Du Quoin State Fair advertising revenue of $27,675 for Fiscal Year 1998 and $60,402 for Fiscal Year 1999 was deposited into the State Fair Promotional Activities Fund rather than the Agricultural Premium Fund as required by the State Fair Act (20 ILCS 210/6). Fair officials said they were not aware of this deposit requirement. (Finding 3, page 12)

We recommended the future advertising revenue be deposited into the correct fund. Department officials accepted this recommendation.

The lease agreements for auto races, horse races, and gospel shows provide only that the Du Quoin State Fair is responsible for providing ticket booths for the contractors. However, the Fair collected ticket admission fees for these events, thus unnecessarily incurring costs for Fair personnel, credit card fees, and losses on bad checks because ticket proceeds were commingled with other Fair revenue. Further, the Fair’s ticket contractor sold tickets for these events, the fees of which were also absorbed by the Fair instead of the event contractors. Deposits of cash for the full amounts of ticket sales were made to the accounts of the contractors with no reductions for any of the above costs. Because proceeds for auto races, horse races, and gospel shows were commingled with other Fair proceeds, the costs incurred by the Fair on behalf of these contractors could not be determined. (Finding 6, pages 15-16)

We recommended the Fair discontinue the practice of selling tickets for these events or modify the contracts to avoid incurring unnecessary costs. Department officials accepted this recommendation and stated they will continue to sell tickets to all grandstand events but will ensure that future contracts specifically provide for the services rendered by the Du Quoin State Fair.

The Ticket Office did not deposit receipts in a timely manner. The State Officers and Employees Money Disposition Act requires that a single receipt of $10,000 or more be deposited into the State Treasury the same day; receipts of $10,000 or more be deposited into the Treasury within 24 hours; and accumulations of receipts between $500 and $10,000 be deposited with 48 hours. Receipt testing for 44 days (June 29 through August 27, 1999) showed nine instances of receipts over $10,000 being deposited three to fourteen days after receipt and 35 instances of receipts from $500 to $10,000 being deposited from four to 14 days after receipt. Untimely deposit of funds can lead to errors and discrepancies and can result in loss of investment earnings for the State. (Finding 8, page 18)

We recommended the Department deposit receipts in accordance with the State Officers and Employees Money Disposition Act. Department officials accepted this recommendation and stated that receipts are now being deposited in accordance with the Act.

The Du Quoin State Fair paid an invoice for $6,300 from Fiscal Year 2000 appropriations for services rendered during Fiscal Year 1999. The Fair’s Pari-Mutual contractor did not receive its 1998 satellite billing until 1999. The Fair reimbursed the contractor for the billing in October 1999 and charged the expenditure to the Fiscal Year 2000 appropriation. Recourse for payment when the time limit has expired may be made only through the Illinois Court of Claims. (Finding 9, page 19)

We recommended the Fair not make payments for services for which appropriations have lapsed. Department officials accepted this recommendation, stating the payment was inadvertent.

The remaining findings were being given attention by the Department. We will review progress toward implementing all recommendations in our next audit.

The Du Quoin State Fair’s funds were audited in our financial and compliance audit of the Illinois Department of Agriculture.

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WILLIAM G. HOLLAND, Auditor General

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Our special assistant auditors for this audit were Sleeper, Disbrow, Morrison, Tarro & Lively.