WHEREAS, the report of the Auditor, "Loss of Budgetary Control: A Summary Report of the Review of Special and Revolving Funds", Report No. 92-14, reviewed all special and revolving funds pursuant to Act 240, Session Laws of Hawaii 1990, to determine whether their continued existence is justified and whether moneys in the fund should be deposited into the general fund, for the purpose of ensuring the State's fiscal integrity; and

WHEREAS, the Auditor found in Report No. 92-14 that the use of special and revolving funds has distorted the State's financial picture by making both revenues and expenditures appear less than they are; and

WHEREAS, another report of the Auditor, "Update of the 1992 Summary of Special and Revolving Funds", Report No. 01-12, examined all special and revolving funds created since July 1, 1990; and

WHEREAS, the Auditor stated in Report No. 01-12 that in a collective response prepared by the Department of Budget and Finance, the executive agencies did not concur with recommendations to repeal or discontinue certain funds or to lapse a portion of the excessive cash balances of other funds; and

WHEREAS, Report No. 92-14 found 166 funds in all, and Report No. 01-02 found that:

WHEREAS, with the current stagnant economy and lagging tax revenues, something clearly needs to be done to discontinue, repeal, or lapse special and revolving funds into the general fund, particularly those that do not meet statutory criteria under section 37-62, Hawaii Revised Statutes; and

WHEREAS, it should be a primary responsibility of the executive branch agencies to comply with the Auditor's recommendations as contained in Report No. 92-14 and Report No. 01-12, because the agencies are tasked with the responsibility to manage those funds; and

WHEREAS, every executive branch agency should review both Auditor's reports, and report to the Legislature on what is being done, if anything, and the reasons therefor for each cited special or revolving fund and for every existing fund not included in those reports; and

WHEREAS, the information provided by the review is necessary and invaluable to the Legislature to act on budget and economic development measures; now, therefore,

BE IT RESOLVED by the Senate of the Twenty-Second Legislature of the State of Hawaii, Regular Session of 2003, that the Governor is requested to direct every executive department and agency to review Auditor Report No. 92-14, Report No. 01-02, and section 37-62, Hawaii Revised Statutes, and determine whether or not any special or revolving fund, including any administratively created funds or accounts, should be repealed, discontinued, or consolidated, or moneys lapsed into the general fund; and

BE IT FURTHER RESOLVED that the Governor report to the Legislature no later than twenty days prior to the convening of the Regular Session of 2004 to provide a listing of all funds, except the general fund, and findings and recommendations, including explanations thereto and draft legislation; and

Report Title:

Governor's Review of Funds