ILLINOIS
FINANCE AUTHORITY
COMPLIANCE EXAMINATION
(In Accordance with the Single Audit Act and OMB Circular A-133)
YEAR ENDED JUNE 30, 2007
|
FINANCIAL INFORMATION |
FY2007 |
FY2006 |
|
·
Total Revenues......................................... |
$14,739,091 |
$16,050,562 |
|
Administrative Service Fees........................
% of
Revenues........................................ |
$6,632,365
45.0% |
$4,370,470
27.2% |
|
Interest
on Loans........................................
% of
Revenues...................................... |
$3,666,594
24.9% |
$3,591,255
22.4% |
|
Interest
and investment income....................
% of
Revenues........................................ |
$2,793,615
19.0% |
$2,600,275
16.2% |
|
Annual
fees................................................
% of
Revenues........................................ |
$1,154,011
7.8% |
$1,299,441
8.1% |
|
Appropriations from the State of Illinois........
% of
Revenues........................................ |
-
0.0% |
$3,800,000
23.7% |
|
Other
Revenues.........................................
% of
Revenues........................................ |
$492,506
3.3% |
$389,121
2.4% |
|
·
Total Expenses.......................................... |
$10,749,742 |
$9,086,808 |
|
Employee
Related Expenses........................
% of
Expenses......................................... |
$3,638,102
33.9% |
$3,030,627
33.4% |
|
Average
No. of Employees.........................
Average
Cost per Employee....................... |
28
$129,932 |
26
$116,563 |
|
Interest
Expense.........................................
% of
Expense............................................ |
$2,767,195
25.7% |
$3,088,416
34.0% |
|
Professional Services..................................
% of
Expenses........................................... ................................................................. |
$2,642,074
24.6% |
$1,782,438
19.6% |
|
Other
Expenses..........................................
% of
Expenses......................................... |
$1,702,371
15.8% |
$1,185,327
13.0% |
|
·
Excess of Revenues over Expenses......... |
$3,989,349 |
$6,963,754 |
|
·
Cash...........................................................
·
Investments...............................................
·
Conduit debt outstanding.......................... |
$41,125,776
$18,997,064
$21,638,350,000 |
$49,920,178
$16,882,342
$20,919,876,000 |
|
SELECTED ACTIVITY
MEASURES |
FY2007 |
FY2006 |
|
·
Federal Program Loans
Outstanding.............. |
$546,455 |
$400,694 |
|
·
Total Number of Bond
Issues and Loans Outstanding at June 30, (Unaudited)............ |
1,058 |
803 |
|
·
Total Number of New Bond
Issues and Loans (Unaudited)................................................ |
120 |
67 |
|
·
Total Jobs Created or
Retained (Unaudited)... |
9,232 |
8,706 |
|
AGENCY EXECUTIVE DIRECTOR |
||
|
During Audit Period: Ms. Jill Rendleman (Interim) (to 5/21/07); Ms. Kym Hubbard (from 5/21/07) Currently: Ms. Kym Hubbard |
||
|
No policy to notify applicants of the nondiscrimination
requirements Applications
did not disclose nondiscrimination requirements
Authority agrees with auditors Outstanding conduit debt was $21.3 billion Notices not filed timely Bond transcripts did not match repayment schedules Authority agrees with auditors $293,645 in delinquent debts were not submitted to the
Comptroller’s offset system
Authority agrees with auditors Contracts tested were not always published in the
Illinois Procurement Bulletin Disclosures of financial interest could not be located
Real estate lease disclosures not filed
Authority agrees with auditors
|
INTRODUCTION The mission of the Authority
is to foster economic development to the public and private institutions that
create and retain jobs, and improve the quality of life in Illinois by
providing access to capital.
FINDINGS, CONCLUSIONS, AND
RECOMMENDATIONS
AUTHORITY MISSING POLICY ON
NONDISCRIMINATION
The Authority did not have
a policy to comply with the Farmers Home Administration program requirements
for nondiscrimination. During our testing of
compliance with the Farmers Home Administration program, we noted the
Authority did not have a formal policy to notify applicants of the
requirements for nondiscrimination.
Also, during our detailed testing of both loans made under the program
during the current fiscal year totaling $317,000, we noted the application
for the loans did not disclose the nondiscrimination requirements. Authority management
stated they were unaware of this requirement due to an oversight in the
administration of the program.
