“Aloha is the unconditional desire to promote the true good of other people in a friendly spirit out of a sense of kinship.” - The Most Reverend Abraham Akaka “In Hawaii, we greet friends, loved ones or strangers with Aloha, which means love. Aloha is the key word to the universal spirit of real hospitality, which makes Hawaii renowned as the world’s center of understanding and fellowship. Try meeting or leaving people with Aloha. You'll be surprised by their reaction. I believe it and it is my creed. Aloha to you.” - Duke Kahanamoku Aloha embraces the heart, mind, body and soul.

1. STATE AUDITOR DINGS
HAWAII DEPARTMENT OF TAXATION AND HAWAII FILM OFFICE
BELIEVE IT OR NOT
Audit of Hawaii’s Motion Picture, Digital Media, and Film Production Income Tax Credit - A
Report to the Governor and the Legislature of the State of Hawaii. Report No. 16-08. November
2016. Office of the Auditor, LESLIE H. KONDO, Esq., State Auditor.1
“This is our first audit of the film tax credit.” Page 7.
“Our audit was performed from November 2015 through May 2016 in accordance with generally
accepted government auditing standards.” Page 8.
Notes, Supplied
1. GENERALLY ACCEPTED GOVERNMENT AUDITING STANDARDS (GAGAS)
The Comptroller General of the United States
“The Generally Accepted Government Auditing Standards, also known as the Yellow Book,
provide a framework for conducting high quality audits with competence, integrity, objectivity,
and independence. The Yellow Book is for use by auditors of government entities, entities that
receive government awards, and other audit organizations performing Yellow Book audits.”
Source: GAO http://gao.gov/products/GAO-12-331G
2 Ethical Principles http://gao.gov/assets/590/587281.pdf
1.10 The ethical principles presented in this section provide the foundation, discipline,
and structure, as well as the climate that influence the application of GAGAS. This
section sets forth fundamental principles rather than establishing specific standards or
requirements.
1.11 Because auditing is essential to government accountability to the public, the public
expects audit organizations and auditors who conduct their work in accordance with
GAGAS to follow ethical principles.
1.12 Conducting audit work in accordance with ethical principles is a matter of personal
and organizational responsibility. Ethical principles apply in preserving auditor
independence, taking on only work that the audit organization is competent to perform,
performing high-quality work, and following the applicable standards cited in the
auditors’ report.
1
Prior to appointment as State Auditor, Mr. Kondo was the Executive Director of the Hawaii Ethics Commission.

2. Integrity and objectivity are maintained when auditors perform their work and make
decisions that are consistent with the broader interest of those relying on the auditors’
report, including the public.
1.17 Public confidence in government is maintained and strengthened by auditors
performing their professional responsibilities with integrity. Integrity includes auditors
conducting their work with an attitude that is objective, fact-based, nonpartisan, and
nonideological with regard to audited entities and users of the auditors’ reports.
[Emphasis Supplied]
“We could not gain unredacted access to the letters because they are considered confidential tax
documents that are part of the taxpayers’ returns. Because our access to these certification letters was
restricted, we could not independently verify the certified expenditure and credit amounts that were
provided by the film office.” Page 10.
Notes, Supplied.
1. “The Auditor is provided with the authority to examine and inspect all books, records, files,
papers, documents, and financial affairs of every state and county agency. The Auditor may issue
subpoenas compelling testimony or the production of other evidence.” Legislative Reference
Bureau. Guide to government in Hawaii. Honolulu: September 2013.
http://lrbhawaii.org/gd/gdgovhi.pdf
2. “Public Utilities Commission Chair Randy Iwase said Monday nine sets of confidential
documents relating to the review of the proposed purchase of the state’s largest electric utility
would be made public. In preparation for the hearings, NextEra filed 60,000 pages of documents,
and about 5 percent, or 3,000 pages, of those were marked confidential. Gov. David Ige said
Friday one of his disappointments with the current review is the high number of confidential
documents submitted by NextEra and HEI. Iwase made his announcement in response to requests
to make public the confidential documents from the state Office of Planning, Sierra Club, the
Division of Consumer Advocacy and Ulupono Initiative.” Source: PUC to release confidential
NextEra-related documents. By Kathryn Mykleseth. December 14, 2015. Honolulu Star
Advertiser. http://www.staradvertiser.com/2015/12/14/business/business-breaking/puc-releases-
confidential-nextera-related-documents/
3. Voluntary Disclosure of Tax Information. Please refer to: Tax Information Release No. 2016-
02. May 25, 2016. http://files.hawaii.gov/tax/legal/tir/tir16-02.pdf
4. Statement No. 51 of the Governmental Accounting Standards Board - Accounting and
Financial Reporting for Intangible Assets
http://www.gasb.org/cs/BlobServer?blobkey=id&blobwhere=1175824062778&blobheader=appli
cation%2Fpdf&blobcol=urldata&blobtable=MungoBlobs

