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FINDINGS, CONCLUSIONS AND
RECOMMENDATIONS
PAYMENTS WERE MADE FOR EFFICIENCY INITIATIVE BILLINGS FROM IMPROPER
LINE ITEM APPROPRIATIONS
The Commission made payments for efficiency initiative
billings from improper line item appropriations. The State Finance Act details that the amount designated as
savings from efficiency initiatives implemented by the Department of Central
Management Services (CMS) shall be paid into the Efficiency Initiatives
Revolving Fund. The Act further
requires State agencies to pay these amounts from the line item
appropriations where cost savings are anticipated to occur.
The Commission did not receive any guidance for the FY04
billings from CMS detailing where savings were to occur. Commission staff reported that CMS
provided no evidence of savings for FY04.
In addition, Commission staff stated that they were unable to determine
any savings that occurred as a result of the efficiency initiatives.
The Commission made payments in FY04 for these billings not
from line item appropriations where the cost savings were anticipated to have
occurred but based on the direction of a budget analyst from the Governor’s
Office of Management and Budget (GOMB).
However, without specific guidance from CMS regarding the nature and
types of savings initiatives, it is unclear whether these were the
appropriate lines from which to make procurement savings payments. Additionally, the documentation submitted
referencing the GOMB analyst advice was from four months prior to the
billings from CMS and for amounts that differed from what was actually
billed.
In FY04, the Commission paid $235,484 toward the procurement and
vehicle fleet management initiative billings from a lump sum appropriation to
the Public Utilities Division. The
monies, from the Public Utility Fund, were specifically appropriated “to
assist the Illinois Commerce Commission in implementing the Electric Service
Customer Choice and Rate Relief Law of 1997, including costs in the prior
year.” The payment to CMS amounted to
12 percent of the total appropriated for this purpose.
The FY05 billings from CMS contained more detail on where CMS
determined the Commission saved monies.
However, it appeared the Commission did not always follow this
detailed guidance in making payment.
Documentation showed Commission officials disputed the FY05 IT billing
with GOMB, but paid the billing in full.
The Commission paid a total of $402,415 in FY04 and
$200,555.47 in FY05 for the efficiency initiative from the Transportation
Regulatory Fund and the Public Utility Fund. (Finding 1, Pages 9-11)
We recommended that the Commission only make payments for
efficiency initiative billings from the line item appropriations where
savings would be anticipated to occur.
Further the Commission 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 Commission’s budget.
will work with CMS on future
initiative billings to
determine appropriate
expenditure information and benefits
to be derived from the
payments.
EXPENDITURES FROM THE
TRANSPORTATION REGULATORY FUND
The
Commission did not expend funds from the Transportation Regulatory Fund (TRF)
in accordance with statutory requirements.
Expenditure allocations were overcharged to the TRF, insufficient
documentation was maintained to support expenditure allocations,
inappropriate methodology was used for some calculations, and a time study
used to determine allocations was compiled untimely. Expenditures from the TRF totaled
$13,404,306 and $13,292,334 in FY04 and FY05, respectively. We noted the following:
·
The Commission overcharged the TRF by 6% of FY04 and
7% of FY05 for indirect expenses, which did not include personal services,
Administrative Services Division (ASD), and Commissioner’s Assistants.
·
The Commission could not provide supporting
documentation for $18,617 of Information Technology Division (IT)
expenditures charged to the TRF in our sample of fifteen IT vouchers.
·
In FY04, the TRF was overcharged $5,327 for building
security services and $417 for express mail charges because the Commission
allocated to the TRF 41% and 45% of those costs, respectively, instead of 25%
as allowed for ASD expenses according to the Commission’s calculations.
·
One of 4 (25%) time studies was compiled four months
after the period ended. The Law
requires time studies be updated at least once each six months.
·
The Commission overcharged the TRF for payroll
expenditures of employees who worked for multiple divisions. We reviewed 5 of 48 (10%) pay periods and
noted that in four (80%) pay periods, the Commission overcharged the TRF a
total of $6,061.
·
Inappropriate methodology was used to calculate the
headcount percentage used for some TRF allocations, including payroll.
·
The Commission did not prepare and maintain
sufficient documentation to support the calculation of facility expenses allocated
to the TRF. (Finding 2, Pages 12-14)
We
recommended the Commission complete semi-annual time studies timely, ensure
TRF expenditures are limited to the amounts allowed by the Law, and maintain
sufficient documentation to support the allocations to the TRF.
The
Commission accepted this finding and stated that they have submitted legislative language to simplify the methodology used
to compute allocations from TRF.
