Maui Business

OHA Leaders Issue Statement on Audit Suspension

December 31, 2019, 7:41 AM HST
* Updated January 3, 9:50 AM
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OHA chair Collette Machado. File photo by Wendy Osher.

Office of Hawaiian Affairs Chair Colette Machado and Vice Chair Brendon Kaleiʻāina Lee issued a statement this morning regarding the State Auditor’s suspension of OHA’s audit.

In 2019, the Legislature approved OHA’s budget act with the condition that the agency’s second fiscal year of general funds cannot be released and used to benefit the Native Hawaiian people until the State Auditor submits an audit report to the Legislature.

In their statement, Machado and Lee said, “Since then, OHA has timely provided the State Auditor with all documents requested, as we have always done for each of the regular audits we undergo every four years with the State Auditor. Specifically, OHA provided the State Auditor with minutes of all executive session meetings he requested. Certain portions of those meeting minutes were redacted because they are protected by the attorney-client privilege codified as Hawai’i Revised Statutes Chapter 626, Rule 503.”

The statement went on to say: “The authority the State Auditor attempts to exert under the guise of Hawaiʻi Revised Statutes 23-5 is unprecedented in scope even for audits conducted by the State Auditor.”

According to Machado and Lee, the Honolulu Authority for Rapid Transportation also provided the State Auditor with redacted executive meeting minutes when it underwent an audit review. “We note this did not prevent the State Auditor from completing its audit of HART (Report No. 19-03). We are disappointed that under the same circumstances, the State Auditor chose to complete its audit of HART but has chosen to not complete OHA’s audit.”

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“We find it unfortunate that the State Auditor is using an unprecedented interpretation of his powers and has now unilaterally decided to not fulfill a legislative mandate and to instead play politics with critical general funds for Native Hawaiians,” said Machado and Lee. “To be clear, the State Auditor could present a situation where a court could decide if it agrees with his unprecedented interpretation of his power. But the State Auditor is not doing this. Instead, he has chosen to not do his job.”

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The OHA chair and vice chair say that despite the news, they hope to work with the Legislature this session to ensure that programs and services to Native Hawaiians continue uninterrupted.

“It’s important to recognize that OHA is constantly audited, by the state auditor (every four years as required by law), annually by an independent auditor, and most recently by a top ten national accounting firm, CliffordLarsonAllen LLP (CLA). OHA has a record of fully cooperating with these audits,” Machado and Lee said.

The two pointed toward improvements made as a result of past reports of the State Auditor.

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“We note that State Audit Report No. 18-08, released in June 2018, found that OHA fully or partially implemented all but one of the 23 recommendations from the previous State Audit Report from 2013. In March 2019, OHA informed the State Auditor that we fully implemented seven and partially implemented 32 of the 39 recommendations from Report No. 18-03 (released in February 2018) and, in August 2019, OHA informed the State Auditor that we fully implemented all 11 recommendations from Report 18-08. We will approach implementing the recommendations made by CLA the same way we do with all audits, and we look forward to reviewing an implementation report by our administration on January 22.”

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