County audit finds backlog, system gaps and training needs in Hawaii County building permit process; SB 66 could shift responsibilities

The Office of the County Auditor presented a performance audit of the Department of Public Works (DPW) building-division permit process to the Communication Reports and Council Oversight Committee on May 20, identifying systemic issues that contribute to permit delays and recommending 29 actions to improve timeliness, quality and transparency.

Tyler Benner, county auditor, said auditors analyzed application data from July 26, 2021 to March 31, 2024, interviewed DPW staff and stakeholders, and conducted ride-alongs with inspectors. Audit team members reported 13 findings and 29 recommendations; management largely agreed and provided a detailed SMART action plan (report pages 93–131).

Key findings included: (1) volume pressures — approximately 15,600 permits received vs. about 11,100 processed in the period reviewed and average incoming 16 applications per day to 12 processed per day, creating a backlog; (2) time-measurement distortions where the department treats incomplete submissions as outside processing timelines, producing statistical but not operational improvement; (3) redundant data collection across portal steps; (4) manual rework and legacy processes; (5) no consistent contact validation; (6) outdated forms and not using digital signature capabilities; (7) lack of standard completeness criteria and a formal complaint process; and (8) inspection inconsistencies, limited management oversight, insufficient ongoing training, and Epic system limitations such as lack of role-based access controls, unrestricted backdating, inaccurate geolocation, and missing exception reporting.

The auditors recommended a three-pronged strategy: reduce volume (exempt low-risk permits, expand self-certification where appropriate), improve processing time (date-driven prioritization, automation, provisional permits), and simplify complexity (clear guidance, updated policies, Epic enhancements, and Lean/Six Sigma assistance).

Audit staff noted that inspectors appreciate consistent inspection practices, and that inspection delays can nullify permit-processing gains. The audit also reported that the fraud, waste and abuse hotline received calls related to potential abuse; auditors said investigations of individual actions are handled separately from the process audit.

The audit referenced a state proposal, Senate Bill 66, then pending with the governor, which would establish a 60-day decision window for counties: when plans are certified by a licensed design professional and meet requirements, a county’s failure to act within 60 days would result in automatic approval. Auditor Benner said SB 66 aligns with many audit recommendations and would likely require Hawaii County to amend Chapter 5 of the construction administrative code and revise administrative rules if enacted; the governor’s sign-or-veto deadline was June 24, 2025.

DPW provided a written management response with time-bound actions and committed to a May 23 Epic (EnerGov) upgrade. Committee members discussed training (International Code Council offerings and recent IECC trainings), Epic enhancements (role-based access, exception reporting, inspector and code-compliance modules), staffing and zonal coverage for inspectors, priority queues, third-party review and self-certification concerns (liability, insurance and lender impacts), and the need for clearer assignment of responsibility to implement action items.

Auditors and department staff agreed that information-technology analysts and permit-optimization resources (including a permit optimization manager contracted through the mayor’s office) are supporting data analysis and implementation planning. The committee asked for a clear Gantt chart or project plan that assigns responsibility for recommended actions and for a public tracking mechanism to follow implementation progress.

A motion to close file on Communication 272 was made and seconded; the committee recorded the communication closed after discussion.