Why the State Audit is Good Medicine for OHA

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A doctor’s diagnosis can be uncomfortable or frightening. The worst thing to do, however, is to ignore or deny the diagnosis. The same is true for organizations being audited, as OHA was recently by the state Auditor.

By now, we are all familiar with that audit, published in February. (https://files.hawaii.gov/auditor/Reports/2018/18-03.pdf) The examination of OHA was thorough and the findings were scathing.

For those of us who see a doctor’s diagnosis as a good thing, the audit findings were welcome. Unfortunately, some disagree, insisting that the Auditor’s findings are skewed, biased or lacking of credibility. This narrative has been characterized by three myths.

Myth 1: It doesn’t matter how the money was spent, as long as it was spent on Hawaiians.

This myth says that OHA can handle money inappropriately as long as it is spent on Hawaiians! The truth is that while OHA is required to spend its funds to help Hawaiians, OHA did not always do so in a way that was responsible or fair. For example, the auditor reports that nine out of 10 applications for Kulia grants lacked required information, demonstrating that funding was often awarded without proper due diligence.

This myth also does not address the question of which Hawaiians get the money. As the auditor pointed out, there were times staff funding recommendations were disregarded by the CEO. According to the auditor, awards were often granted to those who ‘know who to ask.’

In the words of one veteran Trustee, as quoted by the auditor, “Most of us were leading with our hearts rather than with our heads.” The problem is that Trustees are supposed to lead with our hearts AND our heads.

Myth 2: The state Auditor is not qualified and besides, the state has no business looking into OHA’s finances.

The truth is, the Auditor is precisely the one to make such judgment calls and is the most experienced body, appointed by the Legislature, to examine the finances of our state agencies.

The second part of this myth is the idea that, as a semi-autonomous entity, OHA was never meant to be subject to the same set of checks and balances that govern other state agencies. While it’s true that OHA is entrusted with discretion over WHAT it spends on, OHA must be accountable for HOW it spends.

Myth 3: Since the Auditor didn’t recommend a change in leadership, a change in leadership is not needed.

A statement from the Office of Hawaiian Affairs in February stated that the Auditor did not recommend removal of OHA’s CEO. Yes, that is correct, but it wasn’t the role of the audit to tell Trustees what specific leadership decisions to make. It is ultimately up to the Trustees.

In conclusion, it is easy to see why the state audit findings elicited the same reaction as a frightening diagnosis. But all of us who love the patient – in this case OHA – need to stand up and say that denying the truth is the wrong medicine. The right medicine is to accept the diagnosis, prescribe the proper remedy, and move forward. Imua!