OHA Grants | Rowena Akana

IT’S WHAT I’VE BEEN SAYING FOR YEARS: OHA needs more Fiscal Responsibility, but certain Trustees have lacked the political will

`Ano`ai kakou… Recently, there has been a lot of critical news about OHA’s recent spending on grants, sponsorships, and Limited Liability Companies (LLCs). But this is definitely not news to me. It’s what I’ve been saying all along. Here are some highlights of my past Ka Wai Ola articles during the past year:

January 2018 – OHA publishes a book and hands over Scholarship Program to UH. On November 21, 2017, OHA published a book on mana that took five years of staff time to print. I’ve been waiting months for a response about where the money to publish the book came from.

December 2017 – Bring Back OHA Run Programs. I wrote that change will not occur unless the Trustees begin to hold our Administration responsible for their actions.

April 2017 – Back to Normal: Ho Hum, Business as Usual. I wrote that one of OHA’s money managers recommended that we get rid of the Fiscal Reserve slush fund. Trustees seemed supportive, but nothing has happened since. Now the State Auditor is calling this out! I also wrote that we need to find a more efficient way to run our essential programs such as community grants. The State Auditor’s February 2018 Audit of OHA (LINK: http://files.hawaii.gov/auditor/Reports/2018/18-03.pdf) vindicates my position that OHA grants are still not being monitored and mostly given to those who know who and how to ask.

March 2017 – Transition: Change doesn’t have to be painful. I argued that OHA must be an agency that treats our beneficiaries equally and it’s now up to the new leadership to make sure there is an even playing field at OHA. However, this has not occurred. I also mentioned that on February 8^th, the Trustees formed an Advisory Committee to make recommendations to the Board on the scope of a proposed financial audit and management review. This only came about because our beneficiaries demanded it and wanted an answer to the one question I’ve been asking nonstop for the last decade: Where is all the money really going?” This effort has met with great opposition from the Administration.

ON ANOTHER NOTE:

Mona Bernardino, who currently serves as chief operating officer of Hiilei Aloha LLC, one of OHA’s five nonprofit LLCs, recently wrote an op-ed piece to Civil Beat. In it, she tries to shift the blame for OHA’s misspending and lack of transparency solely on the Trustees by hinting that it has to do with Trustee Allowances. What Ms. Bernardino fails to mention is that nothing was spent on things that weren’t allowed under current OHA policies.

Also, the fact that OHA’s LLCs are shrouded in secrecy and riddled with complaints rests mostly on Ms. Bernardino’s shoulders. Her objections to the audit of the LLCs has caught our attention for sure.

This is an election year and people like Ms. Bernardino would like nothing more than to get rid of the Trustees who have been demanding accountability. This is what prompted her op-ed letter. However, what she has done is open the barn door for not just the auditors, but for the Trustees to re-examine the need to have five LLCs. I have NOT been a fan of OHA’s LLCs. Three of them were secretly created by two former Trustees and the former Administrator without Board approval. They were eventually approved by the Board two years after they were formed, but only because I started asking questions about them. Aloha Ke Akua.

OHA turmoil: Trustee Akana says staffers told of flagrant disregard for policies

NOTE: This op-ed was originally printed in the Honolulu Star Advertiser on February 25, 2018

LINK: http://www.staradvertiser.com/?p=722471?HSA=44dec0285d36f9e93efa1bd7b3c84c45c183bddf

In January 2017, as then-chairwoman of the Office of Hawaiian Affairs’ board of trustees, I and four other trustees offered OHA CEO Kamana‘opono Crabbe a buyout of his contract so that we could have a fresh start with a new CEO and correct many of the issues that have now been revealed by the state auditor.

However, three trustees fought us hard: Colette Machado, Bob Lindsey and Dan Ahuna went above and beyond to protect the CEO. They all refused to deal with the problems plaguing OHA and lacked the political will to make the necessary changes.

Over the past few years, OHA has had a problem with a mass exodus of administrative staff. Whole divisions were gutted and we lost our most capable and experienced staff.

Several of these employees confided in trustees they trusted and shared their horror stories of unqualified managers, friends of the CEO, who flagrantly disregarded policies and procedures. When they brought up their concerns, they were threatened, bullied and reprimanded. Most of them left for greener pastures.

There were always at least a few grant applicants who complained to trustees about the application process during every grant-giving cycle. They sent us emails and personally testified at the board table about the unfairness of the whole process. Many of them said their grants were denied based on technicalities. And yet, at the same time, many of the organizations that received grants were not properly evaluated on their deliverables. Many of the institutions that did receive grants had some sort of personal connection to the CEO. Beneficiaries constantly urged the trustees to do something, but the trustees in power believed the CEO was doing a good job and ignored the complaints.