3. 2. As used in this Statement, an intangible asset is an asset that possesses all of the
following characteristics:
a. Lack of physical substance
b. Nonfinancial nature
c. Initial useful life extending beyond a single reporting period.
3. The provisions of this Statement apply to all intangible assets except for the following:
a. Assets that meet the description in the preceding paragraph if the assets are
acquired or created primarily for the purpose of directly obtaining income or
profit.
b. Assets resulting from capital lease transactions reported by lessees, which are
addressed in National Council on Governmental Accounting (NCGA) Statement
5, Accounting and Financial Reporting Principles for Lease Agreements of State
and Local Governments, as amended
c. GOODWILL CREATED THROUGH THE COMBINATION OF A
GOVERNMENT AND ANOTHER ENTITY.
What Is Aloha?
To the ancient Hawaiians, Aloha meant ‘God Within Us.” The authentic meaning of Aloha in Hawaii is
one of compassion, sympathy, pity, mercy, kindness, peace, and love: a guideline for life. Living a life of
Aloha means a heart full of gratitude and love for life, overflowing with joy, sharing the “Aloha Spirit”
with others.
“Aloha is being a part of all, and all being a part of me. When there is pain, it is my pain. When
there is joy, it is also mine. I respect all that is as part of the Creator and part of me. I will not
willfully harm anyone or anything. When food is needed, I will take only my need and explain
why it is being taken. The earth, the sky, the sea are mine to care for, to cherish and to protect.
This is Hawaiian, this is Aloha!”
– Translated Ancient Hawaiian Proverb
History Of Aloha
The deep and abiding connection to "Oneness" also embraces those persons departed from the physical
dimension, family and friends who have crossed the rainbow bridge from human to spirit-wholeness.
Souls who made the transition from the physical to the spiritual world continued their journey, often
serving as spiritual guides.
The ancient belief system is based on respect for others, goodness (pono) always for one’s self and others,
and living a life in alignment with universal laws and one’s true identity.

4. Through stories, songs, and chants, Hawaiian children learn early the lessons of Aloha so that the Keiki
(children) might be a living example to others in how to live a life of Aloha. Kupuna (elders) use the
practice of Mo’olelo or storytelling to teach Aloha’s life lessons.
A - ala: watchful, aware, alertness
L - lokahi: working with unity and understanding
O - oia'i'o: truthful, honest, forthcoming
H - ha'aha'a: humility, grace
A - ahonui: patience, perseverance
Aloha profoundly impacts the Hawaiian culture. For enlightened Hawaiians living a life of aloha, the
“Aloha Spirit” personifies a unique way of living: the ultimate lifestyle, the secret to a rich and satisfying
life.
Today, with the help of surfing and it’s laid back approach to life, the well-known expression travels the
world, adopted by multiple languages and earning Hawaii the nickname of the “Aloha State.” “To have or
not have Aloha is the meaning of life.” Live Aloha!
Source: Live Aloha! OluKai. July 19, 2016. https://www.olukai.com/journal/2016/07/20/live-aloha/
___________
IS ALOHA QUANTIFIABLE?
IS ALOHA MEASURABLE BY
GENERALLY ACCEPTED GOVERNMENT AUDITING STANDARDS
(GAGAS)?
___________
SHARING THE ALOHA SPIRIT HERE, THERE AND EVERYWHERE
TODAY, TOMORROW AND EACH AND EVERY DAY
From Wikipedia, the free encyclopedia https://en.wikipedia.org/wiki/Film_and_television_in_Hawaii
The U.S. State of Hawaii is referenced extensively in popular media, supported by efforts of the
state government.
Hawaii Film Office
The Hawaii Film Office is an agency of the U.S. State of Hawaii through the Department of
Business, Economic Development and Tourism. The agency facilitates all in-state film and
television productions and photography shoots, whether they are small, local, or independent
projects or large commercial projects.

