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HomeMy WebLinkAboutMIN FC 2023/06/06 (2022-2024) Committee on Finance 12th Session Hawai`i County Building 25 Aupuni Street Hilo, Hawai`i June 6, 2023 CALL TO The regular meeting of the Committee on Finance was called to order at ORDER: 9:00 a.m., in the Council Chambers, Hilo, by Mr. Matt Kaneali`i-Kleinfelder, Chair. ROLL CALL: • Present: Mr. Matt Kaneali`i- Kleinfelder, Chair Ms. Cindy Evans, Vice Chair Ms. Michelle M. Galimba, Member Mr. Holeka Goro Inaba Member Ms. Jenn Kagiwada, Member Ms. Ashley L. Kierkiewicz, Member Ms. Heather L. Kimball, Member Ms. Susan L. K. Lee Loy, Member Ms. Rebecca Villegas, Member STATEMENTS The Chair directed the Committee to proceed to the next order of business, FROM THE Statements from the Public on Agenda Items. PUBLIC ON AGENDA ITEMS: (There were none.) CHR. KANEALI`I-KLEINFELDER: Let's go to the top of the order,please? COMMUNI- The Chair directed the Committee to proceed to the next order of business, CATIONS: Communications. Comm. 12.11: REPORT OF FUND TRANSFERS AUTHORIZED: APRIL 16—30, 2023 From Controller Kay Oshiro, dated May 4, 2023. Vote on Comm. 12.11: Mr. Inaba moved to close file on Comm. 12.11. Seconded (Filed) by Ms. Lee Loy and carried by the following voice vote: Ayes: Committee Members Evans, Galimba, Inaba, Kagiwada, Kierkiewicz, Kimball, Lee Loy, Villegas, and Chair Kaneali`i-Kleinfelder—9. Noes: None. Absent: None. Excused: None. FC-12 June 6,2023 Comm. 13.11: REPORT OF CHANGE ORDERS AUTHORIZED: APRIL 16 - 30, 2023 From Finance Director Deanna Sako, dated May 3, 2023,transmitting the above report pursuant to Section 2-12.3 of the Hawai`i County Code. Vote on Comm. 13.11: Mr. Inaba moved to close file on Comm. 13.11. Seconded (Filed) by Ms. Lee Loy and carried by the following voice vote: Ayes: Committee Members Evans, Galimba, Inaba, Kagiwada, Kierkiewicz, Kimball, Lee Loy, Villegas, and Chair Kaneali`i-Kleinfelder—9. Noes: None. Absent: None. Excused: None. Comm. 13.12: REPORT OF CHANGE ORDERS AUTHORIZED: MAY 1 - 15, 2023 From Finance Director Deanna Sako, dated May 16, 2023, transmitting the above report pursuant to Section 2-12.3 of the Hawai`i County Code. Motion to Close File: Mr. Inaba moved to close file on Comm. 13.12. Seconded by Ms. Lee Loy. CHR. KANEALI`I-KLEINFELDER: Any discussion? Council Member Evans, go ahead. MS. EVANS: Yeah, Deanna Sako,please? (Note: At this time, Finance Director Deanna Sako came forward to address the members of the Committee.) MS. SAKO: Good morning. MS. EVANS: I just had a question. I noticed that you paid out more money on the Zoning and Subdivision Code Amendment, Phase 2.5. Maybe you can give us kind of an update of where we're at. They must be ahead of schedule, right? MS. SAKO: I think they're ahead of schedule. They're working on it. This project had kind of been planned to be kind of phased. So, they kind of have different buckets of money that they are adding to that project as funding permits. But they're continuing to work on the entire project together. MS. EVANS: Yeah, I noticed there was a shift there. The other one is Shoreline Pursuit Phase 7, was a significant amount; or no, actually TetraTech. MS. SAKO: Yeah, that Shoreline Phase 7 from TetraTech. They added to the scope of work for Phase 7. I'm not sure specifically unfortunately, what Phase 7 is, but I can find out for you if you want to know. Page 2 FC-12 June 6,2023 MS. EVANS: Yeah, so what is Shoreline Pursuit, is it like an access, we're trying to get access? MS. SAKO: I think this is probably one of our CZM (Coastal Zone Management) studies going along the shoreline and doing one of the studies, but I'll find out for sure. MS. EVANS: Okay, I'd appreciate that. Thank you. Thank you, Chair, I yield. CHR. KANEALI`I-KLEINFELDER: Thank you, Ms. Evans. Council Member Lee Loy. MS. LEE LOY: Thanks, Chair. Deanna, Wainaku Street. MS. SAKO: Just a second. Wainaku Street, yes. MS. LEE LOY: It went up 300 percent. MS. SAKO: So, the explanation is they needed additional base course to fill the void found under the sidewalk and travel-way. So, with our lava tubes and other sink holes and whatnot, sometime yes, we do have to—so it did go from the estimated roughly $10,000 to more like $35,000. So, we must have needed a lot more aggregate. re ate. MS. LEE LOY: I'm just asking because we know, right, everything is just costing more. I get the unanticipated cost, but this is unanticipated, like times 30 percent. MS. SAKO: So, I don't think we have anything to be able to scan for,you know, voids or holes under the ground when we start. So lots of times, they don't find those until we dig it up. So, I think this is one of those examples. MS. LEE LOY: Do you know how much miles of roadway or how much area we covered with this adjustment, or cubic yards, or whatever it was? MS. SAKO: No, I think this was more like sidewalks and other types of repairs. I don't think this was actually paving, so. But I can find out more. MS. LEE LOY: Yeah, if you could. MS. SAKO: Steve is off island today. So, yeah, I'm kind of subbing for him. MS. LEE LOY: Can you just circle back around on him? I'm always just incredibly mindful of our construction dollars really tipping the scales, and this one is like 300 