Review of Special Funds, Revolving Funds, Trust Funds, and Trust Accounts of the Department of Transportation
Sixty special funds, revolving funds, trust funds, and trust accounts were reviewed
Eight funds and accounts did not meet criteria
Hawaii State Auditor Report No. 14-05, March 2014
Section 23-12, HRS, requires the Auditor to review all existing special, revolving, and trust funds every ﬁve years. This is our ﬁrst review of the Department of Transportation since Act 130, SLH 2013, amended Section 23-12, HRS, to require we review the department’s funds.
Special funds are used to account for revenues earmarked for particular purposes and from which expenditures are made for those purposes. Revolving funds, such as loan funds, are often established with an appropriation of seed money from the State’s general fund, and must demonstrate the capacity to be self-sustaining. Trust funds, such as a pension fund, invoke the State’s ﬁduciary responsibility to care for and use assets held for the beneﬁt for those with a vested interest in the assets. Trust accounts are typically separate holding or clearing accounts and are often used as accounting devices for crediting or charging state agencies or projects for payroll or other costs.
We reviewed 60 special funds, revolving funds, trust funds, and trust accounts; and reported on 48 of them (16 special funds, 20 revolving funds, two trust funds, and ten trust accounts). We used criteria developed by the Legislature as well as by our ofﬁce from a review of public ﬁnance and accounting literature. We determined that eight of the 48 funds and accounts did not meet applicable fund criteria.
For each fund, we present a ﬁve-year ﬁnancial summary, the purpose of the fund, and conclusions about its use. We did not audit the ﬁnancial data, which is provided for informational purposes. We do not present conclusions about the effectiveness of the program or its management, or whether the program should be continued.
Inconsistencies were noted
We noted inconsistent adherence by the department to statutory reporting of ﬁnancial transactions and balances, resulting in reports that are incomplete or not ﬁled. Although some funds have been repealed or are no longer active, their appropriation accounts have not been closed and balances remain. Accurate and complete reporting, as well as timely closing of funds, will greatly improve the Legislature’s oversight and control of these funds and provide increased budgetary ﬂexibility.
We also found instances where multiple funds were combined as a single fund in reports and did not include speciﬁc details of individual funds or accounts. When funds are combined and reported in aggregate, reports lack itemized information such as the purpose, sources of revenue, and program expenditures of each fund.
We transmitted a draft of this review to the Department of Transportation. The department agreed with our review of its funds, but disagreed with our conclusion on the Safe Routes to School Program Special Fund.
read ... The Entire Report