Legislators should review UH financial decisions

THE ISSUE A state audit questions whether the Legislature should grant the University of Hawaii more autonomy.

The state auditor has issued a report critical of the University of Hawaii's financial practices, while UH President David McClain's sardonic rebuttal suggests the audit is out of date and "unexceptional." Education committees in the upcoming Legislature should referee the squabble and decide whether UH deserves more autonomy.

In the 2000 election, voters gave the UH Board of Regents more authority over the university's internal affairs, exempting it from most laws that regulate other state agencies. The university seeks even greater financial independence, but state Auditor Marion Higa maintained in the audit that "it has been unable to demonstrate its ability to be accountable for its actions, decisions and performance."

That is a serious allegation, and McClain responded that the audit, conducted by the public accounting firm of Nishihama & Kishida, CPAs, Inc., contains "a number of errors and inaccuracies and findings where clarification is needed."

For example, the audit accused the university of spending $18.8 million on a computerized system for students to register for classes, make payments online and perform other tasks, although the seven-year contract called for a budget of $13.5 million.

McClain shot back that the contract was limited to implementing the software, while other expenses were budgeted elsewhere. In fact, he added, the amount spent on implementing the software came to only $12.8 million, $500,000 under budget. Higa asked why those expenses were not included in the contract.

Regarding other assertions in the audit, McClain said the university had been working in several areas criticized in the audit. "It is unfortunate," he added, "that taxpayer dollars were spent in auditors reviewing documents and processes that were already under revision."

Legislators have the responsibility to review those areas once again to determine whether the audit contains valid criticisms.