State auditors sharply criticized the Research Corporation of the University of Hawaii for “complacency and weak planning” and failing to meet its broader mission to the state, in a report released Tuesday.

RCUH, a public agency that operates independent of the university, was founded by the Legislature in the 1960s to help the university compete for research grants — in part by making the corporation exempt from a number of state procurement laws.


Better planning and training is needed for RCUH to meet its mission, a state audit said.

But according to the report, RCUH was also meant to more broadly serve the people of Hawaii by “proactively” initiating and conducting research and “commercializing inventions and discoveries.”

Instead, RCUH serves mostly as a support service for the University of Hawaii, despite setting goals for broadening its work in a 2004 strategic plan, the auditor found.

“RCUH’s passive approach towards initiating and stimulating research and training, coupled with inadequate planning, has resulted in the corporation’s near complete dependence on UH, which is imprudent and contrary to legislative intent,” the report says.

The organization has yet to act on goals that it set out more than a decade ago, because its board did not have the initiative, training or policies in place to properly make plans, according to the auditor.

The board is “not equipped to perform its policy-making and oversight roles,” the auditors argue, because the board lacks a formal training program and the informational packet for new board members does not include the 2004 strategic plan.

Although the board is supposed to meet quarterly, it only held three meetings in the last fiscal year and the organization’s strategic plan was not a discussion item on any of the agendas.

The corporation has also failed to develop an annual report that meets state requirements for public agencies and therefore “operates without goals, objectives, and metrics needed for measuring performance.”

According to the report, RCUH contends that because it does not receive general funds the organization is exempt from the state’s Act 100 report requirements.

Auditors also found that RCUH doesn’t have enough written policies and staff to properly oversee projects.

Perhaps most troubling is a lack of management controls to make sure that projects qualify for RCUH’s state procurement and civil service exemptions.

Those project oversight deficiencies “jeopardize the integrity of the corporation’s services,” the audit says.

The state conducted two previous audits of RCUH — one in 1993 that criticized the corporation for misleading financial statements and a lack of accountability for operations, and a follow up audit in 1995 that noted some improvements.

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