REPORT DIGEST

ILLINOIS ARTS COUNCIL

COMPLIANCE EXAMINATION
FOR THE TWO YEARS ENDED JUNE 30, 2023

Release Date:  May 16, 2024

FINDINGS THIS AUDIT: 7

CATEGORY:  NEW -- REPEAT – TOTAL
Category 1:  1 -- 1 -- 2
Category 2:  1 -- 4 -- 5
Category 3:  0 -- 0 -- 0
TOTAL:  2 -- 5 -- 7

FINDINGS LAST AUDIT: 7

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, 400 West
Monroe, Suite 306, Springfield, IL
62704-9849
(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

The Illinois Arts Council (Council) was
created through the Arts Council Act (20
ILCS 3915). The Council is governed by 21
private citizens from throughout Illinois,
chosen for their commitment to the arts and
are appointed by the Governor. The members
serve in a voluntary, non-paid capacity and
are responsible for developing the State’s
public arts policy, fostering culturally
diverse quality programs, and approving
grant expenditures. The functions of the
Council are directed by the Council’s
mission statement: “to build a strong,
creative, and connected Illinois through the
arts.” The Council received funds through
the State of Illinois General Revenue Fund
appropriations and federal grants from the
National Endowment for the Arts.

SYNOPSIS

• (23-01) The Council’s internal controls
over its voucher processing function were
not operating effectively during the
examination period.
• (23-02) The Council did not perform
monthly reconciliations.
• (23-03) The Council did not draft or adopt
formal rules, including rules related to
grant procedures.

FINDINGS, CONCLUSIONS, AND RECOMMENDATIONS

VOUCHER PROCESSING INTERNAL CONTROLS NOT
OPERATING EFFECTIVELY

The Council’s internal controls over its
voucher processing function were not
operating effectively during the examination
period.

Due to our ability to rely upon the
processing integrity of the Enterprise
Resource Planning (ERP) System operated by
the Department of Innovation and Technology
(DoIT), we were able to limit our voucher
testing at the Council to determine whether
certain key attributes were properly entered
by the Council’s staff into the ERP.

Our testing noted 17 of 140 (12%) attributes
were not properly entered into the ERP
System. Therefore, the Council’s internal
controls over voucher processing were not
operating effectively.

Due to this condition, we qualified our
opinion because we determined the Council
had not complied, in all material respects,
with applicable laws and regulations,
including the State uniform accounting
system, in its financial and fiscal
operations.

Even give the limitations noted above, we
conducted an analysis of the Council’s
expenditures data for fiscal years 2022 and
2023 to determine compliance with the Code
(74 Ill. Admin. Code 900.70). We noted the
following noncompliance:

• The Council did not timely approve 5 of
1,526 (0.3%) Fiscal Year 2022 vouchers
processed, totaling $19,455. We noted these
late vouchers were between 13 and 19 days
late.
• The Council did not timely approve 50 of
3,014 (0.2%) Fiscal Year 2023 vouchers
processed, totaling $1,259,793. We noted
these late vouchers between 4 and 32 days
late.

We also noted 2 of 35 (6%) vouchers tested
totaling $7,094, did not have adequate
supporting documentation such as invoices
and billings.  (Finding 1, pages 8-9)

We recommended the Council design and
maintain internal controls to provide
assurance its data entry of key attributes
into ERP is complete and accurate.  Further,
we recommended the Council approve proper
bills within 30 days of receipt and maintain
adequate supporting documentation for
vouchers processed.

The Council agreed with the finding and
stated the Council has established
procedures to ensure voucher processing
functions are in place.

MONTHLY RECONCILIATIONS NOT PERFORMED

The Council did not perform monthly
reconciliations.

During our testing, we noted the following:
• Council did not perform monthly
reconciliations with the Comptroller’s
monthly Cash Report (SB05), Monthly
Appropriations Status Report (SB01), Agency
Contract Report (SC14) and Obligation
Activity Report (SC15) for Fiscal Year 2023
and 2022.
• Council did not provide explanation for
one of two (50%) differences amounting to
$3,000 in the SB01 Report during the lapse
period for Fiscal Year 2022.
• Council did not provide explanation for
all (100%) the monthly differences totaling
$1,025,618 in the SB05 Report for Fiscal
Year 2023.  (Finding 2, page 10-11)

We recommended the Council reconcile its
records to the Comptroller’s reports in
accordance with the SAMS manual.

The Council agreed with the finding.

FAILURE TO ADOPT FORMAL RULES FOR THE AGENCY
AND GRANT PROCEDURES

The Council did not draft or adopt formal
rules, including rules relating to grant
procedures.   The Council’s grant
expenditures were $49,080,214 and
$13,787,250 for Fiscal Years 2023 and 2022,
respectively. (Finding 3, pages 12-13)

We recommended the Council draft
organizational rules and grant procedures,
and work with the Joint Committee on
Administrative Rules for assistance with the
formal adoption process.

The Council agreed with the finding and
stated the Council will continue to seek
guidance from the Office of the Governor.

OTHER FINDINGS

The remaining findings pertain to census
data, cybersecurity, service providers, and
disaster contingency planning.  We will
review the Council’s progress towards the
implementation of our recommendations in our
next State compliance examination.

ACCOUNTANT’S OPINION

The accountants conducted a State compliance
examination of the Council for the two years
ended June 30, 2023, as required by the
Illinois State Auditing Act.  The
accountants qualified their report on State
compliance for Findings 2023-001 and
2023-002.  Except for the noncompliance
describe in these findings, the accountants
stated the Council complied, in all material
respects, with the requirements described in
the report.

This State 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

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