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HomeMy WebLinkAboutCOM 0427.001 2024-2026��vner- County Auditor County of Hawai'i Office of the County Auditor Ph 808.961.8386 July 21, 2025 County of Hawaii Office of the County Auditor 120 Pauahi St., 309 Hilo, HI 96720 F 808.961.8905 www. hawai icou nty. gov Honorable Dr. Holeka Goro Inaba, Council Chair Q.C-) r---'CD and Members of the Hawaii County Council Hawaii County Council 25 Aupuni Street Hilo, HI 96720' RE: Single Audit of Federal Financial Assistance Program - Fiscal Year Ending June 30, 2024 - Aloha Chair Inaba and Council Members: It is our pleasure to transmit for your review, deliberation, and acceptance of the Single Audit of Federal Financial Assistance Programs for Fiscal Year Ended June 30, 2024, as prepared by external auditors, Accuity LLP. Additionally, Accuity LLP, has prepared a brief presentation summarizing the results of the report and will be available to answer questions via Zoom. With Aloha, jai Tyler J. Benner County Auditor Enclosures cc. C. Kimo Alameda, Ph.D., Mayor Jon Henricks, County Clerk Diane Nakagawa, Finance Director Donn Nakamura, Audit Partner Comm. No. ��jjU- Ref. To:— l/i�� Ref. Dafe AUG_.=4 2029 Hawaii Cozinty is an Equal Opportunity Provides- and Employer AccuITY County of Hawaii State of Hawaii Single Audit of Federal Financial Assistance Programs June 30, 2024 ���JJJJJJ1111VJOI»l��lf j� rJ1////jlofrrf�i��i�f ► `1� rtr" JJff tj ;f1Jr>f `ff. I County of Hawaii, State of Hawaii Index Year Ended June 30, 2024 Page(s) PART 1— Introduction PART 2 — Compliance and Internal Control Over Financial Reporting Report of Independent Auditors 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 Report of Independent Auditors on Compliance for Each Major Program, Internal Control Over Compliance, and the Schedule of Expenditures of Federal Awards Required by the Uniform Guidance Schedule of Expenditures of Federal Awards..........................................................................................................8-12 Notes to Schedule of Expenditures of Federal Awards...............................................................................................13 PART 3 — Schedule of Findings and Questioned Costs Section I — Summary of Auditors' Results..............................................................................................................14-15 Section II — Financial Statement Findings..............................................................................................................16-18 Section III — Federal Award Findings and Questioned Costs........................................................................................19 Summary Schedule of Prior Audit Findings PART 1 INTRODUCTION ACLU ITY July 18, 2025 To the Chair and Members of the County Council County of Hawai'i, State of Hawai'i We have completed our financial audit of the basic financial statements of the County of Hawai'i, State of Hawai'i (the "County"), as of and for the year ended June 30, 2024. Our report containing our opinion on those basic financial statements is included in the County's Annual Comprehensive Financial Report. We have also audited the County's compliance with requirements applicable to its major federal financial programs. We submit herein our reports on compliance and internal control over financial reporting and over federal awards, the schedule of expenditures of federal awards, and the schedule of findings and questioned costs in accordance with Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (the "Uniform Guidance"). The audit objectives and scope of our audit were as follows: Audit Objectives 1. To provide an opinion on the fair presentation of the County's basic financial statements and the schedule of expenditures of federal awards as of and for the year ended June 30, 2024 in accordance with accounting principles generally accepted in the United States of America. 2. To consider the County's internal control over financial reporting in order to design our auditing procedures for the purpose of expressing our opinions on the financial statements. 3. To perform tests of the County's compliance with certain provisions of laws, regulations, contracts and grant agreements that could have a direct and material effect on the determination of financial statement amounts. 4. To consider the County's internal control over compliance with the 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 internal control over compliance in accordance with the Uniform Guidance. Scope of Audit We performed an audit of the County's basic financial statements and schedule of expenditures of federal awards as of and for the year ended June 30, 2024, in accordance with auditing standards generally accepted in the United States of America; the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States; and the provisions of the Uniform Guidance. 