REPORT DIGEST

ILLINOIS INDEPENDENT TAX TRIBUNAL

COMPLIANCE EXAMINATION
FOR THE TWO YEARS ENDED JUNE 30, 2017

Release Date:  December 12, 2018

FINDINGS THIS AUDIT:  6

CATEGORY:  NEW -- REPEAT -- TOTAL
Category 1:  0 -- 4 -- 4
Category 2:  0 -- 2 -- 2
Category 3:  0 -- 0 -- 0
TOTAL:  0 -- 6 -- 6

FINDINGS LAST AUDIT: 9

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

SYNOPSIS

• (17-04) The Tribunal did not handle
filing fees received with incorrectly filed
petitions in accordance with State laws and
regulations.
• (17-05) The Tribunal did not comply with
certain statutory requirements established
within the Illinois Independent Tax
Tribunal Act of 2012.

FINDINGS, CONCLUSIONS, AND RECOMMENDATIONS

INADEQUATE CONTROL OVER FILING FEES

The Illinois Independent Tax Tribunal
(Tribunal) did not handle filing fees
received with incorrectly filed petitions
in accordance with State laws and
regulations.

During testing, we noted the Tribunal
receives petitions that are either
immediately dismissed or dismissed with the
ability to amend and refile. In either
scenario, the Tribunal returns the
petitioner’s original $500 check or money
order to the taxpayer through the mail. The
Tribunal’s records indicated this occurred
10 times during Fiscal Year 2016 and 16
times during Fiscal Year 2017.

We noted the following noncompliance:

• The Tribunal did not “pay into the State
Treasury the gross amount of money so
received” within the timeframes established
by the State Officers and Employees Money
Disposition Act.

• The Tribunal did not process refunds,
defined as repayments of fees paid in
excess or in error to the State, through
the standard voucher-warrant process.

• The Tribunal did not have appropriation
authority within the Illinois Independent
Tax Tribunal Fund to pay refunds due to
taxpayers in either Fiscal Year 2016 or
Fiscal Year 2017.   (Finding 4, pages
19-20)

We recommended the Tribunal deposit all
remittances received into the State
Treasury and pay refunds, if necessary,
through the State’s voucher-warrant
process. Further, we recommended the
Tribunal request an appropriation to pay
refunds due.

Tribunal officials stated:

We do not agree with the Auditor General’s
recommendation. The Tax Tribunal cannot
deposit checks for petitions that are
deficient and cannot legally be accepted
under the Tribunal’s statute. The Tax
Tribunal has a written policy for when a
petition is initially rejected for being
deficient. If a petition cannot be
accepted, any accompanying check will not
be accepted as well and will be immediately
returned to the petitioner.

In an accountant’s comment, we noted the
issue within the finding is when a receipt
is considered received under the State
Officers and Employees Money Disposition
Act as opposed to when the Tribunal can
accept a petition given its limited
jurisdiction under the Illinois Independent
Tax Tribunal Act of 2012. As received is
defined within the Oxford Dictionary as “to
be given, presented with, or paid,” and our
position is the Tribunal has received a
receipt when the mail is opened and a check
or money order is located with the
incomplete petition. At this moment, the
State Officers and Employees Money
Disposition Act requires the Tribunal to
deposit the entire remittance into the
State Treasury.

If the Tribunal continues to disagree with
our position, the Tribunal should seek a
formal written opinion from the Attorney
General.

FAILURE TO FULLY IMPLEMENT THE ILLINOIS
INDEPENDENT TAX TRIBUNAL ACT OF 2012

The Tribunal did not comply with certain
statutory requirements established within
the Illinois Independent Tax Tribunal Act
of 2012.

During testing, we noted the following:

• The Tribunal did not maintain a principal
office located within Sangamon County.

• The Tribunal did not appoint a clerk or
reporter.

• The Tribunal has not established
requirements for the authentication of
electronic submissions or legal signatures.
(Finding 5, pages 21-22)

We recommended the Tribunal maintain an
office in Sangamon County, appoint a clerk
and reporter, and establish rules for the
electronic submission of documents, or seek
a legislative remedy.

Tribunal officials stated:

We do not agree with the Auditor General’s
recommendation. The Tax Tribunal will not
hire additional employees, request that
additional judges be appointed, or secure
additional permanent office space in
Springfield until the need arises and the
related costs can be justified. The Tax
Tribunal has been open for almost five
years and the statutorily mandated size of
the office was a projection done prior to
its operations commencing. The General
Assembly has been advised through the Tax
Tribunal’s yearly budget submissions and in
budget hearings as to the Tribunal’s
current and potential future staffing and
facility needs. A legislative remedy to
change the language of the statute should
not be done at this time as it is possible
the need for additional staffing and
facilities could arise at any time,
particularly in light of pending
legislation currently pending before the
General Assembly that would increase the
Tax Tribunal’s jurisdiction.

In an accountant’s comment, we noted that,
per the finding, the General Assembly
mandated the Tribunal to have a principal
office in Sangamon County and required the
Tribunal to appoint both a reporter and a
clerk to perform certain duties at the
Tribunal. The primary responsibility of
State agencies is to administer the
functions given to them by the General
Assembly in accordance with State law as
written. If the Tribunal believes
compliance with a statute would result in
an imprudent use of State resources, the
Tribunal should seek a legislative remedy.

Further, the finding does not recommend the
appointment of additional judges.

OTHER FINDINGS

The remaining findings pertain to
inadequate control over reconciliations,
inadequate accounting records, inadequate
segregation of duties, and inadequate
control over annual reports to the General
Assembly.  We will review the Tribunal’s
progress towards the implementation of our
recommendations in our next compliance
examination.

ACCOUNTANT’S OPINION

The accountants conducted a compliance
examination of the Tribunal for the two
years ended June 30, 2017, as required by
the Illinois State Auditing Act.  The
accountants qualified their report on State
compliance for Finding 2017-001 through
Finding 2017-004.  Except for the
noncompliance described in these findings,
the accountants stated the Tribunal
complied, in all material respects, with
the requirements described in the report.

This compliance examination was conducted
by the Office of the Auditor General’s
staff.

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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