In February 2017, I was removed as the board chairwoman because, I believe, of the sweeping changes I intended to make within the organization. The efforts to reform OHA came to a halt and things went back to the status quo when Machado was chosen as my replacement, and the CEO was back in business.

At the time of my ouster, I warned OHA’s new leadership that one cannot hide the truth, that it was only a matter of time before the public found out about what was really going on here. I believe the recent state auditor’s report says it all.

A year has passed since the new faction took over and, as predicted, nothing has changed.

Further, legislative measures such as Senate Bill 1303, which calls for amendments to the OHA election process, are dangerous because many of the reform-minded trustees calling for fiscal responsibility, such as Trustees Hulu Lindsey, John Waihee IV and myself are up for re-election this year. SB1303 specifically targets our races. Those who want to maintain the status quo are hoping that the new voting format will help them knock us out of office. Proponents of the bill say they want a head-to-head race with the three at-large candidates, but this already happens in the primary election. Six candidates will move on to the general election for three seats.

OHA must empower Native Hawaiian nonprofits

`Ano`ai kakou… As the new Budget & Finance Committee Chair for OHA, my immediate goal is to review and evaluate each of the Administration’s divisions and go through their budgets thoroughly. The first will definitely be OHA’s Grants Division.

OHA’s Grants division continues to be a source for many complaints. People have complained that the application process online is cumbersome and complex and that their automatic rejection of any grant that fails to turn in all of the forms when they apply.

For example, a Hawaiian nonprofit recently made a technical error when they submitted their application with two copies of the same form. After the application deadline passed, they received an email from our Grants Division saying that because of their error they were no longer eligible to receive an OHA grant. They submitted the correct form within thirty minutes of receiving the rejection email, but it made no difference. Now they have to wait two years to apply for another OHA grant. Surely, there is room here for improvement in our process.

Another problem is that small Hawaiian nonprofits have to compete against massive institutions like universities, hospitals, and government agencies for OHA grants. What kind of chance does a small Hawaiian nonprofit have against these huge organizations that have grant writers at their disposal? OHA must work towards the betterment of conditions for all Hawaiians and not huge organizations that have other sources of revenue.

My Budget & Finance Committee has every intention of reviewing the whole grant process. Here are a few of the suggested changes I will work to achieve:

Capacity Building for Beneficiary Run Nonprofits. OHA needs to bring back our old program that offered grant writing assistance to help small nonprofits apply for not just OHA grants, but also state, federal, and private grants. As the saying goes, “give a man a fish and you feed him for a day; teach a man to fish and you feed him for a lifetime.”
A Twenty-Four Hour Turnaround Time to Correct Any Errors. Applicants should be given 24-hours to correct any mistakes found in their application once they have been notified of an error by OHA. If an organization can correct their mistakes in a day, they deserve a second chance.
Change the grant period from two years periods to one. This would ensure that nonprofit programs that assist our beneficiaries can be funded every year instead of every two years.
Streamline the grant application process. We’ve also received too many complaints from smaller nonprofits that the grant application process has become highly sophisticated and technical. OHA needs to listen to these complaints and simplify the process further. Native Hawaiian nonprofits fill the gap of services that OHA no longer provides. When we fail them, we also fail the beneficiaries they serve.
Explore Hiring Grant Writers. They can be dedicated specifically to assisting small Native Hawaiian nonprofits.

I very much regret what has happed to our small Hawaiian nonprofits in the recent grant application cycle and will work to make sure that they won’t be rejected over minor technicalities in the future. OHA must work to empower our Native Hawaiian nonprofits. It is only by solving our many issues ourselves that we will truly achieve Native Hawaiian sovereignty.

Many positive things happening at OHA

`Ano`ai kakou… As we start the New Year off, I feel it is important to highlight all of the positive things that have been happening at OHA.

A POSITIVE WORK ENVIRONMENT

OHA Chairman Robert Lindsey is working hard to make sure that everyone at OHA has a voice and that their concerns are heard.

Chair Lindsey has supported me every step of the way as I take over as the new Chairperson of the Asset & Resource Management (ARM) Committee. It is refreshing to finally work with a Chair that doesn’t let his personal feelings get in the way of doing what is right for OHA and its beneficiaries.

GRANTS

In March, Trustees will review grant applications that will make $8.9 million in OHA grant funds available to community-based nonprofits that can help address key priorities for bettering the conditions of Native Hawaiians. Trustees will need to approve between 30 and 35 grants for a two-year period between July 1, 2015 and June 30, 2017.

