22-14, Review of Special Funds, Revolving Funds, Trust Funds, and Trust Accounts of the Department of Taxation

Posted on Nov 17, 2022 in Summary

Photo: Office of the Auditor


One Special Fund, one trust fund, and one trust account did not meet criteria

OUR REVIEW of four special funds, two trust funds, and seven trust accounts of the Department of Taxation (DoTAX) found one special fund, one trust fund, and one trust account did not meet criteria and should be closed or reclassified.

Section 23-12, Hawai‘i Revised Statutes (HRS), requires the Auditor to review all existing special, revolving, and trust funds every five years. Reviews are scheduled so that each department’s funds are reviewed once every five years. Although not mandated by statute, we included trust accounts as part of our review. This is our sixth review of DoTAX’s revolving funds, trust funds, and trust accounts. It is our second review of the special funds held by DoTAX since Act 130, Session Laws of Hawaiʻi 2013, amended Section 23-12, HRS, to require review of special funds along with revolving funds and trust funds. DoTAX did not have any revolving funds during our review period.

We used criteria developed by the Legislature and by our office based on public finance and accounting literature. For each fund, we present a five-year financial summary, the purpose of the fund, and conclusions about its use. We did not audit the financial data, which is provided for informational purposes. We do not present conclusions about the effectiveness of programs or their management, or whether the programs should be continued.

Reporting shortfall
WE NOTED that DoTAX did not file statutorily required reports relating to funds totaling approximately negative $2.3 million. Accurate and complete reporting will greatly improve the Legislature’s oversight and control of these funds.

Agency response
DoTAX did not believe any revisions to the report were necessary and offered no further comments.


are used to account for revenues earmarked for particular purposes and from which expenditures are made for those purposes.

such as loan funds, are often established with an appropriation of seed money from the general fund and must demonstrate the capacity to be self-sustaining.

such as a pension fund, invoke the State’s fiduciary responsibility to care for and use the assets held to benefit those with a vested interest in the assets.

are typically separate holding or clearing accounts and are often used as accounting devices for crediting or charging state agencies or projects for payroll and other costs.

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