HomeMy WebLinkAboutCOM 0636.000 1998-2000 t~w~
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ALAN S. KONISHI DONALD IKEDA
County Clerk Depure Conn(r Clerk
CONSTANCE R. KIRIU
Lc;gisla[i ve Audimr
OFFICE OF THE COUNTY CLERK
Codmty of Hawaii
Han°aii County Building C
~5 Anpuni S(reet -
Hi(o. Hawa7i 96710 ~
January 7, 2000
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TO: Council Members
FROM: Connie Kiri It{
Legislative Auditor
RE: Single Audit Report for Fiscal Year Ending June 30, 1999
A copy of the Single Audit Report of the County of Hawaii,for h'iscal Year Ending
June 30, 1999, is distributed for your information and review. The Single Audit Report was
prepared by KPMG Peat Marwick as part of the Council's overall audit contract.
The Single Audit Report is prepared for federal awarded programs to meet reporting and auditing
requirements. Specifically, subrecipients in receipt of a minimum threshold amount of funds are
audited for the purpose of identifying material weakness of internal controls and testing
compliance with certain provisions of laws, regulations, contracts and grants, which mould have a
direct and material effect on the financial statement amounts. A list of all county programs that
have received federal funds can be found on pages 7-15 ("Schedule of Expenditures of Federal
Awards'). Another separate memorandum dated January 3, 2000 from Controller Dixie Kaetsu
submitting a "Corrective Action Plan" and a "Summary Schedule of Prior Audit Findings"
should be kept with the Single Audil Report.
The auditors found that their testing disclosed no instances of noncompliance that are required to
be reported under Government Auditing Standards. The auditors also noted no matters involving
the internal control over financial reporting and its operation that would be considered to be
material weaknesses. Additionally, the auditors found that the County complied, in all material
respects, with the audit requirements applicable to each of its major federal programs.
Should you have any questions, please feel free to contact me.
EnC. Comm. No. YJ36
File No. (~f~
Ref. To: ~L
Ref. Date JAN 2 5 2000
~1M~t or y~'
P~
Stephen K. Yamashuo Harry A. Takahashi
.Mayor Ovecror
g; •Ni.+' S. K. Schune
~epury
~ouutp of ~a~aii
DEPARTMENT OF FINANCE
25 Aupuni Street, Room I 1 S • Hilo, Hawaii 96720-4252
(BOB) 961-8234. Fax (808) 961-8248
RECEIVED
ntrb-.`~ o0 o m By - - -
January 3, 2000 Date-._!~`-!-,-~-----
unty Council
Re: Single Audit for Fiscal Yeaz Ended June 30, 1999
Corrective Action Plan
Summary Schedule of Prior Audit Findings
As required by OMB Circular A-133, the County has prepared a Corrective Action Plan and a
Summary Schedule of Prior Audit Findings. These two documents contain the County's
response to current and prior year findings contained in the Single Audit report. Please keep
these attached documents with your copy of the Single Audit report.
Dixie Kaetsu
Controller
Attachments
CORRECTIVE ACTION PLAN
Department of Agriculture
Water and Waste Disposal Systems for Rural Communities
CFDA No. 10.760
Department of Housing and Urban Development
Community Development Block Grant/Small Cities Program
CFDA No. 14.219
Federal Award No. B-93-DH-15-0002, B-96-DH-15-0002 and B-97-DH-15-0002
Finding 99-O1 Subrecipient Mouitoring
Recommendation: We recommend that the County closely monitor its subrecipients to
ensure that the required audit reports are completed in a timely mazmer.
Administration's Comment: The County acknowledges the importance of subrecipients'
audit reports to evaluate the administration of the program in accordance with federal
requirements. In the situation cited in this finding, the subrecipient contracted with an
accounting firm to conduct the audit on a timely basis but due to staffing changes at the
accounting firm, the audit and report were delayed. In the future, the County will take
greater care in monitoring subrecipient activities to ensure compliance with the terms and
conditions of the Subrecipient Agreement. To ensure compliance, the County will send out
letters one month prior to the end of the fiscal year to remind subrecipients of their
contractual obligation to submit their audited financial statements within 60 days of fiscal
yeaz end.
