A state audit is criticizing the Department of Health for its poor management of the state’s nonbeverage glass recycling program.

The audit pointed out numerous problems in the program, which requires manufacturers, importers or distributors of glass containers to pay a 1.5 cent fee for each container.

The program is separate from the state’s deposit beverage container program, which places a 5-cent deposit on bottles that consumers can redeem by recycling.

Money generated in the advance disposal fee program is placed into a fund that the Department of Health distributes annually to the counties for their glass recovery programs. The fund — which has been about $750,000 annually the past few years — is divided among the counties through annual contracts based on each county’s population.

At the end of the year, counties are required by law to return unused funds to the state, according to the audit.

The audit, released in December, said the Health Department:

» Submitted inaccurate annual reports to the Legislature.

» Fluctuated the annual reimbursement to counties, hindering the counties’ ability to plan ahead.

» Failed to verify how the counties spent the money.

» Allowed counties to keep unspent funds in violation of state law.

» Gave money to Kauai County when it was in violation of state law under the program.

State Sen. Will Espero (D, Ewa Beach-Iroquois Point) said the audit revealed significant shortcomings in the program’s administration.

"It looks like it’s time for a major review and maybe overhaul of the law if that’s what it’s going to take to make sure we can run it correctly, operate it correctly and get people recycling," he said.

Espero, who noted the state previously had a bad audit of the beverage container recycling program, said legislators need to meet with Department of Health administrators to learn what they are trying to do.

"We need to see what it’s going to take to get this thing operating properly," he said. "Recycling cans and glass should not be that difficult."

Steve Chang, chief of the Solid and Hazardous Waste Branch, which overseas the office administering the program, said the problems stem from the deposit fee not covering the cost of sending glass containers to the mainland to be recycled.

He said it costs about 8 cents a container to recycle it in California, but there is resistance to raising the 1.5 cent fee.

He said the Health Department also is trying to address some of the issues the audit raised by changing the county contracts to require more data from the counties.

"We modified our contracts," he said. "We’ll be able to get a better sense of what’s the total mass of glass that they’re collecting."

According to Chang, the containers in the program are nonbeverage glass containers, such as nail polish bottles, wines, spirits, perfume bottles, jelly jars and other food containers.

The ADF program is much smaller than the beverage container program, which is also run by the Health Department and generated about $54 million in fiscal year 2012, the audit said.

Chang said the beverage container program also loses money in recycling glass, but makes up for that loss in recycling aluminim, which generates a profit.

The audit blamed some of the problems on poor laws, which lack goals for the program, an explanation for how the rate fee was set and factors that should trigger the reconsideration of the fee rate.

Despite the poorly written laws, the Health Department could have created administrative rules that would have addressed the faults in the law, the audit said.

Instead, the department said its role was collecting ADF funds and passing them on to the counties.

According to the audit, the department’s administering the fund as a "pass-through fund" may "explain a number of shortcomings we found in the department’s administration" of the program.

But in its response to the audit, the department said it is a "pass-through agency."

Furthermore, the audit said the department provided ADF funds to Kauai County despite the county not having a glass incentive or "buyback" program as part of its glass recovery program as required by law.

State Sen. Mike Gabbard (D, Kapolei-Waipahu) said in an email that he is working on a bill to adopt the recommendations of the report.

"We need to get this program on track so that all our glass containers are being recycled and the revenue from the container fee is spent wisely," he said.