Finding 1211036 (2025-001)

Material Weakness Repeat Finding

Requirement

Questioned Costs

Year

2025

Accepted

2026-04-30

Audit: 400320

Organization: Hui No Ke Ola Pono, Inc. (HI)

Auditor: CARBONARO CPAS & MANAGEMENT GROUP

AI Summary

Core Issue: Significant inaccuracies in financial statements required 16 adjustments, indicating weak internal controls.
Impacted Requirements: Compliance with Uniform Guidance Part 200 and accurate financial reporting are not being met due to personnel turnover and lack of oversight.
Recommended Follow-Up: Management should enhance oversight and ensure accounting staff are well-trained in Generally Accepted Accounting Standards to improve accuracy and compliance.

Finding Text

2025-001 – Internal Control over Financial, United States Department of Health and Human Services, Native Hawaiian Health Care System 93.932 Criteria: Auditees are responsible for accurate recording and reporting on financial statements. Auditees are also responsible for major program compliance to Uniform Guidance Part 200 requirements. To ensure accuracy and compliance of financials and major program compliance, management is responsible to design sufficient internal control over financials recording and reporting. Condition: As a result of the auditing procedures over the financial statements, 16 adjusting journal entries were required that resulted in a material change to the financial statements. Cause: Due to the continuing personnel turnover in operation and accounting departments, there was a lack of oversight to ensure accurate accounting procedures were performed during the fiscal year. Potential Effect: Lack of sufficient internal controls and monitoring processes increases the likelihood of misstatement and/or fraud. Questioned Costs: None. Recommendation: It is management’s responsibility to review financial statements for accuracy and ensure proper accounting is being performed. The accounting personnel and third party hired by the management to account for and prepare the financial statements should have adequate technical knowledge of Generally Accepted Accounting Standards and how to apply them to the internal procedures for preparing financial statements. Repeat Finding: Yes. See Summary Schedule of Prior Audit Findings, Finding 2024-001. Views of Responsible Officials of the Auditee: The Accounting Department has taken better control and accountability in handling accounting and financial internal control processes and month-end journal entries that have allowed more insights and understanding of financial data. The Organization concurs with the finding and recommendation. See Management Responses and Corrective Action Plans.

Corrective Action Plan

2025-001-Internal Control over Financial Reporting, Health Resources and Services Administration Native Hawaiian Health Care 93.932, Significant adjusting journal entries, Due to lack of fiscal staff and high turnover, the organization fell behind on audits, and therefore, many adjusting entries were required to reconcile accounts. The audits have been completed, and all accounts have been reconciled as of July 31, 2025. In addition to the high turnover, during fiscal year ending 2024, there was an increase in donor funding to assist with the Lahaina wildfires recovery efforts. Again, our staff were challenged to meet the demands of the requirements of the funding and to continue to monitor the previous and current fiscal years financial state.

Other Findings in this Audit

1211032 2025-001

Material Weakness Repeat
1211033 2025-001

Material Weakness Repeat
1211034 2025-001

Material Weakness Repeat
1211035 2025-001

Material Weakness Repeat
1211037 2025-002

Material Weakness Repeat
1211038 2025-002

Material Weakness Repeat
1211039 2025-002

Material Weakness Repeat
1211040 2025-002

Material Weakness Repeat
1211041 2025-002

Material Weakness Repeat
1211042 2025-003

Material Weakness Repeat

Programs in Audit

ALN	Program Name	Expenditures
84.259	NATIVE HAWAIIAN CAREER AND TECHNICAL EDUCATION	$397,070
93.932	NATIVE HAWAIIAN HEALTH CARE SYSTEMS	$345,445
93.866	AGING RESEARCH	$61,089
93.211	TELEHEALTH PROGRAMS	$45,000