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Sunday, December 03, 2017
The Truth About OHA Audits
By Selected News Articles @ 2:45 AM :: 2156 Views :: Ethics, OHA

Ho’oia - The Truth

Welina me ke aloha

by OHA Trustee Maui, Carmen Hulu Lindsey, Ka Wai Ola, December, 2017

When OHA was created and set in motion, the State of Hawaii understood that the elected officials would serve for the betterment of Hawaiians. It is important to note that the role of a Trustee, to the beneficiary, is one of a fiduciary. This word implies that OHA Trustees are held to the highest standards of obligation to act on behalf of the beneficiaries with total trust, good faith, and honesty. It is our duty to assure you that your OHA resources are not only going to further our lahui today, but to ensure there is intergenerational equity in perpetuity. I am required by law to hold OHA up to the highest of standards with respect to executing our duties and obligations.  These are the reasons the Board has deemed it vital to conduct an audit indicating any fraud, waste, or abuse.

Currently OHA undergoes three types of audits, where each one is reviewing specific areas within the organization. The first is required by our Trustee Operations Manual Article 37, referred to as the Financial Statement Audit where its scope is to attest the fairness of the financial statements, which is conducted annually. The second is required by the Office of Management Budget Circular A-133; referred to as the Federal Funds Audit, its scope is to attest the fairness of financial statements; compliance with grant requirements and applicable federal and state laws and regulations, which is conducted annually. The third is required by Hawaii Revised Statutes Chapter 10-14.55 known as the State Audit, where its scope is to examine the efficiency and effectiveness of government programs or agencies, which is conducted at least once every four years, with a follow up done within two or three years thereafter. The first two audits are conducted by CPA firms and the last one is done by the Office of the State Auditor. Their report will be published before the end of 2017.

Although the aforementioned audits serve the public in their own specific ways, it is the will of the Board to conduct another audit holding OHA to an even higher standard.  According to the Request for Statements of Qualification the scope of this specific audit is to "identify and quantify potential areas of waste, abuse, and fraud in the procurement of professional services, as well as other disbursements of funds."  This audit will take a closer look at OHA's procurement and contracts as well as our LLCs', in order to have a clear and objective understanding of how OHA funds have been managed. The audit will look over the past five fiscal years back to 2012. Finally this audit will, according to the SOQ, "provide recommendations on organizational, structural and procedural improvement[s] to strengthen the BOT's fiduciary oversight of the OHA and its LLCs."

As outlined in the SOQ, it is our duty and obligation to ensure that OHA funds are used only to further the mission; to malama (protect) Hawaii's people and environmental resources and OHA's assets, toward ensuring the perpetuation of the culture, the enhancement of lifestyle and the protection of entitlements of Native Hawaiians, while enabling the building of a strong and healthy Hawaiian people and nation, recognized nationally and internationally. To put it more simply, we are here to better the lives of our lahui. This audit will allow us to become fully transparent and show us where there is room for improvement in our policies and operations. This is a tool that will allow us to move forward unified and with strength.

Mele Kalikimaka a Hau'oli Makahiki Hou!!

  *   *   *   *   *

My First Year as OHA Trustee

by OHA Trustee at-large, Dr Keli’i Akina, Ka Wai Ola, December, 2017

This month marks one year since my swearing in as Trustee at Large of the Office of Hawaiian Affairs. It's a good time to reflect on whether I have followed through on the promises I made to OHA beneficiaries and all citizens of Hawai 'i.

From the outset, I committed myself to doing three things for the sake of the Hawaiian people:

  • First, ensure a full and independent audit of OHA.
  • Secondly, guide OHA towards financial sustainability as well as growth.
  • Third, watch to make sure OHA funds are not misspent but rather used to meet the real needs of Hawaiian people.

Auditing OHA

An independent audit of OHA targeting fraud, waste and abuse will begin in early 2018. This independent audit, which goes beyond the scope of OHA's routine financial audits and state legislative audits, will help restore accountability and integrity to OHA. Many individuals worked hard to make this audit possible. I am grateful that my proposal was approved unanimously by all nine Trustees, and that I was appointed to my first leadership position as chairman of the Audit Advisory Committee.  Demonstrating its full commitment, the Board of Trustees authorized $500,000 for this independent audit, sufficient to attract a highly qualified firm in a nationwide search. We estimate the audit to be completed towards the end of 2018 and will address areas of concern to beneficiaries.

Fiscal Sustainability

A serious concern I have raised stems from OHA's own financial consultants' finding that the Native Hawaiian trust fund was being depleted at a rate of approximately five to six percent annually. At that rate, the intergenerational equity of the fund was in jeopardy. Immediately, when I became a trustee, I produced and distributed a report to the trustees entitled, "Crucial Recommendations for Fiscal Sustainability." (You can contact my office for a copy.) My report provides a game plan to ensure long-term financial sustainability for a strong OHA, so that it can accomplish its mission of bettering the conditions of the Hawaiian people. That game plan, which guides my interactions with the board on financial matters for OHA, is as follows:

  1. Protect the trust – Reduce annual spending and create new policies for controlling the budget.
  2. Grow the trust - Ensure that OHA follows sound investment strategies and develops resources like the 30 acres it owns in Kaka'ako.
  3. Properly spend the trust - Spend only on OHA's mission to serve the Hawaiian people.

Proper Spending

OHA commissioned a scientific survey in 2015 which revealed that the Hawaiian people ranked OHA as the least reputable of all Hawaiian organizations. The survey also showed that Hawaiians did not want OHA to be spending its resources on nation-building but instead on real bread and butter issues such as housing, jobs, education, and health care for Hawaiians - not political efforts. Up until then, OHA had spent millions of dollars on pursuing the unsuccessful Akaka bill and failed Hawaiian registry programs such as Kana'iolowalu and Na'i Aupuni. In keeping with the will of OHA's beneficiaries and constitutional mandate, I have worked hard to keep OHA on track and focused on delivering resources that Hawaiians need.

Looking back, it's been an incredible year. Without wise beneficiaries, engaged community members and my outstanding staff, our accomplishments would not have been possible.

Mahalo nui! I am humbled to serve you and pledge my future service to the betterment of the Hawaiian people.

E Hana Kakou/Let's work together ... and have a blessed Christmas season!

Trustee Akina welcomes your feedback. To reach him, call (808) 594-1976 or TrusteeAkina@oha.org.

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