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HomeMy WebLinkAboutSingle Audit of Federal Financial Assistance Programs for Fiscal Year 2016 - 2017COUNTY OF HAWAII STATE OF HAWAII SINGLE AUDIT OF FEDERAL FINANCIAL ASSISTANCE PROGRAMS Fiscal Year Ended June 30, 2017 WIlk v , ;�� N&KCPAs, Inc, AC S'„(D0..iNTAN'llS I COLd'.SIIJ13�A"N7S AMERICAN SAVINGS BANK TOWER I 1001 BISHOP STREET, SUITE 17001 HONOLULU, HAWAII 96813-3696 "T (808) 524-2255 IF (808) 523-2090 1 nkcpa.com . k0i � N&K CPAs, Inc. ACCOUNTANTS I CONSULTANTS March 22, 2018 To the Chair and Members of the County Council County of Hawaii AMERICAN SAVINGS BANK TOWER 1001 BISHOP STREET, SUITE 1700 HONOLULU, HAWAII 96813-3696 "T (808) 524-2255 IF (808) 523-2090 We have completed our financial audit of the basic financial statements and other supplementary information of the County of Hawaii, State of Hawaii (the County), as of and for the fiscal year ended June 30, 2017. Our report containing our opinions on those basic financial statements is included in the County's Comprehensive Annual Financial Report. We submit herein our reports on the County's internal control over financial reporting and compliance, the County's compliance with requirements that could have a direct and material effect on each of its major federal programs and internal control over compliance, and our report on the schedule of expenditures of federal awards. OBJECTIVES OF THE AUDIT The primary purpose of our audit was to form opinions on the fairness of the presentation of the County's basic financial statements as of and for the fiscal year ended June 30, 2017, and to comply with the requirements of Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance), which establishes audit requirements for state and local governments that receive federal financial assistance. More specifically, the objectives of the audit were as follows: To provide a basis for an opinion on the fairness of the presentation of the County's financial statements. 2. To report on internal control over financial reporting and compliance with provisions of laws, regulations, contracts, and grant agreements, noncompliance with which could have a direct and material effect on the determination of financial statement amounts in accordance with Government Auditing Standards. 3. To report on internal control over compliance related to major federal programs and an opinion on compliance with federal statutes, regulations, and the terms and conditions of federal awards that could have a direct and material effect on each major federal program in accordance with the Single Audit Act Amendments of 1996 and the Uniform Guidance. 2 N&K CPAs, Inc. ACCOUNTANTS I CONSULTANTS SCOPE OF THE AUDIT Our audit was performed in accordance with auditing standards generally accepted in the United States of America as prescribed by the American Institute of Certified Public Accountants; Government Auditing Standards, issued by the Comptroller General of the United States; and the audit requirements of the Uniform Guidance. The scope of our audit included an examination of the transactions and accounting records of the County for the fiscal year ended June 30, 2017. ORGANIZATION OF THE REPORT This report is presented in four parts as follows: • Part I - Our report on internal control over financial reporting and on compliance and other matters. • Part II - Our report on compliance for each major federal program; report on internal control over compliance; and report on the schedule of expenditures of federal awards required by the Uniform Guidance. • Part III - The schedule of findings and questioned costs. • Part IV - The summary schedule of prior audit findings. We wish to express our sincere appreciation for the excellent cooperation and assistance extended by the staff of the County. Sincerely, N&K CPAs, INC. 3 COUNTY OF HAWAII, STATE OF HAWAII TABLE OF CONTENTS Page PART I REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING AND ON COMPLIANCE AND OTHER MATTERS Report on Internal Control over Financial Reporting and on Compliance and Other Matters Based on an Audit of Financial Statements Performed in Accordance with Government Auditing Standards 6 - 7 PART II REPORT ON COMPLIANCE FOR EACH MAJOR FEDERAL PROGRAM; REPORT ON INTERNAL CONTROL OVER COMPLIANCE; AND REPORT ON THE SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS REQUIRED BY THE UNIFORM GUIDANCE Report on Compliance for Each Major Federal Program; Report on Internal Control over Compliance; and Report on the Schedule of Expenditures of Federal Awards Required by the Uniform Guidance 9-11 Schedule of Expenditures of Federal Awards 12-23 Notes to Schedule of Expenditures of Federal Awards 24 PART III SCHEDULE OF FINDINGS AND QUESTIONED COSTS 26 PART IV SUMMARY SCHEDULE OF PRIOR AUDIT FINDINGS Status Report 12 4.3w,4%7 PART I REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING AND ON COMPLIANCE AND OTHER MATTERS . k0i � N&K CPAs, Inc. ACCOUNTANTS