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Home My WebLink AboutCOM 1119.000 2014-2016 Dru Mamo Kanuha - Bonnie S.Nims,CGAP =`o@t�°; qy ., Legislative Auditor Chair&Presiding Officer - o. 9 g Council District 7 o Business Address 1266 Kamehameha Avenue °„4.0.” Suite A-8 Hilo,Hawaii 96720 C I:unf of 4 thnxt`i OFFICE OF THE LEGISLATIVE AUDITOR 25 Aupuni Street Hilo, Hawaii 96720 * (808) 961-8386 * Fax(808) 961-8905 website: http://hawaiicountv.gov e-mail:publiclao(aco.hawaii.hi.us Date: November 7, 2016 c► - To: Honorable Dru Kanuha, Council Chair and Members of the Hawai'i County Council Stewart Maeda, County Clerk � � From: Bonnie S. Nims, CGAP, Legislative Auditor %� . Re: Association of Local Government Auditors External Quality Control Review Attached please find our External Quality Control Review. This review was conducted following the guidelines contained in the Association of Local Government (ALGA) Peer Review Guide, 2011 Revision. The objectives of the review determined during the period of July 1, 2012 through June 30, 2016, the County of Hawaii Office of the Legislative Auditor's internal quality control system was suitably designed and operating effectively to provide reasonable assurance of comply with applicable Generally Accepted Government Auditing Standards issued by the Comptroller General of the United States. BSN:mp :omrn.No. 11 r Ref.To: Ref.Date 1sI {f i c; I-0147 Hawaii County is an Equal Opportunity Provider and Employer Cn L... -c7) V CD4..., C .y •.......... (1) 10 C a-+ Q) CI) >, ,a) ,040 C W 0 o _ II'C E O U O limimin ti•ft., 4—L.. mummfts, E Cl) c Q. z *,) 0C (0 > � >. > •�, Q cn a N p � Q vE Q) O N oa +-' v0) O O Cn •1' o ca co c° U CO •— 0 N }, N U .c (1) co co :t_i: � a o +a = U) J •.... o ca 41.1.1O 4.•. 4(4 4— CD (13 O CC 0 >., --I c ., O c C - o (13 ,---1 2 Q CD Zn cQ p OCD 441.J N O "Iftj -C� . O _–I CD .... co — '-- >, 0 •- > '0Cn CI) a) 00 (� a) ■� 4- +_1111111111111. O �M E a) 0E t , LU L-CO co z N -1-, N a N c cc c 0 Z / c OF S2(04/0,7CD Co) N c-its •E c Y a -; Q 2 r 'ND c6 i c U �, • -(I_ g 0 o w Q v � �=1;, 2 O s sb''s, ,,,OC) '`...,, LOC' PyS0C1ATIO4,O External n Quality ar CCitRNME4s. Control Review Office of the Legislative Auditor County of Hawai'i Conducted in accordance with guidelines of the Association of Local Government Auditors for the period July 1, 2012- June 30, 2016 *+6Dwain— v46 GtA>rep,r Cto .4+ A Association of Local Government Auditors July 28, 2016 Ms. Bonnie S Nims. CGAP Legislative Auditor County of Hawai'i Office of the Legislative Auditor 1266 Kamchameha Avenue. Suite A-8 Hilo, Hawaii 96720 Dear Ms. Nims, We have completed a peer review of the Office of the Legislative Auditor, County of Hawai'i for the period of July 1,2012 through June 30, 2016 In conducting our review. we followed the standards and guidelines contained in the Peer Review Guide published by the Association of Local Government Auditors (ALGA). We reviewed the internal quality control system of your audit organization and conducted tests in order to determine whether your internal quality control system operated to provide reasonable assurance of compliance with Government Auditing Standards issued by the Comptroller General of the United States. Our procedures included: • Reviewing the audit organization s written policies and procedures. • Reviewing internal monitoring procedures. • Reviewing a sample of audit and attestation engagements and working papers. • Reviewing documents related to independence, training, and development of auditing staff • Interviewing auditing staff to assess their understanding of, and compliance with, relevant quality control policies and procedures. Due to variances in individual performance and judgment compliance does not imply adherence to standards in every case but does imply adherence in most situations. Based on the results of our review, it is our opinion that the Office of the Legislative Auditor, County of Hawaii internal quality control system was suitably designed and operating effectively to provide reasonable assurance of compliance with Government Auditing Standards for audits and attestation engagements during the penod July 1 2012 through June 30, 2016. We have prepared a separate letter offering suggestions to further strengthen your internal quality control system 0 Terra Van Andel Tina Adams Office of the City Auditor Office of the City Auditor City of Long Beach CA Charlotte NC 449 Lewis Hargett Circle,Suite 290,Lexington,KY 40503,Phone(859)276-0686,fax,(859)278-0507 webmastera nasact org a www aigaonhne org b0CiAT►04 Q,e RAssociation of Local Government Auditors ,, l,' July 28, 2016 Ms. Bonnie S Nims, CGAP Legislative Auditor County of Hawai'i Office of the Legislative Auditor 1266 Kamchameha Avenue, Suite A-8 Hilo, Hawai'i 96720 Dear Ms. Nims We have completed a peer review of the Office of the Legislative Auditor, County of Hawai'i for the period July 1, 2012 through June 30, 2016 and issued our report thereon dated July 28, 2016 We are issuing this companion letter to offer certain observations and suggestions stemming from our peer review We would like to mention some of the areas in which we believe your office excels: • The office focuses on continuous improvement which has led to an updated policy manual. more thorough workpaper documentation and full implementation of all recommendations received during its last peer review • The office performs audits that are impactful to the organization and the community. • The office has successfully undergone its second peer review even with a transition in leadership that could have impacted its ability to do so. We offer the following observations and suggestions to enhance your organization's demonstrated adherence to Government Auditing Standards' Standard 6.11(e) states auditors should assess audit risk and significance within the context of the audit objectives by