THE SENATE
S.C.R. NO. 51
S.D. 1
NINETEENTH LEGISLATURE, 1998
STATE OF HAWAII
SENATE CONCURRENT
RESOLUTION
REQUESTING A FINANCIAL AND MANAGEMENT AUDIT OF 'OLELO:
THE
CORPORATION FOR COMMUNITY TELEVISION.
1 WHEREAS,
in 1984, Congress passed the Cable Communications
2 Policy Act which permitted the franchising
authorities of the
3 cable television companies, such as
the State of Hawai'i, to
4 require their franchisees, the cable
companies, to provide
5 funds for public, education, and government
(PEG) access; and
6
7 WHEREAS,
the State supports PEG access because of the
8 substantial benefit such access provides
to the residents of
9 the State, and requires the cable
companies to set aside moneys
10 for PEG access; and
11
12 WHEREAS,
the State also was instrumental in starting up
13 private, nonprofit cable access organizations
to implement PEG
14 access; and
15
16 WHEREAS,
on O'ahu, the cable access organization was named
17 'Olelo: the Corporation for Community
Television, which has a
18 written contract with the State to provide
PEG services for the
19 entire O'ahu area; and
20
21 WHEREAS,
'Olelo is a relatively well financed
22 organization, one of the largest PEG organizations
in the
23 nation, and has been the center of a certain
amount of
24 controversy for years over its practices
and its budgeting; and
25
26 WHEREAS,
some concern has been voiced over current 'Olelo
27 management practices regarding, among other
things, equipment
28 purchases and depreciation policies; and
29
30 WHEREAS,
the State has investigated 'Olelo twice in recent
31 years, through a Legislative Reference
Bureau report and a
32 report prepared under the auspices of the
Department of
33 Commerce and Consumer Affairs; and
34
35 WHEREAS,
neither of these studies contained a financial
36 audit as 'Olelo is a private nonprofit
organization and is not
Page 2
51
S.C.R. NO.
S.D. 1
1 required to provide the State with
full financial disclosure;
2 and
3
4 WHEREAS,
the State of Hawai'i is committed to making the
5 best use of its PEG (public, education,
and government) access;
6 and
7
8 WHEREAS,
the agreements between `Olelo and the Department
9 of Commerce and Consumer Affairs require
`Olelo to provide a
10 minimal amount of information; and
11
12 WHEREAS,
the State is free, upon the expiration of its
13 contract with 'Olelo, to contract with
another provider to
14 provide PEG access; and
15
16 WHEREAS,
if 'Olelo were to agree to a management and
17 financial audit, this might relieve, in
large part, the State's
18 concerns about 'Olelo's control of this
public resource; now,
19 therefore,
20
21 BE IT RESOLVED
by the Senate of the Nineteenth Legislature
22 of the State of Hawaii, Regular Session
of 1998, the House of
23 Representatives concurring, that 'Olelo
is requested to
24 undertake a full management and financial
audit of its
25 operations by an impartial second party
auditor; and
26
27 BE IT FURTHER
RESOLVED that the Department of Commerce and
28 Consumer Affairs shall oversee the audit
by reviewing and
29 approving the proposed auditor as well
as the scope of the
30 audit; and
31
32 BE IT FURTHER
RESOLVED that 'Olelo is requested to present
33 its audit to the legislature no later than
twenty days before
34 the convening of the Regular Session of
1999; and
35
36 BE IT FURTHER
RESOLVED that certified copies of this
37 Concurrent Resolution be transmitted to
the Executive Director
38 of 'Olelo, the Chairperson of the Board
of 'Olelo, and the
39 Director of Commerce and Consumer Affairs.
STAND. COM. REP. NO. 3120
Honolulu, Hawaii
, 1998
RE: S.C.R. No. 51
S.D. 1
Honorable Norman Mizuguchi
President of the Senate
Nineteenth State Legislature
Regular Session of 1998
State of Hawaii
Sir:
Your Committee on Commerce, Consumer Protection,
and
Information Technology, to which was referred S.C.R. No. 51
entitled:
"SENATE CONCURRENT RESOLUTION REQUESTING
'OLELO: THE
CORPORATION FOR COMMUNITY TELEVISION TO
CONDUCT A FINANCIAL
AUDIT TO ASSURE THAT THE PEOPLE OF HAWAI`I
ARE BEING
APPROPRIATELY SERVED,"
begs leave to report as follows:
The purpose of this concurrent resolution
is to request that
`Olelo undertake a financial audit and report the results of the
audit to the legislature.