percent over what we budgeted. Page 3 FC-12 June 6,2023 MS. SAKO: No, it is actually 300 percent more and definitely when we have these smaller projects like a$10,000 project, any kind of, you know, increase looks substantial. Where if it had been a million-dollar project and it was a $30,000 adjustment, it probably wouldn't have really been noticeable. MS. LEE LOY: Absolutely. I'm just mindful because we went sideways on one roadway that took more than five years. MS. SAKO: Yeah, but I'll double check with them what the repairs were. But I think they—you know, we do find lava tubes and other things and have to fill them in. MS. LEE LOY: Sure, I get it. Construction is messy sometimes. So, thanks Deanna. Thanks for checking. I yield. CHR. KANEALI`I-KLEINFELDER: Thank you. Council Member Evans, follow-up? MS. EVANS: No, thank you. CHR. KANEALI`I-KLEINFELDER: Okay. Seeing no further discussion, we do have the motion to close file on Communication 13.12 on the floor, all in favor? Vote on Comm. 13.12: The motion to close file on Comm. 13.12 was carried (Filed) by following voice vote: Ayes: Committee Members Evans, Galimba, Inaba, Kagiwada, Kierkiewicz, Kimball, Lee Loy, Villegas, and Chair Kaneali`i-Kleinfelder–9. Noes: None. Absent: None. Excused: None. Comm. 139.1: THIRD QUARTER CLAIMS REPORT: JANUARY 1 –MARCH 31, 2023 From Claims Investigator/Adjustor Clifford D. Victorine III, dated May 10, 2023, transmitting the above report pursuant to Section 2-9 of the Hawai`i County Code. Motion to Close File: Mr. Inaba moved to close file on Comm. 139.1. Seconded by Ms. Lee Loy. CHR. KANEALI`I-KLEINFELDER: Now, we do have Mr. Victorine here in our Chambers. Looking good as well, I like that pink color, sir. Council, questions? Ms. Kierkiewicz, go ahead. MS. KIERKIEWICZ: Thank you, Chair. Good morning, Mr. Victorine. Great to see you every quarter, as always. Page 4 FC-12 June 6,2023 (Note: At this time, Corporation Counsel Claims Investigator/Adjustor Clifford D. Victorine III, came forward to address the members of the Committee.) MR. VICTORINE: Clifford Victorine, Corporation Counsel. MS. KIERKIEWICZ: Thank you, I just had a couple of questions about protocol, and if you could remind us, if there are instances where County employees are inadvertently reversing into other vehicles and causing damage, do you provide recommendations that the employee get additional vehicular driving training? What's the process, so that we are managing our liabilities going forward. MR. VICTORINE: Yeah, definitely, especially if we see trends. You know, those are things we see certain things like—you know, we'll get a report. The excuse doesn'treally look like someone is accepting their fault, or you know, lack of a better word. We will contact the departments; either training, the department head, sometimes we have someone that's assigned for us to just reach out to touch. If we feel sometimes, it's getting worse, we'll make sure that the department heads are involved in that communication. But we should also know that anytime anyone is in an accident; any property is damaged, for whatever reason, not just vehicles, the department and the person involved needs to fill out an accident report, property damage report. And that is supposed to go through a chain of command, which includes his immediate supervisor, the department section supervisors, then the department head. So in reality, we shouldn't have to be contacting them,they should be aware of this, but there are times that, you know, they're busy. So, I understand that. So, we'll contact them and so far, I would say, we haven't had any kickback. Almost every time we've contacting somebody,there's been some stuff that, "do we need to do this, and this, and that?" Well,just know that if we come to Council and they have questions, we're going to be advising that we let you guys know, meaning the department. And if they're asking us questions, you know, I don't want to say basically, we're throwing them under the bus, but it is their responsibility and we let them know that. I've had to do that in my little under ten years, maybe twice, and it was a lot early on. So, we really haven't had that issue. MS. KIERKIEWICZ: Thanks for keeping a watchful eye. I don't think it's throwing anybody under the bus. I think it's just making sure that our internal protocols and our training is strengthened. The other thing I wanted to just flag here, two notes of street signs. They both fell on vehicles? Page 5 FC-12 June 6,2023 MR. VICTORINE: What happened in this is, that's actually the same incident and you had the expense that the insurance paid, and then you had additional costs or expenses that the owner of the vehicle had. For some reason,there was something that insurance wasn't going to cover, so we had to put their claims together, but separate the payout. So therefore, it's actually two claims. MS. KIERKIEWICZ: Okay, thanks for the clarification. Then does kind of ping DPW(Department of Public Works) and like their Traffic Division to just take a look at sign maintenance around the island? MR. VICTORINE: Yes. When we get this, we also ask them for their maintenance records. Because just because something fell, it doesn't necessarily mean they're liable. You know, we're doing