HomeMy WebLinkAboutCOM 0272.004 2012-2014 J Yoshimoto Lane Shibata
Chair&Presiding Officer o0-t V,os e!, Acting Legislative Auditor
Council District 2 ■
\4- c*I% Business Address
1266 Kamehameha Avenue
Suite A 8
oF' aN= Hilo,Hawai`i 96720
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OFFICE OF THE LEGISLATIVE AUDITOR -
25 Aupuni Street * Hilo,Hawai`i 96720 * (808)961-8386 * Fax(808)961-8905
website:http://hawaiicountv.gov e-mail:publiclao(&co.hawaii.hi.us
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March 6, 2014
The Honorable J Yoshimoto, Council Chair
and Members of the Hawai`i County Council
Hawai`i County Council
25 Aupuni Street
Hilo, Hawai`i 96720
Dear Chair Yoshimoto and Councilmembers:
RE: REVIEW OF INDEPENDENT ACCOUNTANT'S REPORT Agreed-Upon
Procedures: County of Hawai'i Office of the County Clerk and Elections Division
Regarding the 2012 Primary and General Elections
I would like to sincerely thank Taketa, Iwata, Hara& Associates, LLC, Certified Public
Accountants & Consultants (TIH), for their hard work and effort in preparing this report. Their
findings and recommendations provide insight into problematic issues and suggest improved
procedures relating to election expenditures incurred by the Office of the County Clerk and the
Elections Division.
Resolution 111-13 (Draft 2) adopted by the Council on May 15, 2013, was carefully reviewed
and all issues were considered during development of the scope of work for this agreed-upon
procedures engagement. During our preparation of contract specifications and negotiations with
the independent accountant, attestation procedures for this engagement were mutually agreed
upon by addressing procedures requested in Resolution 111-13 (Draft 2) as well as the attestation
engagement standards of the American Institute of Certified Public Accountants (AICPA). TIH
reviewed 2012 election cycle expenditures and compared them to 2008 and 2010 expenditures to
identify variances in general ledger account classifications for each election cycle.
Summarizing the contents of the findings by independent auditor TIH:
• The first critical area related to County of Hawai'i (COH) Elections Division overtime
salaries and wages during the 2012 primary and general elections, more specifically the
inadequacy of oversight, documentation, and communication of overtime hours.
• The second critical area related to COH Elections Division non-payroll expenditures
during the 2012 primary and general elections, more specifically TIH found that certain
transactions contained inadequate descriptions and supporting documentationCVslve 2.?Z, ,
Ref.To: F G•
Ref. Date MAR 12 2nd
J Yoshimoto,Council Chair
and Members of the Hawai`i County Council
March 6,2014
Page Two
Branch Spending Guidelines were not consistently adhered to, and oversight was
inadequate to ensure the accurate posting of transactions. Although Legislative Branch
managers exercised their authority and responsibility, adequate descriptions and
supporting documentation of transactions are essential to justify the proper expenditure of
public funds.
• The third critical area related to the County Clerk—Office of Council Services (CC-OCS)
overtime salaries and wages incurred for Elections Division work during the 2012
primary election, more specifically TIH found inadequate justification and verification of
overtime hours on timesheets, inadequate recording of overtime hours to the appropriate
Division's expense accounts, and inadequate communication and oversight of updated
payroll procedures.
• The fourth critical area related to 2012 general election costs reimbursable to the State of
Hawai'i (SOH) from the COH Elections Division, more specifically TIH found that
reimbursable overtime performed by SOH personnel was not properly recorded in the
Election Division's Microsoft Access Timekeeping Program for the 2012 general election
(which was conducted by the SOH).
TIH's recommendations focused on consistent adherence to administrative procedures for
timekeeping and recordkeeping by County Clerk and Election Division managers and personnel,
including documentation and verification of payroll and non-payroll expenditures; improved
communication and oversight of updated payroll and non-payroll procedures by County Clerk
and Elections Division managers; and accurate recording and transferring of overtime and
transactions by County Clerk and Elections Division personnel.
TIH did an excellent job in carrying out this agreed-upon procedures engagement to review
2012 election cycle expenditures and identify any variances with 2008 and 2010 election cycle
expenditures. The time and effort expended by TIH to review Elections Division overtime and
non-payroll expenditures, CC-OCS overtime incurred for the performance of Elections Division
tasks, reimbursable costs to the SOH, and analyses of voter registration and absentee ballots
provide detailed information to assess what election expenditures were incurred and how the
Office of the County Clerk and Elections Division can improve their accountability in the
expenditure of public funds.
TIH also assisted the Elections Division in reconciling expenditures categorized as reimbursable
to the SOH, ultimately reducing the amount of reimbursable 2012 general election costs from
$71,481.00 to $30,083.00, a tremendous savings that more than covered the cost of TIH's
$34,374.78 attestation Contract No. C.003999.
J Yoshimoto,Council Chair
and Members of the Hawai`i County Council
March 6,2014
Page Three
Lastly, as stated by TIH, this report is intended solely for the information and use of the County
of Hawai'is Management and County Council and is not intended to be and should not be used
by anyone other than these specified parties.
Sincerely, ,/
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Lane H. Shibata, CGAP
Acting Legislative Auditor
LHS/mp
cc: William P. Kenoi, Mayor
Pat Nakamoto, Elections Division
Gregg M. Taketa, TIH
Serving the Interests of the People of Our Island
Hawaii County is an Equal Opportunity Provider and Employer