Tourism board hires consultant

By Katherine Nichols
Advertiser Staff Writer

The Hawaii Tourism Authority, stung by an audit that concluded it was mismanaging its $61 million annual budget and failing to adequately account for how the money was being used, will spend as much as $24,000 on a consultant in the next three months to improve accountability.

Since its inception in 1998, the authority has awarded close to 390 contracts totaling more than $137 million, according to February's state audit. Yet insufficient monitoring of those contracts "has resulted in serious deficiencies in the contracting process and opens the authority to waste and fraud," the audit said.

It said the tourism authority paid millions to the Hawai'i Visitors and Convention Bureau "with little justification." Inadequate documentation was cited as the most common flaw.

"We really took the auditor's report to heart," said Roy Tokujo, chairman of the tourism authority and president and chief executive of Cove Entertainment.

The authority hired Frank Haas, former vice president of marketing for Ohana Foundation, a nonprofit developer of educational software that closed in the fall. Haas also served as chief executive and managing director of Ogilvy Mather Advertising.

Haas will help the authority establish criteria for all marketing contracts, as well as "assess the relationship we have with the bureau," Tokujo said, referring to the $45 million contract the tourism authority has with the Hawaii Visitors and Convention Bureau that expires at the end of this year.

When Haas, who earned his business degree in marketing from Northwestern University, was asked if his background might be ill-suited for establishing accountability in contracts, he replied, "If you're trying to figure out the accountability, you have to understand what it is they're trying to accomplish, and that requires some understanding of marketing. It all comes down to a systematic procedure for evaluating events so it's objective and fair."

It is worth the relatively small cost to have Haas analyze the details of each contract so the board can remain focused on the big picture, said tourism authority board member David Carey, president and chief executive of Outrigger Hotels & Resorts.

"We've got millions of dollars going out the door," he said, adding that smart people "almost always pay their way."

Haas could be hired as a full-time staff member when his temporary contract expires June 30, Carey said. But because the search continues for an executive director to replace Rick Humphreys, few staff changes will occur until the new director and board members have settled in.

In terms of accountability, the authority's goal is to hold every sporting event, festival and marketing contractor accountable for delivering measurable outcomes and filing a timely report explaining where and how the money was spent, Haas said.

Currently, the authority has 16 full-time paid staff members, three independent contractors (including Haas), and 11 unpaid voting board members.