Report Title:

Office of the Auditor; Investigative Unit

 

Description:

Authorizes the establishment of an investigative unit within the office of the auditor to conduct investigations involving alleged or suspected government waste, fraud, abuse, or malfeasance at the request of the legislature or upon the auditor's initiative; expands the powers of the office of the auditor; appropriates funds for the investigative unit.

 


THE SENATE

S.B. NO.

1928

TWENTY-FOURTH LEGISLATURE, 2007

 

STATE OF HAWAII

 

 

 

 

 

A BILL FOR AN ACT

 

 

relating to the office of the auditor.

 

 

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

 


SECTION 1. The legislature finds that the office of the auditor was established pursuant to article VII, section 10, of the state constitution, which authorized the auditor to conduct investigations in addition to audits. Chapter 23, Hawaii Revised Statutes, authorizes the auditor to conduct investigations and provides the powers to conduct them.

However, the office of the auditor has not conducted investigations in the past, has not been requested to conduct investigations, and has never been provided funds to enable investigations. Through this Act, the legislature establishes an investigative unit in the office of the auditor, and appropriate funds for this purpose.

The investigative unit of the office of the auditor would provide similar investigative functions as inspector generals on the federal level and in several states, including conducting investigations involving alleged or suspected government waste, fraud, abuse, or malfeasance.

The purpose of this Act is to establish an investigative unit in the office of the auditor to conduct investigations involving government waste, fraud, abuse, or malfeasance at the request of the legislature or upon the auditor's initiative. The Act also expands the powers of the office of the auditor, and appropriates funds for the investigative unit.

SECTION 2. Section 23-4, Hawaii Revised Statutes, is amended to read as follows:

"23-4 Duties. (a) The auditor shall conduct postaudits of the transactions, accounts, programs, and performance of all departments, offices, and agencies of the State and its political subdivisions. The postaudits and all examinations to discover evidence of any unauthorized, illegal, irregular, improper, or unsafe handling or expenditure of state funds or other improper practice of financial administration shall be conducted at least once in every two years after the close of a fiscal year, and at any other time or times during the fiscal year as the auditor deems necessary or as may be required by the legislature for the purpose of certifying to the accuracy of all financial statements issued by the respective accounting officers and of determining the validity of expenditures of state or public funds.

(b) The auditor, in conducting postaudits, to the extent practicable and applicable to the audit scope and objectives, shall review and assess the audited agency's rules as defined in section 91-1.

(c) The auditor shall establish an investigative unit within the office of the auditor and shall conduct investigations involving alleged or suspected government waste, fraud, abuse, or malfeasance; provided that investigations may be initiated by:

(1) A concurrent resolution adopted by the legislature;

(2) A request from a standing committee chair of either the:

(A) Senate, with the concurrence of the president of the senate; or

(B) House of representatives, with the concurrence of the speaker of the house of representatives;

(3) An act of the legislature; or

(4) The initiative of the auditor;

provided further that the auditor may consider information from a postaudit pursuant to subsection (a) in initiating an investigation."

SECTION 3. Section 23-5, Hawaii Revised Statutes, is amended by amending subsection (a) to read as follows:

"(a) The auditor may examine and inspect all accounts, books, records, files, papers, and documents and all financial affairs of every department, including the department of taxation, office, agency, and political subdivision. Notwithstanding section 235-116, or any other law making it unlawful for any person, officer, or employee of the State to make known information imparted by any tax return or permit any tax return to be seen or examined by any person, in addition to powers provided to the auditor under this subsection, the department of taxation shall also:

(1) Permit the auditor to inspect any tax return of any taxpayer;

(2) Furnish the auditor with an abstract of the return, if the auditor so desires; and

(3) Supply the auditor with information concerning any item contained in a tax return or disclosed by the report of any investigation of a tax return or of the subject matter of a tax return."

SECTION 4. Section 576D-12, Hawaii Revised Statutes, is amended by amending subsection (a) to read as follows:

"(a) The agency and its agents shall keep records that may be necessary or proper in accordance with this chapter. All applications and records concerning any individual or case shall be confidential. The use or disclosure of information concerning any individual or case shall be limited to:

(1) Persons duly authorized by the State or the United States in connection with their official duties, when their official duties are directly concerned with the administration and implementation of any child support enforcement plan or of a program approved by Title IV‑A through E, or under Title II, X, XIV, XVI, XIX, or XX of the Social Security Act, including but not limited to any legal counsel working on behalf of the agency;

(2) Disclosure to the extent necessary to provide information to family support payors or payees or their authorized representatives regarding payments received by the agency and the status of their support accounts; provided that the information shall be disclosed to an authorized representative only if the request is accompanied by a written waiver of the payor or payee concerned;

(3) Disclosure to consumer reporting agencies as provided in section 576D-6(a)(6);

(4) Other agencies or persons connected with the administration of any other federal or federally assisted program that provides assistance, in cash or in kind, or services, directly to individuals on the basis of need;

(5) Employees acting within the scope and course of their employment with the department as may be approved by the agency;

(6) Purposes directly connected with any investigation, enforcement, prosecution, or criminal, civil, or administrative proceeding conducted in connection with the administration of any plan or program in paragraph (1); [and]

(7) Disclosure to the family court as may be deemed necessary by the family court for any case pending before a court or for purposes of implementation of section 571-51.5[.]; and

(8) Disclosure to the office of the auditor as may be deemed necessary for the purposes of section 23-4 or section 23-5."

SECTION 5. There is appropriated out of the general revenues of the State of Hawaii the sum of $350,000, or so much thereof as may be necessary for fiscal year 2007-2008, and the same sum, or so much thereof as may be necessary for fiscal year 2008-2009, for a five-person investigative unit comprising a manager, a senior level supervisor, two investigative staff, and a clerk, with appropriate computer and other equipment.

The sums appropriated shall be expended by the office of the auditor for the purposes of this Act.

SECTION 6. Statutory material to be repealed is bracketed and stricken. New statutory material is underscored.

SECTION 7. This Act shall take effect on July 1, 2007.

 

INTRODUCED BY:

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