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The reason for setting a local user password in addition (inside Open-AudIT) is so that if Active Directory validation is not working (if the domain controller is offline or some other issue), Open-AudIT will attempt to validate via Active Directory but if this fails will validate the credentials against the internal Open-AudIT credentials and if they match will still allow logon. You can still logon even if Active Directory is not available 
Being configured in this way also enables you to have AD using Active Directory for logon, but also enables you to create Open-AudIT users with no Active Directory account.
That's all there is to it. As long as Open-AudIT can talk to an Active Directory Domain Controller, your users can use their existing Active Directory credentials to logon to Open-AudIT.