proper maintenance, we're doing certain things, acts of god, we can't control that. But, you know, we'll ask for that prior and then we'll discuss it with them even after. You know,the sections that handle this area. MS. KIERKIEWICZ: Okay. Are those records digital or paper? MR. VICTORINE: It depends. Some is paper, some is digital. Most of them are scanned stuff in. So, it initially started off being paper, and then they'll send me a scanned copy. MS. KIERKIEWICZ: Okay, thank you so much for indulging in my questions. I appreciate it. Chair, I yield. CHR. KANEALI`I-KLEINFELDER: Thank you. Council Member Galimba. MS. GALIMBA: Thank you. Just a couple of questions. We are self-insured for this, is that correct or basically we pay for these claims directly? MR. VICTORINE: Okay. So,this is interesting because we hear the word, and people misinterpret what self-insured really means. It sound like we don't have insurance per se for most of the stuff we have,just certain things that we do. I think Finance, they have a person who runs that. But the general description of self-insurance basically means the second part of your description. We pay for that and the taxpayers' money is what pays on this. MS. GALIMBA: Okay, thanks, and just a follow-up question, so like the DPW sign, does that come out of DPW, do they have a fund or is it all sort of one fund that pays out these claims? MR. VICTORINE: So I know we have it in our budget, our department, to pay out claims up to a certain amount that we have. If we start getting really high, and Deanna can correct me if I'm wrong about where that actually comes from—will Page 6 FC-12 June 6,2023 go through Finance. I don't believe it comes out from any department's budget because they don't budget for that, other than Finance. MS. GALIMBA: Okay. So, there's a line item in Finance to cover in both departments, okay. MR. VICTORINE: I think we have one in ours, and then if it's a real high settlement, we send it to them. MS. SAKO: So,per County Code, Corporation Counsel can settle anything under $10,000. So,they pay out those claims under their discretion. Then anything $10,000 or more that comes to Council for approval, those get paid out by Finance. In the back of the budget, we call it the Miscellaneous Section in the 9-11 Section. That's where we budget for those miscellaneous claims and judgements, because at any point in time, we're settling lawsuits or other larger claims. MS. GALIMBA: Okay, thank you. MS. SAKO: Departments do have to pay,though, if they destroy their own vehicle. So, that does come out of their budget. MS. GALIMBA: I think that sounds fair. Thank you, I yield. CHR. KANEALI`I-KLEINFELDER: Thank you, Ms. Galimba. Ms. Lee Loy, go ahead. MS. LEE LOY: Thanks Chair. Thanks, Clifford for being here. Just a question. We see sort dates on your report, is that the date that the claim was made, or the date that it was satisfied? MR. VICTORINE: Sorry, I printed this out and that's one of the things that's automatically generated. I believe these are supposed to be the dates that we initially filed. I can let you know for sure. MS. LEE LOY: Yeah, could you? You can just circle back around to my office. I guess I'm managing expectations, right? Like this one, the sign fell on the vehicle, you know, when did it occur? When was the claim paid? I guess I'm just trying to understand the timeframe as to how long it takes. MR. VICTORINE: You know, the thing is claims can vary, it all depends. Like in this case,there was something going on between the insurance and the insured, and there's not much we could do. You know, I could kind of half-guide, but again, I don't represent them; I don't give them—but they needed to figure out something because sometimes, you know, it took a long time before we got all the info that we needed from both sides. So, that can slow stuff down, but a lot of Page 7 FC-12 June 6,2023 times the slowing down really, you know, I don't want to pat myself on the back, but it doesn't come from our side. There's a lot of stuff, meaning sometimes the department might have a hard time finding certain stuff, depending on what's going on. But a lot of times it has to do with the forms being incomplete, not having enough proper documentation, and we're going back and forth, hey, we need this, we need that, we need this, before we can even consider. That will slow it down, especially in this one when it wasn't even us in control of it, you know. Well, I said, when you guys are done, let me know, you know, I can't really do much anymore. MS. LEE LOY: Yeah, I got a call myself on this one, and yes, absolutely frustrated; not sure, not clear on what type of documentation. So, thanks. You know what, maybe we can just take this off-line, Clifford. Then, like I said, I think from the date of the incident to the filing of the paperwork, to the date that it's paid, I just kind of wanted to understand. Is it a two-month process or a six-month process? But what I hear you saying is it varies on the claim itself Okay, great. I yield. CHR. KANEALI`I-KLEINFELDER: Okay, seeing no further discussion, Mr. Victorine, thank you for your time this morning. I do have a follow-up, I think part of the issue for one of these, for me at least, was "DPW street sign at