LEGISLATURE

OHA will request $7.4 million in state funds during the upcoming 2015 Hawai‘i legislative session. If approved, the biggest impact will be felt in social services, where an estimated 7,250 Native Hawaiians are targeted to receive the support they need to help prevent debilitating debt, unemployment, and homelessness.

CHARTER SCHOOLS

In 2014, Trustees awarded 17 Hawaiian-focused charter schools a $1.5 million grant for the 2013-2014 school year. The grant is helping Native Hawaiian charter schools keep pace with growing enrollment, which had increased to 4,224 from 4,033 the year before.

SCHOLARSHIPS

In 2014, Trustees approved a combined total of $870,000 in scholarship money to help Native Hawaiian students pay for college in a time of rising tuition costs. The average awarded to 354 Native Hawaiian students last year was $2,458. The total amount of college scholarships that OHA has given out over the past five years totals to about $3.5 million.

FACILITATING NATION BUILDING

Trustees are committed this year to facilitate the next steps in a process that empowers Native Hawaiians to participate in building a governing entity. The effort has drawn broad-based support from Hawaiian leaders who are prepared to help shape the process and outcome, with OHA serving as a facilitator and supporter.

REVENUE FROM RENTALS

More than a year after the BOT approved the acquisition of OHA’s headquarters on Nimitz, the building has finally achieved a 90 percent occupancy rate. By comparison, the occupancy rate was only 65 percent in November 2013 when we moved in.

Layoffs vs. furloughs

By: OHA Trustee Rowena Akana

Source: Ka Wai Ola o OHA, August 2009

Everyone knows our state economy is suffering. Despite this fact, the Governor plans to lay off as many as 2,500 state employees to try and balance the state budget. Although OHA is autonomous from the Governor’s control, OHA still plans to lay off as many as 24 employees. In order for our economy to recover, it is important for people to have jobs.

MORE OHA NEWS

* Thirty Meter Telescope on Sacred Mauna Kea

On June 30, 2009, our Administrator sent a letter to the Thirty Meter Telescope (TMT) Observatory Project at the University of Hawaii (UH) at Hilo regarding their Draft Environmental Impact Statement (EIS). Here are some of his many concerns:

(1) The TMT would be the largest telescope on Mauna Kea. It will be 180 feet high and take up 5 acres. They also need to build an access way to the observatory and major renovations to the Hale Pohaku Mid-Level Facility.

(2) OHA believes the Draft EIS is premature because the state Board of Land and Natural Resources (BLNR) has not yet received or approved the following four sub-plans it required of UH in April of 2009: a Cultural Resources Management Plan, a Natural Resources Management Plan, a Decommissioning Plan, and a Public Access Plan.

(3) Past subleases for other Mauna Kea observatories have been issued at a reduced rate of $1 per year with UH getting “in-kind” viewing time at the observatories. This only benefits UH and prevents both the state Department of Land and Natural Resources and OHA from receiving substantial amounts of money that is sorely needed during these difficult times. Public Education is only one of the five purposes of Ceded Lands established by the Hawaii Admission Act.

(4) The Draft EIS needs to stress that there are alternative sites available, such as the Chilean site at Cerro Armazones.

(5) Finally, the Administrator wrote that the cultural resource analysis of the Draft EIS is “wholly flawed” and does not properly examine the impacts of siting what would be the largest telescope on Mauna Kea.

Despite these serious concerns, instead of OHA suing the University of Hawaii for mismanagement of sacred ceded lands, on July 2, 2009, the board of trustees voted in favor of an OHA resolution supporting the selection of Mauna Kea as the site for the proposed TMT project. The question is why?

Trustees Cataluna, Waihee and I were excused from the meeting and did not vote for the measure.

* Quid pro quo for San Diego Charter School?

On May 27, 2009, a proposal to give a San Diego Charter School, Pacific American Academy (PA’A), $100,000 as a pilot project for supporting mainland charter schools with Hawaiian students was included on page 12 of the OHA Fiscal Biennium 2010-2011 Budget Realignment #1 action item. I found this deceptive since there was no way for the trustees to know from reading the board agenda that this proposal would be considered.

The whole idea of trying to sneak what should have gone through OHA’s grant program into our budget was totally inappropriate. One of OHA’s deputy administrators explained that they recommended giving assistance to the Charter School since the group had helped the administration when they traveled to San Diego for Kau Inoa sign-ups. This explanation was defended by the Chairperson, Haunani Apoliona.

Due to serious concerns from trustees, including the fact that the grant request did not go through proper procedures for consideration and the fact that too many critical details were missing from the proposal, the trustees removed it from consideration. I was personally assured that this $100,000 grant would not find its way back to the board.

