HomeMy WebLinkAbout2006-12-11_Independent_audit_of_Hawaii_County o 0
.►�V.4� Lincoln S.T. Ashida
' Corporation Counsel
Harry Kim
Mayor Gerald Takase
Assistant Corporation
Counsel
COUNTY OF HAWAII
OFFICE OF THE CORPORATION COUNSEL
101 Aupuni Street, Suite 325 • Hilo,Hawaii 96720-4262 • (808)961-8251 • Fax(808)961-8622
December 11, 2006
Mr. Myles Y. Miyasato, Chair
and Commissioners
Cost of Government Commission
c/o 101 Aupuni Street, Suite 325
Hilo, Hawaii 96720
Re: Independent Audit of Hawai`i County
(1217106 Agenda Item 7-k)
Dear Chair Miyasato and Commissioners:
It was a pleasure to work with the Commission last week. This letter is in response to the
question raised at the meeting on whether, and how often, an independent audit of the County's
departments is done. This question arose during the discussion of Mr. Sakaguchi's
recommendation (agenda item 7-k) to contract every three years with the State of Hawaii
Legislative Auditor's Office to conduct a management and program audit of all or selected
County departments to identify new practices or procedures which should be in place for
efficiency and cost savings.
The County has a provision for a program audit. Article III, Section 3-16, of the Hawaii
County Charter, Mandatory Program Review, provides that at least once every four years the
County Council must critically review every program supported wholly or partially by County
funds, and unless the Council favorably authorizes its continuation at current or modified levels,
the program will be terminated.
There is also a Charter provision for a financial audit. Article X, Section 10-13, of the
Hawaii County Charter, Post-Audit, provides for an annual audit. The County Council is
responsible for providing an independent audit, at least once every year, of the accounts and
other financial transactions of the County and of every County agency and executive agency.
The audit must include both financial accountability and adequacy of the financial, and
accounting system. The audit must be done by a certified public accountant, or firm of
accountants, who have no personal interest in the fiscal affairs of the County or its agencies.
This Charter section also provides that if the State of Hawaii performs an audit, the
Hawaii County Council may accept it as satisfying the annual audit requirement. I spoke with
Deanna Sako, controller at the Finance Department, who confirmed that the County as a whole is
Hawaii County is an Equal Opportunity Employer and Provider
Ce��+ Na 2vo6-93
o 0
Mr. Miyles Miyasato, Chair
and Commissioners
December 11, 2006
Page 2
audited annually. She clarified that if the state were to independently audit the counties, it would
do so at the directive of the state legislature.
In addition to the County Charter provision for an annual financial audit, state law
requires an annual audit of the Board of Water Supply, and the audit report filed with the County
Council (see Hawaii Revised Statutes Section 54-20).
I hope this information sufficiently addresses the Commission's question. Copies of the
relevant County Charter sections are enclosed for your reference. Please feel free to contact our
office if you have any further questions.
Very truly yours,
Diane A. Noda
Deputy Corporation Counsel
DAN:mc
Enclosures
s:\b&c\cogc\2006-07\communications\ltr to cogc re audits 12-11-06 DAN=