KANKAKEE RIVER VALLEY AREA AIRPORT AUTHORITY
FINANCIAL AUDIT AND COMPLIANCE EXAMINATION
For the Year Ended June 30, 2010
Release Date: July 21, 2011
Summary of Findings:
Total this audit: 2
Total last audit: 2
Repeated from last audit: 2
State of Illinois, Office of the Auditor General
WILLIAM G. HOLLAND, AUDITOR GENERAL
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This Report Digest and Full Report are also available on the worldwide web at www.auditor.illinois.gov
This digest covers the financial audit and compliance examination of the Kankakee River Valley Area Airport Authority (Authority) for the year ended June 30, 2010. The Authority received no appropriations from the Illinois General Assembly, and funds were not held in the State Treasury. The Authority was financed solely though interest income received from locally held funds.
• The Authority had inadequate segregation of duties in the area of expenditure control.
• The Authority failed to comply with the Kankakee River Valley Area Airport Authority Act.
FINDINGS, CONCLUSIONS, AND RECOMMENDATIONS
INADEQUATE SEGREGATION OF DUTIES
The Kankakee River Valley Area Airport Authority (Authority) had inadequate segregation of duties in the area of expenditure control.
During testing, we noted that the Authority’s Vice Chairman had the ability to write and sign checks, reconcile bank statements, and maintain all Authority records. However, the Authority had not written a check since August 2004. (Finding 1, page 9) This finding was first reported in 2008.
We recommended the Authority implement adequate segregation of duties over recordkeeping, expenditure approval, and reconciliation.
The Authority agreed with the recommendation, stating that due to the Authority’s lack of board members, the member remaining is scheduling a meeting with the Kankakee County Board Chairman to discuss the Authority’s future. (For the previous Authority response, see Digest footnote #1.)
NONCOMPLIANCE WITH KANKAKEE RIVER VALLEY AREA AIRPORT AUTHORITY ACT
The Authority failed to comply with certain provisions of the Kankakee River Valley Area Airport Authority Act (Act). We noted the following deficiencies:
• The Authority did not create and submit a written statement and report to the Governor covering its activities for the preceding fiscal year by November 15th as required by statute.
• The Authority had three vacancies requiring appointment. One vacancy required an appointment by the Will County Board and two vacancies required an appointment by the Kankakee County Board. As of 6/30/10, Will County and Kankakee County did not appoint any individuals to fill the vacant Authority member seats.
• Five of Five (100%) Authority members did not file bonds in the amount of $100,000 or file their constitutional oath of office with the Office of the Secretary of State in accordance with the Act. (Finding 2, pages 10-11) This finding was first reported in 2005.
We recommended the Authority prepare and submit a written statement and report covering its activities over the preceding fiscal year to the Governor by November 15th of each year as required. In addition, we recommended the Authority strengthen controls to ensure the Authority obtains the constitutional oath of office and bond in the penal sum of $100,000 for appointed members and that the oaths and bonds are filed with the Office of the Secretary of State or seek legislative remedy.
Further, due to the Authority’s inactivity over the past several years and their inability to maintain eight appointed board members, we recommended the Authority either ensure members are appointed in accordance with the Act or seek legislative remedy.
The Authority agreed with the recommendation, stating that with the lack of board members and inactivity it was thought no report was necessary. The Authority further stated that there is a meeting scheduled with the Kankakee County Board Chairman to discuss the Authority’s future. (For the previous Authority response, see Digest footnote #2.)
The auditors stated the financial statements of the Authority as of June 30, 2010, and for the year ended, are fairly presented in all material respects.
STATE COMPLIANCE EXAMINATION – ACCOUNTANT’S REPORT
The auditors qualified their report on State Compliance for finding 10-2. Except for the noncompliance described in these findings, the auditors state the Authority complied, in all material respects, with the requirements described in the report.
WILLIAM G. HOLLAND
This audit was preformed by the staff of the Office of the Auditor General.
#1 INADEQUATE SEGREGATION OF DUTIES
2009: The Authority agreed that there was a lack of segregation of duties, but noted that there was no expenditure loss or unauthorized use during the period.
#2 NONCOMPLIANCE WITH KANKAKEE RIVER VALLEY AREA AIRPORT AUTHORITY ACT
2009: The Authority agreed with the recommendation and stated that the Authority had no activity during FY 10. They stated that they are currently waiting on Will County to provide an appointed member at this time. The attorney assigned to the Authority will review bonding and oath requirement for all Board members.
In addition, the Authority stated that past attempts to seek legislative remedy have been unsuccessful. The Authority Chairman has and will continue to seek assistance in resolving the future existence of the Authority.