21-12, Review of Special Funds, Revolving Funds, Trust Funds, and Trust Accounts of the Office of the Governor and Lieutenant GovernorPosted on Oct 21, 2021 in Summary
One fund did not meet criteria
WE REVIEWED 3 TRUST FUNDS of the Office of the Governor (GOV); the office did not have special funds, revolving funds, or trust accounts during the period of review, FY2017 – FY2021.
We found GOV’s trust funds did not collect, spend, or transfer any funds in FY2021. GOV closed two of the trust funds during the period under review and planned to close the third. The Office of the Lieutenant Governor (LTG) did not have any special funds, revolving funds, trust funds or trust accounts during the same five-year period.
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 GOV’s revolving funds, trust funds, and trust accounts, and our fifth review of LTG’s funds and accounts. It is our second review of the special funds held by GOV and LTG 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.
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.
WE NOTED THAT GOV did not file statutorily required reports and funds totaling approximately $1,000. Accurate and complete reporting will greatly improve the Legislature’s oversight and control of these funds and provide increased budgetary flexibility.
THE OFFICE OF THE GOVERNOR did not dispute the findings and will take appropriate action to close a trust fund that no longer serves its original purpose. GOV also stated that it will ensure compliance with all reporting requirements.
SPECIAL FUNDS are used to account for revenues earmarked for particular purposes and from which expenditures are made for those purposes.
REVOLVING FUNDS 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.
TRUST FUNDS 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.
TRUST ACCOUNTS 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.