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EXECUTIVE SUMMARY
<br />This limited scope performance audit was initiated by the Hawaii County Office of the Legislative Auditor in
<br />accordance with Hawaii County Charter section 3 -18 and Generally Accepted Government Auditing
<br />Standards (GAGAS). The Highway Fund was designated for review based on a 2007 County -wide risk
<br />assessment conducted by the Legislative Auditor's Office.
<br />HIGHWAY FUND
<br />The Highway Fund was established under section 249 -18, Hawaii Revised Statutes (HRS), to provide for the
<br />expenditure of vehicular taxes collected in each county for acquisition, design, construction, improvement,
<br />repair, and maintenance of public roads and highways, storm drains, bridges, and bikeways; installation,
<br />maintenance, and repair of street lights and power on county maintained public roads and highways;
<br />implementation of functions related to traffic control and safety upon public highways and streets; payment of
<br />interest on and redemption of bonds issued to finance highway and street construction and improvements;
<br />and implementation of functions related to mass transit.
<br />In addition to vehicle weight taxes and motor vehicle registration fees collected by Hawaii County, other
<br />sources of Highway Fund revenues include fuel taxes, public utility franchise taxes, and other revenues such
<br />as State reimbursement for highway traffic signal maintenance and recovery for damages. In FY 2007 -2008,
<br />actual Highway Fund revenues for Hawaii County were $25,575,907; in FY 2008 -2009, budgeted Highway
<br />Fund revenues were $27,473,575; and in FY 2009 -2010, estimated Highway Fund revenues are $27,599,091.
<br />In Hawaii County, the Highway Fund is administered by the Department of Public Works and provides
<br />operational funds for its Highway Maintenance and Traffic Divisions, with a portion of vehicle weight taxes
<br />going to the Mass Transit Agency. Highway Fund revenues also fund capital improvement projects
<br />authorized under HRS section 249 -18.
<br />HIGHWAY MAINTENANCE AND TRAFFIC DIVISIONS
<br />Hawaii County Code section 2 -41(4) states: "... The highway maintenance division shall be responsible for
<br />the construction and maintenance of all roads, streets, highways, footpaths, storm drains, bridges, flood
<br />channels, and certain cemeteries." The Highway Maintenance Division also responds to emergencies
<br />caused by accidents, hazardous material spills, and natural events and evacuations related to heavy rains,
<br />high winds, fires, earthquakes, volcanic eruptions, and tsunamis, and provides assistance to Civil Defense,
<br />Police, Fire, Solid Waste, Parks and Recreation, and other County departments and State agencies.
<br />Hawaii County Code section 2 -41(2) states: "...The traffic division determines the location, installs, maintains,
<br />and repairs all traffic control facilities and devices and street lighting systems; is responsible for all traffic
<br />engineering in the County; maintains a traffic education program; and is responsible for the installation,
<br />maintenance, and repair of on- and off - street parking meters."
<br />The mission statement for the Highway Fund designated by the Department of Public Works is:
<br />"To maintain and to continually improve the County's roadway transportation system
<br />for a safe and efficient movement of people and aoods around the island."
<br />AUDIT SCOPE
<br />This limited scope performance audit is intended to provide a broad review of the adequacy of existing
<br />internal control systems of the Department of Public Works and its Highway Maintenance and Traffic Divisions
<br />to support attainment of its stated mission for the Highway Fund. As such, the audit also reviews the
<br />effectiveness of the County's overall internal control systems as they relate to attainment of the Highway Fund
<br />mission as well as fulfillment of the County's broader responsibilities for providing programs and services
<br />effectively, efficiently, and economically in a transparent and accountable manner. In addition, the audit
<br />considers the impacts of DPW Administration, elected County officials, other County departments, and State
<br />and federal agencies on the operations of the Highway Maintenance and Traffic Divisions and their ability to
<br />effectively and efficiently meet their responsibilities under the Highway Fund. The audit also examines the
<br />operational activities of the Highway Maintenance and Traffic Divisions and compares them to industry
<br />standards and recommended practices related to road, bridge, and flood control maintenance and safety,
<br />including recommendations from the Federal Highway Administration (FHWA), the American Association of
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