However, less than a month later on June 24, 2009, the grant was listed on the board agenda as one of the Fiscal Year 2009 Grant Recommendations. The trustees approved giving the San Diego-based Pacific American Academy a $100,000 grant. Trustees Cataluna and I were excused from the vote. Trustee Mossman voted against the proposal.

There are a hundred reasons why this grant should have been deferred indefinitely. This is a pilot program. It was never clearly identified as to how many Hawaiian children would be enrolled. No itemized budget was submitted. This was certainly not a prudent decision to make in these tough economic times. Grants should be judged on its sustainability. This grant had none.

This San Diego grant was able to rush through the grants process, within 30 days while other local grant applicants are sometimes forced to wait for years due to “lack of funds.” Fast-tracking the grant is especially baffling to me since there wasn’t $100,000 left in the grants budget at the time. Trustees need to be concerned that this sends a very misleading message to future grant applicants – That a grant application can be fast-tracked if you have helped certain OHA personnel or trustees in the past.

* The Native Hawaiian Legal Corp. Giveaway

Without regard to Trust Assets, OHA transferred $863,361.77 from OHA’s Fiscal Reserve Account to the Native Hawaiian Legal Corp. (NHLC) for the balance of attorney’s fees collected, including interest, originally paid to OHA regarding the Hokulia case.

Trustees voted to approve this at our June 24, 2009, board meeting. Trustees Cataluna and I were excused from the vote. In a written memo to the BOT, I opposed the transfer for the following reasons:

(1) The NHLC is not entitled to the $863,361.77 since OHA is not a client of the NHLC and therefore should not have to pay “attorney’s fees.”

(2) A large portion of the NHLC’s operating budget comes from OHA. For many years, NHLC was actually listed by name within OHA’s budget bill passed by the Legislature. Currently, the OHA budget bill that was recently singed by Governor Lingle includes $491,981 in general funds and $491,981 in OHA trust funds for fiscal year 2009-2010 that can be used by NHLC to provide legal services for our beneficiaries. For fiscal year 2010-2011, the amount is $473,080 in general funds and $473,080 in OHA trust funds. In other words, we pay their salaries. If they win a case, then we are entitled to half of the award.

(3) The NHLC has not paid their share of funds from the Hokulia case to the State of Hawaii, which claims they were entitled to half of the award. Instead, OHA paid over $1 million to the state, which included NHLC’s portion.

(4) Unlike other organizations that OHA funds, the NHLC was never forced to make any sacrifices to their budget, unlike other nonprofits that had to suffer a 20 percent budget reduction.

(5) The OHA Fiscal Reserve is to be used for unforeseen emergencies ONLY and not to “seed an endowment,” as NHLC plans to do with the money. I am certain our investment policy has no such provision for that kind of expenditure.

Finally, it makes little sense to release employees because of budget cuts and yet be able to give $100,000 to a group in San Diego, and another three-quarters of a million dollars to another organization at the same time. Until the next time. Aloha pumehana.

Programs need to be self-sufficient

By: TRUSTEE ROWENA AKANA

Source: September 2008 Ka Wai Ola o OHA Column

`Ano`ai kakou… OHA gets millions from the state general fund each year, which OHA matches through trust fund dollars, which totaled about $2.8 million in 2005. Most of these funds goes to three nonprofit organizations that benefit Native Hawaiians — Na Pua No’eau, the Native Hawaiian Legal Corporation (NHLC) and Alu Like. In 2005, Na Pua No’eau received about $700,000 of its $1.5 million budget from OHA. Roughly $600,000 went to the NHLC, which represented more than half of its operating budget. In 2006, OHA earmarked $750,000 toward Alu Like programs. All of these amounts do not include separate grants, contracts, and programs funded by OHA that are outside of these organizations’ budgeted appropriations.

While I applaud the mission of these organizations and the dedication of their employees to better the conditions of Native Hawaiians, OHA does not have the resources to fund these programs indefinitely. Add to that the fact that our economy is slowing and OHA’s Native Hawaiian Trust Fund portfolio has fallen to approximately $375 million (as of June 30, 2008) and the outlook seems even more doubtful.

Given these tough economic times, OHA needs to find a way to help these organizations become more self-sufficient and less of a drain on our budget. Some organizations, such as the Native Hawaiian Legal Corporation, should be completely eliminated from our budget. Funds allocated for legal representation for our beneficiaries should be given to more than one firm so that they may get the best representation they can.

Despite our generous assistance to NHLC over the years, we are constantly hearing complaints from the community regarding NHLC’s treatment of our beneficiaries and the quality of their customer service. Things have gotten so bad lately, that it now seems as if a beneficiary is appearing at almost every meeting to complain about the way NHLC has treated them.

