Scathing city audit ignores improvements, HART CEO says

The head of the agency tasked with building the city’s 20-mile rail line said Friday that the findings of a scathing city audit deal primarily with issues that occurred during the project’s infancy, and that major steps have since been underway to correct the deficiencies.

The 112-page report Opens in a new tab, made public Friday by city Auditor Edwin Young, said major cost overruns and schedule delays were the result of inexperienced Honolulu Authority for Rapid Transportation managers and contractors who made questionable change orders and contract amendments.

HART CEO and Executive Director Andrew Robbins, however, stressed that the audit’s findings dealt almost entirely with actions taken by the agency from its inception in 2008 until June 2016.

“This is more of a historical account,” Robbins told reporters. “The auditor does point out that many improvements have been made by HART since that time.”

HART CEO Dan Grabauskas resigned in August 2016 Opens in a new tab after nearly 4-1/2 years at the helm of the largest and most expensive construction project in Hawaii’s history.

Robbins did not not mention Grabauskas by name, but told reporters that improvements to the procurement process began under interim Executive Director Krishniah Murthy, Robbins’ immediate predecessor.

“We put in a risk management program. … We added a number of checks and balances to that,” Robbins said. “We’re doing a much more effective job in terms of change-order processing and risk management that has … achieved good results so far. For the last two years, we have not had to increase our budget at all.”

HART’s price tag for construction has stayed steady at $8.165 billion, although federal officials say the overall cost is closer to $9 billion when including financing costs and contingency.

Some more recent change orders approved “are really closing out some of these issues from two, three years ago or even longer than that,” Robbins said.

Robbins said many of the the issues pointed out in the latest audit have been addressed, and that the agency believes most of the 18 recommendations suggested in Young’s 2016 audit have been implemented or are being done.

Friday’s audit, however, reported that despite HART’s claims, “we concluded that only one recommendation has been resolved, one recommendation has not been started because HART claims it would incur a penalty if it were implemented, and 16 of the 18 recommendations were still in some stage of implementation.”

Robbins said that doesn’t mean there’s a disagreement. “The auditor prefers not to close those (recommendations) out and to leave them open,” he said. Young’s intent “is for his office to come in during the year and work with us so that they can achieve significant documentation and so forth to prove that we have in fact addressed these open issues, and we’re fine with that. We have no problem with that at all.”

Mayor Kirk Caldwell, in a statement, said “it’s clear that the transit authority made some crucial missteps in the initial stages of the project by moving forward with construction without the proper notice to proceed.” It’s imperative for the HART board to continue to scrutinize improvements promised by the agency’s executive management team, he said.

City Council Budget Chairman Joey Manahan said the audit will be discussed Wednesday at his committee meeting.

Young’s audit as well as a series of four audits being released by state Auditor Les Kondo “substantiate a lot of what we, at the Council, feared was happening with the project with regards to cost overruns and HART’s inability to provide us with certain details of their budget, contingency funds and CIP (capital improvement plan) requests over the years.”

Councilman Ron Menor said he was troubled by the auditor’s findings. He and other Council members who supported an extension of the 0.5 percent excise tax surcharge for rail and approved additional rail construction funding “did so based on HART’s assurances that adequate mechanisms are in place to contain costs and keep the project within budget.”

Councilwoman Kymberly Pine said she and her West Oahu constituents are finding it increasingly hard to trust HART officials, even with a new slate of leaders. “This is the project that’s supposed to improve our lives, and time and time again, every audit shows that the people with the access to make the most important decisions did not know what they were doing and they were not truthful with the people.”