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To Maura Fujihira, the seemed like a perfect solution. The owner of , an art gallery, furniture store and interior design studio in Kakaako, wanted to create a new, needed revenue stream by adding a community ceramics kiln.

Fujihira had a used kiln donated by a friend but needed several thousand dollars to spruce it up, install it and build a small studio. The pivot program provides up to $10,000 for businesses adapting to COVID-19 by doing things like offering new goods or services.

But, as is too often the case with federal CARES Act funds, tapping into the money has proved harder than it seemed. State rules to ensure accountability require grant recipients to spend money first – then get reimbursed with a grant.

For Fujihira, it was a . She couldn’t get a grant unless she finished her project, but she couldn’t finish her project without a grant.

“It’s like a chicken and an egg,” Fujihira says. As she sees it, the state should pivot to help businesses like hers, which need the money the most.

“We certainly empathize and understand how they feel,” says Sherry Menor-McNamara, president and chief executive of the , which is administering the program for the state.

At the same time, Menor-McNamara said she understands why the state requires that businesses spend money up front and document that the money was spent on qualified expenses. State officials, she said, fully expect a federal audit of CARES Act expenditures and need proper documentation.

“In the end, we don’t want the audit to show it was done incorrectly,” she said.

As 2020 winds down, Fujihira’s experience shows the challenges of the state’s efforts to dole out hundreds of millions of dollars to people and businesses before a year-end deadline.

Hawaii has received just under $10.3 billion in federal assistance, and the vast majority of that has been awarded.

Approximately $3.9 billion went to individuals, including $1.7 billion in the form of $600 per week boosts to unemployment insurance payments, according to the , which has been tracking federal CARES Act money in Hawaii.

Another $2.7 billion went to small businesses via the Small Business Administration’s Paycheck Protection Program. Despite much-publicized problems, it was a major administrative effort by the government and businesses who helped administer the programs.

But, according to Jill Tokuda, a former Hawaii Senate Ways and Means Committee chair now tracking CARES Act money for the Data Collaborative, there’s still another $877 million left from a $1.3 billion pot of money. And it needs to be spent by Dec. 31. Known as the Coronavirus Relief Fund, the money has been earmarked for a variety of programs, including the business pivot program that fishcake applied for.

That there’s still such a huge pile of cash sitting there with the deadline just six weeks away shows how hard it is to spend hundreds of millions of federal dollars in a short time.

“We’re all on the hook to make sure this money gets spent,” said Rep. Sylvia Luke, who chairs the House Finance Committee. Luke said she and other legislators had jumped into the fray to keep watch and help make sure the money is spent responsibly.

Part of the challenge, she said, is the state government has had to stand up a massive administrative apparatus quickly.

“I’m just kind of amazed that in such a short time, we were able to ramp up so many programs,” she said.

Half Of Rent Relief Applications Are Incomplete

Ramping up programs is one thing. Spending money is another. The pivot program is hardly the only one facing challenges.

Although Tokuda stressed that money is moving quickly and is hard to track in real time, as of last week, there were numerous programs with unspent money. A fund for testing and surveillance still had about $22 million, for instance, while a fund to support the fishing industry had $2.7 million, according to the Data Collaborative.

Another program with lots of money still unspent is a housing relief program. As of last week, the Data Collaborative reported the program had $81.4 million from a pool of just less than $100 million to be used to help cash-strapped renters cover housing costs.

To administer the program, the Hawaii Housing Finance and Development Corp., a state agency, is working with two nonprofits, Aloha United Way and Catholic Charities.

It was hard enough to set up programs to administer such an enormous amount of money, said Denise Iseri-Matsubara, the housing corporation’s executive director. That meant doing things like hiring staff and buying equipment.

But, she said, the nature of the program presents additional challenges. Although renters apply for grants to cover residential rents, the state pays the landlords, so that means dealing with two parties, which can mean twice as many complications, Iseri-Matsubara said.

In some cases, landlords are hard to reach, she said. And some of those who are reached prefer not to deal with a state program, she said.

Of 15,000 to 16,000 applications submitted about 50% are incomplete or have incorrect information, she said.

Iseri-Matsubara reiterated what others stressed, “When you’re dealing with public dollars, the government has a fiduciary responsibility to do it right.”

Businesses Could Face Huge Unemployment Bill

The silver lining is that any money not spent will not lapse back to the federal government, said Linda Chu Takayama, Gov. David Ige’s chief of staff. Instead, it will be used to replenish the state’s unemployment insurance trust fund, which the state borrowed money from to pay claims.

Without a boost of cash, businesses will be assessed big fees to replenish the fund, she said. And businesses that have had the most unemployment claims – those hit hardest – will face the biggest fees, she said. Some could face bills three times higher than last year.

Menor-McNamara said it’s important to get money back into the fund.

“Businesses start getting assessments in November and have to start paying in March,” she said. “And there’s no way businesses can afford a huge tax bill.”

In light of all of the money out there, the notion that she lacks adequate documentation to justify getting a grant rings hollow to Fujihira.

Sitting at a conference table at fishcake, Fujihira shows a detailed spreadsheet listing the budget for her ceramics studio. She also has an unpaid bill from the workers repairing her kiln. Fujihira has been in business in Kakaako for nearly 14 years and is an institution among artists and craftspeople. Her son, Rechung Fujihira, owns and operates Honolulu’s first co-work space, Box Jelly, which is adjacent to fishcake.

Takayama acknowledges that worthy businesses might be out of luck.

“I wish we could help every single business,” she says. “But number one, we’re running out of time, and number two, I have the federal government breathing down my neck.”

In normal times, Fujihira says, she probably wouldn’t have trouble paying $10,000 up front and getting reimbursed. But, she says, times are really tough. She hopes to be able to finish setting up her kiln without state help.

“I think the idea is just to weather this out,” she says. “And then we’ll be back in business.”