Keli‘i Akina Urges OHA Board to Remove CEO
As fiduciaries, Trustees must act immediately
News Release from Office of OHA Trustee Keli’i Akina PhD, February 20, 2018
HONOLULU, HI- Office of Hawaiian Affairs Trustee Keli‘i Akina is publicly calling on the OHA Board of Trustees to take action to remove CEO Kamana‘opono Crabbe, after a scathing audit revealed serious financial mismanagement.
“Although the state audit reveals that OHA’s CEO is personally responsible for the misspending of millions of dollars, the Trustees who allow him to remain in place are now just as complicit,” Trustee Akina said. “Failure to act decisively to remove the CEO, considering the overwhelming evidence presented by the state Auditor, would be a dereliction of our fiduciary duty as Trustees to protect the Native Hawaiian trust fund.”
After months of rigorous examination of OHA grants, sponsorships and spending in fiscal years 2015 and 2016, the state audit identified gross financial mismanagement and inappropriate spending.
According to the state Auditor, there were numerous instances where the CEO ignored grants staff recommendations, effectively overriding processes put in place to ensure fairness and impartiality.
“Although $7 million of Native Hawaiian trust funds were awarded by OHA in accordance with strict internal policies and controls, twice that amount- $14 million- flowed out of OHA through loosely-administered, noncompetitive methods,” Trustee Akina continued. “While the OHA Board had knowledge of some of these expenditures, the CEO should be working with us, and not against us, in fulfilling our fiduciary duty over the funds.”
The state Auditor also found that in fiscal year 2015, the CEO exceeded his discretionary sponsorship budget of $65,000 to award a total amount of $285,499. Similarly, in 2016, the CEO exceeded his discretionary sponsorship budget of $100,000, and funds expended totaled $210,700.
“The findings of the state audit are egregious, but are merely the tip of the iceberg. They validate the need for a more comprehensive, independent audit. For example, the state Auditor raised questions about, but did not investigate, OHA’s limited liability companies for which OHAs CEO is a manager,” said Trustee Akina. “The need to conduct this independent audit without delay or interference is one more reason the CEO must be removed immediately.”
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Statement from OHA Chair Colette Machado regarding OHA Trustee Keliʻi Akina’s press release calling for the removal of OHA’s Chief Executive Officer
News Release from OHA, Feb 21, 2018
First, Trustee Akina’s statement that “the state audit reveals that OHA’s CEO is personally responsible for the misspending of millions of dollars” is inaccurate. Nowhere in the recent state audit did the auditor find that OHA misspent millions of dollars. This is a gross misrepresentation of the audit.
Instead, the auditor questioned the process OHA used to disburse $14 million in what the auditor deemed “discretionary spending.” Of these expenditures, $13.1 million was approved by the OHA Board of Trustees in public meetings subject to the State Sunshine Law. All of these Board-approved funds were distributed to programs that provide critical services to Native Hawaiians, such as the Department of Hawaiian Home Lands, Hawaiian-focused charter schools and higher education scholarship programs. This is money well spent.
The only time the word “misspent” is found in the audit relates to trustee allowances and the CEO’s administration of the trustee allowance process. The auditor noted that trustee allowances represent just a fraction of OHA’s overall spending.
Moreover, the removal of OHA’s CEO is not included in any of the auditor’s 10 recommendations. The employment of OHA’s CEO is a confidential, personnel matter for the full Board of Trustees to decide and inappropriate to discuss in public.
The state audit points out improvements that need to be addressed by both the Board of Trustees and the Administration. Now is the time for OHA to come together to share in the responsibility of making these changes so we can better serve our beneficiaries. This is why the first action the Board of Trustees will consider will be a moratorium on the use of Fiscal Reserve, Trustee Allowance and Sponsorships, and CEO Sponsorships until such time that these policies can be amended by the Board.