STAND. COM. REP. NO. 3212

Honolulu, Hawaii

RE: S.C.R. No. 29

S.D. 2

Honorable Ronald D. Kouchi

President of the Senate

Twenty-Ninth State Legislature

Regular Session of 2018

State of Hawaii

Sir:

Your Committee on Ways and Means, to which was referred S.C.R. No. 29, S.D. 1, entitled:

"SENATE CONCURRENT RESOLUTION REQUESTING THE STATE AUDITOR TO CONDUCT A FINANCIAL AUDIT OF THE UNIVERSITY OF HAWAII'S ACTIVITIES RELATED TO MAUNA KEA,"

begs leave to report as follows:

The purpose and intent of this measure is to request the Auditor to conduct a financial audit of the University of Hawaii's activities related to Mauna Kea.

Specifically, this measure requests the Auditor to conduct a financial audit on the following as they relate to Mauna Kea:

(1) The University of Hawaii System;

(2) The University of Hawaii Institute for Astronomy;

(3) The Research Corporation of the University of Hawaii;

(4) The Office of Mauna Kea Management;

(5) The Mauna Kea observatories and the Mauna Kea observatories support services;

(6) The Mauna Kea Visitor Information Station;

(7) Financial expenditures from the University of Hawaii research and training revolving fund;

(8) All contracts or professional services;

(9) Various aspects of Mauna Kea comprehensive management plan;

(10) The negotiation process for telescope subleases;

(11) Opportunity costs attributed to the failure of the University of Hawaii to adequately balance observatory development with its public trust obligations; and

(12) Funding sources.

Your Committee received written comments in support of this measure from the Office of Hawaiian Affairs; Hoomanapono Political Action Committee; and OCC Legislative Priorities Committee, Democratic Party of Hawaii.

Your Committee received written comments in opposition to this measure from the University of Hawaii System.

The Office of the Auditor submitted written comments on this measure.

Your Committee finds that Mauna Kea holds unique and significant spiritual, cultural, historical, and scientific value to Hawaii and the world. Your Committee further finds that the activities of the University of Hawaii related to Mauna Kea have been the subject of scrutiny by certain members of the public and that an independent audit of these activities will help to provide a balanced and accurate assessment of the University's stewardship of the area.

Your Committee has amended this measure by replacing the substantive contents of the audit with the audit subjects contained in Senate Bill No. 757, Senate Draft 2, Regular Session of 2018.

Specifically, your Committee has amended the title and body of the measure by requesting the Auditor to conduct the following as they relate to the University of Hawaii's activities on Mauna Kea:

(1) A financial audit of the Office of Mauna Kea Management;

(2) A performance audit of the Research Corporation of the University of Hawaii;

(3) A performance audit of certain aspects of the legal affairs and university general counsel office of the University of Hawaii System; and

(4) An organizational management structure audit of the entities that have jurisdictional authority of Mauna Kea.

As affirmed by the record of votes of the members of your Committee on Ways and Means that is attached to this report, your Committee concurs with the intent and purpose of S.C.R. No. 29, S.D. 1, as amended herein, and recommends its adoption in the form attached hereto as S.C.R. No. 29, S.D. 2.

Respectfully submitted on behalf of the members of the Committee on Ways and Means,

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DONOVAN M. DELA CRUZ, Chair