REPORT DIGEST OFFICE OF THE TREASURER, FISCAL OFFICER RESPONSIBILITIES Financial Audit and Compliance Examination For the Year Ended: June 30, 2011 Release Date: May 2, 2012 Summary of Findings: Total this audit: 1 Total last audit: 6 Repeated from last audit: 1 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 INTRODUCTION This digest covers our financial audit and compliance examination of the State of Illinois Office of the Treasurer – Fiscal Officer Responsibilities for the year ended June 30, 2011. SYNOPSIS • The State of Illinois Office of the Treasurer did not comply with duties mandated by State statute. FINDING, CONCLUSION, AND RECOMMENDATION NONCOMPLIANCE WITH MANDATED DUTIES The Illinois Office of the Treasurer (Office) did not comply with duties mandated by State statute. The following issues were noted during testing: • The Office could not provide documentation of approval from the Governor for certain investments required by the Deposit of State Moneys Act (15 ILCS 520/22.5). Within the Deposit of State Moneys Act, specific reference is made a number of times stating, “the Treasurer may, with the approval of the Governor,” invest State money in various permitted investments. Office personnel stated the Treasurer sends a monthly report to the Governor on activities including investments of all types, as well as fund balances. In addition, the Treasurer’s web site is updated weekly, and contains all information on weekly investments. • The Office did not comply with the Public Funds Investment Act (30 ILCS 235/2.5) specifically, the Office did not adopt an investment policy to govern all investments by State agencies including investments held outside of the State Treasurer’s Office. The current published investment policy of the Office indicates it only applies to investments in the State Treasury. The Office’s staff attributed the issue to the Office having a different interpretation of the Public Funds Investment Act. • The Office did not file their revolving door policy with the Executive Ethics Commission as required by the State Officials and Employees Ethics Act (5 ILCS 430/5-45(c)). Office management stated that they thought that this was filed under the previous administration, until Office staff was notified otherwise by the auditors. Failure to comply with mandated responsibilities is noncompliance with statutory requirements and does not fulfill the legislative intent. (Finding Code No. 11-1, pages 10-12) We recommended the Office comply with the statutory requirements or seek change to the legislation. The Treasurer agreed with the finding and recommendation. AUDITORS’ OPINION The auditors stated the Office of the Treasurer, Fiscal Officer Responsibilities financial statements as of June 30, 2011 and for the year then ended were presented fairly in all material respects. The auditors noted the financial statements have been prepared using accounting practices prescribed by joint agreement of the Illinois Office of the Comptroller and the Illinois Office of the Treasurer, which practices differ from accounting principles general accepted in the United States of America. WILLIAM G. HOLLAND Auditor General WGH:RPU:rt SPECIAL ASSISTANT AUDITORS McGladrey & Pullen LLP were our Special Assistant Auditors for this engagement.