Disappeared News

by Larry Geller

Hawaii may not be getting its value from state-appointed boards or self-appointed non-profits, as illustrated by the current flap over the conduct of the State Ethics Commission. There are steps that could be taken to better prepare these bodies to carry out their intended functions.

Recognizing that there is no training, oversight or accountability is the first step

It may be time for Hawaii to review how its boards, commissions and councils are managed. Throw in the handful of federal- or state-funded non-profits that run on taxpayer money but have never been audited and work with no visible state oversight, and the picture that emerges is of a quasi-governmental public service sector that may be serving the state poorly in some cases.

The tortured process by which the State Ethics Commission handled the dismissal of its long-serving executive director Dan Mollway is but the latest indication of what may be a more widespread governance problem. In December, Hawaii’s Chief Elections Officer resigned amid a flurry of lawsuits and other troubling controversies and, after a 94% cut in the office budget, no plan for carrying out the 2010 elections.

The Ethics Commission might be faulted for a lack of experience in human resource matters, but no requirements are in place that would have given them the necessary training or direction. Similarly, members of the Elections Commission need not have expertise on matters related to voting or elections.

And it’s not uncommon for these state appointees to be ignorant of the requirements of the open meetings and open records laws. The Ethics Commission, for example, routinely adjourned before going into executive session. Trouble is, having adjourned, the executive session was therefore illegal. There are other “details” they failed to observe, including the need to have a recorded vote on a motion to go into executive session. Is it ethical for an ethics commission to operate contrary to law?

Hawaii encourages citizen participation in government thorough appointment to boards, commissions and councils. The statewide Board of Education is elected. Anyone can run in the election. The State Ethics Commission is appointed by the Governor from a panel of persons nominated by the Judicial Council of the Hawaii Supreme Court. Most other boards are appointed by the Governor from among individuals who have indicated a willingness to serve. Some have federal requirements for who may or must constitute the board.

When appointed, the Ethics Commission is charged with enforcing, among other things, the State Ethics Code (HRS chapter 84, the State Lobbyists Law (HRS chapter 97), and the financial disclosure law. Yet expertise in these matters, along with understanding of laws that govern any state board, such as the open meetings or open records laws, is not required, nor is training in these matters generally provided as a requirement to serve.

OIP records indicate that compliance with the open meetings law is spotty. Sometimes we learn about violations by chance. In October 2006, the Procurement Policy Board held a meeting but could not figure out until the end that it did not have a quorum.

In 2009 the Hawaii County Council held a series of serial discussions among themselves prior to their June meeting that violated the Sunshine Law.

Also in 2009,  the Hawaii Historic Places Review Board was having problems making it through their open meeting, so they kicked out the public while they tried to figure out “how to get through the entire agenda in a timely fashion before they lost quorum.”

It’s not unusual for boards or councils to hang around after meetings and continue to discuss matters that should have been part of the open meeting. Usually the public has already departed and so no one is there to rat on them. In 2009, the Kauai County Council was nailed when someone asked what was going on inside the locked room, and someone actually told them.

Ignorance of the law is no excuse but is common enough

The State Board of Education can be described as unfamiliar with the details of the Individuals with Disabilities Education Act and other laws related to civil rights of students. Indeed, knowledge of the laws they are charged with enforcing is not a requirement to be elected, and the press never questions candidates on their background knowledge of state and federal laws.

I testified to the BOE one day that the federal law itself required that boards of education be educated in disabilities laws. How else can they make decisions concerning the rights of the students? Yet these decisions are routinely made. Though confronted with the need to educate themselves, the BOE ignored the requirement. Now, ignorance can be cured, but they had no intention to do so.

Violations of the open meetings law are common. I have somewhere an old video of a county council actually appearing to debate whether they will follow the law or not.

State boards vary, usually depending on whether the particular chair has undertaken to study the requirements.

