Since becoming a Trustee of the Office of Hawaiian Affairs, I have worked hard to increase our transparency and accountability to our beneficiaries. OHA is responsible for almost $700 million in assets including its investment portfolio and land holdings. How OHA handles these resources is the business of everyone who cares about bettering the conditions of Native Hawaiians.
So how is OHA doing in terms of transparency and accountability? The good news is that now there is more attention on carefully examining OHA than at any time in prior history. This includes independent and government audits, as well as an investigation by the State Attorney General. The challenge is that we are in a thoroughgoing process which requires full cooperation by OHA Trustees and administration.
The independent audit by CLA
I was troubled at a recent progress report given by Clifton Larson Allen (CLA), the independent firm examining OHA and its LLCs for potential fraud, waste and abuse. With the audit’s extended deadline of December 16 looming, two issues of concern were reported to the Board at the September 4 Resource Management Committee meeting.
First, CLA reported that despite attempts to schedule meetings with OHA’s former CEO before his contract expired, CLA was never able to interview Kamana‘opono Crabbe as part of the audit. Notably, Crabbe was the contract manager for three contracts that CLA is examining.
Secondly, CLA reported that OHA’s legal counsel has redacted portions of documents submitted to CLA. As a result, CLA states it unsure of its “ability to fully assess the documentation provided as CLA does not know the substance of the information that has been redacted.”
The audit mandated by the state Legislature in Act 37, conducted by the Office of the Auditor
Hawai‘i legislators approved OHA’s budget request at the end of the 2019 session, but in a remarkable move, have withheld OHA’s funds, contingent upon the completion of a special audit of OHA and its LLCs. The state auditor has since announced he plans to conduct a performance audit of OHA’s LLCs.
From the outset, this audit has resulted in a measure of tension between OHA and the state auditor, Les Kondo, who recently wrote to the OHA Board and to state legislators: “We told you that it is not appropriate for OHA to interfere with or otherwise obstruct our ability to perform our audit work.”
Shining a light on OHA’s LLCs
Long hidden from public view, OHA’s LLCs recently received a court order to give its check registers and income and expense statements to journalist Andrew Walden, pursuant to the Uniform Information Practices Act (UIPA). OHA’s LLCs had initially denied Walden’s request, contending they were not state agencies and therefore not subject to the UIPA. According to the state Circuit Court, however, the LLCs are managed by or on behalf of OHA, a state agency, and therefore each LLC is in fact subject to state laws such as the UIPA. Thanks to the Court’s decision, the public may now request access to OHA’s LLCs’ records.
OHA now has a tremendous opportunity to set a precedent for transparency and accountability by cooperating fully with those who wish to examine the organization closely. It would be a mistake to resist these efforts and keep important information away from the public which deserves to see it. In the end, the benefits of transparency and accountability will translate into a stronger OHA, capable of better serving the needs of native Hawaiians. Mahalo to all who are calling OHA to a higher standard!
E hana kākou!