Hilo Farmer's Market hit an insured vehicle." Usually it's the other way around, "vehicle hit sign." In this case, I was just trying to wrap myself around the wording, but you've explained that already, so thank you. But I will go back to what I said, like over the past year or so, every time I see, "County vehicle backs into personal vehicle," in our County. I do think we need to start implementing it. Some of our vehicles, maybe those that are distant sight limited need to have a back-up camera. I know these vehicles are old, but the technology these days, I mean, it's pretty amazing, and if it saves us. I mean just on this one, $2,000 for one backing into, $1,200 for another backing into, that's $3,400. I'm not sure how many back-up cameras that would buy, but I think eventually it'll pencil out. MR. VICTORINE: I think we discussed it before, and I agreed with you. The one thing I think I put in besides the camera was, I would rather have sensors first. The reason for that is the way we're taught to properly drive, the cameras actually take away from those proper peripherals by putting your head down and looking at the camera. I use cameras to reverse, but the sensors will keep your head up, you know, when you drive and let you know—and if we could get both because a lot of places, • they're getting cheaper and cheaper to have, both units. But that is why, they have been asked, and my opinion was that sensors, especially in all around, to me would be one of the first steps. Page 8 FC-12 June 6,2023 The second thing is when we have those reverse, especially in those sight-limited vehicles, we get the police report, and occasionally I'll go and—at the end of the report, in the back of it, they list everybody in each vehicle. You go and you'll see a car was parked in my blind spot, and I look, and I see that our car that backed into this other car that was supposedly in the blind spot had four people in it including the driver. Why didn't one person walk around or why didn't they have a spotter. Those are the things, going back to Ashley's question about, what we would hit the department with; these are things that you guys need to look at as part of the training, you know, this kind of stuff So, we do push those kinds of things out, but the camera sensors, yes. CHR. KANEALI`I-KLEINFELDER: I was laughing because I'm guessing most of the people in this room grew up using their mirrors, because we didn't have cameras back in the day. This wasn't an option. I still have a hard time with the camera, and then I'm looking in my mirrors. But when I look in the camera it throws me off MR. VICTORINE: Well, when you buy a new car, if you look at the warnings that come along with it, it tells you to also look around before, you know, not just stare at your cameras. The cameras are getting better, and better, and better, where they give you this wide angle. But as you're backing, it's not showing you anything forward, and your front might clip the car because you turned a little too earl that's the teachingpart. Y You know, I taught my kids, you don't use this. You don't use your mirrors at first, not that way. When you backup keep your head up. Your mirrors are just to initially guide you, but you keep your head up, because that's where your vision is. CHR. KANEALI`I-KLEINFELDER: Well, it worked for us, you know, and here we are. MR. VICTORINE: I wish we could do that with cellphones. I can take all the cellphones away. CHR. KANEALI`I-KLEINFELDER: I don't want to get too deep into all that, but I think there's something that we can change. Some things to change on our end, because it's not a lot, but it's enough to tell me that we need to make a change at some level. MR. VICTORINE: Those are the things that are advised to the departments, as well. CHR. KANEALI`I-KLEINFELDER: Okay, good. We'll just keep saying that, and I think it'll happen eventually. Okay, thank you, Mr. Victorine. Appreciate your time. Page 9 FC-12 June 6,2023 Mr. Clerk, we do have a motion on the floor to close file on Communication 139.1. All in favor, Council Members? Vote on Comm. 139.1: The motion to close file on Comm. 139.1 was carried (Filed) by the following voice vote: Ayes: Committee Members Evans, Galimba, Inaba, Kagiwada, Kierkiewicz, Kimball, Lee Loy, Villegas, and Chair Kaneali`i-Kleinfelder—9. Noes: None. Absent: None. Excused: None. CHR. KANEALI I-KLEINFELDER: Moving on to our next item. Comm. 162.1: SINGLE AUDIT OF FEDERAL FINANCIAL ASSISTANCE PROGRAMS FOR THE FISCAL YEAR ENDING JUNE 30, 2022 From County Auditor Tyler J. Benner, dated April 19, 2023,transmitting the Above report prepared by N&K CPAs, Inc., pursuant to Section 10-13 of the Hawai`i County Charter. Motion to Close File: Mr. Inaba moved to close file on Comm. 162.1. Seconded by Ms. Lee Loy. Y LI`I-KLEINFELDER: Mr. Benner? Mahalo for those of you CHR. KANEA joining us today online. Good to see you again. Seems like we're seeing you about once a month. (Note: At this time, County Auditor Tyler Benner came forward to address the members of the Committee.) MR. BENNER: Aloha, Council. My name is Tyler Benner, I'm with the Office of the County Auditor. I'm here to introduce our CPA firm,N&K CPAs Inc., and our primary engagement partner, Chad, who conducted and will