Illinois Industrial Commission Self-Insurers' Security Fund 2002 Audit

Note:

This report of the Illinois Workers’ Compensation Commissions’ Self-Insurers Security Fund (Fund) should be read in conjunction with the FY16 financial statements of the Fund and the auditor’s report dated January 4, 2018.

In FY16, the auditors issued an adverse opinion on the Fund’s financial statements due to the Commission having an inadequate process to determine the claims liabilities of the Fund, and because the proper accounting treatment for the insolvent self-insurer security collected by the State of Illinois is not determinable due to two different irreconcilable interpretations of the Worker’s Compensation Act. Because of the adverse auditor opinion of the Fund’s financial statements for the year ended June 30, 2016, the audit reports for the year ended prior to June 30, 2016 should not be relied upon without considering the auditor’s report dated January 4, 2018.

REPORT DIGEST

INDUSTRIAL COMMISSION SELF- INSURERS’ SECURITY FUND

FINANCIAL AUDIT

For the Year Ended:

June 30, 2002

Release Date:
March 11, 2003

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
Attn: Records Manager
Iles Park Plaza
740 E. Ash Street
Springfield, IL 62703

(217)782-6046 or TDD (217) 524-4646

This Report Digest is also available on
the worldwide web at
http://www.state.il.us/auditor

INTRODUCTION

This audit was limited to an examination of the Self- Insurers’ Security Fund for the purpose of rendering an opinion on the financial statements of the Fund. A compliance audit for the two-year period ending June 30, 2003 will be performed next year. The Fund was established to provide compensation for employees of insolvent self-insured employers for injuries and occupational diseases.

AUDITORS’ OPINION

Our auditors state that the financial statements present fairly, in all material respects, the respective financial position of the Fund as of June 30, 2002 and 2001, and the respective changes in financial position thereof for the years then ended.

__________________________________

WILLIAM G. HOLLAND, Auditor General

WGH:KMC:drh

SPECIAL ASSISTANT AUDITORS

Our special assistant auditors for this audit were Hill

Taylor, LLC.

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

INDUSTRIAL COMMISSION
SELF-INSURERS’ SECURITY FUND
FINANCIAL AUDIT
For The Year Ended June 30, 2002

STATEMENTS OF REVENUE EXPENSES, AND CHANGES IN NET ASSETS	FY 2002	FY 2001
OPERATING REVENUES Escrow Fees and Surety Bond	$ 3,078,845	$8415,410
OPERATING EXPENSES Benefit Payments and Refunds Personnel and Operating Expenses Total	$ 5,052,587 218,116 $ 5,270,703	$2,494,319 194,285 $2,688,604
OPERATING (LOSS) INCOME NONOPERATING REVENUES (EXPENSES) Interest Income Change in Liabilities for Unpaid Claims TRANSFERS OUT CHANGE IN NET (DEFICIT) ASSETS	$(2,191,858) $ 225,015 $(6,781,118) $ (6,574) $(8,754,535)	$5,726,806 $ 161,996 $ 389,656 $ - $6,278,458
SELECTED ACCOUNT BALANCES – STATEMENTS OF NET ASSETS	FY 2002	FY 2001
ASSETS: Cash in bank Cash in State Treasury Accrued interest receivable LIABILITIES: Account Payable Liabilities for Unpaid Claims NET ASSETS, End of Year	$ 5,809 $ 6,385,301 $ 12,439 $ 236,875 $ 9,749,952 *$(3,593,018)	$ - $8,290,054 $ 29,402 $ 124,284 $2,962,260 $5,161,517
CHAIRMAN
During Audit Period: Mr. John W. Hallock, Jr., Chairman Currently: Mr. John W. Hallock, Jr., Chairman

^{NOTE: Economic Factors and Fund
Deficit}

^{The Self-Insurers' Security Fund had a
deficit of approximately $3.6 million at June 30, 2002. Agency management
indicates this deficit is primarily due to the deteriorating economic
conditions within the overall economy, which has resulted in increased filing
of bankruptcies. The State of Illinois Industrial Commission is considering
additional assessments during fiscal 2003 to bridge the gap in the Fund's
deficit position.}