Audit of the Honolulu Authority for Rapid Transportation: Report 2
Report No. 19-04, from Hawaii State Auditor, January 15, 2019
In Report 2, we examined the Honolulu Authority for Rapid Transportation’s current management structure, the relationship between HART and its Board of Directors, and HART’s use of third-party consultants to manage the Honolulu Rail Transit Project, focusing on fiscal years 2017 and 2018.
Among the findings: HART and Board policies delineating decision-making responsibilities are still in flux.
In addition, while HART relies on a third-party consultant, HDR Engineering, Inc., to staff many of HART’s key management positions, HART does not evaluate the performance of the embedded HDR employees and approves HDR monthly invoices that average about $800,000 with little substantive review.
Part 1 -- January 10, 2019: Auditor: Internal Docs Show HART Lied to Public About Rail Costs
CB: Audit: Heavy Reliance On Consultants Is Causing Problems For Honolulu Rail Project
That report released Tuesday found that HART in 2017 flagged HDR Inc., CH2M Hill and other outside firms working on rail for “deficiencies” that the agency believes contributed to the project’s climbing costs and schedule problems….
“We … found that HART’s oversight of these consultants given their critical roles on the project is superficial, not well-documented, and does not adequately ensure performance,” the auditor’s new report states.
“Consultants often manage consultants, who manage other consultants,” it adds….
It found that HDR provides on average 19 of HART’s 135 total staff members, at an annual cost of $9.6 million. HART relies on HDR and its other consultants to gauge whether the invoices from their own staff are justified, the report said.
“Determining whether HDR staff work is appropriate is left to the HDR staff’s supervisor … often another HDR employee,” the report said.
The prevalence of so many consultants on Honolulu’s rail project is hardly a new issue. The report points out that the Federal Transit Administration has repeatedly recommended over the years that HART take “more ownership” of the project by gradually transitioning from consultants to staff employed by the agency.
Using consultants has previously raised ethics issues as well.
A 2015 complaint before Honolulu City Ethics Commission, for example, alleged that an HDR employee and his family took a New Year’s Eve coastal sail on the boat of an employee for Kiewit Infrastructure West, the construction firm he oversaw.
“If this were a City employee, they would be in violation of ethics rules,” the complaint stated. “Why is an HDR employee under contract to the city not being held to the same standard?”….
SA: State auditor questions Honolulu rail spending on contract hires
...The new report also questions aspects of the relationship between the HART board of directors and the staff of the rail authority, noting that HART refuses to release to its own board some key information about anticipated “contingency” funding that is budgeted for individual contracts.
“Without this information, how can the board ensure that the CEO is accountable for the work being completed within a contract’s budget?” the report asked. “How does the board ensure that the project stays on budget? How does the board assess HART’s budgeting process?”…
In 2017 HART raised its own concerns about the performance of HDR employees, alleging they failed to enforce the terms of HART contracts in some cases where claims should have been filed against contractors for late work, according to the audit. HDR disputed those allegations….
Not counting the HDR workers, HART had a staff of 117 in November, including 112 employees on personal services contracts and five civil servants….
HNN: Audit: 18 rail consultants paid average of $500,000 a year in salaries, overhead
PBN: Honolulu rail project spent $10M a year on 19 consultant positions, state audit finds
SA: City auditor slams HART practices