Upon his graduation from the University of Hawaii, Edwin S.W. Young entered the auditing profession through the arm of Congress that investigates the performance of the federal government. Many years later, he has returned to Honolulu as the city auditor.
After working at the General Accounting Office, since renamed the Government Accountability Office, Young served as auditor at the Small Business Administration’s office in Los Angeles, director at the U.S. Naval Audit Service, foreign service officer at the State Department’s inspector general office and manager for the Air Force Audit Agency.
In those three decades, Young said, "we were breaking new ground as to what auditing is all about and what auditing should produce as value-added results for the federal government."
"After I retired from the federal government," Young laughed, "my wife said, ‘You’re not going to be a Velcro husband. You’re not going to be around every time I turn around.’"
So much for stay-at-home retirement.
It happened that California State University at Fullerton was looking for an auditor, so Young took the job, then moved to a position as an auditor for the city of Palo Alto, Calif., where he won the 2010 Association of Local Government Auditors Knighton Gold Award.
Now 69, Young returned to his birth home that year as Honolulu city auditor at an office in Kapolei, overseeing a staff of eight, which includes himself and five other auditors.
QUESTION: Why has there been more attention paid to the state auditor?
ANSWER: Partly because the city auditor has been relatively new compared to Marion Higa and the state auditor, and her reports have been of a higher profile, whereas I’m relatively new — I’ve been here only since May 2010 — and our reports have been not of a very high profile and not very readable. So since I have come on board, I’ve tried to make our reports more visible through the website and also of more value-added for the City Council, because we report directly to the City Council. So since I’ve come on board, I believe our visibility is increasing and the City Council is paying more attention to our office than in the past.
Q: What was being an auditor for the federal government like?
A: It’s a good training ground for local government. I was originally born and raised here in Hawaii, the first graduating class of Kalani (High); it seems like eons ago. But it’s amazing when you graduate from public school, that many of us were saying, OK, we need a job. Through the course of completing my education at the University of Hawaii, an opportunity arose to join the General Accountability Office, and GAO was a good training program because it teaches the fundamentals of auditing, and at that time no one had ever heard of performance auditing at all, so it was a relatively new arena for someone like myself.
Q: What is performance auditing?
A: There are three basic types of auditing that most auditors do. One is what most people are familiar with, which is compliance auditing: Are you complying with the laws and regulations of the federal government, state government or the local government?
Financial auditing is the second type, where you are verifying the information of financial statements, saying you probably complied with the accounting rules and regulations, and the information you’re reporting is valid.
The third type is performance auditing, where you’re looking at programs that may have been passed by the state, federal or local government, with specific objectives and anticipated results, and then you’re looking at the program to see if it’s achieved its objectives and how well it’s achieving those objectives.
The Leeward Coast Community College audit that we performed (in 2010) basically would be typical of the type of performance audits that we do. Basically, the City Council gave the Leeward Coast a million dollars a year as an offset for compensation for having the landfill here, and so the $1 million given in grants to nonprofit organizations was supposed to benefit the Leeward Coast. In our performance audit of that particular program, we looked to see if those were achieving the desired results. In the typical audit we found that improvements were needed … We found that of the money that had been appropriated and granted to the nonprofits, a great amount of the money — about $400,000 — was not spent, that many of the nonprofits were not complying with the terms of the grant, and that there was inadequate internal controls to ensure that the funds were being spent for the intended service.
In looking at the Leeward Coast audit, we pointed out to the City Council that the million dollars was not being spent properly, and the City Council immediately yanked the million dollars and the next year it was not in the budget to be given to the nonprofits. They used the money for other purposes. Council Chair (Ernest) Martin took the million dollars and put it into parks, and that’s one reason why the parks are probably in better shape, at least I like to think.
Q: Is that the most revealing audit you’ve conducted since you were here?
A: We also did the ambulance audit (in December 2011), which won a national award. There was some concern regarding how well the ambulances were achieving their programs and serving the public. In our annual citizen survey, which is a poll that we conduct every year, the ambulances rated very high as far as the residents of the City and County of Honolulu were concerned. But what we found is that, in fact, the services were being provided at great cost, a lot of overtime, so we identified the impact of relying on that overtime to keep the ambulance service at such a high level. And Dr. (James) Ireland, who happened to be the (Emergency Services) Department head, estimated that because of the work we did, he saved about a million dollars in overtime the first year.
Q: Can individual City Council members assign you to conduct an audit?
A: We are, by City Charter, supposed to be independent of the City Council, although they do my evaluation and they do our budgets and we are under the City Council. To maintain the independence and objectivity as required by the City Charter and also by our own auditing standards, they will provide inputs to me regarding where they would like me to audit — but our office is an independent entity, decides what we will look at, when we’re going to look at and basically how we’re going to do it; to that extent, an arm’s-length transaction.
At the same time, the City Charter allows the City Council to pass resolutions that specifically address issues that the City Council wants us to look at, and by City Charter we have to address those resolutions and perform the audits in those aspects. … Many people think that we report to the mayor and that our position changes every time a new mayor is elected. That’s not true. By charter, we are separate and we work for the City Council.
Q: What is the status and nature of your audit on rail transit?
A: The resolution asks us to look at the expenditures for the public information staffing and the resources and the contracts. … That was started late last summer, early fall, but we had to suspend it for a few months, so we’ve just restarted it and, by City Charter, we are supposed to release the report by the end of the fiscal year (June 30), which we hope to do.
Q: What other audits are you working on?
A: We’re also, by resolution, looking at customer service, the long lines for DMV; we’re looking at real property assessments, how well they’re assessing the valuation and classifying the real estate here in Hawaii; and we’re also looking at contracts for waste water company Synagro and also the beach construction projects in Waikiki.
Q: Do you anticipate any other audits on rail?
A: We anticipate the City Council will probably ask us by resolution to look at rail. We do a citywide risk assessment as part of our ongoing analysis with the city and where the vulnerabilities are, and we foresee we will need to go into auditing the rail system in the future. So we have contingency plans to do just that.