5. Each county also has its own film commission that works in concert with the state-run Hawaii
Film Office. These county offices coordinate relations between media producers and the specific
counties within which they film — Big Island Film Office, Honolulu Film Office, Kauai Film
Commission and Maui Film Office. Each film commission is led by a film commissioner,
appointed by respective county mayors, that acts as a liaison with the Governor of Hawaii and
the Hawaii State Legislature in consideration of tax incentives and other benefits granted for
filming in Hawaii.
Feature films
 Strange Frame (2012)
 The Descendants (2011)
 Just Go with It (2011)
 Soul Surfer (2010)
 Princess Kaiʻulani (2009)
 A Perfect Getaway (2009)
 Forgetting Sarah Marshall (2008)
 50 First Dates (2004)
 The Big Bounce (2004)
 Punch-Drunk Love (2003)
 Blue Crush (2002)
 Pearl Harbor (2001)
 Lani Loa (1998)
 Race The Sun (1995)
 Picture Bride (1995)
 Honeymoon in Vegas (1991)
 North Shore (1987)
 Tora! Tora! Tora! (1970)
 Hawaii (1966)
 Blue Hawaii (1961)
 South Pacific (1958)
 From Here to Eternity (1953)
Set, but not produced, in Hawaii
 Lilo & Stitch (2002)
Produced, but not set, in Hawaii
 Strange Frame (2012)
 The Tempest (2010)
 Pirates of the Caribbean: On Stranger Tides (2011)
 Avatar (2009)
 Tropic Thunder (2008)
 The Rundown (2003)
 Windtalkers (2002)
 Final Fantasy: The Spirits Within (2001)
 Jurassic Park 3 (2001)
 To End All Wars (2001)

6.  Six Days Seven Nights (1998)
 Waterworld (1995)
 Jurassic Park (1993)
 Uncommon Valor (1983)
 Raiders of the Lost Ark (1980)
 King Kong (1976 remake)
Television projects
 Hawaii Five-0 (2010-): CBS Series
 Living Lahaina (2007): MTV Series
 Maui Fever (2007): MTV series
 North Shore (2004-2005): Fox series
 Endurance: Hawaii (2004): Discovery Kids reality series
 Hawaii (TV series) (2004): NBC series
 Dog The Bounty Hunter (2004-present): A&E series
 Celebrity Mole Hawaii (2003): ABC series
 Baywatch Hawaii (1999-2001): NBC series
 The Real World: Hawaii (1999): MTV series
 Marker (1995): UPN series
 One West Waikiki (1994-1996): CBS series
 Byrds of Paradise (1994): ABC series
 Jake and the Fatman (1988-1990): CBS series
 Raven (1992) : CBS series
 War and Remembrance (1984): ABC mini-series
 The Thorn Birds (1982): ABC mini-series
 Magnum, P.I. (1980-1988): CBS series
 Fantasy Island (1988): ABC series
 The Don Ho Show (1976-1977): ABC series
 Aloha from Hawaii (1973): NBC special featuring Elvis Presley
 Little People (1972-1974): CBS series
 Hawaii Five-O (1968-1980): CBS series
 Gilligan's Island (1964): CBS series
 Adventures in Paradise (1959-1962): ABC series
 Hawaiian Eye (1959-1963): ABC series
Produced, but not set in, Hawaii
 Lost (2004-2010) ABC series
 Off the Map (2011) ABC series
 Flight 29 Down (2005-2007) Discovery Kids series
 Tour of Duty (1987-1988): CBS series
Set, but not produced in, Hawaii
 South Park (2012): Comedy Central; Butters must explore his Hawaiian heritage with his
friend Kenny.

