STAND. COM. REP. NO. 232

Honolulu, Hawaii

RE: S.B. No. 929

S.D. 1

Honorable Ronald D. Kouchi

President of the Senate

Thirty-Second State Legislature

Regular Session of 2023

State of Hawaii

Sir:

Your Committee on Transportation and Culture and the Arts, to which was referred S.B. No. 929 entitled:

"A BILL FOR AN ACT RELATING TO THE DEPARTMENT OF TRANSPORTATION,"

begs leave to report as follows:

The purpose and intent of this measure is to require the Department of Transportation Highways Division to implement recommendations made by the Office of the Auditor regarding compliance with federal funding laws and regulations and information technology authentication.

Your Committee received comments on this measure from the Department of Transportation.

Your Committee finds that the Office of the Auditor conducted a financial and compliance audit of the Department of Transportation Highways Division, and the audit report was issued on February 3, 2022. The audit examined the financial statements relating to government activities and each major fund of the Highways Division for the 2020-2021 fiscal year. As the Highways Division managed federal funding for projects within the State, the audit report focused on ensuring compliance with federal laws and regulations relating to such funding.

However, the audit report made several findings relating to one material weakness and one significant deficiency in internal control over financial reporting, and two significant deficiencies in internal control over compliance. While the Department of Transportation concurred with the findings and developed corrective action plans, further action is needed to ensure compliance with federal laws and regulations.

Your Committee has amended this measure by inserting an effective date of July 1, 2050, to encourage further discussion.

As affirmed by the record of votes of the members of your Committee on Transportation and Culture and the Arts that is attached to this report, your Committee is in accord with the intent and purpose of S.B. No. 929, as amended herein, and recommends that it pass Second Reading in the form attached hereto as S.B. No. 929, S.D. 1, and be referred to your Committee on Ways and Means.

Respectfully submitted on behalf of the members of the Committee on Transportation and Culture and the Arts,

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CHRIS LEE, Chair