By NANCY COOK LAUER
Stephens Media
When the Hawaii County Council last year took the unprecedented step of dipping into the county’s disaster fund to give the nonprofit Food Basket Inc. an emergency $200,000 appropriation, strict reporting standards were put into place to ensure full accountability of taxpayer money.
But a Stephens Media investigation has found that none of the reporting requirements in the May 3, 2012, contract were met, despite $199,000 of the emergency money given to the Food Basket, as well as $74,000 from a separate council action. The required reports couldn’t be located by the Clerk’s Office, former council members or Mayor Billy Kenoi’s administration.
Food Basket Executive Director En Young, who has been on the job since February, assured the newspaper the county’s money was spent only for food.
The Food Basket last month moved into a new $420,000 building it had purchased in Hilo, twice the size of its previous building. In a March 22 letter to Kenoi inviting him to a private grand opening ceremony, Young stated, “through the generous support of private foundations and individuals, local businesses and individuals in the public sector such as yourself, we have made the dream of upgrading our Hilo facility a reality.”
In addition to the $200,000 from the county disaster and emergency fund, the County Council had pledged another $75,000 from the legislative auditor’s account.
Young couldn’t find the required reports, but he did provide Stephens Media a 2012 statement showing the Food Basket had purchased $268,869 worth of Spam, rice, canned beans, canned fruits and vegetables and other food from Hilo-based T.Hara & Co. LLC in May and June.
Young also provided bank statements showing the Food Basket created two restricted bank accounts for the checks and copies of ledger entries showing the money was spent for food.
“Although there may be some confusion as to who received the reports, there is no confusion when it comes to what the money was spent on, who the products went to and the magnitude of the benefit to the community,” Young said Thursday. “We are very grateful for the county’s contribution.”
The Food Basket, upon receiving the $199,000, was to submit monthly written reports to the County Council chairman or his designee, describing project status and all expenditures to date, according to its contract with the county.
A final written report, including “an explanation of the public benefits derived from the awarding of the grant, a complete accounting statement of all expenditures supported by County of Hawaii grant funds and a listing of other funding sources and amounts obtained during the contract period,” was due by Sept. 1. At that time, the Food Basket would receive the final $1,000.
Kenoi, who voiced opposition to the council about using money from the disaster fund, ultimately reluctantly signed the bill that the council unanimously passed. He said in his March 20, 2012, bill-signing message that the disaster fund is meant “to restore and revitalize our island in the wake of a catastrophic disaster, such as a hurricane, earthquake or tsunami.”
The council declared the food emergency based on the fact that 20 percent of all county residents use the Food Basket on a continuous basis. The nonprofit reported a 41.6 percent increase in services accessed, from 619,344 in 2010 to 876,679 in 2011. Nor is the emergency area-specific, the resolution stated.
Kenoi noted that the county already provides $1.5 million in grants each year for which nonprofits, including the Food Basket, compete. He urged the council to hold the nonprofit accountable and that the money go directly for “nutritious food for the truly needy,” and not for salaries, wages, administrative costs or other nonfood uses.
The mayor also wanted “a complete and thorough accounting of how the county funds were spent by the Food Basket, including verifiable reports naming donors and recipients,” according to his message.
Neither the County Clerk’s Office nor the Finance Department had copies of reports. The Finance Department provided proof a check for $199,000 and another for $74,000 were cashed.
The Food Basket operated on a $809,003 budget in 2011, the most recent figures available. Of that, $485,402 was attributed to the East Hawaii program and $323,601 was attributed to the West Hawaii program. The agency, with 10 full-time employees, distributed 1.25 million pounds of food.
The nonprofit serves as a clearinghouse and storage center for donated food that is in turn distributed to soup kitchens, senior programs, homeless and abuse shelters, and other nonprofit agencies. It has two warehouses with refrigerators and areas to store large quantities of food.
Former Council Chairman Dominic Yagong, contacted last week, said “I don’t recall” receiving any monthly reports, but he was assured the money would be spent on food. Yagong referred the question to former Kohala Councilman Pete Hoffmann, who had sponsored the bill granting the money to the Food Basket.
“It was already established that the money would be used for purchasing food,” Yagong said, “because that’s what their request was for. They had a serious shortage of food.”
Hoffmann said he sponsored the bill because he’s a big Food Basket supporter and he knew they were hurting, but “I’m not an employee.”
“I myself don’t know what the Food Basket did or did not do with respect to the reporting requirements,” Hoffmann said. “I thought the idea of monthly reporting would have been to the Finance Department.”
The council passed the election-year measures after a round of emotional speeches from councilors and testimony from supporters declaring island families were starving and children were going to bed hungry.
Kenoi said Thursday he’s “very disappointed” in the apparent lack of transparency and accountability. He said the administration had put the onus on the council to track the spending because of the unusual method of getting the funding. The council had declared an islandwide public health emergency in order to access the disaster account.
Kenoi reiterated that he supports the Food Basket, but he expected oversight. He promised to look into the situation.
“It’s incumbent on the clerk and the council to make their oversight,” Kenoi said. “If that hasn’t been done, we’ll follow up to make sure it is done.”
Email Nancy Cook Lauer at ncook-lauer@westhawaiitoday.com.
