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Regents hire accounting firm for concert debacle investigation

By Craig Gima

LAST UPDATED: 05:23 p.m. HST, Sep 28, 2012

A University of Hawaii Board of Regent's task force looking into the failed Stevie Wonder concert has hired an accounting firm to help it prepare a report on how the university was apparently scammed out of $200,000, and to examine operational, financial and oversight practices.

Board of Regents Chairman Eric Martinson said KMH LLP will be paid up to $50,000 for their services.

Regent vice chairman James Lee told the board that they would like to expand their investigation in phases to look at broader issues raised by the Wonder concert, such as university governance.

The probe comes on the heels of a more than $50,000 external probe of the debacle by the Cades Schutte law firm, which was commissioned by the university. The UH also is paying up to $25,000 to Honolulu attorney Robert S. Katz and his firm, Torkildson Katz Moore Hetherington & Harris, to assist in the aftermath of the ill-fated concert.

Lee said the regents' task force is still working to present its report on the Wonder concert at the board's next meeting on Oct. 18.

But Lee assured members that the task force will not rush the report and it could be delayed if task force members feel it is not ready.

Lee told the board that the task force wants to continue its work after presenting the initial report and look at best fiscal practices at other universities and whether UH should change some of its policies and procedures.

The task force has met twice since the regents approved its formation on Sept. 5, most recently on Wednesday. 

The Operational and Financial Controls Improvement Advisory Task Group consists of five regents and four professionals in the field of business, audit and accounting. 

The report of the task force will be made public when it is presented to the regents.

Regent John Holzman urged the task force to make sure its report is complete, tough and fair. 

"We're the issue too. The board and our credibility are involved here too," he said.

Task force members are: James H. Q. Lee, vice chairman of the Board of Regents and chairman of the Committee on University Audits; Barry Mizuno, regent and vice chairman of the Committee on University Audits; Saedene Ota, regent and member of the Committee on University Audits; Jan Sullivan, regent and member of the Committee on University Audit; Benjamin Kudo, regent; Lawrence Rodriguez, business consultant; Terri Fujii, managing partner, Honolulu office of Ernst & Young LLP; Patrick Oki, managing partner, PKF Pacific Hawaii LLP; and Cory Kubota, Assurance Principal, Accuity LLP.

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Maneki_Neko wrote:
UH gets scammed of $200k.

UH spends $1 million finding out how it got scammed.

Everybody involved all of a sudden has no idea of what went wrong.

