HB1821 SD1

Report Title:

Legislative Auditor

Description:

Appropriate funds to the legislative auditor to conduct financial audits of the departments of education, health, human services, and other state agencies. (SD1)

HOUSE OF REPRESENTATIVES	H.B. NO.	1821
TWENTY-FIRST LEGISLATURE, 2002		H.D. 2
STATE OF HAWAII		S.D. 1

A BILL FOR AN ACT

 

relating to the legislative auditor.

 

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

SECTION 1. The office of the auditor is authorized by article VII, section 10, of the State Constitution. In addition, chapter 23, Hawaii Revised Statutes, requires the office of the auditor to conduct post-audits of the transactions, accounts, programs, and performance of all departments, offices, and agencies of the State and its political subdivisions.

Currently, financial audits for state departments and agencies are conducted annually by public accounting firms contracted by DAGS. The office of the auditor also conducts, under contract with public accounting firms, an average of only three financial audits annually. Auditing principles and standards require that the audits be conducted by an entity independent of the one being reviewed.

The legislature finds that the office of the auditor must conduct all audits of departments, offices, and agencies of the State and its political subdivisions to meet constitutional and statutory requirements.

The legislature also finds that the current practice of allowing DAGS to conduct the audits of executive departments and agencies raises questions regarding the independence of the auditing function. The legislature further finds that it is necessary to provide sufficient funds for the office of the auditor to conduct financial audits to carry out its constitutional and statutory duties.

The purpose of this Act is to provide the office of the auditor with sufficient funds to conduct financial audits of the departments of education, health, human services, and other state agencies.

SECTION 2. Chapter 23, Hawaii Revised Statutes, is amended by adding a new section to be appropriately designated and to read as follows:

"§23- Audit revolving fund. There is established an audit revolving fund in the office of the auditor. The auditor shall administer the fund. The fund shall consist of any moneys received by the auditor from:

(1) Departments, offices, and agencies of the State and its political subdivisions for financial statement audits and audits required under federal law;

(2) A one-time legislative appropriation; and

(3) All interest earned on the deposit or investment of the moneys in the fund.

The auditor shall use the fund moneys for the purpose of conducting financial statement audits and audits required under federal law, or to pay for certified public accountants to conduct such audits."

SECTION 3. There is appropriated out of the general revenues of the State of Hawaii the sum of $          or so much thereof as may be necessary for fiscal year 2002-2003 to be deposited into the audit revolving fund within the office of the auditor.

SECTION 4. The sum appropriated shall be expended by the department of budget and finance for the purposes of this Act.

SECTION 5. There is appropriated out of the audit revolving fund the sum of $          , or so much thereof as may be necessary for fiscal year 2002-2003, for the state auditor to conduct a financial audit of the department of education.

SECTION 6. The sum appropriated shall be expended by the office of the auditor.

SECTION 7. This Act shall take effect on July 1, 2010.