HomeMy WebLinkAboutREP FC 116 07/09/2007 2006-2008 ...4..___._-~
REPORT OF THE
COMMITTEE ON FINANCE
DATE: July 9, 2007 RE: Comm. No. 496
PLACE: Council Chambers
TIME: 9:41 a.m.
Council Chair and Members
Hawaii County Council
Hilo, Hawaii 96720
Your Committee on Finance, to which was referred Communication No. 496, reports as follows:
Communication No. 496, transmitted by Legislative Auditor, Colleen Schrandt, dated June 27, 2007,
submits the post-audit Financial Audit Report of the County of Hawai `i for the Fiscal Year Ended
June 30, 2006, and Management Letter dated Apri127, 2007, as prepared by KPMG LLP.
KPMG LLP has issued an unqualified opinion, indicating that the financial statements present fairly in
all material respects, the financial position of Hawaii County for Fiscal Year Ending June 30, 2006, in
conformance with U.S. generally accepted accounting principles.
This year's Management Letter contains findings and recommendations related to:
? Collection of Receivables
• Deficiencies in landfill receivables, the County has continued in its efforts to improve
collections of landfill fees and to reduce the amounts outstanding over 90 days. These
continued efforts have resulted in a decrease in the amounts outstanding over 90 days as a
percentage of total receivables from 28% at June 30, 2005 to 24% at June 30, 2006.
• For sewer receivables, a bill was passed by the County Council which makes the property
owner ultimately responsible for the sewer bills. Previously, the account holder was billed,
which was often a lessor or a renter. By making the owner responsible, the County will
now be able to place a lien on the property for past-due sewer charges. Although this may
not have immediate results, this is an important step towards improving future collections.
Additionally, effective October 1, 2005, a monthly 1 interest charge on past-due
balances replaced the previous one time penalty of 10%. These efforts have resulted in a
decrease in the amounts outstanding over 90 days as a percentage of total receivable from
63% at June 30, 2005 to 54% at June 30, 2006.
• KPMG, LLP recommends that the Department of Environmental Management continue to
work with the Department of Finance to improve collection efforts on delinquent accounts.
For landfill receivables, this means to focus on specific delinquent accounts as
approximately 57% of the landfill receivable balance outstanding more than 90 days at June
30, 2006 relates to a few customers. For sewer receivables, the focus should be on
enforcing the changes made in the bill that was recently approved and place liens on the
properties of delinquent account holders.
FC REPORT NO. 116
Communication No. 496
Page -2-
Pursuant to Article X, Section 10-13, Hawaii County Charter, the County Council shall provide at
least once every year for an independent audit of the accounts and other evidences of financial
transactions of the County and of every County agency and executive agency. The audit shall be made
by a certified public accountant or firm designated by the Council.
At the Finance Committee meeting, KPMG LLP representatives Managing Paztner Ralph Kanetoku,
and Senior Auditor Grant Nakagawa reviewed the scope of the audit services, the results of the audit,
required communications, the Management Letter comments, and the compliance and internal controls
over Federal awazds.
Your Committee on Finance recommends acceptance of the post-audit Financial Audit Report of the
County of Hawai `i for the Fiscal Year Ended June 30, 2006, as prepared by KPMG LLP.
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Aves rvoes A&e ex Respectfully submitted,
FORD X
RIGA x COMMITTEE ON FINANCE
HOFFMANN X
IKEDA X
JACOBSON X
NAEOLE X
PILAGO x DOMINIC YAGO G C I
YAGONG X FC REP N 116
YOSHIMOTO X ADOPTED: ,JUL 5 2~