999 Bishop Street OFFICE 808.531.3400 Suite 2300 FAX 808.531.3433 Honolulu, HI 96813 accuityllp.com Our report on the basic financial statements of the County as of and for the year ended June 30, 2024 is included under a separate cover. We would like to take this opportunity to express our appreciation to the personnel of the County of Hawaii, State of Hawai'i 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, 0 KM/LKC ACCUITY PART 2 COMPLIANCE AND INTERNAL CONTROL OVER FINANCIAL REPORTING ACCU ITY Report of Independent Auditors 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 To Management and the Chair and Members of the County Council County of Hawaii, State of Hawai'i We have audited, in accordance with the 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 ("Government Auditing Standards"), the financial statements of the governmental activities, the business -type activities, the aggregate discretely presented component unit, each majorfund, and the aggregate remainingfund information of the County of Hawaii, State of Hawai'i (the "County"), as of and for the year ended June 30, 2024, and the related notes to the financial statements, which collectively comprise the County's basic financial statements and have issued our report thereon dated July 18, 2025. 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 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 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 No. 2024-001 and 2024-002 that we consider to be material weaknesses. 999 Bishop Street OFFICE 808.531.3400 Suite 2300 FAX 808.531.3433 Honolulu, HI96813 accuityllp.com Report on Compliance and Other Matters As part of obtaining reasonable assurance about whether the County's financial statements are free from material 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. County's Response to Findings Government Auditing Standards requires auditors to perform limited procedures on the County's response to the findings identified in our audit and described in the accompanying corrective action plan. The County's response was not subjected to the auditing procedures applied in the audit of the financial statements and, accordingly, we express no opinion on the response. 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 result 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. —A"lot L-LP Honolulu, Hawai'i July 18, 2025 ACCUITY ACLU ITY Report of Independent Auditors on Compliance for Each Major Program, Internal Control Over Compliance, and the Schedule of Expenditures of Federal Awards Required by the Uniform Guidance To the Chair and Members of the County Council County of Hawai'i, State of Hawai'i Report on Compliance for Each Major Federal Program Opinion on Each Major Federal Program We have audited the County of Hawaii, State of Hawai'i's (the "County") compliance with the types of compliance requirements identified as subject to audit in the 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, 2024. The County's major federal programs are identified in the summary of auditors' 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 its major federal programs for the year ended June 30, 2024. Basis for Opinion on Each Major Federal Program We conducted our audit of compliance in accordance with auditing standards generally accepted in the United States of America; the standards applicable to financial audits contained in Government Auditing Standards issued by the Comptroller General of the United States ("Government Auditing Standards"); 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 Auditors' 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 programs. 999 Bishop Street OFFICE 808.531.3400 Suite 2300 FAX 808.531.3433 Honolulu, HI 96813 accuityllp.com 14 10%///00/// Auditors' 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 generally accepted auditing standards, 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 performing an audit in accordance with generally accepted auditing standards, 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 test 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 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 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 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 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. ACCUITY Our consideration of internal control over compliance was for the limited purpose described in the Auditors' 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 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. 