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HomeMy WebLinkAboutMIN GOEAC 2024/06/18 (2022-2024) Committee on Governmental Operations and External Affairs 34th Session West Hawai`i Civic Center 74-5044 Ane Keohokalole Highway, Building A Kailua-Kona, Hawai`i June 18, 2024 CALL TO The regular meeting of the Committee on Governmental Operations and ORDER: External Affairs was called to order at 9:55 a.m., in the Council Chambers, Kailua-Kona, by Ms. Cindy Evans, Chair. ROLL CALL: Present: Ms. Cindy Evans, Chair Ms. Susan L. K. Lee Loy, Vice Chair (via videoconference from Hilo) Ms. Michelle M. Galimba, Member Mr. Holeka Goro Inaba, Member Ms. Jenn Kagiwada, Member Mr. Matt Kaneali`i-Kleinfelder, Member (came in later) Ms. Ashley L. Kierkiewicz, Member(via videoconference from Hilo) Ms. Heather L. Kimball, Member Ms. Rebecca Villegas, Member (came in later) STATEMENTS The Chair directed the Committee to proceed to the next order of business, FROM THE Statements from the Public on Agenda Items. PUBLIC ON AGENDA ITEMS: (There were none.) CHR. EVANS: Thank you. Would you please read in the resolution. GOEAC-34 June 18,2024 ORDER OF The Chair directed the Council to proceed to the next order of business, RESOLUTIONS: Order of Resolutions. Res. 539-24: REQUESTS THE COUNTY AUDITOR TO CONDUCT A PERFORMANCE AUDIT OF THE DEPARTMENT OF RESEARCH AND DEVELOPMENT TO PROMOTE TRANSPARENCY, ACCOUNTABILITY, AND EFFECTIVE RESOURCE UTILIZATION Areas of emphasis for review include organizational alignment with the department's mandated duties and responsibilities, the process for awarding discretionary grant funds and determining the measurable impacts the disbursement of funds has on the community, and if the economic objectives and needs of the County are being properly addressed through workforce development initiatives. Reference: Comm. 908 Intr. by: Ms. Kierkiewicz and Mr. Inaba Motion to Approve: Ms. Kierkiewicz moved to recommend adoption of Res. 539-24. Seconded by Mr. Inaba. CHR. EVANS: Member Kierkiewicz. MS. KIERKIEWICZ: Thank you, Chair. I've been on the Council, going on about five-and-a-half years now, and I've always been curious about the sort of very fluid nature of the Department of Research and Development(R&D). I've been very curious about additional kuleana that it's been taking on over the last few years, kind of going beyond what's articulated in the Charter and County Code. This particular budget cycle, you know, really raised some red flags for me around resource utilization, and again, additional responsibilities that the department is carrying. And they're not being total transparency, I think, within the community around what exactly the department is doing. I think there's so much that R&D is doing, that we may not know about and would like for that to just sort of be elevated through a performance audit, and to see if there are ways in which we need to update the Code so that it is crystal clear throughout any Administration as to what exactly R&D is responsible with. You know, I was also very concerned about there not being any Innovation Grant Awards; that cycle not happening this particular fiscal year. And so, with so much discretionary funding not spent by the department, really felt that there was a need for the County Auditor to just take a look at how historically these discretionary funds were being made available to members of the community and provide suggestions for how R&D can be increasing transparency with the public Page 2 GOEAC-34 June 18,2024 and ensuring that each of these resources are available to entities in the community that need them. Happy to answer any questions, but do want to turn it over to my co-sponsor, Council Member Inaba. CHR. EVANS: Member Inaba. MR. INABA: Thank you. Yes, I think having worked on this with Council Member Kierkiewicz, it was good to really get grounded again in what the Charter and the Code say the Department of Research and Development is in charge of and in what areas they're primarily trying to make advances in. As we look overall, we're going to see legislation coming through that touches on any grants that the County gives out to nonprofit organizations. And the Department of Research and Development is one that has given out grants for a really long time through the Innovation, and now, Impact Grants. So, wanting to really get a good handle. And as we work on that legislation, making sure that every dollar of our county taxpayer dollars is going to good use. And that we're getting good reporting and good overall tracking of the funds that are being awarded out to community by the Department of Research and Development, in specific. We do have Director Adams here today. Director, would you like to add anything at this time? (Note: At this time, Research and Development Director Douglass Adams came forward to address the members of the Committee.) MR. ADAMS: Thank you, Council Member Inaba. Doug Adams, Director for Research and Development. I would only indicate that I am very proud of the work that the members of my department are engaged in and continue to do for the people of the Island of Hawai`i, and look forward to assuming that this passes through working with the County Auditor, who has a fine reputation. MR. INABA: Thank you, Director. I would like to ask the support of our colleagues