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Saturday, July 1, 2017
Are you confused about the status of the $250,000 HART special audit?
By Selected News Articles @ 2:34 PM :: 4637 Views :: Ethics, Rail

Are you confused about the status of the $250,000 HART special audit?

From Honolulu Traffic, June 30, 2017

We were. So, we asked HART what the status was. Their reply: "It would be correct to say that the Board of Directors of the Honolulu Authority for Rapid Transportation adopted a budget that includes $250,000 for special audit services should the Board determine other audit services be needed for a scope of work to be determined. This budget is for the fiscal year that begins July 1, 2017. As such, the answer to your second question would be no, the audit has not been cancelled."

That really did not seem to settle the question so we went back to the transcript of the discussion's in the HART Board Meeting. Here are the relevant excerpts:

Ember Shinn, HART Board Member: And my last question has to do with the $250,000 for the special audit. And it’s less of a question and more of a comment about that. I understand that the board put this in the budget in November when it approved the budget, and I would just ask that before that money is spent, assuming it’s not going to be spent for the mandatory audits that you have to do, you know, your regular financial audits, but whatever the special audit, whether it’s a forensic or something else, that the board has an opportunity to discuss, debate and determine whether or not it’s a wise use of funds, given the fact that when the board put this in the budget in November, we did not have the APTA (American Public Transportation Association) peer review, and I thought we weren’t getting the regular reports from PMOC Jacobs (Project Management Oversight Contractor).

And so, as a new member of the board, it’s not my intent to muck around in the past, and try to figure out what we did wrong in the past, it’s more trying to get forward, and trying to make sure that we’re spending appropriately, and we’re cost -- doing very cost conscience decisions, and we’re monitoring everything going forward. And what I like about the APTA peer review as well as the PMOC reports, is that it primarily talks about management and process, as opposed to saying, ‘We made a screwy stupid decision back then.’ And I think going forward, that’s what I would like to do, unless there’s some critical issue where we suspect there’s like fraud or embezzlement or something like that, that really does need that type of an audit. As I said, I’d rather not spend the money and use it in another way that would be moving the process forward.

Wes Frysztacki, HART Board Member: I can’t resist, I need to jump in again. I would like to see your comment number two, or your question number two linked with your question number four, because part of my difficulty is I have no budget whatsoever to look at what needs to be done to make the transition to comply with charter amendment number four. So rather than them spending the $250,000 in looking at the past, and then wondering what we do about it -- maybe we’ve already fixed the things that would be uncovered -- and I think we have actually -- I would like to ask the board to think about doing the things that you said, let’s sit back and kinda look at this budget item. Given what the council said, I think we have discretion to change that and use it for something positive. So I will make that request at the right time. I don’t know whether -- is this the right time right now to perhaps make that request?

Krishniah N. Murthy, Interim Exec. Dir. & CEO, HART: Can I request the chair? Please give us an opportunity, to, since we are in the process of doing some restructuring of the organization to fit into the upcoming projects that we have to handle and the financial issues that we need to deal with, so I think we may need some assistance from outside. The specialty type of individuals or firms to do some type of audit type of work for each group that we have within HART. So I would like to come up with a proposal to the board to consider using part of that $250,000 to do those things.

Summary: It is fairly obvious that these folks don't want to be looking under any damp rocks in case they find evidence of a level of incompetence that might lead the public to believe that the $10 billion would not be enough to finish rail and might cost the $13 billion, or more, that Dr. Prevedouros believes is the likely outcome.

Note that DTS Head Frysztacki said, "I think we have discretion to change that and use it for something positive." Which is to say, nothing negative here folks, move along there's nothing to see. Frysztacki, as head of DTS, would be the rail line's operator and has a vested interest to see that this line gets built no matter what it costs.

Considering that there are $billions at stake, a $250,000 forensic audit is pocket change. The whole purpose of an audit, such as this, is to correct the mistakes that people have been making to get $5 billion in the hole so that you don't keep making the same mistakes and get another $5 billion in the hole. 


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