The divided Office of Hawaiian Affairs Board of Trustees will consider a proposal this week to hire an independent certified public accounting firm to conduct a financial audit and management review of the agency and its subsidiaries for the last three fiscal years.
The proposal by trustee Keli‘i Akina will be considered at 9 a.m. Thursday in a public meeting that was originally scheduled for
10 a.m. Monday. The meeting was postponed Friday due to quorum issues.
Another meeting, a controversial proposed election of new officers originally slated for Tuesday, was also postponed to 10 a.m. Thursday.
Akina’s audit proposal appears less draconian than the “forensic audit” Chairwoman Rowena Akana and some beneficiaries have been calling for.
Such an audit involves a full financial accounting while searching for evidence of fraud, embezzlement and other wrongdoing for potential use in criminal prosecution.
Under Akina’s proposal an independent firm would still identify potential areas of waste, abuse and fraud in the procurement of goods and professional services.
It would satisfy Akana’s concerns for a comprehensive examination of OHA’s finances, he said, while not targeting any individuals.
“The chief goal is to remove the cloud of concern that has been raised by the beneficiaries and the media,” Akina said. “A second goal is to help trustees perform their fiduciary duty.”
Akina said the audit and management review will alleviate the tension and distrust that are plaguing the agency.
“This is what the beneficiaries have been asking for: for OHA to take a proactive approach and to reassure the public that it holds itself to a high ethical standard,” he said.
Some Native Hawaiians have been campaigning for the extreme audit, but getting one could prove tricky. Passage will require six votes, or two-thirds of the board.
Currently, OHA is required by law and policy to undergo three audits: the annual financial statement audit, annual federal funds audit and the state audit conducted every four years.
Akina said the three audits are limited in their scope, falling short of providing the highest level of assurance that OHA’s risk management, organizational governance and internal control policies are consistent with best practices in the areas of public finance and trust fund management.
Under his proposal, Akina is calling for a review of all management contracts and financial transactions of $100,000 or more and a random selection of 25 percent of all contracts and transactions less than $100,000.
In addition, auditors will be called upon to review all management policies and procedures for consistency with best practices.
Several speakers called for investigations into OHA’s operations during the trustee meeting Thursday. Veteran activists Bumpy Kanahele and Mililani Trask even suggested calling in the FBI.
OHA CEO Kamana‘opono Crabbe responded in part that the agency has received passing grades in all recent audits and is now working with the state Auditor’s Office as it continues its current four-year audit of OHA.
