Loading...
HomeMy WebLinkAboutCOM 0713.003 2022-2024County Auditor County of Hawai'i Office of the County Auditor Ph 808.961.8386 County of Hawai'i Office of the County Auditor 120 Pauahi St., 309 Hilo, H196720 F 808.961.8905 www.hawaiicounty.go� May 31, 2024 Honorable Heather L. Kimball, Council Chair t- _ 3 and Members of the Hawai'i County Council Hawaii County Council 'mil' -<-A 25 Aupuni Street r#r Hilo, Hawai'i 96720 s- r RE: Federal Awards Supplemental Information June 30, 2023 (Single Audit) Aloha Chair Kimball and Council Members: It is our pleasure to transmit for your review, deliberation, and acceptance of the Federal Awards Supplemental Information June 30, 2023. External auditors Plante & Moran, PLLC, will provide a brief presentation summarizing the results of the report and answer questions via Zoom. This report will also be available on our website https://www.hawaiicountV.,qov/our- county/legislative/office-of-the-county-auditor/audit-reports in the near future. With Aloha, J� Tyler J. Benner County Auditor Enclosures cc, Deanna Sako, Managing Director Diane Nakagawa, Finance Director William Brickey, Partner, Plante & Moran, PLLC Comm. NO. b. : Ref. To: LU Hawai'i Cotmty is an Equal Oppor�twdty Provider card EarployeRief. Bate ti ro `" ��� I County of Hawaii, State of Hawal'i Federal Awards Supplemental Information June 30, 2023 CounV of Hawaii, State of Hawaii Contents Independent Auditor's Reports Report on Schedule of Expenditures of Federal Awards Required by the Uniform Guidance 1 Report on Internal Control Over Financial Reporting and on Compliance and Other Matters Based on an Audit of Financial Statements Performed in Accordance with Government Auditing Standards 2-3 Report on Compliance for Each Major Federal Program and Report on Internal Control Over Compliance Required by the Uniform Guidance 4-6 Schedule of Expenditures of Federal Awards 7-16 Notes to Schedule of Expenditures of Federal Awards 17 Schedule of Findings and Questioned Costs 18-21 11 Plante moran Plante & Moran, PLLC P.D. Box 307 3Ca) Town Cerder, Swe 100 S"Aff-r3fd, MI 48075 Tel 248.352.2fi0o Fax'248.352.(X);8 planlernoran.Com Report on Schedule of Expenditures of Federal Awards Required by the Uniform Guidance Independent Auditor's Report To the Chair and Members of the County Council County of Hawai'i, State of Hawaii We have audited the financial statements of the governmental activities, the business -type activities, the discretely presented component unit, each major fund, and the aggregate remaining fund information of the County of Hawai'i, State of Hawaii (the "County") as of and for the year ended June 30, 2023 and the related notes to the financial statements, which collectively comprise the County's basic financial statements. We issued our report thereon dated April 26, 2024, which contained an unmodified opinion on those financial statements. Our audit was conducted for the purpose of forming opinions on the financial statements that collectively comprise the basic financial statements. We have not performed any procedures with respect to the audited financial statements subsequent to April 26, 2024. The accompanying schedule of expenditures of federal awards is presented for the purpose of additional analysis, as required by the Uniform Guidance, and is not a required part of the basic financial statements. Such information is the responsibility of management and was derived from and relates directly to the underlying accounting and other records used to prepare the basic financial statements. The information has been subjected to the auditing procedures applied in the audit of the basic financial statements and certain additional procedures, including comparing and reconciling such information directly to the underlying accounting and other records used to prepare the basic financial statements or to the basic financial statements themselves, and other additional procedures in accordance with auditing standards generally accepted in the United Stales of America. In our opinion, the information is fairly stated in all material respects in relation to the financial statements as a whole. April 26, 2024 �Pri Y V Plante moran Plante & Moran, PLLC P.O. eax 307 3000 Town Centaf, &me 100 SauthWd, MI 48075 TO248.352 2.5M Fax: 248 352.0018 pianlP.rnnrafi.aOff) Report on Internal Control Over Financial Reporting and on Compliance and Other Matters Based on an Audit of Financial Statements Performed in Accordance with Government Auditing Standards Independent Auditor's Report To Management and the Chair and Members of the County Council I County of Hawaii, State