Illinois Office of Banks and Real Estate 2002 Audit

REPORT DIGEST

OFFICE OF BANKS AND REAL ESTATE

COMPLIANCE AUDIT

For the Two Years Ended:

June 30, 2002

Summary of Findings:

Total this audit 6
Total last audit 7
Repeated from last audit 2

Release Date:
March 11, 2003

State of Illinois

Office of the Auditor General

WILLIAM G. HOLLAND

AUDITOR GENERAL

To obtain a copy of the Report contact:
Office of the Auditor General
Attn: Records Manager
Iles Park Plaza
740 E. Ash Street
Springfield, IL 62703

(217)782-6046 or TDD (217) 524-4646

This Report Digest is also available on
the worldwide web at
http://www.state.il.us/auditor

SYNOPSIS

The Agency did not perform audits of major systems of internal accounting and administrative controls.

The Agency did not annually ensure that vehicle operators were licensed and insured.

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

OFFICE OF BANKS AND REAL ESTATE
COMPLIANCE AUDIT
For The Two Year Ending June 30, 2002

EXPENDITURE STATISTICS		FY 02		FY 01		FY 00
Total Expenditures (All Funds)		$28,571,299		$27,039,926		$26,173,653
OPERATIONS TOTAL % of Total Expenditures		$28,571,299 100.0%		$26,993,915 99.8%		$25,925,794 99.0%
Personal Services % of Total Expenditures Average Number of Employees		$16,066,124 56.2% 274		$15,081,337 55.9% 263		$15,017,159 57.9% 280
Other Payroll Costs (FICA, Retirement) % of Total Expenditures		$5,930,019 20.8%		$5,251,758 19.5%		$4,868,732 18.8%
Contractual Services % of Total Expenditures		$2,794,570 9.8%		$2,707,650 10.0%		$2,469,229 9.5%
Electronic Data Processing % of Total Expenditures		$1,434,607 5.0%		$1,791,138 6.6%		$1,372,160 5.3%
Travel % of Total Expenditures		$1,170,155 4.1%		$1,059,438 3.9%		$1,127,978 4.4%
Other Expenditures % of Total Expenditures		$1,175,824 4.1%		$1,102,594 4.1%		$1,070,536 4.1%
NonAppropriated/Locally Held Funds Total % of Total Expenditures		$0 0%		$46,011 .2%		$247,859 1.0%
Cost of Property and Equipment		$5,340,317		$4,871,293		$4,295,684
SELECTED ACTIVITY MEASURES (unaudited)	June 30, 2002		June 30, 2001		June 30, 2000
Trust Companies, Trust Departments of State Banks, Savings and Loans, and Foreign Corporate Fiduciaries Regulated State Chartered Banks Regulated Foreign Banking Offices Regulated Financial Information Systems Regulated Pawnshops Regulated State-Chartered Savings and Loan Associations, Savings Banks, and Service Corporations Regulated Mortgage Banking Licenses in Force	305 509 18 566 223 96 1,545		329 517 25 584 227 101 1,494		336 519 28 596 221 94 1,551
	FY 2002		FY 2001		FY 2000
Real Estate Initial Applications Received Renewals Issued Cases Opened Real Estate Appraisers Applications Received Renewals Issued Auctioneers Initial Applications Received (law effective 1/1/00) Renewals issued	7,967 28,548 1,057 1,821 4,639 177 1,417		5,190 34,953 763 374 38 487 0		7,799 29,556 1,421 1,488 589 1,333 0

AGENCY HEAD

During Audit Period: William Darr
Currently: William Darr

Internal audits were not performed on major systems

FINDINGS, CONCLUSIONS, AND RECOMMENDATIONS

NONCOMPLIANCE WITH THE FISCAL CONTROL AND INTERNAL AUDITING ACT

The Agency did not perform audits of major systems of internal accounting and administrative controls at least once every two years. Also, the Chief Internal Auditor did not submit to the Chief Executive Officer a written report detailing how the audit plan for FY 02 was carried out. The Internal Audit Department should have tested the following areas as submitted in the two year audit plan: Personnel/payroll, fixed assets/property control, travel, telecommunications, operations of auto, contractual services, printing, revenues/receivables, petty cash/local funds, GAAP reporting, and lapse period expenditures. (Finding 2, pages 11-12)

We recommended the Chief Internal Auditor ensure compliance with the Fiscal Control and Internal Auditing Act.

Agency officials concurred with our recommendation and stated they are assessing staffing needs to develop and implement plans to meet the requirements of the Act by June 30, 2004.

NEED TO ANNUALLY ENSURE VEHICLE OPERATORS ARE LICENSED AND INSURED

The Agency did not annually obtain current evidence of certification of automobile liability insurance and valid Illinois driver’s license from every employee authorized to operate a vehicle for State purposes as required by the Illinois Vehicle Code (625 ILCS 5/10-101(b)). A signed certification of automobile liability insurance and valid Illinois driver’s license form was only being completed once after the employee had been hired. (Finding 4, page 14)

We recommended the Agency obtain annually a completed and signed certification of automobile liability insurance and valid Illinois driver’s license form from every employee authorized to operate a vehicle for State business purposes as required by statute.

The Agency concurred with the recommendation and indicated they will implement procedures to ensure they comply with statute.

OTHER FINDINGS

The remaining findings are less significant and are reportedly being given attention by Agency management. We will review progress toward implementation of our recommendations during our next audit.

Mr. William Darr, Commissioner, provided responses to our recommendations.

AUDITORS’ OPINION

We conducted a compliance audit of the Commission as required by the Illinois State Auditing Act. We have not audited any financial statements of the Commission for the purpose of expressing an opinion because the agency does not, nor is it required to, prepare financial statements.

____________________________________

WILLIAM G. HOLLAND, Auditor General

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SPECIAL ASSISTANT AUDITORS
Clifton Gunderson LLP were our special assistant auditors for this audit.