Responding to a highly critical state audit, the Office of Hawaiian Affairs board of trustees on Tuesday approved moratoriums on three different OHA spending categories, including the $22,200 personal allowance provided to each trustee.
The spending halt, approved in a meeting at OHA’s Iwilei headquarters, applies to the agency’s Fiscal Reserve Fund, CEO-initiated sponsorships, and the Trustee Sponsorship and
Allowance Fund.
While together the spending categories represent a fraction of the money handled by the semi-autonomous state agency, the funds were among the primary targets of a state auditor’s report released earlier this month.
The report said vague rules governing the “discretionary spending” are broadly interpreted, arbitrarily enforced and sometimes ignored, leading to questionable spending.
In addition to the allowance moratorium, the board voted to have unused balances returned to OHA until new policies are put in place.
OHA Chairwoman Colette Machado said the moratoriums will remain in effect until OHA’s Ad Hoc Committee on Grants and Sponsorships can recommend policies and procedures modifying the funds.
Trustee Keli‘i Akina, one of three board members who voted against the allowance and CEO sponsorships moratoriums, called Tuesday’s action “the wrong medicine.”
“The correct medicine is for trustees who have misspent from their personal accounts to repay all inappropriate expenditures,” Akina said in a statement. “The moratorium does not require repayment and simply pushes the matter off for further policy discussion.”
Akina, who joined the board at the end of 2016, called on all current and past trustees to repay any of their expenditures flagged as inappropriate by the state auditor.
Akina, who also renewed his call for the removal of CEO Kamana‘opono Crabbe, described Tuesday’s measure as largely symbolic, bypassing the real problem of uncontrolled spending by the CEO and administration.
“OHA beneficiaries and state taxpayers deserve better,” he said. “They deserve trustees who will do their fiduciary duty and replace the current CEO.”
But Machado said Akina’s assertion that Crabbe is responsible is a gross misrepresentation of the audit.
Machado said the auditor focused on $14 million of “discretionary spending.” Of those expenditures, however, $13.1 million was approved by the trustees in open meetings and earmarked for “critical services” for Native Hawaiians, such as the Department of Hawaiian Home Lands,
Hawaiian-focused charter schools and higher education scholarship programs.
“This is money well spent,” she said.
Regarding the allowances, the auditor found the rules broad and arbitrarily enforced, resulting in many instances of questionable spending. The trustees use their allowances as they each deem appropriate without the consent or even knowledge of the other trustees, the report said.
The Fiscal Reserve is made up of budgeted funds that remain unspent at the end of the fiscal year. At least six trustee votes are needed to authorize the use of up to $3 million each year.
Among the Fiscal Reserve expenditures authorized in recent years, according to the auditor, was $56,300 to a former OHA trustee who was ineligible for state retirement benefits.
As for CEO sponsorships, nearly $500,000 was awarded in fiscal years 2015 and 2016. But the auditor found that the administration does not consistently follow procedures governing the fund.