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. Report on Schedule of Expenditures of Federal Awards Required by the Uniform Guidance We have audited the financial statements of the governmental activities, the business -type activities, the aggregate discretely presented component unit, each major fund, and the aggregate remaining fund information of the County as of and for the year ended June 30, 2024, and the related notes to the financial statements, which collectively comprise the County's basic financial statements. We issued our report thereon dated July 18, 2025, which contained unmodified opinions 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. The accompanying schedule of expenditures of federal awards is presented for purposes of additional analysis as required by the Uniform Guidance and is not a required part of the basic financial statements. As described in Note 2 to the schedule of expenditures of federal awards, the accompanying schedule of expenditures of federal awards was prepared on the cash basis of accounting, which is a comprehensive basis of accounting other than accounting principles generally accepted in the United States of America. 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 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 States of America. In our opinion, the schedule of expenditures of federal awards is fairly stated in all material respects in relation to the basic financial statements as a whole. Honolulu, Hawaii July 18, 2025 ACCUITY County of Hawaii, State of Hawaii Schedule of Expenditures of Federal Awards Year Ended June 30, 2024 Federal Amount Assistance Listing Pass -through Entity Provided to Federal Federal Grantor/Program/Grant Number Identifying Number Subrecipients Expenditures U.S. Department of Agriculture Food and Nutrition Service Passed Through the State Department of Education Summer Food Service Program for Children (Child Nutrition Cluster) 10.559 1707-8 $ - $ 65,880 Passed Through the State Department of Health SNAP 23-04 400272977; Supplemental Nutrition Assistance Education Program ("SNAP -Ed") (SNAP Cluster) 10.561 SNAP 24-01 #00285657 - 49,984 Forest Service Cooperative Forestry Assistance 10.664 - 717,074 Rural Business Cooperative Service Rural Development Cooperative Agreement Program 10.890 77,390 Total U.S. Department of Agriculture 910,328 U.S. Department of Commerce Economic Development Administration Economic Adjustment Assistance (Economic Development Cluster) National Oceanic and Atmospheric Administration Passed Through the State Department of Business, Economic Development and Tourism Coastal Zone Management Administration Awards Hawaii Coastal Zone Management Program Hawaii Coastal Zone Management Program Hawaii Coastal Zone Management Program Hawaii Coastal Zone Management Program Hawaii Coastal Zone Management Program Total Coastal Zone Management Administration Awards Hawaii Coastal Zone Management Program Total U.S. Department of Commerce U.S. Department of Housing and Urban Development Office of Housing Section 8 — Housing Assistance Payments Program — Special Allocations Kulaimano Elderly Housing (Project -Based Cluster) Community Planning and Development Community Development Block Grant ("CDBG")/State's Program and Non -Entitlement Grants in Hawaii COVID-19 — CARES CDBG/State's Program Non -Entitlement Grants Total CDBG — Community Development Block Grant/State's Program and Non -Entitlement Grants in Hawaii CDBG — Entitlement Grants Passed Through the Hawaii Housing Finance and Development Corporation HOME Investment Partnerships Program HOME Investment Partnerships Program Total HOME Investment Partnerships Program Passed Through the Hawaii Housing Finance and Development Corporation Housing Trust Fund Program Housing Trust Fund Program Total Housing Trust Fund Program Public and Indian Housing Housing Voucher Cluster Section 8 — Housing Choice Vouchers COVID-19 —ARP — Emergency Housing Vouchers Foster Youth to Independence Mainstream Vouchers Program Total Housing Voucher Cluster Family Self -Sufficiency Program Total U.S. Department of Housing and Urban Development 11.307 - 799,842 11.419 70127 - 158,895 11.419 SPP 6 & 7 - 128,744 11.419 72032 - 1,306 11.419 CZM Program FY22-23 - 13,916 11.419 CZM Program FY23-24 - 322,132 624,993 - 1,424,835 14.195 - 396,005 14.228 671,188 2,955,229 14.228 - 432,330 671,188 3,387,559 14.218 - 5,866,154 14.239 FIN 19-11 1,340,807 1,437,216 14.239 FIN 22-07 - 50,000 1,340,807 1,487,216 14.275 FIN 19-12 1,215,000 1,215,000 14.275 FIN 22-05 - 67,962 1,215,000 1,282,962 14.871 - 30,775,660 14.871 - 1,573,002 14.871 - 32,779 14.879 1,052,130 - 33,433,571 14.896 106,413 3,226,995 45,959,880 (continued) See accompanying report of independent auditors and notes to schedule of expenditures of federal awards. 