A University of Hawaii Board of Regents task group looking into the failed Stevie Wonder concert has hired an accounting firm to help in its investigation of 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 its services.
Board Vice Chairman James Lee briefed the board on the task group during an hourlong public discussion at the regent’s meeting Friday at UH-West Oahu.
Lee, a member of the task group, told the board that the group hopes to present the results of the investigation at the Oct. 18 regents meeting and will release the report to the public.
The regents’ investigation comes on the heels of an external probe of the debacle by the Cades Schutte law firm, which was commissioned by the university and cost more than $50,000. UH also is paying up to $25,000 to Honolulu attorney Robert S. Katz and his firm, Torkildson Katz Moore Hetherington & Harris, to help UH release documents requested by news media and a state Senate committee investigating the concert debacle and its aftermath.
Regent John Holzman urged the task group to come out with a report that is complete, tough and fair.
"The board and its credibility are involved here, too," he said.
The Operational and Financial Controls Improvement Advisory Task Group consists of five regents and four nonregents with business and accounting backgrounds.
The regents decided Friday to require the nonregent task group members to fill out conflict disclosure forms and submit the forms to the state Ethics Commission after regent Benjamin Kudo, a task group member, raised questions about group members who work for accounting firms that do business with UH.
Pending the Ethics Commission opinion, the four professional members of the task group will be nonvoting participants.
Task group member Cory Kubota, of Accuity LLP, said he would be willing to serve as a nonvoting member. Accuity LLP has a contract with UH to serve as the university’s external auditor.
"I’m just here to help," Kubota said, adding that he can share insights from his company’s experience auditing the university.
KMH LLP also has a contract with the university, although its employees are not voting task group members.
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.
So far the task group has met twice, most recently on Wednesday, since the regents approved the group’s investigation at its Sept. 5 meeting.
Lee said the task group and KMH LLP will use the Cades Schutte fact-finders report and supporting documents to begin its investigation of the operational and financial controls that led to the failed concert. He said the task group may expand its investigation to look at whether policies, operations and financial controls on other campuses and at the UH system might need revision and will look at best practices at other universities.
After the meeting, Lee said it was important to hire an accounting firm to help the task group sort through the fact-finders report and the numerous policies and procedures at the university.
"It’s money that has to be spent to correct the system, if there’s a flaw in the system," Lee said. "It’s very important that this never happens again."
Other members of the task group are regent Barry Mizuno, vice chairman of the Committee on University Audits; regent Saedene Ota, a member of the Committee on University Audits; regent Jan Sullivan, a member of the Committee on University Audits; Lawrence Rodriguez, business consultant; Terri Fujii, managing partner, Honolulu office of Ernst & Young LLP; and Patrick Oki, managing partner, PKF Pacific Hawaii LLP.
Rodriguez was selected as chairman of the task group.
