REPORT DIGEST ABRAHAM LINCOLN PRESIDENTIAL LIBRARY AND MUSEUM COMPLIANCE EXAMINATION FOR THE TWO YEARS ENDED JUNE 30, 2019 Release Date: April 28, 2020 FINDINGS THIS AUDIT: 15 CATEGORY: NEW -- REPEAT -- TOTAL Category 1: 4 -- 0 -- 4 Category 2: 11 -- 0 -- 11 Category 3: 0 -- 0 -- 0 TOTAL: 15 -- 0 -- 15 FINDINGS LAST AUDIT: 0* *This is the first examination of the Abraham Lincoln Presidential Library and Museum. Category 1: Findings that are material weaknesses in internal control and/or a qualification on compliance with State laws and regulations (material noncompliance). Category 2: Findings that are significant deficiencies in internal control and noncompliance with State laws and regulations. Category 3: Findings that have no internal control issues but are in noncompliance with State laws and regulations. State of Illinois, Office of the Auditor General FRANK J. MAUTINO, AUDITOR GENERAL To obtain a copy of the Report contact: Office of the Auditor General, Iles Park Plaza, 740 E. Ash Street, Springfield, IL 62703 (217) 782-6046 or TTY (888) 261-2887 This Report Digest and Full Report are also available on the worldwide web at www.auditor.illinois.gov INTRODUCTION Effective July 1, 2017, Executive Order 2017-01 abolished the Historic Preservation Agency (HPA) and transferred all the powers, duties, functions, and responsibilities of HPA, except those relating to the Historic Preservation within the Department of Natural Resources’ Office of Land Management Division, to the newly created Abraham Lincoln Presidential Library and Museum (ALPLM). SYNOPSIS • (19-01) ALPLM did not maintain adequate controls over receipts and refunds. • (19-02) ALPLM did not maintain sufficient controls over its property and related fiscal records. • (19-03) ALPLM did not comply with its Museum Collections Policy. FINDINGS, CONCLUSIONS, AND RECOMMENDATIONS INADEQUATE CONTROLS OVER RECEIPTS AND REFUNDS The Abraham Lincoln Presidential Library and Museum (ALPLM) did not maintain adequate internal controls over receipts and refunds. The ALPLM recorded cash receipts of $2,011,225 and refunds of $330 for Fiscal Year 2018 and cash receipts of $2,192,673 and refunds of $1,746 for Fiscal Year 2019. During testing, we noted the following: • The ALPLM did not maintain proper segregation of custody and recordkeeping duties over receipt collection and processing for facility rental and parking fee revenues. • One of four (25%) refunds tested, totaling $1,148, was deposited 75 days late. • Copy petitions revenue of $24,279 for Fiscal Year 2018 and $11,091 for Fiscal year 2019 were not deposited into the State Treasury as of the end of the respective fiscal year and therefore were not included as revenue on the Monthly Revenue Status Report (SB04). • Seven of 60 (12%) receipts tested, totaling $27,720, were deposited between 1 to 20 days late. • Nineteen of 60 (32%) receipts tested, totaling $213,946, did not include any documentation to support the date the receipt was received. Therefore, timeliness of the deposit could not be determined. • Two of 60 (32%) receipts tested, totaling $53,189, have RDTs which were sent to the Illinois Office of the Comptroller (IOC) 12 and 19 days after the State Treasurer issued the Treasurer’s Draft. • Four of 60 (7%) receipts tested, totaling $8,748, have incorrect revenue codes. • Eight of 60 (13%) receipts tested, totaling $55,692, did not include supporting documentation for the receipts. Therefore, accuracy of receipt reporting could not be determined. • One of 60 (2%) receipts tested, totaling $11,273, had no Treasurer’s Draft nor a clearing activity report. Therefore, timeliness of RDT submission could not be verified. In addition, ALPLM was unable to provide supporting documentation for $3,503 of this receipt. (Finding 2019-001, pages 12-14) We recommended ALPLM establish proper segregation of duties over the receipts process, perform supervisory review over all reporting and transaction processing, and maintain accurate documentation to support receipt and refund activities and the related reviews performed. Agency officials accepted our recommendation and stated the ALPLM is currently establishing formal policies and procedures and have already implemented supervisory review over all reporting and transaction processing functions. PROPERTY CONTROL WEAKNESSES The Abraham Lincoln Presidential Library and Museum (ALPLM) did not maintain sufficient controls over its property and related fiscal records. During testing, we requested ALPLM provide various populations related to ALPLM’s equipment. ALPLM provided its detailed