OHA has even been forced to set-up a special fund to handle cases that were rejected by the NHLC, which we call our “conflict fund.” However, in order to qualify for these funds, our beneficiaries have to go through the bureaucratic hassled of first getting a letter from NHLC stating that they cannot take the case. Unfortunately, NHLC seems to be dragging their feet on getting these letters out. For example, one beneficiary claimed that NHLC refused, despite repeated requests, to give them a letter stating they could not represent them because of a conflict of interest.

In another case, a beneficiary in Hilo claimed that NHLC dropped their case at the eleventh-hour. This forced the beneficiary to scramble and find other assistance in order to save her case. There are also several beneficiaries who have reported that NHLC has not responded to them regarding the status of their cases, even after years have gone by. It seems as if the NHLC is keeping certain cases “ongoing” so they can keep them on their books to justify additional funding.

Several trustees have also brought up concerns that the NHLC’s lawsuits against the Department of Hawaiian Homelands (DHHL) on the island of Hawaii will have detrimental affects on OHA’s ability to develop affordable housing. Currently, NHLC is trying to stop DHHL from leasing out lands in order to generate revenue through several lawsuits. Clearly, they are not looking at the larger picture – how can DHHL operate and assist their beneficiaries without more revenue? All the lawsuits are doing is creating a negative sense in the community at-large that “Hawaiians are suing Hawaiians.”

Clearly, if NHLC wants OHA to continue finding their organization, they must conduct a major overhaul. Our administrator has also suggested that they send a report on their caseload to OHA on a weekly or bi-monthly basis so that we are no longer blindsided at the board table. I would require that their continued funding depends on it.

Employee Exodus to Date for 2008

On August 8, 2008, our Chief Financial Officer (CFO), a senior officer in OHA’s administration, resigned from his position effective October 8, 2008. So for those trustees who insist on taking a Pollyanna attitude and insist everything is OK, I would like to remind them of the glaring fact that in the last six-months, OHA’s fiscal department has lost: (1) an accountant, who wrote a letter to trustees saying she felt she was unfairly terminated; (2) our Comptroller, who moved to another state, and (3) our CFO, who left while OHA is in the midst of an audit and finishing up our upcoming total operating budget.

In total, there have been at least six staff members who have left OHA by choice or otherwise this year.

Fiscal Irresponsibility

By: TRUSTEE ROWENA AKANA

Source: August 2008 Ka Wai Ola o OHA Column

`Ano`ai kakou… Here is an update on OHA’s recent spending:

OHA OWNED BUSINESSES

On January 17, 2008, the BOT approved a realignment of the OHA budget appropriating $4,567,511 from OHA’s Fiscal Reserve Fund to be distributed over 3-years to the Hi’ilei Aloha LLC for the operation of its subsidiaries Hi’ipaka LLC and Hi’ipoi LLC. The operating budget for all three businesses for the July 1, 2007 to June 30, 2008 fiscal year was $2,276,882, of which we have already spent $614,809.70 as of March 31, 2008.

MASSIVE GRANTS

The OHA budget was realigned again at our board meeting on June 5^th to accommodate the huge Board Initiative grants which were also approved at the same meeting. The grants include: (1) $1,000,000 to Kanu o Ka Aina Learning ‘Ohana; (2) $750,000 to the Lana’i Cultural Center; (3) $500,000 to Kaumakapili Church; (4) $500,000 to the Malama Learning Center; (5) $150,000 to Hawaii Maoli; (6) $300,000 to Na Maka Walu; (7) $300,000 to Papahana Kuaola; and (8) $150,000 to La’i’opua 2020. The grand total for all of these grants is $3,650,000!

Hawaii Maoli is a permanent fixture in our budget as they are contracted by OHA to collect Kau Inoa registrations. However, there is no accounting for all of the funds that are being spent through this organization, especially monies given to grantees that do not have a 501(c)(3) nonprofit tax status. How much more money is Hawaii Maoli getting through fees or charge-backs from these organizations? The trustees have no idea.

LONG-TERM DHHL LOAN

On June 5^th, the board authorized the Administrator to enter into an agreement with the Department of Hawaiian Homelands to cover their debt service on a loan of $35 to $41 million for a period of 30 years starting on July 1, 2008 with an amount not to exceed $3 million annually.

DHHL is a government agency under the Governor’s budget. The state has long neglected its obligations to house Hawaiians and it should, therefore, be the state’s responsibility to guarantee the DHHL loans – not OHA. It is the only fair thing to do since the state receives 80% of ceded land revenues while OHA has to survive on only 20% of those revenues. As advocates for Hawaiians, OHA should be holding the state accountable instead of funding their shortfalls.