Anticipated Completion Date: This will be an ongoing effort.
Contact Persons: Edwin S. Taira, Assistant Housing Administrator
Office of Housing and Community Development
Richard Tsunoda, Waterworks Controller
Department of Water Supply
Department of Agriculture
Water and Waste Disposal Systems for Rural Communities
CFDA No. 10.760
Finding 99-02 Subrecipient Agreement
Recommendation: We noted that the County and the subrecipient are currently in the
process of executing an amendment to the subrecipient agreement that will be effective
April 29, 1999 and extend the agreement to April 28, 2000. The County should exercise
greater care in monitoring activities under subrecipient agreements.
Administration's Comment: Construction on the Hamakua Housing Corporation water
system was not completed in the expected one-year time period. In the future, care will be
taken to execute contract extensions before the expiration of the original term when
construction takes longer than initially anticipated.
Anticipated Completion Date: This will continue to be an ongoing effort.
Contact Person: Richard Tsunoda, Waterworks Controller
Department of Water Supply
Department of Housing and Urban Development
Community Development Block Grant/Small Cities Program
CFDA No. 14.219
Federal Award No. B-93-DH-15-0002, B-96-DH-15-0002 and B-97-DH-15-0002
Finding 99-03 Procurement
Recommendation: We recommend that the County exercise greater care in ensuring that all
procurement documentation is properly maintained.
Administration's Comment: This is the same finding as Finding 98-02 from the prior year
audit report. As previously explained, the records were misplaced during the transfer of
documents and project responsibilities between County departments. To date, the documents
have not been located but the chair of the selection committee has signed an affidavit
certifying that the selection process was conducted in compliance with the procurement code.
The County ensures that all procurement documents are in the file. This was an isolated
incident where the process was completed but the files were misplaced during the change in
project responsibility.
Anticipated Completion Date: Completed. Documentation of compliance is an ongoing
effort.
Contact Person: Edwin S. Taira, Assistant Housing Administrator
Office of Housing and Community Development
SUMMARY SCHEDULE OF PRIOR AUDIT FINDINGS
Environmental Protection Agency
Capitalization Grants for State Revolving Funds
And
Department of Agriculture
Water/Wastewater Disposal System for Rural Communities
Finding 97-3: The payroll certifications regazding compliance with the Davis-Bacon Act
requirements are not consistently maintained by the County.
Corrected.
Contact person: Peter Boucher
Wastewater Division Chief
Department of Housing and Urban Development
Community Development Block Grant/Small Cities Program
Finding 98-O1: All requests for reimbursements should be processed after actual costs
aze paid by the program.
Corrected.
Contact person: Edwin S. Taira, Assistant Housing Administrator
Office of Housing and Community Development
Finding 98-02: We recommend that the County exercise greater caze in ensuring that all
procurement documentation is properly maintained.
Corrective action taken: The County has ensured that all procurement
documents aze in files. This was an isolated incident where the process
was completed but the files were misplaced during the change in project
responsibility. Refer to response to Finding 99-03 in the current
Corrective Action Plan.
Contact person: Edwin S. Taira, Assistant Housing Administrator
Office of Housing and Community Development
Finding 98-03: We recommend that the County print hard copies of personnel activity
reports and implement a policy to have employees sign the personnel activity
reports.
Corrected.
Contact person: Edwin S. Taira, Assistant Housing Administrator
Office of Housing and Community Development
Department of Housing and Urban Development
HOME Investment Partnership Program
Finding 98-04: We recommend that the County print hazd copies of personnel activity
reports and implement a policy to have employees sign the personnel activity
reports.
Corrected.
