REPORT DIGEST

GOVERNOR’S OFFICE OF MANAGEMENT AND BUDGET

COMPLIANCE EXAMINATION
FOR THE TWO YEARS ENDED JUNE 30, 2019

Release Date:  April 15, 2020

FINDINGS THIS AUDIT:  7

CATEGORY:  NEW -- REPEAT -- TOTAL
Category 1:  3 -- 0 -- 3
Category 2:  4 -- 0 -- 4
Category 3:  0 -- 0 -- 0
TOTAL:  7 -- 0 -- 7

FINDINGS LAST AUDIT: 3

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

• (19-01) The Governor’s Office of Management
and Budget (Office) did not have adequate
controls over its accounts receivable billing,
collection, and reporting.
• (19-02) The Office did not make the required
annual transfer of funds to the Department of
Human Services (DHS) Community Services Fund
(Fund 509) in Fiscal Year 2018.
• (19-04) The Office did not fully comply with
provisions of the Grant Accountability and
Transparency Act (Act) regarding program
specific exceptions and exemptions.

FINDINGS, CONCLUSIONS, AND RECOMMENDATIONS

INADEQUATE CONTROLS OVER ACCOUNTS RECEIVABLE

The Governor’s Office of Management and Budget
(Office) did not have adequate controls over
its accounts receivable billing, collection,
and reporting.

The Grant Accountability and Transparency Act
(GATA) requires the Office’s Grant
Accountability Transparency Unit (GATU) to
provide technical assistance and annual
training to State grant making agencies and
their grantees and subrecipients.  State
agencies are then billed quarterly by the
Office for services related to GATA and
Budgeting for Results (BFR).  Total Office
billings for Fiscal Years 2018 and 2019 were
$1,639,038 and $2,019,016, respectively.

During our testing of accounts receivable, we
noted the following:

• The Office’s GATA/BFR billings for the 3rd
and 4th quarters of Fiscal Year 2019 totaling
$436,776 and $830,812, respectively, were not
sent to State agencies until September 2019,
and these billings were not included in the
Form C-97 and Form C-98 submitted to the
Comptroller.  This resulted in a $1,267,588
understatement of reported accounts receivable
as of June 30, 2019.

• Differences were noted between the Office’s
breakdown of accounts receivable and the
amounts reported on the C-98 Form for the last
quarters of Fiscal Year 2018 and 2019.

• The Office did not have a formal policy or
procedure for the collection of outstanding
accounts receivable.  Based on the Forms C-98
for the last quarters of Fiscal Year 2018 and
2019, 9% and 21% of the total accounts
receivable were outstanding for 180 days to 1
year, respectively.  Further, 56% and 42% of
the total accounts receivable were outstanding
for over 1 year as of June 30, 2018 and 2019,
respectively.  The Office did not make
sufficient attempts to collect on these past
due accounts. (Finding 1, pages 11-13)

We recommended the Office implement the
necessary internal controls to consistently
and accurately report accounts receivable.  In
addition, the Office should ensure accounts
receivables are timely pursued for collection.

Office Officials accepted the recommendation
and stated they will review the internal
process to establish the proper internal
controls regarding the proper accounting and
collection for accounts receivables. Office
officials also stated they will develop a
process regarding the collection of past due
accounts.

INCOMPLETE TRANSFER OF FUNDS TO THE DEPARTMENT
OF HUMAN SERVICES COMMUNITY SERVICES FUND

The Office did not make the required annual
transfer of funds to the Department of Human
Services (DHS) Community Services Fund (Fund
509) in Fiscal Year 2018.

During testing, we noted the Office annually
transfers from the Long-Term Care Provider
Fund (Fund 0345) the following amounts: $1.25
million to the Long- Term Care Ombudsman Fund
(Fund 698) of the Department on Aging, $4
million to the Long-Term Care Monitor/Receiver
Fund (Fund 285) of the Department of Public
Health, and the remaining amount, totaling
$14.75 million, to the DHS Community Services
Fund (Fund 509).  The Office generally
transfers $10 million twice each year.
However, for Fiscal Year 2018, the Office only
transferred $4.75 million of the $14.75
million to the DHS Community Services Fund
(Fund 509). (Finding 2, page 14)

We recommended the Office implement procedures
to ensure the required transfers are made as
required by the Code.

Office officials accepted the recommendation
and stated a recurring annual calendar
reminder has been setup so that the transfer
is not missed in the future.

NONCOMPLIANCE WITH THE GRANT ACCOUNTABILITY
AND TRANSPARENCY ACT’S APPROVED EXCEPTIONS

The Office did not fully comply with
provisions of the Grant Accountability and
Transparency Act (Act) regarding program
specific exceptions and exemptions.

The accountants noted the Office enacted rules
that detail the requirements and procedures
for program specific exceptions and exemptions
to the Uniform Administrative Requirements,
Cost Principles and Audit Requirements for
Federal Awards (Uniform Requirements (UR)) and
the Act.  The Illinois Administrative Code
(Code) (44 Ill. Adm. Code 7000.60) contains
the procedures for State agencies to follow to
apply for exceptions.  However, the Code does
not require the exceptions to be published
within 30 days as required by the Act.

The accountants requested the Office to
provide the population of all requests for
exceptions for Fiscal Years 2018 and 2019 in
order to test compliance with certain
provisions of the Act.  The Office’s Grant
Accountability and Transparency Unit (GATU)
provided a listing of all exceptions State
agencies posted in the CSFA during Fiscal
Years 2018 and 2019.  We noted 15 of 40 (38%)
allowed exceptions tested were published in
the CSFA from 40 to 1,001 days late.

We recommended the Office ensures its enacted
rules comply with the Act to facilitate the
timely posting of Notice of Exceptions as
required by the Act.

Office officials accepted the recommendation
and stated the Office will revise its rules to
facilitate the timely posting of Notice of
Exceptions as required by the Act.

OTHER FINDINGS

The remaining findings pertain to a lack of
controls over the review of internal controls
over service providers, submission of reports
on capital spending, and contracts and the
failure to submit the annual letter on
estimated revenues to the Regional
Transportation Authority.  We will review the
Office’s progress towards the implementation
of our recommendations in our next compliance
examination.

ACCOUNTANT’S OPINION

The accountants conducted a compliance
examination of the Office for the two years
ended June 30, 2019, as required by the
Illinois State Auditing Act.  The accountants
qualified their report on State compliance for
Findings 2019-001 through 2019-003.  Except
for the noncompliance described in these
findings, the accountants stated the Office
complied, in all material respects, with the
requirements described in the report.

This compliance examination was conducted by
Adelfia 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