7.  Step By Step (1993): During second season the blended family wins a trip to Hawaii resulting
in two episodes of Hawaiian adventure.
 Saved By the Bell (1992): The gang visits Hawaii in what was originally a made-for-TV
movie, but was later split into four episodes in syndication.
 Full House (1989): The Tanner Family ventures to Hawaii for one episode to celebrate their
time together, but everyone begins resenting Danny's insistence that they all do everything
together and in accord with his detailed plans written on the "Clipboard of Fun" where he has
allotted only small portions of time to each family member's activity of choice.
 Mama's Family (1987) syndicated; Thelma Harper, having been a contestant on Jeopardy!
wins a Hawaiian vacation for the entire family; two following episodes chronicle the trip.
 Growing Pains (1987): The Sievers visit Hawaii during the first two episodes of season
three.
 The Jeffersons (1980): CBS; To prevent a high risk from suffering a heart-attack, George is
ordered by his doctor to take a vacation. George and Louise take a trip to Hawaii while
Florence accompanies them. While at Hawaii, the Jeffersons learn that the Willises are
staying in the same hotel with them for four episodes.
 Charlie's Angels (1980): ABC; The Angels move headquarters in Hawaii for 5 episodes.
 Charlie's Angels (1977): ABC; Charlie is kidnapped in Hawaii: the Angels go to the rescue.
 Sesame Street (1977-78): PBS; Four of the Sesame Street cast, along with Big Bird, Oscar,
and even Snuffleupagus travel to Hawaii for a week of episodes during which they learn all
about the nuances of Hawaiian culture, and Big Bird and Snuffleupagus search for a famous
mountain shaped like a Snuffleupagus. Episode numbers: #1090 through #1095; originally
aired January 13–20, 1978.
 Sanford and Son (1976): NBC; Fred and his son are vacationing in Hawaii and partaking in a
convention for junk dealers. Little do they realize a pair of jewelry thieves are using them to
smuggle diamonds to the mainland U.S.!
 The Brady Bunch (1973): ABC; The Bradys travel to Hawaii for three episodes when Mike is
assigned to a building project in Honolulu. The boys end up finding an old Hawaiian Idol
that superstitious locals report is "taboo" and they beginning worrying that they are being
cursed with bad luck and should take the idol back to its original resting place.
 I Dream of Jeannie (1967-1968): NBC; Major Anthony Nelson and his voluptuous genie
(Jeannie) are in Honolulu for business when they come across a con artist played by Milton
Berle
__________
FILM TAX CREDIT ABUSED, AUDIT FINDS - A LACK OF OVERSIGHT AND THE
USE OF THE INCENTIVE FOR OUT-OF-STATE EXPENSES ARE ALLEGED IN A
REPORT
Honolulu Star-Advertiser. 23 Nov 2016. By Timothy Hurley thurley@staradvertiser.com
The tax breaks the state of Hawaii offers to lure Hollywood productions to the islands are probably
sweeter than they should be under state law, according to a report released Tuesday by the state auditor.