of Hawai'i We have audited, 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 issued by the Comptroller General of the United States, the financial statements of the governmental activities, the business -type activities, the discretely presented component unit, each major fund, and the aggregate remaining fund information of County of Hawai'i, State of Hawai'i (the "County") as of and for the year ended June 30, 2023 and the related notes 6" to the financial statements, which collectively comprise the County's basic financial statements, and have issued our report thereon dated April 26, 2024, Report on Internal Control Over Financial Reporting ' In planning and performing our audit of the financial statements, we considered the County's internal control over financial reporting (internal control) as a basis for designing audit procedures that are appropriate in the circumstances for the purpose of expressing our opinions on the financial statements, but not for the purpose of expressing an opinion on the effectiveness of the County's internal control. Accordingly, we do not express an opinion on the effectiveness of the County's internal control. A deficiency in internal control exists when the design or operation of a control does not allow management or employees, In the normal course of performing their assigned functions, to prevent, or detect and correct, misstatements on a timely basis. A material weakness is a deficiency, or a combination of deficiencies, in internal "y control such that there is a reasonable possibility that a material misstatement of the County's financial statements will not be prevented, or detected and corrected, on a timely basis. A significant deficiency is a deficiency, or a combination of deficiencies, in internal control that is less severe than a material weakness, yet important enough T to merit attention by those charged with governance. Our consideration of internal control was for the limited purpose described in the First paragraph of this section and was not designed to Identify all deficiencies in internal control that might be material weaknesses or significant deficiencies, and, therefore, material weaknesses or significant deficiencies may exist that were not identified. We identified certain deficiencies in internal control, described in the accompanying schedule of findings and questioned costs as Findings 2023-001 and 2023-002, that we consider to be material weaknesses. Report on Compliance and Other Matters As part of obtaining reasonable assurance about whether the County's financial statements are free from material j misstatement, we performed tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements, noncompliance with which could have a direct and material effect on the financial statements. 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 or other matters that are required to be reported under Government Auditing Standards, r. i To Management and the Chair and Members of the County Council County of Hawai'i, State of Hawai'i The County's Responses to the Findings Government Auditing Standards requires the auditor to perform limited procedures on the County's responses to the findings identified in our audit and described in the accompanying schedule of Findings and questioned costs. The County's responses were not subjected to the other auditing procedures applied in the audit of the financial statements, and, accordingly, we express no opinion on them. Purpose of this Report The purpose of this report is solely to describe the scope of our testing of internal control and compliance and the results of that testing, and not to provide an opinion on the effectiveness of the County's internal control or on compliance. This report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the County's internal control and compliance. Accordingly, this communication is not suitable for any other purpose. April 26, 2024 44W&I2)t* w,P4Ge 3 plante rl"1( ran Plante & Moran, PLLC .. plante 3tP.O. Box307 M sown Cute" Suite 100 moran Tel: 248.352.2500 Fax: 248.352.0018 plantemoran.com Report on Compliance for Each Major Federal Program and Report on Internal Control Over Compliance Required by the Uniform Guidance Independent Auditor's Report To the Chair and Members of the County Council County of Hawaii, Slate of Hawaii Report on Compliance for Each Major Federal program Opinion on Each Major Federal Program We have audited the Countyof Hawaii, State of HawaiTs the ( "County") compliance with the types of compliance requirements identified as subject to audit in the U.S, Office of Management and Budget (OMB) Compliance Supplement that could have a direct and material effect on each of the County's major federal programs for the year ended June 30, 2023, 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. In our opinion, the County complied, in all material respects, with the compliance requirements referred to above that could have a direct and material effect on each of the major federal programs for the year ended June 30, 2023. Basis for Opinion on Each Major Federal Program We conducted our audit of compliance in accordance with auditing standards generally accepted in the United Stales of America (GAAS); the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States; and the audit requirements of Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (the "Uniform Guidance"). Our responsibilities under those standards and the Uniform: Guidance are further described in the Auditor's Responsibilities for the Audit of Compliance section of our report. We are required to be independent of the County and to meet our other ethical responsibilities in accordance with relevant ethical requirements relating to our audit. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion on compliance for each major federal program. Our audit does not provide a legal determination of the County's compliance with the compliance requirements referred to above. Responsibilities of Management for Compliance Management is responsible for compliance with the requirements referred to above and for the design, implementation, and maintenance of effective internal control over compliance with the requirements of laws, statutes, regulations, rules, and provisions of contracts or grant agreements applicable to the County's federal n % programs. NP To the Chair and Members of the County Council County of Hawaii, State of Hawai'i Auditor's Responsibilities for the Audit of Compliance Our objectives are to obtain reasonable assurance about whether material noncompliance with the compliance requirements referred to above occurred, whether due to fraud or error, and express an opinion on the County's compliance based on our audit. Reasonable assurance is a high level of assurance but is not absolute assurance and, therefore, is not a guarantee that an audit conducted in accordance with GARS, Government Auditing Standards, and the Uniform Guidance will always detect material noncompliance when it exists, The risk of not detecting material noncompliance resulting from fraud is higher than for that resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control. Noncompliance with the compliance requirements referred to above is considered material if there is a substantial likelihood that, individually or in the aggregate, it would influence the judgment made by a reasonable user of the report on compliance about the County's compliance with the requirements of each major federal program as a whole. IN In performing an audit in accordance with GAAS, Government Auditing Standards, and the Uniform Guidance, we: Exercise professional judgment and maintain professional skepticism throughout the audit. Identify and assess the risks of material noncompliance, whether due to fraud or error, and design and perform audit procedures responsive to those risks. Such procedures include examining, on a lest basis, evidence regarding the County's compliance with the compliance requirements referred to above and performing such ,- other procedures as we considered necessary in the circumstances. Obtain an understanding of the County's internal control over compliance relevant to the audit in order to design audit procedures that are appropriate in the circumstances and to test and report on internal control over compliance in accordance with the Uniform Guidance, but not for the purpose of expressing an opinion on the effectiveness of the County's internal control over compliance. Accordingly, no such opinion is expressed. We are required to communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and any significant deficiencies and material weaknesses in internal control r over compliance that we identified during the audit. Report on Internal Control Over Compliance A deficiency in internal control over compliance exists when the design or operation of a control over compliance N does not allow management or employees, in the normal course of performing their assigned functions, to prevent, or detect and correct, noncompliance with a type of compliance requirement of a federal program on a timely basis. A material weakness in internal control over compliance is a deficiency, or a combination of deficiencies, in