THE SENATE	S.C.R. NO.	110
TWENTY-FIFTH LEGISLATURE, 2009
STATE OF HAWAII

SENATE CONCURRENT

RESOLUTION

REQUESTING A FINANCIAL AND MANAGEMENT AUDIT OF THE OFFICE OF HAWAIIAN AFFAIRS.

     WHEREAS, in hearings before the Senate in 2008, numerous beneficiaries of the Office of Hawaiian Affairs ("OHA") requested an audit of OHA's finances and management; and

     WHEREAS, pursuant to section 10-14.55, Hawaii Revised Statutes, OHA is subject to an audit every four years.  The most recent audit of OHA was submitted in April 2005; and

     WHEREAS, previous audits of OHA have reported serious shortcomings in its financial and management practices and condition; and

     WHEREAS, in its audit of OHA in 2001, Report No. 01-06, the Office of the Auditor ("Auditor") found, among other things, that "the Board of Trustees has not adequately planned to improve the conditions of Hawaiians;" and

     WHEREAS, in 2001, the Auditor further found that the "board has allowed OHA's master and functional plans to remain outdated and has inefficiently planned for program expenditures;" and

     WHEREAS, in 2001, the Auditor further found that the "board also failed to uphold its fiduciary duties and inefficiently managed OHA's public land trust funds;" and

     WHEREAS, in its audit of OHA in 2005, Report No. 05-03, the Auditor found, among other things, that "OHA has shown little improvement in its ability to serve Hawaiians since our last audit in 2001;" and

     WHEREAS, in 2005, the Auditor further found that "OHA lacks basic policies and procedures to guide the actions of its staff, and its organizational charts and functional statements are inconsistent;" and

     WHEREAS, in 2005, the Auditor further found that "OHA's casual administration of its finances does not demonstrate respect for its fiduciary duty to all Hawaiians.  Certain protocol and trustee expenditures appear questionable;" and

     WHEREAS, a review of OHA's investment portfolio by the certified public accounting firm KPMG LLP resulted in a finding by the Auditor that "KPMG found continuing deficiencies that do not ensure compliance with OHA's fiduciary obligations;" and

     WHEREAS, the numerous requests for an audit of OHA made by OHA's beneficiaries, when considered in light of the Auditor's findings in recent past audits, justify the Legislature's request for the conducting of a financial and management audit of OHA in an expedited manner; now, therefore,

     BE IT RESOLVED by the Senate of the Twenty-fifth Legislature of the State of Hawaii, Regular Session of 2009, the House of Representatives concurring, that the Auditor is requested to conduct a management and financial audit of the Office of Hawaiian Affairs; and

     BE IT FURTHER RESOLVED that the Auditor is requested to submit a report of the Auditor's findings and recommendations on the results of the financial and management audit not later than twenty days prior to the convening of the 2010 Regular Session; and

     BE IT FURTHER RESOLVED that certified copies of this Concurrent Resolution be transmitted to the Chairperson of the Board of Trustees of the Office of Hawaiian Affairs and the Auditor.

OFFERED BY:

_____________________________

Report Title: 

Financial and Management Audit; Office of Hawaiian Affairs