list of owned equipment. We noted the following problems relative to the ALPLM’s population: • ALPLM was unable to provide a complete and detailed population of additions for Fiscal Year 2018 and 2019. The listing of additions supporting the amounts reported as additions on the ALPLM Reports of State Property (Form C-15) submitted to the Illinois Office of the Comptroller (IOC) only included Capital Development Board and Historic Preservation Agency (HPA) transfers-in. Equipment purchases during the examination period which are capitalizable were not recorded as additions. As a result, we were unable to test the ALPLM’s compliance relative to equipment additions. • ALPLM’s population of deletions for Fiscal Years 2018 and 2019 did not identify the date of the deletion and the manner in which the asset was disposed. As a result, we were unable to test the ALPLM’s compliance relative to equipment deletions. Even given the population limitations noted above which hindered our ability to conclude whether selected samples were representative of the population as a whole, we performed tests and a few of the items we noted follow: • Items could not be physically located, items found in a different location than noted on property records, and items with tag numbers that did not agree to the ALPLM’s list of equipment. • Equipment vouchers were not capitalized and were not added to the property • Form C-15s submitted to the Office of the Comptroller were inaccurate. • Annual inventory certifications filed with the Department of Central Management Services were inaccurate. (Finding 2019-002, pages 15-18) We recommended ALPLM improve its controls over property and equipment to comply with applicable laws and regulations. Specifically, we recommended the ALPLM implement procedures to ensure all equipment transactions are recorded timely and accurately, and documentation is retained. We further recommended ALPLM include a supervisory review process in its procedures to ensure clerical, technical, and other errors are promptly detected and corrected. Agency officials accepted our recommendation and stated the ALPLM is currently updating policies and procedures to ensure compliance with property control laws and regulations. NONCOMPLIANCE WITH ALPLM COLLECTIONS POLICY The Abraham Lincoln Presidential Library and Museum (ALPLM) did not comply with its Museum Collections Policy. ALPLM allows loan of museum collections to enhance the mission of ALPLM to preserve the heritage of Illinois and educate the public. ALPLM had a total of 10 outgoing loans of Museum collections during Fiscal Years 2018 and 2019. During our testing, we noted one of three (33%) Museum collection loans tested did not have a written loan request which should provide the following details: reason for the loan, exhibit details, proposed loan dates, proposed travel/shipping arrangements, insurance arrangements, and list of any other participating institutions. In addition, we also noted the borrower did not submit the required American Association of Museum Standard Facility Report. (Finding 2019-003, pages 19-20) We recommended ALPLM comply with its policy regarding loans of museum collections. Agency officials accepted our recommendation and stated the ALPLM is working with appropriate staff to ensure its compliance for future loans. OTHER FINDINGS The remaining findings pertain to lack of controls over monthly reconciliations, employee evaluations, investment of public funds, contracts, cash on-hand, receivables, voucher processing, and locally held fund reporting, a lack of adequate Records Management Program, failure to develop a formal Fraud Risk Assessment Program, noncompliance with the Fiscal Control and Internal Auditing Act, and weaknesses with Payment Card Industry Data Security Standards. We will review the Agency’s progress towards the implementation of our recommendations in our next compliance examination. ACCOUNTANT’S OPINION The accountants conducted a compliance examination of the ALPLM for the two years ended June 30, 2019, as required by the Illinois State Auditing Act. The accountants qualified their report on State compliance for Findings 2019-001 through 2019-004. Except for the noncompliance described in these findings, the accountants stated the ALPLM complied, in all material respects, with the requirements described in the report. This compliance examination was conducted by Adelfia LLC. JANE CLARK Division Director This report is transmitted in accordance with Section 3-14 of the Illinois State Auditing Act. FRANK J. MAUTINO Auditor General FJM:sdw