The Office of Hawaiian Affairs is spending half a million dollars for an independent audit that’s supposed to be done by April. But it’s unclear whether auditors will be able to meet that deadline because some OHA employees are refusing to hand over key financial documents.

That’s according to internal correspondence among CliftonLarsonAllen auditors and OHA trustees obtained by Civil Beat.

The lack of transparency illustrates continuing problems at OHA after a series of scandals including a critical state audit and ethics investigations that ensnared two former trustees. The public agency manages hundreds of millions of trust dollars for the benefit of Hawaiians.

OHA said last year that it is being investigated by the state attorney general. Hawaii News Now reported that OHA is also the target of an FBI probe into public corruption and misappropriation.

OHA Trustee Carmen Lindsey. 4 jan 2017
OHA Trustee Carmen Hulu Lindsey from Maui has been critical of the slow pace of the internal audit. Cory Lum/Civil Beat

OHA’s chief executive officer Kamanaʻopono Crabbe and board chairwoman Colette Machado did not respond to interview requests but a spokesman for OHA said in an email that the agency is committed to the audit process.

Last year’s state audit criticized both Crabbe and OHA trustees for loose spending. But it didn’t look at the limited liability companies created by OHA and led by Crabbe, nonprofits that do a variety of things including managing Waimea Valley on Oahu and promoting economic development for Native Hawaiian businesses.

The internal audit is intended to be a forensic analysis of both the public agency and its LLCs that identifies potential areas of fiscal waste, fraud and abuse.

OHA’s board has been planning to conduct this independent audit for more than two years in response to concerns from beneficiaries. Trustees had high hopes it would help improve the public’s trust in OHA.

“The audit was supposed to be a tool to strengthen OHA, assist the Board in its fiscal oversight and restore credibility to OHA,” Trustee Carmen Hulu Lindsey wrote in a Nov. 30 letter to OHA Chairwoman Colette Machado. She added that the internal audit is supposed to inform OHA’s strategic planning and decisions about the budget and structure of the organization’s LLCs.

But as of Nov. 30, OHA’s administration has “failed to provide 15 of the 33 of the requested documents,” Hulu Lindsey wrote, adding that the limited liability companies — which were excluded from last year’s state audit — haven’t provided any documents to the auditor at all.

“OHA’s failure and the LLCs’ refusal to honor the Board’s will have led to substantial and unwarranted delays. The final audit report was due to the Board by April 2019. It is now unclear whether CLA will be able to complete the audit at all,” she wrote.

OHA Ka Pouhana Kamanaopono Crabbe during Finance Meeting held at the Capitol.
OHA chief executive officer Kamanaʻopono Crabbe addresses members of the House Finance Committee during a recent hearing at the Capitol. Cory Lum/Civil Beat

Hulu Lindsey said Tuesday that she still has the same concerns. She said OHA’s staff has been working on providing documents to the independent auditor but that to her knowledge, the LLCs have still given the auditor no financial documents.

“It is a concern of mine because time keeps ticking,” she said, adding that the board could potentially extend the deadline for completing the audit due to delays.

A Nov. 28 status report from CliftonLarsonAllen to Lindsey and Trustee John Waihee IV noted that the LLCs have cited ongoing litigation as a reason not to provide financial documents. Conservative blogger Andrew Walden is suing OHA’s limited liability companies for access to their financial records.

OHA’s Board of Trustees voted last February to require the LLCs to submit documents for the internal audit.

Trustee Keli’i Akina has been a vocal advocate for accessing that information. He said Tuesday that trustees have been “waiting far too long to get this audit” and that the board needs “to take action and demonstrate the will to push the audit forward.”

“Given delays that we’ve experienced it’s not certain whether we’ll be able to meet the original deadline,” he said. “Beneficiaries and legislators need to speak up and call for a successful and timely completion of this audit.”

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