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HomeMy WebLinkAboutAgenda Item IV.1.e_DEM DAV First Follow Up Report No. 2026-02Department of Environmental Management Derelict and Abandoned Vehicle Program County of Hawai‘i Office of the County Auditor First Follow-Up Report No. 2026-02 August 26, 2026 This page intentionally left blank Hawai‘i County is an Equal Opportunity Provider and Employer August 26, 2026 Honorable Dr. Holeka Goro Inaba, Council Chair and Members of the Hawai‘i County Council Hawai‘i County Council 25 Aupuni Street Hilo, Hawai‘i 96720 Dear Chair Inaba and Hawai‘i County Councilmembers, We respectfully submit our first follow-up review dated [August 26, 2026] (the “Review”) of the County of Hawai‘i’s Department of Environmental Management (DEM) Derelict and Abandoned Vehicle Program (DAV) Audit Report No. 2024-02, dated July 3, 2024 (the “Audit Report”). The Review was conducted pursuant to Section 3-18(d)(3) of the Hawaiʻi County Charter to assess whether the audit recommendations have been addressed through appropriate corrective actions. Of the five recommendations from the Audit Report, three have been completed and two remain in progress. Source: Office of the County Auditor Clare McAdam County Auditor OFFICE OF THE COUNTY AUDITOR 120 Pauahi St. Suite 309 Hilo, Hawaiʻi 96720 Phone (808) 961-8386 • Fax (808) 961-8905 E-mail: countyauditor@hawaiicounty.gov • Website: https://www.hawaiicounty.gov/auditor Status of Recommendations Completed In Progress 3 2 Corrective action has been implemented and is operating effectively. Progress has been made, but additional work is required and Auditor will continue to monitor. In response to a draft of this Review, DEM management expressed general agreement with the findings. DEM management’s complete response is included on page 11. We appreciate the professionalism, cooperation, and timely assistance by DAV throughout this Review. We commend the DAV team for its continued efforts to strengthen accountability and program oversight. To promote accountability and monitor implementation of audit recommendations, the Office of the County Auditor maintains a remediation tracker, available at: https://www.hawaiicounty.gov/our-county/legislative/office-of-the-county-auditor/remediation- tracker. If you have any questions or concerns regarding this Review or the status of recommendations, please feel free to contact me at (808) 961-8386. Respectfully, County Auditor cc: Dr. C. Kimo Alameda, Ph.D., Mayor William V. Brilhante Jr., Managing Director Jon Henricks, County Clerk Daniel Girvan, P.E., Director Craig Kawaguchi, Deputy Director Mike Rivera, Solid Waste Division Chief Tiffany Wallace, Derelict and Abandoned Vehicle Program Specialist Erica Perez, Environmental Management Commission Chair Environmental Management Commission Members Table of Contents Review Highlights .................................................................................................. 1 Summary of Audit Recommendations ................................................................. 2 Status of Recommendations ......................................................................... 3 - 10 Management Response ................................................................................ 11-14 Objective, Scope, and Methodology .................................................................. 15 Appendix A Derelict and Abandoned Vehicle Process .................................................. 16 This page intentionally left blank 1 | Review Highlights Review Highlights Department of Environmental Management Why This Review Matters Implementing these Audit Report recommendations will strengthen the DAV Program and improve employee safety, operational efficiency, and service delivery. Enhanced safety measures, operating procedures, reporting tools, and auction processes will support timely and consistent removal and disposition of abandoned vehicles. The Audit Report recommendations aim to improve program continuity, reduce storage costs, and promote operational consistency through better documentation and cross-training. Implementation will ensure services remain reliable during staffing changes and that procedures are applied uniformly. Collectively, these improvements support a more efficient, accountable, and responsive Derelict and Abandoned Vehicle Program that better serves the community while protecting public resources and employees. Key Takeways of Audit Recommendations 1. Priortizing personal protective measures enhances employee safety in the field, reduces the risk of inquiry, and supports effective field operations. 2. Implementing a proactive awareness campaign for reporting abandoned vehicles enables quicker identification and removal of abandoned vehicles. 