Your Committee received testimony supporting
the measure
from the Department of Commerce and Consumer Affairs, a member of
the Board of Directors of `Olelo, and the Executive Director of
`Olelo. Testimony supporting the intent but opposing the measure
in its current form was received from the Community Television
Producers' Association. Testimony opposing the measure was
received from an interested citizen.
Your Committee finds that `Olelo receives
three percent of
annual revenues from Oceanic Cable for public, education, and
government (PEG) access programs as mandated by the 1984 Cable
Communications Policy Act.
Your Committee further finds that concerns
have been raised
regarding `Olelo's use of the PEG access funds, and the results
of an audit `Olelo instituted itself.
SCR51 SD1
STAND. COM. REP. NO. 3120
Page 2
Therefore, your Committee amended the
concurrent resolution
by:
(1) Requesting that a management audit
as well as a
financial audit
be undertaken by `Olelo;
(2) Requesting that the audit be conducted
by an impartial
second party
auditor;
(3) Requiring the Department of Commerce
and Consumer
Affairs to review
and approve the proposed auditor as
well as the
scope of the audit;
(4) Adding additional language to detail
concerns regarding
`Olelo's management
practices and its withholding of
information
from the Department of Commerce and
Consumer Affairs;
and
(5) Amending the title to read:
REQUESTING
A FINANCIAL AND MANAGEMENT AUDIT OF `OLELO:
THE CORPORATION
FOR COMMUNITY TELEVISION.
As affirmed by the record of votes of the
members of your
Committee on Commerce, Consumer Protection, and Information
Technology that is attached to this report, your Committee
concurs with the intent and purpose of S.C.R. No. 51, as amended
herein, and recommends that it be referred to the Committee on
Ways and Means, in the form attached hereto as S.C.R. No. 51,
S.D. 1.
Respectfully submitted on
behalf of the members of the
Committee on Commerce,
Consumer Protection, and
Information Technology,
______________________________
DAVID Y. IGE, Co-Chair
______________________________
WAYNE METCALF, Co-Chair
Date: 4/ 7/98 Time:
8:58 a.m.
Measure: SCR 51
TITLE: REQUESTING A FINANCIAL AND MANAGEMENT AUDIT OF 'OLELO:
THE
CORPORATION FOR COMMUNITY
TELEVISION. (AMENDED TITLE)
INTRODUCERS: Sens. Ige, D., Metcalf, Ihara and Fukunaga
CURRENT STATUS: is Pending Senate Committee on Ways and Means.
SENATE COMMITTEE REFERRAL: 1. Commerce, Consumer Protection,
and Information
Technology 2. Ways and Means
HOUSE COMMITTEE REFERRAL: No information at this time
SENATE COMMITTEE VOTING INFORMATION:
Notice of public decision
making by CPI on 04-06-98 at 9:00 AM in
conference room 016.
The committee on CPI recommends
that the measure be PASSED, WITH
AMENDMENTS.
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ACCESS: Legislative Information Service
Page: 2 of 2
Date: 4/ 7/98 Time: 8:58 a.m.
The votes in CPI were as
follows: 7 Ayes: Senator(s) Ige, D., Metcalf,
Chun Oakland, Kanno,
Levin, Solomon, Slom; Ayes with reservations:
Senator(s) ; none Noes:
Senator(s) ; and 1 Excused: Senator(s) Tanaka