The city of Honolulu has said it will pay back $1.88 million to the U.S. Department of Housing and Urban Development for federal grant funds that were used inappropriately by a Central Oahu nonprofit.

Honolulu Managing Director Ember Shinn announced the city’s intentions Friday morning during a press conference to reveal the findings of an $80,000 internal investigation into nearly $8 million in federal grants that were given to ORI Anuenue Hale, Inc. to help build facilities to help the elderly and disabled.

The investigation was in response to a June 3 letter from HUD that said the city might have to pay back the $8 million it gave to ORI because the nonprofit was not using the money as it had promised.

ORI had been at the center of a years-long probe that produced allegations ranging from kickbacks and political favors to mismanagement of taxpayer dollars and lax oversight of federal funds.

Shinn said the city will now work with the ORI to bring the nonprofit back into compliance with federal rules so that it can continue serving its target population.

She also said it does not appear that Honolulu Mayor Kirk Caldwell was involved in any of the negotiations surrounding a controversial loan that was forgiven around the time that he was Mufi Hannemann’s managing director.

HUD Regional Public Affairs Officer Gene Gibson said her agency has received the city’s response and that it is currently under review.

“At this point, HUD has made no decisions regarding the document,” Gibson said. “Because of the technical aspects of this matter HUD cannot provide a definite date when we’ll have a final decision.”

You can read the city’s internal investigation findings here: