Honolulu, Hawaii
                                                     , 1999

                                   RE:  S.B. No. 46
                                        S.D. 2

Honorable Norman Mizuguchi
President of the Senate
Twentieth State Legislature
Regular Session of 1999
State of Hawaii


     Your Committee on Ways and Means, to which was referred S.B.
No. 46, S.D. 1, entitled: 


begs leave to report as follows:

     The purpose of this measure is to amend chapters 37 and
302A, Hawaii Revised Statutes, to facilitate the implementation
of school-based budgeting.

     Specifically, this measure:

     (1)  Requires the Department of Education to provide each
          school with the skills and information necessary for
          each school to prepare its own budget, and for each
          school to do so; and

     (2)  Requires that prior to the beginning of each school
          year, schools prepare reports on their expenditures in
          the previous fiscal year.

     Your Committee concurs with the concept that individual
schools should be given increased involvement in the preparation
and execution of each school's budget.  This measure would make
schools responsible for the preparation of their budgets, and
give them maximum flexibility in the expenditure of their moneys.

     However, your Committee has received information from the
individual schools that they do not have the resources or the

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expertise to prepare their own budgets.  Additionally, with the
current economic hardship of the State, the Department of
Education is not able to provide funds for each school to hire
fiscal officers.  

     Nevertheless, your Committee believes that schools must
assume more responsibility for their budgets.  Your Committee
finds that while the Department of Education currently allocates
funds on a school-by-school basis, and gives schools flexibility
to expend funds, these allocations are not made known to the
individual schools until August, well after the Department of
Education's budget is finalized by the Legislature, and only
weeks before the school year commences.  This does not give the
individual schools adequate time to determine the most effective
expenditure options.

     Accordingly, your Committee has amended this measure by:

     (1)  Deleting the requirement that each individual school
          prepare its own budget;

     (2)  Requiring the Department of Education to submit a
          report on its proposed school-by-school budget to the
          Legislature and the individual schools by the opening
          day of each regular session; 

     (3)  Deleting the amendment to section 37-34.5, Hawaii
          Revised Statutes, as it is no longer necessary; and

     (4)  Making technical amendments for the purposes of

     Your Committee notes that this measure focuses on school-
based budgeting, and the issue of educational accountability is
dealt with in another measure.   The Committee on Education and
Technology has passed S.B. No. 1307, S.D. 1, which also mandates
increased accountability by the Department of Education and the
schools.  S.B. No. 1307, S.D. 1, establishes a comprehensive
accountability system for school performance.

     As affirmed by the record of votes of the members of your
Committee on Ways and Means that is attached to this report, your
Committee is in accord with the intent and purpose of S.B.
No. 46, S.D. 1, as amended herein, and recommends that it pass
Third Reading in the form attached hereto as S.B. No. 46, S.D. 2.

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                                 Respectfully submitted on behalf
                                 of the members of the Committee
                                 on Ways and Means,

                                 CAROL FUKUNAGA, Co-Chair

                                 ANDREW LEVIN, Co-Chair

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