UH Foundation faces new threat of subpoena
By Beverly Creamer
Advertiser Education Writer
The University of Hawai'i Foundation has again been threatened with a subpoena by state Auditor Marion Higa, who told legislators yesterday that UH's private fund-raising arm has not turned over everything she wants to see to complete last year's audit.
"We are still contemplating the issuance of a subpoena to the foundation," Higa told members of the House Finance Committee.
Higa also supported a bill for heightened scrutiny of the foundation by her office and the Legislature. The university and the foundation opposed the bill.
Foundation board chairman Howard Karr said the foundation is carrying out many recommendations, including regular financial reports to the UH Board of Regents. "Given all the work the university and the foundation have done to improve their systems and reporting over the last 12 months, we question the need for House Bill 2547, House Draft 1," said Karr.
The bill was passed out of committee last night, but the effective date was changed to 2010, rather than this year. The measure moves to the House floor for a vote before going over to the Senate.
Higa told legislators that it took 18 months to obtain some documents and that some information still has not been delivered.
In reaction, the foundation's vice president for administration and its chief financial officer, Bill King, said the foundation has provided thousands of documents and has been working hard to comply with Higa's requests.
King said the foundation has withheld information in two areas it considers confidential: work plans and performance assessments of development officers, and a confidential report done by private counsel hired to offer suggestions for organizational restructuring.
"We feel that's way over and beyond what the state auditor should be looking at," he said of the performance goals, notes and work plans of individual fund-raisers within the foundation. "The work plans are filled with prospect information and sometimes comments about net worth and maybe even strategies."
King said the foundation has turned over more than 3,000 records of its expendable accounts and a list of all gifts over $10,000.
The renewed conflict comes as the foundation is opening a four-year campaign to raise about $200 million by 2007 and establish a solid endowment for UH to support and expand programs.
"There's a hopeful optimism that we can get this behind us so we can start fund raising again," King said.
The bill offers Higa's office greater oversight, but also demands that the foundation produce a detailed annual report for the Legislature identifying each department supported by foundation money, with all "purposes and activities" of each department identified.
Higa's partially completed audit was critical of several uses of foundation money. Higa said she found "inappropriate" expenditures for employee holiday, farewell and thank-you parties, the purchase of six rock concert tickets for donors, a $300 gift for a potential donor, a tuxedo rental, and the purchase of 50 football tickets costing $1,450.
The dispute between the foundation and the auditor also encompasses the issue of donor privacy. Foundation board chairman Karr said there are concerns that the new bill "do not adequately protect the privacy rights of our donors."
The bill attempts to address this concern by calling for Higa to have the same privacy standards as the foundation. Higa said that if the bill passes, she will ensure the confidentiality of donors.
Reach Beverly Creamer at bcreamer@honoluluadvertiser.com or 525-8013.
