INTRODUCTION
The Illinois
Petroleum Resources Board was created July 10, 1998 by the Illinois Petroleum
Education and Marketing Act. Its
mission is to coordinate a program designed to demonstrate to the general
public the importance of the Illinois oil exploration and production
industry; to encourage the wise and efficient use of energy; to promote
environmentally sound production methods and technologies; to develop
existing supplies of State oil resources; and, to support research and
education activities concerning the oil exploration and production industry. The Board received an appropriation from
the Illinois General Assembly through the Department of Natural
Resources.
LEGISLATION
Public Act 94-1085, effective January 19, 2007 changed the
repeal date of the Illinois Petroleum Education and Marketing Act from
January 1, 2008 to January 1, 2016.
In addition, the Public Act removed the requirement for the Governor
to appoint Board members and transferred the requirement to the qualified
producer associations. Public Act
94-1085 also allows the Board to receive and administer all assessments,
donations, grants, contributions, and gifts received by the Board pursuant to
the Act and to deposit them into accounts maintained by the Board. All moneys and assets of the Petroleum
Resources Revolving Fund are to be transferred to the Board and the fund is
to be abolished. Lastly, the Board
will be responsible for selecting a certified public accountant to audit the
Board annually.
FINDINGS, CONCLUSIONS, AND
RECOMMENDATIONS
USE OF UNAUTHORIZED LOCALLY HELD FUND
The Board utilized a locally held fund during Fiscal Year
2006 that was established in a prior fiscal year without specific statutory
authorization. We noted the
following:
·
The Board utilized a locally held fund throughout
FY06 even though the Board did not obtain proper statutory authorization to
establish the locally held fund as required by the State Officers and
Employees Money Disposition Act. In
addition, the Illinois Petroleum Education Marketing Act did not explicitly
permit the Board to establish a locally held fund.
·
At the end of FY05, excess monies totaling $29,090
remained in the locally held account.
This amount would have been lapsed in the normal appropriation
process, and the Board did not return the excess funding to the Department of
Natural Resources (Department) to be deposited into the Petroleum Resources
Revolving Fund.
·
The Board submitted six claims totaling $490,000 to
the Department to draw down on their appropriation for subsequent deposit
into the locally held fund in FY06.
In addition, the Board did not return $34,255 in excess funds
remaining in the locally held account to the Department.
·
The Board contracted with an accounting firm to
perform bookkeeping functions on behalf of the Board and the partner of the
accounting firm had signature authority over this account.
·
Month end bank balances exceeded the amount of
Federal Deposit Insurance Coverage (FDIC) by $19,828 for 1 of 12 months in
FY06.
·
The Board prepared and submitted quarterly Reports of
Receipts and Disbursements of Locally Held Funds for the last two quarters of
fiscal year 2006 in response to a prior examination’s finding, however the
reports were submitted 18 and 45 days late.
(Finding 1, pages 9-10) This finding was first reported in 2004.
We
recommended the Board comply with provisions of the Illinois Petroleum
Education and Marketing Act and the State Officers and Employees Money
Disposition Act as it relates to the locally held fund. In addition, we recommended the Board have
signature authority for only personnel or Board members and ensure that
accurate reports of receipts and disbursements are submitted to the
Comptroller’s Office on a timely basis, as required by SAMS.
Board officials accepted our
recommendation. (For previous Agency
response see Digest Footnote No. 1)
UNREASONABLE EXPENDITURES
The Board made several expenditures during the examination
period that did not appear to be reasonable and necessary to support mandated
Board operations. We noted the
following:
·
Four of 25 vouchers tested include payments, totaling
$1,068 to the Executive Director for gasoline expenses incurred while driving
a State owned vehicle. According to
expense vouchers submitted, the gasoline expenses were for travel to various
restoration sites, school visits, miscellaneous and administrative
travel. However, no log was
maintained documenting the miles driven or maintenance expenses incurred.
·
One voucher, totaling $553 was for 29 hats that were
for public relation efforts.
·
Two vouchers, included payments to the Executive
Director for reimbursement of breakfast and lunch expenses of approximately
$80.
·
One voucher, totaling $585 had mileage reimbursement
rates in excess of the allowable rate, resulting in an $8 overpayment. (Finding 2, pages 11-12)
We
recommended the Board enhance its internal procedures and require a vehicle
log book to record vehicle mileage and maintain sufficient documentation to
support the vehicle log. Further, the
Board should only purchase those items necessary to support the Board’s
mandated duties and check all travel vouchers to ensure compliance with the
travel reimbursement rates set by the Travel Regulation Council
Board officials accepted our
recommendation.
INACCURATE PROPERTY CONTROL RECORDS
The Board did not maintain
accurate property control records. We
noted the following:
·
Two equipment items purchased, totaling $46,453, were
not timely added to the Board’s property control records. A 2006 vehicle purchased in December 2005
and a 2006 cargo trailer purchased and received in June 2006 have not been
added to the Board’s property records as of January 2007. In addition, a cell phone purchased in
July 2004 and noted in a prior year finding, has still not been tagged or
recorded on the Board’s property control records. The exclusion of these three items resulted in the inventory
records being understated by $46,753.
·
The Board inaccurately recorded amounts for three
separate items on its property control records resulting in an overstatement
of $153.
·
The Board included software totaling $161 on its
property control records resulting in the inventory records being overstated
by $161. (Finding 3, pages 13-14)
We recommended the Board comply with the Illinois
Administrative Code by ensuring all property under its jurisdiction is tagged
and recorded timely on its property control records. We further recommended the Board remove
the software from its property control records.
Board officials accepted our
recommendation.
OTHER FINDINGS
The remaining two findings pertain to 1) the Board not using
competitive sealed bidding for purchases exceeding $25,000 and failing to
create a written contract for purchases exceeding $10,000 and 2) the Board
not being comprised of twelve members as required by the Illinois Petroleum
Education and Marketing Act.
AUDITORS’ OPINION
We conducted a compliance examination of the Petroleum
Resources Board as required by the Illinois State Auditing Act. We have not audited any financial
statements of the Board for the purpose of expressing an opinion because the
Board does not, nor is it required to, prepare financial statements.
___________________________________
WILLIAM
G. HOLLAND, Auditor General
WGH:JSC:pp
AUDITORS ASSIGNED
This
examination was performed by the Office of the Auditor General's staff.
DIGEST FOOTNOTES
#1 – Use of
unauthorized locally held fund – Previous Agency Response
2005: IPRB is doing everything possible to
provide a legislative remedy to the finding.
IPRB anticipates that the proposed legislation will pass during the
current session.
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