Friday, August 07, 2020
Hawai'i Free Press

Current Articles | Archives

Tuesday, March 05, 2019
Tokuda-Connected Recycler Busted for Fraud
By Hawaii State Auditor @ 10:55 PM :: 3958 Views :: Environment, Small Business, Tax Credits

(Editor’s Note: Sen Jill Tokuda is the former ‘director of community relations’ for Reynolds Recycling.  She once registered a ‘nonprofit’ corporation, Charitable Ventures, Inc., at the same address as Reynolds’ Sand Island headquarters.)

Report No. 19-08, Financial and Program Audit of the Department of Health’s Deposit Beverage Container Program, June 30, 2018

From Hawaii State Auditor, Report 19-08, March, 2019

In Report No. 19-08, we found that the Department of Health has not addressed the Deposit Beverage Container Program’s fundamental weaknesses, identified more than a decade ago.

The program remains entirely dependent upon beverage distributors and redemption centers to self-report how many containers they import into the State and the number they collect for recycling. As a result, moneys paid into the program’s special fund and moneys paid out of it are based on unverified numbers and opportunities for fraud and error are legion.

This financial and program audit, which covers the fiscal year that ended June 30, 2018, also found further evidence of an incomplete and broken system.

  *   *   *   *   *

Potentially Fraudulent Overpayments of Deposit Refund Reimbursements to a Redemption Center Discovered (pg 20-23)

In early October 2018, we performed 15 unannounced visits at 10 different redemption centers located throughout the State to verify that the redemption centers were in compliance with the law. In four of the visits, we requested redemption center staff to redeem beverage containers by counting each container. In the remaining eleven visits, we requested redemption center staff to redeem beverage containers by weight.

We found that in 2 out of 15 redemption center visits, the amounts provided in the redemption transaction logs, noted as the manually prepared Cash Receipts Log, did not match to our receipts and the amount paid. Both of the discrepancies were at the Reynolds Recycling location at 1106 University Avenue on October 2, 2018 and October 4, 2018. During those visits, our staff member was required to sign a Cash Receipts Log, which was submitted by the redemption center as detailed support for its DR-1 form. The staff auditor also received a “10- key” tape receipt that detailed the calculation of the amount received.

As the October 2, 2018 receipt indicates, our staff auditor was paid 61 cents for 5.1 pounds of glass bottles redeemed; however, after the visit, 32.8 pounds of aluminum cans and 12.8 pounds of plastic containers were added to the Cash Receipts Log, adding $52.48 and $16.83, respectively, to the total. See Exhibit 2.3. As a result, instead of $0.61, the redemption center was reimbursed $69.31 by the Program. Two days later, our staffer submitted three pounds of plastic containers and was paid $3.95, but 6.9 pounds of aluminum cans were added to the Cash Receipts Log, which added $11.04 to the total. The redemption center was reimbursed $14.99 instead of $3.95. In both instances, the Cash Receipts Logs appear to have been altered after we had visited the location to reflect additional material type containers, resulting in an increase in amounts reimbursed. We reported our findings to the Office of the Auditor and the Director of the Department of Health on November 20, 2018.

During FY 2018, the total deposit amounts reimbursed to Reynolds Recycling was approximately $7.96 million. Although no specific information was available for the University location, the total amount reimbursed to Reynolds Recycling, coupled with the fact that only a small sample was tested, raises concerns as to the potential amount of overpayments that may have been paid to the redemption center.

Conclusions

The Program’s lack of oversight over self-reporting by distributors and redemption centers expose the Program to a greater risk of fraud and incorrect reporting. Plans to address these program weaknesses are pending and have yet to be implemented. Until the Program implements effective preventative and detective activities to verify reports submitted, under reported deposits and fees and over reported redemptions may not be detected. Consequently, the Program may be operating at a greater cost than necessary, and the reported redemption rate may not be reliable. Resolution of these deficiencies is necessary to alleviate public concerns over the cost of the Program, including questions regarding the container fee rate necessary to operate the Program.

Read … Summary or Full Report

Coverage:

Background:

Links

TEXT "follow HawaiiFreePress" to 40404

Register to Vote

2aHawaii

808 Silent Majority

ACA Signups Hawaii

ALEC

Alliance Defending Freedom

Aloha Pregnancy Care Center

American Council of Trustees and Alumni

AntiPlanner

Antonio Gramsci Reading List

A Place for Women in Waipio

Astronomy Hawaii

Ballotpedia Hawaii

Better Hawaii

Blaisdell Memorial Project

Broken Trust

Build More Hawaiian Homes Working Group

ChinaTownWatch.com

Christian Homeschoolers of Hawaii

Cliff Slater's Second Opinion

Coffee Break

DeedySupport.com

DVids Hawaii

E Hana Kakou Kelii Akina

FIRE

Fix Oahu!

Follow the Money Hawaii

Frank in Hawaii

Front Page Magazine

Frontline: The Fixers

Genetic Literacy Project

Grassroot Institute

Habele.org

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 Crop Improvement Association

Hawaii Debt Clock

Hawaii Defense Foundation

Hawaii Family Advocates

Hawaii Family Forum

Hawaii Farmers and Ranchers United

Hawaii Farmer's Daughter

Hawaii Federalist Society

Hawaii Federation of Republican Women

Hawaii Future Project

Hawaii Gathering of Eagles

Hawaii History Blog

Hawaii Homeschool Association

Hawaii Jihadi Trial

Hawaii March for Life

Hawaii's Partnership for Appropriate & Compassionate Care

Hawaii Public Charter School Network

Hawaii Rifle Association

Hawaii Shippers Council

Hawaii Smokers Alliance

Hawaii State Data Lab

Hawaii Together

Heritage Foundation

HIEC.Coop

HiFiCo

Hiram Fong Papers

Homeschool Legal Defense Hawaii

Honolulu Navy League

Honolulu Traffic

House Minority Blog

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 Hawaiian

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

Save Dillingham Airfield

School Choice in Hawaii

SenatorFong.com

Sink the Jones Act

Statehood for Guam

Tax Foundation of Hawaii

The Real Hanabusa

Time Out Honolulu

Trustee Akina KWO Columns

UCC Truths

US Tax Foundation Hawaii Info

VAREP Honolulu

Waagey.org

West Maui Taxpayers Association

What Natalie Thinks

Whole Life Hawaii

Yes2TMT