 technical assistance?
12 A. Okay.
13 Q. Do you know what the court monitor's role was
14 in providing targeted technical assistance?
15 A. No, I can't say that I do.
16 Q. All right. Do you know what this term
17 Coordinated Services Academy, what that is?
18 A. No, I don't.
19 Q. Now, the internal audit report prepared by
20 Mr. Koyama on the Felix 2001 emergency appropriation
21 request, you've reviewed that audit, have you not?
22 A. I've looked at it. Yes, sir.
23 Q. It reported that the department had twelve
24 million dollars in unspent funds for the 2001 emergency
25 appropriation amount. You agree with that?
Page 26
1 A. Well, it was as of the time of his audit.
2 Q. Yes. Yes.
3 A. Yeah. So it wasn't for the entire fiscal year.
4 Q. As of the end of the fiscal year, June 30, had
5 that twelve million dollars been spent?
6 A. What we spent -- I have is that we spent 27.4
7 million dollars of the 27.9 by the end of the fiscal year
8 after the budget had been reconciled, so that was as of
9 the close of the fiscal year.
10 Q. All right. But as of nine months after the
11 fiscal -- strike that. As of nine months into the fiscal
12 year, and yeah, I guess about two months after the
13 appropriations had been given, twelve million dollars had
14 not been spent yet though?
15 A. That's what was reported, that's correct.
16 Q. And I understand there was 17 million dollars
17 in unspent EDN 150 funds at the end of fiscal year '01.
18 Is that correct?
19 A. I think there's maybe some dispute about that.
20 Q. Tell us about it.
21 A. EDN 150, there was still some strike savings
22 that I think were not accounted for there, as well as
23 salary savings from unfilled positions. So there was an
24 amount -- I guess we don't -- I don't know that we
25 necessarily agree that it's 17 million.
Page 27
1 Q. What amount would you agree with?
2 A. Let me check. I'm sorry. I'm confusing carry
3 over and lapsing, so there was a nine million dollar
4 carry over and there was an eight million dollar lapse,
5 so you're correct, there was 17 million balance. So I
6 will stand corrected on that.
7 Q. All right. Now, do you know what comprises
8 that 17 million dollars in unspent EDN 150 funds, in
9 other words, what was it designed to be spent for? What
10 was the plan that could not --
11 A. Some of it was salary savings from the strike,
12 so for persons that obviously weren't being paid for the
13 strike. And a large portion of the remaining part that
14 was carried over is also salary savings from vacant
15 positions.
16 Q. Now, did the department finish that fiscal year
17 '01 with additional surplus funds in other EDNs besides
18 EDN 150?
19 A. Yes, we did.
20 Q. To your knowledge?
21 A. Yes, we did.
22 Q. And which ones were they and how much?
23 A. In EDN 200 we had 1.5 million dollars, EDN 300,
24 $930,000, EDN 400, two million, EDN 500, 1.2 million.
25 Q. Now, in addition to the 17 million dollars
Page 28
1 surplus, the DOE also encumbered 13 million dollars by
2 the end of fiscal '01. First of all, how would you as
3 far as you're concerned define encumbrance?
4 A. Encumbrance would be a commitment to pay
5 something in the future, but it was -- it would be paid
6 out of the fiscal year in --
7 Q. By the end of that fiscal year?
8 A. In which it's committed, that's correct.
9 Q. And does the Department of Education to your
10 knowledge have a different definition than other
11 departments or the State itself, do you know?
12 A. I wouldn't know.
13 Q. I saw somewhere where the -- and again, I may
14 be misstating, but where the department of budget and
15 finance was of the position that the DOE maintains its
16 own definition of encumbrances. Can you speak to that?
17 A. That's not been shared with me.
18 Q. All right. Have you had an opportunity, Miss
19 Johnston, to read the internal auditor's report such that
20 you can comment on various portions of it?
21 A. Probably the ones I paid most attention to were
22 the ones involving anything that mentioned budget. But I
23 can't say that I've memorized it.
24 Q. I understand.
25 A. I have it with me.
Page 29
1 Q. No, I'm not suggesting you should. It was
2 issued not that long ago, but finding number one though
3 had to do with lack of communications in the budget
4 process?
5 A. Yes.
6 Q. Did you understand what Mr. Koyama, what his
7 finding was?
8 A. Yeah, Mr. Koyama and I talked about that.
9 Communication is always a word that's mentioned a lot in
10 the Department of Education, I think primarily because of
11 our size. So it didn't surprise me that people were
12 saying there's lack of communication about the budget
13 because we are usually accused of lack of communication
14 about everything else. I think because of our structure
15 there seems to be some mystique about how the budget's
16 done and because we have school based -- school community
17 based management wherein the schools do receive monies
18 directly but they don't necessarily -- we don't budget by
19 school, there seems to be some confusion about how one
20 requests funds and then how one is given funds, so I
21 don't know, it was sort of a broad comment that Ed had
22 made and I said barring any real details or conversations
23 that could be shared with me, I didn't know really how to
24 respond to that because we communicated in our mind in
25 all sorts of ways with people about the budget. Whether
Page 30
1 it's understood, again, you know, that's often hard to
2 tell. So I didn't -- I didn't really have a whole lot of
3 details to give him on that because I didn't really know
4 exactly where the points of contention were.
5 Q. I see. Is that something that you'll be
6 continuing to work out with Mr. Koyama to make sure you
7 understood what he was saying, and if he's correct, to
8 correct the areas that he followed?
9 A. Yes. I told him, you know, I'm happy to work
10 with him on that. We do have ongoing budget training
11 that we provide, especially to people upon request. We
12 do have information on the web as well as on our Lotus
13 notes data base, help sites that people can use, so maybe
14 it's just a matter of letting people know what's there.
15 Q. Were there other areas, Miss Johnston, in the
16 internal auditor's report with which you did not agree?
17 A. No, I wouldn't say I didn't agree with.
18 Q. Now, I understand that the Department of
19 Education has had excess Federal impact aid funds ranging
20 from nine million dollars to 12 million dollars a year
21 for the past three years. Do you know how the department
22 has used that money?
23 A. How we've used it? I know that we have to
24 request when we have excess funds for expenditure to the
25 governor, that's a law that was passed, I think in 2000.
Page 31
1 We did request, if I can get the date, I think it was in
2 June of 2000, for an expenditure of an additional 19
3 million -- excuse me, twelve million, additional twelve
4 million dollars.
5 Q. Federal?
6 A. In impact aid, that's correct, and it was -- we
7 just had a discussion yesterday evening, myself and the
8 budget director and the interim superintendent about
9 this. The memorandum does say EDN 100 school based
10 budgeting. That's because our impact aid, we do receive
11 it tagged as regular education or reimbursement for
12 special education. This monies came in through the --
13 what we would call the regular education side. So the
14 request to the governor was made to spend it in EDN 100.
15 That's not to say that we're prohibited from spending it
16 in other areas. It's just that's the way it's coming in
17 to the department.
18 Q. I see. I'm not sure if you can answer these
19 questions, but let me ask you this.
20 A. Okay.
21 Q. Primarily because some of these things occurred
22 before you joined the department. But do you know how
23 much the department has paid the court monitor personally
24 or his office since fiscal year '95, is that something
25 that's something you know about or that information
Page 32
1 that's available to you?
2 A. No. I wouldn't know that.
3 Q. To your knowledge, are any members of the now
4 not in existence technical assistance panel doing any
5 work for the Department of Education and I think the
6 people on the panel before it was disbanded was Ivor
7 Groves, Judy Schrag and Lenore Behar?
8 A. I'm not aware of it, no.
9 Q. Now, do you know if the Department of Education
10 is paid for the use of the service testing instrument
11 that is owned by Dr. Groves' company that is used here in
12 Hawaii?
13 A. I don't know about that.
14 Q. Okay. Now, Columbus, Columbus contract.
15 A. Okay.
16 Q. Were you involved in that, in those
17 negotiations and discussions?
18 A. Only when people were talking about money. But
19 not as far as what was going to be in the contract or --
20 Q. I see. Am I to understand then as delegated by
21 the superintendent, then superintendent, Paula Yoshioka
22 was delegated the responsibility of doing the
23 negotiations with Columbus?
24 A. That's my understanding.
25 Q. And she did all of the negotiations, and
Page 33
1 neither you nor Ms. Hamamoto were involved in that aspect
2 of it?
3 A. I wasn't. I can't speak to Mrs. Hamamoto.
4 Q. I understand that you were concerned about the
5 Columbus contract at one time?
6 A. I thought the cost seemed high. But it's just
7 because it was a big number.
