2010-01-AU Limited Scope Performance Audit of Department of Water Supply's Internal Controls for Cash Handling and Financial IT Systems

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CHAPTER 3: DEPARTMENT OF WATER SUPPLY (3) For accident reserve, pension charges, and compensation and insurance; (4) For purchase or development of new sources of water; and (5) For a reserve fund." Hawaii County Charter section 8 -4, Water Fund, provides: "There shall be established a separate water fund which shall be utilized solely for water purposes. State and Federal water grants or appropriations and revenues from operation of the water system shall be included in the water fund." Hawaii County Charter section 8 -5, Administrative Supervision, provides: "The department of water supply shall come under the general supervision and control of the mayor, through the managing director." The Managing Director confirmed that the Department of Water Supply's operational budget is "fully self - supporting ", and that no General Fund monies (including real property tax revenues) are directly transferred to DWS for DWS operations. [See attached. KPMG Financial Statements - June 30, 2008 and 2007] ORGANIZATION [Summarized from DWS website - http: 11www.hawaiidws.orp/1 [Underscored are DWS units which are the subject of this audit.I WATER BOARD As provided in Hawaii County Charter article VIII, the members of the Water Board are appointed by the Mayor and approved by the County Council, with membership of the Water Board representative of each of the nine County Council districts. The DWS Manager, the Director of Public Works, and the Planning Director of the County of Hawaii serve on the Water Board as ex- officio members without the power to vote. The Water Board is responsible for the appointment of the Manager of the Department, who in turn appoints a Deputy with the confirmation of the Water Board. The Water Board shall: (a) manage, control and operate the waterworks of the County and all property thereof; (b) adopt rules and regulations which shall have the force and effect of law relating to the management, control, operation, preservation and protection of the waterworks of the County; (c) adopt an annual operating and capital budget for the Department, subject to the hearing and advertising provisions of County Charter section 10 -4; (d) have the power to acquire by eminent domain, purchase, lease or otherwise, and to sell, lease, or otherwise convey real property in the name of the Water Board; (e) have the authority to issue revenue bonds under the name of the Water Board; and (f) have such other powers and duties as may be provided by law. 14