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Thursday, March 4, 2021
100% Fail: Auditor Report on Legislators' Proposed Special Funds and Revolving Funds
By Hawaii State Auditor @ 4:11 AM :: 1055 Views :: Hawaii State Government

Analyses of Proposed Special Funds and Revolving Funds 2021

Hawaii State Auditor, Report No. 21-04, March, 2021

SECTION 23-11, HAWAI‘I REVISED STATUTES (HRS), requires the Auditor to analyze all legislative bills introduced each session that propose to establish new special or revolving funds. Specifically, the Auditor’s analysis of each bill must be based on the following criteria:

1. The need for the fund, as demonstrated by:

a. The purpose of the program to be supported by the fund;

b. The scope of the program, including financial information on fees to be charged, sources of projected revenue, and costs; and

c. An explanation of why the program cannot be implemented successfully under the general fund appropriation process; and

2. Whether there is a clear nexus between the benefits sought and charges made upon the program users or beneficiaries or a clear link between the program and the sources of revenue, as opposed to serving primarily as a means to provide the program or users with an automatic means of support that is removed from the normal budget and appropriation process.

We sent surveys to bill introducers requesting information about the proposed funds, including the need for the fund as set forth in Section 23-11(b)(1), HRS, and nexus as required by Section 23-11(b)(2), HRS.

Our review included survey responses and statutory criteria; we include with each analysis an assessment of alternative forms of funding and, where we are able, the probable effects of the proposed fund.

We reviewed 75 House and Senate bills proposing 51 special and revolving funds during the 2021 legislative session. None satisfied the criteria set forth in Section 23-11, HRS, for proposed special and revolving funds. References to House Draft and Senate Draft versions reflect bill status at the time of our review.

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