County Finance Committee Discusses pCard Audit

*** Updated at 12:18 p.m. on Aug. 5 to correct the spelling of a Richard Abbett***

Legislative Auditor Bonnie Nims went in front of Hawai’i County Council’s Finance Committee Tuesday afternoon to discuss her recent audit report on county purchasing cards, or pCards.

Nims issued the report in late July. The purpose of the report was to determine whether current internal controls were working to reduce any abuse of the cards. The audit also evaluated pCard purchases by the county and identified potential areas for improvement.

The report showed that there were 164 transactions totaling almost $30,000 that did not follow county policy, had questionable public purpose, and may have violated state law. She recommended the county address the problems by, among other actions, updating the county code and strengthening monitoring practices to ensure expenditures are for a legitimate public purpose and demonstrate a clear benefit to Hawai’i County and taxpayers.

The audit came after months of controversy surrounding Hawai’i County Mayor Billy Kenoi’s use of his county pCard after it surfaced that he used the card at a Honolulu hostess bar and to buy a surfboard.

Prior to Nims’ presentation, several Hawai’i County residents gave testimony on the matter. Only one resident, Mary Begier, did not outright criticize the mayor for his actions.

“I ask that you show restraint in your decision making,” she told the committee. “We’ve all learned a great deal and we’ve heard the old adage that you need to spend money to make money. That’s true in government as it is in any business.”

Begier also commented on omiyage, saying that she sometimes buys wine as a gift while traveling and thinks the action is appropriate.

However, several other residents provided video testimony that criticized county policy and Kenoi’s actions.

“The mayor himself has shown contrition and understands well the blemish and mark of shame that is on the fruit of his good works,” said Ka’u resident Richard Abbett.

“He has absolutely violated public trust,” said Puna resident Gregory Smith in his testimony as he was condemning the council for not requesting Kenoi’s resignation.

Following public testimony, Nims briefly explained the audit and some of its findings before the council members started to ask questions.

Kohala councilwoman Margaret Wille appeared worried about the current checks and balances in place to safeguard the system.

“Why doesn’t it work? Is it that everybody here is so intimidated to carry it out? What is it? How could this go so awry?” she asked.

Nims went on to say that part of the county code relating to pCard use could use clarification so there’s no room for interpretation.

According to the report, the use of pCards for alcohol or personal purchases is restricted, unless specifically authorized. Ambiguous language within the policy appeared to be the topic of discussion Tuesday.

“It doesn’t clarify where they can make exceptions to the rule. In my opinion, it’s vague,” Nims said.

South Kona and Ka’u Councilwoman Maile David found the language of the policy somewhat confusing, as well.

“If you can’t purchase liquor then there shouldn’t be any reason why you could,” she said.

Puna Councilman Greggor Ilagan asked Nims for her definition of “public purpose,” in reference to her report that said state and county law requires all public funds be used for public purpose.

Ilagan plans to introduce legislation that would clarify the county law prohibiting the use of public funds for personal purposes. He did not go into detail about the proposed bill during the meeting.

Nims also told the council members that she’ll be looking into the pCards transactions next year during the annual fiscal review and would be willing to meet with the council again following the report.