in passing this resolution favorably to the Council, and that we can get to work on this in the near future. And we did have some conversations with the Auditor regarding this resolution. So, ask for your support. Mahalo. CHR. EVANS: Member Kaneali`i-Kleinfelder. MR. KANEALI`I-KLEINFELDER: Thank you. Thanks for being here, Director. What are your thoughts on the audit and the direction of the audit? MR. ADAMS: I see it as a—obviously, the Council has its prerogative; the ability to oversee the Executive Branch Department, as a part of that. So, I look forward to learning through the process of this performance audit. It will be good Page 3 GOEAC-34 June 18,2024 for the department to see where we can improve. So, we'll engage in that process, and see how we can improve. MR. KANEALII-KLEINFELDER: Okay, thank you, Director. Is Mr. Benner in the Hilo Chambers? MS. KIERKIEWICZ: He just arrived and he's walking forward. MR. KANEALI`I-KLEINFELDER: Perfect. Thank you for being here today, Sir. (Note: At this time, County Auditor Tyler Benner came forward to address the members of the Committee.) MR. BENNER: Good morning, thank you. Tyler Benner, Office of the County Auditor. MR. KANEALI`I-KLEINFELDER: Mr. Benner, would you please give us an overview on what this audit hopes to accomplish, and if you've spoken to the department? MR. BENNER: Yes, thank you. I have had the opportunity to sit down at length with the director and kind of go over some of the criteria that's been enumerated in the resolution. I think that we are going to be looking really through a pretty amazing breadth of information here. Looking at R&D, in their six-month program objectives, they have nine functional areas of operation to which they have described goals and objectives. That includes agricultural and food systems to which they have 14 categories of goals and objectives. Tourism, which has two goals and three sub-objectives. Business Development, which has four goals and 15 sub-goals and objectives. Energy, which has eight goals and 17 sub-goals and objectives. Resource Center, which has two goals and eight sub-goals and objectives. Film and creative industries, which has four goals and 10 sub-goals. And then, Immigration, which has two goals; four sub-goals, and Workforce Innovation and Opportunity Act that has five goals. Community Well-being has six goals and six sub-goals. So, in their fiscal year 2023-2024 program and final objectives, a total of 110 goals and objectives. And then on top of that, we are talking about alignment with the Charter and the Code, and really establishing kind of that long-term working model, and whether it aligns over time. MR. KANEALI`I-KLEINFELDER: Okay, thank you, Mr. Benner. Then, given that the framework of this was really built around some of the challenges some of Page 4 GOEAC-34 June 18,2024 the Council Members saw in the budget for the department, specifically. How does the audit review or does it, the budget for the department? MR. BENNER: So, me and the Director did have some conversations about that, and I don't know we're at the planning stage of this to where we can give you a lot of specific testing criteria that we would drill into. You know, what we do see is that the description of this department, as with a lot of departments, is very vague. And so that makes it difficult to determine if there is, you know, true efficacy being reached out of the dollars that are being allocated towards certain purposes. I would say that the analysis that's going to have to take place here, is going to be largely qualitative in a number of areas. So, that's generally weaker criteria than if we're just talking about a strict compliance audit. But certainly, I think that there's a lot of potential benefits that we could realize out of doing that analysis. MR. KANEALI`I-KLEINFELDER: Okay, thank you much, Mr. Benner. And Director Adams, thank you for being here this morning. I look forward to seeing what comes of the audit, and hope there's some positive changes that we can effect, if any are needed from the department level. Thank you. CHR. EVANS: Okay. I'm going to check in with Member Lee Loy since I can't see her light, and then come back to Member Kagiwada. Did you have your light on? MS. LEE LOY: Yes, Chair, please. CHR. EVANS: Okay, Member Lee Loy. MS. LEE LOY: Thank you, Chair. In support of this resolution and thank you Auditor for being here. You know, you mentioned some of the benefits, and while it's not mentioned in the resolution itself, we have had opportunities where we have received funding. To that, come to mind, was the ARPA (American Rescue Plan Act) Funding. And the other one is our Lava Recovery dollars that came through. And just curious if some of the lessons that we will learn through the audit will also take in to account, these unique times, when we receive funding for whatever reason. MR. BENNER: I mean, obviously, there's going to be funding buckets that are very specific to a specific purpose. And we find exceptions to that and may only speak to that funding bucket. But any opportunity that we can use to apply findings to other functional areas of our organization, we're certainly going to express that. You know, we're not afraid to say that it should be applied on a Countywide basis when applicable. Page 5 GOEAC-34 June 18,2024 