To be \u201cqualified\u201d can be a good thing. But when it comes to audits, a qualified audit is one that has problems \u2013 like the financial audit of the Western Pacific Fishery Management Council for 2022.<\/p>\n\n\n\n
The audit report was distributed to council members at its December meeting. However, it was not made available to the public, having been stamped \u201cConfidential \u2013 Please do not distribute\u201d by council staff. It was not included in the briefing materials for the meeting published on the Wespac website. <\/p>\n\n\n\n
Yet there is no legal reason why the 40-page-long audit and other financial materials should be withheld from public review. Environment Hawai\u02bbi <\/em>was able to obtain them by filing a federal Freedom of Information Act request.<\/p>\n\n\n\n The audit, conducted by Akamine, Oyadomari & Kosaki CPAs, Inc., relied on financial information provided by the council. <\/p>\n\n\n\n It was in the review of federal financial reports where the auditors found problems. The council is required to submit reports for each of its federal awards semi-annually for periods ending March 31 and September 30, the audit notes. The reports are due within 30 days of the reporting deadline.<\/p>\n\n\n\n \u201cFor eight of the 12 semi-annual Federal Financial Reports tested, the reported cash disbursements did not reconcile to the expenditures recorded in the general ledger,\u201d the report states. \u201cUnreconciled differences ranged from $30 to $104,174 and totaled approximately $199,000.\u201d The cause of the discrepancies is identified as inadequate internal controls \u201cover the recording and classification of expenditures in the general ledger.\u201d<\/p>\n\n\n\n The effect: \u201cFinancial reports provided to the Department of Commerce could be materially misstated.\u201d<\/p>\n\n\n\n The council\u2019s management of drawdowns of cash from Sustainable Fisheries Fund XII and XIII also drew the auditors\u2019 attention. The funds are among several where council expenses have been questioned in past reviews. Drawdowns from fund XII were \u201con hand in excess of 30 days during the periods April through July 2022 and October through December 2022.\u201d Those from fund XIII \u201cwere on hand in excess of 30 days from September through December 2022. The excess funds on hand for these awards ranged from approximately $4,000 to $16,000.\u201d<\/p>\n\n\n\n \u201cInadequate controls over cash management increases the risk of noncompliance with federal cash management requirements and with other federal statutes and regulations related to financial management,\u201d the auditors state.<\/p>\n\n\n\n The council responded by stating that some of the financial reports fell outside the period of this audit and, in any case, corrective action was taken in October 2022.<\/p>\n\n\n\n As for the early cash drawdowns, \u201cCash on hand and existing expenses will be reviewed by the Fiscal Officer prior to the 15th<\/sup> and end of month payables,\u201d the council says. \u201cFunds will be expensed in a timely manner.\u201d<\/p>\n\n\n\n Details<\/strong><\/p>\n\n\n\n The audit affords a peek into the council\u2019s financial position at the end of 2022. Overall, it had assets of $1,890,474 (including $393,775 in cash), and liabilities of $2,134,760, for a deficit balance of $244,286. One reason for the deficit is \u201ccompensated absences\u201d \u2013 accrued sick leave or vacation. \u201cEmployees are credited with vacation at the rate of 13 to 26 days per calendar year,\u201d the audit notes. \u201cAccumulation of such vacation credits is limited to 30 days at calendar year-end and is convertible to pay upon termination of employment. \u2026 Sick leave accumulates at 13 days per calendar year without limitation. For employees aged 62 and above who were hired prior to 1996, all unused sick leave is convertible to pay upon retirement. For employees aged 62 and above who were hired in 1996 and later, unused sick leave of up to 800 hours is convertible to pay upon retirement.\u201d As of the end of 2022, roughly $505,000 was owed in \u201ccompensated absences.\u201d<\/p>\n\n\n\n Kitty Simonds, who has been with the council for 40 years, is one of the few council employees who qualify for the unlimited sick leave credits on her retirement.<\/p>\n\n\n\n There is another unique-to-her benefit noted by the auditors: a nonqualified deferred compensation plan, which is funded by salary deferrals. The council \u201cestablished an annuity contract with an insurance company for the nonqualified deferred compensation plan. \u2026 These assets are not held in a separate trust and are subject to general creditors of [the council].\u201d As of December 31, 2022, the balance stood at $36,825. \u201cNo employee contributions were made to the plan for the year ended December 31, 2022,\u201d the audit report states.<\/p>\n\n\n\n \u2014 Patricia<\/strong> Tummons<\/strong><\/p>\n","protected":false},"excerpt":{"rendered":" To be “qualified” can be a good thing. But when it comes to audits, a qualified audit is one that has problems – like the financial audit of the Western Pacific Fishery Management Council for 2022. The audit report was … Continued<\/a><\/p>\n","protected":false},"author":1,"featured_media":7185,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[522,17],"tags":[7],"class_list":["post-15797","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-march-2024","category-marine","tag-patricia-tummons"],"_links":{"self":[{"href":"https:\/\/environment-hawaii.org\/index.php?rest_route=\/wp\/v2\/posts\/15797","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/environment-hawaii.org\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/environment-hawaii.org\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/environment-hawaii.org\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/environment-hawaii.org\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=15797"}],"version-history":[{"count":0,"href":"https:\/\/environment-hawaii.org\/index.php?rest_route=\/wp\/v2\/posts\/15797\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/environment-hawaii.org\/index.php?rest_route=\/wp\/v2\/media\/7185"}],"wp:attachment":[{"href":"https:\/\/environment-hawaii.org\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=15797"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/environment-hawaii.org\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=15797"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/environment-hawaii.org\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=15797"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}