INTRODUCTION
The State Fiscal Year 1997 financial statements and
accompanying notes will be the last statements prepared
for the Illinois Department of Rehabilitation Services -
Illinois School for the Visually Impaired (School). In
July, 1996, Governor Jim Edgar signed into law House Bill
2632 merging most of Illinois' human services functions
into a new Department of Human Services (DHS) effective
July 1, 1997. The Department of Rehabilitation Services
transferred all of its rights, powers, duties and
functions to the DHS on July 1, 1997 as prescribed by
Public Act 89-507.
FINDINGS, CONCLUSIONS AND
RECOMMENDATIONS
INADEQUATE ADMINISTRATION OF GRANT PROGRAM
The School did not adequately administer its School
Lunch and Breakfast Programs (Program). We noted the
following deficiencies:
- The School did not correctly deposit Program
reimbursements. The federal government and the
State Board of Education reimburse the School, on
a per diem basis, for a portion of the cost of
the Program. The School deposited all
reimbursements received during the audit period,
totaling $39,481, into the Rehabilitation
Services Elementary and Secondary Education Act
Fund (Fund 798). However, Program expenditures
were made from Fund 798 and the General Revenue
Fund. Program expenditures from Fund 798 were
only $32,216, or $7,265 less than total
reimbursements deposited. The majority of the
expenditures for the Program were made from the
General Revenue Fund for food commodities.
Federal regulations require all program
reimbursements be used only for the operation or
improvement of the food services.
- The School charged 100% of the Program
Administrator's salary as a cost of the Program.
According to the employee's position description,
approximately 16% of the employee's performed
duties were not related to the Program. As a
consequence, approximately $4,204 of excess cost
was accounted for as a Program expenditure.
(Finding 1, page 10)
We recommended the School and the Department enhance
their communication pertaining to Program requirements to
bring them into compliance with Program regulations.
The Agency responded it will deposit Program
reimbursements into the fund that originally incurred the
cost and will appropriately allocate future salary
expenses for Program administration based on the actual
percentage of time spent on Program activities.
INADEQUATE ACCOUNTS RECEIVABLE REPORTING
The School did not have adequate controls over
accounts receivable reporting. We noted the following
control deficiencies:
- Quarterly accounts receivable reports were not
filed with the Office of the Comptroller. The
School's accounts receivable totaled $13,356.
- An aging schedule of accounts receivable was not
maintained and quarterly aging reports were not
filed with the Office of the Comptroller.
- Collection attempts for amounts due from students
were not formally documented. The School did not
document attempts to collect $1,178 owed from the
students. (Finding 2, page 11)
We recommended the School comply with the
Comptroller's Uniform Statewide Accounting System (CUSAS)
and file the appropriate accounts receivable reports with
the Office of the Comptroller. We further recommended the
School formally document its collection attempts.
The Agency responded that procedures have been
established and they are now reporting to the Comptroller
in accordance with CUSAS. In addition, procedures for
collection of amounts due from students will be formally
documented.
NUMEROUS SMALL VOUCHERS WERE PROCESSED THROUGH THE
STATE DISBURSEMENT SYSTEM
The School processed 588 small dollar vouchers for
payment ranging from $1.50 to $49.25 and totaling
$14,629. Processing vouchers for less than $50 is
generally more efficient using a petty cash system than
through the State disbursement system. (Finding 3, page
13)
We recommended the School establish and maintain a
petty cash fund account to pay for expenditures of less
than $50 and implement appropriate controls over the
fund.
The Agency responded that a petty cash fund will be
established and maintained to cover expenditures under
$50. In addition, appropriate controls, including
adequate segregation of duties, will be implemented.
INADEQUATE CONTROLS OVER CASH RECEIPTS AND REFUNDS
The School did not have adequate controls over cash
receipts and refunds. We noted the following
deficiencies:
- A detailed cash receipts ledger was not
maintained for receipts and refunds deposited
into the State Treasury.
- Receipts deposited into Locally Held Fund
accounts were not immediately recorded in a
receipts ledger.
- Checks were not immediately restrictively
endorsed.
- Cash receipts were not deposited timely in the
State Treasury.
- Reconciliations of cash receipts to deposits in
the State Treasury were not adequate.
- Segregation of duties over Locally Held Fund cash
receipts was not adequate.
We recommended the School strengthen its controls over
cash receipts and refunds by complying with the State
Officers and Employees Money Disposition Act. We also
recommended the School establish an adequate segregation
of duties over Locally Held Fund receipts.
The Agency responded it will set up a log to record
all cash receipts deposited into the State Treasury. Cash
receipts for deposit into Locally Held Funds will be
immediately recorded in the cash receipts ledger. The
School will work with the Department to obtain an
endorsement stamp, and will begin immediately endorsing
checks. The School will review procedures with the
responsible employees to ensure receipts are deposited
timely and adequate reconciliations are performed. The
School also agreed to make the necessary changes in order
to achieve a proper segregation of duties.
OTHER FINDINGS
The remaining findings are less significant and are
being given appropriate attention by the School. We will
review progress toward implementing these recommendations
in our next audit. Responses to the recommendations were
provided by Mr. James Donkin, Chief Internal Auditor for
the Department of Human Services.
AUDITORS' OPINION
We have stated the financial statements for the
Locally Held Funds of the Illinois Department of
Rehabilitation Services - Illinois School for the
Visually Impaired as of and for the year ended June 30,
1997 are fairly presented in all material respects.
____________________________________
WILLIAM G. HOLLAND, Auditor General
WGH:GSR:pp
AUDITORS ASSIGNED
This audit was performed by the Office of the Auditor
General's staff.
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