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Home My WebLink AboutAnnual Audit Plan FY 2023-2024County Auditor County of Hawai'i Office of the County Auditor Ph 808.961.8386 June 30, 2023 Honorable Heather Kimball, Council Chair and Members of the Hawaii County Council Hawaii County Council 25 Aupuni Street Hilo, Hawaii 96720 Dear Chair Kimball and Council Members, County of Hawai'i Office of the County Auditor 120 Pauahi St., 309 Hilo, HI 96720 F 808.961.8905 www.hawaiicounty.gov KY aF'4A In accordance with Hawaii County Charter Section 3-18(d)(2), the Office of the County Auditor's Fiscal Year 2023-2024 Annual Audit Plan is attached. This provision requires our office to transmit an annual audit plan to the Hawaii County Council and the Mayor. Our plan includes the following: • Annual Comprehensive Financial Report for Fiscal Year Ending 2023 • Audit of the Financial Statements of the Department of Water Supply for the Fiscal Year Ending 2023 • Single Audit of Federal Financial Assistance Programs for Fiscal Year Ending 2023 • Five self -initiated audits • Surprise cash counts • Unplanned engagements and special projects We want to take this opportunity to share our appreciation with the entire organization as we look forward to pursuing the upcoming audit engagements and projects for the County of Hawaii. Respectfully, County Auditor County of Hawaii Hawai'i is an Equal Opportunity Provider and Employer County of Hawaii Annual Audit Plan Fiscal Year 2023 - 2024 County of Hawaii Office of the County Auditor 120 Pauahi St., 309 Hilo, HI 96720 County of Hawaii Office of the County Auditor 120 Pauahi St., 309 Hilo, HI 96720 Date: June 30, 2023 To: Honorable Heather Kimball, Council Chair and Members of the Hawaii County Council From: Tyler J. Benner, County Auditor Subject: Annual Audit Plan Fiscal Year 2023-2024 Executive Summary Under Hawaii County Charter Section 3-18(d)(2), The Office of the County Auditor respectfully submits its Fiscal Year 2023 — 2024 Annual Audit Plan. The provision requires our office to provide an annual audit plan to the Hawaii County Council and the Mayor. An audit plan identifies specific agencies, departments, divisions, funds, programs, and activities that may be considered for examination to achieve one or more of the audit objectives. After considerable discussion and priorities centered around public transparency, and program efficacy Respectfully, County Auditor County of Hawaii analysis, we designed the work plan to focus on and employee safety, environmental stewardship, Cc. Honorable Mitchell D. Roth, Mayor Lee Lord, Managing Director Jon Henricks, County Clerk 1 Vision Statement Our vision is to enhance County government by leveraging new and emerging technology, evolving the control environment at the speed of business, to provide reasonable assurance that public resources and services are receiving the adequate stewardship they deserve. Mission Statement It is our mission to serve the Council and citizens of Hawaii County by promoting accountability, fiscal integrity, and openness in local government. Through performance and/or financial audits of County agencies and programs, the Office of the County Auditor examines the use of public funds, evaluates operations and activities, and provides findings and recommendations to elected officials and citizens in an objective manner. Our work is intended to assist the County government in its management of public resources, delivery of public services, and stewardship of public trust. Audit Objectives We achieve our mission by pursuing the following audit objectives: • Determine the effectiveness and efficiency of organizations accomplishing their mission and identify cost savings and revenue enhancement opportunities. • Evaluate adequacy and compliance of internal controls, policies and procedures, systems, and processes. . Evaluate proper accounting and safeguarding of County -owned assets. • Cause to conduct reviews of the accuracy of financial and operating transactions. • Confirm compliance with local, state, and federal laws and regulations. • Proactively identify and investigate reported fraud, theft, waste, abuse, etc. and recommend controls to prevent and detect such occurrences. • Determine the effectiveness and efficiency of County programs and resources being utilized. • Follow-up, review, and evaluate previously conducted audits to ensure management actions achieve satisfactory solutions to all significant issues. Fiscal Year 2023- 2024 Planned Audits (Order yet to be determined) Mandated by Charter ➢ Annual Comprehensive Financial Audit of the County of Hawaii ➢ Audit of the Financial Statements of the Department of Water Supply ➢ Single Audit of Federal Financial Assistance Programs In accordance with Hawaii County Charter Section 10-13, our office will monitor the contract with the external auditor, P&M Holding Group, LLP DBA Plante & Moran PLLC, (RFP #4375) to complete the following: ➢ Conduct audits of the accounts and other evidence of financial transactions of the County of Hawaii for the Fiscal Year Ending June 30, 2023 ➢ Financial Audit of the Department of Water Supply for the Fiscal Year Ended June 30, 2023 ➢ Single Audit* of Federal Financial Assistance Programs for Fiscal Year Ended June 30, 2023 ➢ Report for Landfill Financial Assurance; and ➢ Financial Assessment Electronic Submission of Section 8 — Housing choice vouchers *Additional programs may be added as determined by the Schedule of Expenditures of Federal Awards (SEFA). 