Contact person: Edwin S. Taira, Assistant Housing Administrator
Office of Housing and Community Development
Environmental Protection Agency
Capitalization Grants for State Revolving Funds
Finding 98-05: We recommend that the Division monitor the contractor's compliance
with the Davis-Bacon Act (and other labor requirements) and ensure that adequate
documentation is maintained. The Division should require that it be provided
with a copy of the appropriate certification(s) as part of the proper monthly
progress billing.
Corrective action taken: The payroll certifications are being maintained by the
Construction Manager for the duration of a project. They provide an
affidavit each month that certified payroll records are in their possession.
During the fiscal yeaz ended June 30, 1999, the County began periodic
inspections of the records in the possession of the Construction Manager.
All records were found to be in order. Such periodic inspections will
continue.
Contact person: Peter Boucher
Wastewater Division Chief
.lnAFfA~~C~ ~ 4~~1~~
COUNTY OF HAWAII
STATE OF HAWAII
Single Audit of Federal Financial Assistance Programs
Year ended June 30, 1999
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COUNTY OF HAWAII
STATE OF HAWAII
Single Audit of Federal Financial Assistance Programs
Year ended June 3Q 1999
Table of Contents
Page
I. INTRODUCTION
Audit Objectives 1
Scope of Audit 2
Organization of Report 2
II. COMPLIANCE AND INTERNAL CONTROL OVER FINANCIAL REPORTING
Report on Compliance and on Internal Control Over Financial Reporting Based on an
Audit of Financial Statements Performed in Accordance with Government Auditing
Standards 3
III. COMPLIANCE AND INTERNAL CONTROL OVER FEDERAL AWARDS
Report on Compliance with Requirements Applicable to Each Major Program and
Internal Control Over Compliance in Accordance with OMB Circular A-133 5
Schedule of Expenditures of Federal Awards 7
Notes to Schedule of Expenditures of Federal Awards 16
Schedule of Findings and Questioned Costs 17
SECTION l -INTRODUCTION
P 0. Box 4150 Telephone 808 531 7286
Honolulu, HI 96812-4150 Fax 808 541 9321
October 15, 1999
To the Members of the
County Council of Hawaii
County of Hawaii
Hilo, Hawaii:
We have completed our financial audit of the general purpose financial statements of the County of
Hawaii, State of Hawaii (County), as of and for the year ended June 30, 1999. We have also audited the
County's compliance with requirements applicable to its major federal financial assistance programs. We
submit herein our reports on compliance and internal control over financial reporting and over federal
awards, the schedule of expenditures of federal awazds and a schedule of findings and questioned costs.
The audit objectives and scope of the financial audit, as defined in our contract with the County, are as
follows:
AUDIT OBJECTIVES
1. To provide a basis for an opinion on presentation of the general purpose financial statements
of the County and all of its agencies, including the Department of Water Supply.
2. To ascertain whether or not expenditures and other disbursements have been made, and
revenues, receipts and receivables to which the County is entitled or is responsible for having
collected and accounted for in accordance with the laws, rules and regulations, and policies
and procedures of the County, the State of Hawaii and the federal government (where
applicable) have been satisfied.
3. To evaluate the accuracy, effectiveness, and efficiency of the systems and procedures for
financial accounting, internal and operational controls of the County and of operations for
which the County is responsible.
4. To ascertain whether: (1) the funds appropriated to the agencies have been expended in
accordance with the purposes for which they were appropriated and in accordance with
applicable laws, ordinances and regulations; (2) adequate accounting systems and procedures
have been established to safeguard the public funds and property; (3) accurate and reliable
fiscal records have been maintained; and (4) there has been efficiency in operations.
5. To test, study, examine, evaluate and report on the general purpose financial statements,
internal accounting and other control systems, and other compliance requirements for federal
financial assistance programs in accordance with the provisions of the Single Audit Act of
1984, the Single Audit Act Amendments of 1996, as may be amended, and U.S. Office of
Management and Budget (OMB) Circular No. A-133.
