Ka Wai Ola - Office of Hawaiian Affairs, Volume 14, Number 4, 1 April 1997 — Administrator' s Column [ARTICLE+ILLUSTRATION]

Administrator' s Column

Someone advised me that undergoing an audit was a little like having a wisdom tooth extracted ... momentarily unpleasant, but worth the relief in the long run. Consistent with this analogy, the state audit team recently completed a comprehensive assessment of OHA's management controls over its programs, cash, as well as short and long term investments. This exercise involved examination of program files, funding sources, internal correspondence, news articles, board and committee meeting minutes, planning documents, accounting documents, and budget documents. Marion Higa's audit staff met with OHA trustees, the administrator, deputy administrators, division and office heads, and selected staff members. They even observed a Board of Trustees meeting conducted on the island of Lāna'i. This process was comprehensive, involved and demanding. When the audit was over, however, we experienced a measure of relief and some unusual words of encouragement. The auditors found certain practices weaken working relationships. For example, some members of OHA's Board of Trustees circumvent OHA policy of requiring trustees to communicate with staff through the administrator. The state auditors recommended that the Board of Trustees... "enforce its policy that all trustee requests for staff assistance be channeled through the administrator." I agree that adherence to this existing poIicy would make for less disruption, staff overload and confusion in the work plaee. The auditors also advised us that we need to move ahead to meet ehallenges in program planning, monitoring, evaluation, and budgeting. Since Ernest Kimoto, our planning officer joined the staff, we have completed a Technical Manual of Evaluation Services in OHA and a Monitoring Plan and Procedures of the OHA Functional Plans. Functional and divisional plan revisions are already underway in several divisions, actions comp!etely consistent with the audiloi^ findings. The auditors also offered sugges-

tions on how to improve financial reporting to the board. Our Chief Financial Officer (CFO), Shaun Kelly has already made revisions to our

monthly varianee reports to make them more useful. Now that he has brought our fiscal division up to almost full capacity we will generate more regular halanee sheets and operating

statements for officers' and Trustees' use. Perhaps the most weleome findings by the auditor's team are found in the conclusion of Chapter 3 of the audit report. ..." The Office of Hawaiian Affairs has mueh to be proud of in its handling of long term investments. OHA has established a foundation of sound investment policy and investment management... " These excerpts eome from the auditor's report whieh examined OHA management controls over its programs from 1994-1996. A separate Deloitte and Touche audit of OHA financial statements for the year ended June 30, 1996 has just been released as well. In our opinion, the independent auditor reports that such combined financial statements present fairly, in all material respects, the financial position of OHA at June 30, 1996 and 1995, and the results of its operations for the years then ended are in conformity with generally accepted accounting principles. The audit teams responsible for generating these reports worked hard to complete their thorough review of our programs and hnaneial operations. Our staff also worked long hours to make available all the necessary documentation necessary for the completion of these important audits. The bottom line? OHA financial and management audits made a number of recommendations whieh will help us improve our performance - many of whieh are already being implemented. Our financial statements and portfolio are sound and secure. Now that this long, exacting, yet ultimately helpful audit process is over, it is time to refocus our energies and attention to the business at hand. Mahalo to all who made these audits a success.

Linda Colburn OHA Administrator