Financial Audit of the Department of Health A Report to the Governor and the Legislature of the State of Hawaii Report No. 04-05 March 2004_part6 pot

48
Chapter 3: Financial Audit
Exhibit 3.9
Water Pollution Drinking Water
Control Treatment
Revolving Revolving
Fund Loan Fund Total
Cash flows from operating activities:
Interest income from loans $ 3,865,871 $ 143,010 $ 4,008,881
Administrative loan fees 1,387,937 309,791 1,697,728
Principal repayments on loans 9,687,830 473,601 10,161,431
Disbursement of loan proceeds (11,279,754) (2,202,868) (13,482,622)
Payments to employees (837,081) (228,813) (1,065,894)
Payments to vendors (345,779) (535,179) (880,958)
Net cash flows provided by (used in)
operating activities 2,479,024 (2,040,458) 438,566
Cash flows from noncapital financing activities:
Federal contributions 4,028,817 3,182,157 7,210,974
State contributions 2,094,000 1,551,000 3,645,000
Payments to others — (255,013) (255,013)
Net cash flows provided by noncapital
financing activities 6,122,817 4,478,144 10,600,961
Cash flows used in capital and related financing activities:
Purchase of equipment (26,002) (153,741) (179,743)
Cash flows provided by investing activities:
Interest from investments 3,016,363 285,281 3,301,644
Net increase in cash and cash equivalents 11,592,202 2,569,226 14,161,428
Cash and cash equivalents at July 1, 2002 77,936,788 8,104,509 86,041,297
Cash and cash equivalents at June 30, 2003 $ 89,528,990 $ 10,673,735 $ 100,202,725
Reconciliation of operating income (loss) to net cash
p

rovided by (used in) operating activities:
Operating income (loss) $ 4,206,090 $ (296,036) $ 3,910,054
Adjustments to reconcile operating income (loss)
to net cash provided by (used in) operating activities:
Depreciation expense 11,294 62,140 73,434
Change in assets and liabilities:
Loans receivable (1,591,924) (1,729,267) (3,321,191)
Accrued interest on loans receivable (90,880) (15,716) (106,596)
Loan fees receivable (63,836) (61,688) (125,524)
Accrued wages and other 8,280 109 8,389
Net cash provided by (used in)
operating activities $ 2,479,024
$
(2,040,458)
$
438,566
See accompanying notes to basic financial statements.
DEPARTMENT OF HEALTH
STATE OF HAWAII
Statement of Cash Flows – Proprietary Funds
Year Ended June 30, 2003
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Chapter 3: Financial Audit
Exhibit 3.10
Agency Fund
Cash and cash equivalents – on deposit with banks and on hand (Note 1) $ 311,900
Total assets $ 311,900
Due to others $ 311,900

Total liabilities $ 311,900
See accompanying notes to basic financial statements.
Liabilities
June 30, 2003
DEPARTMENT OF HEALTH
STATE OF HAWAII
Statement of Fiduciary Net Assets – Fiduciary Funds
Assets
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Chapter 3: Financial Audit
Exhibit 3.11
Actual
Amounts
(Budgetary
Basis)
Original Final (See Note 1)
Revenues:
Current year appropr
i
at
i
ons
$
359,446,015
$
333,635,487
$
318,588,629

Expenditures:
Genera
l
a
d
m
i
n
i
strat
i
on 14,703,672 10,165,058 15,326,591
Env
i
ronmenta
l

h
ea
l
t
h
a
d
m
i
n
i
strat
i

on 14,732,549 16,678,377 15,956,453
Be
h
av
i
ora
l

h
ea
l
t
h
serv
i
ces a
d
m
i
n
i
strat
i
on 185,308,130 157,162,375 146,092,801
Hea
l
t
h
resources a
d

m
i
n
i
strat
i
on 144,701,664 149,629,677 141,212,784
Total expenditures 359,446,015 333,635,487 318,588,629
Excess of revenues over
expen
di
tures
$
—
$
—
$
—
See accompanying independent auditors’ report and note to the budgetary comparison schedules.
Year Ended June 30, 2003
Budgeted Amounts
DEPARTMENT OF HEALTH
STATE OF HAWAII
Budgetary Comparison Schedule – General Fund
Required Supplementary Information (Unaudited)
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Chapter 3: Financial Audit
Exhibit 3.12

Actual
Amounts
(Bud
g
etar
y

Basis)
Ori
g
inal Final (See Note 1)
Revenues:
Tobacco settlement funds received
$
50,342,603
$
50,342,603
$
44,568,461
Expenditures:
Hea
l
t
h
resources a
d
m
i
n
i

strat
i
on 50,342,603 50,342,603 43,725,075
Excess of revenues over
expenditures
$
—
$
—
$
843,386
See accompanying independent auditors’ report and note to the budgetary comparison schedules.
Year Ended June 30, 2003
Bud
g
eted Amounts
DEPARTMENT OF HEALTH
STATE OF HAWAII
Budgetary Comparison Schedule – Tobacco Settlement Fund
Required Supplementary Information (Unaudited)
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Chapter 3: Financial Audit
Exhibit 3.13
(1) Budget to GAAP Reconciliation
Tobacco
General Settlement
Fund Fund
Excess of revenues over expenditures – actual

on a
b
u
d
getary
b
as
i
s
$
—
$
843,386
Reserve for encumbrances at year-end 39,492,554 10,455,938
Expenditures for liquidation of prior year’s encumbrances (64,765,923) (11,768,087)
Accrual and other adjustments 2,338,525 12,655,143
Excess (deficiency) of revenues over
expenditures – GAAP basis $ (22,934,844) $ 12,186,380
The following reconciles the excess of revenues over expenditures presented on a budgetary basis to the
excess (deficiency) of revenues over expenditures presented in conformity with GAAP for the general
and tobacco settlement funds.
Year Ended June 30, 2003
DEPARTMENT OF HEALTH
STATE OF HAWAII
Note to the Budgetary Comparison Schedules
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Comments on
Agency Response

Response of the Affected Agency
We transmitted a draft of this report to the Department of Health on
February 23, 2004. A copy of the transmittal letter to the department is
included as Attachment 1. The response of the department is included as
Attachment 2.
The department recognizes our audit as a constructive one that will
benefit not only its staff but also the general public. The department
acknowledges that the audit findings and recommendations provide an
opportunity for the department to continue to improve efficiency and
effectiveness in its financial oversight, as well as in the procurement
procedures.
The department provides numerous corrective actions contemplated and
planned and offers its perspectives on how it will implement some
modifications of our recommendations.
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