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HOUSE OF REPRESENTATIVES |
H.R. NO. |
157 |
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THIRTY-THIRD LEGISLATURE, 2026 |
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STATE OF HAWAII |
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HOUSE RESOLUTION
REQUESTING THE attorney general and the state AUDITOR TO CONDUCT A COMPREHENSIVE FINANCIAL, PERFORMANCE, AND COMPLIANCE AUDIT OF NONPROFIT ORGANIZATIONS RECEIVING STATE FUNDS FOR HOMELESSNESS-RELATED SERVICES.
WHEREAS, the Hawaii State Legislature recognizes that homelessness remains a critical issue across the State, particularly within the City and County of Honolulu; and
WHEREAS, the State annually expends significant public funds for homelessness services through Grant-in-Aid pursuant to HRS Chapter 42F, direct appropriations, state-administered grants and contracts, and pass-through funding to counties and affiliated agencies; and
WHEREAS, pursuant to HRS 23-4, the State Auditor has the authority to conduct post-audits of the transactions, accounts, programs, and performance of all departments, offices, and agencies of the State and its political subdivisions; and
WHEREAS, pursuant to HRS 28-2.5, the Attorney General has authority to investigate and enforce compliance with state laws and contractual obligations involving the expenditure of public funds; and
WHEREAS, public funds appropriated for homelessness-related services must be expended in accordance with legislative intent, measurable performance outcomes, fiscal accountability standards, and the public trust; and
WHEREAS, the Legislature finds that a comprehensive review of nonprofit organizations receiving state funds for homelessness services is necessary to ensure transparency, effectiveness, fiscal responsibility, and measurable reductions in homelessness; now, therefore,
BE IT RESOLVED by the House of Representatives of the Thirty-third Legislature of the State of Hawaii, Regular Session of 2026, the Attorney General and the State Auditor are requested to conduct a comprehensive financial, performance, and compliance audit of nonprofit organizations receiving state funds for homelessness-related services; and
BE IT FURTHER RESOLVED the audit shall include nonprofit organizations receiving funds through the Grant-in-Aid process under HRS Chapter 42F, direct legislative appropriations, state-administered grants or contracts, or City and County funds which originated from the State; and
BE IT FURTHER RESOLVED the audit shall include nonprofit organizations engaged in emergency shelter operations, transitional housing, permanent supportive housing, street outreach, behavioral health services, substance abuse treatment, food distribution, and case management services; and
BE IT FURTHER RESOLVED the audit shall initially prioritize nonprofit organizations operating within the City and County of Honolulu, with subsequent statewide review; and
BE IT FURTHER RESOLVED the audit shall include, but not be limited to the following:
(1) Total public funds received over the previous fiscal year;
(2) Percentage of funds expended on direct client services, administrative overhead, executive compensation, and subcontracted services;
(3) Executive salaries and benefits compared to program expenditures;
(4) Real property acquisitions, leases, or capital improvements funded in whole or in part with public funds;
(5) Compliance with reporting requirements under HRS Chapter 42F;
(6) Identification of duplicative or overlapping services funded by multiple state sources; and
(7) Verification of client counts and service delivery data reported to the State; and
BE IT FURTHER RESOLVED that the audit shall evaluate measurable performance metrics, including but not limited to the following, as applicable:
(1) Cost efficiency metrics:
(A) Cost per individual served;
(B) Cost per successful housing placement;
(C) Cost per bed per night (for shelters); and
(D) Administrative cost ratio (administrative costs as a percentage of total expenditures);
(2) Housing outcome metrics:
(A) Number and percentage of clients placed into permanent housing;
(B) Average length of stay in shelter or transitional programs;
(C) Housing retention rates at six months and twelve months; and
(D) Returns to homelessness within twelve months;
(3) Service delivery metrics:
(A) Number of individuals served annually;
(B) Case manager-to-client ratios;
(C) Average time from intake to housing placement; and
(D) Utilization rates of funded beds or units;
(4) System impact metrics:
(A) Measurable reductions in unsheltered homelessness within service areas;
(B) Coordination with State and County homelessness initiatives; and
(C) Participation in coordinated entry systems and data reporting systems; and
(5) Data integrity standards:
(A) Verification of data reported through the Homeless Management Information System (HMIS);
(B) Cross-checking reported service outcomes with actual placements; and
(C) Identification of discrepancies between reported and verified outcomes; and
BE IT FURTHER RESOLVED the Attorney General is requested to:
(1) Review compliance with contractual obligations;
(2) Investigate any misuse, misrepresentation, or unlawful expenditure of public funds;
(3) Determine whether corrective actions, civil enforcement, or legislative remedies are warranted; and
(4) Recommend statutory changes to strengthen accountability and enforcement mechanisms; and
BE IT FURTHER RESOLVED the Auditor shall submit a report to the legislature no later than twenty days prior to the convening of the Regular Session of 2027, which shall include:
(1) Findings of fact;
(2) Comparative performance analysis among audited entities;
(3) Identification of best practices and underperforming programs; and
(4) Recommendations for funding restructuring, performance-based contracting, standardized statewide reporting requirements, and statutory amendments; and
BE IT FURTHER RESOLVED that certified copies of this Resolution be transmitted to the Governor, Attorney General, State Auditor, and Mayor of the City and County of Honolulu.