Maui Countywide Fraud Assessment

EXECUTIVE SUMMARY

from Maui County Auditor, February, 2026

Maui County's awareness of fraud risk has increased in recent years because of incidents involving County employees. We were engaged to assess the fraud risks and antifraud processes of 20 of the 21 executive departments 1 to determine whether existing controls address fraud risks.

We found that the County's existing controls are not adequate to mitigate likely fraud risks because they do not cover significant areas of fraud exposure.

We identified significant coverage gaps in the current controls:

• There are no controls designed to mitigate fraud risk when Hawai'i Revised Statutes (HRS) chapter 103D and Hawai'i Administrative Rules (HAR) section 3-122, subchapter 10 (collectively called the Procurement Law) are suspended by emergency proclamations.

• There is no countywide nepotism policy.

• Comprehensive fraud monitoring programs and procedures have not been established for vendors who perform outsourced County services.

• Except for public safety, law enforcement, parks and recreation, and selected fiscal positions, existing hiring processes do not focus on screening job applicants for fraud risk.

• There are gaps in countywide procedures for approving and monitoring overtime to ensure overtime is properly paid, fraudulent claims are prevented, and compliance risks from federal and State overtime laws are mitigated.

• Conflicting statements and unclear oversight roles between the Department of Water Supply (DWS) and the Department of Finance (DOF) have created uncertainty about how DWS's fiscal and procurement processes are reviewed and monitored.

We also found that there is no countywide process for reporting, investigating, and responding to fraud. Instead, multiple County entities receive, investigate, and make decisions on fraud incidents. 2 Each uses their own processes and standards, resulting in confusion and potentially inconsistent dispositions of fraud incidents and sanctions.

Our findings were based on information and documents submitted by the County, results of surveys issued to County officials and employees, and information provided by department heads in interviews. We also conducted research on fraud mitigation measures utilized by other organizations.

We made five recommendations to address these findings. Although the County disagrees with certain findings, it agrees with the recommendations….

Read … Full Report

1 The Salary Commission was excluded from the scope because it does not have staff.

2 The DOF, Department of Management (DOM), Mayor, Department of Personnel Services (DPS), Department of the Corporation Counsel {COR), Department of Police (MPD), Department of the Prosecuting Attorney (PA), individual department heads, and the Ethics Commission all receive and respond to reports of alleged fraud.

MN: Auditor releases findings of County of Maui Fraud Risk Assessment, identifies gaps : Maui Now