STAND. COM. REP. NO. 3488

                                   Honolulu, Hawaii
                                                     , 2000

                                   RE:  S.C.R. No. 151
                                        S.D. 1




Honorable Norman Mizuguchi
President of the Senate
Twentieth State Legislature
Regular Session of 2000
State of Hawaii

Sir:

     Your Committee on Ways and Means, to which was referred
S.C.R. No. 151 entitled:

     "SENATE CONCURRENT RESOLUTION REQUESTING THE AUDITOR TO
     UPDATE ITS 1992 SUMMARY OF SPECIAL AND REVOLVING FUNDS,"

begs leave to report as follows:

     The purpose of this concurrent resolution is to request the
Auditor to update its 1992 summary of special and revolving
funds.

     Your Committee finds that according to the Auditor's report
in 1992:

     (1)  There are many special and revolving funds with growing
          cash balances; 

     (2)  There is an increasing effort by agencies to establish
          and use special and revolving funds; and

     (3)  There is a failure of many funds to meet the criteria
          for establishment as a special or revolving fund.

     These conditions may not have changed since the Auditor's
1992 report, especially since the Legislature has continued to
create more special and revolving funds than it has disbanded.
With the proliferation of these funds, an Auditor's update is

 
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                                   STAND. COM. REP. NO. 3488
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necessary, especially during hard economic times, to ensure that
all available state funds are accounted for.

     Your Committee has amended the concurrent resolution by
requesting the Auditor to also conduct a financial and management
audit of the University of Hawaii.  Your Committee finds that an
audit of the University is timely and appropriate, since the
University has requested autonomy in its operations and budget
functions.  An audit would provide necessary information that
would indicate whether the University has addressed the fiscal
and management issues previously identified by audits conducted
earlier by the Auditor.

     Additionally, an audit would be able to assess the
University as it prepares to implement the Basic Financial
Statements and Management's Discussion and Analysis - for State
and Local Governments (GASB Statement No. 34) and - for Public
Colleges and Universities (GASB Statement No. 35).  The audit
would be able to assess how the University has prepared for, and
implemented the GASB Nos. 34 and 35 requirements.  Since the
implementation is scheduled for July 1, 2001, your Committee has
requested that the audit be conducted after July 1, 2002.

     Your Committee has also amended the title of the concurrent
resolution to reflect its amended intent.

     As affirmed by the record of votes of the members of your
Committee on Ways and Means that is attached to this report, your
Committee concurs with the intent and purpose of S.C.R. No. 151,
as amended herein, and recommends its adoption in the form
attached hereto as S.C.R. No. 151, S.D. 1.

                                 Respectfully submitted on behalf
                                 of the members of the Committee
                                 on Ways and Means,



                                 ________________________________
                                 CAROL FUKUNAGA, Co-Chair



                                 ________________________________
                                 ANDREW LEVIN, Co-Chair

 
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