The Board of Trustees of the Office of Hawaiian Affairs voted to approve a moratorium on the use of Trustee Sponsorship and Allowance Funds (TSAAF) and CEO-initiated sponsorships effective February 27, 2018. The moratorium was recommended by an Ad Hoc Committee on Grants and Sponsorships in response to a state audit report that raised concerns about the sponsorship funds. The moratorium will remain in effect until new policies and procedures are adopted to govern the sponsorship programs.

1. OFFICE OF HAWAIIAN AFFAIRS
Action Item
Board of Trustees
February 27, 2018
BOT #18-01
Action Item: Approval for OHA to impose a moratorium effective February 27, 2018 on
the use of Trustee Sponsorship and Allowance Fund (TSAAF) and CEO
initiated Sponsorships.
Prepared By:
Lopaka Baptiste
Ke Kua Kãko’o, Trustee Aide
L-’ Date
Reviewed By:
Carol Ho’omanawanui Date
Ke ‘Aho Kele, Chief of Staff
Reviewed By: /i
Albert Tiberi Date
Ka Paepae, Corporate Counsel
Reviewed By
Kamana’opo M. Crabbe, Ph.D. Date
Ka Pouhana, Chief Executive Officer
Reviewed By: 7 4]-t 1’i--
Reviewed By:
Date
ohn Waihe’e IV Date
Ke Kua, Trustee At-Large
Ad Hoc Committee on Grants and Sponsorships, Vice-Chair
Reviewed By: 3LWC%. 12Lits1-c
Colette Y. Mhado
Ke Kauhuhu, Board of Trustees Chair
Ad Hoc Committee on Grants and Sponsorships, Chair
2/23/2018
Date
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2. ACTION ITEM
Approval for OHA to impose a moratorium effective February 27, 2018 on the use of
Trustee Sponsorship and Allowance Fund (TSAAF) and CEO-initiated Sponsorships and
the immediate return of the unused balance of the TSAAF to OHA. This moratorium will
remain in effect until the Ad Hoc Committee on Grants and Sponsorships recommends
policies and procedures to the Board of Trustees for its approval.
II. ISSUE
Whether the Board of Trustees shall approve a recommendation received from the Ad
Hoc Committee on Grants and Sponsorships for a moratorium on the use of Trustee
Sponsorship and Allowance Fund (TSAAF) and CEO Sponsorship.
III. DISCUSSION
In its August 1, 2017 meeting, the Board of Trustees voted to create an Ad Hoc
Committee on Grants and Sponsorships (“Ad Hoc Committee”) with six yes votes and
three excused absences. The ad hoc committee was created to address the questions and
concerns Trustees raised regarding the grant making process and the awarding of
sponsorships.
Ad Hoc Committee Purview
The charge and purview of the Ad Hoc Committee would be for Trustees, BOT staff, and
administrative staff to work together to:
• Review current Strategic Plan priorities and current policies and how they guide
the grant and sponsorship process;
• Assess the existing grant making programs, Community Grants and ‘Ahahui
Grants;
• Assess the grant applicant review and scoring process, and the awarding process;
• Review and assess the occurrence of repeat awardees and the amount of the grant
award allocation;
• Review the outreach made to community to better inform beneficiaries of grant
availability and requirements;
• Provide recommendations to improve the grant making process;
• Solicit, develop, and provide recommendations for Kãlia Grant criteria;
• Review and assess the process in which sponsorships are awarded, and
breakdown the levels of sponsorships;
• Present findings and recommendation to the BOT; and
Identify, develop, and recommend policies as necessary for approval by the BOT.
The ad hoc committee shall perform duties, including external consultations,
necessary to accomplish its task.
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3. Ad Hoc Committee Members
The membership of the ad hoc committee members is as follows:
1. Trustee Colette Y. Machado, Ad Hoc Committee Chair
2. Trustee John Waihe’e IV, Ad Hoc Committee Vice-Chair
3. David Laeha
4. Lopaka Baptiste
5. Misti Pali-Oriol
6. Monica Morris
The Ad Hoc Committee has convened two meetings, on January 25, 2018, and on
February 15, 2018.
State Auditor’s Report
On February 13, 2018, the State of Hawai’i Office of the Auditor released report
18-03, “Audit of the Office of Hawaiian Affairs.” One of the objectives of this audit was
to evaluate OHA policies and actions regarding the use of its Fiscal Reserve, Grants,
CEO Sponsorships, and Trustee Allowances and make recommendations as appropriate.
In the report, the Auditor expressed concerns regarding CEO initiated sponsorships and
TSAAF expenditures. The Auditor also recommended that OHA amend, clarify,
reconsider its policies and procedures related to sponsorships and Trustee Allowances
and that OHA ensure that these types of expenditures fulfill OHA’s mission.
In its response to the Auditor, OHA acknowledged that we must endeavor to institute and
enforce disciplined spending through clearly defined, objective and responsible policies
and protocols.
