Wake Up, DOBOR: Your Boat Is Sinking
Imagine Liberty House not billing its charge customers. Think of Visa graciously allowing overdue accounts to ride for months with nary a nasty note to the deadbeats. Dream of the Internal Revenue Service giving pink slips to its entire army of tax collectors and auditors.
Unimaginable. Preposterous. Far-fetched.
But not to the happy-go-lucky folks at the state’s Division of Boating and Ocean Recreation. Borrowing a page from Rip van Winkle, they slept through years when their accounting system appears to have had no checks whatsoever on those things that bookkeepers call accounts receivable. In fact, for all we know, there still may be no checks in place.
In February, David Parsons, DOBOR administrator, informed the Board of Land and Natural Resources, to whom he reports, of the serious arrearage that had accumulated in the case of the Ke`ehi Marine lease — a problem he laid at the door of a Department of Transportation computer system. Parsons assured the board that the accounting system had been tightened up and that no other problems of this magnitude existed. Two months later, in April, Parsons found himself once more put in the painful position of explaining to the Land Board another serious arrearage — this one at Honokohau Harbor — which again had taken years to ripen.
In recent months, the Boating Division has been deservedly praised for its cleanup of Ke`ehi Lagoon. Yet if its oversight of tenants’ activities there, and elsewhere, is of a piece with the agency’s oversight of its accounts receivable, it is not unreasonable to ask whether the contamination itself may be related to a generally slipshod style of management that seems to pervade the agency.
And that’s the most charitable explanation.
Favoritism?
A skeptic might view the twists and turns in the lease payments on both the Ke`ehi and Honokohau leases examined in these pages as something more than mere sloppiness. The extraordinary step-up in lease rent at the Ke`ehi Marine site had the effect of reducing payments owed by its former owners (who include the politically well-connected attorney and Land Use Commissioner Renton Nip), while putting a heavier burden on the present lease owners. With no Land Board approval having been sought for this highly unusual departure from lease terms, the overall impression one is left with is that the Boating Division is not above yielding to political pressure that tilts the playing field, brings profit to the well-connected, and puts all others (including taxpayers) at a disadvantage.
A similar spin could be placed on the lease at Honokohau. There a former politician has been able to skip off, scot-free, leaving others to pick up his six-figure debt to the state. The fact that the Board of Land and Natural Resources is going along with the Boating Division’s decision to let the responsible party escape without legal pursuit is both startling and shameful.
Shell Games
The state has many reasons for desiring to exercise control over occupants of state property. A few we can think of, offhand, might include an interest in making sure that its tenants are responsible, reputable parties who pay their bills and don’t leave the land a mess. Then there’s the legitimate desire to make sure that the state participates in any profits that its lessees might enjoy should they sell their lease-hold interest to other parties.
At the very least, the state has a defensible right to know, simply, who is occupying its land.
Yet for the last five years, the state has had no idea who bore ultimate responsibility for paying the rent on the Ke`ehi Marine lease.
As a first step in addressing this problem, the Board of Land and Natural Resources should include in every new lease and in every lease that must be reopened, for whatever purpose, during its term, language giving the board the right to withhold consent of the transfer of the lease by whatever means: stock assignment or purchase, sale or other conveyance of the lease, or corporate takeover. No new law or rule is needed; just the exercise of some horse sense by the Department of Attorney General.
Cleaning House
The Legislative Auditor recently published a follow-up report to the audit it conducted of expenditures from the Boating Special Fund two years ago. That more recent report (No. 95-11, March 1995) refers to a letter from the Boating Division last November, in which the division listed steps it had taken to address problems identified in the earlier report.
Among the steps reported was development of “an interim budgetary system,” described by the auditor as an accounts receivable system rather than the comprehensive financial accounting and budgeting system that the auditor had two years earlier pressed the agency to install. Even so, the “interim budgetary system” is not expected to be fully operational until sometime mid-year, DOBOR said.
Whenever the system is implemented, the Boating Division should invite — no, make that beg — the Legislative Auditor to check the system out for flaws and review it for its ability to flag not only future transgressors, but also to point out past delinquent accounts. The delinquencies at Ke`ehi Marine and at Honokohau, after all, were discovered not as a result of any system-generated review, but by other means. What this suggests, of course, is that there may be many more delinquencies lurking in DOBOR’s closets.
If the Legislative Auditor is busy, then the Boating Division should take a few dollars from its Boating Special Fund to hire a private auditor to check for leaks and weaknesses in its record-keeping system. Whatever the cost, it would surely save far more in the long run.
Finally, there’s the matter of the utter disarray in which DOBOR’s records have been kept. Piles of boxes, heaped in no particular order, in DOBOR’s back room and “under the ramp at Pier 11” — really! — do not inspire confidence in the agency’s ability to perform its bureaucratic function of record-keeping and oversight.
With Grateful Heart
Environment Hawai`i is delighted to acknowledge the donations of W.S. Merwin, the G.A.G. Charitable Corporation, Bill Stormont, Dieter Mueller-Dombois, Robert Pyle, Tanee Connally, and Annette Kahoelauli`i.
In addition, we are pleased to announce that the Wallace Alexander Gerbode Foundation of San Francisco has awarded Environment Hawai`i a generous grant for organizational development.
Environment Hawai`i is a 501(c)(3) corporation. All donations over the basic price of a subscription are tax-deductible, as provided by law. Subscribers do account for most of our income, but we could not make it without the additional support of foundations and individuals. Mahalo to all.
Volume 5, Number 11 May 1995
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