8 Q. Well --
9 A. I really had no basis to --
10 Q. A hundred million you're talking about?
11 A. Yeah. It was a multi year contract though.
12 The hundred million was not -- the hundred million was
13 spread over two to three years.
14 Q. I understand. But the 100 million also made
15 certain assumptions though --
16 A. Right.
17 Q. -- that were going to occur that never did
18 occur, right?
19 A. There were assumptions that we would get --
20 right, a certain level of teachers.
21 Q. Were you knowledgable enough about the contract
22 to have concerns about any other aspects of it such as,
23 you know, the terms themselves which appear to be a
24 situation where the State pays for everything and is
25 promised nothing by Columbus but a good faith effort
Page 34
1 perhaps?
2 A. I have to say I've never seen the contract.
3 Q. All right.
4 A. So --
5 Q. Even now you're not involved with the
6 administration of that contract?
7 A. No, I'm not.
8 Q. That's all I have. Thank you.
9 CO-CHAIR REPRESENTATIVE SAIKI: Okay,
10 members, we'll proceed with questions from the committee
11 now. Co-Chair Hanabusa has asked if she could go first
12 of all. With the indulgence of the members we'll let the
13 Co-Chair go first.
14 CO-CHAIR SENATOR HANABUSA: Thank you
15 very much.
16 BY CO-CHAIR SENATOR HANABUSA:
17 Q. Good afternoon, Laurel.
18 A. Hi.
19 Q. I want to follow up on the Federal impact aid
20 issue. You said that simply because it was identified as
21 EDN 100, it does not prohibit the department from using
22 those funds in other categories. That's correct, right?
23 That was your testimony?
24 A. That's my understanding, yes.
25 Q. Laurel, you're familiar with Act 234, which was
Page 35
1 enacted in the 2000 legislature, are you not?
2 A. Right.
3 Q. And according to Act 234, there is a limitation
4 on how the department can use the Federal impact aids in
5 that you shall use it proportionally or the governor can
6 only release the funds for you to use it proportionally
7 through the EDN programs, isn't that correct?
8 A. Okay, I'm looking at it now and I'm not
9 seeing --
10 Q. I think it's 29-25?
11 A. Yeah. Where are you, which --
12 Q. It's in the first part. Are you on the act or
13 are you on --
14 A. Yeah. I've got the cite.
15 Q. The 29-25?
16 A. Yeah.
17 Q. And it says that if there is a -- first there's
18 got to be an excess, and if there is an excess it says it
19 shall not be returned to the general fund.
20 A. Uh huh.
21 Q. And then it goes on, I believe, to say that
22 then you shall make a request and the governor shall --
23 it says shall basically let you do it, but it's
24 proportionate over EDN or program ID, basically?
25 A. Okay.
Page 36
1 Q. And the other restriction at the end of that
2 particular section is that you shall not expand any
3 programs.
4 A. Uh huh. Expand existing programs.
5 Q. Right, it's only on existing programs, correct?
6 So would it be correct by reading that, that if you have --
7 you have five -- well, actually more, one, two, three,
8 four, five, six different program IDs, EDN 100, 150, 200,
9 300, 400, 500, that's correct? Right?
10 A. Right.
11 Q. And I think we can say that the appropriations
12 are about 1.09 billion dollars over those EDNs. Does
13 that number sound right to you?
14 A. That's about right, yeah.
15 Q. Yeah. I think you have -- I think you were
16 looking at the same chart that I was earlier when you
17 were checking on the 17 million dollar -- what we called
18 surplus, and you disagreed and I think it's the same.
19 A. Oh, is that what you're looking at?
20 Q. Yeah. So I think it's about one point
21 whatever, billion dollars, and according to this chart,
22 which is a BNF chart, by the way, EDN 100 is about 780
23 million, EDN 150 is 154 million, EDN 200 is about 17, 18
24 million, EDN 300, 22, EDN 400, 100 and EDN 150 about 16
25 million. Is that same chart that you have before you?
Page 37
1 A. Well, actually we did our own chart, but I have
2 the BNF chart, too.
3 Q. You do?
4 A. Yes.
5 Q. But whatever it is, I just want to get a basic
6 feel for it.
7 A. Okay. All right.
8 Q. So if you read the law then, in order for the
9 DOE to expend these appropriated -- expend the surplus
10 impact aid, they'd have to be spent proportionately to
11 the EDNs?
12 A. You know, I'm not an attorney and I don't want
13 to make a legal interpretation of that. Sorry.
14 Q. Okay, but the law says shall, right?
15 A. It says shall, that's correct.
16 Q. Well, let me ask you this. Do you know why the
17 governor has to give you the permission to do it?
18 A. I believe prior to the section being enacted we
19 didn't get to keep any of the funds, and so my
20 understanding was the reason why it was put in there was
21 because the governor as chief executive officer of the
22 State would have to release them.
23 Q. When you were working for the Senate ways and
24 means committee, did you ever run across the statute?
25 A. I didn't work for Senate ways and means.
Page 38
1 Q. I mean, sorry, the Senate judiciary, did you
2 ever run across this provision of the law?
3 A. I don't remember it in particular.
4 Q. You don't remember it? So you don't remember
5 whether there were any discussions as to whether Act 234
6 was an improper delegation of legislative authority?
7 A. I don't remember that, no.
8 Q. And basically, let me ask you something that I
9 think you should know, which is if it's the DOE, the way
10 the law reads, the DOE that shall have the permission to
11 do that --
12 A. Uh huh.
13 Q. Who does that mean? Does it mean -- let me be
14 more specific. Does it mean the superintendent, does it
15 mean the Board of Education, your finance director?
16 A. I think that's a good question because actually
17 there's another statute that says that the board is the
18 one that's supposed to oversee expenditure of Federal
19 funds.
20 Q. Right.
21 A. So I don't know, there might be a conflict in
22 the laws.
23 Q. So it could be that when the law was drafted
24 and they're talking about department, they're just
25 talking about the department and now the department's own
Page 39
1 structure would be the board that would oversee the
2 expenditures?
3 A. I guess it would depend on which section of the
4 law you thought would prevail.
5 Q. So let me ask you this then. What is your
6 understanding as the person who does budgeting, or not
7 the budgeting but oversees the whole Felix expenditures
8 and related types of expenditures, for Federal impact
9 aid, who would have had to say yes or no on the various
10 expenditures, would it be board, superintendent, could
11 the superintendent act independent of the board? Any
12 idea?
13 A. I'll tell you how we do it. We are required to
14 request permission from the board to expend Federal
15 funds. Now, we do it through the budget office because
16 it's an expenditure plan at that point. It's a budget.
17 And so the budget office brings that to the board's
18 attention through the budget committee. Again, as you
19 folks have already talked about, the expenditure side,
20 which is in another office, does a reporting at year end.
21 I believe it's part of our annual financial report, so
22 who should oversee the actual expenditures, all I know is
23 that the law -- in the law, the board is the ultimate
24 authority for --
25 Q. Budgeting?
Page 40
1 A. Overseeing. Well, overseeing both the budget
2 as well as expenditure of Federal funds.
3 Q. Do you know of the request that you referenced
4 that went out in June, whether that in fact had received
5 board approval? The request went to the governor. I
6 believe it's a memo form signed by Dr. LeMahieu with a
7 concurrence statement by the governor, but do you know if
8 the board had actually passed on those requests?
9 A. I'm trying to look at the paper trail here. If
10 I go back and look now, I don't see a memorandum from the
11 superintendent to the board about that. I would suspect
12 that what occurred is that there was a little
13 interpretation of this law which is the department had to
14 seek from the governor authority to expend, and so I'm
15 presuming that that authority was sought before the board
16 was asked how they would want the funds to be expended.
17 Q. But it would be your expectation for being at
18 the Department of Education that after that authorization
19 is given by the governor, that the superintendent would
20 still have to go to the board?
21 A. Right, and there are memorandums showing that
22 we did go to the board.
23 Q. After that?
24 A. Yes.
25 Q. Okay. Now, Miss Johnston, going back to this
Page 41
1 other issue, assuming, I'm not saying that you're stuck
2 with the interpretation that I'm saying --
3 A. Okay.
4 Q. -- which is that it shall be appropriated over
5 EDN numbers, if that is the case like, and we use a round
6 figure of a billion dollars and the EDN 100 being about
7 780 million, it would be about 78 percent, correct, of
8 the appropriation, I mean of what could be used in terms
9 of the impact aid money?
10 A. Yeah.
11 Q. Okay? And that EDN 150 would be about another
12 15 percent or so?
