Amy Kunz

Amy Kunz is assistant superintendent and chief financial officer of the Hawaii Department of Education, which means her responsibilities each day are considerable.

The department, which she joined a little more than a year ago, manages about 250 schools attended by more than 180,000 students. Its annual operating budget is about $1.76 billion, or about a third of the state’s general fund budget; its payroll covers about 22,000 employees, about a quarter of all state government employees.

Handling all that money, and dealing with the paychecks of that many employees, puts Kunz in the spotlight occasionally, as people want to know how various cases of employee embezzlement could have occurred, or why there has been overpayment of wages to some workers that often cannot be recouped.

Those kinds of questions she can answer; others fall outside her purview, such as why it seems to cost so much to provide student bus transportation — that issue apparently falls under the department’s Office of School Facilities and Support Services (OSF).

Kunz makes a persuasive case that some of the department’s problems will be solved once more modern computers and software are installed. Currently, she said, the department is working with virtually ancient technology — 20 to 30 years old — which requires much of the department’s financial work to be done manually.

Before joining the DOE, Kunz had worked in the newspaper business, starting in Nebraska and Nevada, then moving to Hawaii in 2000 to work as controller and director of budget and analyses for The Honolulu Advertiser. She worked there until it was sold in May 2010, after which she worked on special projects for Gannett Co. Inc., before joining the DOE.

Kunz has a bachelor’s degree in comprehensive business administration from the University of Nebraska at Kearney. Her high school alma mater is Sidney High in Sidney, Neb.

Now "almost 40," Kunz lives in Kailua with her husband, Tom, and their two sons (ages 8 and "almost 5") as well as with her mother and grandmother (age 95). She also is a member of the Parent, Teacher, Student Association at Aikahi Elementary, where her children attend school.

"We have very active parents there," she said, "and they’re excited to want to help."

Question: How would you describe what you do at the DOE?

Answer: I’m over five departments. There’s three key ones, so I’m in charge of the Budget Branch, which does both execution and development; the [Accounting] County Services Branch, which processes vendor payments and payroll and general ledger; and then the Procurement and Contracts Branch.

Q: So you’re not just keeping the books; you’re actually directing policy, perhaps?

A: Yes, directing policy, being involved with planning decisions, implementation of objectives and tasks.

Q: Is it part of your duties to appear before the Board of Education?

A: Yes. I actually am the liaison with the Finance and Infrastructure Committee, the FIC committee. I am the liaison to the chairman, Wesley Lo. That committee actually has oversight, if you will, of my office, the Office of Fiscal Services; Ray L’Heureux’s office, OSF, which is the Office of School Facilities and Support Services; and also David Wu of OITS, the Office of Information Technology Services. The acronyms of the DOE are amazing.

Q: Could you explain briefly the process by which the DOE determines how much money it needs for each year and then how it obtains that from the Legislature?

A: We receive our budget instructions for the biennium budget from the governor’s office via Budget and Finance. They provided us a ceiling number that actually matches the ceiling for this fiscal year before restrictions. So then we have been going through a very detailed process for the last two months, since like July, in pulling together our budget, and really looking at programs and verifying how they align with our strategic plan, and determining the initiatives and the Race to the Top, because the Race funds end in the middle of biennium, in fiscal year 2014. Then we needed to make sure that any Race initiative that needed to continue was built into the budget for that second year of the biennium. So we’ve really gone through to challenge the programs, to make sure that they are, you know, not just doing things the same way they’ve always done them, and that they really are looking at the strategic plan and are aligning their program plans with that.

Q: Who comes up with the strategic plan?

A: The strategic plan has been developed over the last, almost year, I think. It’s been in cooperation with the Department of Education and the Board of Education.

Q: After you align with the strategic plan, then what — you go to the Legislature?

A: Ultimately, we have to have the Board of Education review our budget for what actually gets submitted to the governor and Budget and Finance. Then the governor reviews the budget and either approves or adjusts it before it goes to the Legislature.

Q: So then does that mean the governor or one of his people is down there arguing for your case, or does Schools Superintendent Kathryn Matayoshi and other DOE officials go down there? How does that work?

A: In front of the Legislature, we do some informational briefings for them, to make them aware of how we built our budget and the major driving factors in the budget, and express to them our needs and concerns and any issues we have. And the during Legislative session, we are testifying to again request any additional funds or answer questions the legislators may have about our budget.

Q: Have you had that experience of going down to the Legislature yet?

A: Yes, I did do that during the legislative session that ended in April or May of this year.

Q: And how does it usually end up? Do you all get what you want, or is it usually less than what you want?

A: It really depends on the whole state’s financial picture, what the legislators feel comfortable in funding, their priorities. So we go tell our story and justify best that we can, to make sure that the Department of Education is resourced properly, so that we can run our programs and that the money’s getting to the schools and the teachers and supporting that learning in the schools.

