COM 0423.003 2002-2004 - Laserfiche WebLink

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If the Shipper's Wharf Committee Trust Fund is included in the CAFR, what is the extent of the independent audit and will it affect the current audit contract? Since the Shipper's Wharf Committee Trust Fund is reported in the CAFR, it will be subject to the independent audit procedures. Audit procedures cover confirmation of the Trust Fund's year-end cash and investment balances, as well as the performance of analytical review procedures over the Trust Fund's interest earnings and cash disbursements.20 KPMG, the County's current independent auditor, does not anticipate having to amend the County's independent audit contract given the limited activity and fund amount of the Trust Fund. An amendment to the current audit contract would be warranted should the County request an audit opinion on separate, stand-alone financial statements of the Trust Fund or additional compliance work. The scope of the audit work would determine the increased cost of the contract.Zl Trust funds should reimburse the County if the scope of work should increase. 3. COUNTY LIABILITY What is the liability to the County and what measures might be taken to reduce liability in view of the Trust relationship? An important objective of the Council should be to minimize risk to the County. As noted in Deputy Corporation Counsel Craig Masuda's attached memorandum, "extent of liability to the County is minimal, but increases relative to the amount of control the County Council exerts over the trust exercised as a governmental entity." The Legislative Auditor's Office has recommended that the Council not create a 'special fund' by ordinance for an altogether different reason. Greater liability, including potential personal liability, is another compelling reason. The County may still be named in a complaint due to the Mayor's role as a trustee or the Director of Finance as its administrator. The extent of liability to the Mayor or the Director of Finance depends upon the nature of the case and isfact-specific. Deputy Corporation Counsel Craig Masuda informs that the office would defend the Trust as the purpose of the Trust is a public purpose and a municipality is allowed to expend resources on the administration of the trust. Trust funds would be used to defend the actions of the trustee pursuant to Section 554A-3(24), HRS. Ultimately, dissolving the Shipper's Wharf Committee Trust Fund and transferring the funds to the County would eliminate personal liability of the mayor (trustee) and the director of finance (trust administrator) under trust statutes. These actions would require returning to the Court. FINDINGS AND RECOMMENDATIONS Although the underlying issues of the Shipper's Wharf Committee Trust deal with policy, accounting and auditing, and exposure, they are complicated by the fad that the Trust is a creature of the Court, it falls under trust statutes, its public' purpose must be distinguished from 20Ralph Kanetoku, KPMG, letter dated March 11, 2004. 21 Ibid. 6