REPORT DIGEST

DEPARTMENT OF AGRICULTURE

COMPLIANCE EXAMINATION
FOR THE TWO YEARS ENDED JUNE 30, 2019

Release Date:  March 3, 2020

FINDINGS THIS AUDIT:  21

CATEGORY:  NEW -- REPEAT -- TOTAL
Category 1:  1 -- 2 -- 3
Category 2:  7 -- 12 -- 19
Category 3:  0 -- 0 -- 0
TOTAL:  8 -- 13 -- 21

FINDINGS LAST AUDIT: 22

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

• (19-01) The Department failed to adhere to
provisions in the Fiscal Control and Internal
Auditing Act.
• (19-02) The Department was not able to
provide the complete population of system
changes or supporting documentation for
changes.
• (19-04) The Department did not perform
required reconciliations in a timely manner.
Irreconcilable differences noted in multiple
funds ranged from $59 to $4,698,260.

FINDINGS, CONCLUSIONS, AND RECOMMENDATIONS

INNADEQUATE INTERNAL AUDIT FUNCTION

The Department failed to adhere to provisions
in the Fiscal Control and Internal Auditing
Act.

During testing, we noted the following:

• The Department’s Director has not appointed
an individual to fill the Department’s chief
internal auditor position.  This position was
vacated on October 17, 2017, 622 days prior to
the end of the examination period on June 30,
2019.

• The Department and DCMS did not obtain the
Governor’s approval for DCMS to provide
professional internal auditing services to the
Department.

• The Department was unable to provide
documentation for the costs of its internal
audit function.

• The Department granted DCMS authorization to
charge the Department’s appropriations for
payroll costs. (Finding 1, pages 12-15)

We recommended the following:
• The Department’s Director appoint a chief
internal auditor and ensure a full-time
program of internal auditing is in place and
functioning at the Department.
• If another agency is to be relied upon to
supplement internal audit functions at the
Department, the Department obtain written
approval of the Governor for these services
and ensure such services are provided in
accordance with the Act’s requirements.
• The Department implement policies and
procedures to track internal audit costs,
maintain documentation which adequately
documents the costs of the Department’s
internal audit function, and ensure other
agencies providing services to the Department
are only reimbursed for allowable costs.
• Finally, the Department should not grant
another agency the authority to process
payroll against the Department’s
appropriations unnecessarily or without
implementing and documenting proper controls.

Department officials accepts the
recommendation and stated the Department
intends to initiate the process of hiring a
chief internal auditor and to come in full
compliance with the Internal Auditing Act.

WEAKNESSES REGARDING SYSTEM DEVELOPMENT AND
CHANGE CONTROL PROCEDURES

The Department was not able to provide the
complete population of system changes or
supporting documentation for changes.

During the review, we requested the Department
to provide the population of changes made to
computer systems in order to determine if the
Department had complied with its change
control procedures.  In response to our
request, the Department stated that change
logs were still pending approval due to the
time necessary for redaction.  As a result, we
were unable to determine whether the
Department’s procedures over system changes
were being followed.  (Finding 2, pages 16-17)
This finding has been repeated since 2015.

We recommended the Department strengthen
internal controls over system changes to
ensure documentation is maintained and
available to support changes made on the
system and to provide support for the
population of system changes.

Department officials accepted the
recommendation and stated change controls were
not properly in place in the past but have
been updated and documented over the past two
years and are currently in place.  Department
officials also stated the Department was
unable to accommodate the request due to the
high number of programs in use by the
Department and the low number of Department of
Innovation and Technology staff at the
Department to access and provide those change
logs.

INADEQUATE CONTROLS OVER RECONCILIATIONS

The Department did not perform required
reconciliations in a timely manner.  In
addition, for the monthly reconciliations
performed, the Department failed to notify the
Office of the Comptroller and resolve the
differences noted.

During our review of the Department’s monthly
reconciliations, we noted the following:

• The Department failed to perform Fiscal Year
2018 and 2019 monthly reconciliations with the
Comptroller’s Monthly Appropriation Transfer
Report.

• The Department failed to perform Fiscal Year
2018 and 2019 monthly reconciliations with the
Comptroller’s Monthly Object Expense/
Expenditures by Quarter Report.

• The Department failed to complete monthly
reconciliations with the Comptroller’s Monthly
Revenue Status Report during Fiscal Year 2018
from January 2018 through June 2018 for all 23
funds with revenue status. The reconciliations
have not been reviewed and approved. The
incomplete reconciliations for these funds
contained irreconcilable differences ranging
from $950 to $4,698,260.  In addition, for
Fiscal Year 2019, the Department failed to
review and approve monthly reconciliations
with the Comptroller’s Monthly Revenue Status
Report for all 23 funds with revenue status.
The reconciliations for these funds contained
irreconcilable difference of $631.

• The Department failed to perform monthly
contract and obligation reconciliations with
the Comptroller’s Agency Contract Report and
the Comptroller’s Obligations Activity Report
for both Fiscal Years 2018 and 2019.

• The Department failed to perform monthly
reconciliations with the Comptroller’s Monthly
Appropriation Status Report during Fiscal Year
2018 for July 2017 through December 2017.
Furthermore, the Department failed to perform
monthly reconciliations for 6 months, from
January 2018 through June 2018.  For Fiscal
Year 2019, the Department performed a one-time
reconciliation with the Comptroller’s Monthly
Appropriation Status Report after fiscal year
end, instead of performing monthly
reconciliations throughout the fiscal year.

• The Department failed to perform monthly
reconciliations with the Comptroller’s Cash
Report during Fiscal Year 2018, from January
2018 through June 2018 for 5 of 26 (19%) funds
with Cash Reports. In addition, the Department
failed to perform monthly reconciliations from
December 2017 through June 2018 for 21 of 26
(81%) funds with Cash Reports. The
reconciliations performed have not been
reviewed and approved. The incomplete
reconciliations for these funds contained
irreconcilable differences ranging from $59 to
$1,735,915.  In addition, for Fiscal Year
2019, the Department failed to perform any
monthly reconciliations with the Comptroller’s
Cash Report of ending cash available balances
for all funds under the Department.(Finding 4,
pages 22-24)

We recommended the Department perform, review,
and approve monthly reconciliation with
Comptroller’s reports.  We also recommend the
Department notify the Comptroller and resolve
all differences noted during the
reconciliation process.

Department Officials accepted the
recommendation and stated they have
implemented revised processes for required
reconciliations and is working to address
staffing shortages to ensure reconciliations
are completed properly, timely, and in a
consistent manner.

OTHER FINDINGS

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

ACCOUNTANT’S OPINION

The accountants conducted a compliance
examination of the Department for the two
years ended June 30, 2019, as required by the
Illinois State Auditing Act.  The accountants
qualified their report on State compliance for
Findings 2019-001 and 2019-002.  Except for
the noncompliance described in these findings,
the accountants stated the Agency complied, in
all material respects, with the requirements
described in the report.

This compliance examination was conducted by
Adelfia LLC.

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

FJM:skm