Background

The Office of the County Auditor has completed a follow-up engagement with the County of Hawaiʻi’s Department of Human Resources (DHR) Hiring Practices. The original audit was conducted in response to numerous complaints from employees and the public. The audit identified the Staffing Review Committee as having a significant role in the hiring process and consisted of members who exerted undue influence. DHR’s previous process contained questionable hiring authority, inadequate segregation of duties, and insufficient monitoring and oversight. Based on the conditions at the time, eight (8) recommendations were made. The purpose of this follow-up audit was to determine if DHR implemented the prior recommendations.

• Adopt monitoring and oversight procedures
• Define nepotism
• Define conflict of interest
• Define familial relationships including Hānai, relationships
• Establish a policy addressing nepotism and conflict of interest
• Disclose any potential conflict of interest on the interview panelist acknowledgment form

Below are the eight recommendations in five categories.

Recommendation 1: “While the Staffing Review Committee (SRC) has already been eliminated, we recommend the Office of the Mayor, and the Department of Human Resources ensure that hiring selection rests solely with the appointing authority and prevents preferential treatment of new hire candidates. This may include updating policies and procedures, the County Charter, and/or the County Code.”

Condition and Cause: The Staffing Review Committee (SRC) influenced the County’s hiring process.

Effect of the Condition: In select cases, Department staff were pressured to place priority on persons of interest above the merits of other applicants. Additionally, staff feared retaliation, resulting in a bypass of established internal controls.

Department Action: To meet this recommendation, DHR updated their rules, policies, and procedures, strengthened segregation of duties, and ensured the appointing authority determined the method of filling its civil service vacancy. Specifically, the department took the following actions:

In October 2018, DHR reaffirmed through a memorandum, “the Department of Human Resources will not be involved in the actual decision of a hire.”

In December 2019, DHR revised their rules which provides for:

• The referral of the top five ranked names (rule of 5 plus tie scores) on an open-competitive list unless otherwise requested by the appointing authority. The applicant ranking on the referred list is also based on their examination rating and conditions of employment. Previously, DHR referred the entire eligible list and left it up to the hiring department to determine the interview pool using their skill set evaluation criteria method.

• For non-public safety positions, ten names on a registration list will be randomly generated for each vacancy based on the assigned district and duration of employment. Previously, DHR referred the entire list of eligibles and left it up to the hiring department to determine the interview pool using their skill set evaluation criteria method.

DHR updated and strengthened uniform policies and procedures to ensure selections for the positions are impartial, free from coercive political influences, based on the needs of the County, including applicant’s fitness and ability for public employment. Specific procedures were updated to provide internal control over:

• Filling Civil Service Positions
• Interview and Selection
• Request To Fill (RTF) Vacant Position

DHR also provided human resources training for cabinet members discussing the role and responsibilities of the appointing authority.

Audit Activity: To verify completed status, we reviewed laws, rules, procedures, and traced applicable source documents maintained in NeoGov, the applicant tracking system and tested hiring practices to determine if DHR followed and enforced their rules, policies, procedures and found:

• DHR updated rules, policies, and procedures to align with best practices.
• The appointing authority determined the method of filling its civil service vacancies, no exceptions noted.

The appointing authority also known as the department (head) is responsible for determining the method by which the vacant position is to be filled. The Managing Director for the Executive Branch and the Council Chair for the Legislative Branch respectively, reviews and approves the Request to Fill.

The appointing authority has discretion in filling its vacancies by:

• Transfer
• Demotion
• Appointment from an open-competitive or registration list
• An internal recruitment within the department
• An internal recruitment within the County
• Intergovernmental movement, and
• Any other means provided for by statute, these rules, or procedures

• The appointing authority provided justification for filling its vacancy, no exceptions noted.
• DHR reviewed and approved uniform Police department’s Interview and Selection Procedures in November 2018, no exceptions noted.

We determined this recommendation is completed.

Status: Completed

Effect of the Condition: With limited opportunity to report concerns, employees remained silent for fear of retaliation. As a result, stakeholders lost confidence in the hiring process.

Department Action: To meet this recommendation, DHR provided the following response, “DHR agrees an independent whistleblower program would be an effective means to receive anonymous complaints related to hiring practices. DHR supports an independent program where the administration and oversight fall outside the purview of the mayor. An independent program would decrease the potential for political influence or interference in response to complaints.”

Audit Activity: In January 2022, the Office of the County Auditor implemented fraud and whistleblower hotlines to provide County employees and members of the public, a way to confidentially report suspected fraud, waste, and abuse of County positions or resources in a one-year pilot program ending June 30, 2023. The program is outside the purview of the Mayor and the Department of Human Resources. We determined this recommendation is resolved.

