HONOLULU — The Hawaii state auditor suspended an audit of limited liability companies owned by the Office of Hawaiian Affairs after the board of trustees denied full access to the minutes of its meetings.
State Auditor Les Kondo announced the suspension Monday, saying his office cannot complete an audit without full access to unredacted minutes from trustee meetings.
“We got redacted minutes, and we told them it’s not what we want,” Kondo said.
The audit was ordered by the state Legislature and state law gives the auditor the “unambiguous” authority to examine all of the agency’s records.
While the Legislature directed Kondo’s office to report its findings and recommendations prior to the legislative session that opens Jan. 15, the audit cannot proceed without full records access, he said.
“We are compelled to suspend the audit mandated by the Legislature” due to the unacceptable risk of inaccurate or incomplete findings based on insufficient evidence, Kondo said.
The audit is tied to a funding bill passed by the Legislature and millions of dollars set aside for the agency could be in jeopardy if the review is not completed.
An independent audit of the Hawaiian Affairs office last month identified as much as $7.8 million in potentially fraudulent, wasteful or abusive spending.
The agency has fought previous efforts to disclose information about the subsidiaries, arguing that the companies, beginning with the first one established in 2007, are private entities and not subject to state laws.
Chairwoman Colette Machado and Vice Chairman Brendon Lee said in a statement that the agency complied with the auditor’s requests.
“OHA provided the State Auditor with minutes of all executive session meetings he requested,” the trustees said.
They noted “certain portions of those meeting minutes were redacted because they are protected by the attorney-client privilege.”
The two trustees complained Kondo exceeded his authority “using an unprecedented interpretation of his powers and has now unilaterally decided to not fulfill a legislative mandate and to instead play politics with critical general funds for Native Hawaiians.”
But Hawaiian Affairs Trustee Keli‘i Akina issued a statement by email calling the auditor’s action “another black mark in OHA’s record of transparency.”