REPORT DIGEST

DEPARTMENT OF
HUMAN RIGHTS

COMPLIANCE EXAMINATION

For the Two Years Ended:

June 30, 2005

Summary of Findings:

Total this audit                          7

Total last audit                          6

Repeated from last audit           4

Release Date:

April 11, 2006 

State of Illinois

Office of the Auditor General

WILLIAM G. HOLLAND

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 the Full Report are also available on

the worldwide web at

http://www.state.il.us/auditor

SYNOPSIS

·        The Department made payments for efficiency initiative billings from improper line item appropriations.

·        The Department did not maintain adequate financial records or prepare accurate accounting reports.

·        The Department did not process vendor invoices in a timely manner.

·        The Department did not meet the procedural time limits set forth when a charge of a civil right violation had been filed.

{Expenditures and Activity Measures are summarized on the next page.}

EXPENDITURE STATISTICS

FY 2005

FY 2004

FY 2003

·         Total Expenditures (All Funds)..................................

OPERATIONS TOTAL................................................

         % of Total Expenditures.............................................

         Personal Services.......................................................

            % of Operations Expenditures..................................

            Average No. of Employees......................................

         Other Payroll Costs (FICA, Retirement and Group              

         Insurance)..................................................................

            % of Operations Expenditures..................................

         Contractual Services...................................................

            % of Operations Expenditures..................................

         Telecommunications....................................................

            % of Operations Expenditures..................................

         Lump Sums and other Purposes...................................

            % of Operations Expenditures..................................

         All Other Operations Items..........................................

            % of Operations Expenditures..................................

·         Cost of Property and Equipment................................

$8,804,022

$8,804,022

100%

$6,203,841

70.4%

147

$1,689,759

19.2%

$386,797

4.4%

$175,618

2.0%

$156,440

1.8%

$191,567

2.2%

$946,262

$8,368,970

$8,368,970

100%

$6,224,712

74.4%

149

$1,469,799

17.6%

$252,853

3.0%

$83,678

1.0%

$137,699

1.6%

$200,229

2.4%

$1,233,440

$8,750,884

$8,750,884

100%

$6,386,151

73.0%

145

$1,612,268

18.4%

$253,595

2.9%

$141,077

1.6%

$181,083

2.1%

$176,710

2.0

$1,261,325

SELECTED ACTIVITY MEASURES (Not Examined)

FY 2005

FY 2004

FY 2003

Open Discrimination Cases as of 6/30...................................

2,762

2,550

2,145

New Discrimination Cases Filed...........................................

4,055

4,000

3,876

Cases Completed during year...............................................

3,822

3,727

3,733

Charges Completed per Month per Investigator.....................

8.0

7.05

6.60

Investigators employed at end of year...................................

32

41

45

AGENCY DIRECTOR(S)

During Audit Period:      Mr. Rocco Claps

Currently:                      Mr. Rocco Claps

Payments from improper line items

The Department made payments from where there were available funds, not from line item appropriations where the savings were anticipated to occur

The Department did not maintain adequate financial records or prepare an accurate accounting reports for submission to the Office of the State Comptroller

The Department did not meet the procedural time limits set forth when a charge of a civil rights violation had been filed

FINDINGS, CONCLUSIONS, AND

RECOMMENDATIONS

EFFICIENCY INITIATIVE PAYMENTS

      The Department of Human Rights made payments for efficiency initiative billings from improper line item appropriations.

      Public Act 93-0025, in part, outlines a program for efficiency initiatives to recognize, restructure and reengineer the business processes of the State.  The Department received two billings from the Department of Central Management Services (CMS) for savings from procurement efficiency initiatives and information technology initiatives. The initiatives and amounts billed to the Department for FY04 ($77,814) and FY05 ($9,285) totaled $87,099. 

      Department staff could not provide any guidance or documentation with the FY04 billings from CMS detailing from which line item appropriations savings were anticipated to occur.  Further, Department staff reported there was no evidence of savings for the FY04 billings from CMS. The Department paid the  $77,814 in FY04 billings from personal services line item appropriations. Thus, the Department made the payments for these billings not from line item appropriations where the cost savings were anticipated to have occurred but where the Department had available funds.  The FY05 billings from CMS contained more detail and it appeared the Department paid these billings from appropriate line item appropriations.  (Finding 1, pages 9-10)

      We recommended the Department only make payments for efficiency initiative billings from line item appropriations where savings would be anticipated to occur.  Further, the Department should seek an explanation from CMS as to how savings levels were calculated, or otherwise arrived at, and how savings achieved or anticipated impact the Department’s budget. 