13 A. Right.
14 Q. Right. And then we would apply those
15 percentages then to the twelve million, or I think that
16 specific request to the governor totaled about nine
17 million dollars, if you go back and you look?
18 A. Okay.
19 Q. Well, anyway, so then the question becomes of
20 the programs, do you have Mr. Ito's thing that he gave us
21 which shows us the appropriations, amount over
22 appropriation?
23 A. I don't know that I do. I don't know that I
24 do.
25 Q. Well, one of the issues we had for him, and he
Page 42
1 said he was going to check with you, was how many of
2 these specific items that were funded are in fact EDN 150
3 though identified as EDN 100?
4 A. Let me look.
5 Q. Did he speak to you about that?
6 A. Let me look, because I do have some other
7 things here. I do have something. It's a summary, but
8 it doesn't have it broken down about how many items.
9 Q. Well, there's one called school based tech
10 services assistance Felix.
11 A. Right. I'm familiar with that one.
12 Q. That would be it, autism services would also be
13 right, 150?
14 A. Okay. I only know what was asked for. I don't
15 know what was actually expended.
16 Q. This is I think what -- I see what you're
17 saying, but the question still is if that exceeds -- if
18 it's nine million dollars over appropriation and that's
19 already three million, that's 30 percent, if you just
20 read the law for what it says, you've almost doubled the
21 use of Federal impact aid for which you are authorized to
22 do under the law.
23 A. Okay. If that's -- yeah, if that's your
24 interpretation of it.
25 Q. You would agree with that. Thank you. My time
Page 43
1 is up. I'll pass.
2 CO-CHAIR REPRESENTATIVE SAIKI: Thank
3 you. Vice-Chair Oshiro followed by Vice-Chair Kokubun.
4 VICE-CHAIR REPRESENTATIVE OSHIRO:
5 Thank you, Co-Chair Saiki.
6 BY VICE-CHAIR REPRESENTATIVE OSHIRO:
7 Q. Good morning. Good afternoon, Miss Johnston.
8 A. Good afternoon.
9 Q. I wanted to ask a little bit more about the
10 emergency appropriation request. Was there any other
11 request besides for the Felix?
12 A. Besides the emergency?
13 Q. Yeah. Coming from the DOE?
14 A. Well, of course we had our supplemental budget
15 request, so you mean beyond that?
16 Q. Well, I just mean emergency request.
17 A. No, no. From the department, no.
18 Q. And about what period was this request made, do
19 you remember?
20 A. Okay, you mean for what budget period or the
21 time period we were --
22 Q. Well, the time period when the request was
23 formally made?
24 A. Well, the governor has to put in the bill, I
25 think -- I guess by bill introduction deadline sometime
Page 44
1 in January, but we had been working on the request since
2 we received the contempt order, which I think was shortly
3 after August.
4 Q. Okay. And I wanted to get a little more
5 clarification because you stated that I think in the 17
6 million dollars that was unspent in EDN 150 you
7 attributed that to some part of it being the strike and
8 some part of it being salary savings for I guess unfilled
9 positions?
10 A. Uh huh.
11 Q. Would you have any estimate on how much that
12 would be toward each one of those?
13 A. The strike savings I think was about five
14 million. I've been trying to get the amount identified
15 for salaries and it's seeming to be a challenge for us to
16 do that.
17 Q. Why is that considered a challenge?
18 A. Unfortunately, our personnel system, our human
19 resources system is primarily on paper still. It's very
20 difficult to get live data. It's usually all historical
21 and it takes an inordinate amount of time because people
22 actually have to go through and look at paper a lot of
23 the time. Also, our system is fragmented, fragmented in
24 that one report will show vacancies where actually there
25 are either temporary teachers or substitute teachers or
Page 45
1 others in those positions getting paid from perhaps
2 another source, but our reports don't link, so one report
3 is showing that we have a lot of salary savings and
4 there's other places where we're spending funds, let's
5 say for substitutes, but they don't link up.
6 Q. Okay. So is that in any way related to a
7 problem being that you're in one side and one side of the
8 department where at -- let's say Mr. Ito is on another
9 side of the department, is that part of the block?
10 A. It goes to the fact that we don't have an
11 integrated financial and human resource management
12 system, which I think we sorely need.
13 Q. Okay. Do you still intend on pursuing that
14 inquiry in terms of finding out how much there actually
15 was a salary savings?
16 A. Yeah, I'm still hoping to get a number
17 eventually.
18 Q. Okay. Because I think we're really interested
19 in finding out exactly how much you can attribute to that
20 because I think looking at it from our perspective, when
21 we see this 17 million dollars that was unspent and I
22 guess eight million dollars lapsing --
23 A. I agree.
24 Q. -- and nine million dollars being kept, it's a
25 big concern for us, especially when we look at it in
Page 46
1 comparison to the other left over figures in the EDNs
2 being maybe 900,000 and at 1.2 million, 17 million does
3 seem like a pretty substantial number.
4 A. Uh huh.
5 Q. Okay. I also wanted to ask do you recall
6 during this time period, I guess when the emergency
7 appropriation was going through the process, do you
8 recall any sort of I guess interaction or directives
9 being issued from Judge Ezra?
10 A. Directives? I remember going to court once,
11 but I can't really recall if he did anything at the time
12 with the benchmarks or I have to say I wasn't always
13 involved in what was going on in the court. It wasn't
14 really something that -- there were no expectations that
15 I be in court.
16 Q. But not even in the court, maybe in the news
17 media, do you recall hearing anything like Judge Ezra
18 telling us, the legislature, that we better appropriate
19 this emergency fund or else we will not be in compliance?
20 A. Yeah, I read the newspaper but --
21 Q. Okay. Yeah, so you do remember that part of it
22 being part of the -- I guess overall circumstances going
23 on? I think my final question was just when it comes to
24 the emergency appropriation request and the process and
25 how the numbers change from 62 million and eventually
Page 47
1 went down to 27 or 27.9, whatever it was, what role did
2 the actual BOE and the committee on budget -- I mean --
3 A. Fiscal accountability.
4 Q. Fiscal accountability, what role did they play
5 in this process?
6 A. I guess the way I would want to respond to that
7 is as much as we could, we kept them apprised. They
8 generally did have and continue to have monthly meetings,
9 so as much as possible, we would give them status
10 reports. I don't think they really took any action on
11 anything.
12 Q. Okay. But I mean is it your understanding that
13 they needed to approve it or have any of that kind of
14 rule in it rather than just being informed or being a
15 part of the discussion?
16 A. I'll be honest with you, the way the
17 legislature works is, you know, with your short time
18 lines it would not have been feasible, we would have --
19 the board would have had to call emergency meetings.
20 Q. And is there a reticence by them to do such?
21 A. I don't know. I couldn't say.
22 Q. Okay, thank you very much. Thank you.
23 CO-CHAIR REPRESENTATIVE SAIKI: Thank
24 you. Members, we've been going for an hour, so we'd like
25 to give our court reporter a break. We'll take a five
Page 48
1 minute recess. Recess.
2 (Recess.)
3 CO-CHAIR REPRESENTATIVE SAIKI:
4 Members, we'd like to reconvene our hearing, and Co-Chair
5 Hanabusa has asked if she could do her follow up
6 questions at this time. We'll take her out of order.
7 CO-CHAIR SENATOR HANABUSA: Thank you,
8 everyone. Thank you, everyone.
9 BY CO-CHAIR SENATOR HANABUSA:
10 Q. Miss Johnston, my follow up question is
11 regarding an exhibit that we have recently, I believe,
12 secured from you, and I'm doing these questions for
13 authentication.
14 A. Okay.
15 Q. I believe -- I think it was sometime last week
16 that you produced to the auditor's office the DOE
17 superintendent's cellular phone logs. Is that correct?
18 A. I transmitted them -- or I had them ordered
19 from the appropriate office. I didn't myself.
20 Q. You did it yourself?
21 A. I did not do it myself.
22 Q. Oh, you didn't. When you say you ordered it
23 from the appropriate office, are you talking about -- it
24 looks like GTE and Verizon?
25 A. No. I'm sorry. The superintendent's office.
Page 49
1 I made the request to the superintendent's office. They
2 made the request to the telephone company and then I
3 essentially let the auditor's office know the materials
4 were ready to be picked up, so I haven't even seen them.
5 Q. So you didn't review it yourself?
6 A. No, I haven't seen it.
7 Q. Do you know if anyone within the DOE actually
8 reviews cellular phone records?
9 A. I don't know that. No, I don't know.
10 Q. So no one has gone through these documents on
11 the DOE part and actually looked at where the calls were
12 made or to whom the calls were made?
