Four months into fiscal year 2012, Hawaii has still not officially closed the books on fiscal year 2010.

The lag in completing the state’s Comprehensive Annual Financial Report is not only an embarrassment for state administrators, it has had some real-world consequences.

The state has chosen not to sell new general-obligation bonds, fearing potential investors might be spooked about the state’s finances. Nurses at the state’s public hospitals have put off binding arbitration over a new contract, in part because the state’s last audited bottom line is for June 30, 2009 — 28 months ago.

Kalbert Young, state chief financial officer, said the financial report for fiscal year 2010 would likely be finished within the next three weeks.

"It is a poor reflection," Young said of the message the delay sends about Hawaii to potential bond investors. "That’s why we do need to do a better job of delivering the CAFR early."

A Comprehensive Annual Financial Report provides a detailed — and audited — picture of a state’s financial health, outlining assets, liabilities, revenues and expenditures.

Hawaii’s fiscal year ends in June, and the target for state administrators has been to complete the financial report by the start of the next calendar year in January. But in practice over the past five report cycles, the annual report has not been delivered to the governor and the state Legislature until the following October, May, May, March and January.

Young said the fiscal year 2010 financial report has been delayed due to a combination of staff cuts, tighter government accounting standards and other work priorities.

Young said the delayed financial report has not had an impact on taxpayers, but is still far from ideal. Young had made a strategic decision earlier this year not to go to market with new general-obligation bonds because of budget concerns. However, he said he would have considered going to market in July or August — after fiscal year 2012 had started — if the financial report was completed.

"So that means that if I went to the market without a CAFR, I’m going to get a lot of questions and criticism about how come I don’t have financial statements," he said. "It’s going to scare away investors."

Young said he is preparing to sell bonds in anticipation that the fiscal year 2010 financial report will soon be finished.

Public hospital nurses represented by the Hawaii Government Employees Association rejected the state’s two-year contract offer in April and opted to go to binding arbitration with the state. The nurses believe they have a compelling argument that they are not paid as well as nurses in the private sector and deserve better.

But the union has decided to delay binding arbitration in part because the state’s audited financials are so dated. Unions often ask for the state’s latest financial statements to validate the state’s claims about its financial health during collective bargaining.

"The Unit 9 negotiating team has held off from proceeding to arbitration until they have sufficient time to gather and analyze the state and Hawaii Health Systems Corp. financial data. The timing of the release of the CAFR is one of the factors that would dictate the unit’s actions," Jodi Endo Chai, a senior adviser for communications and strategic planning at the union, said in an email.

State Rep. Isaac Choy (D, Manoa), an accountant, said Hawaii should be able to produce a financial report 90 days after the fiscal year ends in June. He called the delay a "total embarrassment."

"I think the state pays over a million dollars for the audit of this particular document, and with information this old it’s probably as good as toilet paper," Choy said.