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Home My WebLink AboutCOM 0407.002 1996-1998 JN1v oo hw UONN.D IKBDA CON4T:A\CG R. I~IR1L Court t u CI rrA L: ~ rL:: tr'.' .L,Ai I o• ?rr ai'Nid OFFICE OF THE COUNTY CLERK County of Haeuaii ~ Hawaii County Building ~ 25AupuniStreet C~ Hilo, Hawaii 96720 _ - August 5, 1997 , TO: Council Members FROM: Connie Kirit~~'+~~~ Legislative Auditor RE: Independent Audit and Mandatory Program Review 1979 CHARTER COMMISSION MINUTES RESEARCH For your information, the attached report was prepared by the Legislative Auditor in June 1989 in response to a Committee request that the Legislative Auditor's Office research and comment on the Charter Commission's discussion regarding the Mandatory Program Review in 1979. COMPARISON OF OTHER COUNTIES' CHARTER REQUIREMENTS KAUAI COUNTY.• 1. The Maui County Charter requires the County Council to cause an independent audit of all county funds and accounts by a certified public accountant (CPA) or CPA firm at least once every two yeazs. 2. Further, the Council or any authorized committee is given the power to conduct investigations of the operation of any agency or function of the county and any subject upon which the council may legislate. MAU/ COUNTY.• The County Council is required to provide for an independent audit of the accounts and other evidences of financial transactions of the county and of all operations for which the county is responsible. The audit shall be made by a CPA or a CPA firm. »ro. ~0 7.02 true lto. A V Q ~Prosented ~G leer. n~ auc s ~aa 2. The Maui Counry Charter also empowers the Maui County Council to conduct investigations of (a) the operation of any department or function of the county and (b) any subject upon which the council may legislate. 3. Further, the Council has the power to require periodic and special reports from all county departments concerning their functions and operations. Such reports shall be requested and submitted by and through the mayor. CITY AND COUNTY OF HONOLULU.• 1. The City and County of Honolulu Charter requires that the Council provide for an independent financial audit of all operations of the city and for which the city is responsible. The audit shall be made by a CPA or a CPA firm. 2. The Charter also empowers the council at any time to provide for a performance audit of any or all of [he agencies and operations of the city and all operations for which the city is responsible. It goes on to say that the scope of [he performance audit shall be in accordance with the terms of an assignment referred to the office of the council services or by written contract, but may include the following activities: "(a) Examination and testing of city agencies' implementation processes to determine whether the laws, policies and programs of the city are being carried out in the most effective, efficient and economical manner. (b) Examination and testing of the internal control systems of local agencies to ensure that such systems are properly designed to safeguard public assets against loss from waste, fraud, or error, to promote efficient operations, and to encourage adherence to prescribed management policies. Said assignment or contract shall encourage recommendations for changes in the organization, management and processes which will produce greater efficiency and effectiveness in meeting the objectives of the programs or operations carried out by the respective city agencies, and shall provide for the completion of the audit within one calendar year " It should be pointed out that the County Council adopted an ordinance in 1994 specifying, in part, that the director of council services has the same power as a department head and authorizing the director to administer oaths in the name of the council, subpoena witnesses and compel the production of documents relevant to a financial or performance audit. The director of council services is appointed by the chair, with the concurrence of the council, for a term of six years. Att. f JOHN A. WAGNER o"~~ ~F'N1t~ TOMIO FU/ff County Clnk ~ y4W~•~ Orputy County Clnk r r~., IfARRY A. TAKAIIASHI ~'••:9• • le isWtioe Auditor tE or 8 OFFICE OF THE COUNTY CLERK County of Hawaii Hawaii County Building 15 Aupuni Sheet Hilo, Hawaii 96710 June 16, 1989 Members of the Committee on Inter-Governmental Relations Hawaii County Council Hilo, Hawaii Subject: Mandatory Program Review During your Committee meeting of June 13, 1989, your Committee requested this office to research the minutes of the 1979 Charter Review Commission on the subject matter of Mandatory Program Review. Based upon our review of the minutes, the following is submitted. PRESENT LANGUAGE: Section 3.17. Mandatory Program Review. At least once every four years, the council shall critically review every program supported wholly or partially by county funds, and unless the council shall favorably authorize its continuation at current or modified levels, the program shall be terminated. The council shall