Trustee Mossman asked whether the timing for this proposal had anything to do with the Sovereign Councils of the Hawaiian Homelands Assembly’s (SCHHA) recent opposition to OHA’s negotiated settlement bill at the state legislature. Trustee Heen assured the trustees that there was no “quid pro quo.” However, I agree with Trustee Mossman that the timing is awfully suspicious. Not to mention the fact that Haunani Apoliona is running for re-election this year. Make no mistake, I am NOT against giving grant money away. However, in order to stay within our budget, we must cut costs elsewhere.

At present, our budget is approximately $41 million. Add to that all of the recent budget realignments and the budget will probably climb to well over $50 million a year. This is a ridiculous figure. Besides all this, OHA is too top heavy with “special assistants” who are getting contracts to work on “special projects” that are taking up a great deal of our inflated budget.

The scariest thing of all is that Apoliona is supporting the increase in spending all the way through 2012. In other words, these realigned budgets are being approved using money that we have yet to receive. With the economy in the “drink,” our people struggling with high gas prices and unable to drive to work or losing their homes and being forced to live under freeway overpasses and beaches, OHA continues to spend money like “drunken sailors.” The question is why? At present, we are already $5 million overspent in our current budget. Wouldn’t our people understand if we explained how important it is to tighten our belts at this time? We should be leading by example.

“Making a lot of nonprofits happy now by offering them a lot of money into 2012 and then taking that money away after the November elections because we are not able to meet these commitments is cruel, irresponsible, and a terrible way to get votes.”

EXPENSIVE ATTORNEY’S FEES

One of OHA’s attorneys for our failed ceded lands negotiated settlement with the state and the OHA v. State II case was paid a total of $414,533.84 in attorney’s fees. A second attorney was paid a total of $423,840.16. As you may recall, the ceded lands negotiated settlement was shot down by the state senate and OHA lost the OHA v. State II case.

OHA’s Washington D.C. law firm that was hired to lobby for the passage of the Akaka bill was paid over $2,000,000 (that we know of, a request for a monthly billing statement would be much more accurate – these numbers are conservative). A special consultant for the Akaka bill was paid an additional total of up to $450,000. That is a total of up to $2,450,000 (conservatively) which have been paid to lobbyists who have not been able to deliver the votes. Make no mistake, I support the passage of the Akaka bill, but I have also suggested many times that we hire people who are able to deliver.

OHA INVESTMENT PORTFOLIO DROPS

The Native Hawaiian Trust Fund portfolio has lost 10% of its value (approximately $39 million) in these tough economic times, and probably more at the time of this printing. National consumer and prognostic indicators say that investors should have at least 20% of their investments in cash that can be liquidated and moved quickly. Unfortunately OHA currently has less than 10% or $25 million of its portfolio in cash

According to a June report from one of our money managers, global equity markets fell by more than 8%, with US and European equity markets returning -8.4% and -11.7% respectively. As of July 9, 2008, the estimated preliminary return for their share of OHA’s portfolio in the month of June was –4.95% compared to benchmark performance of –4.48%. They also stated that the growth outlook for the US economy remains weak, as increased unemployment, a weak dollar, and further pressure on the financial markets contribute to expectations of higher inflation over the next year, with expectations beyond that more restrained. Given all of this bad news, it is now more important than ever to bring our spending under control.

TRUSTEE HEEN’S MEMORY

On another note, I was surprised to read OHA Trustee Walter Heen’s June 13th letter to the Star Bulletin where he wrote, “I do not recall Akana ever dissenting from any of the terms (of the ceded lands negotiated settlement) that were brought before the board, including the waiver provision that she now loudly decries.”

Heen was present at all of the executive session meetings where I expressed concerns regarding the waiver provision. Further, all of the OHA trustees, along with the administrator, received a letter from me, in advance, which explained why I could not support the settlement bill and that I would be submitting testimony to the legislature in opposition to the bill.

I hope that Heen will make sure that OHA has lined up its “ducks” next time for the 2009 legislative session since he is now part of the negotiating team. Further, I question why OHA’s negotiating team is still negotiating with the Governor’s office when she has publicly stated that she will not reconsider her proposal – a proposal that our beneficiaries have overwhelmingly rejected. Why not just work with the legislature?

OHA’s spending is out-of-control

By: TRUSTEE ROWENA AKANA

Source: January 2008 Ka Wai Ola o OHA Column

`Ano`ai kakou… In the last 5 years, OHA’s total operating budget has doubled to $41,094,798 million (Fiscal Year 2008). Since 2006, the $15.1 million OHA gets from the state for our share of the ceded land revenues goes directly into our operating budget instead of being invested in the Native Hawaiian Trust Fund. With the crisis situation our people face regarding health, education and housing, the trustees felt that more resources need to be put to use now to help our beneficiaries.