be presenting the results of the Single Audit for fiscal year, ending June 30, 2022. And with that I'll turn it over to N&K. CHR. KANEALI`I-KLEINFELDER: Thank you. Good morning. (Note: At this time,N&K CPA's, Inc. Chad Funasaki came forward to address the members of the Committee.) MR. FUNASAKI: Hello. Hi, good morning, Chair Kaneali`i-Kleinfelder and Finance Committee Members. My name is Chad Funasaki,N&K CPAs, Inc. I'm here to present the results of the Single Audit Report. Page 10 FC-12 June 6,2023 We did meet with you to discuss the ACFR(Annual Comprehensive Financial Report) earlier this year. So,the agenda's pretty short. I know there's a slide deck that was distributed, and I'm not sure if it's on your screen or not. If the slide deck can get pulled up or I can share my screen if that's easier. CHR. KANEALII-KLEINFELDER: I think that would be better if you could do it in that method at this point. MR. FUNASAKI: Okay, I'll just share my screen then. CHR. KANEALI`I-KLEINFELDER: We have it in front of us, but the public can't see it. MR. FUNASAKI: Okay, can you see this? CHR. KANEALI`I-KLEINFELDER: I can see that on our end. This is your intro screen, correct? MR. FUNASAKI: Yes. CHR. KANEALI`I-KLEINFELDER: Okay, yep, go ahead when you're ready. MR. FUNASAKI: Okay so, lets see the agenda, the scope of the audit services, the summary of the results, and any questions or comments that, I guess, the Finance Committee Members may have. So going through the scope of audit services, it was to express an opinion on the fair presentation of the County's financial statements, and that was what we presented, I believe earlier this year on the ACFR. The second was to express an opinion on the compliance with applicable federal requirements that could have a direct and material effect on the County's major federal programs because, again,this is a single audit portion of the audit. Then perform an audit in accordance with auditing standards generally accepted in the United States of America, and the standards applicable to financial audits contained in Government Auditing Standards and the Uniform Guidance. So, that's the scope. So as it pertains to the results, internal control over financial reporting, we're happy to report that there were no material weaknesses identified or no significant deficiencies reported as it relates to internal control over financial reporting. As it relates to your major federal programs, again, no material weaknesses were identified, and no significant deficiencies were reported. So, basically, we didn't have any deficiencies to report as it relates to financial reporting or on compliance. So, that's the summary of the results. Page 11 FC-12 June 6,2023 Going to the type of opinion rendered on compliance with major Federal programs, it was an unmodified or a clean opinion. No audit findings required to be disclosed in accordance with 2 CFR(Code of Federal Regulations) Part 200.516(a). On the bottom, you're going to see that these are the major federal programs that we looked at. And it was quite a bit this year, it was actually six we had to look at. I believe last year it was three; maybe the year before it was five. But when we went through the assessments as it relates to which programs we need to look at, there were programs that we haven't looked at in the past two years, and there's a rotation. We need to look at programs. If it hasn't been looked at in a while,we need to look at it. So, this particular year we came up with six. So, these are the six that we did look at. The total federal expenditures as it related to these six was approximately $56 million. The total federal expenditures by the County for all Federal programs were about$88 million.. So,these six programs roughly represented 64 percent of your total major federal program expenditures. So, quite a bit this year. Going forward to the next slide, this is a determination of what we call Type A and Type B programs, and the threshold was about$2.6 million. So, any program that expended over this $2.6 million threshold were considered Type A programs, and that kind of triggered those six programs we needed to look at. Yes, the County did qualify as a low-risk auditee. So that did reduce the scope of our work, and again, it's going to be a low-risk auditee going forward for next year. So, that is, in a very general sense, that's the results of the single audit portion of the County audit. And I'll just open it up to any questions that, I guess, the Finance Committee Members may have at this time. CHR. KANEALI`I-KLEINFELDER: Thank you very much. Appreciate that. We as well have our Finance Director here in the County Chambers,just for your reference. Council Members discussion on the communication? Council Member Evans, go ahead. MS. EVANS: Thank you. I was looking at the federal program award amount and the actual amount that got expended. I'm thinking there's probably issues in the fact that, and I'm asking this as a question, I assume a lot of these awards really are good through the September 30th federal fiscal year. Is that why we're seeing the expenditures not near what the dollar amount was awarded? Page 12 FC-12 June 6,2023 MR. FUNASAKI: Correct. Yes, the federal fiscal year is September. The County