3 Audits In Process There are no pending audits to report. The office completed seven audits in Fiscal Year 2022-2023. ➢ Additions to Audit Work Plan We continuously evaluate risk. Risk can be inherent and dynamic and can evolve rapidly. Our audit plan may be modified at any time. Modifications should not be considered a failure of the plan but should instead reflect the changing environment and the need to adapt to new and unanticipated threats. 0 Self -Initiated Audits ➢ County of Hawaii: Building Permits Process Our audit will evaluate the efficiency and effectiveness of the County of Hawai`i's building permit process by aligning the stated permit procedures with the actual user experience. We will assess all project elements, from permit application through certificate of occupancy issuance, to ensure a timely, accurate, and streamlined process compliant with applicable regulations and service standards. ➢ Assessment of Community Service Expectations, Mental Health Support, and Training Programs in the Hawaii County Police Department Our audit will compare community service expectations versus the department's capabilities, mental health access and support for officers, and training programs within the Hawai'i County Police Department. ➢ Department of Public Works: Bridges and Culverts Our audit will assess repair and maintenance practices, work order processes, infrastructure conditions, and resource utilization for culverts and bridges to ensure safe and reliable transportation infrastructure. ➢ Department of Environmental Management: Abandoned Vehicle Program Our audit will examine the Department of Environmental Management's Abandoned Vehicle Program to assess its efficiency, compliance, and coordination efforts. ➢ Performance Audit of the Department of Animal Control Our audit will evaluate and assess the adequacy of the newly formed department by assessing its policies, procedures, training programs, communication, and performance. 5 Special Projects ➢ Grants -in -Aid performance monitoring ➢ Request For Proposal for Annual Comprehensive Financial Audit, multi-year contract ➢ Remediation tracker ➢ Surprise cash counts ➢ Tips requiring further research from Fraud and Whistleblower Hotlines ➢ Performance audits approved by Council resolution or the County Auditor 5.9 Remediation Tracker To increase government transparency and accountability, we have developed a remediation tracker. We will continuously monitor the status of new and applicable recommendations until they are completed. 85 Total Num ber of Recommendations Implemented pendlr _ Clanfy County Cotle -We recommend OHCD walk with Hawaii County Council to reeise applir,able sections of Chapter 11. 'We further—mmentl Mass Transit change lurk or safe —bi nations once an employee who had Fully Implementetl C access leaves the organization or is reassigned to another position." "We Mrther remmmend Mass Transit complete treasury receipt within two working days as required Not Apel icable C by the Depanmem of Fran pa11ry" "We M rther remmmend Mass Transit -- that when an employee is a bserrt from work another Fully Implemented C employee performs their tluties Mallow for the pmendal of irregularities m surtace_' "We further remmmend Mass Transit management and staff—4—cash bags for patterro and Not Applicable C (e_g_ repeated over/shorts, inata ate artd ircomplete trip sheets, cash bags with no trip sheetsces ash bags with trip sheets and no cash• imral'd ticket slut,). If Mass Tramit discovers ure --d patterns artdlor inconsistencies they should follow up with the —e .im bas dri•re Recommendation What was asked of the department Response What the department said they would do Status r - •-. - A. re •rcr •.... _:Farman::' -_^pan __ : _:_ _ s•d to n=cecr :he _ _ ____ _ _ "- _ - _ _ - -. _ =_Ily lmplemantad Mayor _i• :. ... . .......... ..... .. . ...:. _--. _ :. _ __ _ preferential trc-a:nian;. - :; Fc: tr_ns are :•ca•:hat �a jiss•a:ion 7w - :ir I serrice posi[iom rest rerth the _.. .'gauth rty -F=..._.. _. __..a,, ._rcr:•..,_,,....__c3n:i...,;.._.. _, r;.,e. �_=.:>=r:c,.:•,ha n-. Fully lmpe,nenred - - _==c: dearan_F,.:•.q_,::I:—atri-•g _.:..-. :_ _ _ -_ pr:tires and a.es_re scmpli:rce with h•:�s. 2019 raFaa : g departmenta�� rules, and regulrtions. Intervier. s• -_..-=atedures vnth the xceptan :'":-:•d=ira. fbliceand F'r fkpart�rar:: ': Ic.. dap:rtmental crc:s:_res hatwera•a ;.:ad and approved c, :-". n 2016 -ha.: _... :. ._ -cid, evaluaticrarto da.: - ne .. _..._,..-__ nsidered for an in: e,. a... 2)1 n 2018. DHR imp10nn- d d,e e_ _-- -' deparVnen—n! apnq I— pan, 7 Next Steps New audit engagements will commence as scheduling permits. Completed audits will be shared with those charged with governance, and responsible parties will have the opportunity to provide comments. Completed reports will be transmitted to the county council and the mayor and filed with the county clerk as a public record. We want to take this opportunity to thank the County Council and the Administration for their support. We look forward to conducting our work this coming year. Respectfully, 7- 60 County Auditor County of Hawaii 51