A new city audit of Honolulu’s spending priorities and practices for $387 million in emergency COVID-19 relief monies is bluntly critical of the priorities set by the city in 2020 and 2021 — most under the previous administration — and also of the laxity with which the city verified applications and distributed money allocated to Oahu businesses.

Released Nov. 8, the audit includes needed suggestions to avoid future recklessness with public money — and city Managing Director Michael Formby has agreed with all of them, in the city’s response. That is a positive development. Now Honolulu must act on the recommendations — so that the next time the city faces disaster, as it will, financial aid can be distributed more fairly and efficiently.

The audit recommends the city establish standards and metrics — benchmarks — for programs such as aid distribution, so that their effectiveness can be gauged transparently, and in real time. This is a crucial step, and should be acted upon immediately.

Further, and nonnegotiably: When federal, state or other grant-provider rules apply to an aid program, these must be enforced. The city can ensure this by formalizing procedures, so that incomplete, inaccurate and potentially fraudulent grant applications aren’t approved.

In a spot-check of small businesses receiving federal Coronavirus Aid, Relief and Economic Security (CARES) Act money in 2020 and 2021, the audit found that an incredible 98% of these recipients were “potentially ineligible” — i.e., failed to submit adequate documentation of need by, for example, verifying the owner’s residency in Honolulu, or registration with the state Department of Commerce and Consumer Affairs. Rules to prevent a repeat of this low standard of compliance are clearly a necessity.

Fairness in distributing aid money also requires city attention, as the audit points out. This is crucial, given the finding that during the pandemic, households seeking emergency rental assistance were regrettably shortchanged. The audit found that the city’s Small Business Relief and Recovery Fund (SBRF) was overwhelmingly favored for federal money allocation, over the Household Hardship Relief Fund (HHRF), serving housing needs.

Out of $387 million in federal aid money funneled to Honolulu, just $25 million was dedicated to the HHRF. And while the city acted to ramp up funding for small business, and to accept flawed applications, the rental relief program shut down early, when funds ran out, leaving over 2,000 applicants hanging, with an estimated $9 million in unmet needs. In light of Honolulu’s dire housing-affordability problem, and pandemic hardships, the imbalance looks wrong.

The bottom line: Lax standards were applied to generous small business funding, while higher hurdles and limited funding faced households in need.

“In retrospect, additional funds to build capacity for the Household Hardship Relief Fund before program launch was critical,” Formby replied to the findings. The city must ensure this happens before households in need miss out on emergency funding again.

Another piece of the audit faults the city for the “questionable” purchase of vehicles for the city’s fleet of Handi-Vans, to the tune of $4 million, while Honolulu Police Department is dinged for spending $454,000 in CARES Act funding to purchase 40 all-terrain vehicles. The city does have a documented need for Handi-Van transportation, however, and this purchase benefited islanders with mobility impairments. Similarly, given the urgency of need in the pandemic’s early shutdown months, the purchase of ATVs can be defended, and was approved by federal inspectors.

Going forward, with these or any other city expenditures, what the public requires is responsible stewardship. If the HPD is not utilitizing those 40 ATVs adequately, it might consider redeployment — increased patrols along West Side beaches, for example; or a partial sale to state agencies or the public.

To retain public trust, transparent and efficient use of public resources must always be a top priority. We trust that the city will set and enforce its rules accordingly.