MS. LEE LOY: Great. You know, to the makers, and because we did receive testimony specifically around the mechanics of the programming of our ARPA dollars. Just maybe food-for-thought, for my two makers, if there's some language that we might want to include in the resolution or if this is just something that, you know, is based on what our Auditor has mentioned, that they'll actually be some findings around there. Those are my only thoughts about this resolution. I love the idea. I remember starting eight years ago, and kind of always wondering, like what really does R&D do? But I also recognize there's times when we make investments to R&D, and maybe it's not that successful either, right? And so, maybe some stats around those investments and what the return on investments have been, I think would also be very helpful through this audit. MR. BENNER: I think that's a good point, and especially where we can formulate some criteria where when something is not proving to be profitable, we informally say, cut and run before we've spend good money after that and that we're not duplicating those efforts. MS. LEE LOY: Absolutely, and that impact of the dollar, I think is what I'm looking for. Thank you, Auditor for being here. For the two makers, thank you so much for advancing this and that consideration of special programing or special funding that comes through, not only now, but in the future. Thank you, Chair, I yield. CHR. EVANS: Thank you. Member Kagiwada. MS. KAGIWADA: Thank you, Chair. Yes, generally supportive. Thank you to the makers for bringing this forward. Thank you to the Director for being here and being cooperative around this. And to Mr. Benner, I had a similar kind of thought line. I guess, I'm just following up on something Council Member Lee Loy was talking about. My question is more around, will you be kind of looking at how the grantmaking abilities and how R&D's ability to leverage additional funding sources, which I think they have been successful at to some extent, are going considering that this body, I believe, funded some grant-writing positions for the department, and just making sure that those are being used to the best of our County's abilities. I would be very interested in knowing, you know, is this good? Is it working? Are there tweaks we could make around these grant-writer positions and how that's going, and are we really going out and getting those dollars that we had high hopes for? So, thank you, if that can be part of what you're looking at. Is that planned, Mr. Benner? Page 6 GOEAC-34 June 18,2024 MR. BENNER: Not planned, but we'll consider it for planning as an output of these discussions. MS. KAGIWADA: Okay, thank you. Because I do think it's a very important part of what we have kind of expected to some extent of the department. And I think, you know, they have shown that they have the ability to do that. And I just want to know if it's getting done, you know, really well or can we do some things to help it? Alright, I'll yield. CHR. EVANS: Thank you. Member Galimba. MS. GALIMBA: Thank you. So, I really like that this resolution does point out the vast number of areas that R&D has been charged with over the years, and actually it's not even exhaustive. There's other things even that the department does that are not in the first two "Whereas" clauses, I believe. So, it is kind of a catch-all department, and it's also been used almost tactically to deal with things as they come up. So, I think that's going to be useful to have, you know, a consideration of what might be the best functions of the department. And perhaps, helping to figure out how it can best help the County, what ways perhaps we may need to think about reorganization of responsibilities countywide. So, I would personally like to see some props around that, and perhaps recommendations to the Council or the Administration about how to help us to have the best sort of organization of departments. Like for instance, we now have OSCER(Office of Sustainability, Climate, Equity and Resilience). And so, there's quite a bit of overlap in the listed areas that R&D is charged with what we would like OSCER to do. So, the County of Maui, they stood up a Department of Agriculture, and not necessarily saying that's something we want to do, but just kind of thinking about, how do we really have the best kind of organization to get the things that we want to get the things that we want to get done in our County. So I don't know if that's something that you can do, Mr. Benner. MR. BENNER: Well, we're not allowed to determine strategic direction for the counties. We don't make management decisions. But you know, I'm listening to everything that you're saying, and you know, we'll insert ourselves as appropriate to be able to make some distinctions on opportunities for improvement. MS. GALIMBA: Thanks very much. I yield. CHR. EVANS: Thank you. Any other comments? Otherwise, I'd like to offer a question, actually, to Auditor Benner. The language of the third bullet; it says, Page 7 GOEAC-34 June 18,2024 "How the administration of workforce development initiatives, supports the economic goals and needs of the County." Where would you find the economic goals and needs as kind of your measurable outcome? I'm assuming, you know, how do you benchmark it? Where will you look to find