Ka Wai Ola - Office of Hawaiian Affairs, Volume 32, Number 6, 1 Iune 2015 — Fiscal responsibility: Make a budget and stick to it [ARTICLE+ILLUSTRATION]

Fiscal responsibility: Make a budget and stick to it

/A no'ai kakou /\ ... As part of my fidu- # % ciary duties / \as a Trustee of OHA, I attended a forum conducted by one of OHA's money managers. The Commonfund Forum2015: Converging Ideas - Creative Answers, held from March 14 to 17, 2015, is one of the pre-eminent annual eon-

ferences for institutional investors. The forum examined the many challenges endowments, foundations, charities, pension funds and other long-term investors are currently facing. I had a productive and informative discussion with Commonfund regarding OHA's spending policy and budget process. Commonfund had several recommendations: • The Board of Trustees should have a clear understanding of their role as fiduciaries to the Native Hawaiian Trust Fund. Trustees must be disciplined enough to hold the line on budgets and expenditures, otherwise OHA's budget will continue to swell to unsustainable levels.

• Trustees should broaden their knowledge regarding budgeting and investments by regularly attending informative conferences such as the ones presented by our money managers. I have attended several forums by Goldman Sachs, JP Morgan and Commonfund that have provided me with invaluable information and a world view on market trends. • Board Leadership ean also engage all of its members by giving Tmstees meaningful work and allowing them to gain further iinaneial experience. • Board and Committee meetings could be improved by focusing agendas on specific themes and similar issues. This would allow Trustees to express their opinions while keeping the meeting on topic. • The Board of Trustees should eonsider conducting role-playing exercises. For example, how would we react to worse case scenarios, such as catastrophic terrorist attacks or natural disasters? This would prepare us for the worst and it would also allow Trustees to understand the choices and processes that may be necessary in a market crash or some other catastrophic event. • OHA should learn from the past as it plans for the future. The Trustees ean easily analyze past asset allocations and determine

what worked and what didn't work. • When considering new spending, everyone at OHA, whether they are staff or Trustees, we must always consider: (a) Whose money we are spending and investing; (b) Whether we are being prudent; (e) Whether we have developed priorities and timelines for spending; and (d) Whether we have clarified our short-term and long-term goals. • Changing our spending policy limit to W2 percent of the Trust Fund would be a wise move in the current economy. Prudent spending, sticking to budgets and getting rid of the Fiscal Reserve slush fund are all mueh needed changes that were recommended by Commonfund. Commonfund has also agreed to look at our spending policy and make recommendations for the future. After attending another workshop with our two money managers, it appears clear that the stock market will not be a plaee for OHA to look for great retums on our investment over the next few years. The predictors are very gloomy; all the more reason to be cautious and pmdent with spending. Aloha till the next time. ■

Interested in Hawaiian issues and OHA? Please visit my website at www.wwena akana.org for more information or emai.l me at rowenaa @oha. org.

Rūwena Akana Trustee, At-large