8. What’s more, flawed oversight of the film tax credit has likely increased the cost of the credit to taxpayers
while overstating the economic benefits to the state, the audit said.
Both the state Department of Taxation and the Hawaii Film Office got dinged in the report, which noted
that the auditor’s office wasn’t even able to confirm that the film credit is providing a net benefit to the
state.
“What we do know is that (the Department of Taxation) and the film office need to be more accountable
for the administration and oversight of the film tax credit,” the report declared.
Department of Taxation spokeswoman Mallory Fujitani said the agency disagrees with the audit. She said
the department has been following the law and offering the film office the appropriate guidance in
administering the tax credit.
The film office couldn’t be reached for comment Tuesday, but a formal response within the report from
the state Department of Business, Economic Development and Tourism, its parent agency, expressed both
concurrence and dissent with the auditor’s findings.
The film tax credit was created by the state Legislature in 2006 to give tax incentives to motion picture,
digital media and film production companies in an effort to stimulate the economy, create well-paying
jobs in a clean industry and generate exposure for the islands as a prime filming and visitor destination.
According to Tuesday’s report, however, the Department of Taxation has allowed the tax credit to be
stretched to include out-of-state expenses as qualified production costs.
That’s inconsistent with the language of the statute and the Legislature’s aim to stimulate economic
growth in the state, the audit said.
“For example, expenditures paid to out-of-state businesses and service providers do not provide income
for local residents; they do not create local jobs,” the report said.
Additionally, the department should adopt administrative rules to fully implement the tax credit, the
report said.
Without a clear definition of the law that created the incentive, the film office is left with limited guidance
in administering the credit, and film companies might be uncertain about their obligations to qualify for
the tax credit, according to the audit.
There is, for example, no requirement that production costs be independently verified as qualifying for the
tax credit, the report said, nor are there rules to help the film office enforce deadlines and other filing
requirements.
“We don’t agree with the auditor that the lack of administrative rules makes it difficult to administer the
tax credit,” Fujitani said.

9. Fujitani said the department’s occasional “Tax Information Releases” updates have provided sufficient
guidance to the film office.
“We’ve been working with them for 10 years, and they never said they had a problem,” she said.
Fujitani said the department expanded the qualified production costs to out-of-state expenditures on the
advice of the state Attorney General’s Office, which advised that to not do so was likely unconstitutional
and could be subject to a court challenge.
As for the film office, the auditor found that its economic-impact analysis of the film tax credit data uses
“incomplete and overstated data” and therefore fails to measure its true costs.
For instance, the office’s analysis includes an unknown amount of expenditures and wages paid to
nonresidents, including amounts for highly paid producers, directors, actors and crew members who are
often
Expenditures paid to out-of-state businesses and service providers do not provide income for local
residents; they do not create local jobs.” residents outside of Hawaii, according to the audit.
While these crew members might spend some of their salary or wages here, it is “very unlikely” that a
significant percentage of their Hawaii-earned income flows into the local economy, the report said.
“Including these salaries and other out-of-state expenditures in the calculation of benefits to the state
significantly over-inflates the film tax credit’s economic impacts,” the report said.
The film office should instead report to the Legislature on the quality of the jobs generated by film
productions, according to the auditor. Currently, the film office collects this type of information from
production firms applying for the tax credit, the auditor said, but it does not track or report on it.
In the report, the Department of Business, Economic Development and Tourism agreed that internal
controls and administration could be improved to offer lawmakers more accurate and meaningful
information on the productions benefiting from the credits.
DBEDT also agreed that a third party should review information to verify the costs of sizable productions
that qualify for the tax credit.
The department, however, disagreed with the assertion that out-of-state expenditures inflate the credit’s
economic impacts. Film productions usually buy goods and services from out-of-state vendors only when
they are not available in Hawaii, the department argued.
The film tax credit is scheduled to expire at the end of 2018, at which time lawmakers will need to decide
whether the benefits of the program justify its continuing costs, according to the report.

10. “Unfortunately, the film office cannot provide the Legislature with the relevant, accurate, and
timely data necessary to make this determination,” the report said. [Emphasis Supplied]
From a report by the state auditor on tax credits given to motion picture, digital media and film
production companies ———
___________