I CONSULTANTS AMERICAN SAVINGS BANK TOWER 1001 BISHOP STREET, SUITE 1700 HONOLULU, HAWAII 96813-3696 "T (808) 524-2255 IF (808) 523-2090 REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING AND ON COMPLIANCE AND OTHER MATTERS BASED ON AN AUDIT OF FINANCIAL STATEMENTS PERFORMED IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS INDEPENDENT AUDITOR'S REPORT To the Chair and Members of the County Council County of Hawaii We have audited, in accordance with the auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards issued by the Comptroller General of the United States, the financial statements of the governmental activities, the business -type activities, the discretely presented component unit, each major fund, and the aggregate remaining fund information of the County of Hawai°i, State of Hawai°i (the County), as of and for the fiscal year ended June 30, 2017, and the related notes to the financial statements, which collectively comprise the County's basic financial statements, and have issued our report thereon dated December 28, 2017. Internal Control Over Financial Reporting In planning and performing our audit of the financial statements, we considered the County's internal control over financial reporting (internal control) to determine the audit procedures that are appropriate in the circumstances for the purpose of expressing our opinions on the financial statements, but not for the purpose of expressing an opinion on the effectiveness of the County's internal control. Accordingly, we do not express an opinion on the effectiveness of the County's internal control. A deficiency in internal control exists when the design or operation of a control does not allow management or employees, in the normal course of performing their assigned functions, to prevent, or detect and correct, misstatements on a timely basis. A material weakness is a deficiency, or a combination of deficiencies, in internal control, such that there is a reasonable possibility that a material misstatement of the entity's financial statements will not be prevented, or detected and corrected on a timely basis. A significant deficiency is a deficiency, or a combination of deficiencies, in internal control that is less severe than a material weakness, yet important enough to merit attention by those charged with governance. 9 N&K CPAs, Inc. ACCOUNTANTS I CONSULTANTS Our consideration of internal control was for the limited purpose described in the first paragraph of this section and was not designed to identify all deficiencies in internal control that might be material weaknesses or significant deficiencies. Given these limitations, during our audit we did not identify any deficiencies in internal control that we consider to be material weaknesses. However, material weaknesses may exist that have not been identified. Compliance and Other Matters As part of obtaining reasonable assurance about whether the County's financial statements are free from material misstatement, we performed tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements, noncompliance with which could have a direct and material effect on the determination of financial statement amounts. However, providing an opinion on compliance with those provisions was not an objective of our audit, and accordingly, we do not express such an opinion. The results of our tests disclosed no instances of noncompliance or other matters that are required to be reported under Government Auditing Standards. Purpose of this Report The purpose of this report is solely to describe the scope of our testing of internal control and compliance and the results of that testing, and not to provide an opinion on the effectiveness of the entity's internal control or on compliance. This report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the entity's internal control and compliance. Accordingly, this communication is not suitable for any other purpose. Honolulu, Hawaii December 28, 2017 7 PART II REPORT ON COMPLIANCE FOR EACH MAJOR FEDERAL PROGRAM; REPORT ON INTERNAL CONTROL OVER COMPLIANCE; AND REPORT ON THE SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS REQUIRED BY THE UNIFORM GUIDANCE 0 . kZ 19 ;A� N&K CPAs, Inc. ACCOUNTANTS I CONSULTANTS AMERICAN SAVINGS BANK TOWER 1001 BISHOP STREET, SUITE 1700 HONOLULU, HAWAII 96813-3696 "T (808) 524-2255 IF (808) 523-2090 REPORT ON COMPLIANCE FOR EACH MAJOR FEDERAL PROGRAM; REPORT ON INTERNAL CONTROL OVER COMPLIANCE; AND REPORT ON THE SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS REQUIRED BY THE UNIFORM GUIDANCE INDEPENDENT AUDITOR'S REPORT To the Chair and Members of the County Council County of Hawaii Report on Compliance for Each Major Federal Program We have audited the County of Hawaii, State of Hawai`i's (the County) compliance with the types of compliance requirements described in the OMB Compliance Supplement that could have a direct and material effect on each of the County's major federal programs