She wrote the department wants to spur competition, modernize routes through computer software, and give the DOE maximum flexibility to analyze proposed contracts.

In June, the Management Partnership Services Inc. was awarded a contract for $109,000 to scrutinize the school bus program. A report is due in November, and even harsh critics like Ken Levasseur believe the DOE is on the right path.

"I have to commend Kathryn Matayoshi, she is doing everything that is needed to get student transportation back where it should be," said Levasseur, a former lobbyist for bus contractors, who now drives for Gomes School Bus Service, LTD.

Among the more egregious findings in the audit is the DOE's commitment to pay the general excise tax for 75 bus contractors to the tune of $2.2 million. The report also found the DOE paid some contractors $100 per day for every school bus that remained idle for up to 180 days.

Although the DOE ultimately saved $1.35 million in school year 2012 by allowing 22 school buses to remain idle, the policy resulted in bus contractors being awarded $412,574 in compensation.

L'Heureux said the policy on idle buses is one of the items that will be corrected through Management Partnership Services' examination of the program.

"We have to go back and look at our own procurement law, not only ours, but certainly the state as well," he said. "There might be some statutes that need to be changed with regards to how we procure those contracts."

L'Heureux said changes to the school bus program would be initiated before the start of the next school year, and some routes that were cut could be restored. However, that doesn't mean other routes won't be streamlined or eliminated in the future.

"I think everything is on the table," said L'Heureux. "You have to look at all options and examine every possibility of how you make this thing flatter in terms of architecture."

According to the DOE, an estimated 39,000 public school students ride the school bus. The department also provides free curb-to-curb service to approximately 4,000 special education students.