REPORT DIGEST

OFFICE OF THE COMPTROLLER
FISCAL OFFICER RESPONSIBILITIES

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

Summary of Findings:

Release Date:
May 13, 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 Office of the Comptroller has needed to make significant upgrades to the CUSAS State accounting system to reduce certain inefficiencies. On July 1, 1997, the Comptroller implemented a new Statewide Accounting Management System (SAMS). The Comptroller's Office feels the SAMS system will resolve the problems previously reported.

• The Office of the Comptroller did not transfer approximately $2.4 million from the Financial Institutions Fund to the General Revenue Fund as required by statute.
  
  
  
  
  
  
  
  

{Financial Information and Activity Measures are summarized on the next page.}

Fiscal Year 1997

Fiscal Year 1996

Cash Balance

Budgetary Balance*

Cash Balance

Budgetary Balance*

$ 806,213
650,671
371
1,213,146
135,017
422,953
128,818
63,344
221,928
$3,642,461


$ 18,906
1,024,963
$1,043,869

$4,686,330

$ 44,716
544,930
145
412,256
128,534
422,953
(82,418)
33,573
114,286
$1,618,975


$ 17,130
729,801
$746,931

$2,365,906

$425,653
701,359
52,131
993,553
196,922
392,353
115,103
43,602
146,350
$3,067,026


$ 17,524
943,108
$960,632

$4,027,658

$(292,379)
578,141
1,386
560,332
196,881
376,290
(134,249)
6,873
82,316
$1,375,591


$ 16,236
716,616
$732,852

$2,108,443

* Budgetary Balance represents the balances remaining after reduction of Cash Balance at June 30 by expenditures made during the lapse period.

YEAR ENDED
JUNE 30, 1997

YEAR ENDED
JUNE 30, 1996

$40,726,829
$40,469,367
$257,462

$40,264,234
$39,742,613
$521,621

Comptroller's Office implemented new Statewide Accounting Management System on July 1, 1997

$2,440,487 should have been transferred from the Financial Institutions Fund to the General Revenue Fund

INTRODUCTION

Our 1997 audit of the Comptroller's Fiscal Officer Responsibilities is presented in two parts. The compliance part, with our findings and recommendations, is presented in one document. The financial part, with our opinion on the budgetary financial statements, is presented in the State Comptroller's "Illinois Traditional Budgetary Financial Report." Our opinion on the Statewide financial statements prepared in accordance with generally accepted accounting principles is contained in the separately issued Comprehensive Annual Financial Report.

FINDINGS, CONCLUSIONS, AND RECOMMENDATIONS

STATEWIDE ACCOUNTING SYSTEM

As of Spring 1997, the old Comptroller's Uniform Statewide Accounting System (CUSAS) was inadequate to meet the needs and responsibilities of the Comptroller's Office. CUSAS was developed in 1974, and we had reported it was in need of revisions for many years. The CUSAS accounting system design and reporting capabilities and its computer software and telecommunications environment were over twenty years old. They were obsolete and inefficient, and had, for a number of years, been incapable of responding to all the accounting needs of State government. The Comptroller had acknowledged that the deficiencies and risks of CUSAS constituted a material weakness in internal fiscal and administrative controls. We had recommended enhancements to CUSAS since 1975. Due to the Comptroller's Office's accounting responsibilities, the greatest risk posed was that a physical breakdown of the system would have suspended the Office's ability to perform its fiscal duties. (Finding 1, page 15)

We recommended the Office continue its efforts to modify or update the old Statewide accounting system to correct its reported material weaknesses and reduce the old system's technological deficiencies so Statewide fiscal operations may be improved. On July 1, 1997, the Comptroller's Office implemented the new Statewide Accounting Management System (SAMS).

The Comptroller's Office stated that the new SAMS system takes advantage of the latest technology and has replaced the antiquated CUSAS system. They feel the new system will resolve this audit finding that has recurred since 1975.

NONCOMPLIANCE WITH THE STATE FINANCE ACT

The Office of the Comptroller failed to transfer the excess balance in the Financial Institutions Fund to the General Revenue Fund as required by statute.

The State Finance Act requires the Office to compare the balance in the Financial Institutions Fund at the end of the calendar year with the amount appropriated from the Fund for the fiscal year beginning on July 1 of that calendar year. If the balance in the fund exceeds the amount appropriated the excess is to be transferred to the General Revenue Fund.

The balance in the Financial Institution Fund at December 31, 1996 was $4,806,587. The amount appropriated to pay expenses from the fund for fiscal year 1997 was $2,366,100. The excess $2,440,487 should have been transferred from the Financial Institutions Fund to the General Revenue Fund.

Office personnel indicated that as a result of human error the calculation to transfer the funds was not scheduled to be performed on an annual basis. Failure to perform the required transfer to the General Revenue Fund reduces the cash available to the State's general funds. (Finding 2, page 19)

We recommended the Office compare the balance in the Financial Institutions Fund to the amount appropriated on an annual basis and make any transfer needed. The Comptroller agreed with our recommendation. The calendar year 1996 transfer was made on October 2, 1997 and the calendar year 1997 transfer was made on January 15, 1998.

Mr. Michael Moody, Director of Internal Audits, provided the responses to our findings and recommendations.

AUDITORS' OPINIONS

Our auditors state the traditional budgetary financial statements present fairly the fund balances and receipts and expenditures at June 30, 1997, relating to the Fiscal Officer Responsibilities of the Comptroller.

In addition, the Comptroller has issued a separate Comprehensive Annual Financial Report which has additional details on the financial activities of State agencies and funds. Our auditors report that the financial statements in the Comprehensive Annual Financial Report for the year ended June 30, 1997 are fairly presented.

_____________________________________
WILLIAM G. HOLLAND, Auditor General

WGH:RPU:pp

SPECIAL ASSISTANT AUDITORS

Pandolfi, Topolski, Weiss & Co., Ltd. were our special assistant auditors for this audit.