13 A. I don't know if anyone has or not. I don't
14 know.
15 Q. Is there a policy that you're aware of within
16 the DOE or the Board of Education regarding officials or,
17 you know, employees' use of DOE cellular phones for
18 personal use?
19 A. I don't know of a policy. And I don't have a
20 DOE cell phone, so --
21 Q. Do you know who has DOE cell phones?
22 A. I presume various people in the department do.
23 Q. You know that the superintendent has one,
24 right?
25 A. The interim superintendent, I don't know if she
Page 50
1 has one. I know the former superintendent had one.
2 Q. The former superintendent had a DOE cell phone.
3 Do you know what his telephone number was?
4 A. Not right off. No.
5 Q. Not right offhand. But in any event, the
6 information that you requested that was then produced to
7 the auditor's office was the cellular phone records for
8 the former superintendent?
9 A. That's what was requested and that's what I'm
10 hoping was provided.
11 Q. Okay. And as you sit here today, you have no
12 idea about any kind of policy regarding the use of the
13 cellular phone for personal calls and whether the DOE
14 should pay for those calls?
15 A. I don't know a policy.
16 Q. If anyone has a policy, would it be the Board
17 of Education or would it be the superintendent's office
18 itself?
19 A. The first place I would go would be to ask the
20 superintendent's office because I'm -- I'm somewhat
21 presuming that the folks that would be allowed to have a
22 cell phone paid for by State funds had to be leadership
23 type of positions.
24 Q. That makes sense. That makes sense. And so
25 you're not familiar if anyone within the superintendent's
Page 51
1 office actually goes through each of these billings on a
2 monthly basis to determine if all calls are appropriate?
3 A. I don't know that they do that.
4 Q. And as far as you know, the cellular phone
5 bills are paid through State funds, DOE funds?
6 A. I would presume if the bill's presented to the
7 State, the State pays it.
8 Q. Okay. Thank you very much. I have nothing
9 further. I just wanted to authenticate the documents and
10 from your testimony, it seems like maybe Miss Hamamoto
11 should be asked about the specifics. Thank you very
12 much.
13 A. Thank you.
14 CO-CHAIR SENATOR HANABUSA: Thank you,
15 members, for your patience and understanding.
16 CO-CHAIR REPRESENTATIVE SAIKI: Thank
17 you. We'll continue with the members questioning.
18 Vice-Chair Kokubun followed by Representative Ito.
19 VICE-CHAIR SENATOR KOKUBUN: I was
20 going to give Co-Chair Hanabusa my time, but she left so --
21 BY VICE-CHAIR SENATOR KOKUBUN:
22 Q. Miss Johnston, I wanted to just get a better
23 understanding of the Federal funds and how they're to be
24 used.
25 A. Okay.
Page 52
1 Q. You know, we've been talking about some Title
2 4E funds as well. Are you familiar with that?
3 A. A small bit of information. Basically, that
4 they exist and that I know we have reports that talk
5 about them, yes.
6 Q. Okay. But those Title 4E funds are not run
7 through the Department of Education, are they, for foster
8 care, I believe?
9 A. You know, honestly, I wouldn't know. I know
10 that I've seen reports that I thought had that listed as
11 a line item. How it's run through, whether it's run
12 through the department, whether it's through an MOA that
13 we receive them I wouldn't know right offhand.
14 Q. Okay. I mean we have heard testimony that
15 Title 4E funds are used to address some Felix expenses,
16 Felix related expenses, but I don't think it's through
17 the DOE.
18 A. Okay.
19 Q. But we'll look into that further.
20 A. Okay.
21 Q. The Department of Education though does utilize
22 other Federal funds, right?
23 A. That's correct.
24 Q. And they utilize the IDEA funding, for
25 instance?
Page 53
1 A. That's correct.
2 Q. And you know, we got a report from the
3 legislative reference bureau about Federally mandated
4 State programs, and it indicates that the IDEA funds are
5 used actually in areas other than EDN 200 -- I mean EDN
6 100, utilized in like EDN 200, EDN 400 and these are
7 specifically for special education. Are you familiar
8 with that?
9 A. Without seeing a line, I couldn't -- I mean I
10 can think that perhaps it might be to support some
11 administrative personnel that are administering those
12 programs and that's where they're situated, in those
13 EDNs. That would be what I would suspect those
14 expenditures are for.
15 Q. Okay. I guess because I'm trying to figure out
16 now, you know, we're talking about all these separate
17 accounts within --
18 A. Uh huh.
19 Q. -- your budget or the DOE's budget?
20 A. Right.
21 Q. And 150 is specifically for CSSS, is whatever
22 previously and --
23 A. That's correct.
24 Q. And within that CSSS there is the Felix, so I
25 guess I'm trying to get a clearer understanding in terms
Page 54
1 of how these Federal funds are distributed throughout the
2 department's budget.
3 A. Most of the funds I would suspect would show up
4 in EDN 150. There might be some funds that show up in
5 200 and 400, like I said, for administrative expenses,
6 for --
7 Q. Okay.
8 A. -- support for the program. Probably some
9 district level expenses.
10 Q. Okay. I think maybe that's something that I
11 need to follow up on and get some clarification.
12 A. Okay. Okay.
13 Q. Particularly the EDA 504 funds. The other
14 funds, you know, I think are run through -- the Federal
15 funds that are run through the department are like Title
16 7, and that's like civil rights monies for English as a
17 second language.
18 A. I recognize it, I don't know that much about
19 the program.
20 Q. Okay. Well, there was, you know, in the
21 information that we got from Mr. Ito in the impact aid
22 expenditures --
23 A. Okay.
24 Q. -- he also identified Title 6B funds that were
25 also used. It's identified as special ed project one
Page 55
1 through ten.
2 A. Right.
3 Q. Are you familiar --
4 A. I'm familiar with the category. I'd have to,
5 again, see a report to know more about --
6 Q. Okay.
7 A. -- what exactly --
8 Q. Could you get back to us just to explain --
9 A. How they're used?
10 Q. Yeah, specifically.
11 A. So --
12 Q. With restrictions?
13 A. Within the EDNs and how they're used. Okay.
14 Q. Thank you.
15 CO-CHAIR REPRESENTATIVE SAIKI: Thank
16 you. Representative Ito followed by Senator Slom.
17 REPRESENTATIVE ITO: Thank you very
18 much, Co-Chair Saiki.
19 BY REPRESENTATIVE ITO:
20 Q. Good afternoon, Miss Johnston. Miss Johnston,
21 are you familiar with the issue of State payment for
22 medication monitoring?
23 A. For meds monitoring?
24 Q. Yes.
25 A. I mean I know it exists. I don't really know
Page 56
1 who's paying for it right now. I understand there was
2 apparently some discussion about it between the
3 Department of Health and the Department of Education.
4 Q. All right. I have a letter over here from
5 Dr. LeMahieu, on May 14, 2001. This is via Lotus notes.
6 A. Uh huh.
7 Q. Anyway, in this letter, you know, he states
8 that, you know, medical monitoring of treatment services
9 are not appropriate, and that's IDEA. And then the thing
10 got rescinded, the letter, the next day. Do you know
11 anything about this, this memo?
12 A. I don't know about the Lotus notes. I know
13 that there was discussion about who should be monitoring
14 medication given to special education children. There
15 was some discussion, I understood there was some kind of
16 agreement or letter that was signed. I don't know
17 whether anything was rescinded but --
18 Q. Okay. Well, right now the districts are paying
19 for the medication monitoring?
20 A. The districts.
21 Q. For the Felix students, you know, with State
22 funds. And they are not allowed to use Federal funds for
23 this because it's a misuse of those funds. You know, in
24 the Windward District, I have a memo here that they spent
25 $80,000 for medication monitoring during the period of
Page 57
1 July to November 2001. And you know, what happened right
2 now is that the DOE is paying physicians a minimum of one
3 hour at the rate of $120 an hour for their service. In
4 contrast, Mediquest and Medicaid pay physicians for 15
5 minutes to provide medication monitoring. So right now
6 the physicians are switching to DOE payments since the
7 DOE pays at a higher rate. Can you comment on this?
8 A. Other than I don't -- I didn't really know this
9 was occurring. I know that we've been in discussions
10 with the Department of Health about how we can get
11 qualified to get third-party reimbursement and I think
12 we're working on that. All I can presume is that because
13 we're not yet qualified to do that, that we're having to
14 just pay an hourly rate, but yeah, I don't know other
15 than that why we're doing it that way.
