State Auditor Offers Scathing Criticism of Tax Dept

Marion M. Higa, Hawaii State Auditor

By Sonia Isotov

The Hawaii State Auditor released a report this month criticizing the Hawaii Tax Department for its lack of planning and fractured management; saying that it undermines the State’s tax collection efforts.

Under fire was the Dept’s IT system and its vendor contract(s); stretching back to 1999. Lack of staff training at the management and system administrator levels were criticized for leaving the long-term planning to managers with no formal IT or project management experience.

In 1999, the Department of Taxation (DoTAX) began a five-year, $51 million effort to replace its aging computer systems. By October 2004, the department and its vendor completed six major system implementations. Then, over the next four years, the effort continued with an additional 13 projects and enhancements to the system. This was followed in January 2008 by yet another system enhancement—a $25 million delinquent tax collections project, which called for an additional 22 new collection initiatives.

The State Auditor Marion M.ga stated that “with an IT infrastructure in near continuous project development mode for more than a decade, we found an internal staff that is stretched thin and frustrated with spending the majority of their time doing system testing at the expense of other responsibilities. In spite of these problems, the department has not adequately planned for June 30, 2011, when it will lose vendor support and must operate independently.”

According to the Interim Director, corrective actions and improvements are being instituted, especially in the areas of addressing staff shortages and training for new system administrators and project managers.

We also found that not only is the department unable to sustain the current rate of system enhancements, it will also struggle to maintain current levels of activity without assistance.”