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State Auditor Reports
In three reports spanning a decade, the State Auditor has documented unending
problems with the state's small boat harbors.
- 2001 - Report 01-09
Audit of the Management of State Boating Facilities by the Department of
Land and Natural Resources
- 1998 - Report 98-11
Audit of the Management of Small Boat Harbors and Boat Ramps
- 1993 - Report 93-24
Study of the Financing of the Small- Boat Harbors and Boat Ramps Program of
the Department of Land and Natural Resources
2001 State Auditor's Summary
(see
http://www.state.hi.us/auditor/Overviews/2001/01-09.htm for summary)
(see
http://www.state.hi.us/auditor/Reports/2001/01-09.pdf for full report)
OFFICE OF THE AUDITOR
STATE OF HAWAII
Audit of the Management of State Boating Facilities by the Department of Land
and Natural Resources
Report No. 01-09
Summary
Small boat harbors and boating facilities are part of the State's ocean
recreation and coastal areas programs established in Chapter 200, Hawaii Revised
Statutes, and managed by the Department of Land and Natural Resources' Division
of Boating and Ocean Recreation (boating division). Their proper maintenance and
operation allow people to benefit from the state's natural resources by engaging
in recreational boating, commercial and personal fishing, and maritime related
business operations. Residents and visitors alike use boating facilities to
participate in ocean-based activities like yacht races, canoe regattas, ocean
swimming, and surfing and board sailing contests.
Inadequate management of state boating facilities has been a recurring problem.
Our prior audits in 1993 and 1998 reported on these deficiencies. In our present
audit, we found that little had changed in the poor conditions of these state
boating facilities. The boating program's mismanagement and neglect have
deteriorated facilities to the point where their continued use threatens public
safety. Many facilities need major repairs and face permanent closure if not
addressed. For example, 64 of 338 boating slips at the Ke`ehi boating facility
are closed for safety and liability reasons. The closure also results in a loss
of revenues of almost $100,000 per year. We also noted sections of the Wai`anae
and Kailua-Kona boating facilities were closed for the same reasons.
Such problems have resulted partly from poor planning, an insufficient fee
structure, paying a disproportionate share of the department's enforcement
expenses, and funding programs with special fund moneys that should be supported
by general funds. For example, the fee for the State's highest mooring rate is
only $4.10 per foot of vessel at Ala Wai Harbor. Whereas, Ko Olina Marina, a
private facility, charges $9. Other private facilities charge as little as $2.18
per foot, but also require initiation and application fees, dues, and food and
beverage minimums. The boating division has identified several additional
revenue sources such as increasing commercial business operations but without
the support from the Board of Land and Natural Resources. There are also 750
parking spaces at the Ala Wai Harbor that are free to the general public. We
observed that most of those using the free spaces were not accessing boats in
the ocean. Some were carrying construction tools and others were dressed in
hotel uniforms.
We also found that the boating division lacks adequate controls to ensure the
accuracy and integrity of its financial affairs. The boating division is still
unable to accurately determine the cost of operating its boating facilities. In
addition, inventory and cash collection controls are inadequate. Our sample of
the boating division's inventory found six of 100 items missing, at a value in
excess of $5,000. We also found another 40 inventory items that were missing
State of Hawaii identification tags. In addition, delinquent user fees (now
totaling approximately $500,000) continue to increase.
Finally, in the midst of current boating program problems, consideration is
being given to transferring the program to the Department of Transportation. We
conclude that administrative deficiencies within the land department need to be
corrected before such a decision is made.
Recommendations and Response
We recommended that the Division of Boating and Ocean Recreation develop
realistic strategic plans to address both the short and long term problems of
the boating program. This includes addressing the needed repairs in the boating
facilities and increasing a currently insufficient revenue stream for the
boating program. We recommended the boating division address operational
deficiencies in the state boating facilities by ensuring that necessary funding
for repair and maintenance projects is available; the boating program receives
its fair share of enforcement; and all persons moored in state boating
facilities possess current mooring permits, vessel inspection certification, and
vessel registrations. We also recommended that the boating division improve
controls over its financial activities by ensuring expenditures are properly
classified, establishing a better inventory system, segregating duties for cash
collection, improving efforts to collect delinquent user fees, and requiring
more audits of its commercial permit holders. Until these administrative
deficiencies are addressed, consideration of transferring the boating program to
another agency should be deferred.
