Honorable Robert Bunda

President of the Senate

Twenty-First State Legislature

Regular Session of 2001

State of Hawaii

Sir:

Your Committee on Commerce, Consumer Protection and Housing, to which was referred H.B. No. 543, S.D. 1, entitled:

begs leave to report as follows:

The purpose of this measure is to eliminate the requirement that the Housing and Community Development Corporation of Hawaii (HCDCH) ensure that independent compliance audits of homeless service providers are conducted each fiscal biennium.

Testimony in support of this measure was submitted by the HCDCH, Kalihi-Palama Health Center, and Institute For Human Services.

Currently, the HCDCH is responsible for ensuring that compliance audits of homeless assistance providers are conducted by an independent auditing agency at least once each fiscal biennium. The State has been budgeting approximately $121,000 each biennium for this task and the cost is expected to increase during the next funding cycle.

Your Committee finds that funds used to fulfill the compliance audit requirement would be better utilized to provide services to the homeless. Therefore, this measure eliminates the HCDCH's duty to ensure that independent compliance audits are performed.

Your Committee further finds that homeless assistance service providers currently conduct annual independent financial audits, and this measure clarifies that these audits are required to be submitted to HCDCH. This requirement, in addition to HCDCH's existing authority to deny further contracts to a provider until deficiencies identified in an audit have been addressed, provide sufficient procedures to ensure the fiscal accountability of programs receiving State funds to assist the homeless.

Your Committee has amended this measure by making technical, nonsubstantive amendments for purposes of clarity and style.

As affirmed by the record of votes of the members of your Committee on Commerce, Consumer Protection and Housing that is attached to this report, your Committee is in accord with the intent and purpose of H.B. No. 543, S.D. 1, as amended herein, and recommends that it be referred to the Committee on Ways and Means, in the form attached hereto as H.B. No. 543, S.D. 2.