HONOLULU — State Auditor Marion Higa is accusing Gov. Linda Lingle's top budget aides of exercising inadequate oversight of state finances.

In a stinging report issued Thursday, Higa also asserted that state Department of Budget and Finance officials may have violated state law by investing state funds in student loan-backed securities that do not mature in five years or less.

Higa says neither department Director Georgina Kawamura nor her top investment administrator were consulted prior to purchases of about $1 billion in auction-rate securities in recent years.

Higa says because that market has tanked, the state's investments are expected to lose $254 million in value.

Lingle heatedly criticized a draft of the report earlier this month.