Honorable Robert Bunda

President of the Senate

Twenty-First State Legislature

Regular Session of 2001

State of Hawaii

Sir:

Your Committee on Tourism and Intergovernmental Affairs, to which was referred S.C.R. No. 31 entitled:

begs leave to report as follows:

The purpose of this measure is to request the Auditor to conduct a management and financial audit of the Hawaii Tourism Authority and report all findings and recommendations to the 2002 Legislature.

Testimony in support of this measure was received from the Department of Business, Economic Development, and Tourism, Hawaii Tourism Authority (HTA), and Life of the Land.

Your Committee finds that after two years in existence, the policies and procedures of the HTA have evolved to the point that a management and financial audit should be conducted to ensure that public moneys are well spent.

Your Committee further finds that the HTA is in agreement, and has recently contacted the Department of Accounting and General Services (DAGS) regarding a financial audit of the HTA. Your Committee understands that, should either DAGS or the Auditor undertake the financial audit portion, the agencies would issue a contract for these services. In the case of the management portion, the Auditor has indicated the agency would perform this assessment with in-house personnel. DAGS does not include management audits in its services to state agencies.

Your Committee believes that the more comprehensive management and financial audit, performed under the jurisdiction of the Auditor, is more appropriate, given the many concerns raised during this legislative session. Your Committee is particularly concerned that the comprehensive audit look closely at the procedures for contract approvals and contract administration at the HTA.

Your Committee has amended this measure to add two WHEREAS clauses regarding the DAGS audit and the need for a more comprehensive approach under the auspices of the Auditor, and an additional BE IT FURTHER RESOLVED clause that the HTA shall compensate the Auditor for any expenditures incurred by the Auditor for a financial audit of the HTA.

As affirmed by the record of votes of the members of your Committee on Tourism and Intergovernmental Affairs that is attached to this report, your Committee concurs with the intent and purpose of S.C.R. No. 31, as amended herein, and recommends its adoption in the form attached hereto as S.C.R. No. 31, S.D. 1.