6. To recommend improvements to the internal control, reporting and accounting systems and
procedures of the County's agencies as appropriate.
1
KVI ~1~..,.1 KKMM II l~~ini~i , '~on ip
SCOPE OF AUDIT
1. We performed an audit of the general purpose financial statements as of and for the year
ended June 30, 1999 in accordance with generally accepted auditing standards, as adopted by
the American Institute of Certified Public Accountants, and the standards applicable to
governmental financial audits contained in Government Auditing Standards, issued by the
Comptroller General of the United States.
2. As part of the audit of the County's general purpose financial statements, we performed tests
of the County's compliance with certain provisions of laws, regulations, contracts and grants.
We also evaluated the County's internal control over financial reporting, which included an
assessment of the extent to which the intemal control structure can be relied upon to ensure
accurate information, to ensure compliance with laws and regulations, to provide for efficient
and effective operations, and to ensure integrity in the County's receipt and expenditure of
public funds.
3. We performed an audit of the County's federal financial assistance programs for the year
ended June 30, 1999 in accordance with generally accepted auditing standards, as adopted by
the American Institute of Certified Public Accountants, the standards applicable to financial
audits contained in Government Auditing Standards, issued by the Comptroller General of
the United States, certain provisions of OMB Circular A-133 and the applicable sections
described in the OMB's Circular A-133 Compliance Supplement.
ORGANIZATION OF REPORT
Our report is organized into three sections as follows:
1. Section I, entitled "Introduction," describes the objectives and scope of our financial audit
and the organization and contents of this report.
2. Section II, entitled "Compliance and Internal Control Over Financial Reporting," contains our
report on the County's compliance and internal control over financial reporting based upon
our audit of the County's general purpose financial statements.
3. Section III, entitled "Compliance and Internal Control Uver Federal Awards," contains our
report on the County's compliance and intemal control over federal awards in accordance
with OMB Circular A-133, a schedule of expenditures of federal awards and a schedule of
findings and questioned costs.
Our report on the general purpose financial statements of the County as of and for the year ended June 30,
1999 is included under a separate cover. A separate management letter dated October 15, 1999 has also
been issued.
We would like to take this opportunity to express our appreciation to the personnel of the County of
Hawaii for the cooperation and assistance extended to us during our audit. We will be pleased to discuss
any questions that you or your associates may have regarding our recommendations.
Very truly yours,
K`~?~tG u--~
2
SECTION ll -COMPLIANCE AND INTERNAL CONTROL
OVER FINANCIAL REPORTING
P O Box 4150
Honolulu, HI 96812-4150
Report on Compliance and on Internal Control
Over Financial Reporting Based on an
Audit of Financial Statements Performed in
Accordance with Government Auditing Standards
To the Members of the
County Council of Hawaii
County of Hawaii
Hilo, Hawaii:
We have audited the general purpose financial statements of the County of Hawaii, State of Hawaii
(County), as of and for the year ended June 30, 1999, and have issued our report thereon dated October 15,
1999. We conducted our audit in accordance with generally accepted auditing standards and the standards
applicable to financial audits contained in Government Auditing Standards, issued by [he Comptroller
General of the United States.
Compliance
As part of obtaining reasonable assurance about whether the County's general purpose financial
statements are free of material misstatement, we performed tests of its compliance with certain provisions
of laws, regulations, contracts and grants, noncompliance with which could have a direct and material
effect on the determination of financial statement amounts. However, providing an opinion on
compliance with those provisions was not an objective of our audit, and accordingly, we do not express
such an opinion. The results of our tests disclosed no instances of noncompliance that are required to be
reported under Government Auditing Standards.
Internal Control Over Financial Reporting
In planning and performing our audit, we considered the County's internal control over financial reporting
in order to determine our auditing procedures for the purpose of expressing our opinion on the general
purpose financial statements and not to provide assurance on the internal control over financial reporting.