internal control over compliance such that there is a reasonable possibility that material noncompliance with a type of compliance requirement of a federal program will not be prevented, or detected and QA corrected, on a timely basis. A significant deficiency in internal control over compliance is a deficiency, or a combination of deficiencies, in internal control over compliance with a type of compliance requirement of a federal aw program that is less severe than a material weakness in internal control over compliance, yet important enough to merit attention by those charged with governance. Our consideration of internal control over compliance was for the limited purpose described in the Auditor's Responsibilities for the Audit of Compliance section above and was not designed to identify all deficiencies in internal control over compliance that might be material weaknesses or significant deficiencies in internal control over compliance. Given these limitations, during our audit we did not identify any deficiencies in internal control over compliance that we consider to be material weaknesses, as defined above. However, material weaknesses w; or significant deficiencies in internal control over compliance may exist that were not identified. Our audit was not designed for the purpose of expressing an opinion on the effectiveness of internal control over compliance. Accordingly, no such opinion is expressed. pl me To the Chair and Members of the County Council County of Hawai'i, State of Hawai'i The purpose of this report on internal control over compliance is solely to describe the scope of our testing of internal control over compliance and the results of that testing based on the requirements of the Uniform Guidance. Accordingly, this report is not suitable for any other purpose. April 26, 2024 AVI& t to /- IL e 2 plate moran N � pryt� pp�� pp tp m �Qf Y L o O �Ly ry � 0 0 0 o w o E` ® 5 41 F e o U U T u e U LL � m h E 6 9 2 p j w v U ro C Q 2 U n 0 LL Y K to 2 L _ N i V N N ni N ry zz LL 4 z Ir_ iEiiiEiEa � >?3 iIs O� LL a K LL S z R d8 ry n d,d 6 N rf o I I xn a m ru m a rn a mm (D ro ca L x x a Amy {m{yy rryy Amryy {{11 AmCy� mryrr /Y N lV IY N N 1`1 m m m m N N N N (rn(�� N � N .- hh m m m m m ~N m .V- C 5 wy y y c y c y c c N 11) ,�w. to w /. c � n� 0 Z Z Z ( ©© a c E y E a 4 a a a a a dd a m n c y 'u m g v 'm rl m U n � w � w` m � E p@Es� [71R (71�7 U�'!?E�J @ E @E n d m in m in m m m m m 7V � m ec $ m to m ^c c g m q s c o o to t`3 u rLi u a n o n❑❑ T £ S E❑ a pE E g O O ��Yj It a m a gi'i of U U L) fg U I I I a o to w En rq In ;n o S fR 00 MN N (oV = x ei LL p. N > > W W UJ UJ Ul W Ul UI lLrz S S S T i x S S Z m m m m m m m m m ro m m a a a p v a v v v ti v v gNd m E tyryq Q6Q pOp (pm(pyV pmp U1 VI VJ N u. w m m m m m m m d a d v g q q a t�] h w m w w a c n o c U 01 a u E 16 a o K ss$a m n oa LZ > >>>>5 x Eye c p Vi N a fy E v E Ep(p � m m W m ID m m m m m m � � Sa � � Sf ~ ~ � � N F" `T �• j � [3 � � C m m 6 ro N O 7 13 L.. C1. X m 4- 0 m O O c ry w o p N N T T. Q Q a I6 h p N F ki C7 N a X x d N Q O l Ci a O a0 0 ' 00 a N m o N m o' g 00 Ix N r 9 O ll N m C Ul U a e0 4 1 CL q Sc �w n i I � c � } n � � iD t° a0 fd ID (6 N tDD i 6 D 4 pr C u c F a ��EEEiii � � � U 6 7 2`� ✓fl y CC 3C O 1Y m ®. u V S 0 L 5 C a Q +a o r� 55 E ° rn m a m m Q m d n o m (6 'Adnj is c O. N O U N O to n c N W Cl) i1 6 1 F p _ n � N r 9 ¢ Y> 43 � N N 00 N N N Q yUy1 Vyy1 S? 66 $ 4 ?N �( �� n [pvry •LQ (Q � ❑o f0 � NN N N N NC^i N N U � 4 f � W u, to 15 tL C Pia ag c Qroua� » o00 ' r 2Di W yyI �Yiy�1 mD Y1 N Oyr gVF�I � ONY �D p�p VI fY ul � M O tpOp O � � b � [V N PNi 111 I? P � O 9 � N ttbb r C{ � IA 1"i 7 VF Vi Vl Y1 N M +- b {{��II / y ryry ryry its ILn O U a S S 0 o 0 0 o x x 2 S O 4 LL Q. GAO a Oli, a fi O fCfyy} p. 1 nl t%G pf rn � 4l h N � � N t• 1a pF h m Z (t/ </1 in n main vl N Y� v� u) Y1 h JI Y1 41 kl b O N 6 O pOp In 43 Ip Ip iV php N p N N i (� pp pp pp pp p m � y U T O � lW6 � Y 1< LL m n in Y S N L F e c A 88r 4 {gip i z b''� eo e e spy cl LO a jQ�{j G C U 111 O w 8 F U a nR e0 vl v! N Q e c e e e c c c n c c B U t3aaTusmsnvn GH�oE@sV O 0 0 o a �S¢ a £' Ue Yem �J uuu uu�i4u a $ xxx xx aaan w E g w R w w m w a +t A o rc �o a N. c EE� N rly r'�i U Y Q L� LL U l.. 1� U F. v� 2 i �aa aaagacLa a a S9 7�C xo L 2 Y x 2 x' E 2 Z �y' 1� m m LL 4 LL 4 e� 4 x 4 IF 9 M 0 G v M 1 I . x w Q r o V VIA i Sri ro m 0 m U hn {Qy � N W w QQpQ u r N N N CI N a m a m ro LL � E 0 f v v gc s 0 vj W cu o ern m oLU §EL $ B$ 0 00 a 0 0 m c m r v W N 2 N m tlf N� �I W 0 � N 0 a an w a❑❑ L) U❑ to $ o Q¢ Q �a to) a¢¢ a N S Q Q a.4 z Z Q Z �u p Q n N a o n i' it r N a a n Y r :ic