Ka Wai Ola - Office of Hawaiian Affairs, Volume 11, Number 2, 1 February 1994 — OHA gets good report from auditor [ARTICLE]

OHA gets good report from auditor

After an exhaustive six-month audit the Legislative Auditor concluded: "OHA is entering a new phase as a trust with major assets. This change in status emphasizes the importance of having the board and individual trustees understand and behave in a manner appropriate to their fiduciary duties and responsibilities. OHA has initiated several significant programs and has demonstrated its ability to implement programs that are progressive and beneficial to the native Hawaiians and Hawaiians. The board must now seek to implement standards of behavior for the trustees that will complement and enhanee those achievements. This would strengthen OHA and support its increasing independence." This affirmation of OHA's progress and independence was waleome news to the Office of Hawaiian Affairs. OHA has had management audits in 1986 and 1990 as well as this 1993 audit, making OHA the most audited agency in the state. This time the Legislative Auditor had several positive findings: • OHA initiated several significant programs for native Hawaiians and Hawaiians; • OHA demonstrated its ability to implement programs that are progressive and beneficial to native Hawaiians and Hawaiians; • OHA's Board of Trustees, not the Legislature, has responsibility for managing revenues from the public land trust; • OHA's financial controls and internal control structure had no material weakness; • OHA complied with all applicable laws and regulations. The 1993 state Legislature requested management audits of a number of entities, including OHA, to assess their management and use of funds, internal controls, and statutory authority. In OHA's case, the primary objectives were to determine whether OHA is meeting its mission, function and responsibilities; to identify the impact of current restrictions on use of OHA funds; and to identify and evaluate OHA's management controls over programs and activities. A financial audit was also conducted in conjunction with the management audit. In responding to the audit, Chairman Clayton Hee said on behalf of the board. "The Legislature should be reassured that OHA has taken the steps necessary to manage its resources for the betterment of our people," and that OHA is "generally pleased with the results" of the audit. The audit report made several recommendations including: . . * The board needs a better understanding of its role as a fiduciary (keeper of trust assets). OHA's board agreed and noted that training in fiduciary responsibilities and roles would be implemented. • The board needs to establish additional bylaws and policies. Although the board concurred, they took exception to the auditor's suggestion that Hawaiian concepts like "ho'oponopono" be clarified. "Hawaiian terms and practices will continue to have a plaee in OHA bylaws and practices. If not here, where?" said Hee. • The board should reorganize its committee structure in terms of policy rather than operations. The board felt such a reorganization would be unwieldy. Moreover, the board responded strongly that "we believe it would be unwise to stop advocating or dealing directly with staff' when circumstances so dictate. • The board should consolidate its policies and procedures and improve intemal communications. The board concurred and indicated it would take the necessary steps to achieve this. • The board should update OHA's master plan and functional plans. The board agreed that the master plan should be updated, but pointed out that the plan is scheduled to be revised every six years, making the next update this year. The board did not agree that the functional plans needed updating since only two years of the six years outlined had been completed. • The board should treat and refer to revenues from the public land trust as "trust" funds rather than "special" funds. The auditors noted that "statutes support the treatment of revenues from the public land trust, as trust funds," concluding that "all of OHA's ineome and proceeds, including the revenues received from the public land trust are trust assets." This means that "responsibility for managing them rests with the OHA Board of Trustees. The Legislature should not subject Ihe trust funds to appropriation and allolmeni control." This reaffirmation of OHA's independence and diseretion over the use of its revenues tq help ils beneficiaries was weleomeel by ihe bo: whieh agreed wholeheartedly wilh the auditor's lerminology and eonclusions. In summihg up the si«fe3ying philos jphy of t >H Vs response to th< audit, Hee said, 'Tt riiouldf bc noted thai |$e BOT views itS role going beyond that ol inerely betng polic_v makfe achieve the most cffic»nt possible lnstead. we firmly bcheve our role is to better the conditions of otir beneficiaries. including mainiaming and peip0tuating our culture . "As such# we need to be eamiank ajpt#msjoi oarf>enelrciari?s. At times. tliese.gdals anel ow aillueal values>may confMqt-»itlt t mem 4ocbtne, bat.we: wiH- ft<H-saeriftje-dimp (he altar &f menieiLieie.H:)'." :,4.|