REPORT DIGEST OFFICE OF THE SECRETARY OF STATE FINANCIAL AUDIT For the Year Ended: June 30, 2012 Release Date: May 14, 2013 Summary of Findings: Total this audit: 1 Total last audit: 0 Repeated from last audit: 0 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, 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 • The Illinois Office of the Secretary of State did not identify required adjustments necessary to ensure the Office’s financial statements were accurately prepared. FINDINGS, CONCLUSIONS, AND RECOMMENDATIONS PREPARATION OF FINANCIAL STATEMENT REPORT NEEDS IMPROVEMENT The Illinois Office of the Secretary of State did not identify required adjustments necessary to ensure the Office’s financial statements were accurately prepared. The Office’s financial statements were adjusted for the following reporting errors as identified during our audit: • An adjustment was made to reclassify assets improperly classified as restricted net assets to unrestricted net assets as of June 30, 2012. The amount of the reclassification was $ 8.711 million. • An error was identified in the July 1, 2011 beginning fund balance on the June 30, 2012 Statement of Activities and Governmental Revenues, Expenditures, and Changes in Fund Balance. The amount was improperly reported resulting in an overstatement of beginning net assets of $ 8.172 million. Agency officials stated that the financial statements as originally prepared contained these errors. The internal controls did not provide for the detection of the errors by management in the preparation of the Office’s financial statements. These errors have been corrected on the audited financial statements. (Finding #1, pages 54-55) We recommended the Office implement internal control procedures to assess the risk of material misstatements of the Office’s financial statements and to identify such misstatements during the financial statement preparation process. Office officials accepted our recommendation and indicated they would look for ways to improve control procedures over the preparation and review of its financial statements. AUDITORS’ OPINION Our auditors stated the financial statements of the Illinois Office of the Secretary of State as of June 30, 2012, and for the year then ended are fairly stated in all material respects. WILLIAM G. HOLLAND Auditor General WGH:JAF:rt SPECIAL ASSISTANT AUDITORS Our special assistant auditors for this audit were Kerber, Eck & Braeckel LLP.