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

Total Expenditures (All Funds)

Cost of Property and Equipment

Consumer Complaints - Weights & Measures

Consumer Complaints - Motor Fuel

AGENCY DIRECTOR(S)

The Department circumvented appropriation restrictions by transferring Administrative Service employees to unrelated divisional appropriations during fiscal years 1998 and 1999. During a seven month test period for selected divisions, this amounted to $352,471 for fiscal year 1998 and $269,596 during fiscal year 1999.

Department officials indicated transfers were necessary to maintain employees due to inadequate appropriations in certain areas. (Finding 3, page 20) This finding has been repeated since 1991.

We recommended the Department expend funds only for the purpose for which such funds have been appropriated. The Department should plan future staffing levels within appropriations received. The Department agrees that the administrative function needs to be fully funded and is working toward that goal.

We also noted that the Department has not charged other costs to correct appropriation line items. Findings in prior audits noted that the Department did not have a documented methodology or a consistent practice for charging such items as postage, telecommunications, and operation of automotive equipment. As appropriations were exhausted, expenditures were charged to whichever line items had remaining available funds. During fiscal years 1998 and 1999 the Department continued to charge expenditures to incorrect appropriations. The Department developed a methodology for determining the total shortage of needed administrative appropriations and for allocating those amounts to various divisions and programs within those divisions. The total reallocated administrative costs for fiscal year 1999 was $2,243,000. Department personnel have stated that these methods were used because appropriations were not adequate for administrative purposes. (Finding 2, page 19) This finding has been repeated since 1993.

We recommended the Department seek appropriations for individual line items and programs in accordance with their needs. The Department responded that the administrative function needs to be fully funded and that the Department is working toward that goal. (For previous Agency responses, see Digest Footnote #1)

Expenditures from the Wholesome Meat Fund are used for the costs of the Meat Inspection Program. The federal government reimburses 50% of the cost, and the State of Illinois funds the other 50% from the General Revenue Fund. The Department spent $294,188 more from the General Revenue Fund in fiscal year 1998 for meat inspection than from federal funds. In fiscal year 1999, the Department spent $137,644 more. Half of these amounts should have been paid from federal reimbursements that were deposited into the Wholesome Meat Fund. A surplus of about $312,000 had accumulated in the Wholesome Meat Fund as of June 30, 1999. (Finding 6, page 24).

We recommended the Department reimburse the General Revenue Fund for excess expenditures and pay only 50% of the costs for the Meat Inspection Program from General Revenue in future years. The Department agreed and stated it will begin to draw down federal funds based on the accumulated program costs with the goal of achieving a 50-50 distribution of costs between the General Revenue Fund and the Wholesome Meat Fund.

The Department has deposited 100% of indirect cost reimbursements for the Meat and Poultry Inspection program into the federal Wholesome Meat Fund although indirect costs are paid approximately 90% from the State’s General Fund and approximately 10% from the Wholesome Meat Fund. The 10% portion had accumulated from previous reimbursements. By law, indirect cost reimbursements are required to be deposited into the fund from which the original expenditures were made. The Meat and Poultry Inspection program earned $535,878 in indirect cost reimbursements in the federal fiscal year ended September 30, 1998 and $390,314 through June 30, 1999 for the federal fiscal year ending September 30, 1999. These indirect costs should have been deposited into the General Revenue Fund. (Finding 9, page 27).

We recommended that the Department request that appropriations currently made for administrative expenses of the Wholesome Meat Fund be made from the General Revenue Fund and that future indirect cost reimbursements be deposited into the General Revenue Fund. The Department agreed and stated it will pursue appropriation changes with the Bureau of the Budget.

The Department had not included amounts receivable from federal grantor agencies for grants in the quarterly receivable reports it prepares for the Comptroller. At June 30, 1999 approximately $589,000 in receivables from federal agencies were not included in the Quarterly Summary of Accounts Receivable reported to the Comptroller. (Finding 13, page 31)

We recommended the Department properly track grant funds and report them to the Comptroller as required. The Department agreed.

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

Our auditors state the combined financial statements for the Department of Agriculture as of June 30, 1999 and June 30, 1998, and for the years then ended are fairly presented in all material respects.

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WILLIAM G. HOLLAND, Auditor General

WGH:KMC:pp

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