3. Formalizing policies and procedures improves employee safety, ensures consistency, and supports effective program administration. 4. Modernizing vehicle auction processes reduces vehicle storage time and costs, improves inventory management, decreases vehicle backlogs, and supports timely vehicle disposal. 5. Cross-training staff maintains operational continuity and reduces service disruptions during staff absences or turnover. 2 | Summary of Audit Recommendations Summary of Audit Recommendations Definitions • Completed: Fully implemented. Auditor will no longer monitor. • In Progress: Partially implemented. Auditor will continue to monitor. No Recommendation Status 1. Prioritize Personal Protective Measures The Department of Environmental Management Derelict and Abandoned Vehicle Program should prioritize personal protective measures. Completed 2. Increase Reporting Options for Abandoned Vehicles Implement a proactive campaign to educate residents on reporting abandoned vehicles. Completed 3. Formalize Policies and Procedures Continue to enhance policies to ensure consistent and safe administration of the program. In Progress 4. Modernize Vehicle Auction Processes Increase the frequency of auctions to reduce the time stored in impound lots. If possible, utilize online tools to establish a more user- friendly and consistent process. In Progress 5. Provide Cross-Training for Program Continuity Crosstrain staff for operational continuity during absences. Completed Source: Office of the County Auditor 3 | Status of Recommendations Recommendation 1: Completed Prioritize Personal Protection Measures The DAV Program should prioritize personal protective measures. Status Update The DAV program has implemented several measures to improve employee safety during field inspections, including: • Safety Policy: Developed a draft Safety Policy in March 2024 to provide guidance on safe work practices. • Personal Protective Equipment: Since 2024, required, field staff to wear County-branded, high- visibility safety vests, and safety shoes. • Vehicle Safety: Installed Zonar fleet management devices in October 2024 to improve vehicle monitoring and employee safety. • Communication: Issued two- way radios in July 2026 to improve communication during field inspections. • Staffing: The FY 2025–26 supplemental budget approved two additional coordinator positions. In July 2026, DAV requested to fill the approved positions, and DEM Human Resources is currently processing the position allocations. Once filled, the additional staffing is expected to further enhance field safety by supporting a two-person “buddy system” during field inspections. DAV – Puako Boat Ramp, July 2026 4 | Status of Recommendations • Credit Card Payment: Evaluating the implementation of credit card payment capabilities to reduce cash handling and improve employee safety. Finance was consulted in October 2024, discussions resumed in June 2026, and DAV continues to work with the Department's Business Manager to implement this service. Conclusion Based on interviews with staff, site visits, ride-a- long observations, and our review of the draft Safety Policy, and implemented safety measures including personal protective equipment, two-way radios, and Zonar fleet management devices, we determined that this recommendation has been implemented. We commend DAV for strengthening employee safety through these initiatives. We encourage DAV to finalize and distribute the Safety Policy to reinforce consistent safety practices and provide clear guidance for field operations. We also encourage DAV to continue pursuing technology-based solutions, such as credit card payment, to reduce cash handling, improve accessibility and streamline program operations. DAV - Ho’olaulima Road, July 2026 DAV – Nanawale Community Clean Up, August 2026 5 | Status of Recommendations Recommendation 2 Completed Increase Reporting Options for Abandoned Vehicles Implement a proactive campaign to educate residents on reporting abandoned vehicles, including, but not limited to: • Collaborating to facilitate easy reporting, increase community involvement, and expedite the identification and removal of abandoned vehicles from remote or undesirable areas: o Working with the Information Officer to increase public service announcements o Using social media o Using a 311 helpline, app, or similar services o Using online form Status Update The Hawaiʻi Police Department enforces abandoned vehicle laws, while DEM’s Derelict and Abandoned Vehicles (DAV) Program coordinates the removal process, including storage, legal notification and documentation, and final disposition through owner