Ability to prove its worth undermined by transparency and accountability issues

by State Auditor Marion Higa

After nearly 40 years, NELHA has yet to achieve its potential as an ocean-related research, education, and commercial center. In the absence of clearly reported progress and while continuing to struggle with the basics of open government, NELHA has had difficulty convincing legislators, taxpayers, and potential tenants of its worth and successes.

The authority has improved its transparency and accountability since new administration took over in June 2011, but there is still work to be done. The authority was sorely lacking in mission-critical plans and policies such as a master plan, financial plan, and administrative rules; and its policies and procedures manual is seriously out of date. The authority plans to address all of these areas.  However, its board suffers from high turnover and a lack of training. Although there is a policy for a formal training program for new board members, none exists in practice. In addition, the Legislature may wish to reconsider the unusual structure of the board, which includes no public members but has six ex-officio members. Tenant representatives’ voting on items related to rate setting is questionable and may violate both NELHA statute and the State Ethics Code.

The authority continues to struggle with Sunshine Law requirements. Timely access to minutes is not consistent, and there are problems with both the use and documentation of executive sessions.  The statutorily required Research Advisory Committee is inappropriately operating as a “permitted interaction group” in violation of the Sunshine Law, and assignment of a staff member to a board task force was questionable.

Operational issues also exist. The authority’s performance reporting is woefully inadequate; its website is outdated and incomplete; lease rent rates are not uniform; the transparency of seawater pumping rates has improved but controls on calculations are lacking; and fiscal information provided to the board is unreliable.

FULL TEXT: Management Audit of the Natural Energy Laboratory of Hawai‘i Authority