for the fiscal year ended June 30, 2017. The County's major federal programs are identified in the summary of auditor's results section of the accompanying schedule of findings and questioned costs. Management's Responsibility Management is responsible for compliance with federal statutes, regulations, and the terms and conditions of its federal awards applicable to its federal programs. Auditor's Responsibility Our responsibility is to express an opinion on compliance for each of the County's major federal programs based on our audit of the types of compliance requirements referred to above. We conducted our audit of compliance in accordance with auditing standards generally accepted in the United States of America; the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States; and the audit requirements of Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance). Those standards and the Uniform Guidance require that we plan and perform the audit to obtain reasonable assurance about whether noncompliance with the types of compliance requirements referred to above that could have a direct and material effect on a major federal program occurred. An audit includes examining, on a test basis, evidence about the County's compliance with those requirements and performing such other procedures as we considered necessary in the circumstances. 0 N&K CPAs, Inc. ACCOUNTANTS I CONSULTANTS We believe that our audit provides a reasonable basis for our opinion on compliance for each major federal program. However, our audit does not provide a legal determination of the County's compliance. Opinion on Each Major Federal Program In our opinion, the County complied, in all material respects, with the types of compliance requirements referred to above that could have a direct and material effect on each of its major federal programs for the fiscal year ended June 30, 2017. Report on Internal Control Over Compliance Management of the County is responsible for establishing and maintaining effective internal control over compliance with the types of compliance requirements referred to above. In planning and performing our audit of compliance, we considered the County's internal control over compliance with the types of requirements that could have a direct and material effect on each major federal program to determine the auditing procedures that are appropriate in the circumstances for the purpose of expressing an opinion on compliance for each major federal program and to test and report on internal control over compliance in accordance with the Uniform Guidance, but not for the purpose of expressing an opinion on the effectiveness of internal control over compliance. Accordingly, we do not express an opinion on the effectiveness of the County's internal control over compliance. A deficiency in internal control over compliance exists when the design or operation of a control over compliance does not allow management or employees, in the normal course of performing their assigned functions, to prevent, or detect and correct, noncompliance with a type of compliance requirement of a federal program on a timely basis. A material weakness in internal control over compliance is a deficiency, or combination of deficiencies, in internal control over compliance, such that there is a reasonable possibility that material noncompliance with a type of compliance requirement of a federal program will not be prevented, or detected and corrected, on a timely basis. A significant deficiency in internal control over compliance is a deficiency, or a combination of deficiencies, in internal control over compliance with a type of compliance requirement of a federal program that is less severe than a material weakness in internal control over compliance, yet important enough to merit attention by those charged with governance. Our consideration of internal control over compliance was for the limited purpose described in the first paragraph of this section and was not designed to identify all deficiencies in internal control over compliance that might be material weaknesses or significant deficiencies. We did not identify any deficiencies in internal control over compliance that we consider to be material weaknesses. However, material weaknesses may exist that have not been identified. ire N&K CPAs, Inc. ACCOUNTANTS I CONSULTANTS The purpose of this report on internal control over compliance is solely to describe the scope of our testing of internal control over compliance and the results of that testing based on the requirements of the Uniform Guidance. Accordingly, this report is not suitable for any other purpose. Report on Schedule of Expenditures of Federal Awards Required by the Uniform Guidance We have audited the financial statements of the governmental activities, the business - type activities, the discretely presented component unit, each major fund, and the aggregate remaining fund information of the County as of and for