Mauna Kea finances clean in UH internal audit

An internal audit has given the University of Hawaii a clean bill of health when it comes to its financial management of the Mauna Kea Science Reserve.

The audit, which was accepted by a UH Board of Regents committee Wednesday, was authorized by the board in February after the university came under harsh criticism for its management from the Office of Hawaiian Affairs, Hawaii County Mayor Harry Kim and key members in the state Senate, among others.

Among the harshest of critics was state Sen. Kaiali‘i Kahele (D, Hilo), who on Tuesday blasted the internal audit as largely containing information already in the public domain and for failing to address any number of revenue-related issues, including how much money is owed to OHA from the university’s managed lands on Mauna Kea.

Kahele said only an independent, third-party audit will ensure results the public can be confident in, and he plans to introduce a bill requiring just that in the upcoming legislative session.

“I am convinced the way Maunakea has been managed since 1968 by the University of Hawaii is not a blueprint for the future,” Kahele said in an email.

UH spokesman Dan Meisenzahl said the regents commissioned the audit to better understand how the money flows in and around the astronomy reserve, home to 13 observatories, four of which are owned by the university. The effort did just that, he said.

Meisenzahl said the university welcomes any further scrutiny of its operations.

“We’re not hiding anything,” he said.

During the 2018 legislative session, Kahele introduced a bill to establish a new management authority on Mauna Kea. While the bill failed, the university did come under blistering criticism during hearings for its financial management, with some saying millions of dollars in potential fees, charges and rental payments were not being collected.

In response, the regents ordered its Office of Internal Audit to take a closer look at the operation’s finances, including evaluating university funds, lease payments and other funds received in support of stewardship, management, education and other Mauna Kea-related activities.

The audit also included a review of funds transferred between entities, including both the university and the Research Corporation of the University of Hawaii and payments made to university-related support programs by the Mauna Kea observatories and other third parties.

In the end, the audit made a half-dozen recommendations, including a couple of suggestions to improve efficiency and accuracy that UH agreed to adopt.

The audit also suggested the observatories help pay for the $910,000 Maunakea Ranger Program.

The Maunakea rangers, established 18 years ago, are charged with protecting resources, helping to ensure public health and safety and informing visitors about the cultural, natural and scientific significance of the mountain, among other things.

The audit also said UH should determine whether the commercial tour operator per-passenger charge of $6 is sufficient to recover the costs incurred by the Office of Maunakea Management and Maunakea Support Services.

In a response, university administrators said they’ve been in talks with the observatories about adjusting charges on a variety of programs, including the rangers. New charges are expected to be established after the university obtains authorization for a master lease that extends beyond 2033, they said.

Regarding the per-passenger charge, administrators said the Office of Maunakea Management is working with the UH-Manoa School of Travel Industry Management on a study to determine if it is sufficient.

Eight tour operators have permits to take tourists on Hawaii’s tallest mountain, and UH receives about $360,000 in annual revenue from the operators, according to the audit.

Officials said the observatories spend a combined $72.4 million a year for their operations. That includes $5.6 million allocated to Maunakea Observatories Support Services, the entity that runs the day-to-day operations of the summit region.

Robert McLaren, interim director of the UH Institute for Astronomy, previously said the other telescope operators already know they will be expected to pay substantially more when their subleases come up for renegotiation.

The planned Thirty Meter Telescope has agreed to eventually pay $1 million a year — 20 percent of which will go to OHA and 80 percent to mountain management.