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

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Chapter 3 ADF -- GLASS CONTAINER RECOVERY PROGRAM 4. The auditors were unable to complete the procedures delineated in the audit program for one contractor due to the contractors interpretation that the County's right to "audit" is limited. To an off -site records review. 5. Glass Recycling Program Guidelines and recycling contracts do not set forth sufficient control measures to reduce the risk of contractor fraud and/or abuse and ensure the accuracy and validity of contractor's claims. • There is insufficient clarification in Grant Guidelines and individual contracts of minimum control procedures and informational requirements for vehicle identification, standard tare weights, scale house tickets, and end -user verification. 6. While generally accurate, DEM's financial tracking of contracts is inefficient in the following respects: • Payments owed to contractors for excess poundage were not timely carried over to subsequent billing periods. • While contract amounts for the period January to June 2005 were reduced by $20,000, the program file contained no documentation of the reduction, related authorizations, or notification of the affected contractors. • Contract status and financial budget and expenditure tracking information are not reported to the designated budget responsible manager within the department. • Tracking is done outside of the County's FRESH accounting system and does not readily allow for reconciliation of contract invoices and payments. However, invoices were properly initialed for payment without exception by authorized DEM personnel. 7. DEM is not timely in its initiation of procurements or its execution of contracts. • Purchasing Agent Bill Gray, who was responsible for DEM procurements during the audit period, indicated chronic lateness by the department in initiating and completing procurement related tasks, further opining that the delays were due in part to: • Inadequate support staff. • Complexity of contracts, procurement laws, and underlying regulations. 8. Although the State has not enforced the specific "glassphalt" paving requirement under HRS §342G -86, DEM has completed a "glasscrete" project approved by DOH. • It appears that the statutory "glassphalt" paving requirement is unrealistic. HRS §103D- 407 (b) states: "All highway and road construction and improvement projects funded by State or a county or roadways that are to be accepted by the State or a county as public roads shall utilize a minimum of ten percent crushed glass aggregate