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HomeMy WebLinkAboutCOM 0487.001 2008-2010BRENDA J. FORD Council Member District 7 -Central Kona Phone: (808) 326- 5684 Fax: (808) 329- 4786 E-Mail: bford@co.hawaii.hi.us HAWAII COUNTY COUNCIL County of Hawai `i ~~=~ Kailua Trade Center ; ~ ~`"' 75-5706 Hanama Place, Suite 109 ~-' ~ "~ ~= Kailua-Kona, Hawaii 96740 - c - -, N +w: DATE: August 27, 2009 .~ TO: J. Yoshimoto, Chairperson, ca and Members of the Hawaii County Council :.rt '" -= o FROM: ~8renda J. Ford, Council Member SUBJECT: Proposed Amendment to Bill 131; Relating to aCouncil-Initiated Hawaii County Charter Amendment to Amend Article III, Section 3-18, Office of the Legislative Auditor Attached please find proposed amendments to Bill 131. The proposed amendments are in Ramseyer format with respect to Bill 131; a draft copy of Bill 131, Draft 2, is attached with the proposed amendments incorporated. Bolding was applied for illustrative purposes only. The proposed amendments to Bill 131 are as follows: SECTION 1 (Purpose) is amended to read as follows: "SECTION 1. Purpose. The purpose of this ordinance is to establish budgetary independence for the office of the legislative auditor from the executive and legislative branches of county government. This ordinance amends Hawaii County Charter 2000 (2008 edition) article III, Legislative Branch, County Council, by amending section 3-18 to fund the independent audit function of the office of the legislative auditor as a percentage of the total annual budget. Budgetary independence is at the heart of autonomy for the office of the [~}diter] legislative auditor. Principles and procedures shall exist to ensure that auditors cannot be unduly influenced or restricted, either by the county council or by the administration, in its ability to carry out its duties [thenglt] throueh the denial or unreasonable control of funding, staffing, or other resources. A lack of budgetary independence may also potentially disallow an auditor the capacity to review and report openly on issues relating to those Serving the Interests of [he People of Our /stand / / Q'. I Comm. No. T v Hawaii Caunty7s An Equal Oppartunity Pravider And Employer Ref. TOt .9'G"~aS`~d ~i Ref. Dots persons in control of funding. The ability to restrict the [I;egislnt+ve items] legislative auditor's funding is in direct conflict with the intent of the voter-mandated Charter Amendment which was to give the ]office of the legislative auditor independence in fact and appearance in order to permit the [;~=slati=e t4udite~s] legislative auditor's office to conduct and report on county operations free of political influence or bias and without the threat of censorship or retaliation. A lack of budgetary independence potentially presents a conflict of interest, and diminishes the perception that the ( ]legislative auditor is independent of the executive and legislative branches of government. To support budgetary independence, some municipalities allocate a percentage of the government's operational budget, special funds, and capital budget to provide financial assurance for auditing functions. This practice reduces the potential politicization and conflicts of interest for the budgetary development and approval process. This ordinance also makes a minor revision to the provision that authorizes the [~,egislat~e-~At>~ter~ legislative auditor to retain legal counsel." Section 3-18, subsection (g), is amended to read: "(g) For purposes of performing the duties of the legislative auditor's office, the legislative auditor shall have: (1) Full, free, and unrestricted access to any county officer or employee. (2) Full, free, and unrestricted access to and authority to examine and inspect any record of any county agency, executive agency, or program except for any record protected from disclosure by law, rule or privilege. (3) Full, free, and unrestricted access to and authority to examine and inspect any property, facility, or equipment of any county agency, executive agency, or program pertinent to the audit or to a contract. (4) Full, free, and unrestricted access to and authority to administer oaths and subpoena witnesses and compel the production of records pertinent thereto. If any person subpoenaed as a witness or compelled to produce records shall fail or refuse to respond thereto, the proper court, upon request of the auditor, shall have the power to compel obedience to any process of the auditor and to punish, as contempt of the court, any refusal to comply therewith without good cause. (5) The authority to retain independent legal counsel [cur-exen:he ~• BJF/dkr att. AN ORDINANCE TO INITIATE AN AMENDMENT TO ARTICLE III, SECTION 3-18, LEGISLATIVE BRANCH, COUNTY COUNCIL, OF THE HAWAII COUNTY CHARTER 2000 (2008 EDITION), TO ESTABLISH BUDGETARY INDEPENDENCE FOR THE OFFICE OF THE LEGISLATIVE AUDITOR, REVISE THE PROVISION RELATING TO RETENTION OF LEGAL COUNSEL, AND MAKE ONE NON- SUBSTANTIVE CORRECTION TO EXISTING CHARTER LANGUAGE. BE IT ORDAINED BY THE COUNCIL OF THE COUNTY OF HAWAI`L• SECTION I. Purpose. The purpose of this ordinance is to establish budgetary independence for the office of the legislative auditor from the executive and legislative branches of county government. This ordinance amends Hawaii County Charter 2000 (2008 edition) article III, Legislative Branch, County Council, by amending section 3-18 to fund the independent audit function of the office of the legislative auditor as a percentage of the total annual budget. Budgetary independence is at the heart of autonomy for the office of the legislative auditor. Principles and procedures shall exist to ensure that auditors cannot be unduly influenced or restricted, either by the county council or by the administration, in its ability to carry out its duties though the denial or unreasonable control of funding, staffing, or other resources. A lack of budgetary independence may also potentially disallow an auditor the capacity to review and report openly on issues relating to those persons in control of funding. The ability to restrict the legislative auditor's funding is in direct conflict with the intent of the voter- mandated Charter Amendment which was to give the office of the legislative auditor independence in fact and appearance in order to permit the legislative auditor's office to conduct