An internal auditing office at the state Department of Education would regularly analyze "critical processes" and spending at the agency, look into allegations of funds being misspent and examine the effectiveness of all levels of management, under a plan poised for approval by the Board of Education.

The effort to beef up the department’s auditing arm is part of a push to be more strategic about how education dollars are spent and programs reviewed.

The end goal, BOE members said, is helping schools and the system improve.

"People think about audit as purely a money thing," said Wesley Lo, vice chairman of the BOE’s audit committee. "Ultimately, it’s not exclusively about money. It’s about student achievement. That’s what my hope for this is."

Though the department has an internal auditing office, the auditing plan is designed to strengthen internal reviews, make it clear how the office should operate and tie audits to strategic goals for improving schools.

According to a proposed charter drafted by the DOE and the board, the auditing office would operate "free from interference" and be informed when there are suspected cases of employee fraud or theft. The office also would answer not only to the superintendent, but to the BOE’s audit committee.

The full board will take up the auditing plan at its meeting Tuesday.

The plan comes in the wake of a massive employee theft case at Waipahu High, which DOE officials have acknowledged could have been prevented with the right accounting safeguards and personnel checks and balances in place.

Former Waipahu High business manager Warren Harada, 61, of Manoa pleaded guilty last month to stealing nearly $500,000 from the school over a five-year period. Harada was fired from the DOE in December 2010 and was arrested in October on first-degree theft and money laundering charges.

Harada has agreed to pay back the money, under a plea deal.

Board of Education Chairman Don Horner, who is also chairman of the board’s audit committee, said the Waipahu case "was really a breakdown in process" and underscores the need for better auditing practices at the DOE.

Horner said the audit plan was drawn up after a comprehensive study of department functions and potential points of concern. The review spurred the board and department to draft a list of areas for future internal audits.

Among those proposed areas: the hiring practices for DOE temporary employees, "internal controls" and operational efficiency at the department, and student transportation and school food service operations.

Horner said the goal of the auditing office is to shift the department’s auditing function "from just being an ‘I gotcha’ to strengthening the integrity of the system" and identifying "threats to achieving our strategic goals."

In the wake of the Waipahu High case, schools Superintendent Kathryn Matayoshi told the Star-Advertiser that the department planned to review its policies to determine whether any needed to be strengthened and also hire another internal auditor, to add to the department’s existing staff of three.