is the June 30 year end. So, the award amount may not necessarily be all expended within that fiscal year. MS. EVANS: Do you ever look at, are we meeting the expenditure and the rate of expenditure that's required by the award or the contract? Do you look at that? MR. FUNASAKI: I mean, there's a period of availability, meaning that you need to spend it within a certain timeframe. So, yes, that is an area that we do look at and consider. MS. EVANS: And how would you rate it? Do you rank it like they did an okay job, or you know,they really didn't expend down the amount they could have spent down? I mean, I'm just not seeing a reflection here for me to know how well they're doing at spending the money. MR. FUNASAKI: There's no particular rating. I mean, again, there is a period of need to spend it. I mean, it's not something that we would rate. It's not a rating. MS. EVANS: Right. Well, I wanted, if you don't mind, Director, the question is, sometimes when you work with the Federal Government and you don't meet their expectations and spend the money, we do get a little bit of a mark about ooh, they're not really delivering. MS. SAKO: We do have some grants that are required to have spend-down ratios. HUD (Housing and Urban Development) comes to mind, CDBG (Community Development Block Grant), and actually drawing down enough. So, they do monitor that. So, we do get reports. But most of grants, maybe not most, but several of them are actually like, for a project. You know, we're going to build a road. So, as long as we do it by the lapsing date or the end date of the grant,then they're usually okay. So, pretty much we stay within the Federal guidelines to spend by the final due date or whenever the grant expires. But several of the grants are actually multi-year. So even though it may look like we're only spending a portion of the grant here, you may have two or three of these reports and add them up to see during which years we actually spent the total award. It's frequently not all in the same year. MS. EVANS: Is it possible to add a column that says the— MS. SAKO: This is actually the report, as required by the auditing standards. So, we can't really vary from this particular format in this case. Page 13 FC-12 June 6,2023 MS. EVANS: Okay. Alright. I was just thinking, it said the federal program award amount, but it doesn't give you dates. MS. SAKO: Right. That's not a required field on this report. MS. EVANS: Alright, okay. Thank you. Thank you, Chair, I yield. CHR. KANEALI`I-KLEINFELDER: Thank you. Council Member Kierkiewicz, go ahead. MS. KIERKIEWICZ: Thank you, Chair. Thank you so much for the presentation. I had a question about whether you could provide us an example of what a test looks like. So, for instance, I'm taking a look at the disaster recovery money that our County has received, and let's take Hurricane Lane as an example. I think that's money from 2018 or 2019. So many disasters, so hard to keep track. The Federal award amount is about$1.5 million. Expenditures to date, little over $431,000. What sort of actions does your team take to test and make the determination that in how the money are no material weaknesses or deficiencies is being expended? MR. FUNASAKI: Well, each program has compliance requirements, and some of them may not be applicable. I mean in most cases; allowable costs are applicable. All programs involve costs. I mean, it's kind of similar to internal pp p g financial reporting when you look at the processes and procedures about approvals and reviews. So, we do look at controls over the liability of costs. Those tests are going to involve, I mean, it's taking a population of what's expended, whether it be for payroll related or non-payroll related, assessing the processes involved in the review and approval process. So, we call it internal control over compliance. Applicable compliance requirements with that program. So,there are tests that we designed, and we do take a sample of expenditures to see whether those controls are implemented effectively. So, in most cases, basically all Federal awards the allowability is going to be an applicable compliance requirement. So, if we do note any deviation from the prescribed controls that are in place, then yes, it would be reported as a finding. MS. KIERKIEWICZ: Okay, that's very helpful, and I know that with these, like, federal programs, it's very narrow in terms of how and what you can be spending the money on. So, in more like longstanding programs like WIOA, Workforce Innovation and Opportunity Act. I'm just curious because this is something that you've studied periodically over time. Any, like reflections on your assessment of how the County is administering this program? MR. FUNASAKI: No, the WIOA, that's a program I believe we didn't look at. Page 14 FC-12 June 6,2023 MS. KIERKIEWICZ: You haven't looked at before, this was the first time? MR. FUNASAKI: No, we've actually looked at it before. MS. KIERKIEWICZ: Before, okay. the majority of those funds arepassed through the MR. FUNASAKI: That one, � ty g subrecipients. MS. KIERKIEWICZ: Okay. So, in that situation do you monitor the subrecipient's actions? MR. FUNASAKI: No, we assess what the County does as it relates to monitoring your subrecipients. We don't do the