On April 5, 2023, the Hawaiʻi Supreme Court denied Hawaiʻi State Auditor Leslie Kondo full access to minutes of closed executive sessions of the OHA Board of Trustees. The auditor had requested access to unredacted minutes in order to conduct a constitutionally mandated performance audit of the Office of Hawaiian Affairs (OHA). Kondo argued that it was necessary to review information from closed executive sessions in order to complete a full and proper audit. OHA refused to provide the unredacted minutes and ultimately sued the state auditor to prevent him from accessing these records.
Personally, I was disappointed in the decision of the Hawaiʻi Supreme Court. OHA is a state government agency, and the people of Hawaiʻi and beneficiaries of OHA have a right to expect transparency and accountability. The state auditor plays the significant role of being a watchdog. This role enables all stakeholders in our government, from voters to elected officials, to determine whether our public institutions are operating in a pono manner. Recent exposures of public corruption throughout our local and state government underscore why we must keep a close watch.
Speaking out as an individual Trustee in my personal capacity, I am not criticizing my fellow Trustees. I believe that the OHA Board of Trustees acted in good faith to protect and preserve its ʻattorney-client privilege.’ This is an important legal privilege that maintains confidentiality in communication between attorneys and clients. The problem here is that there is a tension between what is legally right and what is the pono thing to do.
The court noted this tension as a contest between two statutes in Hawaiʻi law. On the one hand, HRS 23-5 (2009 & 2014) empowers the auditor to receive “all” records of an auditee. On the other hand, HRS 626-1, Rule 503 (2016) protects the attorney-client privilege. According to the opinion of the federal circuit court, which was affirmed by the Hawaiʻi Supreme Court, an “arm wrestle match between the two statutes” could have decided the winner of this legal battle, and “there’s good arguments on both sides.”
I understand that the court attempted to resolve the tension between two conflicting state laws. However, where does that leave us in terms of holding OHA and other state agencies accountable? This ruling could set a questionable legal precedent. OHA, and possibly other Hawaiʻi state agencies, may now be able to refrain from providing “all” necessary documents to the state auditor during the performance of an audit.
According to the Institute of Internal Auditors (IIA), “audits should be conducted with complete and unrestricted access to employees, property, and records.”* The IIA explains that this helps “government organizations achieve accountability and integrity, improve operations, and instill confidence among citizens and stakeholders.” This access also allows auditors to “detect and deter public corruption.”
There must be a way forward that permits the state auditor to obtain the necessary documents to conduct accurate and robust audits.
Perhaps the two conflicting laws need to be re-examined by the state legislature. Or, perhaps, OHA should consider voluntarily opening its books to the state auditor – not because it is legally required to do so but because it would be the pono thing to do. That could be a great step forward in demonstrating transparency and accountability while continuing to build trust with OHA’s beneficiaries.
To access the Institute of Internal Auditors’ (IIA) report, please visit The Role of Auditing in Public Sector Governance (ca-ilg.org). Trustee Akina welcomes your comments and questions regarding this column and others at TrusteeAkina@oha.org.