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 agency to reserve its right to suspend a contractor from bidding on any or all County contracts with due cause. 4. We recommend that DEM revise Grant Guidelines and subsequent monitoring practices to ensure accuracy of contractor claims and to reduce the risk of errors, abuse and/or fraud. • Require that all contractor reports of diverted source streams be quantifiable and verifiable. • Include specific language delineating the County's right to audit contractor records and operations and to conduct random inspections of contractor operations for the purpose of verifying claims and delivery to end markets. • Include specific language addressing related party transactions, defining who qualifies as a "related parry ", requiring related party disclosures, and delineating additional documentation and control procedures required for related party transactions, contracts, and subcontracts. • Require submittal of a process flow plan for each recycling facility, including measurement procedures for inflow sources, segregation of non - program eligible materials, and verification of end market user deliveries. • Clarify that contractor documentation of its buy -back incentive payments to the recycling public will be required, specifying acceptable documentation such as signed receipts. • Clarify that contractor documentation of its program development efforts will be required, specifying acceptable documentation such as newspaper ads, educational literature distributed, and testimonial letters from participating community groups. Monitor and enforce grant and contract requirements. o DEM needs to develop a comprehensive monitoring and control plan for all programs. If sufficient controls are "built in" at the IFB, RFP, grant guideline, and contract phases, the burden of operational oversight, monitoring and inspection can be reduced. This is not to say that additional personnel may not be required to implement the necessary oversight and monitoring procedures. 5. We recommend that DEM review its ADF program for glass source streams that are not currently being measured, and implement corrective actions to provide greater accountability without causing undue hardship to contractors or County personnel in their application. 6. We recommend that DEM determine whether additional positions will be required to meet timelines for procurement and contract issuance and to conduct necessary oversight and monitoring of contractor performance under procurement and contract agreements. 7. We recommend that DEM research utilizing the project accounting module of the County's FRESH accounting system to assist in more efficient financial monitoring and reporting. 38