FINDINGS, CONCLUSIONS, AND
RECOMMENDATIONS
IMPROPER RECORDING OF ACCOUNTS PAYABLE
The Center did not properly record accounts payable.
The Center did not enter information from vendor invoices into the accounts payable
system until the Center was ready to pay the invoices. Thus, accounts payable were never
accurately recorded in the system. During testing of unrecorded liabilities we identified
four invoices, totaling $1,495, that were for services or goods received in Fiscal Year
1998 but were paid in Fiscal Year 1999.
Generally accepted accounting principles and the Department of Correction's
Administrative Directive 2.40.101 require recognition and recording of liabilities in the
period in which the services or goods are received. (Finding 98-1, page 11)
We recommended the Center enter invoices into the accounts payable system on a timely
basis. Center management agreed with the recommendation and stated that Business Office
staff will monitor input efforts to ensure compliance with the recommendation.
PURCHASED AUTOMOBILE NOT RECORDED
The Center did not record an automobile purchase within the Department's property
control system.
The Department's Administrative Directive 2.75.104 requires purchased property to be
tagged and entered into the Property Control System (PCS). However, Center staff did not
initially tag a new automobile or enter the appropriate data into the PCS. In addition,
when Center staff conducted their annual observation of property, they did not identify
the automobile as an untagged and unlisted item.
Because the Center did not enter the purchase into the system, and did not discover the
error in its annual observation of property, the Center's fixed asset reports submitted to
the Department's Central Office understated property by $14,900, which was the cost of the
automobile. (Finding 98-2, page 12)
We recommended the Center comply with Department administrative directives and properly
tag and record purchases of fixed assets. Center management agreed with the recommendation
noting that the automobile was subsequently tagged and recorded as a Center fixed asset.
UNTIMELY PROCESSING OF INVENTORY TRANSACTIONS
The Center did not properly maintain a perpetual record of the quantity and dollar
value of items in the Center's inventory.
Center staff did not promptly record inventory received or issued out of inventory.
Audit tests showed receipt of commodities in Fiscal Year 1998 were not recorded in the
Department's inventory system until, on average, 21 calendar days after receipt.
Meanwhile, commodities taken out of inventory in Fiscal Year 1998 were not deducted from
the inventory system until, on average, 32 days after distribution. In addition, there
were similar delays in recording receipt (average time of 18 days) and disbursement (29
days) of inventory in Fiscal Year 1997.
The lack of timely recording of inventory into the Department's computer system reduces
the Center's internal control over commodity expenditures as it limits the Center's
ability to safeguard and properly order commodities. (Finding 98-3, page 13)
We recommended the Center establish a schedule to timely record inventory transactions
into the Department's system. We also recommended the Center train additional personnel to
perform this function when responsible staff are absent. Center management accepted the
recommendation and noted that staff will be monitored to ensure timely recording of
inventory transactions.
LACK OF A GENERAL LEDGER
The Center did not maintain a General Ledger of accounting activities for the
period of November 1997 through June 30, 1998.
Department of Correction's Administrative Directive 2.26.104 requires Center accounting
staff to update the General Ledger each month. The Center did not perform this update nor
did it reconcile its General Ledger with reports submitted to the Department's Central
Office or the Comptroller's Office. As a result the Center inaccurately recorded the
assets held by the Center as of June 30, 1998. (Finding 98-4, page 15)
We recommended that the Center process, post, and reconcile the General Ledger by the
20th of the subsequent month to allow the accurate filing of reports to the
Department's Central Office and the Comptroller's Office. Center management concurred with
the recommendation.
AUDITORS' OPINION
We conducted a compliance audit of the Center as required by the Illinois State
Auditing Act. We also performed certain agreed-upon procedures with respect to the
accounting records of the Center to assist our single audit of the entire Department.
Financial statements for the Department will be presented in the single audit report.
____________________________________
WILLIAM G. HOLLAND, Auditor General
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SPECIAL ASSISTANT AUDITORS
Our special assistant auditors for this audit were Duffner & Company, P.C. |