the fiscal year ended June 30, 2017, and the related notes to the financial statements, which collectively comprise the County's basic financial statements. We issued our report thereon dated December 28, 2017, which contained unmodified opinions on those financial statements. Our audit was conducted for the purpose of forming opinions on the financial statements that collectively comprise the County's basic financial statements. The accompanying schedule of expenditures of federal awards is presented for purposes of additional analysis as required by the Uniform Guidance and is not a required part of the basic financial statements. Such information is the responsibility of management and was derived from and relates directly to the underlying accounting and other records used to prepare the basic financial statements. The information has been subjected to the auditing procedures applied in the audit of the basic financial statements and certain additional procedures, including comparing and reconciling such information directly to the underlying accounting and other records used to prepare the basic financial statements or to the basic financial statements themselves, and other additional procedures in accordance with auditing standards generally accepted in the United States of America. In our opinion, the schedule of expenditures of federal awards is fairly stated in all material respects in relation to the basic financial statements as a whole. Honolulu, Hawaii March 22, 2018 is i County of Hawaii, State of Hawaii SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS Fiscal Year Ended June 30, 2017 Federal Grantor/Pass-Through Grantor/Program or Cluster Title Federal CFDA Number Grant Number DEPARTMENT OF AGRICULTURE Food and Nutrition Service Passed Through the State Department of Education: Summer Food Service Program for Children 10.559 N/A Total Department of Agriculture DEPARTMENT OF COMMERCE National Oceanic and Atmospheric Administration Passed Through the State Department of Business, Economic Development and Tourism: Coastal Zone Management Administration Awards 11.419 NA15NOS4190105 Hawaii Coastal Zone Management Program NA16NOS4190093 Total Department of Commerce DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT Office of Housing Section 8 - Housing Assistance Payments Program 14.195 Kulaimano Elderly Housing HI 10 0002001 Pass -Through Federal Total Passed Entity Identifying Program Federal Through to Number Award Amount Expenditures Subrecipients 1707-8 $ 47,827 $ 47,827 $ 47,827 N/A 358,807 13,643 N/A 374,716 319,734 333,377 N/A 259,308 $ 132.435 $ The accompanying notes are an integral part of this schedule. County of Hawaii, State of Hawaii SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS (Continued) Fiscal Year Ended June 30, 2017 Federal Grantor/Pass-Through Grantor/Program or Cluster Title Federal CFDA Number Grant Number Pass -Through Entity Identifying Number Federal Program Award Amount Total Federal Expenditures Passed Through to Subrecipients DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT (Continued) Community Planning and Development Community Development Block Grants/State's Program and Non -Entitlement Grants in Hawaii 14.228 B -14 -DH -15-0002 N/A $ 2,677,897 $ 797,125 $ B -15 -DH -15-0002 N/A 2,465,271 1,353,778 1,160,491 B -16 -DH -15-0002 N/A 2,491,306 560,386 20,000 Program Income 118,214 Subtotal CFDA 14.228 2,829,503 1,180,491 Passed Through the Hawaii Housing Finance and Development WCorporation: Home Investment Partnerships Program 14.239 M -12 -SG -15-0100 FIN 13-02 3,319,441 757,797 696,630 M -14 -SG -15-0100 FIN 16-02 452,684 409,206 409,206 M -15 -SG -15-0100 FIN 16-04 2,852,059 1,237,026 810,077 Subtotal CFDA 14.239 2,404,029 1,915,913 Public and Indian Housing Section 8 Housing Choice Vouchers 14.871 H1002AF 2015 N/A 1,527,638 21,120 H1002VO2016 N/A 15,527,060 8,807,869 H1002AF2016 N/A 1,713,576 1,713,576 H1002VO 2017 N/A 18,319,434 8,465,544 H1002AF2017 N/A 1,844,475 171,409 Program Income 1,381,658 Subtotal CFDA 14.871 $ 20,561,176 $ The accompanying notes are an integral part of this schedule. A County of Hawaii, State of Hawaii SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS (Continued) Fiscal Year Ended June 30, 2017 Federal Grantor/Pass-Through Grantor/Program or Cluster Title DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT (Continued) Family Self -Sufficiency Program Subtotal CFDA 14.896 Total Department of Housing and Urban Development DEPARTMENT OF THE INTERIOR Office of the Secretary Payments in Lieu of Taxes Fish and Wildlife Service Passed through the State Department of Land and Natural Resources Cooperative Endangered Species Conservation Fund. Total Department of the Interior DEPARTMENT OF JUSTICE Office of Juvenile Justice and Delinquency Prevention Passed through the State Department of Human Services: Juvenile Accountability Block Grants Subtotal CFDA 16.523 Passed through the State Department