48 Chapter 3: Financial Audit Exhibit 3.9 Water Pollution Drinking Water Control Treatment Revolving Revolving Fund Loan Fund Total Cash flows from operating activities: Interest income from loans $ 3,865,871 $ 143,010 $ 4,008,881 Administrative loan fees 1,387,937 309,791 1,697,728 Principal repayments on loans 9,687,830 473,601 10,161,431 Disbursement of loan proceeds (11,279,754) (2,202,868) (13,482,622) Payments to employees (837,081) (228,813) (1,065,894) Payments to vendors (345,779) (535,179) (880,958) Net cash flows provided by (used in) operating activities 2,479,024 (2,040,458) 438,566 Cash flows from noncapital financing activities: Federal contributions 4,028,817 3,182,157 7,210,974 State contributions 2,094,000 1,551,000 3,645,000 Payments to others — (255,013) (255,013) Net cash flows provided by noncapital financing activities 6,122,817 4,478,144 10,600,961 Cash flows used in capital and related financing activities: Purchase of equipment (26,002) (153,741) (179,743) Cash flows provided by investing activities: Interest from investments 3,016,363 285,281 3,301,644 Net increase in cash and cash equivalents 11,592,202 2,569,226 14,161,428 Cash and cash equivalents at July 1, 2002 77,936,788 8,104,509 86,041,297 Cash and cash equivalents at June 30, 2003 $ 89,528,990 $ 10,673,735 $ 100,202,725 Reconciliation of operating income (loss) to net cash p rovided by (used in) operating activities: Operating income (loss) $ 4,206,090 $ (296,036) $ 3,910,054 Adjustments to reconcile operating income (loss) to net cash provided by (used in) operating activities: Depreciation expense 11,294 62,140 73,434 Change in assets and liabilities: Loans receivable (1,591,924) (1,729,267) (3,321,191) Accrued interest on loans receivable (90,880) (15,716) (106,596) Loan fees receivable (63,836) (61,688) (125,524) Accrued wages and other 8,280 109 8,389 Net cash provided by (used in) operating activities $ 2,479,024 $ (2,040,458) $ 438,566 See accompanying notes to basic financial statements. DEPARTMENT OF HEALTH STATE OF HAWAII Statement of Cash Flows – Proprietary Funds Year Ended June 30, 2003 This is trial version www.adultpdf.com 49 Chapter 3: Financial Audit Exhibit 3.10 Agency Fund Cash and cash equivalents – on deposit with banks and on hand (Note 1) $ 311,900 Total assets $ 311,900 Due to others $ 311,900 Total liabilities $ 311,900 See accompanying notes to basic financial statements. Liabilities June 30, 2003 DEPARTMENT OF HEALTH STATE OF HAWAII Statement of Fiduciary Net Assets – Fiduciary Funds Assets This is trial version www.adultpdf.com 50 Chapter 3: Financial Audit Exhibit 3.11 Actual Amounts (Budgetary Basis) Original Final (See Note 1) Revenues: Current year appropr i at i ons $ 359,446,015 $ 333,635,487 $ 318,588,629 Expenditures: Genera l a d m i n i strat i on 14,703,672 10,165,058 15,326,591 Env i ronmenta l h ea l t h a d m i n i strat i on 14,732,549 16,678,377 15,956,453 Be h av i ora l h ea l t h serv i ces a d m i n i strat i on 185,308,130 157,162,375 146,092,801 Hea l t h resources a d m i n i strat i on 144,701,664 149,629,677 141,212,784 Total expenditures 359,446,015 333,635,487 318,588,629 Excess of revenues over expen di tures $ — $ — $ — See accompanying independent auditors’ report and note to the budgetary comparison schedules. Year Ended June 30, 2003 Budgeted Amounts DEPARTMENT OF HEALTH STATE OF HAWAII Budgetary Comparison Schedule – General Fund Required Supplementary Information (Unaudited) This is trial version www.adultpdf.com 51 Chapter 3: Financial Audit Exhibit 3.12 Actual Amounts (Bud g etar y Basis) Ori g inal Final (See Note 1) Revenues: Tobacco settlement funds received $ 50,342,603 $ 50,342,603 $ 44,568,461 Expenditures: Hea l t h resources a d m i n i strat i on 50,342,603 50,342,603 43,725,075 Excess of revenues over expenditures $ — $ — $ 843,386 See accompanying independent auditors’ report and note to the budgetary comparison schedules. Year Ended June 30, 2003 Bud g eted Amounts DEPARTMENT OF HEALTH STATE OF HAWAII Budgetary Comparison Schedule – Tobacco Settlement Fund Required Supplementary Information (Unaudited) This is trial version www.adultpdf.com 52 Chapter 3: Financial Audit Exhibit 3.13 (1) Budget to GAAP Reconciliation Tobacco General Settlement Fund Fund Excess of revenues over expenditures – actual on a b u d getary b as i s $ — $ 843,386 Reserve for encumbrances at year-end 39,492,554 10,455,938 Expenditures for liquidation of prior year’s encumbrances (64,765,923) (11,768,087) Accrual and other adjustments 2,338,525 12,655,143 Excess (deficiency) of revenues over expenditures – GAAP basis $ (22,934,844) $ 12,186,380 The following reconciles the excess of revenues over expenditures presented on a budgetary basis to the excess (deficiency) of revenues over expenditures presented in conformity with GAAP for the general and tobacco settlement funds. Year Ended June 30, 2003 DEPARTMENT OF HEALTH STATE OF HAWAII Note to the Budgetary Comparison Schedules This is trial version www.adultpdf.com 53 Comments on Agency Response Response of the Affected Agency We transmitted a draft of this report to the Department of Health on February 23, 2004. A copy of the transmittal letter to the department is included as Attachment 1. The response of the department is included as Attachment 2. The department recognizes our audit as a constructive one that will benefit not only its staff but also the general public. The department acknowledges that the audit findings and recommendations provide an opportunity for the department to continue to improve efficiency and effectiveness in its financial oversight, as well as in the procurement procedures. The department provides numerous corrective actions contemplated and planned and offers its perspectives on how it will implement some modifications of our recommendations. This is trial version www.adultpdf.com This is trial version www.adultpdf.com This is trial version www.adultpdf.com This is trial version www.adultpdf.com This is trial version www.adultpdf.com . 2003 DEPARTMENT OF HEALTH STATE OF HAWAII Statement of Fiduciary Net Assets – Fiduciary Funds Assets This is trial version www.adultpdf.com 50 Chapter 3: Financial Audit Exhibit 3.11 Actual Amounts (Budgetary. See accompanying independent auditors’ report and note to the budgetary comparison schedules. Year Ended June 30, 2003 Bud g eted Amounts DEPARTMENT OF HEALTH STATE OF HAWAII Budgetary Comparison. version www.adultpdf.com 53 Comments on Agency Response Response of the Affected Agency We transmitted a draft of this report to the Department of Health on February 23, 2004. A copy of the transmittal letter to the department