Ka Wai Ola - Office of Hawaiian Affairs, Volume 39, Number 12, 1 December 2022 — OHA Ushers in a New Era of Accountability [ARTICLE+ILLUSTRATION]

OHA Ushers in a New Era of Accountability

(L-R) Trustees Wūihe'e, Akaka, Alapa, Lindsey, Akina and Trask, and CEO Sylviū Hussey ūt the press conference on Nov. 10. - Photo: Joshua Koh

lmplements policies, procedures and practices to prevent fraud, waste and abuse By Office of Hawaiian Affairs Staff Three years ago, during a period of eritieal transition, the Ofhce of Hawaiian Affairs (OHA) ushered in a new era of leadership by appointing Dr. Sylvia Hussey, a eertified puhlie accountant with decades of experience in hnaneial administration, as Ka Pouhana (CEO). "OHA is positioned to serve its beneficiaries better than ever before after a thorough overhaul of its policies,

procedures and practices under the leadership of a new executive team," said Board of Trustees (BOT) Chair, Carmen "Hulu" Lindsey at a press conference on Nov. 10. Lindsey, who was elected Chair in late 2020, made it clear that she, her fellow trustees, and the executive team worked tirelessly to set the tone at the top for overall accountability. "She provides the leadership that OHA needs to ensure ethical stewardship of the resources it manages for its beneficiaries," said Lindsey of Hussey. In September 2018, the OHA BOT engaged a top ten national accounting firm - CliftonLarsonAllen LLP (CLA) - to conduct a detailed review of a sample of OHA and limited liability company (LLC) contracts and disbursements from five fiscal years (2012-2016). While OHA was not required to take this extraordinary step, the BOT opted to do so despite OHA undergoing regular state audits and receiving elean annual independent hnaneial audits for 14 consecutive years (now 18 years). CLA presented the results of their engagement in December 2019, including 73 OHA, 30 LLC and six general oversight and governance recommendations. The report also identified 38 transactions from the five fiscal years reviewed (2012-2016) that may contain elements of fraud, waste and abuse. Better stewardship through tighter systems and eontrols Lindsey highlighted the improvement steps taken by OHA since December 2019 to better align policies, procedures and practices, through Administration's Recom-

mendations Implementation Plan whieh addressed CLA recommendations, including but not limited to: • Implemented three major technology systems for grants management, accounting and contract management. • Established a governance and policy framework for the BOT with updated bylaws. • Approved policy amendments to improve fiscal management and transparency in budget preparation, format, and reporting requirements. • Placed contract monitoring as the responsibility of the operating unit with oversight by the business line executive. • Subjected all grants and sponsorships to approval by the BOT. • Eliminated CEO-initiated sponsorships and the CEO management override practice. • Required that employee-related events be compliant with OHA policies. • Established a hnaneial transparency website that includes 18 years of hnaneial statements and independent auditors' opinions, Trustee Protocol Allowanee and Annual Reports. Steps taken to address 38 questionable transactions In Lebruary 2022, OHA contracted Plante Moran (PM), an audit, tax, consulting and weahh management firm, to perform a detailed follow up of the CLA report. SEE NEW ERA 0F ACC0UNTABILITY 0N PAGE 7

NEW ERAOFACCOUNTABIUTY

Continued from page 5 PM is a contractor experienced in forensic, aecounting, audit, and related type engagements. They utilized standards in accordance with the Statement on Standards for Forensic Services established by the American Institute of Certified Puhlie Accountants Council Forensic and Valuation Services Executive Committee. This eommiītee provides guidance and establishes enforceable standards for members performing certain forensic and valuation services. The PM report found 22 of the 38 questionable transactions with evidence of fraud, waste and abuse. "Throughout both engagements (CLA and PM), OHA's staff and BOT were fully cooperative and responsive," said Lindsey. OHA noted matters requiring criminal prosecution will be turned over to the relevant authorities for appropriate action. "We are determined to ensure accountability for past wrongdoing," said Lindsey. Moving forward, the four strategic directions OHA has identified to impact the most change for its beneficiaries are education, heahh, housing and eeonomie stability. "We know we have to do mueh better to deliver what our beneficiaries need - everything we do and every decision we make will be informed by those strategic directions," concluded Lindsey. ■