gaining an understanding of .ongoing investigations or legal proceedings within the context of the audit objectives. We recommend they include documentation of discussions related to ongoing investigations or legal proceedings within their audit plann+ng documents Standard 6.62 states auditors should evaluate the objectivity, credibility, and reliability of testimonial evidence used to interpret or corroborate documentary or physical information. Standard 6.65 states when auditors use information provided by officials of the audited entity as part of their evidence, they should determine what the officials of the audited entity or other auditors did to obtain assurance over the reliability of the information.We recommend when testimonial evidence and/or information provided by officials of the audited entity are relied upon, the office evaluate the objectivity, credibility and reliability of the information and document the corroboration of the testimonial evidence within the workpapers. We extend our thanks to you and your staff for the hospitality and cooperation extended to us during our review Sincerely, • ' °111Pd-d.A/rd\Z---- Terra Van Andel Tina Adams Office of the City Auditor Office of the City Auditor City of Long Beach, CA Charlotte, NC 449 Lewis Hargett Circle,Suite 290,Lexington,KY 40503.Phone (859)276-0686,Fax:(859)278-0507 webmaster a nasact orgwww algaonlme org Dru Mamo Kanuha Bonnie S.Nims,CGAP .eOF Chair&Presiding Officer -(o* *�. •.� Legislative Auditor . Council District 7 '• Business Address ' ' f HPµ - 1266 Kamehameha Avenue Suite A-8 Hilo,Hawai'i 96720 Ct lutt±v Irf Au1nt`t OFFICE OF THE LEGISLATIVE AUDITOR 25 Aupuni Street Hilo, Hawai'i 96720 • (808)961-8386 * Fax(808)961-8905 website:http://hawaiicountv.t;ov e-mail:publiclao2ico.hawaii.hi.us July 28, 2016 Ms. Terra Van Andel, CFE, CGAP ALGA Peer Review Team Leader Deputy City Auditor Long Beach City Auditor's Office 333 West Ocean Boulevard 8th Floor Long Beach, CA 90802 Ms. Tina Adams Deputy City Auditor City of Charlotte 600 E 4`h Street Charlotte,NC 28202 Aloha Ms. Van Andel and Ms. Adams: On behalf of the Office of the Legislative Auditor, I would like to extend our appreciation to the peer review team for your professionalism, knowledge, and courtesies extended to us during the peer review process. We found the peer review process to be insightful, value added, and rewarding. I am pleased that the independent peer review team concluded that the Office of the Legislative Auditor's internal control system was suitably designed and operating effectively to provide reasonable assurance of compliance with Government Auditing Standards for the period of July 1. 2012, through June 30, 2016. We will share your results with our Hawai'i County Council and make it available to the public on our website. We are also pleased the peer review team found that: • The office focuses on continuous improvement which has led to an updated policy manual, more thorough workpaper documentation and fully implementation of all the recommendations received during their last peer review in 2013. • The office performs audits that are impactful to the organization and the community. • The office has successfully undergone its second peer review even with a transition in leadership that could have impacted their ability to do so. Hawaii County is an Equal Opportunity Provider and Employer Ms.Terra Van Andel,Long Beach City Auditor's Office Ms.Tina Evans,City of Charlotte July 28,2016 Page 2 of 2 In our efforts to continuously improve, we appreciate your recommendations for improving our audit operations and to enhance our office's demonstrated adherence to Government Auditing Standards. The following are our responses to your recommendations: Recommendation 1: Standard 6.11(e) states auditors should assess audit risks and significance within the context of the audit objectives by gaining an understanding of...ongoing investigations or legal proceedings within the context of the audit objectives. We recommend they include documentation of the discussions within their audit planning documents. We concur. We will update our policies and procedures to ensure that ongoing investigations or legal proceedings within the context of the audit objectives are considered during the planning of the audit and that consideration is fully documented in the planning documents. Recommendation 2: Standards 6.62 states auditors should evaluate the objectivity, credibility. and reliability of the testimonial evidence used to interpret or corroborate documentary or physical information. Standard 6.65 states when auditors use information provided by officials of the audited entity as part of their evidence, they should determine what the officials of the audited entity or other auditors did to obtain assurance over the reliability of the information. We recommend when testimonial evidence and/or information provided by officials of the audited entity are relied upon, the office evaluate the objectivity, credibility and reliability of the information and document the corroboration of the testimonial evidence within the workpapers. We concur. We will update our policies and procedures to ensure that the objectivity, credibility. and reliability of testimonial evidence and/or information provided by officials of the audited entity is adequately evaluated, corroborated, and documented within the audit workpapers. We would like to extend our personal thanks to you for your time and effort. We appreciate your participation in the peer review process and taking the time to visit our office and review our operations. We would also like to thank Mary Jo Emanuele for her hard work as your team's coordinator. Our office is committed to continuously improving our audit processes and has greatly benefited through the peer review process. Sincerely, allow allk IF onnie S. Nims, CGAP Legislative Auditor