HART doesn’t need auditor transcripts

With the price tag for Oahu’s rail transit system now topping $8 billion — with costs climbing by more than $3 billion since late 2014 — a double-check of procedures guiding the flow of money is welcome. Questions about spending spikes continue to swirl.

Last fall, when the cash-strapped system was in need of a rescue from cost overruns, state lawmakers put together a bailout package that also stipulated additional financial oversight. A key component of that recently got underway in the form of the first annual state audit of the Honolulu Authority for Rapid Transportation (HART), the semi-autonomous agency responsible for shepherding the 20-mile rail project from Kapolei to Ala Moana.

The audit, which will be submitted to the 2019 Legislature, is expected to continue for much of the remaining calendar year. But state Auditor Les Kondo has already raised a valid red flag, alleging that HART management is interfering with the audit process.

In public testimony during a HART board meeting Thursday, Kondo said that HART staff members were being required to audio record their interviews with auditor staffers, then deliver those recordings to HART management to be transcribed. Such a requirement holds potential to weaken the candor needed to produce a constructive report.

Kondo put it like this:“That’s akin to management sitting in the interview itself. Big Brother is there. Big Brother is listening. And whether intended or not, the implication … to the employees is that they better tow the company line.” Agreed. If management of any sort can have a look at interview transcripts, plain-spokenness could blur for the sake of job security.

The auditor’s staff makes its own tapes. But those copies are confidential, which, in turn, promotes free-flowing exchange of information needed, ultimately, to produce an audit for public transparency. HART officials, meanwhile, maintain that the intent is simply to verify their staffers’ comments when the agency is tasked with responding to the auditor’s findings later this year.

They have a point in that regard. Every audit of the state’s largest- ever public works project to date has yielded complicated financial findings. In this case, HART officials say they have been told they’ll have less than one week to respond to a report that’s based on at least several months of interviews and document analysis. Their impulse to prep is understandable.

In fairness to the agency, the auditor could consider giving HART more time to review and frame a thoughtful response to the audit’s preliminary findings. In the meanwhile, though, HART should not be having its staffers recording the audit interviews for in-house transcription.

The aim of the audit is to examine the processes and policies that HART is using, to determine whether they’re adequate. The report is an examination of the facts — not a litigation. Taxpayers deserve a frank assessment of rail’s financial workings.

The state’s bailout law, Act 1, authorized an additional $2.4 billion for rail funding by extending Oahu’s 0.5 percent general excise tax (GET) rail surcharge by three years to 2030, and increasing the statewide hotel room tax (transient accommodations tax) by 1 percentage point for the next 13 years.

In addition to an annual audit, weak confidence in the rail project prompted lawmakers to also require the city to pay rail project vendors upfront, then submit requests to the state for reimbursements from dedicated tax revenue streams.

The rail construction effort has been in the works for nearly a decade now — and plans are in place to begin limited passenger service in less than 2-1/2 years. Public confidence in the project is based, in large part, on a basic understanding of the handling of rail finances. The board and HART’s management must place a higher priority on transparency.