A significant, necessary tightening of the state’s ambitious but financially sloppy kauhale homelessness initiative is underway, and not a moment too soon. Facing scathing scrutiny by the state auditor, the State Office of Homelessness and Housing Solutions (SOHHS) has ordered vendor HomeAid Hawaii to quickly fix “recurring, systemic noncompliance issues” regarding payment invoices — and HomeAid CEO Kimo Carvalho says it has complied, including paying back thousands of dollars that was misspent.
This is crucial acknowledgment of money irregularities tainting the state’s kauhale initiative — an urgent course correction that gets in front of an imminent Auditor Office probe into SOHHS’ handling of the program. And make no mistake, the audit is expected to be critical. In an April 20 memo to state legislators, Auditor Les Kondo warned of the need for “immediate attention” to address “substantial risk of improper use of public funds,” and expressed worries about “significant deficiencies in internal control” in SOHHS’ implementation of the kauhale initiative.
Big money is at stake, as is public perception and legacy of the kauhale concept that Gov. Josh Green has championed for years. HomeAid’s operating budget was just $207,407 in 2015 — but after the state’s first kauhale opened in December 2019, its budget soared to $142.9 million in 2024, propelled by explosive growth from kauhale contracts after Green’s 2022 election. There are now 26 kauhale statewide, with 33 total envisioned by year’s end.
In 2025, the Legislature authorized another $88 million for more kauhale — tiny-home villages that offer communal support — but troubled by spending accountability, also ordered an audit of the program.
Now comes SOHHS director Jun Yang — who, ahead of the finalized audit, sent an Aug. 7 letter to HomeAid’s Carvalho citing numerous deficiencies, including:
>> Failure to provide original receipts, vendor proof of purchase, or documentation to verify expenditure authenticity.
>> Invoices that included line items “previously submitted, processed, or reimbursed under prior payment requests.”
>> Payment requests “for unallowable expenses or activities” outside contract scope.
Yang instructed HomeAid to take corrective steps within 15 days — including a written action plan detailing fiscal controls and review processes to eliminate “invoice errors.” Further, his letter said, “effective immediately, all pending and future invoice submissions from HomeAid Hawaii will undergo heightened administrative oversight.”
Carvalho said he has since repaid about $18,000 for expenses considered his “personal responsibility.” Conflict-of-interest questions also have been raised over $152,897 in kauhale landscaping projects paid to Dotson Gardens LLC, which was owned by Carvalho’s then- husband, Chris Dotson. And a $112,780 contract for IT was paid to Washington-based Mob TechNet Solutions, owned by Dotson’s stepbrother.
Carvalho, backed by at least two HomeAid board members, said those contracts were justifiable — but noted that tighter, clearer rules on potential conflicts have since been implemented.
Most of this, of course, should have been baseline requirements from the get-go — not implemented after the fact, and only after misspending was called out. SOHHS’ laxness does not boost public confidence in how it is overseeing millions of dollars of the public purse.
It’s also particularly troubling since HomeAid receives the kauhale jobs under no-bid contracts rewarded under emergency housing executive orders. The money issues have cast doubt not only on HomeAid operations but on the entire kauhale initiative — and unfortunately validates earlier concerns about the governor’s overuse of executive authority to override normal processes that have built-in oversight.
The speed with which HomeAid has delivered kauhale units has been both a blessing and evidently, a bookkeeping curse. The blessing comes from hundreds of people being helped off the streets or from the brink of homelessness: nearly 900 beds, which have provided housing and social services to nearly 3,000 people. But the downside has been weak state oversight to prevent financial shenanigans.
As difficult as the homelessness problem is, improper use of public funds enabled by lax state oversight cannot be condoned. Accountability and transparency must be key going forward. SOHHS and HomeAid’s recent shoring-up of kauhale operations was overdue; time, and the upcoming state audit, will tell if deeper improprieties will overtake an otherwise worthy concept to help the houseless.
