HomeMy WebLinkAboutCOM 0496.003 2006-2008
CASEY JARMAN ~f~tr os p KENNETH G. GOODENOW
County Clerk v;••~;;,''~ Deputy county clerk
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lad
COLLEENSCHR,9NDT
Legislative Auditor
Mailin Address:
g ~ •ri oF•N~+~~ Business Address:
(Former County Building 333 Kilauea Avenue, Second Floor
25 Aupuni Street Ben Franklin Building
Hilo, Hawaii 96720 Hilo, Hawaii 96720
County of Hawai `i
Offzce of the County Clerk
Telephone (808) 96/-8255 Facsimile: (808) 961-8912 -
~.i
Date: October 4, 2007
To: Pete Hoffmann, Chairperson
And Members of the County Council
From: Colleen Schrandt~ _
Legislative Auditor
Enclosed for your review is a letter from KPMG LLC (KPMG) requesting an increase of
$17,000 to Contract No. 000756 (Conduct Audits of the Accounts and Financial
Transactions of the County of Hawaii) to address a change in scope of services
pertaining to the single audit of the County's federal financial assistance programs for
fiscal year ended June 30, 2007.
In order to comply with the requirements set forth by the Office of Management and
Budget Circular A-133, three federal financial assistance programs of the County, rather
than the previously anticipated two, will need to be audited. KPMG has indicated that
the expanded scope will require 118 hours in addition to the 362 hours originally
estimated. The cost related to this expansion of scope is reelected below:
Proposed Single Audit Fees for FY June 30, 2007 $66,500.00
Additional Cost: 17,000.00
New Single Audit Fees for FY June 30, 2007 $83,500.00
We will be transferring the funds from Account Number 010.101.5101.02.115 -Audits
to Account Number 010.101.5101.15.115 -External Audit. We will also be requesting
that the Purchasing Department draft a Supplemental Agreement to include the expanded
scope and additional cost.
Should you have any questions, please contact me or Lane Shibata, Audit Analyst.
Att. yq ~.3
Comm. No.
Ref. To: L
Ref. Date ^ OT 0 4 2007
Serving [he !n[eres[s of the Peap[e of Our Island
Hawaii County is an Equa[ Opportunity Provider and Employer
KPMG LLP Telephone 808 531 7286
PO Box 4150 Fax 808 541 9321
Honolulu, HI 96812-4150 Internet www.us.kpmg.com
September 25, 2007
Ms. Colleen Schrandt
Legislative Auditor
County of Hawaii
Hawaii County Building
25 Aupuni Street
Hilo, Hawaii 96720
Dear Ms. Schrandt:
This letter serves to inform you of a significant change in the scope of our professional services
pertaining to the single audit of the County of Hawaii's federal financial assistance programs as
of and for the fiscal year ended June 30, 2007. The increase in scope is due to the unanticipated
increase in the number of major federal financial assistance programs required to be audited as
specified by OMB Circular A-133, Audits of States, Local Governments, and Non-Profit
Organizations.
When planning our audit and at the time we executed the contract, we anticipated that the
number of federal financial assistance programs required to be audited would be consistent with
prior years. Two federal financial assistance programs were audited in both of the fiscal years
ended June 30, 2005 and 2004. Eight federal financial assistance programs were audited in the
fiscal year ended June 30, 2006, for which we obtained additional professional Fees. However,
for the fiscal year ended June 30, 2007, there are three federal financial assistance programs that
are required to be audited. The determination of how many and which federal financial
assistance programs are based solely on the criteria set forth by OMB Circular A-133. Please
see the attachment for a list of the three federal financial assistance programs [hat are required to
be audited and the hours expected to be incurred for each program.
The following is an estimate of the total additional hours expected to be incurred by KPMG
directly attributable to this increase in scope:
Partner 8
Manager 20
Senior/Staff 90
Total 118
KPMG LLP, a U S limrtetl habihty partnership, is the U S.
member hrtn of KPM6 Intamationel, a Swias cooperelrve-
Page 2
Ms. Colleen Schrandt
County of Hawaii
September 25, 2007
Based on previously agreed-upon hourly rates and our estimate of additional hours and out-of-
pocket costs attributable to the increased scope of work, we estimate the additional professional
fees to be $17,000 for the fiscal year ended June 30, 2007, as follows:
Partner $ 2,280 ($285 per hour)
Manager 3,700 ($185 per hour)
Senior/Staff 9,900 ($110 per hour)
15,880
Out-of-pocket costs 1,700
Subtotal 17,580
Hawaii general excise tax 732
18,312
Less discount ~ (1,312)
Total 1 0
We are requesting your approval for additional professional fees due to the increased scope of
our work as previously described in this letter. Should you have any questions, we would be
pleased to discuss this letter with you at any time.
Very truly yours,
KPMG~LLSP,
Ralph T/. Kanetoku
Partner
Attachment
County of Hawaii
A-133 Single Audit
Federal Financial Assistance Programs to be Audited for the Fiscal Year Ended June 30, 2007:
Anticipated Hours
Program CFDA # Partner Manager Staff Tota]
Section 8 -Housing Choice Vouchers 14.871 8 12 85 105
Department of Homeland Security -Various 16.007, 97.004 I I 23 105 139
97.067
Capitalization Grants for Drinking Water State Revolving Funds 66.468 8 20 90 118
Total anticipated hours 27 55 280 362
Less: Anticipated hours in executed contract 19 (35) 190 244
Additional hours 8 20 90 118