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Senate panel recommends audit for UH, training for regents

By Craig Gima

LAST UPDATED: 05:07 p.m. HST, Nov 19, 2012

A state Senate committee investigating the failed Stevie Wonder concert blames a lack of communication, oversight and due diligence for the loss of $200,000 in University of Hawaii Athletic Department funds in an alleged scam.

The committee is also recommending that the Legislative Auditor conduct a financial and management audit of the UH system and that the Board of Regents receive training on the state Sunshine Law and on its own policies. It also suggests that the regents consider hiring a master to make sure the recommendations of the Legislative Auditior and a regent's task group report are carried out.

The findings and recommendations are part of the Senate Special Committee on Accountability report, released today. The committee, which is led by Sen. Donna Mercado Kim (D, Kalihi Valley-Halawa), held an informational briefing on its report this afternoon at the State Capitol.

The university released a statement saying UH President M.R.C. Greenwood was traveling and hadn't had a chance to review the report. The Board of Regents had no comment.

The report raised questions about the university's spending to hire outside law firms and public relations firms. It also questioned the cost of contract buyouts for former UH president Evan Dobelle, former head football coach Greg McMackin and former athletic director Herman Frazier.

"The university should not be sending the message that it rewards individuals for failing to achieve the obligations of their contract, failing to meet certain standards, or failing to perform certain jobs satisfactorily," the report said.

It found that university staff "all seemed to believe that it was someone else's responsibility to conduct due diligence and to make sure the university was protected."

Former athletic director Jim Donovan approved the concert, but delegated responsibility and "failed to provide any other oversight," the committee said.

"While each department played a part in trying to help make the concert happen, the key players within the various departments were not communicating with each other to stop the transaction when certain components were not in place, such as the insurance, and they were relying on others to ensure that all the bases were covered, particularly the legitimacy of the players,' the report said.

The report blames Donovan for failing to provide oversight and ensuring that those working under him conducted the necessary due diligence. It also blames former UH-Manoa chancellor Virginia Hinshaw and Greenwood for failing to provide oversight and making sure that checks and balances were in place to ensure the administration's oversight system was adequate and working. And it blames the regents for failing to provide sufficient oversight and governance control.

The regents are also faulted for a lack of openness and for not following board policies over the approval of Donovan's new job in the UH-Manoa chancellor's office as a legal settlement and the approval of a five-year contract for UH-Manoa Chancellor Tom Apple.

The committee also raised concerns about the regents' independence from, and ability to oversee, the UH president.

The Wonder concert saga began in June when university officials announced that the pop star had agreed to an Aug. 18 performance to benefit the UH athletics department. Ticket sales were well under way by July 10 when Donovan announced that there would be no concert after all because Wonder and his representatives had not authorized the event. About 6,000 ticket holders had to be refunded.

The next day, Apple announced that Donovan and Stan Sheriff Center manager Rich Sheriff were placed on indefinite paid administrative leave while an investigation of the canceled concert was conducted. UH officials also explained they had paid $200,000 to a Florida company that purported to be authorized to book the star. Wonder's representatives later contacted UH officials to say they had not authorized the concert or received any payment. Greenwood acknowledged that the university was apparently a victim of fraud.

In August, Sheriff was reinstated and Donovan, whose athletic director's contract was to expire in March, was re-assigned to a new, vaguely defined marketing role in the UH-Manoa chancellor's office. Documents released to the Star-Advertiser under the state's open records law showed that the UH agreed to the deal in return for Donovan agreeing not to sue the school.

The FBI arrested two men this month in connection with the concert scheme. One of the men, Sean Barriero, 44, of Miami, pleaded guilty to a federal charge related to the UH wiring $200,000 to an account with Barriero's Epic Talent in Florida. The other man, Marc Hubbard, 44, was scheduled to enter a plea to a fraud charge in federal court Honolulu on Nov. 30.

The Senate committee report today said the failed concert and its aftermath will cost UH "an estimated $1.1 million at a minimum,"  including the loss of the $200,000, Donovan's new annual salary of $211,000 for three years, the cost of a search firm to hire a new athletic director, costs of a regents' audit and legal fees. The Senate report's recommendations include:

>> More public discussion by the regents of important issues;

>> Open sessions following its executive session discussions to the maximum extent permitted by law;

>> Better minutes from regents meetings:

>> Allowing public comment as part of the UH president's evaluation;

>> Holding appropriate departments and personnel more accountable for their actions;

>> Annual statement that itemizes how each campus spends the money generated by tuition;

>> A plan of action to improve the negative image of the university from the failed concert and its aftermath, provided that no additional public relations expenses are incurred.

A regents' audit released last week blamed poor judgement by Athletic Department officials for the loss of the money. It recommended tightening fiscal controls, setting up clear policies on the use of the Stan Sheriff Center by outside groups, guidelines on sending funds to escrow accounts and other changes.

