REPORT DIGEST

BUREAU OF THE BUDGET

FINANCIAL AND COMPLIANCE AUDIT
For the Two Years Ended:
June 30, 1997

Summary of Findings:

Release Date:
March 24, 1998

State of Illinois
Office of the Auditor General

WILLIAM G. HOLLAND
AUDITOR GENERAL

Iles Park Plaza
740 E. Ash Street
Springfield, IL 62703
(217) 782-6046

SYNOPSIS

• The Bureau of the Budget did not have sufficient controls over the preparation process of the Federal Cash Management Improvement Act Annual Report.

{Expenditures and Activity Measures are summarized on the reverse page.}

FY 1997

FY 1996

FY 1995

• Total Expenditures (All Funds)
  
  Personal Services
  % of Total Expenditures
  Average No. of Employees
  
  Other Payroll Costs (FICA, Retirement)
  % of Total Expenditures
  
  General and Administrative Expenditures
  % of Total Expenditures
  
  Expenditures necessary to the sale of State bonds
  % of Total Expenditures
  
  Payments pursuant to Build Illinois Bond Act
  % of Total Expenditures
  
  Interest Liability on Federal Funds
  % of Total Expenditures
  
  
• Cost of Property and Equipment
  

$205,228,980

$1,969,880
.96%
53

$299,957
.15%

$182,436
.09%


$437,382
.21%

$201,340,663
98.10%

$998,662
.49%


$463,763

$197,768,995

$1,956,821
.99%
54

$292,471
.15%

$173,776
.09%


$441,803
.22%

$193,523,888
97.85%

$1,380,236
.70%


$466,853

$190,919,180

$1,827,491
.96%
51

$262,212
.14%

$215,286
.11%


$609,615
.32%

$188,004,576
98.47%

$0
0%


$486,754

During Audit Period: Ms. Joan Walters

Currently: Mr. Stephen Schnorf

Formal procedures for the CMIA direct costs are not in place

$28,000 of Federal interest liability was not claimed for FY95

$38,000 of State interest liability was not reported for FY96

FINDINGS, CONCLUSIONS, AND RECOMMENDATIONS

INSUFFICIENT CONTROLS OVER CASH MANAGEMENT IMPROVEMENT ACT ANNUAL REPORT PREPARATION

The Bureau of the Budget has insufficient controls over the preparation process of the Cash Management Improvement Act (CMIA) Annual Report. Also, formal procedures for the calculation and documentation of the State's claim for direct costs are not in place.

The CMIA and 31 CFR require the State to submit a CMIA Annual Report to the U.S. Treasury by December 31 of each year for the State's most recently completed fiscal year. The report summarizes by program the interest due to or owed by the State. In addition, the State is permitted to bill the U.S. Treasury for direct costs up to $50,000 annually for implementation of the CMIA.

During audit testing, it was noted approximately $28,000 of Federal interest liability due to the State was not claimed on the FY95 Annual Report. Also, approximately $38,000 of State interest liability due to the U.S. Treasury was not reported on the FY96 Annual Report. In addition, the direct costs of $38,000 and $25,000 for FY95 and FY96, respectively, were not supported by adequate documentation. (Finding 1, pages 10-11)

We recommended the Bureau develop procedures for the review of the CMIA Annual Report prior to its submission to the U.S. Treasury. We also recommended the Bureau develop formal procedures for the calculation and documentation of claims for direct costs.

The Bureau concurred with the recommendations and stated that a procedure to review the CMIA Annual Report is in place. The net omission of $10,000 in additional State interest liability will be reported as a prior year liability in the 1997 CMIA Annual Report.

AUDITORS' OPINION

Our auditors state the Bureau's financial statements for the two years ended June 30, 1997 are fairly presented.

____________________________________
WILLIAM G. HOLLAND, Auditor General

WGH:BAR:pp

SPECIAL ASSISTANT AUDITORS

Geo. S. Olive & Co. LLC were our special assistant auditors for this audit.