of Human Services: Juvenile Justice and Delinquency Prevention -Allocation to States Subtotal CFDA 16.540 Federal CFDA Number Grant Number Pass -Through Entity Identifying Number Federal Program Award Amount Total Federal Expenditures Passed Through to Subrecipients 14.896 H1002FSH18OA0142016 N/A $ 66,204 $ 31,090 $ 177,301 65,613 H1002FSH18OA014 2017 N/A 66,204 36,378 200,000 124,311 124,311 $ 214,413 $ 67,468 25,994,611 3,096,404 15.226 N/A N/A 332,004 332,004 15.615 FA12AP01107-0001-007A N/A 1,214,000 1,214,000 1,546,004 16.523 2012 -JB -FX -0019 DHS-12-OYS-268 2013 -JB -FX -0043 DHS-12-OYS-268 16.540 2013 -MU -FX -0037 DHS-13-OYS-304 2015 -JF -FX -0053 DHS-13-OYS-304 2016 -JF -FX -0022 DHS-17-OYS-702 The accompanying notes are an integral part of this schedule. 32,066 16,734 16,692 33,425 21,953 20,528 38,687 37,220 177,301 65,613 65,613 24,489 24,489 24,489 200,000 124,311 124,311 $ 214,413 $ 214,413 County of Hawaii, State of Hawaii SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS (Continued) Fiscal Year Ended June 30, 2017 Federal Grantor/Pass-Through Grantor/Program or Cluster Title Federal CFDA Number Grant Number Pass -Through Entity Identifying Number Federal Program Award Amount Total Federal Expenditures Passed Through to Subrecipients DEPARTMENT OF JUSTICE (Continued) Bureau of Justice Statistics Passed through the State Department of the Attorney General. National Criminal History Improvement Program 16.554 2015-RU-BX-KO10 N/A $ 12,000 $ 9,023 $ Office for Victims of Crime Passed through the State Department of the Attorney General. Crime Victim Assistance 16.575 2013-VA-GX-0071 13 -VA -04 341,628 37,307 23,303 2014-VA-GX-0035 14 -VA -04 355,093 317,413 11,636 2015-VA-GX-0035 15 -VA -04 1,649,397 445,073 196,472 Subtotal CFDA 16.575 799,793 231,411 (r Bureau of Justice Assistance Edward Byrne Memorial Justice Assistance Grant Program 16.738 Justice Assistance Grant 2016 -DJ -BX -0226 N/A 120,634 94,716 2015 -DJ -BX -1078 N/A 92,825 47,884 Passed through the State Department of Attorney General: Specialized Sex Assault Unit 2014 -DJ -BX -0910 14 -DJ -01 272,923 164,754 Hawaii Narcotics Task Force 2011 -DJ -BX -2205 11 -DJ -12 46,305 18,286 2015 -DJ -BX -0342 15 -DJ -03 44,162 7,545 SAFE Coordinator 2012 -DJ -BX -0436 12 -DJ -06 24,946 12,649 Subtotal CFDA 16.738 $ 345,834 $ The accompanying notes are an integral part of this schedule. County of Hawaii, State of Hawaii SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS (Continued) Fiscal Year Ended June 30, 2017 Federal Grantor/Pass-Through Grantor/Program or Cluster Title DEPARTMENT OF JUSTICE (Continued) Violence Against Women Office Passed through the State Department of Attorney General: Violence Against Women Formula Grants STOP Violence Against Women Sexual Assault Forensic Examiners Standby Pay SAFE On Call & SANE Coordinator Subtotal CFDA 16.588 Office of Community Oriented Policing Services Public Safety Partnership and Community Policing Grants COPS Passed through the State Department of the Attorney General. Public Safety Partnership and Community Policing Grants Subtotal CFDA 16.710 National Institute of Justice Passed through the State Department of Attorney General: Paul Coverdell Forensic Sciences Improvement Grant Program Criminal Division Equitable Sharing Program Asset Forfeitures Subtotal CFDA 16.922 Total Department of Justice Federal Pass -Through Federal Total Passed CFDA Entity Identifying Program Federal Through to Number Grant Number Number Award Amount Expenditures Subrecipients 16.588 2014 -WF -AX -0019 14 -WF -03 $ 53,586 $ 53,586 $ 2013 -WF -AX -0002 13 -WF -07 51,525 24,609 2014 -WF -AX -0019 14 -WF -07 53,586 3,888 82,083 16.710 2014ULWX0037 N/A 250,000 81,441 2010-CK-WX-0492 2010-CK-WX-0492 46,000 46,000 127,441 16.742 2015 -CD -BX -0010 15 -CD -02 26,751 21,553 16.922 H1001013A N/A 5,655 5,655 H10010000 N/A 44,391 44,391 50,046 $ 1,688,873 $ 483,044 The accompanying notes are an integral part of this schedule. f County of Hawaii, State of Hawaii SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS (Continued) Fiscal Year Ended June 30, 2017 Federal Grantor/Pass-Through Grantor/Program or Cluster Title DEPARTMENT OF LABOR Employment and Training Administration Passed through the State Department of Labor and Industrial Relations: Senior Community Service Employment Program WIA/W10A Cluster WIA/WIOA Adult Program Subtotal CFDA 17.258 WIA/W10A Youth Activities Subtotal CFDA 17.259 WIA/W10A Dislocated Worker Formula Grants Subtotal CFDA 17.278 Total WIA/W10A Cluster Total Department of Labor Federal Pass -Through Federal Total Passed CFDA Entity Identifying Program Federal Through to Number Grant Number Number Award Amount Expenditures Subrecipients 17.235 AD -30402-17-55-A-15 PY16-SCSEP-H-HCOA $ 327,726 $ 238,181 $ 17.258 AA -24088-14-55-A-15 WIA-14-AP-H 400,119 24,947 24,947 AA -26775-15-55-A-15 WIOA-15-A&DWP-H 387,934 261,491 261,491 AA -26775-16-55-A-15 WIOA-16-A&DWP-H 422,171 43,835 13,768 