economic goals and needs? MR. BENNER: A lot of that is going to start with an interview of leadership in that department as to what their priorities are. I mean, when we talk in our audits about departments having not prioritized something, that's because everything requires a tradeoff. So, everybody has to prioritize something, and then in contrast something else has to be prioritized down. So, in this case, we want to find out where are their efforts and energies being put into, and what's being traded off in order to create that and are those appropriate? CHR. EVANS: So, supporting the needs of the County, you feel that the interviewing with the Administration will give you that? MR. BENNER: Well not necessarily, but that to point us as to what guiding documents they're using to establish those priorities. So, you know, perhaps it's the long-term General Plan that they're using or perhaps it's short-term guidance as provided by the Administration. I mean, it's going to be the department that's going to have to provide us with kind of where that information is coming from. And we sort of source it from there and then find out how well they're complying to it. CHR. EVANS: I like what I hear. So, thank you very much, I'm in strong support. MS. KIERKIEWICZ: Chair. CHR. EVANS: Yes, Member Kierkiewicz. MS. KIERKIEWICZ: Thank you. If I could also just add a little bit more to what Auditor Benner has shared about the economic goals and needs of the County? I think we're all familiar with the Comprehensive Economic Development Strategy or CEDS. This is a requirement that all regions across the country do in order to be able to access monies from the Economic Development Administration. This document is crafted in partnership with the Hawai`i Island Economic Development Board, HIEDB. My understanding is that Research and Development is heavily involved in that process. It's a year-long process to engage members of our community to identify what sort of industries do we want to support and are conducive to our Hawai`i Island community. Page 8 GOEAC-34 June 18,2024 So, I think that is something that our Auditor will be taking a close look at to see what R&D's role is, if any to this point, to help convene the conversation; secure the resources necessary to implement the goals and objectives of the CEDS. I also wanted to just take a moment to thank Director Adams for his corroboration in embracing this performance audit, as an opportunity to learn and grow as an organization. I agree with you. I believe your staff is excellent. I think, though over time, there just have been some questions raised around the additional kuleana that the department has accepted or created for itself. And the question I have is, are these additional kuleana appropriate for the County or is it more appropriate for someone in the private or nonprofit sector to be handling? So, these are sort of the test that I'm hoping that the Auditor is able to devise to ensure that all the responsibilities that the department carries are appropriate and the right fit. In hearing the comments raised by my colleague regarding grants management, leveraging other funding; the special funding of ARPA, I will be working with Council Member Inaba and with Auditor Benner to make sure the language is something that your office can actually implement. But I do want to add an additional bullet to increase the scope to ensure that these points that folks are elevating are addressed in the audit. I mean if we're going to do it, we might as well ensure it's comprehensive and done well and includes everything that folks here are sort of raising. And I liked Council Member Galimba's idea of taking a look at how other municipalities, even State entities run similar departments. Are there lessons learned there for how they are operating that we might want to consider as we figure out our Code updates necessary for R&D. Just wanted to share that with you. Happy to take your thoughts right now, but definitely want to work with you and Council Member Inaba offline to author an amendment to include those points. Thank you. MR. BENNER: Thank you. My only comments with regards to the Comprehensive Performance Audit is,the way that the language in this resolution is written, "The County Auditor is hereby requested to conduct a comprehensive performance audit of the Department of Research and Development with an emphasis on." And then it numerates three bullets. Comprehensive audits are not done very often. In fact, we're trained to really divide and subdivide our criteria and to look very closely at specific subject matter. And so, the two comments that I have to the resolution are: a) what is the timeframe that Council would consider? Typically, we've looked at about five years back, and we would be happy to look at five years back here or another time Page 9 GOEAC-34 June 18,2024 period that is had in discussion and you folks feel comfortable with. And the second part of it is I just might offer a suggestion that in that section I've just read, that it be a thorough audit of the enumerated subject matter. If I choose not to look at anything within the department, I've changed it from a comprehensive audit to a limited scope audit. So, I need the flexibility to be able to do that, because certainly, we won't be able to look at