Thursday, February 22, 2018
Auditor’s report pinpoints mismanagement of funds in the Hawaii Tourism Authority
… in the case of AEG’s contract to transition the management and operation of the Hawai‘i Convention Center, we found concrete instances in which HTA approved improper, extravagant expenses disallowed by the terms of that contract.
As the just-released audit of the Hawaii Tourism Authority emphasizes, the HTA is semi-autonomous and exempt from the procurement code. The audit report just released describes abuse of that independence, for which, of course, the Hawaii taxpayer is charged.
The report is easy to read. The one-page summary is worth skimming—it won’t take long for the news to pick this up, but you don’t have to wait. Recent audit reports are remarkable for their use of plain language and the inclusion of explanation. By design, they are accessible to all readers. The use of sidebars and visual material educates and enlightens. Check out the summary or the full report, or browse other easy-to-read reports on the Auditor’s website.
We found that HTA reimbursed millions of dollars to contractors without receipts and other required documentation; reimbursed costs, such as first-class airfare, luxury hotel accommodations, and other extravagant expenses, that were expressly prohibited by contract; and consistently failed to enforce contract terms that are intended to protect the State. HTA has disregarded its own procurement policies and procedures, awarding sole source contracts based on questionable justifications, paying contractors without existing contracts, and voluntarily waiving ownership of intellectual property that the State paid to develop. In response to a statutory change reducing the amount of the Tourism Special Fund that can be used for administrative expenses, HTA shifted some expenses to other budget lines and to HTA programs, but did not significantly reduce its costs.