Play Live Radio
Next Up:
0:00
0:00
Available On Air Stations

New OHA audit finds 22 transactions of fraud, waste of $7M

Mililani Trask OHA 11 10 2022.jpeg
Jason Ubay
/
HPR
Office of Hawaiian Affairs Hawaiʻi Island Trustee Mililani Trask speaks at a press conference at the OHA offices at Nā Lama Kukui in Honolulu on Nov. 10, 2022.

An independent audit of the Office of Hawaiian Affairs found 22 instances of fraud, waste and abuse occurred between 2012 and 2016. Investigators say together they led to more than $7 million in misspent funds.

These new findings come from a forensic audit by Plante Moran, an audit, tax, consulting and wealth management firm. The OHA Board of Trustees hired Plante Moran to follow up on 38 transactions flagged by a previous audit by national accounting firm CliftonLarsonAllen LLP, which the board contracted in 2018.

That year, the state auditor released a critical audit of the semi-autonomous state agency. It noted OHA's discretionary disbursements were nearly double its planned and monitored grants budget.

During that time period, the CEO was able to write grants of up to $25,000. These grants offer some glaring examples. Some grants went to a person with a personal relationship with the CEO — without deliverables.

Kamanaʻopono Crabbe was the Ka Pouhana, or CEO, at the time. He resigned in 2019.

Mililani Trask, OHA’s Hawai’i Island trustee, said after state and private audits, it is clear some of these actions must be referred for criminal investigation and prosecution.

“What is most important is that the government records of our office were not available for inspection. That is a clear indication that persons who had oversight of those documents removed them. We cannot allow our Native trust assets to be mismanaged in this way. Six years may have elapsed, but this board will seek accountability and where our jurisdiction ends, we will take it to the next level.

Carmen Hulu Lindsey OHA 11 10 2022.jpeg
Jason Ubay
/
HPR
Office of Hawaiian Affairs Board of Trustees Chair Carmen "Hulu" Lindsey speaks at a press conference at the OHA offices at Nā Lama Kukui in Honolulu on Nov. 10, 2022.

"Too many years, too many boards look the other way. No more will that be the standard in our board," Trask added. "We're cleaning up our house over here."

"It is important to note that the period of time they were reviewing was from 2012 to 2016," Board Chair Carmen "Hulu" Lindsey said at a press conference. "And since then, OHA has made incredible strides towards addressing improvements in policies, procedures and practices. These implementations strengthen OHA's internal controls and mitigate but not eliminate the likelihood that fraud, waste and abuse transactions could occur."

Some improvements have been implemented since the previous audit, including:

  • Implemented three major technology systems for grants management, accounting and contract management.
  • Established a governance and policy framework for the BOT with updated bylaws.
  • Approved policy amendments to improve fiscal management and transparency in budget preparation, format, and reporting requirements.
  • Placed contract monitoring as the responsibility of the operating unit with oversight by the business line executive.
  • Subjected all grants and sponsorships to approval by the BO
  • Eliminated CEO-initiated sponsorships and the CEO management override practice.
  • Required that employee-related events be compliant with OHA policies.
  • Established a financial transparency website that includes 18 years of financial statements and independent auditors’ opinions, Trustee Protocol Allowance and Annual Reports.
Jason Ubay is the managing editor at Hawaiʻi Public Radio. Send your story ideas to him at jubay@hawaiipublicradio.org.
Related Stories