Doubling our budget has meant that OHA has much more money to spend on grants to aid our beneficiaries. However, the trustees have been irresponsible for continuing to approve grants that should be called into question. For example, trustees approved a grant to support the state Department of Education (DOE). On November 1, 2007, an $88,584 grant was approved to support Pauoa Elementary School’s program to improve literacy, critical thinking and comprehensive skills for grades K-5. This may sound all well and good, but isn’t it the DOE’s kuleana to fund the program? The same could be said of the $66,334 grant to the University of Hawaii at Hilo to support the expansion of their astronomy center. Shouldn’t the state be funding this? The state already receives 20% of the ceded land revenues for public schools and public educational institutions, as described in section 5(f) of the Admissions Act. Shouldn’t that be enough of a contribution to education by our people? Maybe what OHA should be doing is to consider a lawsuit against the DOE for not carrying out their responsibilities. After all, there should be some accountability for all of the funds that they receive. The state should not be taking another bite at our apple. Our mission is clear – we are here to serve our beneficiaries.

Even the federal government is coming to OHA for money. The trustees recently approved a $100,000 grant to help the Kaloko-Honokohau National Historic Park restore its fishpond. Shouldn’t the National Parks Service by paying for this?

Having more grant money has also attracted some slick nonprofits to come to OHA and suck our grant funds with a big straw. These professional organizations know how to fill out forms quickly and have the staff workers needed to make application deadlines. I believe they are preventing truly needy, but less technically savvy, Hawaiian organizations from receiving their fair share of assistance. For example, OHA gave the nonprofit Partners in Development Foundation $100,000 on November 1, 2007 to assist homeless children and another $99,968 on December 6, 2007 to help foster families. This nonprofit knows how to sell their programs. For example, they stressed that they were the only nonprofit organization that specifically targets Native Hawaiian foster children. How could the trustees possibly turn them down at the board table?

The blame for this rests partially with OHA’s administrative staff. The trustees depend on our administrative staff to do the leg work to make sure that the nonprofits are truly worthy of our beneficiaries’ money, but they keep dropping the ball. For example, I keep seeing the same organizations coming back to OHA for grant funding year after year, even though our grant policy is to fund programs that are self-sufficient and projects that are “one-shot” proposals. Our grants are not supposed to be used to keep organizations going.

Our grants department has constantly promised to fix our grant policy, but nothing is ever done. In the past, OHA required all nonprofits to provide matching funds from other organization. OHA would then match other contributions dollar-for-dollar. Now our administration is breaking its own rules by allowing “in-kind” matches with no dollar matches. Nonprofits are now saying their own staff workers’ salaries are part of the matching funds. For example, the Alaka’ina Foundation’s $58,067 grant and Street Beat, Inc.’s $100,000 grant were both approved with in-kind matches of their own workers’ salaries – they didn’t get any matching money from other organizations!

The biggest problem with our current grant policy is that we do not require that a follow-up evaluation be done of each grant we approve. OHA should at least be evaluating the nonprofits who receive massive grants of over $100,000 to make sure our beneficiaries’ money was properly spent, especially for organizations that are repeat requestors. How hard is it to follow-up with the nonprofits to make sure that the Hawaiians they said would be served were actually served? Strict grant control rules should apply for all grantees. At the very least, no grant should be approved that has (1) no real dollar matching fund amounts, (2) no sustainability, and (3) are repeat grant requesters, which obviously proves that they cannot sustain their programs. Again, this problem rests with the trustees and not just the administrative staff. As long as the trustees are comfortable with having no rules – none will be applied. It is just another example of irresponsibility.

I have been assured by our administration that changes will be made and presented to the trustees before the next grant cycle (lets see). I will continue to follow-up with them and keep you informed.

On another note: Thank you for your positive responses regarding my December 2007 column. However, I have received some negative responses from some of my colleagues, which I expected. HAUOLI MAKA HIKI HOU!

Legislative Kokua Critical to Fix OHA’s Money Woes

By: Pat Omandam
January 22, 2002

Source: Star Bulletin

The Office lost millions of dollars in revenue from ceded lands.

If ever the state Office of Hawaiian Affairs needed the kokua of the state Legislature, this is the year.

With no annual revenue from ceded or public trust lands and a legal opinion barring it from distributing any grants, OHA needs a legislative fix for these problems if it wants to fully help Hawaiians.

“I think that the legislators that we’ve talked to have a good sense of where everything is, and I think they’d like to resolve some of these issues,” said OHA Vice Chairwoman Rowena Akana, head of OHA’s legislative committee.