z o 0 0 0 0 i s 0 o N a q x �J m t•i N M N M N N N N N 1V N N N N fV (aj S�- tY1 m m m m m w v m m rn m a> mv. `a [ W ar r V 1� M � O IM1 N h N t7 us w N 1 I I I ! I W D O 4 YY q a N iJ �d o o �i ¢ D- N Y I Y W w W W W IA VR aarcJgl g $ o❑ ❑ L p a s ww +vr 6 � LL (At I YLI A lL W 11) W W W W Omi W OY TN pi Ohl 9 tl W G6 O Cp W U 'ZCy ZpC � � Q ppN b rn2 n x aO am a hg mm a S N N I n o Q O � Q ❑ 4. M rl is i•! n d. N Di !m o. phi Ohs dhi ui r y ul W a r Q c Ia N U W m a n c N c 00 � aaiE c7 CL x E E 01 Z' 27. O O O r999� E y cAe. C G W m V `Lo ppgry � mg� �� jpg3 m 44 03 MEELIZ §2 §§ County of Hawaii, State of Hawaii t Notes to Schedule of Expenditures of Federal Awards Year Ended June 30, 2023 Note 'I - Basis of Presentation The accompanying schedule of expenditures of federal awards (the "Schedule") includes the federal grant activity of the County of Hawai'i, State of Hawai'i (the "County") under programs of the federal government for the year ended June 30, 2023. The information in the Schedule is presented in accordance with the y requirements of Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (the "Uniform Guidance"). Because the Schedule presents only a selected portion of the operations of the County, it is not intended to and does not present the financial position, changes in net position, or cash flows of the County. Note 2 - Summary of Significant Accounting Policies j Expenditures reported in the Schedule are reported on the cash basis of accounting. Such expenditures are recognized following the cost principles contained in Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards, wherein certain types of expenditures -are not allowable or are limited as to reimbursement. The pass - through entity identifying numbers are presented where available. The County has elected not to use the 10 percent de minimis indirect cost rate to recover indirect costs, as allowed under the Uniform Guidance. Note 3 - Disaster Grants Public Assistance Program (ALN 97.036) Included in the Schedule for the year ended June 30, 2023 is $577,028 of expenditures incurred, under the Disaster Grants Public Assistance grant (ALN 97.036), in previous fiscal years. The project worksheet for these expenditures was approved in the current fiscal year and these expenditures have been reported in the current fiscal year in accordance with the reporting requirements outlined in the 2023 Compliance Supplement. 17 Schedule of Findings and Questioned Costs 18 County of Hawaii State of Hawaii Schedule of Findings and Questioned Costs Year Ended June 30, 2023 Section I - Summary of Auditor's Results Financial Statements Type of auditors report issued: Unmodified Internal control over financial reporting: • Material weakness(es) identified? X Yes No • Significant deficiency(ies) identified that are not considered to be material weaknesses? Yes X None reported Noncompliance material to financial statements noted? Yes X None reported Federal Awards Internal control over major programs: • Material weakness(es) identified? Yes X No Significant deficiency(ies) identified that are not considered to be material weaknesses? Yes X None reported f" Any audit findings disclosed that are required to be reported in accordance with Section 2 CFR 200.516(a)? Yes X No Identification of major programs: Assistance Listing Number Name o Federal Proram or Cluster , , 9 _._. .._,.,...,_,__.__.. Opinion p s: 14.218 CDBG - Entitlement Grants Cluster Unmodified 20.205 Highway Planning and Construction Unmodified v 21.023 Emergency Rental Assistance Program Unmodified Dollar threshold used to distinguish between type A and type B programs: $3,000,000 i Auditee qualified as low -risk auditee? X Yes No Ili ;-s II Y yry County of Hawaii, State of Hawaii Schedule of Findings and Questioned Costs (ContirIued) Year Ended June 30, 2023 Section ll - Financial Statement Audit Findings Reference Number Finding 2023-001 Finding Type - Material weakness Criteria - The County should have processes in place to ensure proper recording of all year- end closing entries in accordance with generally accepted accounting principles (GAAP) prior to the commencement of the audit. In addition, the County should have processes and controls in place to ensure the Annual Comprehensive Financial Report (ACFR) is materially stated correctly and complies with relevant Governmental Accounting Standards Board (GASB) pronouncements. Condition - Correcting adjustments for certain financial statement balances were identified during the audit instead of management that were required in order to present ACFR in accordance with GAAP. Context - The