Our consideration of the internal control over financial reporting would not necessarily disclose all matters
in the internal control over financial reporting that might be material weaknesses. A material weakness is
a condition in which the design or operation of one or more of the internal control components does not
reduce to a relatively low level the risk that misstatements in amounts that would be material in relation to
the general purpose financial statements being audited may occur and not be detected within a timely
3
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period by employees in the normal course of performing their assigned functions. We noted no matters
involving the internal control over financial reporting and its operation that we consider to be material
weaknesses. However, we noted other matters involving the internal control over financial reporting,
which we have reported to management of the County in a separate letter dated October 15, 1999.
This report is intended solely for the information and use of the County Administration, the County
Council and federal awarding agencies and is not intended to be and should not be used by anyone other
than these specified parties. ~~c,.,
rt*'N~G LLB
Honolulu, Hawaii
October 15, 1999
4
SECTION 111 -COMPLIANCE AND INTERNAL CONTROL
OVER FEDERAL AWARDS
P O. Box 4150
Honolulu, HI 96812-4150
Report on Compliance with Requirements
Applicable to Each Major Program
and Internal Control Over Compliance in Accordance
with OMB Circular A-133
To the Members of the
County Council of Hawaii
County of Hawaii
Hilo, Hawaii:
Compliance
We have audited the compliance of the County of Hawaii, State of Hawaii (County), with the types of
compliance requirements described in the US. Oj~ce of Management and Budget (OMB) CircularA-133
Compliance Supplement that are applicable to each of its major federal programs for the year ended
June 30, 1999. The County's major federal programs are identified in the summary of auditor's results
section of the accompanying schedule of findings and questioned costs. Compliance with the
requirements of Taws, regulations, contracts and grants applicable to each of its major federal programs is
the responsibility of the County's management. Our responsibility is to express an opinion on the
County's compliance based on our audit.
We conducted our audit of compliance in accordance with generally accepted auditing standards; the
standards applicable to financial audits contained in Government Auditing Standards, issued by the
Comptroller General of the United States; and OMB Circular A-133, Audits ojStates, Local Governments,
and Non-Profit Organizations. Those standards and OMB Circular A-133 require that we plan and
perform the audit to obtain reasonable assurance about whether noncompliance with the types of
compliance requirements referred to above that could have a direct and material effect on a major federal
program occurred. An audit includes examining, on a test basis, evidence about the County's compliance
with those requirements and performing such other procedures as we considered necessary in the
circumstances. We believe that our audit provides a reasonable basis for our opinion. Our audit does not
provide a legal determination on the County's compliance with those requirements.
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ember o~ KPMG International, a Swiss assoaaoon
In our opinion, the County complied, in all material respects, with the requirements referred to above that
are applicable to each of its major federal programs for the year ended June 30, 1999. However, the
results of our auditing procedures disclosed instances of noncompliance with those requirements, which
are required to be reported in accordance with OMB Circular A-133 and which are described in the
accompanying schedule of findings and questioned costs as items 99-O1 to 99-03.
Internal Control Over Compliance
The management of the County is responsible for establishing and maintaining effective internal control
over compliance with requirements of laws, regulations, contracts and grants applicable to federal
programs. In planning and performing our audit, we considered the County's internal control over
compliance with requirements that could have a direct and material effect on a major federal program in
order to determine our auditing procedures for the purpose of expressing our opinion on compliance and
to test and report on the internal control over compliance in accordance with OMB Circular A-133.
Our consideration of the internal control over compliance would not necessarily disclose all matters in the
internal control that might be material weaknesses. A material weakness is a condition in which the
design or operation of one or more of the internal control components does not reduce to a relatively low
level the risk that noncompliance with applicable requirements of laws, regulations, contracts and grants
that would be material in relation to a major federal program being audited may occur and not be detected
within a timely period by employees in the normal course of performing their assigned functions. We
noted no matters involving the internal control over compliance and its operation that we consider to be
material weaknesses.