“I look to them to be fair in resolving these very critical issues,” she said. “After all, OHA has been around 20 years. It’s not as if you can swipe us up in one fell swoop.”

At the top of OHA’s legislative package is a way to address a Hawaii Supreme Court ruling Sept. 12 that struck down a state law giving OHA 20 percent of ceded-land revenues collected by the state. The court did not question using ceded-land revenue to better conditions of native Hawaiians but pointed out that particular law had a disclaimer that declared it void if it conflicted with federal law.

The justices said it conflicted with a federal law governing state airport revenue, and ruled the state Legislature must come up with a new law to pay OHA ceded-land revenues.

Akana said the loss of millions of dollars in annual revenue from the state has forced the OHA board to reassess programs and look for ways to downsize so it can preserve its $300 million native trust, the only source of income it has right now.

Despite a state budget shortfall of $330 million this fiscal year, trustees have submitted a bill asking for an interim ceded-land revenue payment of $17 million next year. State Rep. Ezra Kanoho (D, Lihue), a member of the legislative Hawaiian caucus, said Hawaiian lawmakers believe the money is warranted and will work to get it passed this legislative session.

“I think it’s recognized that OHA is due something, and it would be politically correct to come up with a figure,” he said yesterday.

“If not $17 million, particularly in this very difficult financial times, we’ll try to come up with something. What that something is, I’m not sure,” Kanoho said.

Meanwhile, OHA also seeks a waiver from the state procurement laws. A Sept. 25 opinion from the state Attorney General’s Office advised trustees not to release any further grants because those expenditures did not go through the state procurement code’s competitive bid process and therefore may be illegal.

OHA’s grant-making authority was questioned by the state Procurement Office in December 2000 and by state Auditor Marion Higa in April 2001.

As a result, OHA was forced to hold $800,000 in grants last year, which included money to Alu Like Inc. and the Native Hawaiian Legal Corp.

And the wait continues.

“Literally, we can’t give out money away,” Akana said. “It’s so ridiculous.”

OHA trustees also seek legislation so they can join the state Employees’ Retirement System, something they have pushed for several years. The U.S. Supreme Court’s February 2000 decision in the Rice vs. Cayetano case ruled that OHA was a state agency, so trustees can use that to argue it should be allowed to join the ERS.

OHA’s 2002 Legislative Package

By Trustee Rowena Akana
January 18, 2002

Source Letter to Editor

On September 12, 2001, the Hawaii State Supreme Court delivered a devastating blow to the Hawaiians when they struck down Act 304, which gave OHA 20% of the ceded land revenues collected by the State to be used for Hawaiian beneficiaries.

Without a steady flow of income to sustain all of our programs, we trustees must now reassess our current programs and look at ways to down size to preserve our trust assets.

While the Supreme Court may have struck down the mechanism for payments to Hawaiians, they did declare that the state still must fulfill its constitutional obligation to the Hawaiian people. They also gave the legislature the charge of amending Act 304. Until this is completed, there will be NO payments made to OHA by the state.

OHA will ask the legislature this year for an interim revenue amount until Act 304 is resolved. Because a formula based on revenues has been so problematic for OHA and the state, we must consider, in the very near future, to settle the ceded land claims with the state. This would allow the Hawaiian people the opportunity to have a land base on which to build our nation.

The second OHA bill asks the legislature to adopt a waiver from the state procurement laws. Because of an attorney general opinion, OHA is no longer able to give money to 501 C 3 programs. OHA is unable at this time to give any grants out to anyone. This opinion has basically stopped all flow of money from OHA to any organization or group asking for funds.

The third bill addresses the need to revisit Act 304 as directed by the Supreme Court of Hawaii.

The fourth bill allows the OHA trustees the ability to join the State Retirement System. For 20 years the trustees have NOT been allowed to join the State Retirement System.

At the Federal level: the Federal piece of legislation known as the Akaka Bill is slated to be heard in the Spring of 2002 in the Congress. While there may not be total agreement on the language of this bill, it is very important that Hawaiians receive federal recognition from the United States. Without this recognition we cannot proceed to nationhood.

On another note: I am happy to announce that within the next 30 days OHA will:

1. Increase out business loan amount to $250,000.

2. Partner in building 45 housing units in Kapolei.

3. Develop a partnership with FANNIE MAE to allow ALL Hawaiians to borrow money for home mortgages for down payments and closing costs at a reduced interest rate below the prime rate.

4. We will continue to work to develop a health initiative for our kupuna.

We ask for your kokua, this legislative session, to help us resolve some very critical issues for our people. Mahalo Ke Akua