8 County of Hawaii, State of Hawaii Schedule of Expenditures of Federal Awards Year Ended June 30, 2024 Federal Amount Assistance Listing Pass -through Entity Provided to Federal Federal Grantor/Program/Grant Number Identifying Number Subrecipients Expenditures Department of the Interior Office of Budget National Park In Lieu of Taxes 15.226 - 568,498 U.S. Fish and Wildlife Service National Wildlife Refuge Fund 15.659 - 95,031 Total Department of the Interior - 663,529 Department of Justice Office of Juvenile Justice and Delinquency Prevention Passed Through the State Department of Human Services Juvenile Justice and Delinquency Prevention - Allocation to States 16.540 DHS-2I-OYS-101 176,093 176,093 Office of Justice Programs Passed Through the State Department of Attorney General National Criminal History Improvement Program ("NCHIP") 16.554 NCHIP23 - 285,548 Office for Victims of Crime Passed Through the State Department of the Attorney General Crime Victim Assistance 16.575 20-V2-04 50,000 78,075 Crime Victim Assistance 16.575 20-V2-04(Supp #1) 18,000 225,464 Crime Victim Assistance 16.575 21-V2-04 34,734 485,852 Total Crime Victim Assistance 102,734 789,391 Violence Against Women Office Passed Through the State Department of Attorney General Violence Against Woman Formula Grants STOP Violence Against Women 16.588 22-WF-03 - 53,368 SAFE/SANE Coordination and Training 16.588 22-WF-07 46,450 46,450 Total Violence Against Woman Formula Grants 46,450 99,818 Bureau of Justice Assistance Edward Byrne Memorial Justice Assistance Grant Program 16.738 - 10,908 Physical Readiness Equipment & Mini First Aid Kits ("M-FAK") 16.738 - 987 Passed Through the State Department of Attorney General Edward Byrne Memorial Justice Assistance Grant Program Statewide Multi -Jurisdictional Drug Task Force ("SMDTF") 16.738 21-DJ-01 8,648 Total Edward Byrne Memorial Justice Assistance Grant Program - 20,543 National Institute of Justice Passed Through the State Department of Attorney General Paul Coverdell Forensic Sciences Improvement Grant Program 16,742 20-CD-01 - 11,126 Paul Coverdell Forensic Sciences Improvement Grant Program 16,742 21-CD-01 - 28,270 Paul Coverdell Forensic Sciences Improvement Grant Program 16.742 22-CD-01 - 86,529 Total Paul Coverdell Forensic Sciences Improvement Grant Program - 125,925 Office of Justice Programs Passed Through the State Department of Attorney General NICS Act Record Improvement Program 16.813 2020-NS-BX-I(004 - 83,661 NICS Act Record Improvement Program 16.813 15PBJS23GK02358NARI - 8,895 Smart Prosecution Initiative 16.825 - 126,966 National Sexual Assault Kit Initiative 16.833 - 73,503 Total Department of Justice 325,277 1,790,343 Department of Labor Employment and Training Administration Passed Through the State Department of Labor and Industrial Relations Workforce Innovation and Opportunity Act ("WIOA") Cluster WIOA Adult Program 17.258 WIOA-21-A&DWP-H 39,343 39,343 WIOA Adult Program 17.258 WIOA-22-A&DWP-H 354,103 423,832 Total WIOA Adult Program 393,446 463,175 (continued) See accompanying report of independent auditors and notes to schedule of expenditures of federal awards. 01 County of Hawaii, State of Hawaii Schedule of Expenditures of Federal Awards Year Ended June 30, 2024 Federal Amount Assistance Listing Pass -through Entity Provided to Federal Federal Grantor/Program/Grant Number Identifying Number Subrecipients Expenditures W IOA Youth Activities W IOA Youth Activities Total W IOA Youth Activities WIOA Dislocated Worker Formula Grants WIOA Dislocated Worker Formula Grants Total WIOA Dislocated Worker Formula Grants Total WIOA Cluster WIOA Quality Jobs, Equity, Strategy and Training Dislocated Worker Grant Total Department of Labor Department of Transportation Federal Highway Administration Passed Through the State Department of Transportation Highway Planning and Construction Kaiwiliahilahi Stream Bridge & Honolii Stream Bridge Waianuenue Ave Rehabilitation, Kaiulani Street to Rainbow Drive Kilauea Avenue and Keawe Street Rehabilitation, Ponahawai to Waianuenue Mamalahoa Highway Resurfacing, Kamalani Street to Kalamauka Road Waikoloa Road Rehabilitation, Mamalahoa Hwy to Queen Kaahumanu Hwy Kilauea Avenue, Wailoa Bridge to Puainako Street Lanikaula Street Rehabilitation From Kilauea Avenue to Manono Street Expansion of Hawaii Island Bikeshare Project Hilo Bayfront Trails Phase 2A Safe Routes to School Program Coordinator State Planning & Research Part I HI County Trek the Trails Total Highway Planning and Construction Federal Transit Administration Passed Through the State Department of Transportation Formula Grants for Rural Areas Formula Grants for Rural Areas ARP Formula Grants for Rural Areas Total Formula Grants for Rural Areas Federal Transit Cluster Passed Through the State Department of Transportation Busses and Bus Facilities Formula, Competitive and Low or No Emissions Programs National Highway Traffic Safety Administration Highway Safety Cluster Passed Through the State Department of Transportation State and Community Highway Safety Program Seatbelt Enforcement Seatbelt Enforcement STEP STEP Total State and Community Highway Safety Program National Priority Safety Programs Passed Through the State Department of Transportation National Priority Safety Programs National Priority Safety Programs National Priority Safety Programs Data Grant Total National Priority Safety Programs Total Highway Safety Cluster 17.259 WIOA-2I-YP-H 30,043 30,043 17.259 WIOA-22-YP-H 240,916 287,561 270,961 317,604 17.278 WIOA-21-A&DWP-H 30,831 