Schedule of Expenditures of Federal Awards
We have audited the general purpose financial statements of the County of Hawaii as of and for the year
ended June 30, 1999, and have issued our report thereon dated October 15, 1999. Our audit was
performed for the purpose of forming an opinion on the general purpose financial statements taken as a
whole. The accompanying schedule of expenditures of federal awards is presented for purposes of
additional analysis as required by OMB Circular A-133 and is not a required part of the general purpose
financial statements. Such information has been subjected to the auditing procedures applied in the audit
of the general purpose financial statements and, in our opinion, is fairly stated, in all material respects, in
relation to the general purpose financial statements taken as a whole.
This report is intended solely for the information and use of the County Administration, the County
Council and federal awarding agencies and is not intended to be and should not be used by anyone other
than these specified parties.
l~ti+i(G LLP
Honolulu, Hawaii
October 15, 1999
6
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COUNTY OF HAWAII
STATE OF HAWAII
Notes to Schedule of Expenditures of Federal Awards
Year ended June 30, 1999
(1) Basis of Presentation
The accompanying schedule of expenditures of federal awards (schedule) includes the federal grant
activity of the County of Hawaii, State of Hawaii (County), and is presented on the modified accrual basis
of accounting, which is described in Note 1 to the County's general purpose financial statements. The
information in this schedule is presented in accordance with the requirements of OMB CircularA-133,
Audits of States, Local Governments, and Not-Profit Organizations. Therefore, some amounts presented in
this schedule may differ from amounts presented in, or used in the preparation of, the general-purpose
financial statements.
(2) Subrecipients
Of the federal expenditures presented in this schedule, the County provided federal awards to Subrecipients
as follows:
Amount
CFDA Provided to
Program Title Number Subrecipients
Housing Preservation Grant 1998 10.433 $ 25,506
Housing Preservation Grant Program
Income ]0.433 27,500
Paauilo Water System 10.760 743,181
Ookala Water System 10.760 352,169
Community Development Block
GranUSmall Cities Program 14.219 628,096
Emergency Shelter Grants Program 14.231 51,167
HOME Investment Partnership Program 14.239 398,240
Title V -Delinquency Prevention Program 16.548 4,058
Crime Victim Assistance 16.575 149,113
Bicycle Education Program 20.600 54,624
Title III, Part F -Disease Prevention and
Health Promotion Services 93.043 13,090
Title III, Part B -Grants for Supportive
Services and Senior Centers 93.044 198,280
Title QI, Part D - In Home Services for
Frail Older Individuals 93.046 8,520
16
COUNTY OF HAWAII
STATE OF HAWAII
Schedule of Findings and Questioned Costs
Year ended June 30, 1999
(I) Summary of Auditor's Results
(a) The type of report issued on the general purpose financial statements: Unqualified opinion
(b) Reportable conditions in internal control were disclosed by the audit of the financial statements: No
Material weaknesses: No
(c) Noncompliance which is material to the general purpose financial statements: No
(d) Reportable conditions in internal control over major programs: No Material weaknesses: No
(e) The type of report issued on compliance for major programs: Unqualified opinion
(f) Any audit findings which are required to be reported under section. 510(a) of OMB Circular A-133:
Yes
(g) Major programs:
Department of Agriculture - 10.760 - Water and Waste Disposal Systems for Rural
Communities
Department of Housing and Urban Development:
14.219 -Community Development Block Grant/Small Cities Program
14.239 -HOME Investment Partnership Program
Environmental Protection Agency - 66.458 -Capitalization Grants for State Revolving Funds
(h) Dollar threshold used to distinguish between Typc A and Type B programs: 3% of total federal
awards expended or $867,936
(i) Auditee qualified as a low-risk auditee under Section .530 of OMB Circular A-133: Yes
(2) Findings Relating to the Financial Statements Reported in Accordance with Government Auditing
Standards:
None
17 (Continued)
COUNTY OF HAWAII
STATE OF HAWAII
Schedule of Findings and Questioned Costs
Year ended June 30, 1999
(3) Findings and Questioned Costs relating to Federal Awards:
Department of Agriculture
Water and Waste Disposal Systems for Rural Communities
CFDA No. 10.760
Department of Housing and Urban Development
Community Development Block Grant/Small Cities Program
CFDA No. 14.219
Federal Award No. B-93-DH-15-0002, B-96-DH-15-0002 and B-97-DH-15-0002
Finding 99-O1 5ubrecipient Monitoring
Condition: During our testwork on subrecipient monitoring, we noted that the County has not received the
audit report from a subrecipient, Hamakua Housing Corporation, for the year ending December 31, 1998 as
required by OMB Circular A-133.
