Office of the Auditor | State of Hawai`i

Photo: Department of Hawaiian Home Lands

AUDITOR’S SUMMARY

Financial Statements, Fiscal Year Ended June 30, 2024

THE PRIMARY PURPOSE of the audit was to form an opinion on the fairness of the presentation of the financial statements for the Department of Hawaiian Home Lands, as of and for the fiscal year ended June 30, 2024, and to comply with the requirements of Title 2, U.S. Code of Federal Regulations, Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance), which established audit requirements for state and local governmental units that receive federal awards. The audit was conducted by Accuity LLP.

Financial Highlights

FOR THE FISCAL YEAR ended June 30, 2024, DHHL’s total revenues exceeded total expenses by $252 million. Revenues totaled $346.5 million and consisted of (1) program revenue of $80.4 million and (2) state appropriations, transfers, and adjustments of $266.1 million. Expenses totaled $94.4 million. Program revenues were comprised of interest income (approximately 33 percent), grants and contributions (23 percent), revenue from the general lease program (19 percent), and other sources (25 percent).

As of June 30, 2024, total assets of $1.78 billion exceeded total liabilities of $391 million, resulting in a net position balance of $1.39 billion. Total assets included net capital assets of $540 million, cash of $828 million, loans receivable of $84 million, and other assets and deferred outflows of resources of $331 million. Loans receivable consisted of 1,290 loans made to Native Hawaiian lessees for the purposes specified in the Hawaiian Homes Commission Act. Loans are for a maximum amount of approximately $452,000 and for a maximum term of 40 years. Interest rates on outstanding loans range up to 10 percent. Total liabilities included bonds and lease liabilities totaling $40 million and temporary deposits payable and other liabilities of $351 million.

Auditors’ Opinions
DHHL RECEIVED AN UNMODIFIED OPINION that the financial statements were presented fairly, in all material respects, in accordance with generally accepted accounting principles. DHHL also received an unmodified opinion on its compliance with major federal programs in accordance with the Uniform Guidance.

Findings
THERE WERE NO REPORTED DEFICIENCIES IN INTERNAL CONTROL over financial reporting that were considered to be material weaknesses and no instances of noncompliance or other matters that were required to be reported under Government Auditing Standards. However, the auditors identified one significant deficiency in internal control over financial reporting that was required to be reported under Government Auditing Standards. A significant deficiency is a deficiency, or a combination of deficiencies, in internal control that is less severe than a material weakness, yet important enough to merit attention by those charged with governance. The significant deficiency is described on page 55 of the report.

There were no findings that were considered material weaknesses in internal control over compliance in accordance with the Uniform Guidance.