Wednesday, April 08, 2020
Hawai'i Free Press

Current Articles | Archives

Saturday, July 11, 2015
Kauai Payroll and Hiring Audit: Fraud, Overpayments and Contract Violations
By Andrew Walden @ 2:35 AM :: 3950 Views :: Kauai County, Labor

by Andrew Walden

The Kauai County Auditor this week released two reports prepared for the County by local auditing firm PKF Pacific.

PKF Pacific partner Patrick Oki was recently arrested at the Honolulu Airport on embezzlement and money laundering charges so obviously this company is well-positioned to understand Kauai's accounting systems. PKF has also provided auditing services to HART and OHA.

Here are some highlights from the PKF audit of Kauai County's payroll system:

Finding 1: The amount of supporting documentation maintained by Department of Personnel Services ("DPS") is inconsistent and could expose the County to risk of noncompliance with bargaining unit agreements.

Employee files are not centrally and securely maintained. There were many instances of missing documents due to lack of record retention and poor transitions of duties and responsibilities as payroll personnel turnover occurred. Documentation for benefit elections were not maintained prior to 2013.

Finding 2: The County applied incorrect pay or benefit rates resulting in overpayments to employees.

Finding 3: Certain County personnel have the ability to make changes in both the hiring and payroll systems, resulting in a lack of proper segregation of duties. 

Certain employees outside the payroll function are capable of creating positions requisitions, adding new users and updating user permissions, among other user rights. They also have the ability to reapply base rates, rebuild hours, override and make pay adjustments. Though they cannot create new employees themselves, personnel outside of the payroll function should not have the ability to adjust an employee's pay rate due to the potential for fraud.

And these are highlights from the PKF audit of Kauai County's hiring practices:

Finding 1: The County did not consistently adhere to Hawai'i Revised Statutes ("HRS") and County policies when hiring and conducting promotions, transfers and reallocations.

The Department of Personnel Services ("DPS") did not conduct physical examinations for two of the employee numbers in our sample.  DPS also delegates certain procedures to the appointing authority but does not require formal documentation to show the procedures were actually performed.

Recommendation; DPS should reassess current procedures and controls to ensure compliance with HRS and County policy to establish fair and consistent hiring, promotions, transfers and reallocations....

Finding 2: The amount of supporting documentation maintained by DPS is inconsistent and could expose the County to the risk of non-compliance with bargaining unit agreements, internal policy and HRS.

We noted 64 instances where DPS was unable to provide documentation for one of our hiring, promotion, transfer or reallocation testing procedures, including four files that were missing in their entirety....

Finding 3: A lack of controls surrounding certain procedures subjects the County to fraud risk.

In accordance with internal policy, DPS is allowed to designate certain positions as "unskilled labor," which permits the appointing authority to bypass the interview process during recruitment. However, we noted there were insufficient approval and monitoring controls surrounding the assignment of this designation, which potentially allows the interview process to be circumvented for all county positions....

---30---

KGI: Payroll audit finds overpayment

April 6, 2015: Prosecutor: HART & OHA Auditing Firm Victim of 3-year, $500K Embezzlement Scheme

PDF: AUDIT OF COUNTY PAYROLL SYSTEM

PDF: AUDIT OF COUNTY HIRING PRACTICES

KGI: Audit: County hiring practices lacking

PKF Report: "OHA Will Run Out of Funds"

Links

TEXT "follow HawaiiFreePress" to 40404

Register to Vote

2aHawaii

808 Silent Majority

808 State Update AM940

ABCDEFG Blog

ACA Signups Hawaii

ACCE

ALEC

Alliance Defending Freedom

Aloha Life Advocates

Aloha Pregnancy Care Center

American Council of Trustees and Alumni

American Mothers of Hawaii

AMVETS-Hawaii

AntiPlanner

Antonio Gramsci Reading List

A Place for Women in Waipio

Astronomy Hawaii

Audit The Rail

Ballotpedia Hawaii

Better Hawaii 

Blaisdell Memorial Project

Broken Trust 

Build More Hawaiian Homes Working Group

CAFR Hawaii

Castaway Conservative

Children's Alliance Hawaii

Children's Rights Institute

ChinaTownWatch.com

Christian Homeschoolers of Hawaii

Citizens for Recall

Cliff Slater's Second Opinion

Coffee Break

CSIS Pacific Forum

DAR Hawaii

DeedySupport.com

DVids Hawaii

E Hana Kakou Kelii Akina

E Māua Ola i Moku o Keawe

Farmers For Choice Hawaii

FIRE

Fix Oahu!

