HART postpones discussion on scrapping internal audit

Feb. 28—A call to scrap a previously sought top-down internal review of the Honolulu Authority for Rapid Transportation was postponed this week.

A call to scrap a previously sought top-down internal review of the Honolulu Authority for Rapid Transportation was postponed this week.

HART's board of directors Tuesday was set to consider a recommendation from its Internal Audit Committee to cancel a 2023 internal audit solicitation.

However, Internal Audit Committee Chair Edwin Young, who urged the cancellation of the internal audit until a better option could be found, was not in attendance.

Although he showed virtually to the board meeting Tuesday morning, Young appeared to suffer technical difficulties but eventually used his phone to converse with the rest of the panel. Still, HART officials did not immediately say why Young was absent from the latter half of the same meeting.

Due to Young's absence, HART board Chair Colleen Hanabusa requested discussion on the item be suspended.

"We should have a clear understanding of what the (committee ) chair's position is, " she said, "so I think it's in our interest to defer this matter."

According to its website, HART issued the latest internal audit solicitation in August, with a Sept. 30 due date.

"The contractor will report administratively to HART Executive Director /Chief Executive Officer through the HART Board Executive Officer, " the posted job description reads in part. "The contractor will perform an overall assessment of HART's processes to ensure policy and procedural operational efficiency, financial reporting reliability, and compliance with applicable laws and regulations."

But on Feb. 2, Young said the board of directors should cancel procuring outside internal audit services until a better option could be established.

A former Honolulu city auditor, Young told the committee that finding HART's reviewer had been nothing short of problematic, "primarily because the bids came in higher than anticipated ... and also because it is premised on internal audit standards, which are contrary to what government auditors follow in terms of the accepted government auditing standards."

Young also asserted the rail agency's solicitation violated the City Charter and that the "scope of services " for a future internal auditor were "incompatible " and "redundant " as the city had about 42 full-time equivalent positions "performing the same functions that are listed in the scope of services."

Typically, the role of internal auditors is to review large organizations, such as a private company or government agency, to identify operating inefficiencies, wasteful spending, noncompliance with laws and regulations, and even fraud and theft, among other issues.

The largest public works project in Hawaii history, HART has awarded over 82 contracts, totaling approximately $4.6 billion, since its inception in 2011, the agency's website states. Now called Skyline, its construction—delayed for years due to cost overruns—is budgeted at nearly $10 billion.

But the request to cancel a planned internal audit displeased board member Nat ­alie Iwasa, who claimed she'd been pushing for years for a full-scale review of HART's inner workings.

"I just can't believe it wasn't established in the very beginning because we have a $10 billion project, " she told the panel Feb. 2.

Meanwhile, HART's board of directors postponed another item on its Tuesday agenda : to discuss and create a formal permitted interaction group, or PIG, to study the feasibility of seeing HART and the city Department of Transportation Services—which operates Skyline, TheBus and TheHandi-Van—merge into one transit agency.

HART, upon completed construction of Skyline's 19-station, 18.9-mile fixed-guideway rail system to Kakaako, is slated to dissolve by 2031, city officials say.

But much like the internal audit item before it, Hana ­busa said she was "also going to defer that matter because there's issues ... as to who can sit on the PIG."

"My understanding is you don't need to be a member of the board on a PIG like that, " she added, "but given that our corporation counsel was not here when we last looked at this, I would want to defer that matter to give us the opportunity to look further on this agenda item."