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Friday, June 01, 2018
Auditor: OHA Openly Violates HRS10-17 Nepotism
By Hawaii State Auditor @ 10:57 PM :: 3946 Views :: Ethics, OHA

Auditor: OHA Openly Violates HRS10-17 Nepotism

From Hawaii State Auditor’s Report

Section 10-17, HRS Requirement – Not Met

From Appendix A

In the case of a nonprofit organization, have a governing board whose members have no material conflict of interest and serve without compensation, have bylaws or policies that describe the manner in which business is conducted and policies relating to nepotism and management of potential conflict of interest situations, and employ or contract with no two or more members of a family or kin of the first or second degree of consanguinity unless specifically permitted by the office; (pg 43)

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Grant Eligibility Requirements

We reviewed [OHA’s Transitional Assistance Program] TAP’s Grants Program Standard Operating Procedures manual, as well as the solicitations, applications, agreements, and other relevant documents for the ‘Ahahui and Community Grants we sampled, to determine whether the grant recipients fulfilled the minimum eligibility requirements of Section 10-17, HRS.

We found that they did in most cases, except for one key requirement (refer to Appendix A for the detailed results of our analysis). To receive a grant, a nonprofit organization must:

(1) have a governing board whose members have no material conflict of interest and serve without compensation;

(2) have bylaws or policies that describe the manner in which business is conducted and policies relating to nepotism and management of potential conflict of interest situations; and

(3) employ or contract with not more than two members of a family or kin of the first or second degree of consanguinity unless specifically permitted by OHA.

TAP confirmed it has no formal procedures to ensure these requirements are being met by nonprofit organization applicants and does not require applicants to sign a statement certifying their compliance with the statute’s eligibility requirements. (pg 11)

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Auditor’s Summary Audit of the Office of Hawaiian Affairs’ Competitive Grants and Report on the Implementation of 2013 Audit Recommendations

Hawaii State Auditor Report No. 18-08, June, 2018

Our audit of the Office of Hawaiian Affairs was conducted pursuant to Sections 10-14.55 and 23-7.5, Hawai‘i Revised Statutes, which requires the Auditor to conduct an audit of the Office of Hawaiian Affairs at least every four years….

IN REPORT NO. 18-08, Audit of the Office of Hawaiian Affairs’ Competitive Grants and Report on the Implementation of 2013 Audit Recommendations, we reviewed the Office of Hawaiian Affairs’ two competitive grant programs, i.e., those with a formal solicitation process: ‘Ahahui Grants and Community Grants. We also assessed the status of OHA’s implementation of the 23 recommendations in our 2013 audit of OHA, which relate to OHA’s land management and grants administration processes. This report is a companion to Report No. 18-03, Audit of the Office of Hawaiian Affairs, issued in February 2018.

What we found Although the policies and procedures for OHA’s competitively awarded grants are largely defined, we found shortcomings in the way that the agency’s grants staff monitors and evaluates these grants. Specifically, while OHA predominantly met the statutory requirements for its Community Grants, it did not consistently meet the requirements to monitor and evaluate ‘Ahahui Grants. For example, OHA did not require that staff attend and monitor ‘Ahahui Grant-funded events, and afterward, did not formally evaluate the events to determine whether they met the intended objectives and/or should be funded in the future.

With regard to the 23 recommendations made in our 2013 audit, we found that OHA has fully implemented 7 of those recommendations and partially implemented 15 others. OHA has taken no action and does not intend to implement one of the recommendations.  (That would be the nepotism thing.--Editor)

Why did these problems occur?

In some cases, OHA does have policies and procedures in place that, if performed consistently, could provide the requisite assurance that both ‘Ahahui Grants and Community Grants are being awarded and used in a manner consistent with the purpose and intent of the grant, and allow OHA to assess whether the grant achieved the expected results. However, in practice, these procedures are not followed in every case, leading to gaps in OHA’s process for competitively awarded grants. Additionally, the agency has not established policies and procedures that fully address the statutory requirements for monitoring and evaluating all OHA grants.

Why do these problems matter?

Without consistent monitoring and evaluation of its competitive grants, OHA cannot ensure it is meeting its statutory requirements. While the total dollar amounts being awarded in the form of competitive grants are relatively small, compared to OHA’s non-competitive grants and total annual budget overall, OHA still has a fiduciary obligation to its beneficiaries to ensure that Native Hawaiian Trust Fund resources are used consistent with their intended purpose in order to better the conditions of all Native Hawaiian and Hawaiian beneficiaries, both in the short-term and in the future.

read … Full Report (49pgs)  

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OHA Trustee Akina Weighs in on State Audit of OHA Grants

News Release from Office of Trustee Keli'i Akina

HONOLULU, HI- The State Office of the Auditor today released its report on the Office of Hawaiian Affairs Competitive Grants and Report on Implementation of 2013 Recommendations. The report is available at

According to Trustee Keli’i Akina, “While OHA implemented some of the recommendations from the last State audit of its grants program, much more should have been done by now.  We owe it to the Hawaiian people and to all citizens of the state to ensure that OHA funds are administered properly.  Rather than dispute the findings of the State Auditor, we should be implementing the Auditor's recommendations."

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Another Hawaii State Audit Questions OHA Grant Spending

CB: …“In fact, during the course of our audit work, we noted two grants – a $500,000 grant to the International Union for Conservation of Nature’s 2016 World Conservation Congress and a $250,000 Kūlia Initiative to the State Department of Labor and Industrial Relations – that were not included in OHA’s FY2015 annual report. Both TAP and fiscal personnel confirmed that the grants should have been included in the report and were omitted due to oversight,” the audit continued….

“Distributing grant moneys throughout the community does not by itself better the conditions of OHA’s beneficiaries, as OHA seems to suggest in its response,” the auditor said. “Proper vetting, monitoring, and evaluation of all OHA grants is necessary to help ensure that funds distributed are being used consistent with the intended purpose, as well as with OHA’s overall mission.”….

read … Another Hawaii State Audit Questions OHA Grant Spending 

News Release: OHA statement on today’s state audit

Details: OHA Response to Audit of the Office of Hawaiian Affairs’ Competitive Grants and Report on the Implementation of 2013 Audit Recommendations



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