Office of Hawaiian Affairs audit flags potential fraud, waste, abuse

A recent review of Office of Hawaiian Affairs contracts and transactions from 2012 to 2016, released this week, found evidence of 22 instances of potential fraud, waste and abuse.

The review comes three years after an audit by one of the nation’s top accounting firms flagged 38 transactions for possible evidence of mismanagement.

“We are determined to ensure accountability for past wrongdoing,” said Board of Trustees Chair Carmen “Hulu” Lindsey at a news conference held Thursday. “Throughout both engagements, OHA’s staff and BOT (Board of Trustees) were fully cooperative and responsive.”

The initial review, conducted in 2019 by the national accounting firm of CliftonLarsonAllen (CLA) LLP, evaluated a total of 185 contracts and disbursements and found potentially fraudulent, wasteful or abusive transactions estimated at upward of $7 million. Those findings led to the resignation of OHA CEO Kamana‘opono Crabbe, who stepped down in June 2019 — a decision that he and the board had agreed on together. Crabbe served as the semi-autonomous state agency’s CEO from 2012 to 2016.

As part of the 2019 audit, CLA provided OHA with a plan to improve on its policies, procedures and practices, which the OHA administration has since implemented, culminating with the recently completed follow-up review.

Plante Moran, an audit, tax, consulting and wealth management firm, was contracted for the detailed follow-up in February. In response to its findings, OHA trustee Mililani Trask said people proved to be responsible for wrongdoing would be held accountable.

“This board will seek accountability,” Trask said during the news conference. “And where our jurisdiction ends, we will take it to the next level and set a new standard right now that there will no longer be tolerated waste, abuse of our people’s trust assets.”

Established by the state Constitutional Convention in 1978, OHA, tasked with improving conditions for Native Hawaiians, is guided by a publicly elected nine-­member board of trustees.

Lindsey highlighted the strides OHA has made since the four-year time frame ending in 2016, when the reviewed transactions had occurred. Among other improvements, OHA maintains that it has stepped up fiscal management and transparency in budget preparation, format and reporting requirements.

Trustee Keli‘i Akina said, “The Office of Hawaiian Affairs is today a totally different place from 2012 to 2016.” He added, “When we look back, we saw that there was a culture that made fraud, waste and abuse easy to do at OHA. … That culture is no longer here.”

Linsey Dower covers ethnic and cultural affairs and is a corps member of Report for America, a national service organization that places journalists in local newsrooms to report on undercovered issues and communities.