release, recycling, public auction, or disposal. To increase program awareness and improve reporting accessibility, the DAV Program Specialist conducts island-wide outreach and education on identifying and reporting suspected abandoned vehicles. Outreach activities include Kupuna meetings, Coffee with a Cop events, Neighborhood Watch meetings, and distribution of informational flyers at community locations. DAV-Kupuna-Coffee with a Cop, Ainaloa Neighborhood Watch, July 2026 DAV Program 6 | Status of Recommendations DAV also developed a fillable application1 and informational flyer to simplify the reporting process and provide residents with clear guidance on available services. In FY 2025-26, DAV processed 584 Vehicle Disposal Assistance Program (VDAP) applications and recycled 436 vehicles. Compared to FY 2024-25, there were 543 VDAP applications and DAV recycled 437 vehicles. Conclusion Based on our review of applicable laws and regulations, program procedures and supporting documentation, site visits, ride-a-long observations, and staff interviews, we determined that this recommendation has been completed. We commend DAV for expanding public outreach and improving awareness of abandoned vehicle reporting. We also encourage the program to continue evaluating technology-based solutions, such as online payment processing, an inventory management system, and enhanced digital reporting options, to further improve accessibility and operational efficiency. 1 County of Hawaiʻi Derelict and Abandoned Vehicle Program. Vehicle Disposal Assistance Program Application. https://www.dem.hawaiicounty.gov/home/showpublisheddocument/307083/638380669007130000. Accessed: 7-16-26 DAV – Free Junk Vehicle Removal 7 | Status of Recommendations Recommendation 3: In Progress Formalizing Policies and Procedures Continue to enhance policies to ensure consistent and safe administration of the program. Status Update The Derelict and Abandoned Vehicles (DAV) Program has made progress toward formalizing its policies and procedures by: • Drafted Standard Operating Procedures (SOPs) for the Derelict and Abandoned Vehicle Section, which are undergoing internal review and refinement • Developed a Derelict and Abandoned Vehicle Process Flowchart to document and clarify program operations (Appendix A) • Completed a draft Safety Policy, which is undergoing final review and approval by the County’s Safety Division Conclusion Based on our review of the draft SOPs, draft Safety Policy, site visits, and staff interviews, we determined DAV has made progress toward implementing this recommendation. We encourage DAV to finalize and implement its policies and procedures to promote consistent, safe, and effective program operations. DAV – Standard Operating Procedures This page intentionally left blank 8 | Status of Recommendations Recommendation 4: In Progress Modernize Vehicle Auction Processes Increase the frequency of auctions for abandoned vehicles to reduce the time stored in impound lots. If possible, use online tools to establish a more user-friendly and consistent process for timely auctions of these vehicles. Status Update DAV reported that the County of Hawaiʻi is the only jurisdiction in the state conducting its own auctions. No auctions have been held since December 2024. DAV stated that the December 2024 auction required a minimum of four staff members to coordinate and safely conduct. As of July 2026, DAV is recruiting two clerks to support program operations, including auction-related activities. The additional staffing is expected to improve the program's capacity to coordinate and conduct auctions. DAV also reported that auction frequency depends on the number of vehicles available for auction. While the program remains committed to conducting at least one auction per fiscal year, additional staffing may provide greater flexibility to increase auction frequency. DAV indicated that it would use an inventory-based auction trigger. Once the number of auction- eligible vehicles reaches an established threshold, DAV would assess the staffing and costs required and determine whether an auction is appropriate. This approach would allow the County to hold auctions more frequently when sufficient inventory is available while ensuring that resources are used responsibly. DAV reported it will continue to evaluate technology-based auction solutions, including online platforms, where appropriate. It will also research auction practices used by other counties within Hawaiʻi and jurisdictions outside the State to identify opportunities to improve the auction process. DAV – Auction Notice 9 | Status of Recommendations Because abandoned vehicles are often acquired without maintenance records, keys, or