No malfeasance was found.

But that's about all the good news to be gleaned from a new audit of the state Department of Business, Economic Development and Tourism.

The state auditor's report, released last week, found that DBEDT staff displayed a disturbing lack of commitment to follow the Hawai'i Public Procurement Code between July 1, 2005 and June 30, 2008.

The audit cited DBEDT's "many errors" in implementing the code, including a 40 percent error rate in a sampling of items. Those responsible for following the code didn't fully understand it. Training was inadequate. Following the rules was not a top priority. It's little wonder the audit used a descriptive adjective — "apathetic" — to describe the procurement environment at DBEDT.

DBEDT Director Ted Liu acknowledged that his preference for decentralizing decision-making, along with limited training, may have contributed to the procurement problems.

He pledged to take the audit seriously and to work toward improving procurement practices within DBEDT.

That's a start. But Liu and his staff must treat this issue not merely as a bureaucratic problem to be solved, but as a failure of the public trust.

The procurement code governs the way the state awards and manages contracts — funded by taxpayer money, for the public good. DBEDT handles millions of dollars in procurements, including those involving one of Hawai'i's most important growth industries — high technology, a focus of the audit.

The rules are complex and can be confusing. But there's no excuse for any state agency, including DBEDT, to have less than firm control of this process. It's critical that those entrusted with public funds handle them responsibly, ensuring transparency, accountability and fair competition.

That the errors individually were small, and not the result of corruption, is little comfort. Protecting the public interest depends on following the rules.

The audit rightly warns that a working environment without rigorous standards, properly followed, "could lead to abuse, even fraud."

The audit also questioned the transfer of money to projects the Legislature declined to fund, an apparent disregard for legislative intent. Liu rejects that conclusion, saying lawmakers expressed support for them, and that the administration was within its rights to transfer unused payroll funds for the projects. That's debatable; numerous lawmakers, including outspoken critics of the administration, would disagree.

The department already labors under a cloud. Liu himself is under investigation for questions related to his handling of a hydrogen fund contract, a probe instigated by the state Senate. This was a key motive that prompted the Legislature to order this audit.

Taxpayers have a right to expect the audit to bring results. It's imperative that Liu and DBEDT strengthen and solidify the procurement policies of the department so the public can have full confidence in its operations — now and in future administrations.