Criteria: The County, as a direct recipient or pass-through agency, should obtain and review audited
financial statements as part of its subrecipient monitoring process to comply with OMB Circular A-133.
The subrecipient agreement between the County, the subrecipient and the grantor for the Water and Waste
Disposal Systems for Rural Communities program requires audited financial statements to be provided
within 150 days of the subrecipient's December 31 year end.
Effect: The County is unable to utilize the audit report to evaluate the subrecipient's administration of the
program in accordance with Federal requirements.
Cause: The subrecipient is in the process of finalizing the audit. The County expects to receive the
subrecipient's audit report in the near future.
Questioned Cost: $0
Recommendation: We recommend that the County closely monitor its subrecipients to ensure that the
required audit reports are completed in a timely manner.
Department of Agriculture
Water and Waste Disposal Systems for Rural Communities
CFDA No. 10.760
Finding 99-02 subrecipient Agreement
Condition: During our testwork on subrecipient monitoring, we noted that activities under a subrecipient
agreement continued beyond the expiration date (April 28, 1999) of the subrecipient agreement with
Hamakua Housing Corporation.
18 (Continued)
COUNTY OF HAWAII
STATE OF HAWAII
Schedule of Findings and Questioned Costs
Year ended June 30, 1999
Criteria: subrecipient monitoring procedures should ensure that the subrecipient activities are performed
within the terms of the subrecipient agreement.
Effect: Activities were performed by and payments were made to Hamakua Housing Corporation
subsequent to the expiration of the subrecipient agreement. However, the County and the subrecipient
continued to follow the terms and conditions of the expired subrecipient agreement during the period
subsequent to expiration of the agreement.
Cause: We were informed by management that extension of the subrecipient agreement was inadvertently
overlooked.
Questioned Cost: $0
Recommendation: We noted that the County and the subrecipient are currently in the process of
executing an amendment to the subrecipient agreement that will be effective April 29, 1999 and extend the
agreement to April 28, 2000. The County should exercise greater care in monitoring activities under
subrecipient agreements.
Department of Housing and Urban Development
Community Development Block GranUSmall Cities Program
CFDA No. 14.219
Federal Award No. B-93-DH-15-0002, B-96-DH-15-0002 and B-97-DH-IS-0002
FindinH 99-03 Procurement
Conditions: During our testwork of 25 selected contract files and while following up on a prior year
finding, we noted one instance where the contract file did not contain documentation supporting contractor
evaluation and selection for expenditures amounting to $43,952 as required by the Hawaii Procurement
Code, Hawaii Revised Statutes (HRS), Sec. 103D.
Criteria: The County is responsible for procuring goods and/or services in accordance with Hawaii
Procurement Code, HRS, Sec. ]03D.
Effects: We were unable to determine whether the contractor evaluation and selection process for this
sample item complied with the Hawaii Procurement Code, HRS, Sec. 103D.
Cause: We were informed by management that the procurement documentation was misplaced.
Questioned Costs: $43,952
Recommendation: We recommend that the County exercise greater care in ensuring that all procurement
documentation is properly maintained.
19