UH spending $224K to study $200K Stevie Wonder scam - Hawaii News Now - KGMB and KHNL

UH spending $224K to study $200K Stevie Wonder scam

Larry Rodriguez Larry Rodriguez
Eric Martinson Eric Martinson
Glenn Shizumura Glenn Shizumura
HONOLULU (HawaiiNewsNow) -

A year and a day after the University of Hawaii canceled a Stevie Wonder concert because it was scammed, a task group is recommending the UH Board of Regents become more proactive and better trained to avoid similar blunders in the future. 

UH lost $200,000 in the scam, but the UH is spending more than that to study how to prevent similar problems.  Consulting firm KMH has a $224,000 contract – for which it has billed UH $173,000 so far – to help the task group study ways to improve UH financial and management oversight.    

Larry Rodriguez, a business consultant and chair of the task group, told the UH Board of Regents Audit Committee Thursday the regents have not been proactive enough and they need better initial training and annual updates about how to be good, involved regents. 

"Right now, the manner in which the board orientation is taking place has been, in comparison with leading practices, rather limited.  And what we're recommending is that that process be given more rigor and depth," Rodriguez said. 

Outgoing Regents Chairman Eric Martinson agreed the board has been reactive. 

"But I hope you all agree as well that FY 2013 was an extraordinary year that required a lot of reaction to events," Martinson said. 

The task group said there is no regents policy about risk management or the need for a comprehensive annual risk assessment at the university to avoid another Wonder Blunder. 

That's something that's being handled -- by default – by the office of UH Internal Auditor Glenn Shizumura, Rodriguez said. 

"We applaud that internal audit is taking the lead role in resurrecting the risk management process within the university.  But clearly that role should function off the role of the president," Rodriguez added. 

The task group also said the regents, who have just four full-time staff positions and only three of them filled, need additional staff, something that will cost more money. 

"I think things are getting backed up.  The request for additional data from the Board of Regents and the information that they need to be aware of is only building, it's not reducing," Rodriguez said. 

The executive administrator and secretary of the board position has been vacant for more than seven months, since Keith Amemiya stepped down to take a job in the private sector at the end of 2012. UH General Counsel Darolyn Lendio is serving as the acting board secretary until the position is filled and is not being given additional pay, a UH spokeswoman said. 

Sources said the board wants to appoint former Regent Michael Dahilig, whose term expired late last year. But the board is waiting for the State Ethics Commission to issue an opinion about his acceptance of large numbers of free tickets to UH athletics games before deciding whether to hire him, a source said.

The task force also recommended the regents consider holding committee and full board meetings more often, something regents pointed out will also cost more money, since they fly in some regents from the neighbor islands.   

So far, management consultants KMH have billed UH $172,000 on a $224,000 contract to help the task group put together its study, according to Peter Hanashiro, a partner at KMH. UH has budgeted $260,000 in total for the review of its oversight practices, UH officials said.

Earlier this year, UH said the project would require about 2,000 hours of labor and demand the best available in the field to perform it.  UH did not have the internal capacity to produce such a report, UH said, and needed the help of consultants to pull it together. 

The final phase of the task group, which is made up volunteers from the auditing community and UH regents, will analyze what the UH president and top UH executives should do to improve oversight and management at the school.  That part of the study is expected to be released in about four weeks. 


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