Not all boards are run this way. The State Rehabilitation Council provides members with a half-day training on the open meetings and open records laws, on ethics, and requires that the state and federal regulations be read and understood. Meetings are held and conducted properly. If there is a question, OIP is consulted on the correct procedure. I have served two terms on the Council and have been impressed with their governance.

The only oversight may be administrative interference in board communications

Sadly, when the activities of a board are reviewed, it may be because the Governor is unhappy with their activities. A special law was passed in 2008 over the Governor’s veto that guaranteed the independence of boards and commissions and their ability to communicate with the Legislature without administration censorship (Act 60).

Non-profits on their own, fueled by endless state or federal funding

Moving down on the accountability scale, Hawaii is served by a network of non-profit organizations with self-appointed boards, whose members are often cherry-picked and under the thumb of the executive director. A number of them have never, to my knowledge, been audited, and there is no oversight of their activities. Yet they may receive hundreds of thousands of dollars annually of state or federal funds. Some have been on their own recognizance for a decade to 15 years or so, without a state management or fiscal audit.

In 2008 a controversy arose that produced illustrative legislative testimony. See here and here for the first two hits in a Google search around the question of a management audit of the Hawaii Centers for Independent Living. That organization is only one of a cluster that operates without much state attention (until, of course, a problem arises).

Any proven lack of professionalism on the part of either the boards or the non-profits affects the public interest. We are paying for something we may not be receiving. In the case of the non-profits, we’re talking big bucks.

The solution is not rocket science

Clearly, the Legislature could, without much difficulty, require that all appointees to boards, commissions or councils be given a basic course in Hawaii’s open meetings, open records, and ethics laws. With a little more effort, they could be provided with reference material on hiring and supervising executive directors and other staff. The state could have a basic employment handbook that could be given to each appointee, along with a form that must be signed indicating that the material has been read and is understood.

The Board of Education should be required to undertake whatever training is currently required by the feds or useful in carrying out their duties, and perhaps additional classes in school governance and basic pedagogy. Yes, send ‘em to class. It would still be a citizen board, but once in office it would receive training. And maybe a few pop quizzes to be sure the material is understood.

It would be great to have some organization professionals review how Hawaii does its board governance and come up with recommendations for improvement. The feds, for good motive or otherwise, are moving towards better fiscal accountability for tax-exempt non-profits. We could no doubt get better results from our boards with just a few tweaks and some legislation, and without discouraging people from volunteering to serve.

A similar study could put an end to non-profit executive profiteering at state expense. Particularly in these difficult economic times it seems reasonable to know whether the money going to each agency is simply supporting its director and staff or if we are receiving the intended benefit. If not, why not pull the plug and put the function out to bid. Is 10-15 years of a non-bid contract a good way for the state to operate? I suggest not.

The Legislature could set requirements for periodic management and fiscal audits and set procedures for assigning contracts, including the requirement that contracts be put out to bid where appropriate. It should not be automatic that an agency that has received nearly a half-million dollars each year for more than a decade be given the same next year without transparency or oversight.

Finally, sloppy governance can lead to litigation. In these difficult economic times we shouldn’t expend legal fees and pay high settlement costs over avoidable situations. The Ethics Commission appears to have exposed some private information about the dismissal of their executive director that could result in litigation. If that should happen, the cost to the state (that is, to taxpayers) could certainly be far above the nominal cost of providing the Commission with education, guidance and resources in its human resources responsibilities.

By requiring education, oversight and accountability, Hawaii can both get better service from its boards and non-profits, and spend our tax dollars in a way to produce the best returns.

For more on the Ethics Commission flap, See:

Ethics agency harmed by Mollway dismissal (Star-Advertiser, 6/19/2010)

We question Hawaii State Ethics Commission termination of its Executive Director (Disappeared News, 6/16/2010)

Ethics Commission chastised in public testimony for its handling of action against Dan Mollway (Disappeared News, 6/9/2010)

Permalink posted by Larry @ 6/19/2010 03:30:00 PM