Searing Audit Says OHA Misspent Millions Of Dollars
From Civil Beat, January 31, 2018 (excerpts)
…The results of the initial analysis portray an agency where a handful of officials have power to disburse large sums of money with few checks and balances. Some even told auditors that it’s hard to say no to funding requests that they know don’t meet requirements.
The audit lambasted both Chief Executive Officer Kamana’opono Crabbe and members of the Board of Trustees for misusing funds. The auditors said Crabbe repeatedly approved thousands of dollars in expenditures against OHA staff recommendations….
Board members used thousands of dollars of their allowances for a long list of questionable expenses, including the following:
- funding for a recipient to compete in the Miss Rodeo America pageant in Las Vegas;
- helping to pay for the medical expenses of a trustee’s son; and
- paying for legal fees associated with a lawsuit between OHA trustees.
The draft audit found that the pool of discretionary spending was nearly twice as big as formal grants between 2015 and 2016. The non-competitive awards aren’t publicized and have to be initiated by someone within OHA.
That means millions of dollars are being spent loosely and given to those who “know how and who to ask.”…
OHA has used money from the Native Hawaiian Trust Fund to pay for “retirement benefits for a former trustee, political events, an international conservation convention, as well as a beneficiary’s rent, other beneficiaries’ funeral-related clothing expenses, and a trustee’s personal legal expenses.”….
OHA has spent down its fiscal reserve quickly, disbursing hundreds of thousands of dollars on grants, even though the fund isn’t supposed to be used for grants. In one case, $56,300 went to a former OHA trustee to cover their retirement benefits….
The fiscal reserve spending included nearly $600,000 to an elderly care facility called Lunalilo Home and Trust….
The trustee added that they are aware ‘there’s that pot of money or bucket of money sitting here,’ indicating that it was tempting to use when trustees receive numerous funding requests from beneficiaries.”…
The audit found OHA’s chief executive officer also repeatedly overruled staff recommendations to give money to organizations that didn’t meet guidelines. Poor management also allows some organizations to get money twice….
Among the expenditures: helping someone fly to the Cook Islands for a cultural exchange program; a flight upgrade on United Airlines; access to Hawaiian Airlines Premium Club; and tickets to the Polynesian Football Hall of Fame Dinner….
“When we asked trustees if they verified requestors’ Hawaiian ancestry, one trustee replied that he may ask the question on occasion, but if the requestor’s name is Hawaiian, he doesn’t make an inquiry. Another trustee told us that trustees are not qualified to make that determination, while another did not ask. The remaining six trustees told us that they just know who is Hawaiian.”….
read … Searing Audit Says OHA Misspent Millions Of Dollars
PDF: Draft Audit Report (58 pgs)
ILind: Auditor’s quest for secrecy is misguided
HHC: It seems like every decade or so another “searing” audit blasts the Office of Hawaiian Affairs for mismanagement and insider dealing
KITV: Native Hawaiian community reacts to OHA audit
HNN: The audit couldn't have come at a worse time for OHA. Many of its trustees are up for re-election and the agency is asking for more money from the state Legislature.
NOTE: 1:45PM Thur Feb 1 HWN/WTL/JDC to Hear SB2136 'RELATING TO INCREASING THE OFFICE OF HAWAIIAN AFFAIRS' PRO RATA SHARE OF PUBLIC LAND TRUST FUNDS.' UPDATE: "The committee(s) on HWN/WTL/JDC will hold a public decision making on 02-06-18 2:15PM in conference room 016."
Companion Bill HB1747: "Bill scheduled for decision making on Tuesday, 02-06-18 9:30AM in conference room 312."
* * * * *
STATEMENT OF OHA CHAIR COLETTE MACHADO
News Release from OHA January 31, 2018
OHA appreciates that the role of the Auditor is to provide an independent and objective analysis of OHA to assist us in better fulfilling our mandate of improving the conditions of Native Hawaiians. We also understand that the daunting challenges our beneficiaries face – as well as our sweeping mandate – require our commitment to continuous improvement and progress.
We acknowledge that the findings and recommendations of the draft audit highlight areas that need to be addressed, and we look forward to reviewing the draft report in further detail to see how we can best move forward. In some instances, the draft audit identifies areas for which we have already begun to address. For example, on August 1, 2017, the OHA Board established an Ad Hoc Committee to review and recommend changes to policies relating to our grants and sponsorships, which includes trustee allowances. Furthermore, as part of the agency’s ongoing Fiscal Sustainability Planning, the OHA Board established an Implementation Advisory Committee that includes a number of working groups that are focusing on policy recommendations for several issues identified in the draft audit, including our Fiscal Reserve and other spending policies.
OHA is extremely disappointed with the unauthorized release of the draft audit before we could fully review the report and provide a formal agency response to the Auditor, and before the Auditor has had the opportunity to review our response and issue its final audit.
Again, OHA is committed to making the necessary improvements to better serve our beneficiaries.
Questions about the status of the audit should be directed to the Office of the Auditor.
* * * * *
OHA Trustees Order LLC Managers to Provide Check Registers for Independent Audit
Trustee Keli‘i Akina comments on independent audit and leaked state audit
News Release from OHA Trustee Keli’i Akina, PhD January 31, 2018
HONOLULU, HI- The Office of Hawaiian Affairs Committee on Resource Management today unanimously moved to order its LLC managers to provide check registers related to OHA’s LLCs, clearing a significant hurdle for the independent audit approved by the Board of Trustees in 2017.
The Trustees’ action today coincided with an alleged leak of the state’s own audit of OHA to news media.
“While I am not at liberty to comment on the specific contents of the state audit before it is officially released, it indicates the need for OHA to get its financial house in order. OHA’s independent audit is an important step in that direction,” Trustee Akina said. “While the state audit may indicate problems within OHA, the independent audit will take a deeper look at why these problems exist in both OHA and its LLCs.”
Trustee Akina, as chair of the Audit Advisory Committee, crafted the scope of work for the independent audit in an effort to identify instances of fraud, waste and abuse within OHA and its LLCs.
“Both the state audit, and OHA’s independent audit constitute a real win for the beneficiaries of OHA and all citizens of Hawai‘i who demand transparency and accountability in public institutions,” Trustee Akina said.
* * * * *