Gov. David Ige ap­points new tax di­rec­tor

Honolulu Star-Advertiser - - FRONT PAGE - By Kevin Day­ton kday­ton@starad­ver­

Gov. David Ige on Wed­nes­day named long­time gov­ern­ment ex­ec­u­tive Linda Chu Takayama as the new di­rec­tor of the state De­part­ment of Tax­a­tion, quickly re­plac­ing out­go­ing di­rec­tor Maria Zielin­ski in a key po­si­tion in his ad­min­is­tra­tion.

Takayama is a lawyer who now serves as Ige’s di­rec­tor of the state De­part­ment of La­bor and In­dus­trial Re­la­tions, and pre­vi­ously served as state in­sur­ance com­mis­sioner. Her ap­point­ment is ef­fec­tive Mon­day.

Zielin­ski abruptly re­signed in the wake of a re­port that re­vealed state tax of­fi­cials in­structed a sup­pos­edly in­de­pen­dent con­sul­tant on which sub­jects it should ad­dress in its mon­i­tor­ing re­ports on the progress of a new $60 mil­lion tax com­puter sys­tem. The tax de­part­ment also re­quested changes in the re­ports by con­sul­tant Ad­vanTech LLC be­fore they were made pub­lic.

Ad­vanTech is an “in­de­pen­dent ver­i­fi­ca­tion and val­i­da­tion” con­sul­tant hired un­der a $1.43 mil­lion con­tract to help im­ple­ment the Tax Sys­tem Mod­ern­iza­tion project, or TSM. The con­sul­tant’s job is to mon­i­tor and re­port on the ex­e­cu­tion of the mul­ti­year tax de­part­ment project, and to make sure it functions as the TSM con­trac­tor promised it would.

House Fi­nance Chair­woman Sylvia Luke last week de­scribed the most re­cent re­port from Ad­vanTech as “shock­ing” be­cause it re­vealed that tax de­part­ment ad­min­is­tra­tors in charge of the com­puter project “have ma­nip­u­lated the con­tents of this re­port.”

Zielin­ski said Wed­nes­day that her res­ig­na­tion “has ab­so­lutely noth­ing to do with the in­de­pen­dent val­i­da­tion and ver­i­fi­ca­tion re­port done by Ad­vanTech.”

“I can un­equiv­o­cally state that to my knowl­edge, no facts or find­ings were ma­nip­u­lated in any way,” Zielin­ski said. “Any­one fa­mil­iar with IV &V and au­dit re­ports knows that there is al­ways an ex­change of com­ments and dia­logue be­tween the client and the con­sul­tant/ au­di­tor. Ul­ti­mately, the in­de­pen­dent con­sul­tant/ au­di­tor who pre­pared the re­port owns it and stands by it.”

Zielin­ski de­clined to say why she abruptly sub­mit­ted her res­ig­na­tion on Mon­day, the day be­fore it be­came ef­fec­tive. Ige told re­porters that Zielin­ski’s res­ig­na­tion “was not di­rectly re­lated to the TSM project.”

Takayama will earn $144,552 a year in her new job. She pre­vi­ously served as di­rec­tor of eco­nomic de­vel­op­ment in 2014 and 2015 for Honolulu un­der Mayor Kirk Cald­well, and was deputy di­rec­tor of the state De­part­ment of Com­merce and Con­sumer Af­fairs un­der for­mer Gov. Ben Cayetano.

She was also Hawaii in­sur­ance com­mis­sioner from 1991 to 1994 un­der for­mer Gov. John Wai­hee. She is mar­ried to state Rep. Gregg Takayama, (D, Pearl City-Waimalu-Pa­cific Pal­isades).

Ige is un­der in­tense pres­sure to ef­fi­ciently ex­e­cute the $60 mil­lion con­tract to re­place the tax de­part­ment’s old com­puter sys­tem. State gov­ern­ment has had an em­bar­rass­ing his­tory of botched com­puter projects dating back to pre­vi­ous ad­min­is­tra­tions, and the com­puter sys­tem for col­lect­ing state taxes is a crit­i­cal piece of state in­fra­struc­ture.

The project has al­ready stirred con­tro­versy. Randy Per­reira, ex­ec­u­tive di­rec­tor of the Hawaii Gov­ern­ment Em­ploy­ees As­so­ci­a­tion, on Oct. 31 wrote to Ige to ob­ject to the de­ci­sion ear­lier this year to take con­trol of the project away from Zielin­ski and TSM Pro­gram Man­ager Robert Su.

Ige in July named state Chief In­for­ma­tion Of­fi­cer Todd Na­ca­puy as “ex­ec­u­tive spon­sor” of the tax project, and placed it un­der the con­trol of Na­ca­puy and tax de­part­ment Deputy Di­rec­tor Damien Ele­fante.

Per­reira said the man­age­ment change “se­verely im­pacted” state over­sight, adding there is “com­plete lack of con­fi­dence” in the new lead­er­ship of Ele­fante and Na­ca­puy.

How­ever, Ad­vanTech wrote in its lat­est re­port dated Oc­to­ber that the new man­age­ment team urged Ad­vanTech to be more di­rect in de­scrib­ing its find­ings. The con­sul­tant then went on to ex­press con­cern about the progress of the project, warn­ing that “at present, the pro­gram is not op­er­at­ing in an op­ti­mal way.”

“There con­tinue to be a num­ber of is­sues and risks re­lated to pro­gram ex­e­cu­tion that, if not ad­dressed and re­me­di­ated im­me­di­ately, may have a sig­nif­i­cant neg­a­tive im­pact on the pro­gram’s abil­ity” to func­tion prop­erly when per­sonal in­come taxes are shifted over to the new com­puter sys­tem next year,” the con­sul­tant wrote.


Linda Chu Takayama ———

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