REPORT DIGEST

 

DEPARTMENT ON

AGING

 

COMPLIANCE EXAMINATION

 

For the Two Years Ended:

June 30, 2004

 

 

Summary of Findings:

Total this audit                         12

Total last audit                           2

Repeated from last audit            2

 

Release Date:

March 31, 2005 

 

 

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 is also available on

the worldwide web at

http://www.state.il.us/auditor

 

 

 

 

 

SYNOPSIS

 

 

¨      The Department made payments for efficiency initiative billings from improper line item appropriations.  Efficiency initiative payments totaled $184,216 in fiscal year 2004.

¨      The Department had not established adequate comprehensive security-related policies and procedures for its information systems, nor had it formally assigned a Security Administrator.

¨      The Department did not file certain accounting reports with the Office of the State Comptroller on a timely basis.

¨      The Department did not implement a senior benefit advocacy program statewide through area agencies.

¨      The Department did not implement the provisions of the Community Senior Services and Resources Act.

¨      The Department did not establish specialized Alzheimer’s Day Care Resource Centers and develop training modules for the Centers.

 

 

 

 

 

 

 

 

 

 

 

 

 

        {Expenditures and Activity Measures are summarized on the reverse page.}

 

 


DEPARTMENT ON AGING

COMPLIANCE EXAMINATION

For The Two Years Ended June 30, 2004

 

EXPENDITURE STATISTICS

FY 2004

FY 2003

FY 2002

!  Total Expenditures (All Funds)......................

$314,301,410

$304,434,583

$297,869,884

          OPERATIONS TOTAL................................

                % of Total Expenditures..........................

                Personal Services....................................

                % of Operations Expenditures..............

                Average No. of Employees..................

                Average Salary Per Employee.............

$14,436,246

4.59%

$4,319,852

29.92%

108

$39,999

 

$14,953,086

4.91%

$4,827,994

32.29%

116

$41,621

$14,725,610

4.94%

$4,812,005

32.68%

125

$38,496

                Other Payroll Costs (FICA, Retirement)....

                % of Operations Expenditures.............

$1,095,896

7.59%

$1,268,585

8.48%

$1,275,233

8.66%

                Contractual Services................................

                % of Operations Expenditures.............

$308,098

2.13%

$334,678

2.24%

$348,927

2.37%

                All Other Items.......................................

                % of Operations Expenditures.............

$8,712,400

60.36%

$8,521,829

56.99%

 

$8,289,445

56.29%

         UNAPPROPRIATED EXPENDITURES &

         REFUNDS........................................................

                % Of Total Expenditures.............................

 

 

$854,402

.27%

 

$1,213,312

.40%

 

$314,379

.11%

          GRANTS TOTAL.............................................

                % of Total Expenditures.........................

$299,010,762

95.14%

$288,268,185

94.69%

$282,829,895

94.95%

!  Cost of Property and Equipment...................

$1,115,660

$1,108,536

$1,095,344

 

COMMUNITY CARE PROGRAM (Not Examined)

FY 2004

FY 2003

FY 2002

!  CCP Average Monthly Caseload (clients)............

39,321

38,950

39,354

!  Prospective Nursing Home Cases Prescreened....

78,206

73,448

69,660

!  Clients Over 75 Living Alone..............................

60%

61%

61%

!  Average Cost Per Client Per Month.........................

$482

$456

$445

 

The Community Care Program (CCP) provides in-home homemaker and senior companion services, adult day care and case management services to persons aged 60 years and older.  Services are designed to prevent inappropriate or premature institutionalization.

 

AGENCY DIRECTOR

During Audit Period:  Mr. Charles D. Johnson (effective 3-1-03); Ms. Margo E. Schreiber (through 2-28-03)

Currently:  Mr. Charles D. Johnson

 


 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Department did not receive guidance or documentation with efficiency initiative billings from CMS

 

 

 

 

 

Auditors question whether the appropriate appropriations were used to pay the anticipated savings

 

 

 


Payments were made from line items that had available monies

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 


Department paid a total of $184,216 for the efficiency initiative

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Comprehensive information systems policies and procedures had not been developed

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 


Accounting reports were submitted to the Office of the State Comptroller late - in one instance 70 days late

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 


Senior benefits advocacy program was not implemented

 

 

 

 

 

 


Officials state the program is unfunded

 

 

 

 


Estimated cost $1.92 million

 

 

 

 

 

 

 

 

 

 


Community Senior Services and Resource Act was not implemented

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

No rules, regulations, guidelines or directives have been promulgated

 

 

 

 


Department has not determined the amount of funding to implement the State law

 

 

 

 

 

 

 

 

 


Corrective action being taken by the Department

 

 

 

 

 

 

 

 

 

 

 

 

 


Alzheimer’s Day Care Resource Centers were not established

 

 


Training module not developed

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 


Department officials stated funding to open the centers was not provided

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

FINDINGS, CONCLUSIONS, AND RECOMMENDATIONS

 

PAYMENTS WERE MADE FOR EFFICIENCY INITIATIVE BILLINGS FROM IMPROPER LINE APPROPRIATIONS

 

      The Department on Aging (Department) made payments for efficiency initiative billings from improper line item appropriations.