(Finding 1, page 12) We recommended that the
Authority implement a formal policy against discrimination that will inform
applicants that the Authority does not discriminate based on the requirements
of the program. Authority officials
accepted the recommendation and stated it would revise its policies and
applications for this program to ensure that all future applicants of this
program are notified of the nondiscrimination requirements. BOND INFORMATION NOT REPORTED
TO THE ILLINOIS OFFICE OF THE COMPTROLLER The Authority did not
report required revenue bond information to the Illinois Office of the
Comptroller. During the fiscal year
ended June 30, 2007, the total outstanding balance of conduit debt that was
in the care of the Authority was $21.3 billion. The Comptroller’s office
reported 184 delinquencies while the Authority had 20 delinquencies on its
records. During our detailed testing,
we selected 54 samples of delinquent records from the Comptroller’s
listing. We noted that 14 (26%)
notices were not submitted timely. We
also selected 27 newly issued bonds for compliance. We noted that 2 out of 27 (7%) bond transcripts did not match the
repayment schedules. The bond
transcript is the document that specifies that actual repayment schedule for
the bonds. Authority management
stated that the discrepancy is due to the Authority personnel preparing the
repayment schedules based on the bond agreement and not the actual bond
transcript. (Finding 2, page 13) This
finding was first reported in 2005. We recommended the
Authority review its procedures to insure that the information submitted to
the Comptroller’s office for newly issued bonds is submitted timely and that
the information is accurate. Further,
the Authority should insure that the Notice of Payment forms are submitted to
the Comptroller’s office timely. Authority officials
accepted the auditor’s recommendation and stated it was currently reviewing
ways to strengthen its policies to insure that repayment schedules reported
to the Comptroller match the bond transcripts. BAD DEBTS NOT REFERRED TO THE
COMPTROLLER’S OFFSET SYSTEM The Authority did not
refer bad debts to the Illinois Office of the Comptroller’s offset
system. While reviewing the
Authority’s policy for delinquent debts, we noted the Authority did not
utilize the Comptroller’s offset system for delinquent debts as required by
Statewide Accounting Management System (SAMS) procedures. The Authority had $293,645 in delinquent
debts that should have been submitted to the Comptroller’s offset
system. Authority Management
stated that they were unaware of this requirement. (Finding 3, page 14). We recommended the
Authority refer delinquent debts to the Comptroller’s offset system in
accordance with SAMS procedures. Authority officials
accepted the auditor’s recommendation and stated it was currently in the
process of establishing procedures to ensure that all bad debts over $1,000
and more than 90 days past-due are referred to the Comptroller’s offset
system. NONCOMPLIANCE WITH THE
ILLINOIS PROCUREMENT CODE AND SAMS PROCEDURES The Authority did not
publish its contracts in the Illinois Procurement Bulletin and did not file
Real Estate Lease Disclosure forms with the Illinois Office of the
Comptroller. We reviewed all 25
contracts entered into by the Authority for fiscal year 2007. We noted that 7 (28%) of the contracts
totaling $129,435 were not published in the Illinois Procurement
Bulletin. The Authority was also
unable to locate the disclosures of financial interest statements for these 7
contracts. We also reviewed all lease
agreements. We noted the Authority
did not file the Real Estate Lease Disclosure form for all seven leases
examined. Authority officials stated
the failure to publish the seven contracts in the Illinois Procurement
Bulletin and the failure to file the Real Estate Disclosure forms with the
Comptroller was due to oversight. (Finding 4, page 15). We
recommended the Authority publish all its contracts in the Illinois
Procurement Bulletin in order to comply with the Act. In addition, we recommended that the
Authority file its leases with the Comptroller and submit the required lease
forms. Authority officials
accepted the auditor’s recommendation and stated it would comply with the
Illinois Procurement Code and file the Real Estate Lease Disclosure forms
with the Illinois Office of the Comptroller.
OTHER FINDINGS The remaining findings are reportedly being
giving attention by the Authority. We
will review progress toward implementing our recommendations in our next
examination. AUDITORS’ OPINION
We conducted a compliance examination of the Authority for the year ended June 30, 2007 as required by the Illinois State Auditing Act, the Single Audit Act and OMB Circular A-133. A financial audit covering the year ending June 30, 2007 was issued separately. ____________________________________ WILLIAM G. HOLLAND, Auditor General WGH:JAF:pp SPECIAL ASSISTANT AUDITORS
McGladrey & Pullen, LLP were our special assistant auditors for this engagement. DIGEST
FOOTNOTE
#2 – BOND INFORMATION NOT REPORTED
TO THE ILLINOIS OFFICE OF THE COMPTROLLER – Previous Commission Response
2006: The
Authority accepts the recommendation.
The Authority will continue to work with the Comptroller’s Office to
eliminate discrepancies between the Comptroller’s reports and the Authority’s
reports. |