Senate Accountability Committee Report on Stevie Wonder Concert

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turbolink wrote:
And now it all becomes a footnote. The BOR shook it off, the Senate Panel made it's recommendations. Back to business as usual.
on November 19,2012 | 11:37AM
gth wrote:
If it's going to be audited by Marion Higa & company...give 'em hell. If not, why not?
on November 19,2012 | 11:44AM
peanutgallery wrote:
Higa can audit 'til the cows come home, but nothing will change there. It's like Keystone cops. Complete incompetence at almost every level. U.H. suffers from the same mentality that says: "we have to spend top bucks, to get top talent. This ideology has bankrupted more companies than Carter has pills. It's an ideology put forth by those who have no idea how to perform their own jobs, and those who have no confidence in their ability to recognize talent. They believe money takes the place of competence, and nothing could be further from the truth.
on November 19,2012 | 03:11PM
HOSSANA wrote:
Very well said. Thank you.
on November 19,2012 | 04:05PM
lowtone123 wrote:
The committee is also recommending the Legislative Auditor to conduct a financial and management audit of the UH system and that the Board of Regents receive training on the state Sunshine law and on its own policies. Training on it's own policies? What?!?!
on November 19,2012 | 11:48AM
gth wrote:
lowtone123: You're right. WT?! is going on there. Political appointees who have no idea what they are doing. Maybe that's one of the reasons our educational system is the pits.
on November 19,2012 | 11:51AM
mcc wrote:
Who is making sure the Senat Committe is accountable?
on November 19,2012 | 12:44PM
connie wrote:
on November 19,2012 | 06:14PM
serious wrote:
The Manoa campus does not look good--landscaping is not nice. Grounds are not kept up. To attract the elete it should show some spunk, some attraction, show some curb appeal.
on November 19,2012 | 12:50PM
islandsun wrote:
The audit should make public the names of those politicians being supplied with ample free UH tickets, otherwise dont waste our money
on November 19,2012 | 01:41PM
allie wrote:
true and the entire JJ Sugar Bowl fiasco that wasted hundreds of thousands of dollars for free air fare and tickets for the "important" was neevr accounted for
on November 19,2012 | 02:11PM
turbolink wrote:
Allie, you've been telling us how outsiders with short term views of Hawaii can give Hawaii residents fresh perspectives. Since you want us to think that's you when it's convenient, how would you remember Coach June Jones and the undefeated football season? Or is this another one of your "or so I'm told" moments?
on November 19,2012 | 05:29PM
nitpikker wrote:
at the very least, BOR leaders heads should be rolling!!
on November 19,2012 | 02:01PM
Publicbraddah wrote:
UH and the Board of Regents have lost a great amount of credibility with the public so it's incumbent that this audit be done right using people with no ties to UH, BOR, or state. It should be a "no holds barred" audit so real changes can be made and all monies and donations are strictly accounted for. Let's see if the state can do it right for once.
on November 19,2012 | 02:02PM
false wrote:
I will offer to train the regents for a very affordable investment of 4.25 million per year. Only I can do this. Don't you wan't what is best for the children?
on November 19,2012 | 02:04PM
Maneki_Neko wrote:
Blah...blah....blah....all we want to know is who is guilty and what is the punishment.
on November 19,2012 | 02:04PM
1assa wrote:
After the dust settles very few are named below the top dogs. Its part of an ingrained set up.
on November 19,2012 | 05:04PM
allie wrote:
Good recommendations and it should have been done decades ago!
on November 19,2012 | 02:10PM
Graham wrote:
on November 19,2012 | 03:11PM
Graham wrote:
How about an audit for the Legislature? And training for the Legislators??
on November 19,2012 | 03:12PM
Venus1 wrote:
Who do you recommend for that ?????
on November 19,2012 | 04:16PM
Manoa2 wrote:
There is a serious lack of oversight at UH. You take away the legislature to give the UH autonomy from the legislature and any state agencies.That leaves only the board of regents to have oversight over the UH administration. The Board of Regents though has no professional staff, and they are unpaid, meet only at official meetings, and really little more than almost honorary political appointees-- they are in no position to exercise oversight over the Administration which can run circles around the board if they wanted. We need to clarify that the Regents have this oversight responsibility, how it will work, make the Regents a compensated board, and add a small professional staff-- independent obviously from the Administration they supervise.
on November 19,2012 | 04:12PM
Venus1 wrote:
Should be more oversight !!! Much more transparency !!!!!
on November 19,2012 | 04:17PM
csdhawaii wrote:
The BOR DOES have staff. They have at least three that I've heard of: Ivy Yagi I think is a secretary, Keith Amemiya (soon to be departed - leaving for another job) is the Executive Secretary, and Leila Wai is Keith's assistant in some capacity. Keith is one guy who really made out - who got off scot-free and is now leaving for a more lucrative job. As the facilitator between the BOR and the University, he's the one who should have been giving them advice and guidance on their role and on the BOR policies. But it seems he never really bothered learning his job and didn't know any more about the BOR policies than the Regents do.
on November 19,2012 | 04:36PM
ski3779 wrote:
Hey allie, you should be the one to oversee that everything the Senate Accountability Committee says need to be done, is carried out to a "T".
on November 19,2012 | 04:40PM
sailfish1 wrote:
The BOR already had some outside consultant teaching them how to do their jobs (see past SA articles). I guess the BOR are slow learners - get rid of them and get some competent people who want to do a good job.
on November 19,2012 | 05:28PM
csdhawaii wrote:
Good point.
on November 19,2012 | 06:35PM
Anonymous wrote:
There comes a point when the "powers that be" finally lose touch with the people that make up their constituency...they assume with their degrees and credentials that they are above and beyond the "common folk", and that dishing out bread and circuses will allay the poor people and calm them. History has proven time and time again that once that point is reached, what follows is catastrophe. How do you expect to preach to your students about academic integrity, when all you've ended up teaching them is: take what you can when you can...if in doubt...hire a lawyer. Suppose that actually MAY be the best lesson for them after all.
on November 19,2012 | 07:21PM
Nevadan wrote:
Pleasant surprise, especially after the insane SA editorial yesterday. Excellent senate recommendations. Thorough. Unbiased. Badly needed by taxpayers. Grateful to Sen Kim and her committee. She will make an excellent governor.
on November 19,2012 | 07:58PM
Kapuna wrote:
Marsha is not doing enough to bring diversity and talent to UH. There is a decline in foreign students and scholars.
on November 19,2012 | 09:37PM
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