monitoring of the subrecipient. We do look at what the County does to monitor that particular subrecipient,though. MS. KIERKIEWICZ: Thank you. Just trying to understand the boundaries of this audit. Very helpful. Thank you so much, Chair. I yield. CHR. KANEALI`I-KLEINFELDER: Thank you, Ms. Kierkiewicz. Council Member Lee Loy, go ahead. MS. LEE LOY: Thank you, Chair. Deanna, thank you. Chad, thank you. You know, I've seen a few of these, and it's always just relieving to know, no deficiencies, right, and no weaknesses. I just had a question at the summary part, and either Chad or Deanna for you guys to answer. There's a Note C about Indirect Cost and us doing the "10-percent de minimis" amount, and Hawai`i County is electing to not do that. I was just curious as to that decision. MS. SAKO: I'm sorry, what page are you on? MS. LEE LOY: It's on Page 25 of the audit, it's towards the back. MS. SAKO: Sorry, I skipped over that page earlier. To go through the indirect cost, there's a lot of requirements to meet. So, in most of our cases, we do actual administrative costs. MS. LEE LOY: Got it. Then that's separate and apart, from like the bond fees, and some of the other stuff that we do when we're doing larger projects? MS. SAKO: Correct, like our staff time and things like that. MS. LEE LOY: Got it, thank you. MS. SAKO: Not every grant allows administrative costs, but some do. Page 15 FC-12 June 6,2023 MS. LEE LOY: Great. Thank you so much, and again Deanna, congratulations. This is always just wonderful news. Thank you, I yield. CHR. KANEALI`I-KLEINFELDER: Thank you. Council Member Galimba. MS. GALIMBA: Thanks. Just a quick question. So, the "Single Audit", that phrase, does that mean like one point in time, or what is the significance of a "Single Audit?" MS. SAKO: It's Federal Rules. I should let Chad answer. The Federal Government calls it a"Single Audit," and we're required to have one. So, it's one audit looking at all of our federal expenditures. So, a"Single Audit,"yes. MR. FUNASAKI: Yeah, I'm not sure exactly why they use that term. That term has been used for years, but it does relate to an audit of your federal awards. MS. GALIMBA: Thank you very much. I yield. CHR. KANEALI`I-KLEINFELDER: Thank you. Okay, looking around the room. MS. SAKO: Chair, before you take the vote, we've actually had the privilege of working with N&K for I think, nine years now. They have chose not to bid on our next audit. Who knew accounting graduates are in short demand. Okay, it's not us, I know they like working with us, but I just wanted to express our thanks to them. I know County Auditor hires them and it's really their contract, but it's really the Finance team and the Finance people, and the various departments that help us put not just the Single Audit but the ACFR together. So, we really want to thank them. There's been easy times and hard times, and every time there's a new GASB (Governmental Accounting Standards Board), it gets challenging. But we've really appreciated Chad and their team, and I just wanted to thank them publicly, so. MS. FUNASAKI: If I may add to that? I wanted to also, you know, thank Tyler (Benner), Deanna(Sako), Kay (Oshiro), and the various departments we worked with for the past nine years. I mean, it went by really quick. Yeah, unfortunately, we couldn't like Deanna mentioned, it was really tight to continue. But, you know,we really appreciate everything, and thanks a lot. CHR. KANEALII-KLEINFELDER: Thank you very much. We appreciate it. On behalf of the County, you guys have been good to us, and your reports are always very thorough and consistent. So, thank you. Thank you for your time. Page 16 FC-12 June 6,2023 MS. LEE LOY: Chair. CHR. KANEALI`I-KLEINFELDER: Council Member Lee Loy. MS. LEE LOY: Yeah, thank you. You know, I actually had the privilege and honor of working with N&K when I was over at the Department of Water Supply, because they also do the audits there. So, I've known Chad for the better part of maybe 12 or 13 years now. So, Chad, really, thank you so much because you do take a very complex audit and deliver it in a manner that we all can understand. So, thank you for your amazing work, and it's really been a privilege and honor. Please share that with the rest of your colleagues over at N&K. Thank you so much, I yield. MR. FUNASAKI: Thank you. CHR. KANEALI`I-KLEINFELDER: Thank you. Ms. Sako, I have a question regarding some of the grants and awards and the way this is presented. As I read through the report, but also the schedule of expenditures, there's some of these that I just want to make sure that we're spending down. You know, we have potential bills on the table and departments on the table that will do grant funding research. I know that you folks are probably tracking this as well as the departments. But I mean, we're looking at about $80-something million in Federal grants that stretch over multiple years through multiple administrations across multiple departments. It would be in our best interest to know where we're at and that we're spending them all down. So, how do you folks track these beyond, like our monthly? MS. SAKO: So, in the Monthly Budget Status Report,that actually has the cumulative amount or remaining amount of the budget, and then