Honorable Robert Bunda

President of the Senate

Twenty-Second State Legislature

Regular Session of 2003

State of Hawaii

Sir:

Your Committee on Transportation, Military Affairs and Government Operations, to which was referred S.B. No. 386 entitled:

begs leave to report as follows:

The purpose of this measure is to prohibit the Governor and the Director of Finance from restricting any state agency's ability to expend federal grant moneys if the granting federal agency has already approved the expenditure.

Your Committee received testimony in support of this measure from the Department of Education. The Department of Budget and Finance submitted testimony in opposition to this measure.

Your Committee finds that state agencies that receive federal grants are currently required to seek the approval of the Governor when making certain expenditures of federal grant moneys, even though the expenditures have already been approved by the federal granting agency, which regularly audits those expenditures.

Your Committee finds this approval process unnecessary, and therefore supports the intent of this measure, which will facilitate the timely expenditure and allocation of federal funds.

As affirmed by the record of votes of the members of your Committee on Transportation, Military Affairs and Government Operations that is attached to this report, your Committee is in accord with the intent and purpose of S.B. No. 386 and recommends that it pass Second Reading and be referred to the Committee on Ways and Means.