Audit of the Office of Economic Revitalization

Report No. 26-01 from Honolulu City Auditor, January, 2026

BACKGROUND

In October 2020, the Honolulu City Council adopted Resolution 20-197, FD1, which established the Office of Economic Revitalization (OER).  The office was tasked to coordinate the city’s near term COVID-19 economic response and recovery efforts and guide long-term strategy and economic development, diversification, and investments for the city.  OER, which is administratively attached to the Managing Director’s Office, is comprised of 20 staff (FTE).  Over the five-year period of FY 2021 to FY 2025, OER expended over $324.3 million, which consisted of federal, private, and city general funds. …

AUDIT RESULTS

Despite its creation in 2020, OER has only recently begun to establish actual program implementation.  OER’s priority was to create staffing capacity over economic recovery and revitalization.

(IQ Test: Look in the mirror.  Is that a 'knowing smirk' on your face?)

In addition, there was a lack of transparency particularly with program budgetary information and reporting. Although the Honolulu City Council established OER via resolution in 2020, the agency did not report a budget in the Honolulu Operating Budget until FY 2025. In the Office of the Managing Director, the former Office of Economic Development (OED) and OER coexisted simultaneously in staffing records until FY 2025. City budget records do not list OED and OER staffing as separate from city management, even though other programs under the Managing Director’s Office (MDO) report staffing separately. Complicating staffing counts further, budget documents and personnel numbers differ from internal OER staffing records due to funding source discrepancies. As a result, accountability and transparency related to OER’s staffing and funding was reduced.

We also found that OER has not fully met the responsibilities outlined in Resolution 20-197, FD1. While the charter establishes eight specific requirements for the office and its executive, our review found that OER has only accomplished or made measurable progress toward three of the eight resolution responsibilities (38%). Specifically, OER has demonstrated activity in economic response and recovery, identifying and management of funds for economic revitalization, and small business support. However, the office has not fully established or implemented the remaining five required functions including economic development and investment, economic improvement projects, a business resource hub, sector-specific economic support, and economic revitalization commission. The city’s administration prioritized OER’s organizational setup over program implementation as directed by Resolution 20-197, FD1. As a result, OER has not fully met the intent or operational scope envisioned by the resolution, limiting its ability to provide comprehensive economic revitalization leadership for the city.

The report makes five recommendations to the Office of Economic Revitalization and the Economic Revitalization Commission.

OER generally accepted the audit’s findings and recommendations and provided clarifying information.  The office also expressed its commitment to strengthening transparency and establish priorities collaboratively with continuous improvement going forward….

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