the granularity of all aspects of their operation. Things like payroll for example. So, this, by definition, won't be a comprehensive performance audit. So, that's the only other comment that I might make a subtle change to that language. MS. KIERKIEWICZ: That's extremely helpful. Thank you. We'll be working with you offline to ensure that the language in the actual resolution that's adopted is accurate and reflective of the work that your office is going to perform. In terms of timing, because we are asking you to review so much information, and not just connect with folks within the County, but I'm assuming that some of your interviews are going to take place with folks that serve on different boards and commissions that interact with R&D. What's a good timeframe for a project like this? I'd love to see something in 120 days, but I think that is wishful thinking. What is a good amount of time for your office to tackle a project like this? MR. BENNER: Most of my colleagues in the industry would say a year. We try to work at a really unprecedented pace. So, what we fear is, as I learned about structured data, and information technology is, there's a saying that frequents that segment. It says everything that you asked for but nothing you wanted. And so, we're trying to avoid that with these conversations and make sure the documents that we produce are going to be valuable, and that you can make informed decisions based on them, that the department has good strategic direction that it can take based on the evidence that we produce. You know, with that said, once our field work stops, a lot of times we are at the will of departments to provide, say their management responses. We're at the will of the departments to provide information to us when we're engaged in fieldwork. In particular, R&D travels a lot, which may make interviews difficult to schedule. They've said that they will do what they need to do in order to prioritize those meetings. So, what I would say is probably 180 days is what we would aim to shoot for, understanding that there are factors that are within our control and factors that are beyond them. MS. KIERKIEWICZ: Okay, thank you. Sony Chair, I'm thinking here. I hesitate to put a hard deadline in here, because life happens; things happen. But 180 days sounds reasonable. I just want to be able to get something before the next budget hearings. Because we want to be able to have this information sort of walking into those conversations. But if you feel comfortable that internally, Page 10 GOEAC-34 June 18,2024 you're able to get something done within 180 days, would you be opposed to us introducing an amendment to the resolution, or would you rather just kind of keep it flexible? MR. BENNER: I would really prefer the flexibility if at all possible. When I make a promise, I like to deliver the promise. So, I don't want to overpromise if I know that I have factors that I can't control. MS. KIERKIEWICZ: Great, okay. Thank you, Auditor Benner, I appreciate it. Thank you, Chair. I appreciate everyone's comments and support. I yield. CHR. EVANS: Thank you. Member Kaneali'i-Kleinfelder. MR. KANEALI`I-KLEINFELDER: Thank you. Follow up for maybe both directors regarding the policy discussion revolving around the resolution and the audit. I'm wondering if that's on addressing the policies that R&D is performing under versus the actual department budget, grants, that kind of thing. That's an interesting aspect of the conversation today. CHR. EVANS: Director Adams. MR. ADAMS: Thank you, Council Member. Obviously, the Auditor is the owner of his process. We will talk with the auditor about whatever the auditor wants to talk to us about. The determination of the policies that the department is operating with and under and moving towards, more than happy to address those. I think it's part and parcel of our mission to do it. MR. KANEALI`I-KLEINFELDER: Thank you, Director. Mr. Benner. MR. BENNER: Yeah, we're happy to take a look at how those things are designed and implemented and to determine if there's some opportunities for improvement in there. MR. KANEALI`I-KLEINFELDER: I think more I'm asking, is it appropriate for an audit to address policies of a department that are driven by an Administration? MR. BENNER: I'd have to review those policies before making—I wouldn't be able to make a blanket statement. MR. KANEALI`I-KLEINFELDER: Okay, and I appreciate that. And I have a question mark there as well for how we look at policies of an Administration through an audit of a department. So, something to think about before we hear you back at Council. Thank you. Page 11 GOEAC-34 June 18,2024 CHR. EVANS: Thank you. Members we have amotion on the floor to forward Resolution 539-24 to Council with a favorable recommendation. All in favor? Any opposed? Vote on Res. 539-24: The motion to recommend adoption of Res. 539-24 was (Approved) carried by the following voice vote: Ayes: Committee Members Galimba, Inaba, Kagiwada, Kaneali`i-Kleinfelder, Kierkiewicz, Kimball, Lee Loy, Villegas, and Chair Evans—9. Noes: None. Absent: None. Excused: None. ADJOURN- Seeing no further business, Chair Evans adjourned the meeting at 10:28 a.m. MENT: Approved: i , / eir......„ ---- 7/20/2 67/ Ms. Cindy Evan air (Date) Committee on GI •rnmental Operations and External Affairs CE/dt Page 12