30,831 17.278 WIOA-22-A&DWP-H 167,214 200,675 198,045 231,506 862,452 1,012,285 17.277 DW39211226OA15 - 47,663 862,452 1,059,948 20.205 20025 - 34,875 20.205 21024 - 486,496 20.205 22045 - 7,767,617 20.205 23062 - 193,946 20.205 22055 - 9,698,031 20.205 20005 - 18,064 20.205 23048 - 246,949 20.205 21051 70,065 70,065 20.205 22047 - 586,120 20.205 23023 - 24,661 20.205 SPROO10A(50) - 163,530 20.205 TAP-0100(092) - 94,400 70,065 19,384,754 20.509 1623-2022-7 - 78,249 20.509 H1-2021-006 800,270 878,519 20.526 1623-2017-2; 1623-2018-2; - 2,233,975 1623-2019-5; 1623-2021-11 20.600 OP23-H-03 - 23,744 20.600 OP-24-H-01 - 86,227 20.600 PT23-H-02 - 171,816 20.600 PT24-H-01 - 370,704 652,491 20.616 AL23-H-02 - 28,504 20.616 AL24-H-01 - 57,433 20.616 AL23-S-07 - 9,003 20.616 TR23-H-03 47,616 142,556 795,047 (continued) See accompanying report of independent auditors and notes to schedule of expenditures of federal awards. 10 County of Hawaii, State of Hawaii Schedule of Expenditures of Federal Awards Year Ended June 30, 2024 Federal Amount Assistance Listing Pass -through Entity Provided to Federal Federal Grantor/Program/Grant Number Identifying Number Subrecipients Expenditures Alcohol Open Container Requirements Passed Through the State Department of Transportation Road Block Program 20.607 AL24-H-01 - 165,489 Alcohol Open Container Requirements 20.607 AL24-H-02 - 10,153 Total Alcohol Open Container Requirements - 175,642 Minimum Penalties for Repeat Offenders for Driving While Intoxicated Passed Through the State Department of Transportation Road Block Program 20.608 AL23-H-02 - 86,774 Total Department of Transportation 70,065 23,554,711 Department of Treasury COVID-19 — Emergency Rental Assistance Program 21.023 2,870,365 3,088,806 Passed through the State of Hawaii Department cf Budget & Finance COVID-19 — Emergency Rental Assistance Program 21.023 ERA0173 9,432 9,432 Total Emergency Rental Assistance Program 2,879,797 3,098,238 Passed through the State of Hawaii Department of Budget & Finance COVID-19— Homeowner Assistance Fund 21.026 HAF0002 5,516,137 5,523,382 COVID-19 — Coronavirus State and Local Fiscal Recovery Funds 21.027 320,000 2,400,578 Total Department of the Treasury 8,715,934 11,022,198 National Endowment for the Arts Promotion of the Arts Grants to Organizations & Individuals Our Town 45.024 - 36,740 Total National Endowment for the Arts - 36,740 Environmental Protection Agency Passed through the State of Hawaii Department of Land and Natural Resources Climate Pollution Reduction Grants 66.046 98767001 - 40,481 Water Quality Management Planning 66.454 CWB604132023-1 - 3,241 Total Environmental Protection Agency - 43,722 Department of Health and Human Services Administration for Community Living Passed Through the State Executive Office on Aging Special Programs for the Aging Title III, Part D — Disease Prevention and Health Promotion Services 93.043 ASO LOG 21-192 - 17,881 Aging Cluster Special Programs for the Aging — Title III, Part B — Grants for Supportive Services and Senior Centers 93.044 ASO LOG-21-192 - 168,363 Special Programs for the Aging — Title III, Part B — Grants for Supportive Services and Senior Centers 93.044 ASO LOG-20-198 - 204,120 COVID-19 — Special Programs for the Aging — Title III, Part B — Grants for Supportive Services and Senior Centers 93.044 ASO LOG-20-198 - 16,461 Total Special Programs for the Aging —Title III, Part B — Grants for Supportive Services and Senior Centers - 388,944 Special Programs for the Aging — Title III, Part C — Nutrition Services Home Delivered Meals 93.045 ASO LOG 21-192 - 248,417 Special Programs for the Aging — Title III, Part C — Nutrition Services - Congregate Meals 93.045 ASO LOG 20-198 - 134,407 Total Special Programs for the Aging —Title III, Part C — Nutrition Services - 382,824 Nutrition Services Incentive Program 93.053 NSIP22 - 58,190 Nutrition Services Incentive Program 93.053 NSIP23 - 16,294 Nutrition Services Incentive Program 93.053 NSIP24 57,697 Total Nutrition Services Incentive Program 132,181 Total Aging Cluster - 903,949 (continued) See accompanying report of independent auditors and notes to schedule of expenditures of federal awards. 11 County of Hawaii, State of Hawaii Schedule of Expenditures of Federal Awards Year Ended June 30, 2024 Federal Amount Assistance Listing Pass -through Entity Provided to Federal Federal Grantor/Program/Grant Number Identifying Number Subrecipients Expenditures Passed Through the State Executive Office on Aging Special Programs for the Aging National Family Caregiver Support, Title III, Part E 93.052 ASO LOG 21-192 - 140,181 National Family Caregiver Support, Title III, Part E 93.052 ASO LOG 20-198 - 83,324 Total National Family Caregiver Support, Title III, Part E - 223,505 Substance Abuse and Mental Health Services Administration Passed Through the State Department of Health Substance Abuse and Mental Health Services Projects of Regional and National Significance 93.243 ASO