State Audit of OHA is just the tip of the iceberg!

by OHA Trustee Keli’i Akina, PhD, Ka Wai Ola, March, 2018

The recently-released state audit of the Office of Hawaiian Affairs is good news for beneficiaries because it is an important first step in holding OHA Trustees and the administration accountable for every dime we are entrusted with. But it's just the tip of the iceberg! There is much more that needs to be examined, and that will be the purpose of the upcoming independent audit initiated by the OHA Board of Trustees. 

While the State Auditor's report, released on February 13, shows serious problems with OHA grants, sponsorships and spending in fiscal years 2015 and 2016, it is merely a starting point. The independent audit, on the other hand, will systematically examine both OHA and its ILCs, providing a more complete picture of OHA's financial health.

For example, while the state audit found mismanagement and inappropriate spending of millions of dollars over a two-year period, the independent audit will cover a five--year period of time and a broader sampling of expenditures. And while the state Audit merely raised questions about OHA's LLCs, the independent audit will provide an actual examination of LLC contracts and financial records.

Essentially, while the state audit points to much of what needs to be changed, the independent audit is needed to identify root causes.  Serving as chairperson of the (Independent) Audit Advisory Committee, I advocated for an independent auditing firm to identify fraud, waste and abuse within OHA and its subsidiary ILCs. The work of this independent audit is currently taking place and beneficiaries should stay tuned for the announcement of its findings.

After all is said and done, what is the value of these audits? The answer is that these audits are of great value, indeed. Proper audits are essential to ensuring that the wealth of OHA is used to serve Hawaiian beneficiaries in the areas of jobs, housing, education, healthcare, and other bread and butter issues.

OHA trustees have a fiduciary and constitutional obligation to watch over and administer the Native Hawaiian trust fund. When I became a Trustee, I vowed to pursue three objectives with respect to the Native Hawaiian trust fund:

1. Protect the trust fund.
2. Grow the trust fund.
3. Ensure that trust funds are expended to meet the real needs of Hawaiians;

I am glad to say that the state audit and upcoming independent audit will help to achieve the first of these objectives, to protect the Native Hawaiian trust fund by exposing any areas of fraud, waste and abuse.

Like physicians, we need to get a clear diagnosis of the problem and its causes in order to put OHA back on course financially to serve the Hawaiian people.

Toward this end, E Hana Kakou/Let's work together!

The State Audit of OHA, Report No. 18-03, is available on the Office of the Auditor website at http://auditor.hawaii.gov/.

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Trustee Akina welcomes your feedback.  Contact him at TrusteeAkina@oha.org or call (808) 594-1976.