Ka Wai Ola - Office of Hawaiian Affairs, Volume 11, Number 3, 1 March 1994 — Auditor's theme: run OHA more like a trust, less like the Legislature [ARTICLE+ILLUSTRATION]

Auditor's theme: run OHA more like a trust, less like the Legislature

by Rowena Akana Trustee-at-large Apart from the reports that OHA management controls are inadequate, or that standing eommittees are dysfunctional, or that trust funds are mislabeled, or that the office's master and functional

plans have not been updated, or that policy and procedure manuals are incomplete and not compiled in a useful way, or that internal eommunications are poor — apart from all that — the state auditor seems to think the

Board of Trustees needs training in how to be trustees. I think the state auditor is right. OHA was created to be the prineipal vehicle for the state to meet its trust responsibilities to Hawaiians and native Hawaiians. Instead, the office runs more like the Legislature — full of gas but no road map. OHA and the trustees are fiduciaries to all Hawaiians, not just the people that got them elected. Three fundamental fiduciary duties are marshalling resources, loyalty and prudence. One out of three is not good

enough Loyalty implies that trustees must administer OHA's $160 million in revenues solely in the interest of the beneficiaries. Some trustees focus their responsibilities on the constituents who elected them, rather than the ben-

I eficiaries as a whole. "Seeing themselves as equivalent to legislators would permit board members to engage in activities that would not be appropriate for trustees who are held to the highest fiduciary standard

dictated by the duty of loyalty," the auditor reported. The use of office staff for personal purposes is another example. Not only do trustees act like legislators, they don't think clearly when they do. "Trustees have also made decisions without prudence," the auditor writes. "For example, the board has not [made sure] OHA has a basic operating manual." Such a manual would ensure OHA receives the necessary policy direction and guidance to function.

It must look strange to our Hawaiian passengers that the board has been driving OHA for 14 years without a road map. The "official" OHA response to the audit says the board will waste no time hiring outside experts as "travel guides." Prudence also implies, according to the auditor, that a trustee not staff an advisory committee to a board committee that the trustee also chairs. In other words, being a policy maker and an advisor is not prudent, though it is politically convenient. "For a better understanding of their fiduciary duties, trustees need more guidance and train-

ing, the state auditor reported. "The board's bylaws and policies and procedures do not define fiduciary responsibilities, and training about the responsibilities has been non-existent." To that end, the board chairman announced the board's intent to hire people to educate us. Let us hope they are people the board chooses, and that they are eminently qualified in trust law. Responding to all the criticism from the state auditor, OHA's chairman told news media the board will take to heart the auditor's suggestions.

Well, most of the suggestions. The office functional plans are just fine, says the board's official response to the audit, despite the auditor's finding that "without current plans, OHA is unable to assure that its various activities operate in concert with eaeh other and are relevant to meeting its goals." The sensation of all this is one where the board revs its engines ... but stays in neutral. That way, individual trustees take occasion

to stroll off the straight and narrow. Concrete plans, to the eontrary, make stepping out more difficult. To truly fulfill OHA's fiduciary duties, the biggest step trustees ean take is to "follow the rules." But then, we must first have it in our hearts to be trustees. Hawaiians waited 16 years for OHA to perform its fiduciary duties. Let's hope the auditor's next report in 1998 doesn't offer the same suggestions.

recorded notice of OHA meetings scheduled, eall the OHA Newsline at 594-1979*. (*New number effective Feb. 3, 1994) |