Hawaii County finance staff present updated annual inventory after physical audit; systemization underway

Finance Director Diane Nakagawa told the Hawaii County Council Committee on Finance on Aug. 20, 2025, that a yearlong physical inventory and migration into a new asset-management system produced a more complete county inventory and identified roughly $22 million in additions, including $14 million in large equipment purchases.

The inventory report, submitted by Nakagawa and transmitted “pursuant to section 103D-1208 of the Hawaii Revised Statutes,” was presented to the committee as communication 441 and filed after discussion and questions from council members.

Why it matters: Council members pressed for clarity about missing items, asset condition, vehicle consolidation and longer-term budgeting for replacements. The finance department said the new system will add location tracking, allow approvals and reports to be run inside the system, and support useful-life and depreciation calculations for fixed assets.

Nakagawa said the $22 million increase reflected two factors: about $9 million that should have been included in the prior year, and roughly $14 million in large purchases during the reporting period. She listed examples of major equipment included in the increases — fire trucks, dozers, generators, trailers, compactors and four ambulances — and said departments used paper forms for transfers and disposals in the past, which increased the risk of missed paperwork.

“Because the work was done to get it to where it is today, this information is now in the new system as of today,” Nakagawa said.

Deputy Finance Director Malia Keikai described the inventory as an annual, yearlong process and said staff are encouraging departments to process additions, transfers and disposals throughout the year rather than concentrating the work at fiscal year-end. Keikai said the new system will include location information for assets; the current printed list available to the committee shows only which department holds an item.

Council members pressed on missing items and condition tracking. Council member Inaba asked whether the report showed “significant missing property”; Nakagawa said individual departments still report lost items and that finance is working with larger departments to tighten procedures and reduce losses.

Council member Kurkowitz asked how long the physical inventory takes; Keikai said it is a yearlong process, with more intensive work during transition years when department heads change. Kurkowitz and others asked whether condition (good/fair/poor) or current functional status is tracked. Nakagawa said the present list does not include condition for every item but that the new system will hold useful-life calculations and depreciation for fixed assets; tracking the functional status of nonvehicle equipment is still being refined.

Council member Kimball confirmed that the inventory list covers county-owned items only and that vehicles are included in the printout the council members can download; he urged development of a consolidated fleet plan and tracking of functional assets such as solar panels. Council member Onishi and others discussed moving unused vehicles to auction and consolidating underused vehicles for sharing.

Keikai said staff are also considering county storage needs and noted the county-wide rental budget (office space and storage) is “a little over $2,000,000,” a figure she said would need further analysis for storage-specific costs.

The committee voted to file the inventory report. The clerk recorded eight ayes with one member absent.

Council members thanked property management, the Department of Public Works and the clerk’s office for providing temporary staffing to complete the inventory work.