adopt procedures and details to implement this section. ORIGINAL MOTION: "Once every four years, the council shall critically review every program supported by county funds and unless the council shall favorably authorize its continuation at current or modified levels, the program shall be terminated. The council shall adopt procedures and details." In support of this motion, the maker emphasized that it was his intent to have every program funded by the County be reviewed every 4 years. He also indicated that politicians tend to keep things going regardless of the benefits being derived, a mandated review would force the issue as to whether the program pprovides a <o a 7 benefit and if not would be terminated. Gomm. No. r File No. ' Ref. Tos 1'"'~ Ret. Date J U ~ 1 9 1989 .E O£THECOUNT}'CILRK 1 /AWAIT COUNTY BUILDING 13 AUPUNI,TTHEl:T ' HICO, ILA IVAl19G 710 [9embers of the Committee on Inter-Governmental Relations Page 2 June lti, 1989 The charter commissioners referenced the mandate as a sunset law which may have been thought of in line with the State's Sunset provisions to various State boards and commissions. In their efforts to identify applicable situations, commissioners were not able to specifically identify a particular situation where the sunset proviso would apply to county situations. The commissioners were advised by their counsel that he was not sure that such a proviso would be necessary at the county level. Other commission members caised the point that the council had the power to check into any department or program through the budget process. It was felt that the budget process did provide for adequate levels of checks and balances. The minutes are not clear as to whether the commission did identify the scope of the mandate. Some of the points raised were: 1. The Program was not meant to cover any agency or anything that is established by charter, but merely .f or programs. 2. Sunset law calls for mandatory review of all programs of the county government. 3, Intent was not to review agencies and departments, sunset law is for programs. Leyal counsel explained that the scope of the program review needed to be identified. It was also emphasized that the council would be hardpressed to determine what they are supposed to do unless the commission provided the scope of the review. Points raised were: 1. There is going to have to be some kind of distinction as to programs that are authorized by the council as opposed to programs within each department. 2. We are more concerned on those that are specifically created or funded by council. Problem would arise where agency recommends a program and council funds it. The Commission's legal counsel advised them that the definition of agency as incorporated in the charter included any office, department, commission or other governmental unit. Such a broad interpretation of agency could prohibit any review by the interpretation of 'agency'. `•1• OF THE COUNTY CLERK U Wqll COUNT}' OUlID1NG S AUPUNI STRP1'T HILO. HAWA/l Xi TO Members of the Committee on Inter-Governmental Relations Page 3 June 16, 1989 It was also pointed out that this sunset proviso would be the first amongst the counties. The reason other counties have not included any sunset proviso is that by virtue of the legislative branch having control over budget appropriations, itself, is a built-in sunset authority. A mandate would force the council to look at it a second time, whether it accomplishes anything is questionable. Recognizing the difficulty in identifying the scope of the mandate and the specific programs to which the mandate would apply, a commission member explained that the minutes could be reviewed for intent. Commission deliberated upon whether the final language should specifically exclude executive agencies.... Legal counsel advised the commission members that in drafting statutes the rule is to word it in a positive fashion to avoid confusion, STAFF CONCLUSIONS: It seems that the 1979 Charter Review Commission recognized the need to include a sunset provision to programs funded by the county, However, the Commission had a very difficult time identifying the scope of the mandate and the programs to which the mandate would apply, The charter minutes illustrate various points of views by different commissioners, however, there were no motions to indicate the clear intent of the Commission in proposing the charter amendment. Without any clear directions as to the scope of the mandate and the programs which fall within the scope of the review it seems that the decision is left up to the Council. Recognizing that the budget approval process is the final decision as to whether a program continues to exist or gets terminated, the Council should then decide as to the scope of the review and the programs to which said review would apply. These determinations should be established in the Council's procedures and details, Respectfully submitted, ~~--C~~ Harry A, Takahashi Legislative Auditor