Gov. Josh Green blasted Hawaiʻi State Auditor Les Kondo’s preliminary report on his signature tiny homes project, accusing the Legislature’s watchdog of being overly aggressive and expressing an unwillingness to help the administration with the endeavor.
The auditor, Green said, is engaged in a “personal vendetta.”
“Instead of being constructive,” Green said of the audit process, “it became a very caustic, aggressive process.”
“It was very much an interrogation,”
Green added.
Lawmakers in 2025 approved a total of $88.2 million 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’t have receipts or other documents detailing the specific use of public money for some kauhale projects.
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, by prohibiting funding for such off-grid tiny home villages.
Green’s administration has awarded the bulk of kauhale work to the nonprofit HomeAid Hawaiʻi under a series of no-bid contracts, and the management of those contracts is at the center of Kondo’s memo. Kondo has not issued a final report, but last week wrote lawmakers to alert them that his office has found issues that “warrant immediate attention.”
“We are concerned that significant deficiencies in internal control in the State Office of Homelessness and Housing Solutions’ (SOHHS) implementation of the kauhale initiative create an ongoing and substantial risk of improper use of public funds,” Kondo wrote in the memo to members of the Legislature and Ryan Yamane, director of the Hawaiʻi Department of Human Services, which oversees the homelessness office.
In an interview with Civil Beat last week, Green sharply criticized Kondo’s work. Green accused Kondo of verbally attacking mid-level managers working on the initiative.
“That is shocking, and that is exactly what he did,” Green said. “So this is an unconscionable approach he’s taken.”
Green also took issue with the auditor’s overall posture, which the governor said failed to demonstrate a desire to help the executive branch.
“When my people said, ‘We would love your input so you can help us?’ he instead said, ‘I’m not here to help you,’” Green said of Kondo. “I think the auditor is here to help any executive branch do better.”
Finally, Green said Kondo’s memo failed to mention the program’s 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.
By contrast, Green’s kauhale initiative is designed to integrate deeply affordable tiny homes with onsite social and medical services — including, in some cases, onsite medical clinics. The program now provides 940 more beds for homeless people than existed before, Green said.
“In that context, it is an extraordinary success,” Green said. “It does things that we haven’t done before.”
Green added that Kondo sent his memo to the Legislature in the waning days of the session, as lawmakers are making tough budget decisions.
“It is an abomination that, number one, he didn’t look at it more broadly like an intelligent individual should be able to do,” Green said. “And, 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.”
In a statement, Kondo defended his office’s approach of raising what the memo described as problems that warrant immediate attention.
“It is our responsibility to ask direct questions and examine issues of public concern,” Kondo said. “Scrutiny should not be misrepresented as aggression or disrespect. We stand by our approach and remain committed to honest, objective, and fact-based dialogue.”
Kondo said he has always interacted with Green and agency staff “in a professional and respectful manner.”
“Mischaracterizing good-faith oversight does not serve the public, or the principles of accountable government,” Kondo said.
Analogous to the U.S. Congress’s General Accountability Office, state auditors are independent agencies that report to legislatures on the performance of the executive branch. In Hawaiʻi, the state auditor is appointed by the Legislature and reports on executive programs as directed by lawmakers.
According to the GAO standards used in Hawaiʻi, the purpose of performance audits such as the one Kondo is conducting isn’t simply to look at what programs are doing and whether they’re 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.
Kondo’s preliminary memo was not a final report. It didn’t discuss the kauhale initiative’s overall mission and effectiveness or offer final findings and recommendations. Instead, the memo sounded an alarm.
“We believe it necessary to issue this interim communication due to the immediate and continuing risk of waste and improper use of public funds,” the memo said.
The auditor’s office looked at 10 contracts between the state and the nonprofit housing developer HomeAid Hawaiʻi totaling $40 million to develop kauhale on undeveloped state land.
By reviewing invoices, receipts and other documents, the auditor’s office “identified almost $1.7 million that appears to be unsupported, unallowable, duplicative, or not clearly consistent with the contract terms or applicable State requirements,” the preliminary report said.
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.
The homelessness office paid HomeAid another $916,000 in costs the state shouldn’t have paid for various reasons, the memo said. In one instance, the state paid HomeAid twice for the same work.
“These issues appear to be general and recurring rather than isolated,” the memo said.
The memo also pointed to deficiencies in policies and procedures, known as “ internal controls ” in auditing parlance, related to contracting, contract administration and invoice review.
Deficiencies included a lack of processes to assess whether HomeAid’s contract amounts were reasonable and no evidence that Green administration officials had meaningfully reviewed HomeAid’s invoices before paying the contractor.
Green said his administration had gotten approval from Hawaiʻi Attorney General Anne Lopez on “how to approach things under emergency rules.”
Kondo’s criticisms should come as no surprise to Green.
In February 2025, Green’s 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 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.
In another instance, a former construction manager on kauhale projects wrote Green expressing concerns about numerous issues related to the projects, including inadequate internal controls.
Civil Beat’s reporting also pointed out flaws in contract administration, which Kondo’s memo discusses.
In rebutting Kondo’s memo, the governor didn’t address the auditor’s preliminary findings regarding payments or management procedures. The governor acknowledged there’s room for improvement but said the program is an overall success.
“I totally acknowledge that we can make the program better each year,” Green said. “But if you ask people out there, it’s extraordinary. It’s getting a lot of the toughest-to-help homeless individuals off the street.”
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This story was originally published by Honolulu Civil Beat and distributed through a partnership with The Associated Press.
