REPORT DIGEST DEPARTMENT OF FINANCIAL INSTITUTIONS FINANCIAL AND COMPLIANCE AUDIT For the Two Years Ended: June 30, 2002 Summary of Findings: Total this audit 4 Release Date: State of Illinois Office of the Auditor General WILLIAM G. HOLLAND AUDITOR GENERAL To obtain a copy of the Report contact: (217)782-6046 or TDD (217) 524-4646 |
SYNOPSIS
{Expenditures and Activity Measures are summarized on the next page.} |
ILLINOIS DEPARTMENT OF FINANCIAL INSTITUTIONS
FINANCIAL AND COMPLIANCE AUDIT
For The Two Years Ended June 30, 2002
EXPENDITURE AND CASH RECEIPT STATISTICS | FY 2002 |
FY 2001 |
FY 2000 |
||
|
$8,183,068 |
$8,310,487 |
$7,252,567 |
||
Personal Services % of Total Expenditures Average No. of Employees |
$4,933,400 |
$4,781,910 |
$4,323,931 |
||
Other Payroll Costs (FICA, Retirement) % of Total Expenditures |
$1,888,393 |
$1,734,650 |
$1,453,904 |
||
Contractual Services % of Total Expenditures |
$495,418 |
$601,500 |
$562,176 |
||
Electronic Data Processing % of Total Expenditures |
$356,751 |
$393,813 |
$325,562 |
||
All Other Items % of Total Expenditures |
$509,106 |
$798,614 |
$586,994 |
||
Cost of Property and Equipment | $837,609 |
$795,648 |
$799,342 |
||
Cash Receipts | $7,748,864 |
$9,001,084 |
$6,908,162 |
||
SELECTED ACTIVITY MEASURES (unaudited) | FY 2002 |
FY 2001 |
FY 2000 |
||
CONSUMER CREDIT DIVISION |
1,698 |
1,768 |
1,705 |
||
CURRENCY EXCHANGE DIVISION |
973 |
979 |
1,008 |
||
CREDIT UNION DIVISION |
433 |
449 |
458 |
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AGENCY DIRECTOR | |||||
During Audit Period: Sarah Vega |
The Department did not comply with the Fiscal Control and Internal Auditing Act
Ambulatory currency exchanges and out of state consumer installment loans and sales finance licensees not examined on an annual basis |
INTRODUCTION The Department of Financial Institutions is authorized by law to investigate, examine, license, and regulate financial institutions in the State of Illinois, including currency exchanges, credit unions, title insurance companies, foreign exchanges, and businesses making loans of $25,000 or less. FINDINGS, CONCLUSIONS, AND RECOMMENDATIONS NEED TO PERFORM INTERNAL AUDITS ON MAJOR SYSTEMS Internal audits were not conducted on any of the major systems of accounting and administrative controls at the Department during the audit period. The annual Internal Audit two-year plan was not prepared timely and only one internal audit was conducted during the audit period. From the one internal audit conducted, the workpapers indicated that there was a lack of documentation of planning, identification of preparer, supervision, and a review or referencing of the workpapers. In addition, the Department did not file the FCIAA Certification with the Auditor General for fiscal year 2001 in a timely manner. The Fiscal Control and Internal Auditing Act (Act) requires the Department to have (a) an approved, two-year audit plan; (b) audits of all major systems of internal accounting and administrative controls at least once every two years, and (c) written internal audit reports. In addition, the Act requires an annual certification on the systems of internal fiscal and administrative control be filed with the Auditor General by May 1 of each year. Department personnel attributed the lack of compliance to the lengthy vacancy in the position of chief internal auditor. In addition, the new Chief Internal Auditor was not free of operational duties. (Finding 1, pages 12 and 13) Department management accepted our recommendation to comply with the law regarding internal audit planning, performance, and reporting. EXAMS NOT PERFORMED ANNUALLY The Department did not examine any of the 320 fiscal year 2001 or 340 fiscal year 2002 ambulatory currency exchanges that were active during the audit period. Further, the Department did not examine 180 of 189 (95%) consumer installment loan and sales finance licensees located out-of-state that were active during fiscal year 2002. The Currency Exchange Act requires the Department to investigate the currency exchange business of any licensee at least once in each year. In addition, the Consumer Installment Loan Act and the Sales Finance Agency Act requires the Department to conduct an annual examination of each consumer installment loan and sales finance licensee located out of state. Department personnel stated that the exams were not performed due to the Department noting few problems with these examinations during the past 10 years. As a result of few problems, the Department chose to utilize examiners on more critical examinations. (Finding 4, pages 17 and 18) Department management accepted our recommendation to comply with the law regarding annual examinations of all ambulatory currency exchanges, out-of-state consumer installment loan, and sales finance licensees. According to their response, corrective action will be taken by hiring additional personnel. OTHER FINDINGS The remaining findings and recommendations were less significant and are reportedly being given attention by Department management. We will review progress toward implementation of our recommendations during our next audit. Mr. George Preski, Chief Internal Auditor, provided the Department's responses. AUDITORS OPINION Our auditors state that the Departments fiscal year 2002 financial statements for its nonshared and locally held funds are fairly presented in all material respects.
____________________________________ WILLIAM G. HOLLAND, Auditor General WGH:TLD:pp SPECIAL ASSISTANT AUDITORS The accounting firm of Sikich Gardner & Co, LLP served as our special assistant auditors for the engagement. |