Auditor ends contract for audit of rail change orders

HONOLULU (AP) — The state auditor has canceled a $700,000 contract with an outside accounting firm to examine change orders and other cost items of the 20-mile rail line under construction on Oahu.

The office terminated the contract with BKD LLP because it was not happy with the work, state Auditor Les Kondo told the Honolulu Star-Advertiser.

Kondo said he does not know if his office will rebid the contract, or if the state will try to recoup about $450,000 already spent on the contract. The office is consulting the state attorney general’s office about the matter, he said.

“We had concerns about the accuracy of the information that was being reported, and we had asked the contractor to provide us with assurance that the information was accurate and supported with appropriate evidence,” Kondo said. “The contractor was not willing to do that.”

The auditor’s decision comes as state lawmakers are considering measures that would reduce the auditor’s oversight of the $9.2 billion rail project. The state House voted Tuesday to stop requiring the auditor to produce an annual review of Honolulu Authority for Rapid Transportation documents.

The projected price of the rail line has ballooned from the $5.1 billion price tag estimated in 2012. Lawmakers had instructed the auditor to provide annual reviews as part of a $2.4 billion state bailout of the project in 2017.

Lawmakers are now considering giving the responsibility to the state attorney general. House Finance Committee Chairwoman Sylvia Luke, a Democrat, said she wants attorney general’s office to take a “more aggressive approach” following growing concerns about the project.

Federal investigators in recent weeks have demanded tens of thousands of documents from the transportation authority, ranging from closed-door meeting minutes to information about landowners and tenants relocated from the rail path.

“In concert with the federal government, I think the state needs to do a little bit more in our investigation of finding out if there were misused (funds) and fraud dealing with state funds,” Luke said. “That’s not going to be accomplished by an audit. That needs to be accomplished through criminal vetting and the attorney general’s office taking a more aggressive approach on this issue.”