REPORT DIGEST ENVIRONMENTAL PROTECTION TRUST FUND COMMISSION COMPLIANCE EXAMINATION FOR THE TWO YEARS ENDED JUNE 30, 2018 Release Date: July 2, 2019 FINDINGS THIS AUDIT: 2 CATEGORY: NEW -- REPEAT -- TOTAL Category 1: 0 -- 0 -- 0 Category 2: 0 -- 2 -- 2 Category 3: 0 -- 0 -- 0 TOTAL: 0 -- 2 -- 2 FINDINGS LAST AUDIT: 2 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 SYNOPSIS • (18-01) The Commission did not have adequate controls over the administration of its accounts receivable. • (18-02) The Commission did not have adequate controls over its receipts. FINDINGS, CONCLUSIONS, AND RECOMMENDATIONS INADEQUATE CONTROLS OVER ACCOUNTS RECEIVABLE The Environmental Protection Trust Fund Commission (Commission) did not have adequate controls over the administration of its accounts receivable. The Commission’s accounts receivable balance was approximately $13.855 million, of which approximately $13.074 million had been due over one year. The Illinois Environmental Protection Agency (Agency) handles all financial activities for the Commission. During testing, the auditors noted the following: • Twenty-four of 40 (60%) accounts receivable tested, totaling $2.009 million, were over 90 days past due and had not been referred to the Comptroller’s Offset System or the Department of Revenue’s Debt Collection Bureau. In addition, 15 of 40 (38%) accounts tested, totaling $1.923 million, were over one year old and were not referred to the Attorney General for write off. • Two of 40 (5%) accounts receivable tested, totaling $16,750, were not established timely. The time elapsed from the due date to the set-up of the receivables ranged from 97 to 215 days. • The Accounts Receivable Management Policy and Guidance (Policy) document was not updated to reflect current operations and practices. The Policy required all delinquent debt that is at least 90 days past due and in the amount of $10 or more to be referred to a private collection firm. The auditors noted that the Commission does not use a private collection firm for collecting delinquent accounts receivable. (Finding 1, pages 7-9) This finding has been repeated since 2010. We recommended the Commission pursue all reasonable and appropriate procedures to collect on outstanding debt as required by State laws and regulations. We also recommended the Commission ensure its accounts receivable balances are promptly reported. We further recommended the Commission periodically review and update its written policies to reflect current operations. Commission officials agreed with the recommendation and stated Agency staff continues to improve collections with the focus on current billings. (For the previous Commission response, see Digest Footnote #1.) INADEQUATE CONTROLS OVER RECEIPTS The Commission did not have adequate controls over its receipts. The Illinois Environmental Protection Agency (Agency) handles all financial activities for the Commission. During testing, the auditors noted five of 40 (13%) receipts tested, totaling $409,000, were deposited from one to six days late. (Finding 2, page 10) This finding was first reported in 2014. We recommended the Commission strengthen its receipt processing controls to ensure receipts are timely deposited. Commission officials agreed with the recommendation. (For the previous Commission response, see Digest Footnote #2.) ACCOUNTANT’S OPINION The accountants conducted a compliance examination of the Commission for the two years ended June 30, 2018, as required by the Illinois State Auditing Act. The accountants stated the Commission complied, in all material respects, with the requirements described in the report. This compliance examination was conducted by E.C. Ortiz & 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 FJM:PH DIGEST FOOTNOTES #1 - INADEQUATE CONTROLS OVER ACCOUNTS RECEIVABLE 2016: Agree. Agency staff continues to improve collections with the main focus on current billings. The Agency is working with the Legal department to overcome some of the challenges faced with placing debt into the Comptroller’s Offset System. Accounts receivable balances have been reviewed for accuracy before conversion to the new ERP accounting system. #2 – INADEQUATE CONTROLS OVER RECEIPTS 2016: The Agency will notify staff to fully document receipt date on the support.