The state Historic Preservation Division risks losing more than $1.1 million in federal funding—about half its budget—due to program lapses detailed in a new report by the National Park Service.

The park service put the agency on notice yesterday, placing it on “;high-risk grantee”; status and demanding improvements within two years.

The 138-page report, dated Friday and delivered yesterday, details a multitude of persistent problems.

“;This action is not taken lightly,”; National Park Service Director Jonathan Jarvis wrote in the report, “;and comes only after multiple attempts to help the (division) correct serious deficiencies identified in audits going back as far as 2002.”;

The division is in charge of preserving Hawaii's cultural, archaeological and architectural landmarks, with an inventory that includes more than 38,000 sites.

The division is required to meet a list of mandated corrective actions within two years. If it fails, the park service will suspend annual federal matching grants.

But Laura Thielen, director of the Department of Land and Natural Resources, which includes the division, said some of the corrective actions are unrealistic because of insufficient resources, fiscal constraints, limited staff and a heavy workload.

Park Service officials conducted a site visit in July in response to a “;pattern of recurrent problems”; with the Historic Preservation Division's ability to meet federally mandated activities, the report noted.

The criticism is not new.

The division faced harsh complaints in years past, including objections to its handling of native Hawaiian burial sites, a program not funded by federal money.

In 2007, Administrator Melanie Chinen resigned following criticism of her management style and the departure of 19 staff members over a two-year period. An additional 18 people have left since then.

In the report, federal officials did cite significant improvements within the division, among them being well-organized files and libraries at the Maui and Big Island offices and its qualified staff. Fourteen of 21 positions have been filled at the division, according to the report. Vacancies remain due to a hiring freeze.

One of the mandated corrective actions is implementation of an organized and accessible inventory system of the state's historic sites. Federal officials said the inventory data is disorganized and difficult for staff, the public and researchers to access.

But Thielen said the staff lacks the technical expertise and resources to improve the data system. The division recently requested technical support from the Park Service.

“;We need more resources,”; said Thielen, noting that they are already hampered with completing numerous reviews with limited staffing. The division handles an estimated 6,000 reviews annually.

The Historic Preservation Division is also required to revise its statewide historic preservation plan, last updated in 2001.

Administrator Puaalaokalani Aiu said they are required to revise the plan every five years. State officials have established a state plan committee and progress has been made in tackling the revision.