 

      Public Act 93-0025, in part, outlines a program for efficiency initiatives to reorganize, restructure and reengineer the business processes of the State.  The State Finance Act details that the amount designated as savings from efficiency initiatives implemented by the Department of Central Management Services (CMS) shall be paid into the Efficiency Initiatives Revolving Fund.  “State agencies shall pay these amounts…from the line item appropriations where the cost savings are anticipated to occur.”

 

      The Department did not receive guidance or documentation with the billings from CMS detailing from which line item appropriations savings were anticipated to occur.  According to Department staff, they received no documentation or information from CMS detailing the nature and/or type of savings that CMS anticipated.  The only guidance received was the amount of payments that should be taken from General Revenue Funds ($181,751) versus Other Funds ($2,465) for the September 2003 billings.

 

      Based on our review, we question whether the appropriate appropriations, as required by the State Finance Act, were used to pay for the anticipated savings.  For example, the Vehicle Fleet Management Initiative billing was not paid from the Department’s Operation of Auto Equipment appropriation. 

 

      We found that the Department made payments for these billings not from line item appropriations where the cost savings were anticipated to have occurred but from a line item that simply had available monies to make payments from.  The Department used:

 

§         $184,216 from a distributive lump sum grant-in-aid appropriation to pay for all the efficiency billings described above.  The specific appropriation was “For Grants and for Administrative Expenses Associated with Case Management.”

§         In a correspondence to CMS dated September 26, 2003, the Department’s Director reported that without knowing how the savings were computed it was “unclear which line items should be adjusted.”  Further, the Director stated “An alternative to further reducing our FY04 GRF operations budget would be to transfer the funds from our Community Care Program.  Doing so, however, removes funding to pay for critical senior services.” (emphasis added)  The Department requested further guidance from CMS in the correspondence, did not receive a response from CMS, and paid the entire amount from the appropriation utilized for the Community Care Program.

 

      The Department paid a total of $184,216 for the efficiency initiative.  (Finding 1, pages 9-11)

 

      We recommend that the Department only make payments for efficiency initiative billings from line item appropriations where savings would be anticipated to occur.  Further, the Department should seek an explanation from the Department of Central Management Services as to how savings levels were calculated, or otherwise arrived at, and how savings achieved or anticipated impact the Department’s budget.

 

      Department officials partially agreed with our finding and stated, in part, that they were unsuccessful in receiving support documentation from the Department of Central Management Services on the calculation for the projected Efficiency Initiative. 

 

SECURITY POLICIES AND PROCEDURES NEED IMPROVEMENT

 

      The Department had not established adequate comprehensive security-related policies and procedures, nor had it formally assigned a Security Administrator.

 

      The Department relied on its computer systems for meeting its business objectives and administering State and federal funds.  Comprehensive information systems policies and procedures had not been developed.

 

      We also noted that the Department had not established formal policies and procedures related to various information system areas including:

 

·        Appropriate uses of computer equipment, including policies on personal and unlicensed software;

·        General security provisions, including internet and network security;

·        Routine backup of information and off-site storage of backups;

·        Virus protection measures; and,

·        Physical security. 

 

      Department officials stated that the Department’s information system resources were not allocated to developing policies and procedures because other projects were assigned higher priorities. (Finding 3, pages 15-16)

 

      We recommended the Department formally assign security administration responsibilities to ensure written security-related policies and procedures are established and enforced for securing the Department’s computer resources.  Once assigned, the Security Administrator should work with Department officials to establish comprehensive formal policies and procedures relating to its information systems. 

 

      Department officials agreed with our recommendation and indicated that they are currently addressing this issue as part of the Health Insurance Portability and Accountability Act of 1996 security assessment.

 

YEAR END ACCOUNTING REPORTS NOT FILED TIMELY

 

      The Department on Aging failed to file certain accounting reports on a timely basis with the Office of the State Comptroller.