LOG NO. 23-077 - 3,989 Substance Abuse and Mental Health Services Administration Passed Through the State Department of Health Block Grants for Substance Use Prevention, Treatment and Recovery Services 93,959 ASO LOG NO. 23-077 13,607 Total Department of Health and Human Services 1,162,931 Corporation for National and Community Service Retired and Senior Volunteer Program 94.002 - 65,924 Total Corporation for National and Community Service 65,924 Executive Office of the President High Intensity Drug Trafficking Areas Program Hawai'i Impact 95.001 - 614,005 Total Executive Office of the President - 614,005 Department of Homeland Security Passed through the State Department of Defense Disaster Grants — Public Assistance (Presidentially Declared Disasters) Kilauea Volcanic Eruption and Earthquakes 97.036 FEMA-4366-DR-HI - 1,222,936 Hurricane Lane 97.036 FEMA-4395-DR-HI - 1,117,254 Hawaii Wildfires 97.036 FEMA-4724-DR-HI - 527,759 COVID-19 — Disaster Grants— Public Assistance (Presidentially Declared Disasters) 97.036 PA-09HL-4S10 - 1,832,959 Total Disaster Grants — Public Assistance (Presidentially Declared Disasters) - 4,700,908 Passed through the Hawaii Emergency Management Agency Hazard Mitigation Grant 97,039 FFMA-4366-15-07R - 127,835 Hazard Mitigation Grant 97,039 HMGP 44366-03-05 - 25,944 Hazard Mitigation Grant 97,039 DR-4366-HI 176,555 Total Hazard Mitigation Grant - 330,384 Emergency Management Performance Grants 97.042 EMF-2022-EP-00006-04 - 48,687 Emergency Management Performance Grants 97.042 EMF-2023-EP-00002-04 - 128,073 Total Emergency Management Performance Grants - 176,760 Federal Emergency Management Agency Assistance to Firefighters Grant 97.044 - 334,745 Passed through the State Department of Defense Homeland Security Grant Program ("HSGP") 97.067 EMW-2020-SS-00022 - 209,135 Homeland Security Grant Program ("HSGP") 97.067 EMW-2021-SS-00030 - 14,510 Homeland Security Grant Program ("HSGP") 97.067 EMW-2022-SS-00026 - 151,059 Total Homeland Security Grant Program ("HSGP") - 374,704 Staffing for Adequate Fire and Emergency Response ("SAFER") 97.083 - 1,408,679 Total Department of Homeland Security - 7,326,180 Total Expenditures of Federal Awards $13,200,723 $95,635,274 (concluded) See accompanying report of independent auditors and notes to schedule of expenditures of federal awards. 12 County of Hawaii, State of Hawaii Notes to Schedule of Expenditures of Federal Awards Year Ended June 30, 2024 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, 2024. The information in the Schedule is presented in accordance with the 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. Summary of Significant Accounting Policies Expenditures reported in the Schedule are reported on the cash basis of accounting. Such expenditures are recognized following the cost principles contained in the Uniform Guidance, wherein certain types of expenditures are not allowable or are limited as to reimbursement. The pass -through entity identifying numbers are presented where available. 3. Indirect Cost Rate 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. See accompanying report of independent auditors. 13 PART 3 SCHEDULE OF FINDINGS AND QUESTIONED COSTS County of Hawaii, State of Hawaii Schedule of Findings and Questioned Costs Year Ended June 30, 2024 Section I — Summary of Auditors' Results Financial Statements Type of auditors' report issued Internal control over financial reporting • Material weaknesses identified? • Significant deficiencies identified? Noncompliance material to financial statements noted? Federal Awards Internal control over major programs • Material weaknesses identified? • Significant deficiencies identified? Type of auditors' report issued on compliance for major programs Any audit findings disclosed that are required to be reported in accordance with the Uniform Guidance? Dollar threshold used to distinguish between type A and type B program Auditee qualified as low -risk auditee? Unmodified X yes no yes X none reported yes X no yes X no yes X none reported Unmodified yes X no $2,869,058 yes X no 14 County of Hawaii, State of Hawaii Schedule of Findings and Questioned Costs Year Ended June 30, 2024 Identification of Major Programs Assistance Listing Number Name of Federal Program or Cluster 21.023 COVID-19 — Emergency Rental Assistance Program 21.026 COVID-19 — Homeowner Assistance Fund 21.027 COVID-19 — Coronavirus State and Local Fiscal Recovery Funds CDBG — Community Development Block Grant/State's Program and Non -Entitlement Grants in Hawaii 14.228 Community Development Block Grant/State's Program and Non -Entitlement Grants in Hawaii 14.228 COVID-19 — CARES CDBG/State's Program Non -Entitlement Grants Housing Voucher Cluster 14.871 Section 8 — Housing Choice Vouchers 14.871 COVID-19 — ARP — Emergency Housing Vouchers 14.871 Foster Youth to Independence 14.879 Mainstream Vouchers Program 15 FINANCIAL STATEMENT FINDINGS County of Hawaii, State of Hawaii Schedule