HTA must open financial books
Hawaii tourism is an industry, indisputably part of the private sector, with businesses competing for their share of the marketplace. But it’s also the foundational element of the state’s economy, in which the public has invested heavily.
And that means the taxpayers, who have contributed millions toward bolstering the state’s economic engine, own a piece of it. They deserve to know how their money is being spent.
That does not seem to be the assumption of the Hawaii Tourism Authority, which has been less than forthcoming with information offered to the public’s elected representatives.
And this week, members of one state Senate panel rightfully sounded the alarm over what they described as an opaque agency whose financial reporting has been woefully short of details. The situation is all the more woeful for the fact that the authority is publicly funded.
The Senate Ways and Means Committee delivered a smackdown of the HTA for its failure to submit a budget with meaningful information: It lacked breakdowns for individual programs.
Further, legislators noted at the Tuesday pre-session briefing, the agency gave no rationale for why it budgeted $93.2 million for the past year and $89.9 million in 2017. That’s far more than what’s allotted annually: $82 million from the tourism special funds.
This, lawmakers charged, seemed inexplicable given that it’s happening during a red-hot visitor market. According to the HTA annual report, tourism experienced in 2016 the fifth consecutive year of record-breaking growth.
Finally, they wondered why HTA is remitting to the state only $20 million of the $26.4 million yearly internal debt service on the Hawai‘i Convention Center.
State Sen. Jill Tokuda, who chairs Ways and Means, has ordered HTA officials to deliver four years’ worth of actual spending and actual revenue — data that she said the Legislature has not received previously.
And it’s not that the lawmakers haven’t tried. Ways and Means member and Tourism Committee Chairman Sen. Glenn Wakai requested budget worksheets Dec. 6, and when they weren’t immediately delivered, he made a formal open-records request. That was denied, citing the need to protect “proprietary information” and “competitive advantage.”
It’s appalling that HTA takes this stance. As Wakai told the Star-Advertiser before the briefing, the law requires disclosure to lawmakers, and any proprietary business information the documents contain, he can protect.
Part of the problem is that the agency seemingly is adopting the perspective of a private entity itself. George Szigeti, the authority’s president and chief executive officer, said he sees the requested documents as “proprietary” and withheld it with HTA board approval.
“No CEO would give the road map of their company’s success to their competitor,” he said. “We are competing against other countries that want our business. We don’t tell them what we do.”
But the HTA is not a company entitled to take this attitude. It is a state agency, with a duty to public accountability.
To that point, the Legislature has some rational concern about HTA sustainability. Chief Operating Officer Randy Baldemor said excess spending was covered with unspent marketing funds from prior years. There’s also a $14 million reserve fund he said is adequate, but at this rate, that wouldn’t last long if there’s a downturn.
These are worrisome trends, especially at a time when the tourism market is changing. Hawaii is bringing in more than 8 million visitors, but their needs and spending habits are changing.
Hawaii needs to prepare adequately to serve this market, which requires information. The Legislature convenes next week, and that would be a fine time for the HTA to start shedding its tendency toward secrecy.
14 responses to “HTA must open financial books”
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“State Sen. Jill Tokuda, who chairs Ways and Means, has ordered HTA officials to deliver four years’ worth of actual spending and actual revenue — data that she said the Legislature has not received previously.” It is becoming abundantly clear that Sen. Tokuda has some homework to do to better understand the requirements for government accounting. What is slowly coming to light through her bursts of self-righteous indignation is the broader issue of fiscal accountability lacking throughout the administration and the need for timely publication of annual financial reports as prescribed by the Government Accounting Standards Board (GASB). The information she is requesting is found in the HTA’s annual financial statements that are routinely audited by the state auditor. Unfortunately, if you visit the Office of the Auditor’s website, the last audit of the HTA’s financials was on the FY 2015 financial report. Where is the FY 2016 report? FY 2016 ended on June 30, 2016. For that matter, where is the FY 2016 annual financial report for the state of Hawaii? And herein lies the fundamental accountability problem throughout the state government. If anything, I would suggest that she should think about solving this ongoing problem and compose a bill that requires these vital financial reports by the state and all of its component units to be published (meaning made readily available to the public) shortly after the end of the fiscal year. 90 days would be a good number to start with. That would give our elected representatives time to “comprehend” the comprehensive annual financial reports, study the script and work on their lines before the Kabuki Theater opens up for their forthcoming repertory performances.
I agree with SA. HTA has been poorly managed and run for many years. The public is a primary investor and deserves a full accounting of how funds have been used. HTA gets credit for a booming tourist industry. They do not deserve it.
It would appear State Sen. Jill Tokuda, ShibaiDakine, and you allie have no clue what goes on in the state. Have you not heard of the “State Auditor? Guessing not.
From their link you can search for “Tourism” and see links to state audits from 2008-2015. Guessing 2016 is not done yet.
http://auditor.hawaii.gov/financial-audits/
Way too many rookies out there. Especially in public office. Whiners and millennials, our weakest generation ever.
If you take the time to read what I wrote you would see that I referenced auditors sight. “…if you visit the Office of the Auditor’s website, the last audit of the HTA’s financials was on the FY 2015 financial report.” It was the second place I looked on my computer before I wrote my piece. The first place I looked was in my document files where I had downloaded the 2014 HTA financials more than a year earlier. I would venture to say that I have forgotten more about how this state works vis-a-vis finance and government accounting standards than you will ever know.
errata “site”, not “sight” Re: State Auditor, the audits you cited are, for the most part, useless due to the untimeliness of their publication. That is another issue which is off topic and better saved for another time and place.
I have but HTA has not been properly audited..see shibaikind below.
George Szigeti, the authority’s president and chief executive officer, said he sees the requested documents as “proprietary” and withheld it with HTA board approval. “No CEO would give the road map of their company’s success to their competitor,” he said. “We are competing against other countries that want our business. We don’t tell them what we do.”
This makes a lot of sense, especially considering HTA has been extremely successful, with record visitor numbers. The senators know how much they parceled out for the HTA budget. Why not let the professionals use the funds appropriated as they see fit and continue doing an excellent job, without telling Mexico, the Caribbean countries and other competitors what makes Hawaii’s marketing so successful.
As a taxpayer, I’m happy to do so. i doubt that a politician, knowing the breakdown of how funds are allocated for marketing activities is going to improve the outcome. Legislators’ meddling could cause serious problems in this case.
The HTA receives funds from taxpayers. Withhold taxpayers’ funding until they provide a full accounting. Also, in the words of Obama, tell the President and CEO to “knock it off”.
HTA is a complete WASTE of taxpayers monies. Using OUR taxes to help PRIVATE business is disgusting. We have ENOUGH tourists and our islands are FULL. STOP promoting Hawaii and use the HTA money to FIX our city which is FALLING APART.
People know about Hawaii already, and social media from actual tourists is MUCH MORE EFFECTIVE and FREE, NO NEED PROMOTE. Let the hotels and airlines use their OWN money to promote their business and let us taxpayers off the hook. SO SICK of the waste and CORRUPTION in this city.
Politicians grandstanding at the beginning of session. Give it a couple weeks and then it’s business as usual and “YES…with reservations” for EVERYONE!!!
I’m surprised by commenters defending HTA’s position. They are a state agency and use taxpayer money…they do not have the option of refusing to divulge their books. Ige needs to clean house.
HTA must have learned from HART on how to be deceptive and waste taxpayer money.
ShibaiDakine said it all.
Audit, audit, audit!