HomeAid Hawaiʻi’s Response to the State Auditor’s Kauhale Report
News Release from HomeAid Hawai’i, Oct 07, 2026
Deeply affordable housing starts with bringing costs down. HomeAid Hawaiʻi brings public funding, philanthropic contributions, industry expertise, and community volunteers together to reduce market costs and make limited housing dollars go further.
Through the Kauhale Initiative, we put that model to work under the State’s emergency authority and with its guidance, helped the State to deliver safe affordable housing while reducing costs. As we address the audit claims, we believe the full picture should include both how public funds were managed and what was delivered: homes, value, and a different path to housing people can afford.
The audit misses the full value of this housing approach
Households with the least income need the greatest support. All-in costs for Hawaiʻi Housing and Finance Development Corporation (HHFDC) regularly exceed $600,000 per unit, while we report an average of $120,900 per unit. These figures reflect different housing types and cost scopes but provide important context for evaluating this approach to affordability.
This deep affordability is made possible through a combination of philanthropic and industry contributions that supplement State funds. In other words, such a low-cost alternative to affordable housing would not be available to the State in the absence of philanthropic and industry contributions.
HomeAid Hawaiʻi’s model reverses the housing subsidy framework: we have directly facilitated over $4.4 million in philanthropic and industry contributions to supplement approximately $39 million in State funding for the Kauhale Initiative. Public-private coordination also resulted in an estimated $11.7 million in construction cost savings compared with traditional development models. We believe the audit gave insufficient attention to how the Kauhale Initiative can deliver safe, affordable homes to those most in need.
Reconciliation as a contractual safeguard
Kauhale launched under emergency authority as projects and delivery systems evolved. HomeAid Hawaiʻi and SOHHS incorporated a reconciliation process into the contracts as a safeguard to review costs, resolve questions, correct allocations, and return funds where appropriate. Many of the financial claims underlying the $13.7 million in allegedly questionable payments cited in the audit report have already been reconciled and resolved.
Fewer than 5% of the thousands of transactions reconciled to date have required correction in favor of the State. The most recent reconciliation efforts appear to indicate that HomeAid Hawaiʻi has not been reimbursed for more than $1.7 million in State-directed project costs advanced by HomeAid Hawaiʻi as a result of State-directed changes to project scope and contract terms. A complete accounting should address reconciliations in favor of the State, as well as HomeAid Hawaiʻi.
We believe the audit report failed to achieve this, denying taxpayers information necessary to understand the full picture.
The audit should evaluate the full public investment
SOHHS has a $88.2 million legislative appropriation to support the broader Kauhale Initiative. Act 309 required a management and performance audit of that complete Initiative. Instead, the Auditor only examined nine development contracts belonging to HomeAid Hawaiʻi, representing less than half of the total Kauhale Initiative budget. We believe that concentration leaves the public without a complete evaluation of program outcomes and value.
Hawaiʻi needs an evaluation that identifies what should be corrected and what is working. Without adequately examining housing outcomes, project savings, the value created through public-private partnerships, and the supplemental financial support rendered thereby, we risk missing an opportunity to bring deeply affordable homes within reach of more residents at a lower cost to the State of Hawaiʻi than is otherwise achievable through costly traditional housing programs.
For additional information, please see homeaidhawaii.org/dashboard.
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HomeAid Hawaiʻi Shares the Fuller Picture Behind Its Growth and Accountability
News Release from HomeAid Hawai’i, Oct 04, 2026
The October 4 Honolulu Star-Advertiser article examined challenges during a period of extraordinary growth for HomeAid Hawaiʻi. We want to share additional context about our emergency housing work, the safeguards built into our contracts and the improvements we have made.
Responding to an urgent need
In 2023, the State asked us to expand Kauhale on an emergency timeline. The Maui wildfires then brought an additional responsibility to create housing for displaced families. Between 2023 and 2024, our organization grew more than fifty-fold.
(IMAGE: Between 2023 to 2024, HomeAid Hawaiʻi’s annual revenue grew from $2.2 million to $142.9 million.)
These initiatives brought new housing approaches into operation under rapidly changing conditions. This required HomeAid and the State to anticipate project changes, cost allocations, and billing errors requiring reconciliation. Our contracts included provisions to protect both parties by providing a process to review documentation, correct allocations, and return funds when appropriate.
Jeff Prostor, Board President, Owner, Isle Communities – “Kimo has been transparent about the challenges and has worked to bring in the right people and make the necessary changes. That is the leadership we expect, addressing problems openly and following through.”
Independent reviews and stronger oversight
In parallel to reconciliation, HomeAid Hawaiʻi completed independent audits of its 2024 and 2025 financial statements. Separately, independent board directors, supported by legal counsel and a third-party CPA, reviewed vendor relationships and found no evidence of fraud, self-dealing or excess private benefit within that review, concluding that HomeAid generally received value equal to or greater than the amounts paid.
The completed accounting reconciliation and investigation accounted for every transaction within its scope, corrected misclassifications, and resulted in reimbursement to the State. To address control weaknesses identified, HomeAid brought accounting in-house, added senior financial leadership, and strengthened invoice review and board oversight.
Ralph Mesick, Treasurer, Vice Chairman at Central Pacific Bank – “The board stands behind the steps taken to improve financial oversight. We took the findings seriously, corrected billing issues and returned funds to the State. We remain committed to following through on these improvements and building a stronger organization.”
Delivering housing and earning trust
To date, the Kauhale initiative has delivered nearly 900 beds and provided stable housing and human services to nearly 3,000 formerly houseless neighbors. Behind those numbers are people who now have a place to live and access to support that can help them stay housed.
Our responsibility is to deliver homes, account for the funds entrusted to us and follow through on improvements.
Kimo Carvalho, Chief Executive Officer, HomeAid Hawaiʻi – “For me, leadership means being accountable when something goes wrong and following through on the work needed. As a leader, I will always do what’s right, even when mistakes are made.”
Read the full Honolulu Star-Advertiser story
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SA: Kauhale builder cites initiative’s value, says audit overlooks donations | Honolulu Star-Advertiser
BACKGROUND: Audit: Kauhale Director Billed Taxpayers for Bondage Sex Toys TWICE