16 Q. Okay.
17 A. I wasn't aware that we were doing that.
18 Q. Okay. You know, you know, you use words like
19 lack of communication, fragmentated, you know, because of
20 the size of the DOE structure?
21 A. Uh huh.
22 Q. And you know, when Mr. Koyama was here, he
23 talked about the budget and the accounting departments
24 should be together.
25 A. Uh huh.
Page 58
1 Q. What are your comments on that?
2 A. Actually I think I could argue both positions.
3 It's really interesting if you even look at the State of
4 Hawaii, the department of budget and finance and the
5 department of accounting and general services are
6 separate State agencies. I'm presuming there's a reason
7 why it's that way. I think historically we have always
8 separated budget and accounting functions because you
9 don't want the person who's allocating the funds to also
10 be controlling the expenditure of funds, so I think there
11 is a real logic to that argument. Now, whether because
12 of the technology now we don't really need that, because
13 if you have certain technological, I guess abilities to
14 make sure that, you know, the functions were separate,
15 then maybe it would be okay. Again, I'm not a financial
16 management expert per se, but I can -- I can see the
17 argument both sides. Certainly we do need to do a much
18 better job of trying to bridge our two sections or
19 offices. I think, you know, I wouldn't argue with that
20 at all. Whether they should actually be combined, I
21 might want to get some outside views on that.
22 Q. Did the former superintendent talk to you about
23 reorganization?
24 A. Yes, he did.
25 Q. What happened at the meeting?
Page 59
1 A. He and I did have a discussion about perhaps
2 putting accounting folks in with the budget folks or
3 having them all be in one group, and I -- at the time
4 part of my reticence was frankly I was just trying to get
5 the budget side sort of to a level where I thought we
6 could do some basic budget analysis, and so I wasn't sure
7 that I was ready to take on a whole other task, and part
8 of it was I really wasn't sure if that was the correct
9 thing to do. I think we need to work on our technology
10 side, too, within the department. Our technology
11 infrastructure in my opinion is woefully inadequate, and
12 if we don't put some resources into that, it's going to
13 be kind of hard to do some of the things that I think we
14 need to be doing.
15 Q. Okay. Thank you very much.
16 A. Thank you.
17 REPRESENTATIVE ITO: Thank you very
18 much, Co-Chair.
19 CO-CHAIR REPRESENTATIVE SAIKI: Thank
20 you. Senator Slom followed by Representative Kawakami.
21 SENATOR SLOM: Thank you, Co-Chair
22 Saiki.
23 BY SENATOR SLOM:
24 Q. Good afternoon, Miss Johnson.
25 A. Good afternoon.
Page 60
1 Q. When exactly did you start with the DOE, this
2 position?
3 A. June 2000.
4 Q. June 2000, and you had indicated before that
5 this basically was a new or created position, no one was
6 doing it before?
7 A. That's correct.
8 Q. Okay. Did they approach you or how did that
9 come about?
10 A. Who is they?
11 Q. The DOE? I mean did you apply for a position?
12 A. I applied for a position.
13 Q. Okay, but was it this position specifically?
14 A. That's correct.
15 Q. It was? Okay. You mentioned that one of the
16 responsibilities for this position is to bring in outside
17 money.
18 A. Uh huh.
19 Q. Prior to your taking the position and then
20 afterwards, what was your understanding in terms of what
21 the share or financial responsibility of the Federal
22 government was in the Felix related issue?
23 A. I understood generally that the Federal
24 government was not putting in its fair share. I mean I
25 knew that sort of historically. I think anyone who had
Page 61
1 been paying attention to education, and I had been
2 working in education policy when I was over in the
3 Senate, understood that it was under -- it was an under
4 funded State -- excuse me, Federal mandate.
5 Q. Was the figure 40 percent, was that the figure
6 that people were using originally?
7 A. That was what I believe the original Federal
8 legislation said, that the Feds would provide about 40
9 percent.
10 Q. And the actual figure that was received was
11 around in the neighborhood of nine to ten percent, is
12 that accurate?
13 A. That's correct. That's correct. I think we've
14 never gone into double digits.
15 Q. What, if anything, did the DOE or you in your
16 position try to do to get more of those funds?
17 A. I think we did several things. I know that the
18 former superintendent -- there was a -- there's a
19 national organization, I think council chief State school
20 officers or something, they had, I think, a campaign or
21 whatever to ask the Federal government to improve funds.
22 I had met with some staff at Senator Inouye's office,
23 they're very aware of this. This is not something that I
24 think our Congressional delegation has not been aware of
25 and hasn't been working on. I know that Representative
Page 62
1 Patsy Mink is aware of it, so I think we reiterated that
2 we thought that we deserved more money.
3 Q. But nothing basically came of those efforts?
4 A. Well, it's a -- it wouldn't be just Hawaii that
5 would receive the funds, it would be the entire --
6 Q. And you said our Congressional delegation was
7 aware of it and you were aware that about a month and a
8 half ago, Mrs. Mink made the statement publicly that that
9 40 percent figure was erroneous and that the government
10 made no promise, Federal government made no promise to
11 the States of any amount?
12 A. I'm not aware she said that.
13 Q. Okay. During these hearings and when people
14 were talking about budgeting and so forth, we had a new
15 term that became very prolific. The term was forward
16 funding.
17 A. Uh huh.
18 Q. Now, what does that mean to you?
19 A. Well, actually I first heard forward funding
20 with regards to Federal funds because the Federal
21 government actually does that to a certain degree. For
22 instance, the current Federal fiscal year, which started
23 October 1, actually by the time I guess legislation gets
24 finalized and the monies get out to the states, we won't
25 receive monies until May or June of next year. So the
Page 63
1 Federal government does some bridging of some funding.
2 They have the capacity to do that, I'm presuming, so my
3 understanding of Federal funding was from actually --
4 excuse me, forward funding was from the Federal level, so
5 I was presuming it was a similar type of mechanism that
6 we were talking here at the State level, which would be
7 we would be receiving funds ahead of what we anticipated
8 we needed to be spent.
9 Q. And when we were talking about emergency
10 appropriations and all, are you anticipating asking the
11 2002 legislature for emergency funding?
12 A. I think you'd probably want to direct that to
13 the superintendent. I think that's her call.
14 Q. Okay. And finally, you did go through the
15 budget process for us, which was very helpful. But I
16 didn't hear anywhere in there the schools, any
17 involvement that the schools have or the Board of
18 Education or the district offices or anyone else in
19 actually creating the budget. Do they have a role? I
20 heard you talk about informing them and giving them
21 information, but do they have a role in creating the
22 budget?
23 A. No, actually, let me step back. The request --
24 the request is built upon information that is derived
25 from program managers and school level. We sent out the
Page 64
1 information electronically, they resubmit it to us, so
2 actually, they are on the front end of it. The district
3 superintendents do review after all this is compiled, the
4 request before we actually take it to the board, so they
5 are involved now. We don't do -- and I guess this is
6 what I was trying to clarify, we do not do school by
7 school budgeting in this State, so not every school will
8 submit a budget request to us. That's correct.
9 Q. All right. Thank you, Miss Johnston.
10 SENATOR SLOM: Thank you, Co-Chair.
11 CO-CHAIR REPRESENTATIVE SAIKI: Thank
12 you. Representative Kawakami followed by Senator Buen.
13 REPRESENTATIVE KAWAKAMI: Thank you,
14 Co-Chair Saiki.
15 BY REPRESENTATIVE KAWAKAMI:
16 Q. Hi.
17 A. Good afternoon.
18 Q. Miss Johnston, I wanted to ask you first of
19 all, the service testing, is that test that is used paid
20 by the DOE?
21 A. I've been told that it is. I don't know. I
22 don't have anything with me today. I understand that we
23 have expended funds for service testing.
24 Q. Do you know how much, round figures?
25 A. I don't have that.
Page 65
1 Q. What it cost?
2 A. I don't have that with me. Sorry.
3 Q. You don't have that. Okay. Are we -- they're
4 moving now toward a cadre of testers. I understand that
5 testers were various people, am I correct?
6 A. Right. That's my understanding.
7 Q. And for consistency, I guess they're looking
8 toward a cadre that would go out and do the testing and
9 move on and do the testing and so forth?
10 A. Uh huh.
11 Q. Is that true? Is that how we're moving?
12 A. You know, I have to tell you, I'm not involved
13 in the program level.
14 Q. Okay.
15 A. I've heard that that's the direction, just
16 because I happened to be in a meeting where it came up,
17 but I'm not really involved in those decisions.
18 Q. Okay. But the monies for them come through the
19 monitor, is that it? You don't see any of this then?
