The state Office of Hawaiian Affairs failed to establish an adequate organizational infrastructure before expanding its real estate holdings, according to a state audit released today.

And ineffectual oversight has barred OHA from ensuring grants achieve their intended results as mandated, hampering trust fund transparency and accountability, the audit says. 

To top it off, the audit says the agency is not living up to its primary mission.

“OHA continues to be remiss of one of its core responsibilities — improving the conditions of all Hawaiians — in its grant programs,” the audit says. “For instance, the office continues to lack policies and procedures to adequately monitor compliance and performance and ensure that grants achieve intended benefits for Hawaiians. In addition, grant outcomes are not consistently brought to the attention of trustees.”

This audit is the latest of seven that the state auditor’s office has done of OHA, not to mention three reviews covering the office’s funds. The report shows improvement in some key areas that were identified in the 2009 audit, but significant room for improvement in others. 

Read the 64-page audit in its entirety here. And check out past Civil Beat coverage here.

Update: OHA Chairwoman Colette Machado provided the auditor with an agency response. Excerpt:

The board chair responded that OHA appreciated our recommendations and intends to further develop land policies to integrate cultural and commercial values that best support its lāhui (people). Regarding our finding about OHA’s lack of land policies, the chair said trustees waited until the Kaka‘ako Makai land settlement was approved by the State before approving additional positions to manage OHA’s land holdings. This misses our broader point that OHA’s lack of a policy framework and other infrastructure to implement its real estate vision, mission, and strategy and other best practices is contrary to fulfillment of the board’s role as fiduciary and policymaker and undermines the board’s ability to ensure that real estate acquisitions are based on a strong financial foundation.

Regarding the significant stewardship costs of OHA-acquired lands, the chair said OHA will at times acquire land with the primary purpose of preservation and protection of “our ‘āina and rights,” and that the goal of financial return and sustainability must not compromise that purpose. We maintain that OHA is not following best practices for a conservation land trust nor its own stated strategy to ensure financial sustainability. 

Regarding our grant-related findings and recommendations, the chair said OHA sincerely appreciates the intent of the audit and views our recommendations as an opportunity to improve its grants program—a process the chair says has been underway since July 2012. …


Taro fields on Kauai. (King Damus via Flickr)

—Chad Blair and Nathan Eagle