HDOT audit finds discrepancies
by Caleb Loehrer, The Garden Isle, March 27, 2019 (excerpt)
The Hawaii Department of Transportation’s Highways Division in fiscal year 2018 did not review capital improvement projects in a timely manner, incorrectly classified federal expenditures and violated cash management requirements by drawing funds from a federal agency prior to paying a subcontractor, according to a report issued by the Hawaii State Auditor’s Office.
An independent audit conducted on behalf of the state auditor assessed the Highways Division’s presentation of financial statements through June 30, 2018 and identified “a number of errors in supporting documentation” made by HDOT administrators.
Auditors reviewed 25 HDOT projects in progress where little or no activity had occurred in the prior two fiscal years and found that all but five were categorized inappropriately. Twenty of the selected projects “were deemed to either have been placed in service or were canceled,” the report said.
Some of the errors had been caught and recorded as proposed audit adjustments by HDOT management, but Highways Division administrators did not catch over $12 million in misappropriated or improperly transferred funds, according to the audit.
The auditor’s report also noted a trend that “could be indicative of a larger internal control issue.” Auditors found several discrepancies in adjustments made by HDOT management totaling roughly $20 million, which could potentially allow for “material misstatements of the financial statements.” …
read … HDOT audit finds discrepancies
Auditor: Highway Division Single Audit Report
The auditors from BKD, LLP reported one material weakness and one significant deficiency in internal control over financial reporting that are required to be reported under Government Auditing Standards. There was one significant deficiency in internal control over compliance in accordance with the Uniform Guidance.
Read … Summary or Full Report