Although it was always the intent of the Ad Hoc Committee to make improvements to the
ways in which we support our beneficiaries, the issuance of the State Auditor’s report
raised an immediate need to prioritize a review of the Trustee Sponsorship and
Allowance Fund (TSAAF) and CEO-initiated sponsorship. The Ad Hoc Committee
reviewed the State Auditors report and discussed the findings in its meeting. In order to
be careful stewards of these funds in moving forward, the Ad Hoc Committee is
recommending a moratorium on the use of these funds while updates to the current
policies and procedures are considered.
Recommendation of the Ad Hoc Committee
By a unanimous vote of its six members at its February 15, 2018, meeting, the Ad Hoc
Committee on Grants and Sponsorships voted to recommend the Board of Trustees
impose a moratorium effective February 27, 2018 on the use of Trustee Sponsorship and
Allowance Fund (TSAAF) and CEO-initiated Sponsorships. The recommendation
further includes the immediate return to OHA of the unused balance of the TSAAF. This
moratorium will remain in effect until the Board of Trustees adopts policies and
procedures recommended by the Ad Hoc Committee on Grants and Sponsorships.
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4. An immediate moratorium and immediate return of the unused balance of the TSAAF to
OHA will:
• assure OHA’s beneficiaries that no further spending will be made from the
TSAAF and the CEO-initiated Sponsorships while OHA works on amendments to
its policies and procedures; and
• give adequate time for the Ad Hoc Committee to develop and recommend
changes to the policies and procedures for the Board of Trustees’ consideration
and approval.
Approving this action item as it is currently written will implement the following:
• A moratorium will be imposed on the use of the TSAAF and the CEO-initiated
Sponsorships effective immediately upon approval by the Board of Trustees on
February 27, 2018. This moratorium will remain in effect until the Ad Hoc
Committee on Grants and Sponsorships recommends policies and procedures to
the Board of Trustees for its approval;
• Requests that are in process as of February 27, 2018 should be processed as usual.
“In process” means the request was received with the proper documentation,
reviewed and recommended for approval, and is currently in the process of
obtaining the appropriate signature(s) for approval or waiting for a check to be
processed. Any requests that have been received prior to February 27th,
but not
reviewed and recommended for approval should not be processed and requests
received on or after February 27, 2018 should not be processed;
• Trustees will immediately return to OHA the unused balance of the TSAAF;
make checks payable to the Office of Hawaiian Affairs and deliver it to the OHA
CEO; and
• Trustees will follow the reporting requirements in the current TSAAF Internal
Guidelines and Procedures (May 2016) and will submit to the OHA CEO the
Trustee Quarterly Sponsorship and Annual Allowance Expenditure Report
(“TQSAAER”) for the 3’’ quarter of FY2018, which will cover the period from
January 1, 2018 up to February 27, 2018. The 3tc1
quarter TQSAAER is due
within 15 calendar days and due no later than March 14, 2018.
• The moratorium excludes sponsorships approved in the OHA FY2018-2019
Biennium Budget in Action Item RM #17-07 for:
o Community Outreach & Engagement;
o Federal Advocacy;
o Papahanaumokuãkea;
o Legacy Land Manager;
o Land Stewardship;
o Strategic Priorities & Results Initiatives; and
o Legacy Sponsorships — Prince Lot Hula Festival
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5. IV. ALTERNATIVES
A. Approve the imposition of a moratorium effective February 27, 2018 on the use of
Trustee Sponsorship and Allowance Fund (TSAAF) and CEO-initiated
Sponsorships and the immediate return of the unused balance of the TSAAF to
OHA. This moratorium will remain in effect until the Ad Hoc Committee on
Grants and Sponsorships recommends policies and procedures to the Board of
Trustees for its approval.
B. Approve the imposition of a moratorium on the use of Trustee Sponsorship and
Allowance Fund (TSAAF) and CEO-initiated Sponsorships and the return of the
unused balance of the TSAAF to OHA with an alternative effective date proposed
by the Board of Trustees at its meeting on February 27, 2018.
C. Do not approve the imposition of a moratorium on the use of Trustee Sponsorship
and Allowance Fund (TSAAF) and CEO-initiated Sponsorships and the
immediate return of the unused balance of the TSAAF to OHA.
V. RECOMMENDATION
The Board of Trustees approves the imposition of a moratorium effective February 27,
2018 on the use of Trustee Sponsorship and Allowance Fund (TSAAF) and CEO
initiated Sponsorships and the immediate return of the unused balance of the TSAAF to
OHA. This moratorium will remain in effect until the Ad Hoc Committee on Grants and
Sponsorships recommends policies and procedures to the Board of Trustees for its
approval.
VI. TIMEFRAME
The moratorium will take effect immediately upon approval by the Board of Trustees on
February 27, 2018.
VII. FUNDING SOURCE
No funding required.
VIII. ATTACHMENT
None.
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