of Findings and Questioned Costs Year Ended June 30, 2024 Section II — Financial Statement Findings Finding No. 2024-001: Financial Statement Reporting (Material Weakness) Condition The County of Hawai'i reports on a cash basis throughout the fiscal year and only prepares accrual basis financial statements for its annual report as of and for the fiscal year ended June 30. Accordingly, in preparing accrual basis financial statements, there should be written procedures to clearly define the reporting and closing procedures, the timing of such procedures, and the review and approval process involved. Included in the reporting and closing procedures should be the timely preparation of account reconciliations, and recording adjustments to properly present accrual basis financial statements. There should be clear procedures and supporting schedules to reconcile information that is reporting in the County of Hawai'i's annual comprehensive financial report ("ACFR"). This process ensures the accuracy, validity and timeliness of financial information provided. A similar finding was reported as a material weakness in the prior year as Finding No. 2023-001. Criteria Management is responsible for establishing and maintaining internal control over financial reporting to permit the preparation of the County of Hawai'i's financial statements in conformity with accounting principles generally accepted in the United States of America. These accounting principles require financial statements to be prepared using the economic resources measurement focus and accrual basis of accounting. Effective internal control supports timely and accurate financial reporting. Cause We noted that the accuracy and delay of the preparation of the ACFR, including accrual basis financial statements, report support schedules, account reconciliations, and the trial balance were affected by the following: • Scheduled requested items were not provided timely; • Numerous schedules were inaccurate or did not reconcile to the financial statements; • Responses to follow-up questions were not provided timely; • Several proposed audit adjustments were made, including the following significant entries: decreasing governmental activities claims and judgment liability and related expenses by approximately $34 million; reclassifying approximately $19 million of equipment from construction work in progress; reclassifying approximately $54 million of bonds payable from current to noncurrent; increasing general fund revenues by approximately $3 million; increasing general fund accrued liabilities and related expenditures for pending temporary hazard pay settlements by approximately $70 million; and transferring approximately $53 million of restricted cash from the general fund to the capital projects fund; and • Insufficient or appropriate resources devoted to timely closing process. Effect The preceding issues resulted in significant delays in receiving the trial balance and accrual basis financial statements that captured all valid journal entries and accruals, resulting in a delayed audit process and the issuance of the audited financial statements. 16 County of Hawaii, State of Hawaii Schedule of Findings and Questioned Costs Year Ended June 30, 2024 Recommendation We recommend that management re-evaluate its annual closing and financial reporting process to clearly define financial reporting and closing procedures, the timing of such reporting, and the review and approval process involved. These written procedures should also document the process to ensure the trial balance and financial statement preparation process, including preparing the ACFR, captures all valid journal entries and accruals, and that the year-end trial balance is complete and accurate. An evaluation should be made by management to determine if additional resources are needed to perform these procedures in a timely manner. 17 County of Hawaii, State of Hawaii Schedule of Findings and Questioned Costs Year Ended June 30, 2024 Finding No. 2024-002: Timely Financial Statement Reporting — Department of Water Supply (Material Weakness) Condition In preparing the Department of Water Supply's accrual basis financial statements, there should be written procedures to clearly define the reporting and closing procedures, the timing of such procedures, and the review and approval process involved. Reporting and closing procedures should include preparing timely account reconciliations and recording adjustments to properly present accrual basis financial statements. This process ensures the accuracy, validity and timeliness of financial information provided. Criteria Management is responsible for establishing and maintaining internal control over financial reporting to permit the preparation of the Department of Water Supply's financial statements in conformity with accounting principles generally accepted in the United States of America. These accounting principles require financial