330,273 300,206 17.259 AA -26775-15-55-A-15 WIOA-15-YP-H 403,455 102,076 101,774 AA -26775-16-55-A-15 WIOA-16-YP-H 289,333 286,541 183,507 388,617 285,281 17.278 AA -24088-14-55-A-15 WIA-14-DWP-H 227,841 16,201 16,201 AA -26775-15-55-A-15 WIOA-15-A&DWP-H 353,926 257,759 257,759 AA -26775-16-55-A-15 WIOA-16-A&DWP-H 416,431 28,754 9,687 302,714 283,647 1,021,604 869,134 $ 1,259,785 $ 869,134 The accompanying notes are an integral part of this schedule. I. County of Hawaii, State of Hawaii SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS (Continued) Fiscal Year Ended June 30, 2017 Federal Grantor/Pass-Through Grantor/Program or Cluster Title DEPARTMENT OF TRANSPORTATION Federal Highway Administration Passed through the State Department of Transportation: Highway Planning and Construction: DOT Flex Grant Aggressive Driving Project Leica Scan Station Training Reeds Island Bridge Replacement on Kaiulani Street in Hilo Bridge Inspection/Appraisals Mamalahoa Hwy Widening, Mana Road Alii Drive ROW Waimea Trails & Greenways Alii Drive Culvert Replacement Kaiminani Drive Roadway Imp, Mamalahoa Hwy to Ahiahi St Kaiminani Drive Roadway Imp, Ahiahi St to vicinity of Ane Keohokalole Hwy Kamehameha Avenue Resurfacing, Wailoa Bridge to Ponohawai Street Puainako Street Extension, Komohana St to Country Club Rd Waianuenue Ave Imp, Rainbow Dr to Akolea Rd Kawailani Street Improvements, Iwalani to Pohakulani Street Manono St Improv, Lanikaula to Kekuanaoa Subtotal CFDA 20.205 Federal CFDA Number Grant Number 20.205 1500093 1500093 1500093 BR -0100(47) BR-NBIS(67) NH -019-1(044) RS -0187(1) RS -0187(4) STP -0100(51) STP -0186(1) STP -0198(1) STP -0198(2) STP -1910(1) STP -2000(4) STP -2720(001) STP -2760(2) STP -2770(004) Pass -Through Federal Total Passed Entity Identifying Program Federal Through to Number Award Amount Expenditures Subrecipients Flex 2016 - Project 5 $ Flex 2016 -Project #8 Flex 2016 -Project 17 96039 16002 12032 00014 10010 96044 97029 11007 13034 05003 00030 13019 99021 11043 The accompanying notes are an integral part of this schedule. 98,898 $ 65,845 $ 60,112 12,836 200,000 199,851 6,932,169 18,669 160,800 57,001 1,352,000 276,888 3,127,200 82 6,564,594 133,639 313,644 7,024 462,885 37,513 9,434,330 (94,101) 16,126,147 248,042 12,842,182 169,210 27,020,026 84 1,000,000 2,299 19,386,623 2,077,274 5,589,416 253,581 $ 3,465,737 $ T County of Hawaii, State of Hawaii SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS (Continued) Fiscal Year Ended June 30, 2017 Federal Grantor/Pass-Through Grantor/Program or Cluster Title DEPARTMENT OF TRANSPORTATION (Continued) National Highway Traffic Safety Administration Passed through the State Department of Transportation: Highway Safety Cluster State and Community Highway Safety Click It or Ticket Speed Enforcement Traffic Investigation Program Distracted Driving Subtotal CFDA 20.600 National Priority Safety Programs Prosecutor's Training Data Grant Seatbelt Enforcement Roadblock Program Subtotal CFDA 20.616 Total Highway Safety Cluster Federal CFDA Number Grant Number Pass -Through Entity Identifying Number Federal Program Award Amount Total Passed Federal Through to Expenditures Subrecipients 20.600 18X9204020 OP16-05(02-H-01) $ 18,500 $ 3,005 $ 18X9204020 SC16-06(01-H-02) 91,168 15,343 18X9204020 SC17-06(01-H-02) 103,068 29,645 18X9204020 PT16-01(02-H-01) 71,500 529 18X9204020 PT17-01(02-H-01) 53,250 14,421 18X9204020 DD16-10(02-H-01) 57,430 13,526 18X9204020 DD17-10(02-H-01) 57,430 39,009 115,478 20.616 18X9205464 AL16-02(03-S-01) 10,800 241 18X920405D AL17-02(03-S-01) 11,370 1,450 18X920405C TR16-03(04-H-01) 123,777 3,745 18X920405C TR17-03(04-H-01) 135,680 1,644 18X9204056 OP16-05(01-H-02) 78,480 19,035 18X9204056 OP17-05(01-H-02) 78,843 56,528 18X920405D AL16-02(01-H-02) 166,079 27,523 18X920405D AL17-02(01-H-02) 52,655 27,118 137,284 $ 252,762 $ The accompanying notes are an integral part of this schedule. L County of Hawaii, State of Hawaii SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS (Continued) Fiscal Year Ended June 30, 2017 Federal Grantor/Pass-Through Grantor/Program or Cluster Title DEPARTMENT OF TRANSPORTATION (Continued) Alcohol Open Container Requirements Roadblock Program Subtotal CFDA 20.607 Minimum Penalties for Repeat Offenders for Driving While Intoxicated Prosecutor's Training Total Department of Transportation ENVIRONMENTAL PROTECTION AGENCY Office of Water Passed through the State Department of Health: Capitalization Grants for Drinking Water State Revolving Funds Waimea WTP Microfiltration Total Environmental Protection Agency DEPARTMENT OF HEALTH AND HUMAN SERVICES Administration for Community Living Passed through the State Executive Office on Aging: Special Programs for the Aging - Title III, Part D - Disease Prevention and Health Promotion Services Aging Cluster Special Programs for the Aging - Title III, Part B - Grants for Supportive Services and Senior Centers Subtotal CFDA 93.044 Federal 7,889,201 Pass -Through Federal Total Passed CFDA 15,067 Entity Identifying Program Federal Through to Number Grant Number Number Award Amount Expenditures Subrecipients 20.607 18X9205464 AL16-02(01-H-02) $ 17,526 $ 17,526 $ 18X9205464 AL17-02(01-H-02) 143,305 96,061 113,587 20.608 18X9205464 AL17-02(03-S-01) 123,236 2,065 3,834,151 66.468 FS99986516 N/A 93.043 3D-4-2015 HA2015NO3 93.044 313-4-2015 HA2015NO3 313-4-2016 HA2016NO3 The accompanying notes are an integral part of this schedule. 