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Wednesday, December 04, 2019
Red Flags: An Analysis of the Independent Audit of OHA and its LLCs
By Keli'i Akina PhD @ 11:50 PM :: 2598 Views :: OHA

Independent Audit of OHA Finds Indicators of Fraud, Waste and Abuse 

OHA Trustee Keli‘i Akina Calls for Greater Accountability 

News Release from Office of OHA Trustee Keli’i Akina, PhD, December 4, 2019

Honolulu, HI - An independent audit report on the Office of Hawaiian Affairs (OHA) and its LLCs released today found indicators of fraud, waste and abuse in a number of the agencies’ contracts, procurement of professional services and disbursement of funds. Of the cases reviewed by the audit, 85 percent did not follow statutory requirements and/or internal policies. Trustee Akina has summarized his view on the audit report in the attached document, entitled “Red Flags: An Analysis of the Independent Audit of OHA and its LLCs.” (See attached.)

OHA & LLCs Contract and Disbursement Review

“This audit raises numerous concerns over the possibility of waste, fraud and abuse,” said Trustee Akina.  “It is essential for OHA to deal with these concerns and act decisively to implement the auditors’ recommendations.” 

Clifton Larson Allen (CLA) reviewed 185 transactions that OHA and its subsidiary LLCs entered into during fiscal years 2012-2016. From this sample, 85 percent of the transactions included audit observations, defined as “occurrences of noncompliance with statutory requirements and/or internal policies” or situations “that revealed indicators or red flags of waste, fraud, or abuse.” In addition, 32 “Red Flag” transactions (17 percent of the total audit sample) worth $7.8 million were identified as potentially fraudulent, wasteful and/or abusive expenditures.

“People ask why I care so much about auditing OHA,” Trustee Akina said. “It's because there are Hawaiians who need housing, jobs, education, and healthcare. Every dollar matters. One thing is clear: OHA needs a watchdog!”

The audit was spearheaded by Trustee Akina in 2017 as his first major action in office. Trustee Akina’s proposal was approved unanimously by the OHA Board of Trustees and he served as chairperson of the Audit Advisory Committee to craft the scope of the audit and public solicitation.

In 2018, CLA was retained by the Board of Trustees to conduct an independent audit of OHA and its subsidiary LLCs. CLA reviewed a sample of contracts and disbursements and applied specific audit procedures to determine if the Procurement Code, Ethics Code, and internal policies were followed. Various tests were also conducted to determine if sufficient contract oversight was provided and if contract deliverables were actually met. 

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PDF:  Red Flags: An Analysis of the Independent Audit of OHA and its LLCs

DISCLAIMER: The views expressed in this news release are the personal views of Trustee Akina and may not reflect the views of the Office of Hawaiian Affairs or its Board of Trustees.

Keliʻi Akina, Ph.D., is a community leader who is known for the phrase he has coined, "E Hana Kākou" - Let's work together! Over the past several years as a public policy adviser at the legislative, congressional and international levels, Dr. Akina’s mission has been to preserve the Aloha Spirit by which native Hawaiians and people of all races are welcomed and encouraged to work together for a better future for all our keiki. He was elected to the Office of Hawaiian Affairs Board of Trustees in November 2016.

Related: OHA Admits LLC Audit "observed indicators of potential fraud"  

CB: OHA Trustees Differ Over New Audit’s Analysis

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