The state agency that for years has struggled to protect Hawai'i 's historic and cultural sites is in danger of losing federal funding that amounts to half its budget.

That alarming prospect could cripple the State Historic Preservation Division, which was put on "high-risk" status this week by the National Park Service. The service manages federal Historic Preservation Fund grants that lately have made up about half of SHPD's annual budget.

In a 138-page report released yesterday, the National Park Service criticized SHPD for operational shortcomings largely related to staffing and availability of information on important sites. The notice placing the agency on high-risk status gives SHPD, part of the Department of Land and Natural Resources, two years to meet certain turnaround goals or face the loss of grant money.

DLNR Director Laura H. Thielen said she has serious concerns about SHPD's ability to meet the goals without assistance from the federal government.

"We don't have the technical expertise or money to get (SHPD ) to the level the National Park Service wants," she said.

Losing the grant money would be a huge blow to the agency's mission that includes protecting archaeological and cultural sites, important architecture, and iwi, or human remains considered sacred by Native Hawaiians. It also could hamper federally funded construction projects and access to $1.1 million in matching grants.

This fiscal year, SHPD's $1.1 million budget included $571,458 from the Historic Preservation Fund. The federal money, provided because much of SHPD work involves federal projects and the National Historic Preservation Act, has become more important in recent years as state funding of the division has decreased.

"This action is not taken lightly, and comes only after multiple attempts to help the SHPD correct serious deficiencies identified in audits going back as far as 2002," Park Service Director Jonathan Jarvis wrote in the report.

The Park Service said it's committed to helping the state agency, and will send an official to Honolulu to oversee the turnaround effort during the two-year period.

The three major shortcomings cited by the federal report are: inadequate staffing; the lack of a suitable database; and an out of date statewide historic preservation plan.

SHORT STAFFED

Some of the report's criticisms echo complaints lodged over the past decade by concerned entities, including Native Hawaiians, the Society for Hawaiian Archaeology, the O'ahu Island Burial Council, the State Auditor and members of the Legislature.

Among the main criticisms in the Park Service review was a finding that SHPD is inadequately staffed, and that some staff lack sufficient job training or qualifications.

Thielen said all staff now meet National Park Service qualification requirements, but she agreed that low staffing levels continue to hinder the agency.

Of 27 positions authorized for SHPD , only 14 are filled. A hiring freeze, furloughs and negative publicity have constrained efforts to fill jobs. Staffing at the agency has been a chronic problem for years, but is worse than in 2008 when SHPD had about 20 employees and a $1.8 million budget.

A relative few criticisms in high-profile cases, such as the agency's decision on a Kaua'i home being built on stilts over iwi, has unfairly contributed to the negative image of the agency and made it difficult to recruit staff, Thielen said.

Among the unfilled jobs today is the architecture branch chief position, which has been vacant since January 2009.

The staffing shortage has created a backlog of project reviews performed by the agency, which handles about 6,000 reviews a year.

"We are buried under compliance reviews," Thielen said.

SHPD reviews development plans on private and government property to ensure that historic and cultural sites are protected.

The Park Service report said rapid staff turnover and the loss of institutional memory in recent years have adversely affected the quality of the reviews, and in some cases led to redundant reports with conflicting conclusions.

Among top departures plaguing SHPD were the 2007 resignation of agency administrator Melanie Chinen, a former policy adviser to Gov. Linda Lingle who took the job two years after prior administrator Don Hib-bard abruptly resigned in 2002. Hibbard's departure came in the wake of a scathing analysis by State Auditor Marion Higa who advised Lingle to improve management of the agency.

Puaalaokalani Aiu, a former analyst with the Office of Hawaiian Affairs and public relations consultant, has led SHPD since April 2008.

DATABASE LACKING

Another major shortcoming cited by the Park Service is the lack of a searchable, online database of historic and cultural sites identified or reviewed by SHPD .

The agency has information on 38,000 known historic properties in Hawai'i, and adds about 1,000 new sites to the inventory annually. The division also has more than 3,500 archaeological reports, but access is limited to physical review in SHPD's Kapolei headquarters or Neighbor Island field offices.

Only two preservation plans for ongoing development projects are posted on the agency's Web site, www.hawaii.gov/dlnr/hpd.

The Park Service evaluation found that organizational problems and incomplete files result in inconsistent information of site descriptions, locations and other details that could produce detrimental results.

Though the report didn't detail any specific cases with detrimental results, a May 10, 2007, article in The Advertiser said the agency was unable to determine if an SHPD -approved plan to grade part of a Big Island coffee farm destroyed a suspected heiau, agricultural terraces and other features listed on the National Register of Historic Places.

The Park Service said a comprehensive database should be linked to geographic mapping software and include SHPD review documents, which would be valuable to the public, researchers and help the division with its work.

SHPD hasn't maintained a centralized statewide database for internal use since 2005. Thielen said an archaeologist is working on improving the internal file-sharing system at the expense of other work.

The public database is a daunting task, Thielen said, especially because even if money were provided to develop such a system, it would be hard to implement within two years because of procurement rules, furloughs and hiring freezes.

Thielen said she's asked the Park Service to help develop the requested system.

A third major shortcoming cited by the Park Service is SHPD's failure to update its statewide historic preservation plan, which directs the agency in its mission.

By law, the plan is supposed to be updated every five years. An update of the 2001 plan is in progress.

An updated plan would help SHPD focus its limited resources and prioritize its mission.

Thielen and Aiu said the agency accomplishes much good work with the limited staff it has. For instance, the agency helped reinter several hundred sets of iwi in the past three years.