23-16, Review of Special Funds, Revolving Funds, Trust Funds, and Trust Accounts of the Department of Defense

Posted on Dec 13, 2023 in Summary

Photo: Department of Defense


One Special Fund did not meet criteria

OUR REVIEW of one special fund, one revolving fund, five trust funds, and three trust accounts of the Department of Defense (DOD) found one special fund did not meet the criteria for a special fund 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 third review of DOD’s revolving funds, trust funds, and trust accounts. It is our third review of the special funds held by DOD since Act 130, Session Laws of Hawai’i 2013, amended Section 23-12, HRS, to require review of special funds along with revolving funds and trust funds.

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 DOD did not file statutorily required reports for non-general funds totaling approximately $875,000, administratively created non-general funds totaling approximately $12.6 million, and non-general funds with balances totaling approximately $13.5 million under the cost element and program measures reporting requirements. Accurate and complete reporting will greatly improve the Legislature’s oversight and control of these funds.

Agency response
DOD 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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