Tourism authority The Hawaii Tourism Authority lacks accountability, has deficiencies in the awarding of its contracts and has not fully complied with the state's open-meetings law, says a draft audit by state Auditor Marion Higa.
attacked in audit
The HTA is criticized for its contracts
and lack of accountabilityBy Pat Omandam
pomandam@starbulletin.comThe preliminary management audit, sent to the authority and state legislators for review and comment before it is officially released, criticizes the 13-member HTA board for its "alarming array of management deficiencies" in accounting for the roughly $61 million it receives annually to manage the strategic growth of Hawaii's tourism industry.
"The management problems at the HTA are both troubling and alarming," the draft audit said. "Since its inception over three years ago, the authority's board of directors has failed to develop and implement a framework that ensures that state resources are accounted for and utilized wisely and appropriately.
"Multimillion-dollar contract payments are made with little justification. Furthermore, with inadequate guidance and support from the authority's first chief executive officer, staff are not functioning as a well-balanced team and are confused and frustrated," it said.
Rick Humphreys, the authority's executive director, said yesterday it would be illegal for him or other HTA officials to comment on the draft audit because it has not yet been released publicly by the state auditor. The HTA is preparing its response to the draft report.
Humphreys said it is highly irregular for state officials to discuss a draft report, adding it is unfair to the agency involved to have public discussion on it before it is released.
The audit was requested by the Legislature last year after Senate Tourism Chairwoman Donna Mercado Kim (D, Aiea) criticized the authority for not improving its accountability.
"I felt that the money we've given, $61 million, is a lot of money and that they haven't maximized it, and we haven't gotten the maximum benefit from the money that's been expended," Kim said yesterday.
Lawmakers asked the auditor to review the responsibilities and functions of the HTA board, its contracting and personnel procedures, and appropriate financial issues.
The draft report said the Legislature's concerns were well founded.
Among the major problems was the authority's lack of a management plan to ensure it operates successfully and manages its sizable resources prudently.
As a result, significant sums of public funds are administered poorly and without benefit to the state.
For example, the draft audit pointed to the three-year, $546,000 contract awarded to Fishman Enterprises for management and planning of the authority.
The auditor said the authority could not provide documentation on the history of the contract, as well as why the board went with an independent contractor instead of hiring owner Robert J. Fishman as an employee. Fishman was the first executive director of the authority.
"The authority's failure to fully document expenditures made under this contract, or to evaluate the performance of Fishman Enterprises ... has not ensured that state moneys were used prudently," the report said.
Fishman could not be reached for comment. The former city managing director and airline executive was called to active duty in the Army Reserve last October and is currently assigned to the Pentagon. His three-month active-duty stint has been extended.
Elsewhere, the draft report said the authority failed to fulfill the intent of the public's right to know under the state Sunshine Law. Since its inception in 1998, the authority went into executive session 28 times to discuss confidential, proprietary or personnel matters, but the auditor's office found minutes for only nine of those closed-door meetings.
Furthermore, no minutes exist for any executive sessions conducted in 2000.
The report was also critical of how the HTA awards contracts, saying 29 percent of the 51 contracts awarded in fiscal year 2001-2002 did not have adequate documentation to support the awards.
The audit recommended, among other things, that the HTA board develop a strategic plan, conduct self-evaluations and ensure it has written policies and has properly documented contracts. It also needs to have a training program and regular staff evaluations.
Kim, who believes she is free to publicly discuss the draft report, said while she agrees with its findings, more needs to be done.
"I think the concept of HTA is a good one. Unfortunately, the Legislature did not watch them and did not stay on top of them and monitor them in the first two or three years of their existence, and so it got really out of hand," she said. "And obviously from the audit, they haven't done what they're supposed to do."
Hawaii Tourism Authority