information regarding their mechanical condition, DAV believes that allowing prospective bidders to inspect vehicles in person promotes transparency and informed purchasing decisions. This approach helps manage bidder expectations and supports the program's mission to reduce abandoned vehicles while minimizing the likelihood that auctioned vehicles will later be abandoned on County roadways. Conclusion Based on staff interviews, news releases, and auction notice, we determined that DAV has made some progress toward implementing this recommendation. We encourage DAV to continue pursuing technology-based improvements to modernize program operations. Opportunities include implementing an inventory management system, expanding digital reporting options, and automating payment and auction administration. DAV – Kona Impound Lot 10 | Summary of Audit Recommendations Recommendation 5: Completed Expand Cross-Training to Ensure Program Continuity DEM management should cross-train staff for operational continuity during staff absences. Status Update DAV has implemented cross-training to improve program continuity and reduce reliance on individual staff. Cross training began in October 2024 in preparation for staffing transitions. By January 2025, existing staff had assumed program responsibilities, with former staff available to provide transition support and guidance. Staffing capacity also improved with the filling of the West Hawaiʻi Coordinator position in July 2024 and the Program Specialist position in February 2026. During vacancies, the coordinators assumed critical program functions to maintain uninterrupted operations. Cross-training activities include coordinator participating in community outreach events to gain hands-on experience with public interactions, program procedures, and operational responsibilities. The Program Specialist and coordinators also provide island-wide coverage during staff absences to maintain continuity of services. DAV is currently recruiting two clerks to further support program operations including auction-related events. Conclusion: Based on staff interviews, site visits, ride-a-long observations, and review of supporting documentation, we determined that this recommendation has been implemented. DAV has established cross- training practices and staffing coverage that support continuity of program operations during staff vacancies and absences. DAV-Kupuna Meeting / Coffee with a Cop, Ainaloa Neighborhood Watch, July 2026 This page intentionally left blank 11 | Management Response Management Response 12 | Management Response 13 | Management Response 14 | Management Response 15 | Objective, Scope, and Methodology Objective, Scope, and Methodology Objective Did the Department of Environmental Management’s (DEM) Derelict and Abandoned Vehicle (DAV) Program implement the 2024 Audit Report recommendations? Scope This Review covered the period from August 2024 through August 2026. The Review was limited to assessing the status of corrective actions related to the 2024 Audit Report recommendations and does not address new issues or matters outside the original audit scope. Methodology To verify the status of the audit recommendations, we: • Obtained and reviewed sufficient and appropriate evidence to support our conclusions • Worked with program staff to verify management responses and corrective actions • Reviewed applicable laws, regulations, policies, and governance requirements • Tested internal controls and control environments • Conducted site visits and ride-a-long observations to assess program operations, monitoring practices, and safety measures • Remained alert to indicators of fraud, waste, and abuse • Identified exceptions and areas for improvement This first follow-up review was conducted by Maxinne Pacheco and Melissa Duarte. Questions or requests for additional information may be directed to the Office of the County Auditor at countyauditor@hawaiicounty.gov or (808) 961-8386. Mahalo. 16 | Appendix A Appendix A: Derelict/Abandoned Vehicle Process DAV Derelict and Abandoned Vehicle Process This page intentionally left blank County of Hawai‘i Fraud, Waste, and Abuse Hotline The Office of the County Auditor maintains a Fraud, Waste, and Abuse Hotline that provides County employees and members of the public with a confidential way to report suspected fraud, waste, abuse, or misuse of County resources within any County department, agency, or facility. All reports are taken seriously and reviewed promptly. Information submitted through the hotline supports the public interest and helps promote transparency, accountability, and responsible stewardship of public resources. To submit a report, call (808) 961-8386 or click on the QR code.