HomeMy WebLinkAboutCOM 0155.000 2024-2026County Auditor
County ofHawoi'i
Office ofthe County Auditor
Ph8O8SO1.838O
Honorable Dr. HolekaGomInaba, Council Chair
and Members ofthe Havvoi'iCounty Council
Hoxvai'iCounty Council
25AupuniStreet
County ofHmwail
Office of the County Auditor
120PauahiGL.309
Hi|o, H|SO72O
Subject: Post -Audit Responsibilities and Audit Progress Update
Dear Council Chair Inaba and Council Members,
Pursuant to Section 10-13 of the Hawai'i County Charter, the County Council is responsible for
providing an independent audit of the County's financial transactions and operations at least once
per year. In accordance with this mandate, the authority to conduct or cause the post -audit to be
conducted has been delegated to the County Auditor, as outlined in Section 3-18 of the Charter.
Following ecompetitive bidding process, AccuityULPwas selected eethe independent auditor to
conduct the Countvofinancial audits for ofive-year period, beginning with the fiscal year ending
June 30. 2024. Since the engagement oornnoenced, our office has received monthly status
updates from Accuitytoensure progress and address emerging concerns.
Accuity has reported challenges inreceiving the necessary documentation from the County of
H@vv8^i and the Department of Water Supply (DWS), impacting their timely [9vExwa. These
challenges include:
° A significantnurnberofoendingitenne
° Staffing shortages within the County have resulted in significant delays.
° Continued delays inreceiving requested items from the County and DVVS.
° Changes in County administration and staffing have further contributed to delays.
° Certain onaoo have required multiple follow-ups and revised aohedu|ao, adding to the
overall time required.
To navigate the challenges associated with administrative transitions and key personnel turnover
cost-effectively, Finance has collaborated with AouuUv to tarnponahk/ suspend the review of
submitted documentation until a significant portion ofthe required materials is available. Finance
maintains regular meetings and open dialogue with Acouky[o discuss chaUongea, acknowledge
de|ayo, and work toward solutions. Committed to expediting the ppocean. Finance has also
|rnp|ennenhad corrective nneaeunao, including contracting with on external agency to gather and
organize the necessary documentation.
Given the adjusted timeline, the anticipated issuance ofthe financial statements 1anow osfollows:
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• Department of Water Supply — End of March 2025 (earliest)
• County of Hawaii — End of April 2025 (earliest)
Additionally, while Finance has actively sought to minimize cost overruns, Accuity has incurred
costs beyond what was initially anticipated due to the extended timeline and additional follow-ups
necessary to complete the financial audit. As a result, the Council should expect a forthcoming
supplemental budget request to cover these unanticipated expenses.
Please let me know if you require additional information or if further action is necessary to facilitate
the completion of the audit.
Respectfully,
County Auditor
cc: C. Kimo Alameda, Ph.D., Mayor
William V. Brilhante Jr., Managing Director
Jon Henricks, County Clerk
Diane Nakagawa, Finance Director
MEMORANDUM: ACCU ITY
DATE: February 17, 2025
TO: Tyler Benner, County Auditor
FROM: Kim Miyoshi, Accuity LLP
Lance Chee, Accuity LLP
SUBJECT: Status report as of February 17, 2025, for the FY2024 Financial Statement and
Single Audits of the County of Hawaii, and stand-alone FY2024 Financial
Statement Audit of the County's Department of Water Supply
Current Status
Countv of Hawaii — Latest check -in meeting held 2/12/2024
• Current project phase: fieldwork
• Outstanding
requests areas:
o
Major fund determination
o
Restricted cash schedule
o
Accounts receivable
o
Preliminary Analytics
o
Accounts Payable
o
Debt
o
Capital assets
o
Pension and OPEB
o
Census data testing
• Schedules received but not yet reviewed:
o
Leases & SBITA
o
Real property tax testing
o
Landfill liability schedules
o
Claim testing— WC & GL
o
Pension & OPEB schedules
o
Revenue testing —Special Revenue Funds
o
Contract listing for current year procurements
Deoartment of Water Suoolv (DWS) — Latest check -in meeting held 2/13/2024
• Outstanding requests areas:
o Bank reconciliations (expected 2/21)
o Revenue testing
o Internal control walkthroughs
o Entity -level controls
o Financial Statement drafts
999 Bishop Street OFFICE 808.531.3400
Suite 2300 FAX 808.531.3433
Honolulu, HI 96813 accuityllp.com
Single Audit —
• Received final SEFA (2/5/2025)
• Expect to test five federal programs, an increase from the three programs initially
budgeted
Tasks Accomplished
Countv of Hawaii
Procedures over cash and investments have been substantially completed, pending
restricted cash schedule and any subsequent inquiries
Accounts Payable testing (July — December) has been substantially completed
• Testing over majority of capital asset categories have been initiated
Department of Water Supply
• Accounts Payable testing (July — November) has been substantially completed, with
December & January testing initiated
• Procedures over Debt have been substantially completed, pending inquiries
• Testing/substantive procedures over the following areas have been complete: Accounts
Receivable, Inventory, Capital Assets, Leases/SBITAs, Accrued Liabilities, Pension, OPEB,
Operating Expenses, and Other Income & Expenses
Problems/Issues
• Staffing issues in the County of Hawaii has lead to significant delays.
• There have been continued delays in receipt of requested items from the County of
Hawaii and Department of Water Supply.
• Changes in the County of Hawaii administration and staffing changes have resulted in
additional delays
• Certain areas have required multiple follow-ups or revised/updated schedules resulting
in additional time incurred
Findings
• To date, we have no formal findings to report.
• We expect to report a financial reporting control finding.
Engagement Schedule
• As Accuity enters its busy season, we have elected to suspend review over County's
provided support/schedules until a substantial amount of items have been added. At
that time, we will review all uploads and continue testing and procedures. With the
continued delays, we currently anticipate the Financial Statements of the County's
Department of Water Supply to be issued by the end of March at the earliest with the
County of Hawaii to be issued by the end of April at the earliest.
• Spire has been contracted to assist the County in completing financial audit schedules
and the preparation of the ACFR