8,834,381 7,889,201 7,889,201 17,640 15,067 492,169 57,652 427,215 371,934 $ 429,586 $ County of Hawaii, State of Hawaii SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS (Continued) Fiscal Year Ended June 30, 2017 Federal Grantor/Pass-Through Grantor/Program or Cluster Title DEPARTMENT OF HEALTH AND HUMAN SERVICES (Continued) Special Programs for the Aging - Title III, Part C - Nutrition Services Subtotal CFDA 93.045 Nutrition Services Incentive Program N Total Aging Cluster National Family Caregiver Support, Title III, Part E Subtotal CFDA 93.052 Centers for Disease Control and Prevention Passed through the State Department of Health: Chronic Diseases: Research, Control and Prevention Substance Abuse and Mental Health Services Administration Passed through the State Department of Health: Substance Abuse and Mental Health Services Projects of Regional and National Significance Subtotal CFDA 93.243 Total Department of Health and Human Services Federal Pass -Through Federal Total Passed CFDA Entity Identifying Program Federal Through to Number Grant Number Number Award Amount Expenditures Subrecipients 93.045 3C1-4-2015 HA2015NO3 $ 240,578 $ 24,058 $ 3C14-2016 HA2016NO3 240,018 81,220 3C14-2017 HA2016NO3 330,129 176,623 3C2-4-2015 HA2015NO3 122,332 12,233 3C2-4-2016 HA2016NO3 204,394 114,010 3C2-4-2017 HA2016NO3 204,448 58,237 466,381 93.053 N/A NSIP16 89,150 17,097 913,064 93.052 3E-4-2014 HA2013NO3 129,401 19,263 3E-4-2015 HA2015NO3 115,636 78,121 97,384 93.068 NU58DP006260-01-00 N/A 2,500 866 93.243 5U79SP020167-03 ASO LOG NO. 16-162 5U79SP020167-04 ASO LOG NO. 16-162 The accompanying notes are an integral part of this schedule. 110,000 17,396 11,000 51,280 68,676 $ 1.095.057 $ County of Hawaii, State of Hawaii SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS (Continued) Fiscal Year Ended June 30, 2017 Federal Grantor/Pass-Through Grantor/Program or Cluster Title CORPORATION FOR NATIONAL AND COMMUNITY SERVICE Retired and Senior Volunteer Program Total Corporation for National and Community Service DEPARTMENT OF HOMELAND SECURITY Federal Emergency Management Agency (FEMA) Passed through the State Department of Defense: Disaster Grants - Public Assistance (Presidentially Declared Disasters) Pu'u 0'o Volcanic Eruption & Lava Flow Emergency Management Performance Grants Assistance to Firefighters Grant Homeland Security Grant Program Subtotal CFDA 97.067 Total Department of Homeland Security Federal Pass -Through Federal Total Passed CFDA Entity Identifying Program Federal Through to Number Grant Number Number Award Amount Expenditures Subrecipients 94.002 16SRPH1002 N/A $ 140,008 $ 71,044 $ 71,044 97.036 FEMA -4201 -DR -HI N/A 97.042 EMF -2016 EP -00008 N/A 97.044 EMW-2015-FO-02101 N/A 97.067 EMW-2014-SS-00003 N/A EMW-2015-SS-00003 N/A The accompanying notes are an integral part of this schedule. 6,882,245 13,200 200,000 200,000 1,369,493 1,246,062 535,000 210,024 760,000 15,462 225,486 $ 1,684,748 $ N W County of Hawaii, State of Hawaii SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS (Continued) Fiscal Year Ended June 30, 2017 Federal Pass -Through Federal Total Passed CFDA Entity Identifying Program Federal Through to Federal Grantor/Pass-Through Grantor/Program or Cluster Title Number Grant Number Number Award Amount Expenditures Subrecipients OFFICE OF NATIONAL DRUG CONTROL POLICY Hawai'i Impact 07.000 G15HI0004A N/A $ 205,425 $ 23,815 $ G16HI0004A N/A 164,048 197,002 G17HI0004A N/A 171,510 22,772 Total Office of National Drug Control Policy 243,589 TOTAL EXPENDITURES OF FEDERAL AWARDS $ 45,688,267 $ 4,448,582 *Audited as a major federal program for the fiscal year ended June 30, 2017. The accompanying notes are an integral part of this schedule. County of Hawaii, State of Hawaii NOTES TO SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS Fiscal Year Ended June 30, 2017 NOTE A - BASIS OF PRESENTATION The accompanying schedule of expenditures of federal awards (the Schedule) includes the federal award activities of the County of Hawaii and its discretely presented component unit, the Department of Water Supply, under programs of the federal government for the fiscal year ended June 30, 2017. The information in this Schedule is presented in accordance with the requirements of Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance). Because the Schedule presents only a selected portion of the operations of the County of Hawaii , it is not intended to, and does not present the financial position, changes in financial position, or cash flows of the County of Hawaii. NOTE B - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Expenditures reported on the Schedule are reported on the cash basis of accounting. Such expenditures are recognized following, as applicable, either the cost principles in Office of Management and Budget Circular A-87, Cost Principles for State, Local and Indian Tribal Governments, or the cost principles contained in the Uniform Guidance, wherein certain types of expenditures are not allowable or are limited as to reimbursement. NOTE C - INDIRECT COST RATE The County of Hawaii has elected not to use the 10 -percent de minimis indirect cost rate allowed under the Uniform Guidance. 