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Hawaii County finance director says new system will shorten delayed budget reports; ending fund balance reported at $270.5 million
Summary
Finance Director Diane Nakagawa told the Committee on Finance that implementation of a new financial system should reduce long reporting lags; the county reported an ending fund balance of $270,528,719.39 and staff said about $167,033,719 remains after a $59 million appropriation for temporary hazard pay.
Diane Nakagawa, director of the Hawaii County finance department, told the Committee on Finance in Kona that a recently implemented financial system is behind earlier-than-desired monthly report delays but will produce timelier monthly budget status reports once year-end close issues are resolved. “It has been, a tremendous effort,” Nakagawa said, describing the July go-live of the new platform and the department’s work to stabilize it.
Controller John Arboles told the committee the reporting lag improved from an average of seven to eight months in 2024 to about four to five months in 2025 and that the office’s goal is to limit delays to one to three months for routine monthly reports. “With the new system, timely would look like within the next one to two months,” Arboles said, adding that October 15 would be the latest acceptable delay in normal circumstances.
Finance presented an ending fund balance of $270,528,719.39 as of June 30, 2025. Nakagawa said the department is accounting for a $59 million appropriation for temporary hazard pay from the most recent fiscal cycle; after that appropriation the remaining fund balance was reported as about $167,033,719. Finance staff told the committee the primary contributors to the increase are slightly higher real property tax and transient accommodation tax receipts, stronger interest income, and lapsing salary-and-wage expenditures.
Council members asked for more digestible, visually accessible monthly reports and for an opportunity to preview demonstration reports before they are finalized. Arboles and Nakagawa said the vendor work and internal testing are close to producing more usable, push-button reports and pledged to provide samples for council feedback once year-end close and accuracy checks are complete. Arboles acknowledged an implementation hiccup that produced duplicate expenditure entries in October–November and said that fix delayed report production but has been addressed.
Several council members asked staff to provide a closeout summary for the temporary hazard pay appropriation—how much was paid, consulting costs related to allocations and the final fiscal impact—before the budget process proceeds. Nakagawa agreed to return that information. The committee approved closing the file on the monthly-status report item and moved on to other agenda items; no formal budget actions were adopted at the meeting.
The finance department said it will continue to refine reporting and return to council with demonstration reports and hazard-pay closeout numbers ahead of the upcoming budget deliberations.
