2006-01-AU Audit of the County of Hawai‘i's Recycling and Diversion Grants Program

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CHAPTER 2 GENERAL FINDINGS • Current monitoring and control procedures are reactive rather than proactive, resulting in costly corrective measures. • Current protocol does not include regular and timely reporting and review of program and contractor performance. • Current protocol does not include regular monitoring of program and contractor compliance with applicable federal, State, and County permit requirements and funding agency requirements. • Current tracking of budgets and expenditures related to the Special Programs Group is inadequate and does not readily allow for tracking of contract specific costs and payments. [However, DEM accountant Robin Bauman advises that steps to address this deficiency have been implemented after the audit period. Specific budget accounts have been created for the Special Programs Group. However, the capability to track and report at program or contract levels is still lacking.] • Current tracking of contract- and program - related expenditures is done outside of the County's FRESH accounting system, and utilization of the FRESH project accounting module has not been implemented. 4. DEM has not been effective or efficient in its application for and utilization of government funding. • The department did not pursue EPA funding for fiscal year 2006 -2007 to permit further development of its waste recycling and diversion capabilities. Meanwhile, non - profit agency Hawaii Island Economic Development Board did pursue EPA funding and was granted $500,000 for this purpose. • The County was awarded $250,000 in Community Development Block Grant (CDBG) funds for fiscal year 2003 -2004 for upgrade and repair of its transfer stations. However, according to DEM Director Barbara Bell, no funds were expended for this project until fiscal year 2005 -2006, and as a result, the County was excluded from pursuing additional CDBG funding in fiscal year 2004 -2005. As of April 2006, DEM has completed its initial assessment of the condition of all County transfer stations and ranked them as to priority for repair. This initial assessment does not include any cost estimates for repair of existing facilities, nor does it include any consideration for upgrading facilities to allow for recycling and diversion. The self - assessment rates 13 of the 21 transfer stations as "Failed" (See Exhibit 1.5). • The department's issuance of multi- tiered EPA contracts and subcontracts resulted in a significant percentage of grant monies being expended on program administration rather than on actual recycling and diversion operations. 5. DEM's managerial deficiencies were exacerbated by external influences in County government. There appears to be a lack of common vision in County government for solid waste management, waste stream diversion, and recycling and reuse. The administrative and legislative branches of County government have not reached consensus as to long -term solutions for addressing Hawaii County's solid waste streams. This lack of commitment and 11