Amid growing uncertainty and upheaval over rail, the transit project’s embattled executive director took the unusual step Thursday of going on the offensive against a critical audit report before its public release Saturday.
Honolulu Authority for Rapid Transportation Executive Director Dan Grabauskas excoriated city Auditor Edwin Young during a news conference, saying most of the rail audit’s findings are flawed and that Young rushed to complete it under pressure from the City Council.
Grabauskas further questioned the integrity of Young’s office, saying it leaked some of the confidential report’s findings to some City Council and local media members.
HART RESPONSES TO AUDIT
>> The city auditor’s team checked hundreds of HART documents. None of the documents showed any money misspent. All money was present and accounted for.
>> HART regularly and accurately reports general excise tax receipts and forecasts.
>> HART regularly updates its financial plans based on the most current information and in conjunction with the Federal Transportation Administration.
>> HART has filled key vacancies.
>> The audit’s release was rushed and its confidentiality was compromised.
“I’d say that this so-called audit is a joke, but it hasn’t been funny. It’s a mess,” a strident Grabauskas said during the press conference, held shortly after HART submitted its official response to the auditor. He said the rail agency agreed with only some of the auditor’s 21 findings, and that it was rushed to get those responses in early.
Grabauskas has faced his own harsh criticisms in recent weeks from the city’s top elected officials over the project’s management. Those criticisms include a call to resign last week from Council Chairman Ernie Martin.
Martin is considering a mayoral run against Mayor Kirk Caldwell later this year, and he mentioned the audit’s findings in his April 7 letter calling on Grabauskas and former HART board Chairman Don Horner to resign.
“Preliminary information indicates that HART’s financial and subsidiary plans are unreliable and outdated and additional cost overruns and shortfalls are likely,” Martin wrote of the audit. The letter helped spur Horner, a retired First Hawaiian Bank executive, to resign earlier this week after serving about eight months as the volunteer board’s chairman.
On Thursday, Grabauskas, who’s led HART for the past four years, deflected questions on whether he would resign as well, saying he would address the issue today. He instead spent the news conference defending HART against criticisms in the yet-to-be-released audit, including some already leaked to the media.
The auditor’s office, Grabauskas said, found no misspent or unaccounted funds.
He acknowledged that the project’s operations and maintenance budget, as well as rail’s overall financial plan (both of which date from 2012), need to be updated.
Grabauskas said HART is now working on those new numbers. The agency had to wait for city leaders to approve the five-year rail tax extension, he said, in order to show that the cash-strapped project would have more revenue coming in.
Nonetheless, questions have persisted for years over how exactly the city will cover operating costs once rail is built. On Thursday, Grabauskas said it’s the city’s kuleana (responsibility) to work out those details, not HART’s.
HART has filled some key vacancies but agrees with the auditor that it still has more to fill, Grabauskas said.
He further defended HART’s decision to repackage station construction contracts last year, saying the move saved $38 million compared with the initial bids for that work.
But Grabauskas also took aim at how the audit came together.
He said that Young pulled him aside just before a March 31 meeting on the audit and told him he needed to speed up the report’s response process and then release it by April 15 because he was “under tremendous pressure from members of the City Council to get this out.”
In June, Grabauskas said, Young had told him his office would have until this July to finish the audit.
“I have people who have almost been living at this office for the last five days in order to try to put this response together,” Grabauskas said. “There’s a real sense of frustration and unfairness that that’s not the way that the auditor is supposed to conduct themselves.”
Young fired back at Grabauskas on Thursday following the HART event.
“I am disappointed that Mr. Grabauskas chose to misrepresent and mischaracterize our discussions and the history of this audit,” Young wrote in an email. “The City Council Chair has been briefed on what actually transpired and I will defer to his comments. Our office will continue to maintain our professionalism and will not respond to the HART Executive Director’s unprofessional conduct.”
In February the Association of Government Accountants, a national organization for financial professionals in government, gave Young its Distinguished Local Government Leadership Award. He has 40 years’ experience in government financial management, according to an AGA news release.
Martin declined to comment Thursday — his staff members said via email he wanted to see the final audit first, along with HART’s responses.
“This project has been dealt some pretty terrible cards, (including) lawsuits … things that are beyond the control of the people who work here,” Grabauskas said of HART on Thursday. “I think they’re doing the best job that they can to navigate what’s happening.
The auditor’s office is slated to release the report to the City Council today, and then release it online to the public Saturday on the city’s website.
