Lawmakers Question State Auditor on Agribusiness Agency Investigation
Members of a House inquiry committee are investigating a public agricultural company for its apparent lack of progress in making profits on former sugar and pineapple land, as well as having no plan or policy clear on how to achieve this.
Meanwhile, the same committee is also investigating how state auditor Les Kondo’s office came to these conclusions in a report released earlier this year.
This report on Agribusiness Development Corp. revealed that the agency created by the Legislature was deficient in several key areas. It has purchased over 22,000 acres since its inception in 1994, but has done little to develop this land and does not have the plans to manage it.
Although it recently showed progress in advancing a project in Wahiawa, ADC largely failed, according to the audit report.
State Auditor Les Kondo told the committee on Monday that he was surprised his office also appeared to be caught up in the House’s investigation of government entities. The panel of lawmakers is also investigating a state land agency.
In his view, a review of his desk should be beyond the reach of the House committee. He believes the committee’s questioning is an extension of an investigation into his desk led by Speaker of the House Scott Saiki earlier this year.
“I hope the committee drops the pretext,” Kondo said. âLet’s put our cards on the table. Let’s honestly discuss whatever you want to discuss, whatever your concerns.
House Majority Leader Della Au Belatti, the committee chair who posed the most in-depth questions to Kondo’s office, disagreed with her assessment and said the committee’s mandate is sufficient. wide to include the auditor survey.
Belatti continued with questions about how Kondo’s office performed the audit, often delving into the finer details of government accounting standards and auditing practices.
Representative Mark Hashem asked why the audit found that CDA lacked policies and procedures to manage their land. Hashem said his office had received documents outlining those policies, as well as others challenging claims that the ADC did not have the proper controls to keep some of its packages secure.
“If we don’t get documents and we don’t get answers, we don’t know what we don’t know,” Kondo said.
Later in the hearing, Kondo said his office met with CDA executive director Jimmy Nakatani before releasing the audit. He said it would have been an opportunity to provide the auditors with all the documents to respond to the findings.
“I find it a little strange that they don’t address this in their exit statement and comment on it later,” said Rep. Dale Kobayashi.
Kondo also said he offered to meet again with CDA leadership and its board to review the findings and discuss ways to develop plans to address them, but he has not received any feedback. reply.
The CDA audit also criticized the agency’s record keeping. At the time the audit was carried out, the Kondo team found that the financial documents were in such a mess that a financial audit could not be performed.
Kondo told the committee that CDA had hired an accounting firm, KMH LLP, to sort the records. During this time, the auditor has contracted with the accounting firm Accuity to perform an audit of the files made available by KMH.
Kondo expects the financial audit to reflect the findings of its performance audit of CDA.
âThere will be some important findings in the report,â Kondo said. “They will find significant flaws in these financial records and in these processes that CDA hasâ¦ to maintain these records, the accuracy of these records.”
The ADC has previously told lawmakers it does not have the staff to compile the documents and said in 2018 it was too busy to be audited.
CDA critic Amy Perusso asked Kondo who is responsible for hiring more staff and making sure documents are in order. The auditor said Perusso’s questions are best addressed to ADC.
The CDA is scheduled to appear before the House committee on Tuesday morning, with Kondo returning for another round of questioning Tuesday afternoon.