State roundup for November 7


$32M to redo state tax system

HONOLULU (AP) — State officials say Hawaii is spending $32 million to rebuild a tax collection system that has never worked properly.

And lawmakers are questioning why Hawaii’s health insurance exchange would hire the same contractor to build the state’s online marketplace at the center of President Barack Obama’s health care overhaul.

CGI Group Inc. was paid $87.5 million from 1999 to 2011 to modernize a system for the state Department of Taxation.

Senate President Donna Mercado Kim says she doesn’t think the Hawaii Health Connector should have hired CGI to a $53 million contract given past problems.

“I would want to get a company that had a good track record, not one that had a bad track record in our state. Let the evidence speak for itself,” Kim said, pointing toward problems with both systems.

Hawaii’s health exchange was delayed two weeks at the start of open enrollment because of software problems, with consumers unable to see or compare plans or apply.

CGI says its tax system has been successful, helping collect $385 million in delinquent taxes it would not have and cutting refund times in half or more.

Audit faults state recycling

HONOLULU (AP) — Hawaii’s beverage container recycling program continues to lack effective inspection and enforcement and its financial viability could be undermined as a result, according to a state audit.

The audit made public Tuesday said state payments to redemption centers continue to be based on what centers claim to have received from consumers and not what they send to recyclers.

“Management has known about its flawed payment system for years but has done little to address the defect,” the report said.

Department of Health’s Gary Gill, who oversees the HI-5 program, said the audit did a good job of presenting the details. He questioned how the overall findings were laid out.

“I dispute the sensationalism they use,” Gill said.

The program has had phenomenal success keeping soda cans and other containers from landfills despite staff and funding challenges, Gill said. Consumers recycled nearly 75 percent of the 911.8 million containers sold in the state in fiscal 2013.

Acting Auditor Jan K. Yamane, however, concluded that problems identified in past audits are still around.

For two years ending in fiscal year 2012, the program paid $6.2 million in deposit refunds for nearly 7.5 million pounds of materials that could not be tracked, the audit said.

The state pays 5 cents per container to redemption centers. Claimed amounts are not validated. That can mean overpayments, according to the audit.

The department lacks adequate management to provide effective oversight, the audit said. One redemption center may have been overpaid by $2.2 million in deposit fees and could not account for a discrepancy involving more than 2 million pounds of claimed material, according to the audit.

Auditors said a priority should be a “back-end” payment system based on shipped totals of recyclable containers instead of claimed amounts.

That’s a goal, Gill said, but the change could undermine the stability of the industry. Redemption centers, he said, would have to carry the debt for nickels paid to consumers for weeks longer than they do now.

 

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