Audit follow-up notes improvements to Hawaiʻi County affordable housing credit program

A follow-up review of the Hawaiʻi County affordable housing credit program notes significant progress by Hawaiʻi County Office of Housing and Community Development to strengthen accountability, transparency and oversight.

Six of seven recommendations from a 2023 performance audit were fully implemented, which was confirmed by the county auditor in the new review.

No. 7 is in progress.

It involves updates to Chapter 11 of Hawaiʻi County Code to support future adoption of administrative rules governing the county’s affordable housing programs.

Hawaiʻi County Office of Housing and Community Development implemented standardized procedures, strengthened internal controls and formalized policies to support consistent program administration.

Formal adoption of administrative rules will follow completion of Chapter 11 revisions.

The original performance audit was issued in February 2023 and evaluated the administration, oversight and internal controls related to the affordable housing credit program, identifying areas of improvement.

Reforms and implementation efforts from the past 3 years were reviewed and assessed in the follow-up review, which found the county housing office completed substantial operational reforms and accountability measures designed to strengthen safeguards, improve oversight and build long-term program integrity.

These actions include:

• Formalizing written policies and procedures for administering Chapter 11 affordable housing requirements.
• Increasing monitoring and compliance oversight of affordable housing agreements and credits.
• Implementing technology and data tools to improve management and tracking of affordable housing projects and credits.
• Strengthening segregation of duties and internal review processes.
• Providing ongoing staff training related to affordable housing administration and internal controls.
• Expanding transparency and reporting measures including quarterly reporting requirements and enhanced documentation standards.

“The follow-up report reflects the dedication of our [Hawaiʻi County Office of Housing and Community Development] staff to strengthen oversight and to deliver affordable housing to our community with integrity,” said Hawaiʻi County Mayor Kimo Alameda in a release about the review.

Updated procedures were implemented requiring certification, authentication and verification processes prior to the award, transfer or redemption of affordable housing credits.

Additional safeguards now include expanded supervisory review, standardized templates and checklists, ongoing compliance monitoring and quarterly reporting to Hawaiʻi County Council.

“We appreciate the Office of the County Auditor’s partnership in identifying areas for improvement and recognizing reforms that have strengthened the program’s oversight, transparency and administration,” said Hawaiʻi County Housing Administrator Kehaulani Costa in the release.

The report also highlights the development of the county housing office Affordable Housing Dashboard, an interactive mapping and data tool that tracks affordable housing projects around Hawaiʻi Island.

Information related to project status, unit counts, affordability levels and housing inventory, with additional functionality under development for tracking affordable housing credits, is centralized in the dashboard.

View the Affordable Housing Dashboard online.

“Working in close collaboration with [Hawaiʻi County Office of Housing and Community Development] staff, the Office of the [Hawaiʻi] County Auditor, Corporation Counsel and other county partners, we have implemented stronger internal controls, formalized procedures, improved tracking and reporting systems and enhanced oversight practices,” said Anne Bailey in the release.

Bailey oversees the Community Development Division of the county housing office, which is responsible for administering Chapter 11.

“These improvements reflect a sustained effort to strengthen safeguards and build long-term program integrity, positioning the program for more consistent, transparent and effective delivery of affordable housing moving forward,” she added.

The follow-up report is available online through the Hawai’i County auditor’s office.