HomeMy WebLinkAboutCOM 0799.000 2008-2010Colleen NI. Schrandt
Legislative aud tlor
,llud ung : I ddress
/fort ai a County Building
25 : upon, Street
lldo, llairai'i 96720
Date: April 22, 2010
Att.
i i nnnfu Qf paflxai'i
OFFICE OF THE LEGISLATIVE AUDITOR
Telephone. (808) 961 -8386 Facsinule (808) 961 -8905
To: J Yoshimoto, Chairman
And Members of the County Council
From: Colleen Schrandt
Legislative Auditor
Should you have any questions, please contact Colleen Schrandt, Legislative Auditor.
Serving the Interests of the People of Our Island
Haim; County is an Equal Opportunity Provider and /implorer
Business .I ddresa
1266 Aame home lui .! v
/runu'ork.■ Building, Room 4-1
Ildo, Hawaii 96721
Enclosed for your information and review is a letter from KPMG LLC requesting an increase of
$35,000.00 to Contract No. 000756 (to conduct audits of the accounts and financial transactions
of the County of Hawai'i), as there has been a significant change in the scope of their services
pertaining to the single audit of the County's federal financial assistance programs for fiscal year
ended June 30, 2009.
In order to receive federal funds, the County is required to undergo a single audit. The Office of
Management and Budget (OMB) Circular A -133 establishes specific requirements and
thresholds for the single audit and the number of major programs required to be included in the
single audit changes each year based upon the amount of federal funds received during that year.
For the Fiscal Year 2008 -2009, this resulted in five major federal assistance programs being
audited to meet the single audit requirement. However, KPMG's original contract fees included
only two programs for the fiscal year ended June 30, 2009.
KPMG has communicated that the addition of three major programs will require an additional
222 hours (approximate) over the original 414 hours as submitted in their initial proposal to
complete the single audit. The additional cost breakdown is attached for your review.
We are requesting the Department of Finance to certify $35,000.00 from the Legislative
Auditor's Miscellaneous Contract Services, Audits, Studies, Services, Account No.
010.108.5108.02.115, as sufficient funds were budgeted to cover the additional contract cost.
Conpi. No. 7 q
Ref. To:
Ref, APR 22 2010
March 17, 2010
PRIVATE & CONFIDENTIAL
Ms. Colleen Schrandt
Legislative Auditor
County of Hawaii
1266 Kamehameha Avenue, Suite 1 A
Hilo, Hawaii 96720
Dear Ms. Schrandt:
KPMG LLP Telephone 808 540 2800
PO Box 4150 Fax 808 356 1522
Honolulu, HI 96 81 2 -41 50 Internet wwwus.kpmg.com
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 ending June 30, 2009. 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. For the fiscal years ended June 30, 2008, 2007,
and 2006, three, three, and eight federal financial assistance programs were audited,
respectively. Additional fees were obtained in each of these three fiscal years. For the fiscal
year ended June 30, 2009, there are five 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 five federal financial assistance programs that are
required to be audited and the hours expected to be incurred for each program.
KPMG LLP, a U S limited liability partnership, is the U S
member firm of KPMG International, a Swiss cooperative
Page 2
Ms. Colleen Schrandt
County of Hawaii
March 17, 2010
The following is an estimate of the total additional hours expected to be incurred by KPMG
directly attributable to this increase in scope:
Partner 20
Manager 26
Senior /Staff 176
Total 222
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 $35,000 the fiscal year ended June 30, 2009, as follows:
Partner $ 6,000 ($300 per hour)
Manager 5,070 ($195 per hour)
Senior /Staff 21,120 ($120 per hour)
32,190
Out -of- pocket costs 5,000
Subtotal 37,190
Hawaii general excise tax 1,549
38,739
Less discount (3 739)
Total 35 1100
Page 3
Ms. Colleen Schrandt
County of Hawaii
March 17, 2010
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 LLP
Nancy C. Rose
Partner
ACCEPTED:
County of Hawaii
By
Its
Date
County of Hawaii
A -133 Single Audit
Federal Financial Assistance Programs to be Audited for the Fiscal Year Ended June 30,
2009
Anticipated Hours
Program . CFDA # i Partner . Manager I: Staff Total
Community Development Block Grant /State's Program and
Non - Entitlement Grants in Hawaii
!HOME Investment Partnerships Program — — _
:Section 8 - Housing ChoiceVouchers
Highways Planning and Construction
Disaster Grants - Public Assistance
Total anticipated hours
Less: Anticipated hours in executed contract,
excluding 50 hours for reporting and administrative tasks
Additional -hours
Attachment
14.228
14.239
14.871
181! 130
15 j 100
l .
2 . 85
120
i! 44 . 77i 515
160
105
100
148
636
- (24) . (51)1 . (339):' (41461
20 i ` 26 3 176 222