STAND. COM. REP. NO. 1558

Honolulu, Hawaii

RE: S.R. No. 151

Honorable Ronald D. Kouchi

President of the Senate

Thirtieth State Legislature

Regular Session of 2019

State of Hawaii

Sir:

Your Committee on Hawaiian Affairs, to which was referred S.R. No. 151 entitled:

"SENATE RESOLUTION REQUESTING THE OFFICE OF HAWAIIAN AFFAIRS TO COMPLETE THE 2017 INDEPENDENT FINANCIAL AUDIT AND MANAGEMENT REVIEW OF THE OFFICE OF HAWAIIAN AFFAIRS AND ITS SUBSIDIARIES,"

begs leave to report as follows:

The purpose and intent of this measure is to request the Office of Hawaiian Affairs to complete the 2017 independent financial audit and management review of the Office of Hawaiian Affairs and its subsidiaries.

Your Committee received testimony in support of this measure from the Center for Hawaiian Sovereignty Studies. Your Committee received comments on this measure from the Office of Hawaiian Affairs.

Your Committee finds independent audits are important tools to assess an organization's financial and management performance and to help measure an agency's mission implementation, program management, and expenditures of public funds. In 2017, the Office of Hawaiian Affairs Board of Trustees authorized an independent financial audit and management review of the Office of Hawaiian Affairs and its subsidiaries to address concerns raised by the Board. In the Office of the Auditor's Report No. 18‑03, Audit of the Office of Hawaiian Affairs, the Auditor raised concerns similar to those of the Board regarding spending irregularities pertaining to alternate funding processes for limited liability companies created by the Office of Hawaiian Affairs. Your Committee acknowledges that the Office of Hawaiian Affairs has taken proactive steps to improve its internal processes. To continue that forward momentum, your Committee urges the Office of Hawaiian Affairs to complete the 2017 independent financial audit and management review of the Office of Hawaiian Affairs and its subsidiaries.

As affirmed by the record of votes of the members of your Committee on Hawaiian Affairs that is attached to this report, your Committee concurs with the intent and purpose of S.R. No. 151 and recommends that it be referred to your Committee on Ways and Means.

Respectfully submitted on behalf of the members of the Committee on Hawaiian Affairs,

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MAILE S.L. SHIMABUKURO, Chair