the remaining amount to be spent. So, that's a better way to track the grants and the spending of the grants. It's a little more difficult with the Single Audit. This particular year, you know, we did have high expenditures. So,there's still a lot of Federal COVID money. So, I think we're at like $88 million. In Fiscal Year 2023, that will be coming up, we'll continue to be high partly because of, you know, COVID funding that still continues to be available in our community. But also because of CDBG-DR (Community Development Block Grant Disaster Recovery), which is the buyouts of the lava lands in Puna. So, we do kind of monitor the remaining amounts being spent, and we're pretty aware of the deadlines to spend those down. So, some funds, you know, have multiple years, some are just a single year; although it can be the federal fiscal year which is actually September 30th. Page 17 FC-12 June 6,2023 CHR. KANEALI`I-KLEINFELDER: Yeah, there's some interesting programs in here, and it's hard to see here where we're at in each individual program. But understanding your comment about the way this is presented. MS. SAKO: But if you have one you're particularly worried about, feel free to email us and we'll double check on it. CHR. KANEALI`I-KLEINFELDER: I guess that's my point it's hard to know if I need to be worried because I'm not sure where I stand, budget summary. MS. SAKO: That's why I'm saying to look at the Monthly Budget Status Report. So,they all are disbursed throughout the different departments. Then, some of the larger grants that you may be concerned about, some are in the Housing Fund because they have a lot of the COVID money, and then some are in that 911 or 900 Section towards the back of the General Fund Budget. CHR. KANEALI`I-KLEINFELDER: Okay, does each department know to follow these grants so they have someone specific to each one, like Roadblocks or Rural Mass Transit, you know, whatever might it be with each program? MS. SAKO: Yes, because the department applied for the grant, they know they need to track it. CHR. KANEALI`I-KLEINFELDER: Okay, let me follow-up with you off-line about that. MS. SAKO: Sure. CHR. KANEALI`I-KLEINFELDER: Thank you. Okay, thank you very much Deanna. Thank you very much for all your services to the County. Mr. Benner, mahalo for your time this morning. Okay with that we do have the motion on the floor to close file on Communication 162.1. Council Members, all in favor? Vote on Comm. 162.1: The motion to close file on Comm. 162.1 was carried (Filed) by the following voice vote: Ayes: Committee Members Evans, Galimba, Inaba, Kagiwada, Kierkiewicz, Kimball, Lee Loy, Villegas, and Chair Kaneali`i-Kleinfelder—9. Noes: None. Absent: None. Excused: None. CHR. KANEALI`I-KLEINFELDER: Motion carries. Page 18 FC-12 June 6,2023 ORDER OF The Chair directed the Committee to proceed to the next order of business, RESOLUTIONS: Order of Resolutions. Res. 186-23: AUTHORIZES THE ACCEPTANCE OF ALL DONATIONS OF SECURITIES OR PERSONAL PROPERTY TO THE COUNTY OF HAWAI`I WITHIN THE 2023-2024 FISCAL YEAR THAT ARE NOT COVERED BY THE DEPARTMENT OF FINANCE'S CAPITALIZATION PROCEDURES Provides County Council pre-authorization for the County to accept donations that are not covered by the Finance Department's capitalization procedures for Fiscal Year 2023-2024. Reference: Comm. 310 Intr. by: Mr. Kaneali`i- Kleinfelder (B/R) Motion to Approve: Mr. Inaba moved to recommend adoption of Res. 186-23. Seconded by Ms. Lee Loy. CHR. KANEALI`I-KLEINFELDER: Ms. Sako if you could. I don't see any attachment to this. I understand the process. So, I figured we start with that, and then we'll go to questions. (Note: At this time, Finance Director Deanna Sako came forward to address the members of the Committee.) MS. SAKO: So, I think many of you remember seeing the quarterly reports that we submit with the donations. This is the resolution to authorize us to do that again for the coming fiscal year rather than coming in each time we have those small donations,just consolidating them and bringing that report forward quarterly. So, because the fiscal year is going to start on July 1st, we're just asking for permission to continue that process for the coming year. CHR. KANEALI`I-KLEINFELDER: Okay, thank you. Appreciate it. Council Members, discussion? Okay seeing none, motion is on the floor, all in favor? Vote on Res. 186-23: The motion to recommend adoption of Res. 186-23 was (Approved) carried by the following voice vote: Ayes: Committee Members Evans, Galimba, Inaba, Kagiwada, Kierkiewicz, Kimball, Lee Loy, Villegas, and Chair Kaneali`i-Kleinfelder—9. Noes: None. Absent: None. Excused: None. Page 19 FC-12 June 6,2023 CHR. KANEALI`I-KLEINFELDER: Mr. Clerk, I believe that brings us to the end of our agenda. ADJOURN- There being no further business, at 9:48 a.m., Mr. Inaba moved to adjourn MENT: the meeting. Seconded by Ms. Lee Loy and carried by the following voice vote: Ayes: Committee Members Evans, Galimba, Inaba, Kagiwada, Kierkiewicz, Kimball, Lee Loy, Villegas, and Chair Kaneali`i-Kleinfelder—9. Noes: None. Absent: None. Excused: None. CHR. KANEALI`I-KLEINFELDER: We are adjourned. It is 9:48 a.m. Approved: `` 11 plc 13 Mr. Matt Kanea,i`i-Kleinfelder, Ch:it (Date) Finance Commi ee MK/dt Page 20