Q: Since you’ve only been in your job for about a year, I guess you’re not in a position to comment on whether life is better under the BOE now that its members are appointed versus when they were elected, are you?

A: No, I don’t have prior experience with the elected board.

Q: What’s your sense, though? Do you feel like it’s more business-like?

A: Our current members, they have a lot of different backgrounds, and it’s good to have those different views in the room, because it helps to challenge us, keep us going in the right direction and keep us focused.

Q: Are there any obvious inefficiencies at the DOE that jump out at you, that could easily be resolved if red tape or lack of funding, like, say, for new technology, were not an issue?

A: Yes. One of the biggest things we’re dealing with in my area, that really impacts everyone, is the financial systems that we are working on are 20 to 30 years old. So, you can imagine: Technology now changes by the day, and to see that our entire financial world is on a system that is 20 or 30 years old, it makes for a lot of manual processes, a lot of paper, so there are tons of inefficiencies right there.

Q: Is it true that you guys are doing the payroll by hand?

A: Yes, we actually are doing payroll by hand. We take greenbar paper and cross it out if there’s any gross pay changes.

Q: The state comptroller earlier this year was saying there were a lot of state employees who are getting overpaid, and a lot of this money is uncollectable. And, of course, with DOE having the most salaried employees, it had the largest overpayment amounts. Is this something that you’re addressing? Can you do anything about that before your technology is upgraded?

A: Yes, for sure, and we have taken steps to better control this situation. Again, because all of our systems are manual, we’re dependent on having a piece of paper submitted to tell us if someone is no longer employed or has lost or has changed positions. So with it being so manual or paper-based, honestly, sometimes they will get lost or we don’t receive them timely. In some cases, people continue to be paid while we are waiting for that form to be submitted. We have put in some procedures, we’ve increased out training to the field, so that we now have implemented “Call payroll.” If somebody leaves, call payroll so that we can immediately make the adjustment and then reconcile it back to make sure that paper was actually submitted at a later date.

Q: What was your reaction to the recent internal audit of the purchasing policies at DOE, which as you know, has suffered from cases recently of employee embezzlement, some of it quite substantial? Beyond your reaction to that, is that a function of the financial systems that you have?

A: Some of it, because some of our controls are basically paper-based. Any new enterprise resource planning system has a lot of these processes and controls built into the system. We’re trying to implement those controls based on people and paper, so it is sometimes hard to monitor.

Q: New systems have that in place?

A: Yes, they do. And let me touch on that a little bit. The department is partnering with the State of Hawaii on a project that we are aggressively looking at, procuring and putting together a requirement for a new enterprise resource planning system — ERP. This system would upgrade all of our current payroll, HR, time and attendance, general ledger, budgeting, vendor payments — all of those pieces are in the new ERP system. so we are putting together our requirements on that and the DOE will be part of that statewide solution.

Q: What’s your expectation for getting that in place?

A: Sonny B. (Sanjeev Bhagowalia) — he is the state’s chief information officer — he and Kalbert Young from Budget and Finance are helping to spearhead this, but the DOE wanted to be involved in it because we’re a complex and large organization as part of the state. We wanted to make sure that the specifications of the system really met our needs. And Sonny has been pushing hard on getting funding for this. He actually did receive some funding from the Legislature this year. So we are aggressively trying to put together our specifications so we can go out to bid for this project.

Q: About the audit, regarding the schools’ purchasing problems, was there anything besides what it recommended that you might have recommended yourself?

A: Well, we’ve already taken some actions in this area, even before the audit. So, we’re looking to always increase training of a huge undertaking that we started with SASA Academy — SASA is the School Administrative Services Assistants. They’re our fiscal people at the school level, and they’ve had very little training, so we launched this SASA academy to train them on everything about what to do on their jobs, which is a very long list.
First it was, basically, what is the role of the SASA? Then we’re going to do required procurement training, starting in October. And then there’s everything from payroll to budgeting, how to run reports on the system. So it’s a real comprehensive … there’s hundreds of things that we’re training the SASAs. It’s a big step for us because right now everything is just in a binder that they have to go reference.

Q: Why are you not involved in helping cost out the bus contracts? The contracts were an issue of concern lately, and that certainly involves DOE spending, so I wondered why you’re not more involved in that.

A: A lot of it is just the history of the separation of this office between us and OSF.

Q: Do you miss working for newspapers?

A: (Long pause) I’m sorry, I’m just thinking. (Laughter)
No … I mean, after the Advertiser sold, I really kind of figured I would be doing something else. So what I’m doing now is totally different than what I was doing at the paper. You know, just different, learning new things…

Q: It’s probably kind of fun in a way, yeah?

A: It is. It’s a different kind of business. Learning the new terminology, the acronyms. I did newspapers for a long time, but this is really … it’s been a fun challenge. I think this is where I’m supposed to be.