Report Title:

Department of Hawaiian Home Lands; Audit

Description:

Requires the Legislative Auditor to conduct a financial, program, and management audit of the Department of Hawaiian Home Lands.

HOUSE OF REPRESENTATIVES

H.B. NO.

805

TWENTY-THIRD LEGISLATURE, 2005

 

STATE OF HAWAII

 


 

A BILL FOR AN ACT

 

relating to Audits of the department of hawaiian home lands.

 

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF HAWAII:

SECTION 1. The department of Hawaiian home lands (DHHL) administers certain public lands, known as Hawaiian home lands, for homesteads. These homesteads are designed to allow native Hawaiians to return to their lands and promote self-sufficiency, self-determination, and preservation of the values, culture, and tradition of native Hawaiians. DHHL leases homesteads to native Hawaiians who are at least fifty per cent Hawaiian by blood. Homestead leases may extend up to one hundred ninety-nine years with each lessee paying a rental fee of $1 per year. In addition to administering homestead leases, DHHL carries out other duties such as the development of Hawaiian home lands for income-producing purposes or for homestead use, and for managing home lands that are not used for homestead leases.

The legislature finds that a financial audit of DHHL performed by the office of the auditor in September 2002 revealed several glaring problems with the financial operations of DHHL, including:

(1) Insufficient documentation of the methodology used to determine the allowance for doubtful accounts for loans receivable;

(2) Failure to ensure that all departmental accounting policies and procedures are in place and enforced; and

(3) Improper record-keeping of infrastructure improvements.

The legislature finds that another audit will prove useful in determining whether DHHL has addressed the problems identified in the previous audit. Another audit may also reveal new concerns. In addition, the legislature finds that expanding the scope of the follow-up audit to include management issues will provide further insight into the operation of DHHL as a whole.

The purpose of this Act is to better inform the legislature and the general public on the operation and effectiveness of DHHL by requiring the office of the auditor to perform a financial, program, and management audit.

SECTION 2. (a) The office of the auditor shall conduct a management, program, and financial audit of the department of Hawaiian home lands. The audit shall include but not be limited to a review and analysis of all sources of funding used or managed by the department of Hawaiian home lands.

(b) The department of Hawaiian home lands shall reimburse the office of the auditor for all costs incurred for the audit.

(c) The office of the auditor shall report its findings and recommendations to the legislature no later than twenty days prior to the convening of the regular session of 2006.

SECTION 3. This Act shall take effect upon its approval.

INTRODUCED BY:

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