The Department of Land and Natural Resources concurred in general with the
conclusions and recommendations in our report. Despite differences in opinion,
the department stated that the report provides a solid base and positive
direction for the improvement of state boating facilities in a fiscally
responsible manner. The department strongly disagreed with our finding that the
Board of Land and Natural Resources and Division of Boating and Ocean Recreation
mismanaged and neglected the State's boating program. The department also
offered additional information and points of clarification.
The Department of Transportation also concurred with the findings and
recommendations of the report and offered specific comments regarding key issues
that were discussed. The department noted that while it is concerned with the
condition of the State's boating program, the boating program should "first look
internally to resolve its issues rather than seeking safe harbor within the
Department of Transportation."
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1998 State Auditor's Summary
(see
http://www.state.hi.us/auditor/Overviews/1998/98-11.htm for original)
OFFICE OF THE AUDITOR
STATE OF HAWAII
Audit of the Management of Small Boat Harbors and Boat Ramps
Report No. 98-11
Summary
For some time, various groups, including the Legislature, the Office of the
Auditor, and the boating community have been critical of the management of small
boat harbors and boat ramps in Hawaii. In response to this growing concern, the
1997 Legislature, through House Concurrent Resolution No. 153, H.D. 1, requested
the Auditor to conduct an audit of the management of state run small boat
harbors and boat ramps.
As centers of economic activity, small boat harbors are important assets to the
State. Their proper maintenance and operation allow Hawaii residents to benefit
from the state's natural resources by engaging in recreational boating,
commercial and personal fishing, and small business operations.
Proper management of small boat harbors and boat ramps has been a long-standing
problem for the Department of Land and Natural Resources. Our office has pointed
out in past audits that the administration and operation of small boat harbors
and boat ramps are deficient in several areas. Some of these problems include
the lack of a comprehensive boating program for the State, unsafe conditions in
the small boat harbors, inadequate security, and unreliable financial
information on the revenues and expenditures. In this audit we found the
management of small boat harbors and boat ramp continues to be plagued with
problems. The Board of Land and Natural Resources, which is responsible for the
overall administration of Hawaii's boating program, has not sufficiently
improved and directed that program. Harbors are unsafe, in need of repair, and
boaters fail to receive adequate services. In addition, we found the Department
of Land and Natural Resources has not adequately managed the small boat harbors
and boat ramps. The boating program lacks clear guidance, boating regulations
are not enforced, and the true cost of operating individual boating facilities
is unknown. Finally, we found that the department needs to correct strategic and
operational deficiencies before attempting to evaluate alternative management
practices such as privatizing the small boat harbors. For example, the role and
function of small boat harbors must be clarified, and the department must be
able to accurately account for expenditures and project budgeting needs.
Recommendations and Response
We recommend that the Board of Land and Natural Resources establish a
comprehensive statewide boating program to include the establishment of a
strategic plan, statewide standards for the minimum services to be provided at
each of the boating facilities, and a multi-year program and financial plan
addressing the need for repairs at the boating facilities. We also recommend the
Department of Land and Natural Resources, in conjunction with the Division of
Boating and Ocean Recreation, establish adequate management and financial
controls that would include a policies and procedures manual, clear and concise
administrative rules, clear procedures for issuing permits and conducting vessel
inspections, and a financial accounting system that is able to track all
expenditures and account for all moneys owed to the division. Finally, we
recommend that the department delay the implementation of alternative forms of
management until it has corrected the strategic and operational deficiencies
identified in our current report.
