Saturday, January 21, 2017


Call For Full Forensic Audit Grows 

Date: January 19, 2017
To: All Trustees
From: Trustee Keli`i Akina

Subject: Personal Concerns Relating to the Fiscal Sustainability Plan

Dear Trustees,

I would like to share the following observations and concerns with you relating to the Fiscal Sustainability Plan and the current contract with Spire.

Based upon a comprehensive review of the contract1, I would like to share the following two concerns with you:

1. The current contract with Spire for the Fiscal Sustainability Plan reflects a duplication of services that the Administration should already be doing on a regular basis.

The contract for the Fiscal Sustainability Plan stipulates the following four responsibilities:
a) An inventory of all critical assets and liabilities which are part of OHA or reasonably expected to be part of OHA in 10 years.
b) An evaluation of the condition and performance of inventories, assets and liabilities.
c) An evaluation of OHA’s operating capabilities, including but not limited to, core services, organizational planning, and resource planning.

The comprehensive review includes an evaluation of the following documents:
* Action Items: #16-08, 16-03
* Contract # 2976, 2976-01, 2976-02, 2976-03, 2976-04
* Spire Invoices (5/15/2016 till 12/07/2016)
* OHA Fiscal Sustainability Sessions 1-4
* Guidance for OHA Fiscal Sustainability Implementation Plan
* Fiscal Sustainability Excel Spreadsheets

d) The development of five-, nine and 12-year plans for the on-going sustainability of OHA.

* The responsibilities are duplicative to the essential functions and duties of a CFO.
* An inventory of OHA’s assets and liabilities is already conducted during OHA’s annual financial statement audit.

2. The “Guidance for OHA Fiscal Sustainability Implementation Plan” report that Spire produced is an educational tool, not a plan.
a) The final report that Spire produced is an educational tool that provides suggested work plan examples that could be used by the Administration to develop a fiscal sustainability plan.
b) A plan that does not exist cannot be implemented.
c) There is a need for a plan that addresses the growing level of expenditures and the lower-than-projected investment portfolio returns.

3. The contract with Spire has grown from an annual award of $95,000 in FY 2014 to a total award of $723,000 in FY 2016.

The sudden growth of the contract and the lack of proper oversight raise broader concerns with respect to procurement and management of contracts.
a) Spire was initially retained in FY 2014 to provide independent financial analysis to the Board of Trustees.

Without any official RFP, [Request For Proposal - meaning no competitive bidding} the contract was amended 4 times to eventually include the responsibility of the development of a Fiscal Sustainability Model.

* The lack of an RFP for the Fiscal Sustainability Model raises questions with respect to compliance with the Procurement Code.

* In addition, because there wasn’t an RFP, the Board of Trustees doesn’t know whether the Spire model (merely an Excel spreadsheet) is the best possible solution at the lowest cost.