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.

HR157

HOUSE OF REPRESENTATIVES

H.R. NO.

157

THIRTY-THIRD LEGISLATURE, 2026

STATE OF HAWAII

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

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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

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BE IT FURTHER
RESOLVED the audit shall initially prioritize nonprofit organizations operating
within the City and County of Honolulu, with subsequent statewide review; and

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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;

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(3)
�
Executive salaries and benefits compared to
program expenditures;

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(4)
�
Real property acquisitions, leases, or
capital improvements funded in whole or in part with public funds;

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(5)
�
Compliance with reporting requirements under
HRS Chapter 42F;

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(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

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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;

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(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;

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(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

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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

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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

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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.

OFFERED BY:

_____________________________

Report Title:
�

Audit;
Attorney General; Reporting; Nonprofit Organizations; Homelessness; Funding