SCR122.DOC

WHEREAS, there have been numerous legislative measures passed and other actions taken to help improve Hawaii's failing public school system; and

WHEREAS, a child enrolled in Hawaii's public school system is just as capable of achieving educational success as any other child enrolled in any other public school system in this nation; and

WHEREAS, Hawaii's public school teachers are just as proficient and capable as other public school teachers in the nation; and

WHEREAS, the Department of Education, in 2010, received a quarter of the State's general fund appropriations, the largest of any state agency; and

WHEREAS, The Department of Education's funding in 2008 was over $2.5 billion. In 2009, it was almost $2.6 billion. During the recession in 2010, it was well over $2.4 billion; and

WHEREAS, according to the 2010 Superintendent's 21^ST Annual Report, per student costs continued to increase from $8,997 per student in 2005, to $9,876 per student in 2006, to $11,060 per student in 2007; and

WHEREAS, according to the Superintendent's Report, the national assessment of student progress in targeted grade levels confirms that many Hawaii public school students generally score below the national average in reading and mathematics; and

WHEREAS, PricewaterhouseCoopers LLP, an independent accounting firm, said in a 2005 audit of Department of Education programs that "the lack of transparency made it difficult, and in some cases impossible, to determine whether many public-school programs were achieving their objectives and whether taxpayer dollars were being spent wisely," and went on to say that "roughly one-third of the department's 278 state-funded programs had inadequate systems in place to monitor their effectiveness and at least one in five suffered from insufficient oversight of program spending and many programs completely lacked either;" and

WHEREAS, PricewaterhouseCoopers LLP further noted that "though the department's budget has grown steadily in recent years to the current $1.78 billion, much of the increase has been due to the mounting cost of employee benefits and to court-mandated spending on special education;" and

WHEREAS, the PricewaterhouseCoopers LLP audit's results concluded that it was often impossible to tell whether spending aligned with each program's purpose, noting that funds were often instead used to address urgent school needs such as classroom supply shortages; and

WHEREAS, the legislative Auditor, in 2006, made its first audit of the management practices and controls of the Department of Education at Kailua High School, which uncovered numerous managerial and financial problems; and

WHEREAS, the audit concluded that the Department of Education had not provided adequate support to Hawaii's public school system, including Kailua High School, in the implementation of the No Child Left Behind Act, and in the management of school programs and assets; and

WHEREAS, the legislative Auditor determined that the Department of Education had not provided Hawaii's public school system with the support and resources needed to achieve the goals of the No Child Left Behind Act; and

WHEREAS, the legislative Auditor stated "the measures that the Department of Education uses to determine the effectiveness of its budget are irrelevant, inaccurate and ambiguous...and are based on assumptions, estimates, and unverified data." Further, the legislative Auditor concluded that "as a result, legislators are denied potentially valuable information, and some may be basing their fiscal decisions on flawed data;" and

WHEREAS, the Department of Education's last comprehensive audit of the entire organization, management processes, and personnel administration happened thirty-eight years ago, in 1973; and

WHEREAS, the Department of Education's spending, administrative, and managerial practices need to be reviewed and resolved before an increase in funding from the Legislature is warranted; now, therefore,

BE IT RESOLVED by the Senate of the Twenty-sixth Legislature of the State of Hawaii, Regular Session of 2011, the House of Representatives concurring, that the Office of the Auditor conduct a comprehensive financial and management audit of the Department of Education; and

BE IT FURTHER RESOLVED that the results of the Office of the Auditor's audit of the Department of Education, along with findings and recommendations, be reported to the Hawaii State Legislature and the governor at least twenty days prior to the beginning of the 2012 legislative session; and

BE IT FURTHER RESOLVED that certified copies of this Concurrent Resolution be transmitted to the Office of the Auditor, the Department of Education, and the Board of Education.

	OFFERED BY:	_____________________________

Report Title:

Department of Education Financial and Management Audit

THE SENATE	S.C.R. NO.	122
TWENTY-SIXTH LEGISLATURE, 2011
STATE OF HAWAII