REPORT DIGEST

OFFICE OF THE TREASURER –
ILLINOIS ACHIEVING A BETTER LIFE EXPERIENCE
PROGRAM

FINANCIAL AUDIT
FOR THE YEAR ENDED JUNE 30, 2017

Release Date:  January 31, 2019

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

SYNOPSIS

• (18-01) The Office did not maintain
adequate controls to ensure all external
service provider’s internal controls were
reviewed timely.

FINDINGS, CONCLUSIONS, AND RECOMMENDATIONS

LACK OF ADEQUATE CONTROLS OVER THE REVIEW
OF EXTERNAL SERVICE PROVIDER

The Office of the Treasurer (Office) did
not maintain adequate controls to ensure
all external service provider’s internal
controls were reviewed timely.

The Office utilized an external service
provider for the management of the
Achieving a Better Life Experiences Program
(ABLE). The external service provider was
responsible for the operations of the ABLE
Program including recordkeeping, investment
advisory and administrative services.  In
addition, the external service provider
used third party subservice organizations
to perform certain significant services.
The external subservice organizations were
responsible for various services including
the recordkeeping platform, custody and
cash management, and providing services for
the checking account product within the
checking (banking) option.  As of June 30,
2018, the net position held in trust for
participants was $2,295,650.

During testing, the auditors noted:
• The internal controls for the subservice
organization utilized by the external
service provider, responsible for custody
of investments within the checking
(banking) option portfolio, were not
reviewed. While not identified by the
external service provider as being material
to its operations, the subservice
organization was material to the Office.
As of June 30, 2018, total assets of the
checking (banking) options were $565,634.
• The external service provider’s Service
Organization Control (SOC) report was
issued on February 15, 2018, but the Office
did not request the SOC report from its
service organization until May 16, 2018, 90
days after issuance.  In addition, the SOC
report was provided one day after it was
requested on May 17, 2018, but was not
reviewed by the Office until June 25, 2018,
130 days after report issuance and 39 days
after it was received. (Finding 1, pages
42-43)

We recommend the Office establish an
internal control process to timely request,
review and document the review of all SOC
reports from its service provider and
subservice organizations when reports are
issued.

The Office accepted the recommendation and
stated it will obtain and review the SOC
report for the subservice organization.

AUDITOR’S OPINION

The auditors stated the Office of the
Treasurer, Achieving a Better Life
Experience program financial statements as
of and for the year ended June 30, 2018 are
fairly stated in all material respects.

This financial audit was conducted by Crowe
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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