Former National Emergency Grant Manager, Tuimavave Tauapa’i Laupola supports the move by Governor Lolo Matalasi Moliga to challenge the decision by the USDOL to seek from ASG repayment of $2.5million in non allowable costs under the National Emergency Grant (NEG) program.

In 2011, the Native Hawaiian Holding Company (NHHC) signed a contract with the government to provide training and employment in the contact center industry for 900 NEG participants and authorized it to operate job placement and supportive services in a setting that would serve as part of the Workforce Investment Act (WIA) Workforce System which was overseen by Human Resources.

The Federal Audit Report (FAR) issued last year disclosed that costs totaling $2.53million are being questioned and USDOL is asking for repayment.

Last week the governor, during a teleconference meeting with his cabinet, informed his directors he’s seeking thorough information prior to anything being done on this matter, because this is a substantial amount of money.

RESPONSE TO FAR

Former NEG Manager Tuimavave provided a report in response to the Auditor’s Report, noting there was a failure to respond to FAR and as a result, the Treasury office has established policies and procedures to ensure the submission of timely responses to findings for all future FARs.

The ASNEG report also pointed out there was evidence of training with sub recipients regarding general administrative requirements. It noted that proper oversight did occur and as recommended by FAR, ASNEG worked with the sub recipient NHHC.

ASNEG provided FAR with evidence documenting that proper oversight measures were taken to ensure that costs incurred by NHHC met the program criteria for allowable costs and activities. “As a result of these oversight measures, ASNEG [themselves] discovered questionable costs with the NHHC financial reports. ASNEG financial reviews of the reports submitted by NHHC were handed over to the auditors — which led to the $2,538,651 questioned cost finding.”

According to the ASNEG response, the NEG is a complex program and ASNEG experienced the failure of a major contract for job placement and other activities.

“The contract with NHHC first showed signs of difficulty in late summer 2012. We followed a clear process proving technical assistance, then focusing on compliance and finally withholding the final payments for cause.” (The payment was for $1.2 million).

ASNEG’s report further states that this resulted in a series of lengthy formal memos and the engagement of legal counsel.

In March 2013, ASNEG was made aware of the NHHC’s Vice President being indicted on charges that were unrelated to the NHHC contract. At that point, ASNEG realized that non-compliance was more likely intentional fraud and took action to receive assets, and with the help of USDOL Region 6 partners and the National Office and consultant Social Policy and Research, documented the entire relationship with NHHC.

In the meantime, ASNEG has reminded the Attorney General’s office of ASNEG’s request to go after NHHC for the unallowable costs of $2.5million, according to Tuimavave.