HONOLULU, Hawaii (HawaiiNewsNow) - The Office of Hawaiian Affairs paid a mainland firm to take a hard look at questionable contracts, grants and other financial transactions.
As expected, the firm ― CLA (CliffordLarsenAllen) ― found such lax management that potential fraud, waste and abuse was going unnoticed at the agency.
The firm used its experience to judge which areas of spending had the most risk for problems and asked OHA to provide documentation on 185 transactions from 2012 and 2016.
In many cases, the documentation was not adequate to establish that work OHA or its non-profit affiliates had paid for was actually produced.
The review reinforced the prior findings of government auditors, which described lax controls on financial transactions ― many of which were arranged by former CEO Kaamanao Crabbe ― didn’t meet basic standards of procurement.
Those transactions had few or no checks for insider dealing, competitive bidding or following up on how money was spent.
Board of Trustees Chair Colette Machado said the board has already implemented recommendations, including taking away the CEO’s authority to spend without board review and new controls on trustee allowances.
She said the board hired a new CEO, Sylvia Hussey, who helped reform management of the Kamehameha Schools.
Machado said the CLA report and the prior audits are a road map for OHA’s reform.
“Its been an opportunity to work with our new CEO she is a certified public accountant she has tremendous background in how to manage these things,” Machado said. Hussey has been given until January to propose reforms to the board.
While the agency leadership prefers to look forward, Trustee Kelii Akina, said the report’s findings are alarming enough that more should be done to examine what happened in the past.
“It would be a mistake to simply whitewash this audit and say there are no problems. clearly there are issues that have to be dealt with there are people who shold be held accountable,” Akina said. “I think its important to take a deeper look and see if there are problems throughout the entire organization.”
Akina and his staff did their own analysis of the CLA findings, which total around 1,000 pages.
“Between the years of 2012 and 2016, the audit found that 85% of all the transactions sampled had some kind of problem and 17% had indications of waste fraud and abuse. That’s egregious,” Akina said.