on September 28,2012 | 01:10PM
allie wrote:
well said..the nightmare continues
on September 28,2012 | 01:27PM
lani_moo wrote:
Where have you gone Marion Higa? The state turns it's lonely eyes to you...
on September 28,2012 | 01:45PM
Sunny wrote:
My early estimate was a $1M but now I'm thinking $1.5M is more likely and this does not include the possible replacement of the UH President. Sadly, we will spend all this money and not see a notable improvement in the UH administration. There are too many "chiefs" and too much politics in play.
on September 28,2012 | 02:38PM
Wazdat wrote:
on September 28,2012 | 03:27PM
kailua000 wrote:
Pay me $50k and Ill tell you how it was done. Shoot, Ill tell you for free. No leadership; no responsibility. Find out who authorized it and fire them. There, just saved the University $50k. They are going to spend $1M of the taxpayers money to find out what happened and who is responsible for losing $200,000 by the time this mess is pau.
on September 28,2012 | 01:10PM
Manoa_Fisherman wrote:
Rather than spending all that money for outside lawyers and accountants to tell the public that the UH lawyers and accountants didn't do their jobs, it is cheaper and better in the long run to just fire the executives who are involved and end this bloodletting, once and for all. Greenwood, Freitas, Todo and Lendio have to go and give the UH system a fresh start.
on September 28,2012 | 01:18PM
Locokane wrote:
Agree that all is needed is to have Todo who has yet to be questioned by anyone including Donna Kim on what written UH fiscal policies exist on wiring of funds, commingling of funds, realignment of funds, funding thresholds and approved funding authorizations given to the President, etc. It appears that no internal controls exists and a lack of checks and balances over financial transaction. Why is he exempt from any fact finding reviews?
on September 28,2012 | 06:16PM
CriticalReader wrote:
This is getting absurd. Read the $50K fact finder report. Assuming it's accurate, then Finance capitulated to Athletics pressure to do things outside normal procedures, in response to either harassment from or caving to almighty athletics. No need accountants to figure that out. If the fact finder's report is wrong, then the only thing an accountant would be helpful doing is counting the $50,000;00 UH should still have in its account at the end of the year.
on September 28,2012 | 01:20PM
gsc wrote:
I guess they spent so much money they need a professional to tally up the total amount...... It's time for a leadership change from the top............
on September 28,2012 | 01:22PM
allie wrote:
long overdue
on September 28,2012 | 01:27PM
fishwrider wrote:
This comment has been deleted.
on September 28,2012 | 01:46PM
honopic wrote:
crack me up! at least her grad from posting. wot, get chance?
on September 28,2012 | 04:03PM
Wonderful_World wrote:
Whose money are they spending anyway? Taxpayer? Students? Their own?
on September 28,2012 | 01:24PM
allie wrote:
tax payer dollars...your money hon
on September 28,2012 | 01:27PM
McCully wrote:
More money being spend. I wonder what fund the regents are taking the money from?
on September 28,2012 | 01:26PM
bboops wrote:
How stupid is this!!!! Stop spending OUR MONEY!!!! You need to all be fired because this shows stupidity beyond anything... STOP!!!!!!!
on September 28,2012 | 01:31PM
cojef wrote:
Law firms, PR firms, now auditing firm, and beat goes on. By the time it is fiinished over $500,000 is spent to find out it was mismanagement, from the outset. Hiow ridiculous to spend to find out who caused the loss of the $200,000. How asinine is the Board of Regency. Stupid is as stupid does, is apt here.
on September 28,2012 | 05:46PM
taxpayer1 wrote:
Waste of money. They got scammed on the simplest level. Move on, stop spending money on this. Same goes for the PR positions - get rid of the former reporters, they're not PR professionals, moreover, they've failed.
on September 28,2012 | 01:37PM
realist3463 wrote:
First you get scammed. Then you hire lawyers to help you look even more stupid to the legislature. Then you hire accountants to figure out you got scammed for $200K but you already knew that. Maybe they will find out how much the students and taxpayers really lost having been further scammed by the incompetent University administration and the meddling and corrupt governor and legislature. Hawaii gives other third world countries a bad name. Vote them all out!!!!
on September 28,2012 | 01:38PM
pridon wrote:
UH has $700 million budget. UH system has about 30,000 students. Solve the problem by closing the University, selling off its assets and offering $20,000 a year in schalrships to be used at mainland colleges (or local prviate ones). No more concerts, no more Mackins, no more Greenwood or Apples. No university -proplem solved and money elft over. No need for rail. 15000 cars off the road. Think about it!
on September 28,2012 | 01:45PM
Mallory wrote:
hmm good point - when University is out of session, traffic is much better!!
on September 28,2012 | 03:28PM
csdhawaii wrote:
UH has a $1.3 billion budget and 50,000 students. Much of the budget is from tuition and other revenues...remember, MRC said the public was a minority shareholder with our $350 million. Your idea is not sustainable at any level, especially when you take out the monies that the students themselves contribute. And $20K a year doesn't cover out-of-state tuition nor private college tuition. You're trying, though, I give you credit.
on September 28,2012 | 03:46PM
mcc wrote:
Who can spend more money? The State on the University or the City for the RAIL?
on September 28,2012 | 01:48PM
PCWarrior wrote:
Greenwood and Apple HAVE GOT TO GO. We pay each of them more than $400,000 and they cannot make a freakin decision without hiring committees and lawyers and accountants. If you have to hire all these people to make a freakin decision then hire me for $200,000 and I'll make the freakin decision. The UH LEADERSHIP AND UH BOARD OF REGENTS ARE THE LAUGHINGSTOCK OF THE NATION. THE NATION!
on September 28,2012 | 01:49PM
mcc wrote:
Who can spend more money, the State for the University or the City for the RAIL?
on September 28,2012 | 01:50PM
Publicbraddah wrote:
I think this is how rail became such an eyesore. They started at 3.5 billion and are now up to 5.2 billion with little to show. A $200K Stevie Wonder concert became a no concert and now UH has to pay for legal and accounting services with nothing to show for it.
on September 28,2012 | 01:51PM
mcc wrote:
Another $50,000 of taxpayer's money to see how they lost $200,000.
on September 28,2012 | 01:52PM
Kaleo744 wrote:
It should have stopped at the GOVERNORS office he should be the one firing all of these idiots...and again with all of this "DISPOSABLE INCOME" NOTHING WILL BE DONE ABOUT IT..with most likely a slap on the wrist with a scolding...Do you promise not to do this again.? We promise..your majesty....
on September 28,2012 | 02:07PM
Kaleo744 wrote:
At this point I can think of only think of three words...CIVIL DISOBEDIENT MARCH!!
on September 28,2012 | 02:08PM
Big C wrote:
This is typical government mentality, blame on someone else's department, spend more money (since it's not coming out of their own pockets), make yourself look busy even though you know you really really screwed up.
on September 28,2012 | 02:09PM
Kaleo744 wrote:
What the hell planet are these jokers on"
on September 28,2012 | 02:09PM
Kaleo744 wrote:
Scotty can you beam the BOR up Please....
on September 28,2012 | 02:10PM
Kaleo744 wrote:
Here we go "comment sent for approval"....
on September 28,2012 | 02:12PM
Kaleo744 wrote:
You can screw the people once maybe twice and even a third time...but the bucks stops now...yea right! whats next. lets hire another firm to see if the firm we hired are doing what they suppose to be doing,,,huh!
on September 28,2012 | 02:14PM
Kaleo744 wrote:
Comment sent for approval...dito dito dito!!!!
on September 28,2012 | 02:15PM
yskeulb wrote:
Instead of hiring an outside accounting firm, why not utilize the current undergraduate and graduate accounting students along with the UH Internal Audit department? Besides, if controls are lacking and policies are not in place, then UH should just give up its autonomy.
on September 28,2012 | 02:18PM
DanielO wrote:
Please stop already . . . why keep spending? Please, I beg you on behalf of the future of education in Hawaii . . . stop throwing money around as if it were not your money!
on September 28,2012 | 02:22PM
Anonymous wrote:
Mo money Mo money
on September 28,2012 | 03:34PM
luvshawaii wrote:
on September 28,2012 | 03:42PM
4sanitysake wrote:
Can somebody put a stop to this madness? Now they are giving jobs to their friends in accounting firms who already have existing contracts with the university. I bet they are going to request travel expenses to visit other institutions to see how they do things. When something like this happens a "reasonably sane administration" would look to contact colleagues at peer institutions, as well as involve their own employees, in the process of investigating processes and creating policy. The way the BOR is doing it there is no vested interest to ensure the new processes and policies they create are monitored and working other than to continue to pay outside consultants.
on September 28,2012 | 03:48PM
sukebesan wrote:
Stupid, idiotic UH Administration and Board of Regents now getting scammed by a national accounting firm to the initial tune of $50,000 and will lead to a $500,000 accounting bill when the final, final, final, final, final report is finally completed and turned in to those incompetant smucks called the UH Board of Regents. As I told that part-time paid UH student who phoned me about updating my personal contact information for UH solicitation purposes: " I now longer wish to be acknowledged as a University of Hawaii graduate."
on September 28,2012 | 04:21PM
lychee wrote:
Task Force member: one member is from the CPA firm (Ernst & Young). That's where Howard Todo (UH CFO) came from. Cover Up
on September 28,2012 | 04:34PM
Papakolea wrote:
Actually, hiring an accounting/auditing firm is not a bad idea and should have been done in the first place rather than hiring a law firm to do the first investigation. The Cades Shutte $50,000 was a big waste of time. At least an auditor has to follow auditing procedures.
on September 28,2012 | 04:59PM
sukebesan wrote:
Firing squad needed, not an accounting firm
on September 28,2012 | 04:59PM
akuman808 wrote:
What, come on Man!!! Here is some free advice. Instiitute an approval process for all expenditures over $1K. The final signature is the President of the university, where the buck should stop. Simple GAP SOP's. Right now the UH has SOS, stuck on $tupid.
on September 28,2012 | 05:03PM
Maneki_Neko wrote:
As they say up at Manoa: "More clowns than Quidan."
on September 28,2012 | 05:12PM
nitpikker wrote:
here we go again!! would be nice if BOR said THEY will fund investigation which is being done simply to try and show public that they are DOING something!!
on September 28,2012 | 05:36PM
nitpikker wrote:
about time for abercrombie to call for martinsons head!!
on September 28,2012 | 05:38PM
jakwa wrote:
on September 28,2012 | 05:43PM
nitpikker wrote:
i wonder if BOR and UH admin. get together and plot to take turns spending taxpayers mmoney???
on September 28,2012 | 05:43PM
slc3755 wrote:
UH was defrauded by its own incompetence.
on September 28,2012 | 05:43PM
ejkorvette wrote:
Wow, that's alot of money that could used to: - Fix much needed road conditions - School programs for our precious children in Hawaii (Our Future) - Reward HPD Guardians, the one that are not Thieves, Liars, Abusers of their Positional Authority - Our Elderly Food Programs And much more more. But Oh Well, because at the End of the Day: YIPPPEEEEE, YAHOOOOO, WOOOOO HOOOO, LUCK YOU LIVE HAWAII. YAH, YAH?
on September 28,2012 | 06:07PM
hon2255 wrote:
Greenwood, Apple and all of BOR should resign immediately or be FIRED , MRC and Apple fired for CAUSE and will not get a dime more from us taxpayers!!!! as Michael Jackson once said...Beat It Just Beat It!!!!! Leave our islands and do not return!!
on September 28,2012 | 09:46PM
Yukio wrote:
This should be the last straw. The UH administration is thumbing their noses at the legislators and tax-paying citizens of this state. Clean the house of these incorrigibles. Getting rid of top administrators at UH may present short-term instability to the institution but long-term stability. UH faculty and students need to make their voices heard on campus.
on September 28,2012 | 09:54PM
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