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. (HB1821 HD1)

HOUSE OF REPRESENTATIVES

H.B. NO.

1821

TWENTY-FIRST LEGISLATURE, 2002

H.D. 1

STATE OF HAWAII

 


 

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 (emphasis added) 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 the Constitution 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 duty.

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. There is appropriated out of the general revenues of the State of Hawaii the sum of $1,000,000 or so much thereof as may be necessary for fiscal year 2002-2003 to conduct financial audits of the department of education, department of health, and department of human services.

SECTION 3. There is appropriated out of the general revenues of the State of Hawaii the sum of $3,700,000 or so much thereof as may be necessary for fiscal year 2002-2003 to conduct financial audits of state agencies not otherwise provided for in section 2 of this Act.

SECTION 4. The sums appropriated shall be expended by the office of the auditor for the purposes of this Act.

SECTION 5. This Act shall take effect on July 1, 2002.