UTILITY COST RECOVERY
The Commission has not established rules or
procedures to be utilized in evaluating how utilities are to recover and
allocate costs incurred from the construction of generation or production
facilities which have been cancelled.
The Public Utilities Act (220 ILCS 5/9-216) requires these
procedures. (Finding 4, pages 17-18)
We recommended that the
Commission comply with the statutory mandate by promulgating the required
rules or continue to seek legislation that would eliminate the requirement
for rules.
Commission
management responded that as a result of significant changes in the electric
industry and the Commission’s statutory regulation of electric utilities,
utility cost recovery rules for cancelled facilities are no longer
needed. Management further responded
that the Commission has submitted legislation to amend and eliminate section
9-216, which is pending before the legislature.
FAILURE TO CERTIFY THE
AMOUNT OF REQUIRED FUNDING FOR THE ACCESSIBLE ELECTRONIC INFORMATION ACT
The Commission did not
determine and certify to the State Treasurer the amount of funding necessary
to support the Accessible Electronic Information Service Program (Program)
prior to July 1, 2005 as required.
The Program
provides grants for the provision of accessible electronic information
service to blind and disabled persons throughout Illinois. The Commission held initial meetings with
the Secretary of State (State Librarian) but did not determine and certify
the amount needed by the mandated date.
(Finding 8, pages 23-24)
We recommended the
Commission annually collaborate with the State Librarian to determine the
amount of the Program funding necessary and certify that amount to the State
Treasurer prior to July 1st of each year. We further recommended the Commission
ensure the Digital Divide Elimination Infrastructure Fund has sufficient
funds or direct the Illinois Telecommunications Access Corporation to remit
the appropriate amount for deposit to ensure adequate funding of the program.
The Commission accepted
our recommendation and further responded that the appropriate amount needed
for FY06 was not given to the Commission until November 2005. The Commission also responded that the
$40,000 requested will be paid in FY06.
RECOMMENDATIONS FROM THE 2003 MANAGEMENT AUDIT OF EXPENDITURES FROM THE
GRADE CROSSING PROTECTION FUND NOT FULLY IMPLEMENTED
The Commission had not
fully implemented two recommendations made in the Management Audit of
Expenditures from the Grade Crossing Protection Fund (November 2003):
·
The second recommendation in the management audit
stated that the Commission should assure that Grade Crossing Protection Fund
projects are adequately managed. To
do this, the expertise of Commission Railroad Safety Specialists should be
utilized through on-site construction management to assure that the needed
safety work is performed, that Order requirements are met, and that project
expenditures are proper. Commission
personnel stated that the Commission requested another Railroad Safety
Specialist to follow-up on these projects.
However, due to budget constraints and headcount restrictions the
request was not approved. Commission
management also stated that as of January 2005, staff conduct a final
inspection when a construction project is complete.
·
The third management audit recommendation stated that
the Commission should assure that appropriate data is captured within
computer systems to allow adequate management and timely completion of Grade
Crossing Protection Fund Projects.
Commission personnel stated they had been working on development of an
enhanced computer system, “Railroad Information and Location System” (RAILS),
that would have allowed for more comprehensive data input and project
management. However, further work on
RAILS had not been conducted during fiscal years 2004 and 2005 due to budget
constraints.
We recommended the
Commission continue its efforts to implement recommendations made in the 2003
OAG Management Audit of Expenditures from the Grade Crossing Protection
Fund. Specifically, we
recommended:
·
The Commission should continue their efforts to
assure that the needed safety work is performed, order requirements are met
and that project expenditures are proper.
·
The Commission should either prioritize the
development of the RAILS system or implement other controls to ensure
appropriate data is captured within the system to allow adequate management
and timely completion of the Grade Crossing Fund projects.
The Commission responded
that to assure that Grade Crossing Protection Fund projects are adequately
managed, it has incorporated a final inspection of projects into the duties
of the Railroad Signal Inspectors.
The Commission further responded that it has worked to make the RAILS
system a priority. Management stated
the conversion portion of the system started in January 2006 and is 25%
completed.
OTHER FINDINGS
The remaining findings
are reportedly being given attention by the Commission. We will review the Commission’s progress
toward the implementation of our recommendations during our next examination
of the Commission.
Mr. Gene Beyer, Acting Director, provided the responses to
our recommendations.
AUDITORS’ OPINION
We conducted a compliance examination of the Illinois
Commerce Commission as required by the Illinois State Auditing Act. We have not audited any financial
statements of the Commission for the purpose of expressing an opinion because
the agency does not, nor is it required to, prepare financial statements.
____________________________________
WILLIAM
G. HOLLAND, Auditor General
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AUDITORS ASSIGNED
This examination was conducted by the staff of the Office of
the Auditor General.
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