2023 State Audit of OHA: Is the ‘Glass Half Empty’ or ‘Half Full’?

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Keli‘i Akina, Ph.D., Trustee, At-Large

Audits can be a difficult pill to swallow. However, in the end, they can prove to be good medicine. Audits are often viewed from differing perspectives. The auditor may view an audit as being an objective and independent assessment while the party being audited may view it as a one-sided account that does not include the full context. Put simply, the auditor may have a ‘glass half empty’ perspective while the auditee may have a ‘glass half full’ viewpoint.

On March 13, 2023, the State of Hawaiʻi Office of the Auditor published its constitutionally mandated audit of OHA. State Auditor Les Kondo and his team did a thorough job identifying where the glass is ‘half-empty.’ One issue that the auditor raised was related to the development of OHA’s properties at Kakaʻako Makai, now known as Hakuone. I agree with the auditor that the people of our state, both Hawaiian and non-Hawaiian, deserve to see better progress by now.

At the same time, I hope the auditor and his team recognize that the glass is also ‘half-full’ and becoming fuller. OHA has made significant progress over the past several years in overcoming challenges which kept it from being fully productive. Most notably, by implementing prior audit recommendations, OHA has moved away from tolerating ‘fraud, waste and abuse’ to actively promoting transparency. OHA has also revamped its grants system which now provides millions of dollars more to beneficiaries. And OHA has renewed its pursuit of developing land resources to serve Hawaiians, such as Hakuone at Kakaʻako Makai. Here are some examples of the ‘glass half full’ and the ‘glass half empty’ contrasts.

Real Estate Strategy

‘Half Empty’: The state auditor reported that OHA expanded its land portfolio without adopting a Real Estate Strategy.

‘Half Full’: Actually, OHA expanded its land portfolio by adhering to OHA’s strategic plan Mana i Mauli Ola and OHA’s Real Estate Vision, Mission, and Strategy Policy. While OHA acknowledges that these documents need formalizing, the policy framework for a real estate strategy does exist and is being used by Trustees to guide their decision-making.

Lack of Development at Kakaʻako Makai

‘Half Empty’: The state auditor claimed that OHA is not close to developing its properties at Kakaʻako Makai and was unfamiliar with OHA’s formation of a “special committee” related to these parcels.

‘Half Full’: Actually, OHA’s Trustees inherited the Kakaʻako Makai development project from previous boards and administrations. Since then, OHA has been proactively lobbying the legislature to lift residential restrictions. In addition, the “special committee” that the auditor claims to be unaware of was a Permitted Interaction Group (PIG) formed in 2021 for the purpose of investigating the development of policies and strategies related to its Kakaʻako Makai parcels.

Classification of Legacy Lands

‘Half Empty’: The state auditor had concerns over the stewardship agreements related to OHA’s legacy lands, particularly Waimea Valley (i.e., Waimea Falls).

‘Half Full’: OHA operates as a partner with other stakeholders who assert various rights to the properties. As to Waimea Falls, it is actually not a legacy property, but a commercial venture of which OHA is one member of the group that manages the venture.

So, is the ‘glass half empty’ or is the ‘glass half full’? The answer depends on whether you are looking at a snapshot of the past or at what has happened since then and going forward.

The state audit is a valuable tool to assist OHA in serving our beneficiaries. But a complete picture should also look at the progress OHA has made in recent years. E hana kākou! Let’s work together!