Gov. Josh Green blasted Hawai\u02bbi State Auditor Les Kondo\u2019s preliminary report on his signature tiny homes project, accusing the Legislature\u2019s watchdog of being overly aggressive and expressing an unwillingness to help the administration with the endeavor.<\/p>\n
The auditor, Green said, is engaged in a \u201cpersonal vendetta.\u201d<\/p>\n
\u201cInstead of being constructive,\u201d Green said of the audit process, \u201cit became a very caustic, aggressive process.\u201d<\/p>\n
\u201cIt was very much an interrogation,\u201d Green added.<\/p>\n
Lawmakers in 2025 approved a total of $88.2 million<\/a> for the sprawling statewide kauhale initiative in 2026 and 2027, but also required Kondo to conduct an audit of the program. The request came after reporting by Civil Beat that found the state didn\u2019t have receipts<\/a> or other documents detailing the specific use of public money for some kauhale projects.<\/p>\n Lawmakers also moved to curb excessive operating costs of urban kauhale built without connections to public utility grids, which Civil Beat reporting also had previously exposed<\/a>, by prohibiting funding<\/a> for such off-grid tiny home villages.<\/p>\n Green\u2019s administration has awarded the bulk of kauhale work to the nonprofit HomeAid Hawai\u02bbi<\/a> under a series of no-bid contracts, and the management of those contracts is at the center of Kondo\u2019s memo. Kondo has not issued a final report, but last week wrote lawmakers to alert them that his office has found issues that \u201cwarrant immediate attention.\u201d<\/p>\n \u201cWe are concerned that significant deficiencies in internal control in the State Office of Homelessness and Housing Solutions\u2019 (SOHHS) implementation of the kauhale initiative create an ongoing and substantial risk of improper use of public funds,\u201d Kondo wrote in the memo to members of the Legislature and Ryan Yamane, director of the Hawai\u02bbi Department of Human Services, which oversees the homelessness office.<\/p>\n A \u2018Damning Letter\u2019 To Lawmakers<\/p>\n In an interview with Civil Beat last week, Green sharply criticized Kondo\u2019s work. Green accused Kondo of verbally attacking mid-level managers working on the initiative.<\/p>\n \u201cThat is shocking, and that is exactly what he did,\u201d Green said. \u201cSo this is an unconscionable approach he\u2019s taken.\u201d<\/p>\n Green also took issue with the auditor\u2019s overall posture, which the governor said failed to demonstrate a desire to help the executive branch.<\/p>\n \u201cWhen my people said, \u2018We would love your input so you can help us?\u2019 he instead said, \u2018I\u2019m not here to help you,\u2019\u201d Green said of Kondo. \u201cI think the auditor is here to help any executive branch do better.\u201d<\/p>\n Finally, Green said Kondo\u2019s memo failed to mention the program\u2019s results and innovative concept. Green pointed out that the kauhale initiative differs from the approach of previous administrations, which generally helped homeless people through a patchwork of services including shelters, housing vouchers, social service checks and emergency room visits for medical care.<\/p>\n By contrast, Green\u2019s kauhale initiative is designed to integrate deeply affordable tiny homes with onsite social and medical services \u2014 including, in some cases, onsite medical clinics. The program now provides 940 more beds for homeless people than existed before, Green said.<\/p>\n \u201cIn that context, it is an extraordinary success,\u201d Green said. \u201cIt does things that we haven\u2019t done before.\u201d<\/p>\n Green added that Kondo sent his memo to the Legislature in the waning days of the session, as lawmakers are making tough budget decisions.<\/p>\n \u201cIt is an abomination that, number one, he didn\u2019t look at it more broadly like an intelligent individual should be able to do,\u201d Green said. \u201cAnd, two, to send such a damning letter to the Legislature two weeks before they have to make determinations on funding without getting that fair input.\u201d<\/p>\n In a statement, Kondo defended his office\u2019s approach of raising what the memo described as problems that warrant immediate attention.