More information is available:

Online: https://www.hawaiicounty.gov/departments/office-of-the-county-auditor/whistleblower

Fraud and waste hotline: (808) 480-8213

Whistleblower hotline: (808) 480-8279

Status: Resolved

Recommendation 3: “We recommend the Department of Human Resources develop and implement policies and procedures that address monitoring and oversight of countywide interviewing and selection processes to deter, detect, and prevent questionable hiring practices and ensure compliance with applicable laws, rules, and regulations.”

Condition and Cause: DHR did not monitor hiring department’s interview and selection process to ensure compliance with the merit principle.

Effect of the Condition: The County did not ensure uniform and transparent hiring practices.

Department Action: To meet this recommendation, DHR established a process to review interview packets to ensure hiring departments are following employment laws including lawful and non-discrimination practices, countywide interview and selection procedures, and the merit principle.

From October 2018 to November 2021, DHR reviewed twenty-two hiring department’s interview packets for:

• Position’s information sheet with instructions to the panelists
• Interview questions with model answers/concepts
• Assessment exercise(s) with criteria for rating applicants
• Rating sheets

DHR disclosed the following exceptions:

• DHR reviewed all County departments except for the Office of Management because there was no civil service request to fill to test.
• A review of Mass Transit Agency interview packets is past due as of December 30, 2021.

Audit Activity: To verify completed status, we reviewed all twenty-two interview packets or 100% of the testing population, and found no exceptions.

We identified opportunities to further strengthen monitoring and oversight of the County’s hiring process. DHR should continue ongoing monitoring of all department’s interview packets as a best practice and address the following in their rules, policy, and procedures:

• Adopt monitoring and oversight procedures
• Define nepotism
• Define conflict of interest
• Define familial relationships including Hānai, relationships. A term used in the Hawaiian culture that refers to the informal adoption of one person by another
• Establish a policy addressing nepotism and conflict of interest
• Disclose any potential conflict of interest on the interview panelist acknowledgment form

Status: Completed

Effect of the Condition: DHR was unaware hiring departments were bypassing qualified applicants for an interview and not uniformly vetting qualified applicants.

Department Action: To meet this recommendation, in May 2017, DHR required hiring departments track the status of all applicants referred in the NeoGov system:

• Date of contact
  • if still interested in an interview
  • schedule job interview
  • selection
  • reason for non-selection:
    • no response by deadline
    • decline interview
    • interviewed, not selected
    • decline offer
• Method of written contact
  • Electronic notification through NeoGov or US mail

 DHR also monitors:

• Reason for extending referred list beyond 90-day eligibility period
• Justification for requesting additional names
• Accurate reporting of new hire
• Expiration of referred lists

Audit Activity: To verify completed status, we reviewed applicable NeoGov source documents (e.g., exam plan, evaluation steps with detail, referred list with status detail, notices to eligibles, etc.) and found hiring departments were notifying and tracking applicants in NeoGov, no exceptions were noted. We determine this recommendation is completed.

Status: Completed

Recommendation 5: “We recommend that the Department of Human Resources provide mandatory on-going hiring procedure and merit principles training for all employees involved in the hiring process.”

Condition and Cause: Although DHR trained hiring departments to uniformly apply skill set evaluation criteria method to determine the interview pool, lack of oversight lead to a breakdown of internal controls.

Effect of the Condition: Hiring departments used questionable criteria (i.e., letters of interest from the applicant requesting an interview without civil service status, mailing address, interviewing the same number of applicants as vacancies when there is large pool of applicants, etc.) as a tool to identify the interview pool.

Department Action: To meet this recommendation, DHR updated their interview and selection procedures to eliminate using the skill set evaluation criteria method to identify the interview pool but used as a tool to identify the desired education, skill set, licenses(s), special working conditions, and ability to perform the essential job duties.

DHR provided “Conducting an Effective Job Interview” (CEJI) training, a mandatory course for employees and non-employees serving on interview panels. This training provided an overview of the interview and selection process in filling a county position training included a:

• Review of class specification
• Review of position description
• Required knowledge, skills, and abilities
• Development of skill set and criteria
• Roles and responsibilities of interview chair/panelist
• Asking standard questions and clarifying questions
• Interview questions with guidelines for panelists
• Protected categories under federal and state laws
• Lawful/unlawful employment inquires
• Recommendation(s) for selection

DHR also tracked mandatory training for employees and non-employees serving on interview panels.

In addition, DHR conducted the following training:

• Guidelines for Pre-Employment Inquiries
• Skill Set Development and Evaluation
• Developing Interview Questions & Assessment Exercises
• Human Resources Boot Camp
• Cabinet Human Resources Training
• Supervisory Training Program

Audit Activity: To verify completed status, we reviewed sign-in sheets and training material containing hiring procedures and merit principles, and found no exceptions. We determine this recommendation is completed.

Status: Completed

Recommendation 6: “We recommend the Department of Human Resources only use open-competitive recruitments on a continuous basis for “difficult-to-fill” classes of work.”

Condition and Cause: DHR conducted continuous recruitment for classes of work that were not difficult-to-fill.

