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The Honolulu Advertiser
Posted on: Thursday, January 31, 2002

'Serious' problems cited at Tourism Authority

By Katherine Nichols
Advertiser Staff Writer

The Hawai'i Tourism Authority, which oversees the $61 million annual state tourism budget, has management deficiencies, possible ethical conflicts and dubious accounting practices, according to a draft of a state audit sent to authority board members and legislators this week.

The 52-page report does not, however, recommend further investigation, and advocates only general improvements, including a more stringent evaluation process, said Sen. Donna Mercado Kim, D-15th (Kalihi Valley, 'Aiea), chairwoman of the Tourism and Intergovernmental Affairs Committee.

The report, prepared by state Auditor Marion Higa, concludes that the authority is "fraught with serious management problems; as a result, significant sums of public funds are administered poorly and with unknown benefit to the state," Kim said, quoting the document, which has not been made public.

Higa declined to comment on the audit. "We don't comment until it's released," she said.

The audit was scheduled to be released to the Legislature 20 days before the current session began. Higa said she could not meet that deadline because her office "had difficulty in getting information from the authority."

The authority now has a chance to review and respond to the audit's findings before a final report is issued.

"It's a draft form; we're doing our responses," said Rick Humphreys, the authority's executive director. "We're not allowed to give out any information regarding the audit."

This is the first audit of the authority, which was formed in 1998 in an effort to increase accountability and financing of the state's marketing of tourism. Previously, the Hawaii Visitors Bureau — which was renamed Hawai'i Visitors & Convention Bureau — led Hawai'i's tourism marketing. The Hawai'i Visitors & Convention Bureau currently has a contract with the authority under which it receives $45 million each year to promote tourism to the state.

"I think it's a scathing report," said Kim, who has often pushed the authority to release more information about its finances and activities. "It points out all of the problems we were asking about last session."

Both Higa and Humphreys declined to cite a date when the final audit might be released.

"We're hoping next week, but that's still not absolute," Higa said. "We gave (HTA) a deadline, but they've asked for an extension, so we'll have to see."

In an authority board meeting yesterday, Humphreys said the deadline for the authority's response to the audit is noon tomorrow.

Higa said that while replies are included, they typically do not significantly alter an audit. "Historically, no, there hasn't been a whole lot of change," Higa said of previous audits. "But it's difficult to predict how this one will go."

When finished, the complete text will appear on the State of Hawai'i Office of the Auditor home page.