A state agency responsible for protecting Hawaii’s historic and cultural sites, including construction sites where Hawaiian burials are found, is declaring success fixing serious deficiencies the federal government flagged two years ago amid chronic struggles to properly carry out its mission.

The State Historic Preservation Division of the Department of Land and Natural Resources recently submitted a final report to the National Park Service, saying it has addressed problems and instituted plans that merit removing it from federal monitoring and ending the threat of it losing critical grant money.

The report says SHPD (pronounced ship-D), which suffers from a rather negative public image, has executed a turnaround and become a stronger organization with a better corporate culture and a bigger and more productive staff capable of handling agency tasks and challenges that include protecting historic sites and properties such as fishponds, heiau, unmarked Native Hawaiian graves, buildings and homes.

Two high-profile court cases in the past two months haven’t reflected well on SHPD procedures.

In one case, the Hawaii Supreme Court ruled that SHPD was wrong to let the city’s rail development project begin construction on a phase in one area before archeological survey work was complete for all other phases.

The other case involves a decision by SHPD allowing Kawaiaha‘o Church to avoid an archeological survey before starting construction on a multipurpose building under an exemption for graveyards. Hawaii’s Intermediate Court of Appeals granted an injunction against excavation work at the church and said it is likely that it will rule that SHPD violated its own procedures by approving the project without requiring a survey.

A growing economy that produces more construction projects is expected to increase pressure on SHPD to meet its historic preservation mission. But the agency said the National Park Service’s corrective plan has put it on a good track to meet future challenges.

"Overall, the (corrective plan) has made SHPD a much stronger organization," the report said. "The state of Hawaii still faces challenges in historic preservation but these can and will be addressed over time."

William Aila, DLNR’s director overseeing SHPD, said he’s hopeful that the corrective action plan established by the National Park Service has been fulfilled to the satisfaction of the federal agency.

"We feel we’ve worked very closely with the NPS and feel we have met or are about to meet the last monitoring tasks," he said.

NPS officials aren’t commenting on SHPD’s report. The corrective plan set a Sept. 30 deadline for submitting the report but gives SHPD until Feb. 28 to demonstrate it is effectively carrying out its responsibilities. NPS plans an on-site evaluation in February upon which it will render a decision, according to NPS spokesman Mike Litterst.

Just six months ago, NPS notified SHPD that it had serious concerns about the state agency filling key staff positions and creating an online database of historic and cultural sites as required by the corrective plan.

The concerns, expressed in an April letter, followed a March site visit and prompted NPS to initiate discussions with another federal agency, the Advisory Council on Historic Preservation, about a contingency plan in case SHPD lost oversight of federal projects subject to preservation law review.

Kiersten Faulkner, executive director of the nonprofit Historic Hawai‘i Foundation, said that based on SHPD’s report it appears the agency has accomplished what it was instructed to do by NPS.

"At this point, we’re quite optimistic that they’ll be able to move off of observation into full compliance," she said.

Failure to satisfy NPS could be devastating to the state and SHPD, which in recent years has relied on NPS funding for roughly a third to a half of its annual budget.

NPS has oversight of SHPD under the National Historic Preservation Act. The federal agency took the unusual step of putting SHPD on "high-risk status" in 2010 and focusing attention on problems that a host of local stakeholders — the state auditor, members of the Legislature, Native Hawaiians, the Society for Hawaiian Archaeology and the O‘ahu Island Burial Council — had complained about for many years.

Three major shortcomings cited by NPS in 2010 were inadequate staffing, failure to update a statewide historic preservation plan and lack of a searchable, online database of historic and cultural sites.

Two years ago, when NPS took action, SHPD employed 14 people. The agency was authorized at the time to employ 27, but budget cuts, furloughs and the agency’s public turmoil hurt its ability to fill positions. NPS also said some SHPD staff lacked sufficient qualifications or training.

Since then, staffing levels have improved modestly, but the quality and stability of staff has been substantially elevated, according to Pua Aiu, SHPD’s administrator.

SHPD presently employs 17 people, 11 of whom were hired in the past two years and three in the past six months, according to the agency’s report to NPS.

Among new hires are four archeologists, two burial site specialists, an architectural historian and branch chiefs in archaeology and architecture.

Three hires required by NPS haven’t been made, but the federal agency agreed to extend deadlines for filling the positions, SHPD’s report said.

Over the next eight months, SHPD anticipates filling the three positions plus four more not required by NPS, to bring total staff to 24. The additional positions include two archeologists, a burial sites specialist, an archivist/librarian, an information technology specialist and a history and culture branch chief.

The history and culture branch chief should particularly help improve administration of cultural review work that includes burial sites, the report said.

If the Legislature approves the additional positions SHPD intends to request next year, the agency would increase its staff to 30.

The report said well-qualified people are joining SHPD and improving the agency’s effectiveness and corporate culture.

"The most important thing is we have really good staff — not just warm bodies, the right people in the right positions," Aiu said. "We have a lot more stability than we used to have, even though the numbers haven’t changed that much."

For example, of SHPD’s five archaeologists, one has a doctorate, three have master’s degrees and one has 14 years of experience in Hawaiian archaeology, the report said.

One key new position filled last month was a geographic information system specialist to expand access and use of historic property information connected with mapping software.

SHPD lacked a centralized statewide database since 2005, and NPS had cited system problems and incomplete files that it said led to inconsistent information of site descriptions, locations and other details that could produce detrimental results.

Over the past two years, SHPD improved system operability with NPS help and worked to input several years worth of missing data. Aiu said the geographic information system now works on one computer for internal use, and will be expanded to a dozen more computers expected to arrive within a month for staff use.

The geographic information system is one critical deficiency SHPD says it has substantially cured.

A broader goal to make the agency’s information on about 38,000 Hawaii historic sites accessible to the public online is more difficult partly because some information about burials needs to be protected, Aiu said. SHPD aims to meet this goal by the end of 2014.

The third major deficiency was SHPD’s statewide historic preservation plan. Two years ago, an update of a 2001 plan was still in progress even though the plan by law is supposed to be updated every five years.

An updated plan setting goals for the next five years, including the public geographic information system, was completed earlier this month and submitted for NPS review.

SHPD produced the plan, which also discusses important issues and aims to protect more historic prop­erties, after forming a 27-member advisory com­mittee, surveying residents, interviewing stakeholders, and holding community meetings and workshops.

Other accomplishments SHPD says also satisfy the corrective plan include developing written procedures for the Hawai‘i Historic Places Review Board, certifying county officials on Maui and Kauai for historic preservation program implementation and formalizing SHPD procedures pertaining to historic survey, inventory, review and compliance work.