20 A. All I know is that we have -- we have a program
21 ID, within that program ID we do pay for service testing
22 expenses, whether it's for these people or the
23 instrument.
24 Q. But you --
25 A. I'm presuming there's some kind of cost
Page 66
1 attached to it.
2 Q. But there is costing that is --
3 A. Right. We do pay for service testing costs.
4 Q. Okay. The other question I wanted to ask was
5 on enrollment changes in schools now --
6 A. Uh huh.
7 Q. -- is there a threshold before they receive
8 more money? Let's say students move from school to
9 school, etc. Is there a threshold so that I can get, you
10 know, more money for that school because let's say
11 substantially it drops?
12 A. Right.
13 Q. For some reason or other.
14 A. Again, most of the budget that's attached to a
15 school is in personnel, and personnel counts are attached
16 to enrollment figures. So if an enrollment were to
17 substantially drop, the personnel count or the allocation
18 would drop. Where those positions would go, I guess we
19 would have to make the adjustments and that is what the
20 personnel office does.
21 Q. So you don't see that?
22 A. I don't, no. The personnel allocations are
23 done through the personnel office.
24 Q. Okay. The other question is the per capita
25 spending per special ed child versus a regular ed child?
Page 67
1 A. Uh huh.
2 Q. Do you have those figures? This is always
3 asked and I know they compare us to the mainland.
4 A. Yeah.
5 Q. Etc.
6 A. I know that when we do the year end financial
7 report, that's Mr. Chris Ito's office, he does do a
8 figure for that. I don't think it's done yet. I think
9 it's usually wrapped up right about now. I think it's
10 published -- there's no date on the last one I have.
11 Well, yeah, January, so it should be coming out in
12 January. We do it per pupil.
13 Q. January. The last question I have has to do
14 with the Columbus contract.
15 A. Uh huh.
16 Q. You also -- there's the Sun Belt contract?
17 A. Right.
18 Q. And the EPS contract, etc.?
19 A. Right.
20 Q. And I was wondering are those contracts -- do
21 you get to see those? Not at all?
22 A. Not through the normal course of business. If
23 I happen to be in a meeting where it's being talked
24 about, maybe it's shared, but it's not like it comes
25 through my office.
Page 68
1 Q. I see. Okay, we'll save it for Miss Hamamoto.
2 A. Okay.
3 Q. Thank you.
4 A. Thank you.
5 REPRESENTATIVE KAWAKAMI: Thank you,
6 Chairman.
7 CO-CHAIR REPRESENTATIVE SAIKI: Thank
8 you. Senator Buen followed by Representative Leong.
9 SENATOR BUEN: Thank you, Co-Chair
10 Saiki.
11 BY SENATOR BUEN:
12 Q. Thank you, Ms. Johnston, for being here today.
13 A. Sure. Thank you.
14 Q. My question is in the positions -- in positions
15 hired by the DOE, can you tell me how many positions are
16 there in regards to special education teachers and
17 educational special ed, educational assistants and the
18 numbers for the State? And can you tell me were these
19 types of positions -- what's the amount paid by the DOE?
20 A. Okay. I don't have that with me. Do you mean
21 like teaching positions and educational assistant
22 positions? You mean any position that's funded through --
23 Q. EDN 150?
24 A. EDN 150, or I mean I can get it for you but I
25 guess I just want to make sure I'm going to get you the
Page 69
1 right information, so any position that's funded through
2 150 and you want to know salary --
3 Q. Yeah.
4 A. -- levels. Okay. I'll work on it. I'll try,
5 I can tell you that the department of budget and finance
6 has been trying to get that for awhile, too, but I have
7 to work through the personnel office to get that.
8 Q. Okay. Thank you. I've got -- the other
9 question that I had was when Mr. Kawashima was asking you
10 about the unspent monies and all the EDN 200, 300 and
11 400. There was unspent monies in each of these EDNs?
12 A. Uh huh.
13 Q. I just want to get it clear in my mind whether
14 these monies that are unspent all go into EDN 100? Is
15 that how the budgeting works in the DOE?
16 A. Right. The law prohibits us from moving EDN
17 100 or EDN 150 monies into the other IDs. However, we
18 are allowed to carry over five percent from fiscal year
19 to fiscal year, moving EDN 200, 300, 400, 500 funds into
20 100. That is what we try to do and the department of
21 budget and finance did not approve that. So that's why
22 we lapsed monies in those areas.
23 Q. Oh, okay. Okay. Now I understand. Thank you.
24 I have no other questions.
25 CO-CHAIR REPRESENTATIVE SAIKI: Thank
Page 70
1 you. Representative Leong followed by Senator Sakamoto.
2 REPRESENTATIVE LEONG: Thank you.
3 BY REPRESENTATIVE LEONG:
4 Q. Good afternoon.
5 A. Good afternoon.
6 Q. A testifier previous to you brought up the
7 subject of impact aid.
8 A. Uh huh.
9 Q. And we know that impact aid has been running
10 from nine to twelve million a year for the last three
11 years. My question is how has the department used the
12 money, impact aid?
13 A. Okay. Impact aid, actually we've received a
14 bit more than that, and let me just explain first a
15 little bit how we get it. It is attached to children of
16 Federal employees who either live on base or, you know,
17 are somehow attached to the Federal government. I have
18 something kind of generic -- oh, wait. We're just
19 actually -- we were just -- I was just finalizing the
20 reports to you folks because we do do annual reports to
21 you folks that you'll be getting shortly on all the use
22 of Federal funds. We do annual reports, so you'll be
23 getting it. I can tell you what we allocated funds for
24 in this last fiscal year. Instructional materials was
25 one area, reading improvement projects was another,
Page 71
1 autism, which you're aware of, Office of Hawaiian
2 Studies, now, I want to say that Office of Hawaiian
3 Studies funds, some of you may or may not be aware, we
4 have a settlement agreement with the Office of Hawaiian
5 Affairs where we have to dedicate a certain amount of
6 money each year. We are allowed to use other than State
7 funds. We are allowed to use other Federal funds or
8 private funds if we need. We do have to put in
9 additional funding every year, so that's what we use
10 there for Office of Hawaiian Studies. We use some funds
11 for computer education, safety managers, student
12 transportation, computer costs, gender equity, so I mean
13 I have a listing, and again, you folks will be getting
14 this.
15 Q. Okay. And who disburses these funds? Is it
16 one department or could it be --
17 A. The budget office does allocate the amount and
18 then as far as who expends it, again, whoever the program
19 manager is for these particular programs receiving the
20 funds would go ahead and spend the monies and then it's
21 paid through the accounting office, Mr. Chris Ito's
22 office.
23 Q. I recall having heard that Dr. LeMahieu could
24 have used this impact funds to help pay the teachers'
25 salaries.
Page 72
1 A. I believe that the impact aid funds were
2 offered by the former superintendent during negotiations
3 to pay for not salary, I think it was the bonus.
4 Q. Yeah. So that would be possible, that could
5 have been possible?
6 A. I don't know that I have an opinion or a
7 comment on that. I don't know. I didn't -- I don't know
8 legally if that's possible or not.
9 Q. And I just have another question. Mediation
10 office was set to be funded in the -- to be funded by the
11 technical targeted assistance emergency budget request.
12 What is the function of this office?
13 A. I know that there is a current mediation
14 office, I don't know if it's the same one, so I'll tell
15 you what the current office does, and the current
16 mediation office has been set up to hopefully help with,
17 my understanding, particularly contentious IEPs before
18 they go to due process hearings, and also, you know,
19 other areas within the department where we're trying to
20 prevent grievances and that kind of thing.
21 Q. I see. Could you name the director of this
22 office?
23 A. I think it's Mr. Paul Brown.
24 Q. Paul Brown. All right. Thank you. And thank
25 you for answering my questions.
Page 73
1 A. Okay.
2 REPRESENTATIVE LEONG: Thank you,
3 Chair.
4 CO-CHAIR REPRESENTATIVE SAIKI: Thank
5 you. Senator Sakamoto followed by Representative
6 Marumoto.
7 SENATOR SAKAMOTO: Thank you, Chair.
8 BY SENATOR SAKAMOTO:
9 Q. I apologize if some of the questions you've
10 covered before, but in any event, you know me, I want the
11 answers brief. I guess since impact aid has come into
12 question on the use of funds, in the past the department --
13 the recent past has always underestimated or
14 underestimated what we would receive and the legislature
15 in what they thought was their wisdom decided to let the
16 department keep the extra. As we go forward in light of
17 what has now transpired, how can you better estimate what
18 the funds are so we don't call into question how we use
19 or misuse the overage?
