DEPARTMENT OF INSURANCE FINANCIAL AND COMPLIANCE AUDIT Summary of Findings:
WILLIAM G. HOLLAND Iles Park Plaza |
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DEPARTMENT OF INSURANCE
FINANCIAL AND COMPLIANCE AUDIT
For The Two Years Ended June 30, 1997
EXPENDITURE STATISTICS | FY 1997 |
FY 1996 |
FY 1995 |
|
$21,694,666 |
$20,379,829 |
$19,595,170 |
SELECTED ACTIVITY MEASURES | FY 1997 |
FY 1996 |
FY 1995 |
Financial/Corporate
Regulation
Consumer Services
Pension Division
|
607
923
80 |
616
|
677
92 |
AGENCY DIRECTOR(S) | |
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All major internal control systems were not reviewed as required by statute |
FINDINGS, CONCLUSIONS, AND RECOMMENDATIONS INTERNAL AUDIT The internal audit unit did not review all of the Department's major systems of internal control as required by the Fiscal Control and Internal Auditing Act (FCIAA). FCIAA (30 ILCS 10/2003) requires the internal audit program to include audits of major systems of internal accounting and administrative control and be conducted on a periodic basis so that all major systems are reviewed at least once every two years. Our review of the internal audit work for the two years ended in 1997 disclosed that 7 of the 11 major systems of internal control were audited during the audit period, 2 additional audits were completed, but the reports had not been released, and 2 audits were not yet started. This finding has been repeated since 1989. (Finding 2, pages 16-17) We recommended the Chief Internal Auditor continue to implement the internal audit plan for FY 97/98 in order to complete a review of all systems of internal control as required by the Fiscal Control and Internal Auditing Act. The Department responded that an internal audit program has been implemented which has shown significant improvement during the fourteen months since the current Chief Internal Auditor has been in the position. (For the previous Department responses, see Digest footnote #1.) OTHER FINDING The remaining finding is less significant, and the Department's response indicates it is addressing the condition. We will review progress toward implementing the recommendation in our next audit. AUDITORS' OPINION The auditors state the Department of Insurance's financial statements for the two years ended June 30, 1997 are fairly presented. ___________________________________ WGH:BAR:pp SPECIAL ASSISTANT AUDITORS Clifton Gunderson L.L.C. were our special assistant auditors for this audit. DIGEST FOOTNOTES #1 INTERNAL AUDIT - Previous Department Responses 1995: "The Department agrees with this recommendation. The Department has addressed the clearing up of this repeated finding by requesting in fiscal year 1997 an additional experienced staff position to direct the internal audit function. This new position will be responsible for the Department's internal audit operation and should be hired by July 1, 1996." 1993: "The audit plans for the next two fiscal years include limited audits for all of the Department's systems of internal accounting control and internal administrative control. The internal auditor will continue to devote efforts in improving management's annual evaluations of the Department's internal controls. Assistance will be provided by the electronic data processing section in conducting reviews of their internal controls. The word processing unit will be utilized, if required, to assist the internal auditor in the preparation of audit reports. This will enable the internal auditor to be more timely in the completion of audits. The internal auditor uses the annual evaluations, prior audits by the Auditor General, and prior internal audits in conducting all new audits. It is anticipated that all major and some minor internal controls will be reviewed for the next evaluation period." 1991: "The Audit Plan for Fiscal Year 92 and Fiscal Year 93 includes limited audits for all of the Department's internal accounting and internal administrative systems. The audits will be directed to the major areas of each system initially, and will be more specific in future years to include minor areas of each control system. Emphasis has been placed on the annual evaluations of the internal fiscal and administrative controls of the Department conducted by Division Management to show possible weaknesses, and strong points in the various areas. The Internal Auditor uses these reviews, prior audits by the Auditor General, and prior internal audits in conducting all new audits. It is anticipated that all major, and some minor internal controls will be reviewed every two years." 1989: "The Audit Plan for FY 1990
and FY 1991 was revised in November 1989, and approved by
the Director. This plan was revised to ensure that audits
of major systems of internal accounting and
administrative control are conducted on a periodic basis
so that all major systems are reviewed at least once
every 2 years. Review of the design of major new
electronic data processing systems and major
modifications of those systems provide for adequate audit
trails and accountability. Special audits of operations,
procedures, programs, electronic data processing systems
and activities will be performed as directed by the
Director." |