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Auditors give HCDA a clean FY2024 opinion; internal controls and compliance flagged as sound
Summary
External auditors KKDLY LLC reported an unmodified opinion on HCDA's June 30, 2024 financial statements, found no material weaknesses in internal control and identified no material noncompliance; auditors and staff discussed accounting estimates, development credits and a significant appropriations balance tied to specific projects.
KKDLY LLC presented the Hawaiʻi Community Development Authority’s fiscal year 2024 financial audit at the Jan. 8 at‑large authority meeting, issuing an unmodified (clean) opinion on the agency’s financial statements and reporting no material weaknesses in internal control over financial reporting.
Ralph Kanitoku of KKDLY told the board the audit, performed under contract with the state Office of the Auditor, was completed on schedule and met all state financial reporting deadlines. KKDLY said it issued three formal reports: the independent auditor’s report on the financial statements (unmodified opinion), a report on internal control and compliance (no material weaknesses and no instances of noncompliance with a direct and material effect on the financial statements), and the required communication letter to those charged with governance.
Guy Nishihira of KKDLY highlighted accounting estimates the auditors reviewed, including valuation of accounts and loans receivable, carrying value of capital assets, and HCDA’s allocated share of the state’s net OPEB and pension liabilities. The auditors said they evaluated methods and assumptions and found them reasonable for financial‑statement purposes. KKDLY also confirmed its independence as of the audit report date of Dec. 3, 2024.
Board questions focused on line‑items and legacy balances. Chair Sterling Higa and Member Garrett Sasaki (staff introduction) asked why appropriations increased significantly; staff explained the balance rise reflected funds for projects including Ulihunui (West Oʻahu) and Wailupe Kapalama (as reported by staff) and that those appropriations will be spent as project cash flows occur. Member Yamasaki asked about a disclosure labeled “development credits” (note 14 on the audit packet); staff said the line reflects historical credits or public facility dedication credits that remain on HCDA’s books from projects that did not proceed and that they are not actively being used. Member Gortner asked whether the reserve housing revolving fund was included; staff replied it is a subaccount of the Hawaiʻi Community Development Fund and appears in the monthly financial package with subaccount detail.
No audit disagreements with management were reported, and auditors said they encountered no significant difficulties during the audit. The auditors recommended no material changes to HCDA’s accounting policies and observed no transactions lacking authoritative guidance.
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