<\/p>\n \u201cIt is our responsibility to ask direct questions and examine issues of public concern,\u201d Kondo said. \u201cScrutiny should not be misrepresented as aggression or disrespect. We stand by our approach and remain committed to honest, objective, and fact-based dialogue.\u201d<\/p>\n Kondo said he has always interacted with Green and agency staff \u201cin a professional and respectful manner.\u201d<\/p>\n \u201cMischaracterizing good-faith oversight does not serve the public, or the principles of accountable government,\u201d Kondo said.<\/p>\n Audits Are Meant To Spot Flaws, Offer Recommendations<\/p>\n Analogous to the U.S. Congress\u2019s General Accountability Office, state auditors are independent agencies that report to legislatures on the performance of the executive branch. In Hawai\u02bbi, the state auditor is appointed by the Legislature<\/a> and reports on executive programs as directed by lawmakers.<\/p>\n According to the GAO standards<\/a> used in Hawai\u02bbi, the purpose of performance audits such as the one Kondo is conducting isn\u2019t simply to look at what programs are doing and whether they\u2019re effective. The audits are also meant to show how the programs are being managed. If they find problems, auditors are expected to help by recommending ways to improve.<\/p>\n Kondo\u2019s preliminary memo was not a final report. It didn\u2019t discuss the kauhale initiative\u2019s overall mission and effectiveness or offer final findings and recommendations. Instead, the memo sounded an alarm.<\/p>\n \u201cWe believe it necessary to issue this interim communication due to the immediate and continuing risk of waste and improper use of public funds,\u201d the memo said.<\/p>\n The auditor\u2019s office looked at 10 contracts between the state and the nonprofit housing developer HomeAid Hawai\u02bbi totaling $40 million to develop kauhale on undeveloped state land. <\/p>\n By reviewing invoices, receipts and other documents, the auditor\u2019s office \u201cidentified almost $1.7 million that appears to be unsupported, unallowable, duplicative, or not clearly consistent with the contract terms or applicable State requirements,\u201d the preliminary report said.<\/p>\n In one instance, the auditor reported, the state homelessness office paid $770,000 to HomeAid, which HomeAid later paid back, indicating that the homelessness office approved HomeAid invoices that included unsupported costs. <\/p>\n The homelessness office paid HomeAid another $916,000 in costs the state shouldn\u2019t have paid for various reasons, the memo said. In one instance, the state paid HomeAid twice for the same work.<\/p>\n \u201cThese issues appear to be general and recurring rather than isolated,\u201d the memo said.<\/p>\n The memo also pointed to deficiencies in policies and procedures, known as \u201c internal controls<\/a> \u201d in auditing parlance, related to contracting, contract administration and invoice review.<\/p>\n Deficiencies included a lack of processes to assess whether HomeAid\u2019s contract amounts were reasonable and no evidence that Green administration officials had meaningfully reviewed HomeAid\u2019s invoices before paying the contractor.<\/p>\n Green said his administration had gotten approval from Hawai\u02bbi Attorney General Anne Lopez on \u201chow to approach things under emergency rules.\u201d<\/p>\n Auditor\u2019s Criticisms Are Not New<\/p>\n Kondo\u2019s criticisms should come as no surprise to Green.<\/p>\n In February 2025, Green\u2019s then-homelessness coordinator, John Mizuno, raised concerns about the high costs of building and operating a kauhale not hooked up to public utilities. Civil Beat reported at the time that taxpayers had paid $21,000 per month<\/a> to provide electricity to one kauhale consisting of 20 100-square-foot tiny homes with a common kitchen, bathrooms and other community buildings. Mizuno stepped down as homelessness coordinator later that month.<\/p>\n In another instance, a former construction manager<\/a> on kauhale projects wrote Green expressing concerns about numerous issues related to the projects, including inadequate internal controls.<\/p>\n