Follow the Money Hawaii

Frank in Hawaii

Front Page Magazine

Frontline: The Fixers

Genetic Literacy Project

Get Off Your Butts!

God, Freedom, America

Grassroot Institute

Habele.org

Hawaii Aganst Assisted Suicide

Hawaii Aquarium Fish Report

Hawaii Aviation Preservation Society

Hawaii Catholic TV

Hawaii Christian Coalition

Hawaii Cigar Association

Hawaii Coalition Against Legalized Gambling

Hawaii ConCon Info

Hawaii Credit Union Watch

Hawaii Crime Victims' Rights

Hawaii Crop Improvement Association

Hawaii Debt Clock

Hawaii Defending Marriage

Hawaii Defense Foundation

Hawaii Families for Educational Choice

Hawaii Family Advocates

Hawaii Family Forum

Hawaii Farmers and Ranchers United

Hawaii Farmer's Daughter

Hawaii Federalist Society

Hawaii Federation of Republican Women

Hawaii Firearm Community

Hawaii Fishermen's Alliance

Hawaii Future Project

Hawaii Gathering of Eagles

Hawaii History Blog

Hawaii Homeschool Association

Hawaii Jihadi Trial

Hawaii March for Life

Hawaii Meth Project

Hawaii's Partnership for Appropriate & Compassionate Care

Hawaii Public Charter School Network

Hawaii Rifle Association

Hawaii Right to Life -- Big Island

Hawaii Right to Life -- Oahu

Hawaii Shield Law Coalition

Hawaii Shippers Council

Hawaii Smokers Alliance

Hawaii State Data Lab

Hawaii Together

Heritage Foundation

HI Coalition Against Legalized Gambling

HIEC.Coop 

HiFiCo

Hiram Fong Papers

Homeschool Legal Defense Hawaii

Honolulu Homeless Crisis

Honolulu Navy League

Honolulu Traffic

Horns of Jericho Blog

House Minority Blog

House Republican Caucus YouTube

HPACC

Hump Day Report

I Vote Hawaii

If Hawaii News

Imua TMT

Inouye-Kwock, NYT 1992

Inside the Nature Conservancy

Inverse Condemnation

Investigative Project on Terrorism

Iowa Meets Maui

Jackson v Abercrombie

Jihad Watch

July 4 in Hawaii

Kahle v New Hope

Kakaako Cares

Kau TEA Party

Kauai Co GOP

Keep Hawaii's Heroes

KeyWiki

Land and Power in Hawaii

Legislative Committee Analysis Tool

Lessons in Firearm Education

Lingle Years

Malulani Foundation

Managed Care Matters -- Hawaii

Malama Pregnancy Center of Maui

Mauna Kea Recreational Users Group

MentalIllnessPolicy.org

Middle East Forum--The Legal Project

Mililani Conservatives for Change

Military Home Educators' Network Oahu

Missile Defense Advocacy

MIS Veterans Hawaii

Muslim Brotherhood in America

NAMI Hawaii

NARTH

Natatorium.org

National Christian Foundation Hawaii

National Parents Org Hawaii

National Wind Watch

New Zeal

NFIB Hawaii News

No GMO Means No Aloha

Northwest Economic Policy Seminar

Not Dead Yet, Hawaii

Now What I Really Think

NRA-ILA Hawaii

Oahu Alternative Transport

ObamaCare Abortion Hawaii

Obookiah

OHA Lies

Opt Out Today

OurFutureHawaii.com

Pacific Aviation Museum

Patients Rights Council Hawaii

PEACE Hawaii

People vs Machine

Pritchett Cartoons 

Pro-GMO Hawaii

P.U.E.O.

RailRipoff.com

Rental by Owner Awareness Assn

Republican Party -- Hawaii State

Research Institute for Hawaii USA

Rick Hamada Show

RJ Rummel

Robotics Organizing Committee

School Choice in Hawaii

SenatorFong.com

SIFE Remington

SIFE W. Oahu 

Sink the Jones Act

Smart About Marijuana--Hawaii

St Marianne Cope

State Budget Solutions Hawaii

State Policy Network

Statehood for Guam

Tax Foundation of Hawaii

The Harriet Tubman Agenda

The Long War Journal

The Real Hanabusa

Time Out Honolulu

Trustee Akina KWO Columns

Truth About Trade & Technology - Hawaii

UCC Truths

Union Members Know Your Rights

US Tax Foundation Hawaii Info

Valor in the Pacific

VAREP Honolulu

Waagey.org

West Maui Taxpayers Association

What Natalie Thinks

Whole Life Hawaii

Yes2TMT