statements to be prepared using the economic resources measurement focus and accrual basis of accounting. Effective internal control supports timely and accurate financial reporting. Cause We noted that the accuracy and delay of the preparation of the accrual basis financial statements and the trial balance were affected by the following: • Scheduled requested items were not provided timely; • Numerous audit and client adjustments were proposed after receipt of the initial trial balance; • Responses to follow-up questions were not provided timely; • Numerous versions and revisions to the financial statements, including the statement of cash flows; and • Insufficient or appropriate resources devoted to timely closing process. Effect The preceding issues resulted in significant delays in receiving the trial balance and accrual basis financial statements that captured all valid journal entries and accruals, resulting in a delayed audit process and issuance of the audited financial statements. Recommendation We recommend that management re-evaluate its annual closing process to clearly define financial reporting and closing procedures, the timing of such reporting and the review and approval process involved. These written procedures should also document the process to ensure the trial balance and financial statement preparation process captures all valid journal entries and accruals, and that the year-end trial balance is complete and accurate. Management should also consider performing adjustments, prior to fiscal year-end closing, either on a quarterly or semi-annual basis, or at the end of the third quarter of the fiscal year. An evaluation should be made by management to determine if additional resources are needed to perform these procedures in a timely manner. 18 FEDERAL AWARD FINDINGS AND QUESTIONED COSTS County of Hawaii, State of Hawaii Schedule of Findings and Questioned Costs Year Ended June 30, 2024 None noted. Section III — Federal Award Findings and Questioned Costs 19 C. Kimo Alameda, Ph.D. Mayor William V. Brilhante Jr. Managing Director County of Hawaii Finance Department 25 Aupuni Street, Suite 2103 • Hilo, Hawaii 96720 (808) 961-8234 • Fax (808) 961-8569 July 18, 2025 Kim Miyoshi Accuity 999 Bishop Street, Suite 2300 Honolulu, HI 96813 Diane Nakagawa Director Malia A. Kekai Deputy Director The County acknowledges the importance of financial reporting and strives to ensure compliance with GAAP. During the year end close process, the County experienced significant and material turnover in its key accounting personnel, including a change in its Controller position. This occurred while the year-end audit was ongoing and severely delayed the close process. Job responsibilities to complete the audit were reassigned mid -stream with new personnel being tasked to work through unfamiliar reconciliations and external consulting also being brought on to assist with the reporting process. The largest adjustments were related to these reclassification procedures that were impacted by the changes previously noted. The County has since identified a permanent replacement to the Controller position and is in the process of implementing a new financial accounting system. Alongside the system deployment, the County will be revamping its standard operating procedures around the financial close process, including how entries are recorded to the system that produces governmental financial statements, and ensuring compliance with GAAP. These changes include the use of technology to enable proper recording of transactions in the accrual method, system generated reporting to assist with reconciliations and monitoring and will improve the timeliness of producing complete and accurate financial statements. The Department of Finance will be responsible for ensuring implementation of the new system and will schedule training to address these matters. Sincerely, 6z: Diane Nakaga a Finance Director Hawai'i County is an Equal Opportunity Employer and Provider SUMMARY SCHEDULE OF PRIOR AUDIT FINDINGS County of Hawai'i, State of Hawai'i Summary Schedule of Prior Audit Findings Year Ended June 30, 2024 Finding No. Description Classification 2023-001 Untimely Financial Statement Material Reporting for County of Hawai'i ACFR Weakness 2023-002 Department of Water Supply— Material Accounting for Water Deposits Weakness Status Current Year Resolved Unresolved Finding No. X X 2024-001 County of Hawaii, State of Hawaii Summary Schedule of Prior Audit Findings Year Ended June 30, 2024 Corrective Actions Taken for Unresolved Finding Finding No. 2023-001: Untimely Financial Statement Reporting for County of Hawaii ACFR Corrective actions were taken in fiscal year 2024 to mitigate a number of the previously reported deficiencies; however, additional deficiencies were noted. Corrective action is still ongoing. As a current year finding (Finding No. 2024-001) is reported, Finding No. 2023-001 will not be carried forward.