following material adjustments were identified as a result of audit procedures: Governmental activities capital assets decreased and expenses increased by approximately $51 million. Governmental activities infrastructure assets increased and capital construction in progress assets decreased by approximately $10 million. Major governmental fund deferred inflows related to unavailable revenue increased and revenue decreased by approximately $5.2 million. Business -type capital construction in progress assets increased and capital assets decreased by approximately $100,000. In addition, the following immaterial adjustments were also identified and not corrected by management: adjustments to leased assets and liabilities, capital assets and expenses, and deferred inflows and revenue. a Cause - Although the County has certain processes and controls in place related to year-end closing entries, those controls did not detect the aforementioned reporting errors. Effect - If the auditor -identified entries identified above had not been recorded, the financial statements would have been materially misstated. Recommendation - We recommend that the County implement review procedures ensure proper recording of all year-end closing entries in accordance with generally accepted accounting principles (GAAP) prior to the commencement of the audit. Views of Responsible Officials and Planned Corrective Actions - The County acknowledges the importance of GAAP and strives to ensure that all of our financial reporting and accounting practices are in compliance with GAAP. The aforementioned condition specifically relates to the accounting treatment of non -equipment fixed assets, which did not -" impact any of the governmental fund balances in the general ledger. The largest adjustment involved an accounting situation for the County that was not a typical transaction that the County had encountered historically, However, the County did account for the few transactions that occurred in the prior year properly but due to several vacancies in key roles and prolonged vacancies, the special accounting treatment was overlooked in the process. The Department of Finance will schedule training to address these matters. e 20 County of Hawai'i, State of Hawaii Schedule of Findings and Questioned Costs (Continued) Year Ended June 30, 2023 Section II - Financial Statement Audit Findings (Continued) Reference Number Finding 2023-002 Finding Type - Material weakness Criteria - In accordance with generally accepted accounting principles, revenue should be recognized related to water deposits once the commitment has either expired or been fulfilled. Condition - During the audit, we identified various deposits that should have been recognized as revenue. Context - A significant portion of the $14 million of unearned revenue liability should have been recognized as revenue during previous periods, considering the amount of time that has lapsed on renewals for some customers. Correcting this error resulted in a prior period adjustment increasing beginning net position by $7,713,362 and decreasing the correlating liability as of the prior year end. Cause - Although the Department of Water Supply (the Department) has processes and controls in place surrounding the water commitment deposits, those processes and controls did not ensure that the aforementioned activity was correctly reported at June 30, 2023 and that all activity that needed to be accurately reflected in the Department's Financial statements was reviewed, reconciled, and corrected or recorded timely. Effect - If accounts are not reconciled throughout the year, the Department's management and the Water Board are not provided with accurate financial information to make decisions during the Department's fiscal year, and material inaccurate financial reporting could result. Recommendation - The Department should have processes and controls in place to ensure proper recording and reconciling of liability and revenue accounts throughout the year. Views of Responsible Officials and Planned Corrective Actions - Revenue related to the wafer deposits will be recognized at the expiration of the initial 3-year commitment term and at the expiration of any subsequent extension term(s) or upon completion of the requirements for the proposed project or development, whichever occurs earlier. Reconciliations of the water commitment liability and associated revenue account with the applicable source documents will be performed on a monthly basis. Section III - Federal Program Audit Findings Reference Number Current Year None Finding Questioned Costs i -,: 21