REPORT DIGEST

DEPARTMENT OF MILITARY AFFAIRS

COMPLIANCE EXAMINATION
For the Two Years Ended: June 30, 2012

Release Date:   March 28, 2013

Summary of Findings:
Total this audit: 6
Total last audit:  4
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
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SYNOPSIS

• The Department failed to establish an internal audit
function.

• The Department’s controls over its property and
related records needs to be improved.

• The Department needs to improve its documentation
associated with cadets in the Lincoln’s Challenge
Academy.

FINDINGS, CONCLUSIONS, AND RECOMMENDATIONS

FAILURE TO ESTABLISH AN INTERNAL AUDIT FUNCTION

The Department did not comply with the Fiscal Control
and Internal Auditing Act (Act) requirements for
internal audit.

The Department had not appointed a chief internal
auditor or established a program of internal auditing.
(Finding 1, page 9)

We recommended the Department establish an internal
audit program and appoint a chief internal auditor.

Department officials agreed with the recommendation and
stated they will establish a program by entering into an
agreement with the Department of Veterans Affairs to
share this function. The Department further stated they
are developing a Memorandum of Agreement and should have
an active program shortly.

NEED TO IMPROVE CONTROLS OVER PROPERTY

The Department did not maintain sufficient controls over
its property and related records.  We noted the
following:

•	The Department did not timely record 15 of 25
(60%) equipment additions tested, totaling $60,282, on
its property records.  These items were recorded from 3
to 121 days late.  In addition, the Department did not
timely record 4 of 25 (16%) deletions tested totaling
$2,092.  These items were deleted from 35 to 197 days
late.

• The Department could not locate 3 of 150 (2%) items
from the property listing selected for testing totaling
$3,779.

• Five of 75 (7%) property items observed and selected
for testing could not be traced to the property listing.
(Finding 2, pages 10-11)  This finding was first
reported in 2004.

We recommended the Department strengthen controls over
property control.  Specifically, the Department should
implement procedures to ensure all equipment
transactions are recorded timely.  Further, the
Department should ensure all property under its
jurisdiction is properly recorded and maintained.

Department officials agreed with the recommendation and
stated they are working to implement tighter controls.
(For the previous Department response, see Digest
footnote #1)

CADET FILES LACK DOCUMENTATION

The Department’s Lincoln’s Challenge Academy did not
maintain all documentation to substantiate cadets met
the requirements for enrollment. We noted the following:

• Thirteen of 15 (87%) cadet files tested did not have
documentation noting that the juveniles dropped out of
school.

• Eleven of 15 (73%) cadet files tested did not contain
evidence that background checks were conducted before
admission.   (Finding 5, pages 14)

We recommended the Department ensure all cadets meet the
required criteria for entry into the program and
maintain documentation to substantiate the
qualifications.

Department officials agreed with our recommendation and
stated corrective procedures have been put in place.
Further, the admission process is under review and the
admissions checklists will be adjusted.

OTHER FINDINGS

The remaining findings are reportedly being given
attention by the Department.  We will review the
Department’s progress towards the implementation of our
recommendations in our next engagement.

AUDITOR’S OPINION

We conducted a compliance examination of the Department
as required by the Illinois State Auditing Act.  We have
not audited any financial statements of the Department
for the purpose of expressing an opinion because the
Department does not, nor is it required to, prepare
financial statements.

WILLIAM G. HOLLAND
Auditor General

WGH:rt


AUDITORS ASSIGNED

This examination was performed by the staff of the
Office of the Auditor General.

DIGEST FOOTNOTES

#1 – PROPERTY CONTROL WEAKNESSES – Previous Department
Response

We agree. The Department will continue to review
procedures and processes to ensure that all property
under its jurisdiction is properly recorded and
maintained.