Effect of the Condition: Hiring departments were unable to manage large lists of qualified applicants.

Department Action: To meet this recommendation, DHR closed continuous recruitment in December 2016 for classes of work that were not difficult-to-fill.

DHR no longer conducts open-continuous recruitments for entry-level classifications for Custodian-Groundskeeper, Laborer II, and Park Caretaker I. These registration recruitments are advertised for 10-calendar days.

Difficult-to-fill positions generally include positions that:

• Require specialized education, training, and/or certifications
• Have a low number of qualified applicants

Audit Activity: To verify completed status, we reviewed and found:

• Recruitment announcements were advertised for 10-calendar days, no exceptions noted.
• Open-competitive recruitment on a continuous basis were for difficult-to-fill positions, no exceptions noted.
• DHR authorized continuous recruitment for Clerk III and Cashier II positions to increase the applicant pool island-wide because there are more Request to Fill (RTF) requests, a low number of qualified applicants for these positions, and the prior list expired, no exceptions noted.
• We determine this recommendation is completed.

Status: Completed

Recommendation 7: “We recommend the Department of Human Resources develop and implement written policies and procedures clearly defining prohibited personnel hiring practices.”

Condition and Cause: DHR did not have provisions clearly addressing prohibited personnel hiring practices in writing.

Effect of the Condition: Appearance of, or actual preferential treatment of applicants.

Department Action: To meet this recommendation, DHR asserted their rules, policies, and procedures conform to Hawaiʻi Revised Statutes Chapter 76 Civil Service Laws including the merit principle, providing:

• Equal opportunity is in accordance with all laws prohibited discrimination. No person shall be discriminated against in examination, appointment, reinstatement, reemployment, promotion, transfer, demotion, or removal, with respect to any position when the work may be efficiently performed by the person without hazard or danger to the health and safety of the person or others.
• Impartial selection of individuals for public service by means of competitive tests which are fair, objective, and practical.

DHR also said lawful and unlawful employment practices are covered in various written procedures conforming with the merit principle in various training they provided.

In October 2018, DHR developed, adopted, and circulated “Human Resources Best Practices” as a foundation of their actions and decisions. It describes the best practice they strive to maintain the core values of the merit system which the County’s personnel system is based on in accordance with state law. (Attachments 1.2 – 1.4)

DHR oversees departments and agencies compliance with:

• Continuous recruitment request requirements.
• Employee training requirements to ensure hiring practices are fair, impartial, and relevant to the position.
• Interview and selection procedures.
• Audit of Interview Packets Memorandum No. 018-078.
• Filling Civil Service Positions procedures.
• HRS §76-1: selection of persons based on their fitness and ability for public employment.

Audit Activity

To verify resolved status, we reviewed DHR rules, applicable policies and procedures, HR Best Practices, various training materials and memos that addressed employment laws including lawful and non-discrimination practices, equal opportunity, and discrimination and compared to hiring practices and found DHR applied compensating controls to address the risk.

We identified opportunities to further strengthen internal controls. For example, DHR should clearly define, develop, and implement written policies and procedures to address prohibited personnel hiring practices to ensure future administrations adhere to applicable federal and state laws, their rules, and County’s policy and procedures. Otherwise, incorporate Human Resources Best Practices into their rules, policies, and procedures.

Prohibited personnel practices (PPPs) is defined as employment-related activities that are banned in the workforce because they violate the merit system through some form of employment discrimination, retaliation, improper hiring practices, or failure to adhere to civil service laws, rules, or regulations that directly concern the merit system principles.

Status: Resolved

Recommendation 8:“We further recommend the Department of Human Resources work with other jurisdictions to have the State's Hawaiʻi Revised Statutes updated or reinstated to include provisions that addresses prohibited personnel practices using federal laws as a guideline.”

Condition and Cause: DHR changed its rules to allow the SRC to make questionable hiring decisions.

Effect of the Condition: Appearance of or actual preferential treatment of candidates.

Department Action: To meet this recommendation, in October 2017 and November 2021, DHR contacted the Legislature as well as the State Department of Human Resources Development (DHRD) regarding steps to address prohibited personnel practices, but actions did not result in reinstating Prohibited Activities in Hawaiʻi Revised Statutes Sections 76-91, 92 that was repealed in 2001.

To mitigate the risk, in December 2019, DHR reinstated written examinations to ensure testing of fitness and ability of applicants for positions in civil service as follows:

• Classes of work are entry level into a series:
  • Clerical
  • Professional
  • Blue collar
• Classes of work are within a career progression series
• Education and experience requirements are either non-existent or minimal
• Applicant pool size is large based on recruitment history
• For designated classes such as fire and police, examinations are conducted at the department’s request annually, and they are for internal recruitments

Audit Activity: To verify resolved status, we reviewed rules, NeoGov exam plan, notes, corroborated with DHR staff, and found no exceptions.

Status: Resolved