REPORT DIGEST

OFFICE OF THE SECRETARY OF STATE

FINANCIAL AUDIT
FOR THE YEAR ENDED JUNE 30, 2017

Release Date:  January 9, 2018

FINDINGS THIS AUDIT:  1

CATEGORY:  NEW -- REPEAT -- TOTAL
Category 1:  0 -- 1 -- 1
Category 2:  0 -- 0 -- 0
Category 3:  0 -- 0 -- 0
TOTAL:  0 -- 1 -- 1

FINDINGS LAST AUDIT: 1

Category 1: Findings that are material
weaknesses in internal control and/or a
qualification on compliance with State laws
and regulations (material noncompliance).
Category 2: Findings that are significant
deficiencies in internal control and
noncompliance with State laws and
regulations.
Category 3: Findings that have no internal
control issues but are in noncompliance with
State laws and regulations.

State of Illinois, Office of the Auditor
General
FRANK J. MAUTINO, 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

INTRODUCTION

This digest covers the financial statement
audit of the Office of the Secretary of State
(Office) as of and for the year ended June
30, 2017.  The Office’s Compliance
Examination covering the two years ended June
30, 2017 will be issued in a separate report
at a later date.

SYNOPSIS

• (17-1) The Office did not identify the
required adjustments necessary to ensure the
Office’s audited financial statements were
accurately prepared.

FINDINGS, CONCLUSIONS, AND RECOMMENDATIONS

FAILURE TO IDENTIFY FINANCIAL STATEMENT
REPORTING ERRORS

The Office did not identify the required
adjustments necessary to ensure the Office’s
audited financial statements were accurately
presented in accordance with generally
accepted accounting principles (GAAP).

The Office’s financial statements were
originally submitted to the Illinois Office
of the Comptroller with errors. The
government-wide adjustments on the
Reconciliation of Statement of Revenues,
Expenditures and Changes in Fund Balance of
Governmental Funds to Statement of Activities
were materially misstated by approximately
$340,000,000, primarily due to incorrect
pension adjustments. In addition, the
governmental funds balance sheet did not
balance because total assets and deferred
outflows of resources did not equal total
liabilities, deferred inflows of resources
and fund balances by $6,000 on the Statement
of Net Position and Governmental Funds
Balance Sheet. The Office submitted revised
financial statements with the previous issues
corrected, however, additional misstatements
were noted. (Finding 1, pages 62-63).

We recommended the Office implement internal
control procedures to assess the risk of
material misstatements of the Office’s
financial statements and devote adequate
resources to identify such misstatements
during the financial statement preparation
and review process.

Office officials agreed with the
recommendation and stated corrective measures
will be taken in order to ensure that
documentation of Office financial reporting
procedures is current and complete, and that
appropriate resources are utilized to ensure
a more accurate and timely review of reports
prior to submission.

AUDITOR’S OPINION

The auditors stated the financial statements
of the Agency as of and for the year ended
June 30, 2017 are fairly stated in all
material respects.

This financial audit was conducted by Kerber,
Eck & Braeckel LLP.

JANE CLARK
Division Director

This report is transmitted in accordance with
Section 3-14 of the Illinois State Auditing
Act.

FRANK J. MAUTINO
Auditor General

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