20 A. I do know that the Federal program managers
21 were here and they were looking at our collection of
22 information. I believe they're going to prepare some
23 kind of report, I don't know if there will be some
24 recommendations in there. My understanding is we have a
25 fairly high, over 90 percent return rate, so I'm not sure
Page 74
1 why our numbers would be so far off. I will ask.
2 Q. Okay. Next question, in your budgeting which
3 is your responsibility as opposed to who pays what bills,
4 the hope would be from the system that we can maximize
5 Federal funds on one of the -- as we shift from
6 Department of Health to Department of Education, some of
7 what the department was trying to collect in Federal
8 reimbursements was called into question, but now as some
9 of those services shift to the DOE, my understanding was
10 the DOE isn't set up to receive Federal reimbursement.
11 What are we currently doing to be able to receive Federal
12 reimbursement and maximize Federal funds?
13 A. I have to say I'm not sure what we're doing to
14 try to get funds. I know we were trying to get into the
15 position to be able to be someone who -- or an agency
16 that can receive reimbursements. Right now we can't,
17 we're not set up to do that.
18 Q. How are you going to budget for that?
19 A. I'm not really sure.
20 Q. Thank you. The next issue I guess was
21 addressed with Rep Ito on, you know, with the budget
22 office on the left hand, expenditure office on the right
23 hand. In light of some of the issues that have arisen
24 over the past few weeks, in a concise manner, how do you
25 hope from your perspective to have the two parties at
Page 75
1 least know what the other party's doing in a more timely
2 manner?
3 A. I think probably this investigative committee
4 has pointed out to the offices that they need to start
5 working together a little bit more closely. From my
6 position, I have now become aware that when I discuss
7 certain things, I need to make sure that all the
8 different bodies and people are there when we have these
9 discussions, so they understand that they need to be
10 sharing information and that all the information needs to
11 be there at one time. I would maybe direct that to our
12 interim superintendent, maybe she wants to
13 institutionalize that somehow.
14 Q. Okay. In previous testifying, many people say
15 their job is to count the dollars or quantify measures,
16 but few people, if any, said their job was to do quality
17 and performance results. In the budgeting obviously more
18 bang for the dollar is a quality issue. How do you -- or
19 what steps are you taking so we cannot just say we need
20 more of this but we're getting quality of this as we move
21 forward?
22 A. I did -- I did mention earlier that I've asked
23 the budget staff to go back over the EDN 150 budget to
24 see how we could possibly better use funds that are
25 currently allocated there. As far as evaluation of the
Page 76
1 actual quality of the programs, I can only reiterate what
2 I've heard that hopefully will be a useful tool for us,
3 which is the ISPED system. It is supposed to have in it
4 qualitative data that we're going to be able to use to
5 see how kids are doing. How that's going to be tied to
6 the money I think we still have to work out.
7 Q. Okay, I'm glad you're working on all of this.
8 One more question. Many times the one size fits all
9 formula, 550 and you get a VP 549 none, this many
10 students, you get a teacher, one less you get no teacher,
11 there's been a lot of consternation over the one size
12 fits all but it doesn't fit me, and obviously that's part
13 of the budgeting process.
14 A. Uh huh.
15 Q. What changes are you proposing, whether it's
16 Felix or regular ed so we can have a better fit and less
17 people feeling the one size fits all doesn't fit me, him,
18 her?
19 A. You raise a good point that does apply to the
20 entire department. I guess I do agree that one size fits
21 all is not necessarily the way to go. I think we're
22 somewhat a little bit conflicted or stuck again in that
23 role of being a State agency and also a school system
24 because we are again required by State law to submit our
25 budget and to formulate our budget according to State law
Page 77
1 as a State agency. Is that the best way that a school
2 system should be doing its budgeting, I think maybe
3 that's a good question. I know that certain other
4 states, at least in their provision of State dollars to
5 school -- local school districts have very sophisticated
6 formulas in doing that. I'm not a person that could do
7 that, but I'm saying maybe we should look at least some
8 kind of formula driven way of giving funds. One of the
9 current discussions at the national level is equity of
10 funding versus adequacy of funding.
11 Q. Like it's A in equity. We're not getting A in
12 adequacy. Maybe the last question then, in light of all
13 of what's occurred and in this case bringing to mind
14 issues where we need to improve, and you know, I'm glad
15 you're saying you work -- we'll work on many of those, as
16 you budget, how can you help develop what benchmarks,
17 outcome indicators we can use as targets so that
18 everybody's pointing to the same measure and willing to
19 use dollars wisely at targets that are meaningful? How
20 can you help us?
21 A. That's tough.
22 Q. Ask the superintendent?
23 A. No, no, no. You know, some people I guess
24 would debate what is our product and who do we serve. To
25 me our product are the students, that is our product.
Page 78
1 And is it a quality product or not, that would be based
2 on I guess what we show as the inputs and I guess the
3 outputs. That's a rather simplistic view of it to some
4 degree though, and I know that we have been asked or we
5 have been asking the schools to develop their standards
6 and implementation designs to make sure their curriculum
7 and their programs are aligned to the standards, as well
8 as the State offices have now been asked to do that. My
9 office has been going through that. Part of that is
10 developing performance measures. Maybe that will help
11 get us to where you would like to be.
12 Q. More work. Okay, thank you.
13 SENATOR SAKAMOTO: Thank you, Chair.
14 CO-CHAIR REPRESENTATIVE SAIKI: Thank
15 you. Representative Marumoto.
16 REPRESENTATIVE MARUMOTO: Thanks.
17 BY REPRESENTATIVE MARUMOTO:
18 Q. Laurel, I'm kind of surprised. Representative
19 Kawakami said that, you know, you may hear the -- during
20 the course of conversations and meetings that you hear
21 about certain contracts like the Columbus or the Sun
22 Belt. Yet the Columbus contract was 100 million dollars
23 over three years.
24 A. Uh huh.
25 Q. And does anybody ask you whether this fits in
Page 79
1 the budget?
2 A. When we were developing the Felix response plan
3 budget, again, we were developing it based on what we
4 thought we needed to make sure we achieved all the
5 benchmarks. My understanding is there was some
6 preliminary investigation into how we could meet those
7 benchmarks, that we needed to use private recruitment
8 firms, this was the firm that was selected or responded,
9 and that those were the numbers that were given to help
10 us get to where we needed to go. Unfortunately, I guess
11 I don't have a basis upon which to evaluate whether those
12 are good services or realistic. We were putting together --
13 actually I called it more of an expenditure plan really
14 than a budget because we were basically told we have to
15 do these things and find a price tag, I mean you know,
16 like what is the price tag to do these things.
17 Q. Well, yeah. It wouldn't, you know, have you
18 judge the quality of the services, but just the amounts,
19 do they clear these amounts for you, you know, are they
20 part -- do you make sure they're budgeted items?
21 A. Well, in the Felix response plan, again, that's
22 why we went in for an emergency appropriation, because
23 there weren't funds in our minds that were going to be
24 available to cover that expense, not a large expense like
25 that.
Page 80
1 Q. I have -- you said that Federal funds impact
2 aid is allocated proportionately, is that the words that
3 I heard you use?
4 A. I believe Senator Hanabusa was saying that's
5 what the law requires. I guess I'm not -- obviously not
6 familiar enough with it to render an opinion, and like I
7 said, since I'm not an attorney I don't want to give a
8 legal interpretation of it.
9 Q. But as the budget person, you make sure it's
10 budgeted proportionately?
11 A. No, we -- to my knowledge we haven't done that.
12 Q. I was concerned about any -- well, the same
13 concern that Senator Sakamoto expressed. Do you get --
14 you estimate how much comes in, and then if it's more
15 than that, where do the funds reside and who has control
16 over its expenditures?
17 A. When we find out we have excess funds, again,
18 we have to go to the governor to request permission and
19 we submit a list. We attach a list of things that we
20 wanted to use the funds for to the governor and the
21 governor approves the memo and then again, we send it
22 through the board and they approved it as well.
23 Q. So it goes into EDN 100 and it's expended from
24 there?
25 A. That's what this particular one was. Yes.
Page 81
1 Q. I was a little upset with some of the money
2 that went from 100 into 150 to the PREL contract which
3 was then a portion given to Na Laukoa, and that was given
4 to certain complexes in special education. Now, I was
5 just wondering whether that was spent proportionately
6 because it was more maybe directed toward the neighbor
7 islands whereas, you know, most of the population is
8 here, so I don't -- I was just wondering whether, you
9 know, you're always certain that the money is spent
10 correctly and proportionately?
