UH took 7 years to discover $200K accounting error

HONOLULU (HawaiiNewsNow) - University of Hawaii officials said it took seven years for them to discover a $200,000 accounting error at the university's marine biology lab at Kaneohe Bay.

UH's Hawaii Institute of Marine Biology at Coconut Island in Kaneohe receives millions of dollars in federal grants for research on coral reefs, dolphins, sharks and more.

Last year, UH officials discovered that $200,000 in payroll money had been paid from the wrong account, an error that went undiscovered for seven years.  Hawaii News Now first reported the problem on Oct. 11.

"For seven years no one noticed that this money was unaccounted for or missing?  And why?" asked State Sen. Michelle Kidani (D-Mililani) during  an informational budget briefing of the Senate Ways and Means Committee last Thursday.

"The money hadn't disappeared, it had just been put in ... the right places hadn't been charged.  That has been reconciled.  We have put different oversight, we have done retraining," said Brian Taylor, dean of UH'S School of Ocean and Earth Science and Technology, who oversees the Kaneohe facilities.

Taylor told the committee Thursday the money was never stolen or missing, just that it was charged from the wrong account.

"It just causes a red flag for me," Kidani told UH officials.

"I caused a red flag for me, because it happened in my shop and I didn't know it was occurring, as the dean," Taylor told Kidani.  "And the individual actually came to me and explained the situation and I had to deal with it."

Taylor said the fiscal officer responsible for the mistake at Coconut Island was put on paid leave for six months while the incident was investigated and is undergoing remedial "retraining."

"There's no oversight except for one fiscal officer?" Kidani asked.

Kathy Cutshaw, UH Manoa's vice chancellor for administration said, "Well, there clearly is now, that's one of the reasons we have changed to the new financial system that automatically reconciles those accounts on a regular basis."

Cutshaw said UH's new Kuali Financial System, which went online at all ten UH campuses on July 1, detected the error and will help prevent similar mistakes in the future.

In this case, UH fronted about $200,000 in salary money over several years to cover payroll between grants, but the fiscal officer never reimbursed the UH for the money from the new grant when it started, sources said.

UH officials who oversee Coconut Island were furious when they found out about the oversight and told colleagues the error should have been caught immediately and should never have happened, sources said. 

State senators have promised greater scrutiny of university spending and management following the canceled Stevie Wonder concert last year that prompted two days of investigative briefings by senators looking into UH management and oversight of the failed event.

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