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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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Kuniarr wrote:
Loss prevention in the government is vital in today's environment of government budget deficits.
on November 10,2011 | 02:01AM
Sunny wrote:
That's why the DOE doesn't have enough money, it's being stolen under their noses!
on November 10,2011 | 06:41AM
Sunny wrote:
That's why the DOE doesn't have enough money, it's being stolen under their noses!
on November 10,2011 | 06:41AM
LemonySnickets wrote:
You making up stories. Really?
on November 10,2011 | 07:57AM
Kuniarr wrote:
on November 10,2011 | 01:20PM
LemonySnickets wrote:
You making up stories. Really?
on November 10,2011 | 07:57AM
Kuniarr wrote:
on November 10,2011 | 01:19PM
HonoluluHawaii wrote:
Let us face it, there will never be efficiency in Government as there always will be in Private Industry. The situation in Hawaii is off base because of all the Democratic based Unions that permeate the Government system all over the place, that is at The State and The Local (city and county) Levels. The Federal is big here too, what with The Missouri and The Arizona, bookends of World War Two situated near the Arizona Memorial in Pearl. If one were to classify me, I would say that to take care of the poor and the needy, however also do not give RICH PEOPLE WELFARE also, not in the usual sense of Welfare, however in the sense of Tax Shelters that kill of all tax collections. The Train, well maybe you know my position. Build the one that already exists, that is the one a ground level that goes through Ewa and also crosses through the Ko Olina property.
on November 10,2011 | 02:19AM
Anonymous wrote:
It would appear that the chief financial officer created by the legislature and the principles of these schools are not doing their jobs, all the while collecting large paychecks. The hard question should be, "Why aren't you doing your job?"
on November 10,2011 | 03:46AM
HonoluluHawaii wrote:
I think u mean Principals. u lolo. There and Their. Principles and Principals. None and Nun.
on November 10,2011 | 06:36AM
LittleEarl_01 wrote:
Now don't you feel better and far more superior having corrected my typo?
on November 10,2011 | 07:12PM
HonoluluHawaii wrote:
LittleEarl_01 was transposed into Anonymous via HSA ?? Oh okay. Well, this is all too common a mistake. THERE is over there. The volleyball is over there. THEIR is something belongs to their family. LOL. Go talk to Frank DeLima.
on November 10,2011 | 11:05PM
bender wrote:
These are the same people who think it's okay to buy Apple laptops for grade schoolers and Ipads for phys ed classes. So to them it's not that big of a deal if someone buys a half million dollars worth of video equipment over 5 years. Accountability is lacking at many levels.
on November 10,2011 | 08:28AM
false wrote:
This is a drop in the bucket compared to the nonsense they are spending on RTTT. $500,000 for two different trainers for the ZOI. MIllions for a teacher evaluation system. Look at the data, 60% of the students aren't making it. That means teachers are hitting 40% with DOE demanded core programs. So change the CORE Programs to fit the students' needs and fix the 60% in time for 2013 SBAC. It's not rocket science. STOP blaming the teachers and put the MILLIONs into staffing and resources for direct services to students. Students in Korea go to school from 8 am to 4 pm with dinner and study hall and then tutoring until 10 pm. That's the staffing that can change the education in our schools. Put the MONEY on the students and NOT on the organization. We can and want to do this year round, 7 to 4, but pay us what it costs.
on November 10,2011 | 04:51AM
SmedleyFerndock wrote:
SA, please indicate the positions that were required to retire or resign to accept responsibility for this fiasco. If none, Mr Horner you are not executing your responsibilities!
on November 10,2011 | 06:36AM
bikemom wrote:
". . . alleged theft underscores the need for better auditing practices . . . " Auditing may help reduce the amount of loss on a fraud scheme that is already in place, but it doesn't prevent it from happening in the first place. What is needed is a good system of checks and balances, i.e., internal controls. Returning merchandise should go through an approval process similar to that for purchases. Given Mr. Horner's background, I'm disappointed he appears not to know that.
on November 10,2011 | 08:44AM
tinapa wrote:
There are 2 types of funds maintained at the school level. One is the appropriated funds which come from the State's general fund to cover the school's normal and routine expenditures The other is the non-appropriated local school funds whose sources range from private donations, proceeds from fund raising activities by students, collection from individual students Basically, these funds belong to the students which are intended to cover costs associated with school activities as well as student activities, such as field trips, excursions and the likes. Unfortunately, these school based funds are most susceptible to theft due to lack of internal controls. The concept of internal controls dictates that no single individual has complete control over a financial transaction which means that cash collections, their recordations and disbursements should be done by different individuals to provide check and balances. Monitoring of the system to ensure its effectiveness must also be done because lack of supervision erodes control for internal controls and consequently, the "crime of opportunity" is hatched. I believe the allege perpetrator was able to do what he did because he had complete control of every aspect of the transactions.. He handled and deposited cash, manipulated bank statements and accounting records and issued checks without countersignature by other authorized individual (principal). Therefore, I place the blame on the school adminisrators for this fiasco by not implementing an efffective controls that would would have prevented the thefts of students' monies.
on November 10,2011 | 11:02AM
HonoluluHawaii wrote:
There are two types of people. One likes to talk and talk and talk and talk until everybody sleeps. The other type just talks briefly and people listen. u ever hear of JUST WIN BABY !!!!! ??
on November 10,2011 | 11:18PM
cojef wrote:
DOE a top heavy structured bureaucracy, where high-priced executives are stumbling over each other, and guarding their turf as a daily task, to the detriment of the schools. Most of the expenditures are expended at the headquarters level. Half of the positions can be eliminated and consolidated with the remaining units, with no loss of efficiency. An in depth study should be made and cut out the waste. The organization has grown and there is end in sight. It has become inefficient and unwieldy. More moneys at the operational level, and more staffing at the teaching levels will be much moe effective. pau
on November 10,2011 | 11:36AM
Kauikalewa wrote:
An in depth study will just take more dollars away from students. Just look at the schools. Are they using data to drive instruction? Are students receiving differentiated instruction? Do the teachers reflect the JOY of teaching? Are teachers able to manage the many facets of instructional delivery, model, lead, test? I do, we do, you do? Is there a mixture of media in the delivery of instruction? Teaching is as complicated as putting on a live act on stage every hour of instruction every day. Walk the school and tally the positive praise to expectation. Are the students authentically engaged? Is the thinking developing and are the students secure enough to express their concerns and understandings. School, some of us love every corner of it with all of the challenges, even the external ones.
on November 10,2011 | 04:10PM
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