Wednesday, October 7, 2015         


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Tighten controls over school funds


A lot of times, things will slip through cracks in the state bureaucracy, but those cracks have to be pretty big to let something like a half-million dollars get away.

The case of Warren S. Harada, former business manager at Waipahu High School, shocked many in the school community and its policy overseers of the state Board of Education, and for good reason.

Regardless of the outcome of the case — Harada has been charged with one count of first-degree theft and four counts of money laundering in the taking of nearly $500,000 from the school over five years — it's stunning that something of this magnitude could have escaped attention for that long.

Isn't the Department of Education supposed to be scraping to find every dollar it can in this era of severe budget cutting?

What's worse is that this isn't exactly an isolated incident. The Waipahu case comes on the heels of thefts involving employees at Lehua and Pearl Ridge elementary schools: A staffer took $13,000 from fundraisers and donations Lehua collected for student programs, a case that led to a community-service sentence last December. And at Pearl Ridge, a secretary was convicted of stealing nearly $70,000.

But the Waipahu haul — $499.769.50, to be precise — is in another order of magnitude, an episode that should set off clanging alarms that a course correction is needed.

Money management at DOE has been a concern for years, leading lawmakers in 2006 to create a new position for someone to take charge at the macro level: a chief financial officer, a post filled that year. In the enabling legislation, House Bill 1865, lawmakers asserted that "the department needs a comprehensive budgeting and accounting system that takes into account the whole picture, from the administration to the school level.

"And as any responsible business has measures in place to ensure accountability and transparency of financial operations, a chief financial officer would be the authority on how educational dollars are being spent — resources entrusted to them by Hawaii's taxpayers."

Of course, the responsibility for oversight of such a large bureaucracy can't fall on one administrator alone. But Board of Education Chairman Don Horner pointed out that the alleged theft underscores the need for better auditing practices, and it would be impossible to argue against that. DOE officials have declined any detailed comment on how they will respond to the challenge, but Horner said the board and department would beef up its auditing operations to flag potential accounting problems.

In this case, Harada is alleged to have purchased expensive video equipment with school money and then returned it to the company and cashed the refund checks. There should be a way to catch such anomalies before the damage mounts up as high as it did at Waipahu.

It's sad to see that anyone in a position of trust at a school, where funds are clearly needed to provide better educational experiences for children, would betray that trust. But an agency of 20,000 employees is a pretty big barrel, one sure to have some bad apples in the mix.

Still, the schools are entrusted with taxpayer funds, and taxpayers can't sit back and hope nothing like this happens again. It's incumbent on the administration of public schools to erect more effective safeguards than have been in place so far.

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