      The Department response stated they will adhere to this recommendation.

INADEQUATE FINANCIAL REPORTING

      The Department of Human Rights did not maintain adequate financial records or prepare accurate accounting reports for submission to the Illinois Office of the Comptroller.  The Department did not keep adequate records, schedules, or reconciliations to support grant/contract data, accounts receivables, and accounts payable.

      As part of the year-end accounting and financial reporting closing process, State Agencies are required to prepare and submit to the State Comptroller accounting reports prepared in accordance with generally accepted accounting principles (GAAP) which summarize their yearly financial activities and status of their funds at year-end.  The accounting reports are used by the Comptroller to prepare the State’s Basic Financial Statements (which are prepared on an accrual basis).  The Department’s books and records were maintained using the Comptroller’s Statewide Accounting Management System (SAMS) which is essentially a cash basis budgetary accounting system.  Data must be gathered and a computation must be made annually to prepare GAAP basis financial statements.  While the SAMS manual has information and instructions for preparing the “GAAP Reporting Package”, the Department did not comply with these requirements.  (Finding 2, pages 11-12)  This finding, or variations thereof, has been repeated since 1997.

      The Department agreed with our recommendation to keep adequate records, schedules, and reconciliations to support grant/contract data, accounts receivables, and accounts payable so that accurate “GAAP Reporting Packages” can be prepared in the future.  (For previous agency response, see Digest Footnote 1.)

UNTIMELY PROCESSING OF VENDOR INVOICES

      The Department of Human Rights did not process vendor invoices in a timely manner.

      We noted that 92 vouchers ($172,844) of 248 ($405,330) tested in fiscal years 2004 and 2005 (37%) were not approved within 30 days.  We also noted that 56 vouchers paid out of the General Revenue Fund (33 in fiscal year 2004 and 23 in fiscal 2005) were paid 1 to 93 days late.  For two of these late vouchers interest totaling $280 was due but not automatically paid to the vendor.

      Department management stated that the untimely approval of vouchers was due to lack of personnel in the Fiscal Division.  Additional resources were not available until January 2005.  (Finding 4, pages 15-16)  This finding has been repeated since 1995.

      We recommended the Department process vendor invoices timely and pay interest due vendors in compliance with the State Prompt Payment Act. 

      Department officials stated that they agreed with the recommendation and have made significant improvements in regards to timely processing of vouchers.  (For previous agency response, see Digest Footnote 2.)

NONCOMPLIANCE WITH STATUTORILY MANDATED TIME LIMITS

      The Department of Human Rights did not meet the procedural time limits set forth when a charge of a civil rights violation has been filed.

      In our review of 60 cases filed with the Department, we noted in five employment cases (8%), the Department did not serve a copy of charge on the respondents within 10 days, and in one housing case (2%) the Department did not notify both parties in writing when the investigation was not completed within 100 days of the date on which the charge was filed.                                                                                                                     

      Department management stated that the untimely issuance of notices was due to lack of personnel to process the large number of cases file in the Charge Processing Division.  (Finding 6, pages 19-20)

      We recommended that the Department adhere to the processing timetable as mandated by the Illinois Human Rights Act.

      Department officials stated they will adhere to this recommendation.

OTHER FINDINGS

        Other findings dealt with inadequate expenditure classifications and documentation, inadequate cash receipts records and reconciliation procedures and inadequate controls over telecommunication expenditures.  We will review progress toward implementation of all our recommendations during our next audit.

___________________________________

      WILLIAM G. HOLLAND, Auditor General

WGH:KMC:drh

SPECIAL ASSISTANT AUDITORS

      Our special assistant auditors for this audit were E. C. Ortiz & Co., LLP.

Digest Footnotes

1.        INADEQUATE FINANCIAL REPORTING – (Previous Department Response)

2003:       “The Department keeps all source documents and schedules and

                will in the future maintain its accounts receivables and accounts

                payables in general ledger form.”

2.        INADEQUATE  VOUCHER PROCESSING - (Previous Department         Response)

        2003:       “The Department will try to approve and process vouchers

                         within 30 days and will pay interest owing in compliance with

                         the State Prompt Payment Act.”