Appropriate funds and mandate financial and management audits of all state departments.

A BILL FOR AN ACT

SECTION 1. The legislature finds that Article VII, section 10 of the Hawai`i State Constitution establishes the position of the auditor, and sets forth the duties of the auditor. The constitutional mandate of the auditor is to "conduct post-audits of the transactions, accounts, programs and performance of all departments, offices and agencies of the State and its political subdivisions, to certify the accuracy of all financial statements issued by the respective accounting officers and to report the auditor's findings and recommendations to the governor and to the legislature at such times as shall be provided by law." Chapter 23 of the Hawai`i Revised Statutes reiterates this duty, and specifies that this duty shall be carried out at least every two years.

The legislature further finds that this constitutional and statutory mandate has not been carried out. The failure to conduct comprehensive performance and management audits goes beyond the failure to carry forth a constitutional or statutory mandate. Without such information, the legislature does not have the transparency and information to develop a reasonable and competent budget. With regular management and performance audits, the auditor will help the departments, legislature, and public, to uncover inefficiency as well as obsolete programs and management practices that in many cases are imbedded in statute. An example of this was the Department of Education's storeroom program. Through a management audit, the auditor determined and reinforced what teachers were telling legislators for years, that the storeroom was horribly inefficient. That management audit helped the legislature to reprioritize its spending, and to eliminate the wasteful program. On a statewide scale, such management and performance audits have the potential to uncover hundreds of millions of dollars in wasteful spending and ineffective management practices whether they are mandated by obsolete laws, or occur because of lack of information. The purpose of this Act is to appropriate funds for the fulfillment of the auditor's constitutional and statutory mandate to conduct comprehensive biannual management and performance audits.

SECTION 2. There is appropriated out of the general revenues of the State of Hawaii the sum of $16,000,000, or so much thereof as may be necessary for fiscal year 2006-2007, for the performance of the first year of biannual performance and management audits for all state departments, offices, and agencies.

SECTION 3. The sum appropriated shall be expended by the legislative auditor for the purposes of this Act.

SECTION 4. This Act shall take effect on July 1, 2006.