REPORT DIGEST

DEPARTMENT OF NATURAL RESOURCES
SCHEDULE OF CAPITAL ASSETS

FINANCIAL AUDIT
FOR THE YEAR ENDED JUNE 30, 2017

Release Date:  January 31, 2019

FINDINGS THIS AUDIT:  1

CATEGORY:  NEW -- REPEAT -- TOTAL
Category 1:  0 -- 0 -- 0
Category 2:  1 -- 0 -- 1
Category 3:  0 -- 0 -- 0
TOTAL:  1 -- 0 -- 1

FINDINGS LAST AUDIT: 0

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

INTRODUCTION

This digest covers the financial audit of
the Illinois Department of Natural
Resources’ Schedule of Capital Assets for
the year ended June 30, 2018.  The
Department’s compliance examination
covering the two years ended June 30, 2018
will be issued in a separate report at a
later date.

SYNOPSIS

• (18-01) The Department did not have
adequate control and oversight over the
valuation of donated intangible assets and
the responsibility to value these assets
was not clearly assigned to a responsible
individual or division.


FINDINGS, CONCLUSIONS, AND RECOMMENDATIONS

INADEQUATE CONTROL AND OVERSIGHT OVER
VALUATION OF INTANGIBLES

The Department of Natural Resources
(Department) did not have adequate control
and oversight over the valuation of donated
intangible assets and the responsibility to
value these assets was not clearly assigned
to a responsible individual or division.

During testing of capital asset additions
during Fiscal Year 2018, we noted the
Department received donated conservation
easements and dedicated lands for
preservation in perpetuity totaling
$7,033,339 from local government units,
private individuals, and not-for-profit
organizations.  The Department then
calculated the value of these donated
easements and dedicated lands by using land
sales information of various counties and
an index factor to estimate the current
land values, and applied a certain
percentage for the encumbrance.  In our
review of the calculation, we noted the
Department did not ensure the Office/
Division performing the calculation used
updated data.  The land sales information
used and the index factor were from 2013
and were not updated using recent sales
data.  (Finding 1, pages 16-17)

We recommended Department management
clearly identify and assign the
responsibility for valuing these assets to
the responsible Office/Division.  We also
recommended the Department periodically
revisit these calculations to ensure
updated sales data and index factors are
used in performing the valuations.

The Department agreed with the
recommendation and stated they have
identified the Office of Realty and
Environmental Planning as being responsible
for valuing these types of assets and they
will periodically revisit the calculations
to ensure updated sales data and index
factors are used in performing the
valuations.

AUDITOR’S OPINION

The auditors stated the Department’s
Schedule of Capital Assets as of June 30,
2018, is fairly stated in all material
respects.

This financial audit was conducted by E. C.
Ortiz and Co., 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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