and report on county operations free of political influence or bias and without the threat of censorship or retaliation. A lack of budgetary independence potentially presents a conflict of interest, and diminishes the perception that the legislative auditor is independent of the executive and legislative branches of government. To support budgetary independence, some municipalities allocate a percentage of the government's operational budget, special funds, and capital budget to provide financial assurance for auditing functions. This practice reduces the potential politicization and conflicts of interest for the budgetary development and approval process. This ordinance also makes a minor revision to the provision that authorizes the legislative auditor to retain legal counsel. SECTION 2. Article III, section 3-18 of the Charter of the County of Hawaii 2000 (2008 Edition), is amended to read as follows: "Section 3-I8. Office of the Legislative Auditor. (a) There is established within the legislative branch an independent office of the legislative auditor to be headed by a legislative auditor who shall be appointed by the county council and shall serve for a period of six years, and thereafter, until a successor is appointed. The council, by atwo-thirds vote of its membership, may remove the legislative auditor from office at any time for cause. (b) The legislative auditor shall possess adequate professional proficiency for the office demonstrated by relevant certification, such as certification as a certified internal auditor or certified public accountant or an advanced degree in a relevant field, and at least three years of general auditing experience which shall include a minimum of one year's experience in the field of government auditing. A certified internal auditor or certified public accountant shall be preferred. All financial audits shall be conducted by a certified public accountant. (c) [ E6HnE11 Tl, I 1 ,1' 1. 1, 1 ~ EBHt261-~] The annual operating budget shall include an allocation to cover the expenses of the office of the legislative auditor. (~ Two-tenths of one percent of the combined operating, special funds, and capital budgets shall be allocated each fiscal year to the office of the legislative auditor. Any unexpended or unencumbered funds shall revert to the general fund balance. Funds that aze not anticipated to be used by the office of the legislative auditor may be returned to the general fund at any time, at the discretion of the legislative auditor. (d) The legislative auditor shall hire at-will staff necessazv to fulfill the duties of the office of the legislative auditor. [(d~](e~The legislative auditor shall conduct or cause to be conducted: (1) The annual financial audit of the county, as required in article X, Financial Procedures, section 10-13, Post-audit. (2) Performance and/or financial audits of the funds, programs, services, and operations of any county agency, executive agency, or program, as set forth by the legislative auditor in an annual audit plan that shall be transmitted to the county council and the mayor and filed with the county clerk as a public record. (3) Follow-up audits and monitoring of responses to audit recommendations by audited entities. [(ej](~f For purposes of this section, "county agency" or "executive agency" includes any office, department, board, commission, agency, semi- autonomous agency, or other governmental unit of the county in the executive or legislative branch that is supported, in whole or in part, by county funds. [(#~]~ For purposes of [~;~-auE-an~uud ,] performing the duties of the legislative auditor's office, the legislative auditor shall have: (1) Full, free, and unrestricted access to any county officer or employee. (2) Full, free, and unrestricted access to and authority to examine and inspect any record of any county agency, executive agency, or program except for any record protected from disclosure by law, rule or privilege. (3) Full, free, and unrestricted access to and authority to examine and inspect any property, facility, or equipment of any county agency, executive agency, or program pertinent to the audit or to a contract. (4) Full, free, and unrestricted access to and authority to administer oaths and subpoena witnesses and compel the production of records pertinent thereto, If any person subpoenaed as a witness or compelled to produce records shall fail or refuse to respond thereto, the proper court, upon request of the auditor, shall have the power to compel obedience to any process of the auditor and to punish, as [a] contempt of the court, any refusal to comply therewith without good cause. [T~ a• ..e :..i ,.oi .wo .,,,~ ., "r *~v:~rs] (51 The authority to retain independent legal counsel. [(gj] 1(~i The legislative auditor shall conduct or cause to be conducted all audits in accordance with government auditing standards, and shall set forth final audit findings and recommendations in written reports, copies of which shall be transmitted to the county council and the mayor and filed with the county clerk as public records." SECTION 3. Charter material to be repealed is bracketed and stricken. New charter material is underscored. When revising, compiling, or printing these charter provisions for inclusion in the Charter of the County of Hawaii, the reviser need not include the brackets, bracketed material, or underscoring. SECTION 4. If any provision of this ordinance, or the application thereof to any person or circumstance, is held invalid, such invalidity shall not affect other provisions or applications of this ordinance which can be given effect without the invalid provision or application, and to this end, the provisions of this ordinance are declared to be severable. SECTION 5. Upon adoption of this ordinance, the council, by appropriate resolution, shall provide that this charter amendment be submitted to the electorate of Hawaii County for approval at the 2010 general election. SECTION 6. The charter amendment proposed in this ordinance shall take effect upon its approval by a majority of voters voting on this legislation in the 2010 general election. If approved by the electorate, the provisions of this ordinance shall be applied to the budgeting process and the budget for the fiscal year 2011-2012 and each fiscal year thereafter, unless otherwise amended.