11 A. Again, I guess I would want to ask probably an
12 attorney for an interpretation of what proportionally
13 means, whether it means by population or whether it means
14 by the way the budget is structured. My understanding of
15 why technical assistance went to certain complexes was
16 because they were the ones that needed more help than
17 others and --
18 Q. Obviously there was a need. It's just that it
19 was -- happened to be impact funds that were given for
20 the entire PREL contract?
21 A. Uh huh. That's correct.
22 Q. And if the board okay'd it, well, you know, I
23 suppose it's okay?
24 A. Well, the board -- let me clarify. The board
25 okay'd that we could use impact aid for targeted
Page 82
1 technical assistance.
2 Q. Okay. I was just wondering whether some of the
3 funds were perhaps under the purview of the
4 superintendent, whether he was able to direct the funds
5 on his own.
6 A. Okay. I guess --
7 Q. Given his super powers?
8 A. Well, his super powers extended to procurement
9 and certainly contracts, so I'm presuming yes, he had the
10 authority to do that.
11 Q. How do you show the surplus on paper, do you
12 budget in the following year?
13 A. The surplus in Federal funds?
14 Q. Federal funds.
15 A. Yes. It's shown as funds that will be rolled
16 over into the next fiscal year, that's correct.
17 Q. Okay. Thank you very much.
18 A. Okay.
19 CO-CHAIR REPRESENTATIVE SAIKI: Thank
20 you.
21 BY CO-CHAIR REPRESENTATIVE SAIKI:
22 Q. Miss Johnston, I just have a few questions.
23 Have you -- I know you started in June 2000, but have you
24 been involved with -- in attending status conferences or
25 meetings with the court monitor?
Page 83
1 A. No, I've only been to a couple court hearings
2 that were public.
3 Q. So you've never attended meetings conducted by
4 the court monitor?
5 A. With the monitor? I think I sat in a meeting
6 in which the monitor was there. I don't think the
7 meeting was specifically called by the monitor. I don't --
8 you know, one time I remember being in a meeting and he
9 was there.
10 Q. Are you aware of the frequency at which the
11 monitor meets with parties to the consent decree?
12 A. No.
13 Q. You're not aware?
14 A. No.
15 Q. Are you generally aware with how the benchmarks
16 and FRP were formulated?
17 A. How they were formulated, no.
18 Q. Well, are you familiar with how they've been
19 revised since June 2000?
20 A. I know that the court revised them upon I guess
21 recommendation of the monitor. I do know that, but why
22 they were revised that way I don't know.
23 Q. Do you know whether the DOE had input in the
24 revision of those benchmarks or the FRP?
25 A. I don't know. I would presume they did, but I
Page 84
1 don't know that for a fact.
2 Q. As part of your responsibilities at DOE, do you
3 know -- do you know whether or not anyone is charged with
4 insuring that benchmarks or implementation plans or the
5 FRP provisions conform to IDEA, and by that, I mean
6 whether or not these implementation plans may go beyond
7 the requirements of IDEA from an accounting perspective
8 as well?
9 A. Okay. I'm going to have to ask you to repeat
10 it because I heard maybe two questions in there so --
11 Q. Well --
12 A. I'm sorry.
13 Q. Just to your knowledge, is anybody at DOE
14 charged with insuring that benchmarks or implementation
15 plans not exceed Federal requirements?
16 A. Not exceed Federal requirements. I have to say
17 I don't know. I mean there may be someone, but I don't
18 know.
19 Q. You're not sure?
20 A. I don't know.
21 Q. Have you ever wondered though in evaluating
22 benchmarks whether or not benchmarks conform to Federal
23 law?
24 A. Okay, you're talking about the benchmarks in
25 the contempt order?
Page 85
1 Q. Benchmarks or the FRP provisions, any
2 implementation plans?
3 A. Have I wondered if they comport with it or --
4 Q. Right.
5 A. I guess I'm presuming that there are people
6 that have worked in this area that know a lot more about
7 the details of IDEA than I do, and so no, I guess I've
8 never wondered about that.
9 Q. You had mentioned that you had worked on the
10 funding for the FRP, for the FRP provisions last year?
11 A. Uh huh.
12 Q. And one of those provisions was for targeted
13 technical assistance?
14 A. Uh huh.
15 Q. Do you know how much of a priority was -- how
16 much priority did the DOE place in that specific FRP
17 provision?
18 A. How much -- you mean was it more important than
19 others?
20 Q. Right.
21 A. No. When I arrived, there were these twelve
22 areas -- twelve FRPs, as we call them, and I didn't hear
23 that one was any more important than others except as
24 they directly related to certain benchmarks.
25 Q. Well, do you know whether or not, for example,
Page 86
1 whether or not the superintendent spent more of his time
2 on certain provisions of the FRP than others, personal
3 time?
4 A. His own time?
5 Q. Right.
6 A. No, I don't know.
7 Q. How closely did you work with the court --
8 superintendent?
9 A. The superintendent himself?
10 Q. Right.
11 A. I guess as closely as any of the other
12 assistant superintendents. I mean I would go to meetings
13 and I mean I don't think any differently than anyone
14 else.
15 Q. Do you know what kind of relationship the court
16 monitor had with parties to the consent decree through
17 your observations?
18 A. Parties to the consent decree meaning the --
19 Q. Plaintiffs' attorneys?
20 A. Plaintiffs'?
21 Q. Department heads?
22 A. Relationship of the monitor to those people?
23 Q. Right.
24 A. I mean I don't know.
25 Q. You have no idea based on your observations?
Page 87
1 A. I've never -- I mean I know who the plaintiffs'
2 attorneys are through other contacts. I've never seen
3 them in the DO -- in the building. I mean I've never
4 seen them in there. I've never been in meetings with
5 them.
6 Q. Have you ever been contacted by members of the
7 Federal monitor's office or the consultants to that
8 office concerning implementation of benchmarks or funding
9 for -- or funding of implementation plans?
10 A. Have I been contacted by them?
11 Q. Right.
12 A. I think I spoke to Dr. Groves once. He needed
13 a budget number. I mean you know, like how much had been
14 appropriated for a report, but I mean other than that I
15 haven't talked to him about money.
16 Q. Well, you know, this is as a general question.
17 A. Yes.
18 Q. How much do you know about the Felix Consent
19 Decree? I mean --
20 A. How much do I know about it?
21 Q. How much of your job is tied into the consent
22 decree?
23 A. More than I would like.
24 Q. Okay. Thank you.
25 CO-CHAIR REPRESENTATIVE SAIKI:
Page 88
1 Members, are there any follow up questions?
2 SENATOR BUEN: Yes.
3 CO-CHAIR REPRESENTATIVE SAIKI: Senator
4 Buen.
5 SENATOR BUEN: Thank you.
6 BY SENATOR BUEN:
7 Q. Miss Johnston, in your work in providing the
8 positions for the EDN 150, can you give it to us by cost
9 and by cost categories, and these would include cost --
10 the contract costs and equipment as well?
11 A. Okay. So you want salary and associated --
12 Q. Right.
13 A. -- costs, okay. And I want to get clear, this
14 is for DOE employees as well as contract employees.
15 Q. Yeah.
16 A. Is that correct? Okay.
17 Q. Thank you.
18 CO-CHAIR REPRESENTATIVE SAIKI: Thank
19 you. Members, any other follow up questions?
20 SPECIAL COUNSEL KAWASHIMA: I have
21 none.
22 CO-CHAIR REPRESENTATIVE SAIKI: Okay.
23 Members, since we have no further questions, we'll
24 adjourn for the day and we will reconvene tomorrow
25 morning at nine a.m. We're adjourned. Thank you.
Page 89
1 (Hearing concluded at 3:15 p.m.)
Page 90
1 C E R T I F I C A T E
2 STATE OF HAWAII )
3 ) SS.
4 CITY AND COUNTY OF HONOLULU )
5 I, SHIRLEY L. KEYS, Notary Public, State of
6 Hawaii, do hereby certify:
7 That the hearing was taken down by me in
8 machine shorthand and was thereafter reduced to
9 typewriting under my supervision; that the foregoing
10 represents to the best of my ability, a true and correct
11 transcript of the proceedings had in the foregoing
12 matter.
13 I further certify that I am not an attorney
14 for any of the parties hereto, nor in any way concerned
15 with the cause.
16 DATED this ______ day of _____________, 2001,
17 in Honolulu, Hawaii.
18 ______________________________
SHIRLEY L. KEYS, CSR 383
19 Notary Public, State of Hawaii
My Commission Exp. May 19, 2003
Page 91