UH responds to state auditor's report on Manoa campus

University of Hawaiʻi
Contact:
Carolyn Tanaka, (808) 956-9803
External Affairs & University Relations
Posted: Dec 30, 2005

HONOLULU — University of Hawaiʻi leaders reacted sharply to the recently-released "Systemwide Financial Audit of the University of Hawaiʻi System: Phase I." focused on the University of Hawaiʻi at Mānoa produced by the State Auditor‘s office and made public today.

In a 16-page letter written to State Auditor Marion Higa on December 19 commenting on the draft Audit Report, Interim President David McClain acknowledged her staff‘s effort to fulfill the purpose of the request made in House Concurrent Resolution No. 213, 2005 Regular Session; the resolution was sponsored by House Higher Education Chair Representative Tommy Waters.

McClain commented, "While we do not concur with a number of the findings and conclusions in the Report, we do agree there is room for improvement. Indeed, we are continually striving to do better, and have hired a new Chief Financial Officer with a very strong audit background. These efforts have been reflected in our reports to the Board of Regents and its Audit Committee on the numerous financial and compliance audits we undergo each year and our actions resulting from those audits. We appreciate those instances where our efforts and progress have been acknowledged in the Auditor‘s Report."

"The Mānoa campus is working hard to improve budget transparency and fiscal accountability with a greater emphasis on performance measures," stated Interim Chancellor Denise Konan. "I‘m pleased that the State Auditor has endorsed the direction we‘re taking."

McClain‘s letter states, however, " we strongly disagree with the draft report‘s overall conclusion that ʻthe University of Hawaiʻi at Mānoa cannot fully ensure fiscal accountability.‘" Howard Todo, UH System Vice President for Budget and Finance and Chief Financial Officer, adds, "The financial statements of the University of Hawaiʻi are audited annually by external auditors. The reports of those external auditors have reflected an unqualified opinion that the financial statements of the University are fairly stated in conformity with generally accepted accounting standards. In addition, no material weaknesses in internal controls have been reported as a result of those audits, which have been performed in accordance with generally accepted auditing standards and Government Auditing Standards."

McClain‘s letter also noted that the University disagrees with the Auditor‘s summary findings, stating that "It is in fact the case that the University of Hawaiʻi at Mānoa‘s budget is adequately founded" and "The University of Hawaiʻi at Mānoa does provide an accurate picture of its overall fiscal condition."

McClain also wrote, "We are concerned by the quality of work reflected, for example, by the failure of your staff to ask for budget funding priorities which had clearly been provided to the Legislature before developing a finding asserting that they had not been provided to the Legislature."

Commenting on the final Report, McClain stated, "The Auditor‘s Report contains seemingly willful distortions of the University‘s intentions, as for example in the uses for which the Budget Level Summary report was intended, and in the UH calculation of cost per student, which in fact has substantial value for the purposes for which it is intended. After all the effort that went into this Audit and the ensuing discussion at the exit conference and our written comments on the draft Report, we‘re frankly puzzled as to how and why these distortions of our intentions remained in the final version of the Report."

To view the University‘s full response to the draft Audit Report, visit http://www.hawaii.edu/offices/eaur/govrel/otherdocs/SystemFinAuditPhI-12-2005.pdf.

To view the final Audit Report, visit http://www.state.hi.us/auditor/Reports/2005/05-15.pdf.

ABOUT THE UNIVERSITY OF HAWAIʻI
Established in 1907 and fully accredited by the Western Association of Schools and Colleges, the University of Hawaiʻi is the state‘s sole public system of higher education. The UH System provides an array of undergraduate, graduate, and professional degrees and community programs on 10 campuses and through educational, training, and research centers across the state. UH enrolls more than 50,000 students from Hawaiʻi, the U.S. mainland, and around the world. For more information, visit www.hawaii.edu.