REPORT DIGEST

DEPARTMENT OF COMMERCE AND ECONOMIC
OPPORTUNITY

STATE COMPLIANCE EXAMINATION
FOR THE TWO YEARS ENDED JUNE 30, 2022

Release Date:  April 18, 2023

FINDINGS THIS AUDIT: 18

CATEGORY:  NEW -- REPEAT -- TOTAL
Category 1:  0 -- 2 -- 2
Category 2:  3 -- 13 -- 16
Category 3:  0 -- 0 -- 0
TOTAL:  3 -- 15 -- 18

FINDINGS LAST AUDIT: 19

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

SYNOPSIS

• (22-4) The Department did not comply
with various statutory mandates.
• (22-6) The Department’s
organizational chart contains
excessive vacancies and no longer
reflects a usable representation of
the organizational structure of the
Department.
• (22-15) The Department failed to
implement adequate internal controls
over its service providers.
• (22-16) The Department failed to
implement internal controls over
changes to its applications and data.

FINDINGS, CONCLUSIONS, AND
RECOMMENDATIONS

NONCOMPLIANCE WITH STATUTORY MANDATES

The Department of Commerce and
Economic Opportunity (Department) did
not comply with various statutory
mandates.

A few issues we noted during our
testing of statutory mandates follows:

• The Department did not use its
Office of Urban Assistance to plan and
coordinate existing State programs
designed to aid and stimulate the
economic growth of depressed urban
areas.

• The Department’s official website
did not contain a comprehensive list
of State, local, and federal economic
benefits available to businesses in
each of the State’s counties and
municipalities.

• The Department did not create the
Clean Water Workforce Pipeline Program
to provide grants and other financial
assistance to prepare and support
individuals for career in water
infrastructure.

• The Department did not create the
economic plan to assist businesses and
municipalities located geographically
close to bordering states as required
by the Illinois Home Grown Business
Opportunity Act. (Finding 4, pages
19-24) This finding has been reported
since 2012.

We recommended the Department seek or
allocate resources to comply with
statutory requirements or seek a
legislative remedy as appropriate.

The Department accepted our
recommendation.

EXCESSIVE VACANCIES ON THE
ORGANIZATIONAL CHART

The Department’s organizational chart
contains excessive vacancies and no
longer reflects a usable
representation of the organizational
structure of the Department.

During the examination, we obtained
the Department’s most recently
compiled organizational chart.  For
the two years ended June 30, 2022, the
Department’s organizational chart
depicts 772 positions, of which 194
were filled and 578 were vacant (75%).

The Department’s headcount, going back
approximately 20 years, was highest in
Fiscal Year 2004 at 519 employees.
During inquiry with Department
management during our examination,
Department management stated it does
not view “vacant” positions on the
organizational chart as needed to be
filled in a specific time frame.
Rather, vacancies on the
organizational chart are placeholders
for positions that can be filled and
are part of the approved headcount.
(Finding 6, pages 27-29)

We recommended the Department annually
evaluate and update its organizational
chart to reflect the true reporting
lines and programs of the Department.

The Department disagreed with our
recommendation and stated that it
believed the criteria applied to the
Department was a best practice for
non-governmental organization.  The
Department stated that governmental
agencies do not operate in the same
manner as non-governmental
organizations due to the levels of
bureaucracy required.  The Department
stated that in order to be agile and
swiftly responsive to new or changing
legislation, the Department
strategically maintains positions in
the organization chart because lead
times for establishing positions have
historically been very long.  The
Department stated that lead times for
many of its position types have
recently been reduced, and therefore
the Department began the process to
eliminate many of the vacant positions
on the organization chart.

Accountants commented that an
organizational chart should be a
pictorial representation of an
agency’s lines of authority and
communication to assist management
with managing the organization and
only include vacancies expected to be
filled within a reasonable period of
time. The Department’s organizational
chart contains so many vacancies that
its usefulness as a management tool
has been significantly degraded.

FAILURE TO REVIEW EXTERNAL SERVICE
PROVIDERS’ INTERNAL CONTROLS

The Department failed to implement
adequate internal controls over its
service providers.

We requested the Department provide
the population of service providers
utilized to determine if it had
reviewed the internal controls over
its service providers.  However, the
Department was unable to provide such
a listing.  As a result, we were
unable to conduct testing over the
Department’s control of its service
providers, and we were unable to
conclude the Department’s population
records were sufficiently precise and
detailed under the Professional
Standards promulgated by the American
Institute of Certified Public
Accountants (AT-C § 205.36).  (Finding
15, pages 45-46)

We recommended the Department
strengthen its controls to maintain a
listing of service providers.

The Department accepted our
recommendation and stated it was
looking at ways to obtain the
expertise necessary to comply.

CONTROLS OVER CHANGE MANAGEMENT
PROCEDURES NEED IMPROVEMENT

The Department failed to implement
internal controls over changes to its
applications and data.

During the examination, we noted the
Department had not established change
management policies and procedures to
control changes to its applications
and data.  Additionally, the
Department had not established a
system development standard to ensure
new application developments met the
Department’s requirements.

In addition, for the 37 changes
tested, we were not provided with
documentation supporting the approval
of the changes for 37 (100%) and the
same individuals who tested 24 (65%)
of the changes moved the changes into
the production environment.  (Finding
16, pages 47-48)

We recommended the Department develop
policies and procedures documenting
internal controls over changes.
Further, we recommended the Department
improve its segregation of duties over
change controls.

The Department accepted our
recommendation and stated it was
looking at ways to obtain the
expertise necessary to comply.

OTHER FINDINGS

The remaining findings are reportedly
being given attention by Department
personnel.  We will review the
Department’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
Department for the two years ended
June 30, 2022, as required by the
Illinois State Auditing Act.  The
accountants qualified their report on
State compliance for Findings 2022-012
and 2022-015.  Except for the
noncompliance described in these
findings, the accountants stated the
Department complied, in all material
respects, with the requirements
described in the report.

This State compliance examination was
conducted by Sikich LLP.

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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