Regents question
Dobelle paymentsThe UH president's delay
in repaying some protocol
fund bills raises concern
The University of Hawaii Board of Regents is investigating why the UH Foundation paid UH President Evan Dobelle's credit card bills without sorting out which charges were for business and which were personal.
What is the fund?
Question: What is the protocol fund?Answer: The University of Hawaii Foundation sets aside $200,000 annually from operating expenses to provide a fund for the president and his staff to use for expenses that advance the university.
The money comes from interest on investments, fees and other operating money, but donor funds are not used, unless a donor specifically designates it for the UH president.
Former UH Vice President for External Affairs Paul Costello told the Star-Bulletin in 2002 that $100,000 was donated to the president in fiscal year 2002.
The president has wide discretion over how he uses the fund, but it is not a personal fund; it must be used for university purposes.
Dipping into the protocol fund
Question: How is the protocol fund spent?Answer: In December 2002, the university allowed reporters to look at UH President Evan Dobelle's receipts for his spending from the fund for the previous 18 months.
The receipts show he spent money for first-class upgrades for himself and his wife while traveling, for parties and private club memberships, and to recruit top UH officials.
Dobelle spent $9,188.78 from the fund to fly former UH Vice President for External Affairs Paul Costello, his wife and child to Hawaii and put them up at the Halekulani Hotel in July 2001.
The fund was also used to fly UH mascot Vili Fehoko and five family members to Penn State University to cheer on the men's volleyball team in the national championship game at a cost of $6,480; $2,313 to print Dobelle's 2001 Christmas cards; and $9.86 for a shovel that Dobelle used as a prop in a speech.
In two cases, the foundation was not reimbursed until more than a year after it had paid the bills, receipts show.
The unusual financial arrangement came under scrutiny yesterday at a board meeting in which regents questioned UH Foundation Chief Financial Officer Bill King about Dobelle's spending from the group's "protocol fund."
The regents have commissioned an audit of the fund as part of this year's annual evaluation of Dobelle's performance. The auditors' report has not been made public.
However, in last year's evaluation of the president, the regents criticized Dobelle's use of the fund for "lavish spending" on travel and "inappropriate purchases."
King said yesterday that there did not appear to be any inappropriate spending, but noted that the foundation no longer pays Dobelle's monthly credit card bills.
The protocol fund, now $200,000 annually, is available for spending that the president feels will advance the university. Dobelle, who earns $442,000 annually in salary, uses it for meals, first-class travel upgrades, functions at his residence at College Hill and other discretionary spending.
The protocol fund first generated controversy in April 2002 after Dobelle used at least $1,625 from it to buy Janet Jackson tickets for staff and donors.
The president uses his personal Aloha Air Awards credit card to pay for travel on university business.
King told the regents that the foundation began paying Dobelle's credit card bills to avoid paying late charges. He said he didn't know when the foundation began the practice, but when Dobelle first arrived at the university in July 2001, the foundation only reimbursed his business expenses.
King said he began his job at the foundation in November 2002 and the practice of paying Dobelle's credit card bills was stopped in March 2003.
UH Chief of Staff Sam Callejo said Dobelle, who was not at yesterday's meeting, was traveling and unavailable for comment.
Callejo said Dobelle asked that the practice be ended. He said the foundation began paying the president's entire credit card bill because it sometimes took a long time for Dobelle to be reimbursed for his business expenses.
"Evan has been owed lots of money," Callejo said.
King said it sometimes took several months before Dobelle sent checks to the foundation to pay back his personal expenses. The checks were sometimes for large amounts covering more than one credit card statement, and staff had to go back and figure out what was being reimbursed.
"The lag created reconciliation challenges," King said.
Travel documents obtained by the Star-Bulletin show that Dobelle wrote three checks to the foundation on Nov. 16, 2002, totaling $14,382.93, for personal expenses dating back to April 2002.
Another reimbursement, of $1,508.25, was paid on Aug. 27, 2003, for personal expenses in November 2001 and August 2002.
Regent Jane Tatibouet asked King when, if a regular employee owed personal expenses to the foundation, he or she would be expected to pay it back.
"Immediately," King replied.
The practice of paying the president's credit card bill raises questions about the quality of internal controls at the foundation, said UH accounting professor Tom Pearson.
"I would frown on the practice," Pearson said.
He said paying the entire credit card bill puts staff who work for the president in the difficult position of having to deny his expenses as not being business-related.
It also sets a bad example, said Pearson, who noted that university employees are instructed to strictly separate their personal and business spending.
"In auditing, the tone at the top of the organization is important," he said.
Regents Tatibouet, Kitty Lagareta, Myron Yamasato and James Haynes also questioned why just the credit card statement, without supporting receipts, were enough for reimbursements.
King replied that since the auditors sent him their draft report, the foundation is now requiring more documentation from Dobelle.
He noted that the foundation did get airline tickets, hotel folios and other documents. Most of the other expenses involved meals, King said.
Regents also wanted to know why Dobelle spent $268,000 in fiscal year 2002 when the amount available in his protocol fund at that time was $150,000.
King said only $150,000 in protocol fund money was spent that year. The payment for the additional expenses was authorized by the foundation board to be paid from foundation operating expenses. He said some of the expenses that year had to do with College Hill, the Manoa home that is provided to the UH president, which was being renovated.
UH presidents have long had access to a protocol fund. Former president Kenneth Mortimer's fund was $150,000, the same amount as in Dobelle's first year in office.
King said the foundation board increased the amount in the protocol fund available to Dobelle in his second year to $200,000 annually.
Dobelle is not the only administrator who has access to the protocol fund. The president also sets aside money for other top administrators.
The money for the fund, which is called a UH support fund by the foundation, comes from interest and fees on endowments and donations and other foundation operating moneys. No donor money is used, King said, unless a donor specifically designates it for the UH president.
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