The Department of Land and Natural Resources generally agrees with the findings
and recommendations. The department states that the efforts to explore
alternative forms of management such as privatization of facilities,
community-based management, or even the proposed Hawaii Maritime Authority, were
externally driven. The department basically disagrees with our recommendation to
delay the implementation of alternative forms of management until it has
addressed its strategic and operational deficiencies. It notes that while
operational deficiencies need to be corrected, it intends to recommend an
alternative management scheme to the Board of Land and Natural Resources if such
a scheme to correct these deficiencies can be identified. We disagree with the
department. The overall direction of the program, or the desired end, needs to
be addressed first before the State can determine the most effective and
advantageous means, or form of management, for the boating program.
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1993 State Auditor's Summary
(see
http://www.state.hi.us/auditor/Overviews/1993/93-24.htm for original)
OFFICE OF THE AUDITOR
STATE OF HAWAII
Study of the Financing of the Small- Boat Harbors and Boat Ramps Program of the
Department of Land and Natural Resources
Report No. 93-24
Summary
House Concurrent Resolution No 430, House Draft 2, requested the Office of the
Auditor to conduct a comprehensive study of the revenue and service operations
of all state-run small boat harbors and boat ramps." The resolution specifically
requested an itemized review of program expenditures and revenues, and the
degree to which services provided by the Department of Land and Natural
Resources (DLNR) are satisfactory. The study was conducted by the Office of the
Auditor and the certified public accounting firm of Nishihama & Kishida, CPA's,
Inc.
Small boat harbors are designed for recreational boating activities, the landing
of fish, and commercial vessel activities. The department currently operates 18
small boat harbors and 12 launching ramps in all four counties. Our study found
that the statewide boating program needs improvement. Facilities and services
vary from harbor to harbor and many are inadequate. Boater dissatisfaction with
the facilities and services is widespread. In addition, small boat harbors and
launch ramps lack adequate security. Harbor staff are not on duty during
weekends and holidays, harbor agents lack authority to enforce boating rules,
and DLNR has little control over the marine patrol that is supposed to provide
security for the program.
We found management of the boating program continues to be divided between the
Department of Transportation (DOT) and DLNR causing problems in program
operations. Needed positions have not been established or remain unfilled and
repairs must often wait until DOT personnel have time to make the repairs.
A clearly defined program could help resolve many of the problems we noted.
Currently the program is only defined in statute and communicated through
confusing and unwieldy rules. A more detailed budgeting and accounting system is
also needed. A well developed boating program plan should include statewide
standards for facilities and services, policies on how program costs are to be
financed, and a timetable for achieving the standards.
We found the accounting controls for the boating program to be inadequate. For
example, the department has not ensured that cash handling duties are
segregated, established controls over cash receipts, ensured timely deposits of
cash collections, or developed written accounting procedures.
Recommendations and Response
We recommend that the Legislature consider transferring the marine patrol from
the Department of Public Safety to the DLNR. If the Legislature chooses not to
act on this recommendation, DLNR should be allowed to hire or contract for its
own security personnel.
We also recommend that the DLNR develop a comprehensive statewide boating
program that describes and sets statewide standards for facilities and services
to be provided, defines policies for setting fees to finance these costs, and
establishes goals and milestones for bringing facilities and services up to
standard. The plan should also address security needs, administrative rules, and
the need for a comprehensive financial and budgeting system.
We recommend that the department make the transfer of functions from the
Department of Transportation a priority. In addition, the department should
correct problems with its internal accounting controls by improving cash
handling and processing procedures, reconciling internal collection records with
the State's FAMIS system reports, preparing written accounting procedures,
reconciling security deposits per harbor records to the department's trust fund
for security deposits, and properly recording fixed assets in the State's fixed
asset inventory records.
The department generally concurs with our findings and recommendations. It
believes it may not yet be appropriate to transfer the marine patrol to DLNR— it
would like to wait and see the results of implementation of a new memorandum of
agreement concerning the marine patrol. The department also agrees with our
recommendation to improve its internal accounting controls. It has retained the
services of a consultant to help develop a new accounting system. In its
response, the department pointed out some clarifying language which we
incorporated in the report. It has removed the abandoned waste containers and
dilapidated catwalk pictured on pages 7 and 8 respectively.
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