THE SENATE |
S.B. NO. |
2998 |
THIRTY-FIRST LEGISLATURE, 2022 |
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STATE OF HAWAII |
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A BILL FOR AN ACT
relating to recycling.
BE IT
ENACTED BY THE LEGISLATURE OF THE STATE OF HAWAII:
SECTION 1. The legislature finds that the office of the auditor conducts a financial and program audit of the department of health's deposit beverage container program every other year. Time after time, these audits demonstrate the program's failure to develop and execute procedures to verify the accuracy and completeness of data used to support claims of the deposit and container fees paid to the program by the distributors, as well as deposits and handling fees paid to the redemption centers. Without such procedures, the program relies on self-reported data and accepts that cash receipts from the distributors and payments made to redemption centers are accurate and complete. As a result, these audits found inaccuracies and possible fraudulent reporting in the data used in these calculations. In the auditor's 2019 report to the legislature, one of the recommendations for the deposit beverage container program management was to develop a risk-based process to select distributor and redemption center reports submitted to the program to audit on a periodic basis.
Therefore, the purpose of this Act is to require the department of health to develop a risk-based process to help remedy the flaws in the deposit beverage container program.
SECTION 2. Chapter 342G, Hawaii Revised Statutes, is amended by adding a new section to part VIII to be appropriately designated and to read as follows:
"§342G- Risk-based selection process; audit. (a) The department shall develop a risk-based
process to select deposit beverage distributor and redemption center reports submitted
to the deposit beverage container program for periodic audit. The department may hire personnel or external
consultants to perform the audits. In
developing a risk-based process to monitor deposit beverage distributors and redemption
centers, the department shall:
(1) Consider a
variety of risk factors, including but not limited to the amount of money
transacted, prior audit findings, and frequency of the deposit beverage distributor's
or redemption center's prior audits;
(2) Require deposit beverage distributors to
send monthly or semi-annual distribution reports and supporting records, such
as schedules of invoices, shipping documents, point‑of‑sale
reports, and other documentation as required by the department, to the deposit
beverage container program on a periodic basis; and
(3) Ensure that the
audit process includes a risk assessment derived from deposit beverage distributor
and redemption center data based on the reports submitted, including but not
limited to performing analytics and trend analyses to target certain deposit beverage
distributors and redemption centers with unusual fluctuations.
(b) The department shall:
(1) Summarize the results
of deposit beverage distributor and redemption center audits and assess whether
enforcement actions should be considered to ensure amounts that are being reported
are appropriate;
(2) Consider
conducting follow-up audits; and
(3) Consider public
announcements of violations.
(c) All deposit beverage distributors shall:
(1) Develop and
submit to the deposit beverage container program for approval an internal
control process to ensure that accurate data is entered on the monthly or semi-annual
distribution report forms and adequate records are maintained; and
(2) Obtain independent
audits for years ending in an odd number."
SECTION 3. New statutory material is underscored.
SECTION 4. This Act shall take effect upon its approval.
INTRODUCED BY: |
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Report Title:
Deposit Beverage Container Program; Auditor Recommendations; Risk-based Selection Process; Distributors; Redemption Centers
Description:
Requires the department of health to implement the auditor's recommendations for the deposit beverage container program, including developing a risk-based selection process to select reports submitted by distributors and redemption centers for audit.
The summary description
of legislation appearing on this page is for informational purposes only and is
not legislation or evidence of legislative intent.