REPORT DIGEST

ILLINOIS DEPARTMENT OF TRANSPORTATION

FINANCIAL AUDIT
FOR THE YEAR ENDED JUNE 30, 2018

Release Date:  March 26, 2019

FINDINGS THIS AUDIT:  1

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

FINDINGS LAST AUDIT: 0

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

• (18-1)  The Illinois Department of
Transportation’s internal controls over
financial reporting were insufficient to
prevent misstatements.

FINDINGS, CONCLUSIONS, AND RECOMMENDATIONS

INADEQUATE CONTROLS OVER FINANCIAL
REPORTING

The Illinois Department of Transportation’s
(Department) internal controls over
financial reporting were insufficient to
prevent misstatements.

During our audit of the significant
balances comprising the Department’s
financial statements, we noted the
following errors and deficiencies related
to financial statement classification and
presentation:

• Implementation of Governmental Accounting
Standards Board (GASB) Statement No. 75,
Accounting and Financial Reporting for
Postemployment Benefits Other than Pensions

In the first draft of the Department’s
financial statements received on October
15, 2018, the engagement team noted
management did not appropriately implement
GASB Statement No. 75.  Specifically, the
Department did not restate beginning net
position in the government-wide financial
statements.

The effect of this misstatement in the
Department’s government-wide financial
statements resulted in an overstatement of
the beginning of the year net position and
current period transportation expenses
totaling $2,458,485,000. There was no
impact on total net position as of June 30,
2018. The Department corrected this item in
the financial statements and the
restatement was reflected in subsequent
drafts of the financial statements
received.

• Classification of Fund Balances in the
Governmental Funds Financial Statements

The Department inappropriately grossed-up a
deficit balance in unassigned fund balance
within the governmental fund financial
statements for Fund 0433, the Federal High
Speed Rail Transit Fund.  During fiscal
year 2018, Fund 0433 acquired inventory
which was classified as a nonspendable
portion of inventories in the governmental
funds financial statements. Rather than
reducing the available committed fund
balance for Fund 0433, the Department
reported a deficit fund balance for the
amount of fund balance reported as a
nonspendable portion of inventories. The
Department’s expenditures did not exceed
amounts committed to the purpose for Fund
0433.

The effect of this misstatement in the
Department’s governmental funds financial
statements was an overstatement of
committed fund balance, and a corresponding
understatement of unassigned fund balance,
totaling $20,865,000 as of June 30, 2018.
The Department corrected this item in the
financial statements.

• Classification of Liabilities in the
Government-wide and Governmental Funds
Financial Statements

The Department’s underlying calculations
used to estimate accounts payable at the
end of the fiscal year inappropriately
allocated amounts to accounts payable and
accrued liabilities instead of
intergovernmental payables for Fund 0553,
Transportation Bond Series A.

The effect of this misstatement in the
Department’s government-wide and
governmental funds financial statements was
an overstatement of accounts payable and
accrued liabilities and an understatement
of intergovernmental payables totaling
$5,717,000 as of June 30, 2018. The
Department corrected this item in the
financial statements.   (Finding 1, pages
62-64)

We recommended the Department enhance and
improve its controls over financial
reporting to ensure amounts reported within
the Department’s annual financial
statements are accurate and presented in
accordance with accounting principles
generally accepted in the United States.

Department officials agreed with our
finding and recommendation.

AUDITOR’S OPINION

The auditors stated the financial
statements of the Department as of and for
the year ended June 30, 2018 are fairly
stated in all material respects.

This financial audit was performed by
CliftonLarsonAllen 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