An internal audit report presented to the University of Hawaii Board of Regents’ audit committee criticizes Kapiolani Community College’s Culinary Arts Program for failing to track its inventory and spending nearly 70 percent of its revenue on food and drink costs. 

In addition to providing culinary arts instruction to roughly 450 students each year, the program runs two cafeterias, two restaurants, banquet rooms and a booth at the KCC farmers’ market.

The university’s auditing office looked at inventory figures recorded in 2011 and 2012 — $90,500 and $106,800, respectively — and found that program administrators didn’t determine whether beginning and ending stock values were consistent with purchases and sales. Such oversight, auditing Director Glenn Shizumura said, means that the program would have a hard time determining errors and theft. 

The program also fails to compare actual expenses to expected costs, according to Shizumura. 

In addition, Shizumura estimated that food and drink costs accounted for 68 percent and 66 percent of the program’s total revenues in 2011 and 2012, respectively — much larger ratios than those expected at comparable programs. Shizumura couldn’t, however, say exactly how those percentages compare to cost ratios elsewhere. 

But community colleges Vice President John Morton stressed that the culinary program and its operations aren’t designed to make a profit.

“We’re not running restaurants — we’re running instructional programs,” he said. Students “aren’t auditable figures.”

He said it’s difficult to track every financial detail of a program whose purpose is to give students the skills they need to succeed in the culinary world. 

Still, regents urged university administrators to better manage the program’s finances and minimize food and drink expenditures. 

Audit committee Chair James Lee also recommended that the college charge the Hawaii Farm Bureau more for the farmers’ market, which is held every Tuesday and Saturday and includes between 20 and 65 vendors, respectively, including some well-established non-farmers who sell professional products. 

Shizumura in his presentation said he doubted that the college is getting its “fair share” from the farmers’ market.

Meanwhile, an eight-member advisory group that’s been tasked with reviewing the university’s operational and financial structures said today that the Board of Regents generally operates according to par with best practices but could use work in some areas.

Review of the Board of Regents policies was among several tasks assigned to the group. It’ll soon report on its assessment of how authority is delegated among university-wide administrators. (Civil Beat looked into that topic today in its piece “Time for a Makeover for the University of Hawaii?”)

One of the main recommendations today is that authority over the university’s general counsel be shifted from the Board of Regents to the president.

Photo courtesy of KCC.

— Alia Wong