Tourism is our top industry, representing 20 percent of the state’s economy. While a recent steady rise in visitors is cheered for churning out more than $14 billion in economic activity annually, some legislators are knocking Hawaii Tourism Authority’s lack of transparency in how it spends of taxpayer dollars in promoting the state.
The latest move is a call for a management audit of HTA, even though one already is scheduled for next year. And while lawmakers are right to call for stepped-up public oversight of the state agency, an additional audit is an unnecessary overstep.
The Economic Development, Tourism and Technology Committee, chaired by Sen. Glenn Wakai (D, Kalihi-Salt Lake), advanced two resolutions requesting the audit and directing that findings and recommendations, including proposed legislation, be submitted prior to the 2018 legislative session. However, state law requires the agency to undergo a management and financial audit of major contracts and agreements every five years — and the next one is slated for 2018.
Pushing ahead with HR 130/HCR 202 would likely result in duplicating efforts, wasting time and money.
In written testimony opposing HR 130/HCR 202, HTA’s president and CEO, George Szigeti, correctly observed: “Considering the mandatory audit in 2018, the yearly voluntary audits and the disclosures to the Legislature, there is no reason or benefit to requiring the State Auditor to conduct another audit of HTA in 2017.”
Wakai maintains that the current HTA management team, which took shape after the 2013 audit, should be tagged for immediate audit scrutiny. But it’s probable that not enough time has passed for a thorough evaluation of the new leadership. State lawmakers could fare better in establishing more openness and by pushing harder for transparency-focused legislation.
Senate Bill Opens in a new tab1084 Opens in a new tab, introduced by Wakai, was prompted by HTA’s taciturn disclosure policies and increasing reliance on lengthy behind-closed-doors sessions, making it impossible for agency outsiders to fully evaluate spending. In January, state senators criticized the agency, which gets $108.5 million in public funds to market state tourism and oversee the Hawai‘i Convention Center, for refusing to provide unredacted budgets.
Among the bill’s current provisions: HTA must provide unredacted budgets to the leaders of the legislative tourism and finance committees; closed-door meeting minutes must be available to legislators; and information about market plans and strategies discussed in closed-door session must be disclosed after execution. These would lift some of the fog enveloping HTA spending. But lawmakers should go further.
Certainly there’s a need to protect “proprietary information” and “competitive advantage” while various contract deals are in the works. Even so, the public’s right to know would benefit if the Legislature took away HTA’s exemption from the state’s open records and Sunshine Law, which more closely restricts what an agency can keep secret and how it conducts closed-door meetings.
HTA must take note that a budget that doesn’t include breakdowns for individual programs under each line item will only leave legislators and the rest of us wondering whether the agency is hiding something.
A transparency tug-of-war has been underway since HTA was formed by the Legislature in the late 1990s — established within the Department of Business, Economic Development, and Tourism. The agency has undergone yearly financial audits since its start.
A state-required report issued by the Office of Auditor in 2016, following up on the last five-year finance/management audit, credited HTA with making strides toward correcting deficiencies in areas ranging from contract oversight to public disclosure of spending information. The 2013 audit had found a “lack of a cohesive marketing plan and poor reporting on measures of effectiveness impeded transparency.”
Tourism is a thriving contributor to the state’s economy. Last year’s Hawaii visitor arrivals (estimated at 8.9 million) and spending topped records for a fifth consecutive year — and 2017 appears to be poised for further gains. A proper audit in 2018 should show how HTA’s efforts contributed to that success.
In the meantime, however, taxpayers deserve to know how their money is being spent. State lawmakers must insist that HTA refrain from holding spending information too close to the vest.
