Ka Wai Ola - Office of Hawaiian Affairs, Volume 30, Number 10, 1 October 2013 — OHA: New procedures were underway before audit [ARTICLE]

OHA: New procedures were underway before audit

By Garett Kamemoto The Office of Hawaiian Affairs had begun implementing changes to its grants program and was working to rebalance its land portfolio even before an audit by the state Auditor was eonducted. The state Auditor released a report in early September saying better land planning and grant monitoring by the Office of Hawaiian Affairs would help the agency better fulfill its duties. OHA said in many cases it had already identified the same problems and had begun implementing new procedures. Changes implemented in the last year were not noted in the audit as they fell outside the scope of the report. Acting StateAuditor JanYamane said land policies, procedures and infrastructure are inadequate for an

organization that is the 13th largest landowner in Hawai'i. The audit said, "Without the policies, procedures and staff to help guide and support the increased real estate activity, OHA's Board of Trustees cannot ensure that its acquisitions are based on a strong hnaneial foundation." Yamane referred to recent land acquisitions, including the $200 million land settlement in Kaka'ako Makai to settle past-due ceded land claims; the acquisition of 500 acres of former Galbraith Estate land, whieh was done in partnership with the Trust for Puhlie Land with money from OHA, the City and County of Honolulu, U.S. Army Garrison Hawai'i and D.R. Schuler Homes; and the acquisition of the Gentry Paeihe Design Center. OHA responded by saying its mission includes preservation of land and cultural resources, and acknowledged its land portfolio has

been skewed toward preservation lands. "However, given the importance of 'āina to our culture and the Native Hawaiian people, there are times when OHA will acquire land where the primary purpose is preservation of our 'āina and rights," board Chairwoman Colette Machado said in her response to the audit. The audit faulted the Board of Trustees for not beefing up its land management staff. In 2008, a eonsultant had suggested a 50-person land and property management division to handle corporate securities. Machado said the board prudently waited until it was known what types of land OHA would be getting before beefing up its land staff. She said onee the Kaka'ako Makai settlement was approved by the state in 2012, the board moved to hire additional staff. Yamane also claimed a vote taken by the Board of Trustees to acquire

the Gentry property violated a board policy saying perceived eonflicts of interest was violated. The state Ethics Commission cleared Trustee Haunani Apoliona of any wrongdoing. In her response to the audit, Machado said the auditor interpreted the perceived conflict of interest policy too broadly. Yamane predicted with the development of Kaka'ako Makai, the "likelihood of similar conflicts will increase, particularly for trustees involved in banking, real estate and professional services firms that stand to benefit from the project." Machado replied, "As policy makers, OHA Trustees are expected to possess a high level of knowledge and experience. ... OHA's Trustees and Administration take great exception to the report's insinuation that the very traits that allow OHA Trustees to be effective policymakers hinder their ability to be

effective and ethical civil servants to our Native Hawaiian beneficiaries. Certainly this case and this vote are examples of a Trustee acting carefully, prudently and without a doubt, ethically." The auditor also found what it called "inadequate and inconsistent grant monitoring." OHA says it was already in the process of improving the grants program before the audit was eonducted. OHA said many changes have been made to strengthen the program including production of a new solicitation template, a new process for evaluating proposals and implementation of performancebased contracts. Machado said the agency has also increased the transparency in the program by publishing its annual report in Ka Wai Ola o OHA and on www.oha.org. In addition, board approvals are also published soon after a hnal vote is taken. To read the full report and OHA's full response, please go to www. oha.org/audit. ■