 

The Department filed the following accounting reports late to the Office of the State Comptroller:

                                    Number of Days Late              

                                    FY04               FY03

SCO-563                      26                      5              

SCO-563C                   26                    42

SCO-580                      70                    34

 

The SCO-563 is the Grant/Contract Analysis form.  The SCO-563C is the Grant/Contract Analysis Supplemental Information form and the SCO-580 is the Compensated Absences form.

Department officials stated that the forms SCO-563, SCO-563C and the form SCO-580 were not timely filed due to time constraints, due to existing fiscal staff being required to spend time working on the transfer of the Circuit Breaker/Pharmaceutical Assistance Program and due to staff shortages. 

Failure to submit reports to the Office of the State Comptroller on a timely basis affects the State’s ability to timely complete the State of Illinois’ Comprehensive Annual Financial Report.  (Finding 4, pages 17-18)  This finding was first reported in 2000. 

We recommended that the Department allocate sufficient resources for the timely and accurate preparation of accounting reports submitted to the Office of the State Comptroller.  Further, the Department should train additional staff on the preparation of these reports to alleviate the Department’s dependence on certain employees.

Department officials agreed with our recommendation and indicated that changes are being implemented to guarantee timely report filing.  (For previous agency response, see Digest Footnote #1)

 

SENIOR BENEFIT PROGRAM NOT IMPLEMENTED

     

      The Department did not implement the senior benefits advocacy program through area agencies on aging.  Additionally, the Department did not distribute funds under this program.

 

      Effective January 1, 1997 the Illinois Act on Aging (20 ILCS 105/4.10) required the Department to develop and implement a senior benefits advocacy program statewide through area agencies.  The Act also required that the Department distribute funds under this Section in accordance with the formula provided in Title 89, chapter 2, part 230.45 of the Illinois Administrative Code.

 

      Department officials stated that the Senior Benefits Program is unfunded on a statewide basis.  Department officials stated that the program would cost approximately $1.92 million to fund statewide and that they last requested  funding in fiscal year 1998 for this program.  (Finding 6, page 20-21)

 

      We recommend the Department implement the senior benefits advocacy program on a statewide basis through area agencies as required by law or seek legislative remedy to the statutory requirement.

 

      Department officials agreed with our recommendation and stated that many attempts were made to obtain funding for the Senior Benefits Program statewide, however, they cannot implement this programmatic mandate without an appropriation.

 

COMMUNITY SENIOR SERVICES AND RESOURCE ACT NOT IMPLEMENTED

 

      The Department failed to implement the provisions of the Community Senior Services and Resources Act (the Act). 

 

      The Community Senior Services and Resources Act (320 ILCS 60/) became effective on July 22, 2003 and requires the Department to perform the following duties:

 

 (1)       Promulgate rules, regulations, guidelines, and directives necessary to implement the Act. 

 (2)       Establish a Community Senior Services and Resource Center Advisory Committee.

 (3)       Make grants to non-profit agencies and units of local government on or after January 1, 2005. 

 (4)       Facilitate access to government-issued bonds for the purpose of capital improvement.

 (5)       Provide technical assistance to centers.

 (6)       Develop a comprehensive list of centers and the senior services they offer for publication on the Department’s web site and for distribution through other promotional opportunities.

 (7)       Develop a survey for annual distribution through the centers to gather information concerning the lack or inadequacy of senior services and to identify service demand trends and the unique needs of older Illinoisans and their families.

 (8)       Conduct an annual survey of centers to access their facility, program and operational needs.

 (9)       Report annually in conjunction with the Advisory Committee to the Governor and the General Assembly.  The report shall include findings from all surveys conducted pursuant to this Act, a list of grantees by county (including amounts awarded), and recommendations concerning the ongoing financial stability of centers.

(10)      Pursue alternative funding opportunities.

 

      The Department nominated members to serve on the Community Senior Services and Resources Center Advisory Committee.  The Department did not promulgate any rules, regulations, guidelines or directives necessary to implement the Act nor have they complied with any of the other duties required by the Act.

 

      Department officials stated that they were unable to obtain funding to implement the Act.  Department officials further stated that they did not pursue the alternative funding specified in the Act and that those funding sources were not required to provide funds.  Department officials also stated that they have not determined the amount of funding necessary to implement the Act.  (Finding 7, pages 22-23)

 

      We recommended the Department implement the Community Senior Services and Resources Act or seek legislative remedy to the statutory requirement.

 

      The Department officials agreed with the finding and indicated that they forwarded nominations to the Governor’s office for his appointment to the Advisory Committee in January 2004.  The nominations were approved in July 2004.  Since that time the Department has convened two meetings with the Advisory Committee, they have elected a Chairman, they have developed draft by-laws, and established meeting dates for the rest of 2005.  Department officials further indicated that the Advisory Committee’s Chairman has sent letters to all of the entities listed in the legislation that could provide funds to implement the Act and that although they are behind the timeframes listed in the Act, the Department is now implementing the Act consistent with the legislative intent. 

