Staffing shortages and inefficient technology are hampering operations of the special-education program in Hawaii’s public schools, according to an internal audit released this week that found the program is functioning at a “marginal” level.

The review, which was presented Tuesday to the Board of Education’s Audit Committee, focused on the business operations of the program, which services more than 18,800 special-needs students. It did not review curriculum or instruction.

“Based upon our review, we found the DOE’s controls related to the business processes to manage the (special education) program are functioning at a marginal level,” the report concluded. “A marginal rating indicates that there may be a potential for loss to the auditable area and ultimately to the DOE.”

Under the federal Individuals With Disabilities Education Act, school districts are required to provide a “free, appropriate public education” to qualified students with disabilities, regardless of the nature or severity of the disability. Special education refers to specially designed instruction and services to meet the needs of students with disabilities, and can include academic services, speech-language services, psychological services, physical and occupational therapy, and counseling services.

Nearly a quarter of the DOE’s general fund budget, or $325.5 million, was allocated for special education last school year. The state also received $40 million in federal funds under IDEA.

The audit highlighted a “lack of qualified personnel” at the district and school level, along with a lack of incentives to keep existing staff.

“Through numerous interviews with district educational specialists, a common problem is a shortage of qualified personnel,” the report said.

The department had about 652 vacant special-education-related positions — such as educational assistants, speech pathologists and psychologists — of the 3,786 available positions, representing a 17 percent vacancy rate. At the school level the DOE had 120 vacant special-education teacher positions of the 1,830 available. Most of the teaching vacancies, the report said, are filled by substitute teachers.

For those on staff, the report noted, the DOE is lacking incentives to retain them.

“There are numerous reasons why the DOE has a hard time finding qualified personnel, which are also some of the same reasons it makes it difficult to retain the existing personnel,” the audit said. “Additional reasons include lack of incentives for them to stay, lack of support, larger caseloads and excessive paperwork due to shortages of personnel, as well as existing personnel approaching retirement age.”

The report said the high turnover leads to a heavy reliance on outside contractors for what’s known as paraprofessional support services and behavioral instructional support services. The DOE spent about $38 million to contract those services last fiscal year, the audit showed.

The report said the shortages are concerning because they could lead to inconsistent services for students; unqualified teachers in the classroom; loss of funds due to a greater use of contractors; and a higher number of complaints and due-process cases.

“We have a lot of work to do in this area,” said BOE Vice Chairman Brian De Lima, who has a special-needs daughter in public school. “Basically, we’re going to continue to have ongoing retention problems if we don’t create a work environment where the teachers are able to feel not only valued, but they’re given the resources and the support.”

BOE member Don Horner suggested the department start thinking more creatively to address the workload issues that special- education teachers complain about — such as creating clerical support positions.

The audit also criticized the DOE for not documenting its oversight of special-needs students placed in private schools at the DOE’s expense.

The department spent $6.5 million last fiscal year on local and out-of-state private education facilities for special-education students, but auditors were unable to determine how many students are attending private schools because the DOE does not have a tracking system in place. (The most recent indication from a 2013 report showed 57 special-education students were receiving services at private schools that year.)

“Inefficiencies in the monitoring process may possibly lead to violations in the law due to special education private school-placed students not being monitored on an annual basis by their respective home school,” the audit said.

The state’s special-education advisory panel said the report addressed a lot of the concerns the panel has been raising over the last several years.

“The majority of these report findings present a moderate level of risk to the (DOE), which speaks to the urgency of fixing these problems in a timely manner,” Martha Guinan, chairwoman of the Special Education Advisory Council, said in written testimony.

The BOE’s Audit Committee voted to refer the audit to the board’s Student Achievement Committee for further review, and recommended the department come up with a realistic timeline for addressing the issues raised.