24 PART III SCHEDULE OF FINDINGS AND QUESTIONED COSTS 25 County of Hawaii, State of Hawaii SCHEDULE OF FINDINGS AND QUESTIONED COSTS Fiscal Year Ended June 30, 2017 SECTION I - SUMMARY OF AUDITOR'S RESULTS Financial Statements Type of report the auditor issued on whether the financial statements audited were prepared in accordance with GAAP: Unmodified Internal control over financial reporting: Material weakness(es) identified? _ yes ✓ no Significant deficiency(ies) identified? _ yes ✓ none reported Noncompliance material to financial statements noted? _ yes ✓ no Federal Awards Internal control over major federal programs: Material weakness(es) identified? _ yes ✓ no Significant deficiency(ies) identified? _ yes ✓ none reported Type of auditor's report issued on compliance for major federal programs: Any audit findings disclosed that are required to be reported in accordance with 2 CFR 200.516(a)? Identification of major federal programs: CFDA Number 14.228 93.044/93.045/93.053 Dollar threshold used to distinguish between Type A and Type B programs: Auditee qualified as a low-risk auditee? SECTION II - FINANCIAL STATEMENT FINDINGS No matters were reported. Unmodified yes ✓ no Name of Federal Program or Cluster Community Development Block Grants/State's Program and Non - Entitlement Grants in Hawaii Aging Cluster Capitalization Grants for Drinking Water State Revolving Funds $1,370,648 ✓ yes _ no SECTION III - FEDERAL AWARD FINDINGS AND QUESTIONED COSTS No matters were reported. 26 PART IV SUMMARY SCHEDULE OF PRIOR AUDIT FINDINGS (Provided by the County of Hawaii) 27 County of Hawaii, State of Hawaii STATUS REPORT Fiscal Year Ended June 30, 2017 This section contains the current status of prior audit recommendations. The recommendations are referenced to the pages of the previous audit report for the fiscal year ended June 30, 2016, dated March 29, 2017. FINANCIAL STATEMENT FINDINGS Reference Number Recommendation Current Status 2016-001 Physical Security (page 28) We recommend that the County develop formal The County has identified a policies over the physical security of IT systems at new location that will be the Center and to implement them. The server room renovated into the new server should be locked and access to keys or codes room and partial funding has should be limited to authorized personnel. A fire already been secured. The suppression system should be installed to prevent new location would include a or limit the loss of data from fire. backup generator capacity to support servers and air conditioning; fire suppression and a secure managed access. In the interim, racks have been relocated to improve airflow and allow the door of the current room to be secured. As in prior years, the County still contends that its current policies serve as mitigating controls that address the recommendations of the auditors including the fact that the general facility that houses the server room is restricted to authorized personnel and overall access is limited and that all data is backed up nightly to a different physical location to prevent the loss of data from all possibilities. W County of Hawaii, State of Hawaii STATUS REPORT (Continued) Fiscal Year Ended June 30, 2017 FEDERAL AWARD FINDINGS AND QUESTIONED COSTS Reference Number Recommendation 2009-001 Activities Allowed and Unallowed - Calculation of Federal Expenditures (page 34) The County overstated the federal share of eligible costs related to the Ikuo Hisaoka Gymnasium, resulting in a questioned cost of $27,965. The amount the County reported was based on the actual expenditures, however, as the Ikuo Hisaoka Gymnasium was insured at the time of the loss, the expenditures should have been based on the insurance deductible in accordance with Title 44 Code of Federal Regulations (44 CFR 206.250(c)). 29 Current Status As of last year, as an indication of the difficulty posed by this project's various sources of funding, the State Civil Defense had just submitted their recommendation to closeout this project to the federal government over seven (7) years after the County submitted initial paperwork. The recommendation was to pay the County $50,431.20 and that process to make payment has just recently been initiated by the State Civil Defense.