THE SENATE

S.C.R. NO.

113

TWENTY-THIRD LEGISLATURE, 2005

 

STATE OF HAWAII

 
   


SENATE CONCURRENT

RESOLUTION

 

REQUESTING the auditor to conduct a PROGRAMmatic AND FInancial AUDIT OF THE HAWAII TOBACCO SETTLEMENT special FUND.

 

 

WHEREAS, Hawaii was one of forty-six states that prevailed in 1998 in a multi-billion dollar class action lawsuit against the five largest United States tobacco manufacturers; and

WHEREAS, Hawaii's share of the settlement is expected to be approximately $1,300,000,000 over twenty years with annual payments ranging from $53,000,000 to $63,000,000; and

WHEREAS, as of August 2004, Hawaii has received $213,000,000 in settlement moneys; and

WHEREAS, in Act 304, Session Laws of Hawaii 1999, the Legislature established the Hawaii Tobacco Settlement Special Fund, now codified under section 328L-2, Hawaii Revised Statutes, to receive deposits of all tobacco settlement moneys and to allocate moneys from the fund; and

WHEREAS, Act 304, Session Laws of Hawaii 1999, allocated forty per cent of tobacco settlement moneys to the Emergency and Budget Reserve Fund for a rainy day reserve, thirty-five per cent to the Department of Health for health-related programs, including up to ten per cent to be transferred to the Department of Human Services for the Children's Health Insurance Program, and twenty-five per cent to the Hawaii Tobacco Prevention and Control Trust Fund for smoking prevention and cessation programs for youths and adults; and

WHEREAS, Act 14, Third Special Session Laws of Hawaii 2001, amended the allocation to the following:

(1) Twenty-four and one-half per cent for the Emergency and Budget Reserve Fund;

(2) Thirty-five per cent for the Department of Health for health promotion programs;

(3) Twelve and one-half per cent for the Tobacco Prevention and Control Trust Fund; and

(4) Twenty-eight per cent for the University of Hawaii Medical School; and

WHEREAS, in the six years of the Hawaii Tobacco Settlement Special Fund's existence, the Legislature has given the executive branch, its contracted program providers, and its grant and investment administrator, the Hawaii Community Foundation, a good deal of latitude to develop effective programs; and

WHEREAS, a sufficient period of time has elapsed since the establishment of the Hawaii Tobacco Settlement Special Fund and its operation for it to be appropriate to examine issues such as:

(1) How, and how effectively and efficiently, the tobacco settlement moneys have been spent;

(2) How effective have the programs funded by the settlement moneys been;

(3) How effectively and efficiently have the settlement moneys been invested; and

(4) Other relevant programmatic and fiscal issues; and

WHEREAS, the Auditor is constitutionally and statutorily responsible for auditing state and county programs, expenditures, and any agencies that receive state funds, and undertakes audits at the request of the Legislature or upon the Auditor's initiative; now, therefore

BE IT RESOLVED by the Senate of the Twenty-third Legislature of the State of Hawaii, Regular Session of 2005, the House of Representatives concurring, that the Auditor is requested to conduct a programmatic and financial audit of the Hawaii Tobacco Settlement Special Fund; and

BE IT FURTHER RESOLVED that the Auditor is requested to include at least the following in the audit:

(1) An accounting of the tobacco settlement moneys by their various sources and uses, including investment history, vendor, and contract;

(2) How the executive branch has structured program implementation and evaluation;

(3) Planned and actual outcome and effectiveness measures for each of the programs;

(4) Out-year plans for the expected funding;

(5) Alternative proposals for extending the reach of programs or "making the money stretch even further"; and

(6) The effects, if they can be determined, of changing the allocation formula under Act 14, Third Special Session Laws of Hawaii 2001; and

BE IT FURTHER RESOLVED that the Auditor is requested to report findings and recommendations, including any necessary proposed legislation, to the Legislature twenty days prior to the convening of the Regular Session of 2006; and

BE IT FURTHER RESOLVED that certified copies of this Concurrent Resolution be transmitted to the Auditor, the Attorney General, the Directors of Health, Finance, and Human Services, the President of the University of Hawaii, the Dean of the University of Hawaii Medical School, and the Superintendent of Education.

 

 

 

OFFERED BY:

_____________________________

Report Title:

Program/Financial Audit; Hawaii Tobacco Settlement Special Fund