 

NEED TO ESTABLISH SPECIALIZED ALZHEIMER’S DAY CARE RESOURCE CENTERS

 

      The Department failed to establish one urban and one rural specialized Alzheimer’s Day Care Resource Center as required by the Illinois Act on the Aging (the Act).  In addition, the Department failed to contract with a public or private agency to develop a training module for the specialized Alzheimer’s Day Care Resource Centers.

 

      The Illinois Act on Aging (20 ILCS 105/8.05 (b)) states that in order to address the needs of persons suffering from Alzheimer’s disease or a disease of a related type, the Department shall encourage the development of adult day care for these persons through the administration of specialized Alzheimer’s Day Care Resource Centers.  The Act requires the Department to establish at least one urban and one rural specialized Alzheimer’s Day Care Resource Center. 

 

      The Act also requires the Department to contract with a public or private nonprofit agency or with professional persons in the fields of health or social services with expertise in Alzheimer’s disease to develop a training module for the specialized Alzheimer’s Day Care Centers. 

 

      Department officials stated that they believed the Adult Day Care Resource Centers were never opened because monies were never appropriated for that purpose.  Department officials further stated that the Department did not request funding in their fiscal year 2003 or 2004 appropriation request.  Department officials also stated that they believed they were complying with the training provisions of the Act by providing funding to colleges and hospitals for Alzheimer’s training.  (Finding 8, pages 24-25)

 

      We recommended the Department establish one specialized Alzheimer’s Day Care Resource Center in an urban area and one in a rural area and develop a training module to assist persons with Alzheimer’s disease and other related diseases of that type as required by the Act or seek legislative remedy to the statutory requirement.

 

      Department officials indicated they plan to:  1) seek funding to open for the centers, or 2) recommend that this section be amended to remove the statutory mandate.

 

ANNUAL REVIEW OF INTERNAL CONTROLS NOT PERFORMED TIMELY

 

      The Department did not timely file the required certification for fiscal year 2004 that the Department’s systems of internal fiscal and administrative controls comply with the requirements of the Fiscal Control and Internal Audit Act (FCIAA).  The Department’s fiscal year 2004 certification required by FCIAA should have been filed with the Office of the Auditor General by May 1, 2004.  However, it was filed 27 days late.  (Finding 5, page 19)  This finding was first reported in 2002.

 

      We recommended the Department commence the annual internal control review earlier to alleviate unforeseen time constraints on individuals involved in the annual internal control review process in order to file the required certification in a timely manner. 

 

      Department officials agreed with the finding and indicated that staff responsible for monitoring FCIAA compliance was new to this responsibility and while the form had been completed, submission of the report by the required date to the Auditor General was overlooked.  (For previous agency response, see Digest Footnote #2.)

 

OTHER FINDING

 

      The remaining findings are less significant and are reportedly being given attention by the Department.  We will review the Department’s progress towards the implementation of our recommendations in our next audit.

 

      Mr. Charles D. Johnson, Director, provided responses to the findings for the Department on Aging.

 

ACCOUNTANTS’ REPORT

 

      Our auditors stated that the Department on Aging complied in all material respects with the compliance requirements described in the Audit Guide for Financial Audits and Compliance Attestation Engagements of Illinois State Agencies as adopted by the Auditor General during the two years ended June 30, 2004.  

 

 

 

_____________________________________

WILLIAM G. HOLLAND, Auditor General

 

WGH:JAF:pp

 

 

 

SPECIAL ASSISTANT AUDITORS

 

Our Special Assistant Auditors were De Raimo Hillger & Ripp.

 

 

 

DIGEST FOOTNOTES

 

#1 - COMPTROLLER’S YEAR END ACCOUNTING REPORTS NOT FILED TIMELY – Previous Agency Response

 

2002:   The Department is making changes to our accounting procedures to overcome the difficulties in completing the SCO reports.  We will also document future attempts at resolving lateness on the Comptroller’s behalf in getting the reports to us.  It is also our understanding that several Departments have refused to complete the SCO-563C.

 

#2 – ANNUAL REVIEW OF INTERNAL CONTROLS NOT PERFORMED TIMELY – Previous Agency Response

 

2002:  The Department acknowledges the oversight.  Due to personnel changes, the staff responsible for monitoring the FCIAA compliance was new to this responsibility and while the form had been completed and filed internally the submission of the report to the auditor general was overlooked.