OHA Vows Accountability After Audit Finds Evidence Of ‘Fraud, Waste And Abuse’
A financial investigation released Thursday found 22 instances of questionable spending worth more than $7.3 million made by former top officials at the Office of Hawaiians Affairs.
The findings were a follow-up to a 2019 report that initially flagged 38 transactions made from 2012 to 2016.
“We are determined to ensure accountability for past wrongdoing,” OHA Chair Carmen Hulu Lindsey said at a news conference. “We know we have to do much better to deliver what our beneficiaries need.”
OHA’s board of trustees is planning to meet to decide whether to hand over the findings to federal and state agencies to whether a criminal investigation is warranted, officials said.
It was unclear when that would happen since new trustees who won in Tuesday’s general election need to be sworn in.
OHA is a semiautonomous state agency tasked with managing a more than $600 million trust fund made up of revenues once held by the Hawaiian kingdom to ensure the well-being of Native Hawaiians. The nine-member board of trustees is responsible for ensuring that the funds are appropriately managed.
But the agency for years has been criticized for loose spending and a lack of transparency, including a series of scandals ranging from a critical state audit to an ethics investigation.
Following the 2019 report by national accounting firm CliftonLarsonAllen, OHA said it has taken steps to revamp its policies and procedures, including updating its technology and bylaws, eliminating CEO-initiated sponsorship and management override practices and ensuring that the trustees approve more transactions and sponsorships.
OHA spent $200,000, appropriated by the Legislature in 2021, for the forensic audit by tax and audit firm Plante Moran, to investigate the 38 suspicious transactions found in 2019. The audit, which was conducted in February, found evidence of “fraud, waste and abuse” in 22 of the transactions based on a review of board meeting minutes, financial disbursements, progress reports and other evaluations as well as the 2019 CLA report, emails and personal folders.
One transaction that was deemed questionable was a nearly $2.6 million contract with the Akamai Foundation on behalf of Na‘i Aupuni to facilitate a Native Hawaiian convention. The audit cited a lack of contract monitoring and inappropriate OHA involvement.
Trustee Mililani Trask, an attorney who holds the Hawaii island seat, said it’s clear that the more than $7.3 million of trust assets were inappropriately spent by former OHA administrators, executive staff and outsiders “who benefited from those breaches.”
She called for a criminal investigation and prosecution.
“This is beyond the capacity of the Office of Hawaiian Affairs,” she said.
She underscored that government records from the agency were not available for inspections, alleging “that is a clear indication that the persons who had oversight of those documents removed them.”
Trask vowed that the board will no longer tolerate those past practices.
“We’re cleaning up our house over here, and we send this message to our beneficiaries,” Trask said. “Our door is open. If you have pilikia (trouble of any kind, great or small), if you have information, bring it now because we are seeking accountability.”
Trustee Keli’i Akina, an outspoken critic of OHA, said the report confirmed his concerns about the misuse of money in the past.
“I commend OHA’s administration for adopting the necessary policies that seek to prevent these actions from occurring again,” Akina said in a statement. “But it is now time for OHA to take the appropriate steps to ensure that we uphold our fiduciary duty by holding the individuals who were involved in these transactions accountable for breaching their fiduciary duty.”
“We owe it to our beneficiaries to follow through and see that instances of fraud, waste, and abuse are investigated and referred to the appropriate agencies for action,” he added.