The Hawaii Legislature asked the Office of the Auditor to examine two major Department of Education computer projects--a financial management system (FMS) and a student information and program management system (SIPMS). It also requested guidelines for use in evaluating funding requests for future projects. A 1-year implementation delay in the FMS project has resulted in unused training facilities and equipment, additional consultant fees, and unreliable completion cost estimates. These problems were caused by major shortcomings in the development and procurement process. Still in the early planning stage, the SIPMS project has completed a preliminary plan and a requirements definition. The plan, which proposes a "staged" approach, will take 6 years and $23.8 million to complete. The estimated $3.3 million for the first 2 years is realistic, although auditors cannot comment on the remaining $20.5 million covering construction and implementation costs. The FMS project should: (1) agree on software capacities, critical requirements, and capabilities needed before full implementation; (2) develop a work plan; and (3) define project responsibilities and agree on remaining task assignments. The SIPMS project should continue its phased implementation approach and use existing hardware and software as much as possible. Legislature requests for funding such projects should be in understandable language. (MLH)