REPORT DIGEST

ILLINOIS ARTS COUNCIL AND FOUNDATION

FINANCIAL AND COMPLIANCE AUDIT

For the Two Years Ended:
June 30, 2001

Summary of Findings:

Total this audit 4
Total last audit 4
Repeated from last audit 3

Release Date:
April 10, 2002

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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
Attn: Records Manager
Iles Park Plaza
740 E. Ash Street
Springfield, IL 62703

(217) 782-6046 or TDD (217) 524-4646

This Report Digest is also available on
the worldwide web at
http://www.state.il.us/auditor

  

 

 

 

 

SYNOPSIS

 
  • The Agency did not reconcile cash receipts to the Illinois State Comptroller’s records.
  • The Agency’s fiscal and grant departments did not perform compliance audits on grants during the two-year period ending June 30, 2001.

 

 

 

 

 

 

 

 

 

 

 

 

 

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

 

ILLINOIS ARTS COUNCIL AND FOUNDATION
FINANCIAL AND COMPLIANCE AUDIT
For The Two Years Ended June 30, 2001

EXPENDITURE STATISTICS

FY 2001

FY 2000

FY 1999

Total Expenditures (All Funds)

$20,302,345

$22,210,318

$17,370,950
OPERATIONS TOTAL
% of Total Expenditures
Personal Services
% of Operations Expenditures

$1,636,731
8.1%
$1,061,577
64.9%

$1,558,538
7.0%
$1,022,895
65.6%

$1,461,522
8.4%
$933,940
63.9%
Other Payroll Costs (FICA, Retirement)
% of Operations Expenditures

$225,640
13.8%

$216,580
13.9%

$193,891
13.3%
Average No. of Employees
Contractual Services
% of Operations Expenditures

21
$155,973
9.5%

21
$133,763
8.6%

21
$116,777
8.0%
All Other Items
% of Operations Expenditures

$193,541
11.8%

$185,300
11.9%

$216,914
14.8%
GRANTS TOTAL
% of Total Expenditures

$18,665,614
91.9%

$20,651,780
93.0%

$15,909,428
91.6%
Cost of Property and Equipment

$173,220

$165,597

$251,891
SELECTED ACTIVITY MEASURES

FY 2001

FY 2000

FY 1999

Federal Grant Receipts

$633,430

$574,300

$650,357

Foundation Revenues

$257,597

$96,145

$27,945

Grant Applications Received

2,800

2,715

2,723
AGENCY DIRECTOR

During Audit Period: Ms. Rhoda Pierce
Currently: Ms. Rhoda Pierce
 

 

 

 

Cash receipts were not reconciled to the Illinois State Comptroller's records

 

 

 

 

 

 

No audit of grants totaling $35 million

FINDINGS, CONCLUSIONS, AND RECOMMENDATIONS

LACK OF RECONCILIATION OF AGENCY RECORDS TO THE COMPTROLLER

The Agency did not reconcile cash receipts to the Illinois State Comptroller’s records. Total cash receipts were $645,627 in Fiscal Year 2001 and $575,866 in Fiscal Year 2000. Neither monthly receipts nor year-end balances were reconciled to Comptroller records in either Fiscal Year.

We recommended the Agency perform monthly cash receipt reconciliations. (Finding 1, page 13)

The Arts Council agreed with our recommendation and stated that reconciliation of cash receipts each month had been reinstated immediately.

LACK OF COMPLIANCE AUDITS OF GRANTS

The Agency’s fiscal and grant departments did not perform compliance audits of grants during the two-year period ended June 30, 2001. This finding has been repeated since 1997.

Total grants awarded were $14,317,074 in Fiscal Year 2001 and $20,947,518 in Fiscal Year 2000. The Agency’s internal policy requires the fiscal and grant departments to audit a sample of final grant reports each month. (Finding 2, page 14)

We recommended the Agency perform grant compliance audits on a timely basis and consider incorporating sample size criteria into their existing policies.

The Arts Council agreed with our recommendation, stating now that adequate staff is in place, this procedure has been implemented. The desk review of grant close-out reports is being performed by an experienced accountant who checks all financial reports to determine that grant funds are accounted for and for compliance with match requirements of the grant. The second step of grant compliance review by program staff will be started by the end of January 2002 with a sample size of one out of ten grants awarded. The accountant will monitor the progress of the second audit step. (For previous Council responses, see Digest footnote.)

OTHER FINDINGS

The remaining findings, involving controls over voucher processing and not performing annual internal control reviews, are of lesser significance and are reportedly being given attention by the Arts Council. We will review progress toward implementation of all recommendations during the next audit.

Agency responses to the findings and recommendations were provided by Mr. Richard Carlson, Deputy Director.

AUDITORS’ OPINION

Our auditors stated the Illinois Arts Council’s financial statements present fairly, in all material respects, the financial position of the nonshared funds as of June 30, 2001 and June 30, 2000, and the results of its operation for the years then ended.

____________________________________

WILLIAM G. HOLLAND, Auditor General

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SPECIAL ASSISTANT AUDITORS

Our special assistant auditors on this audit were De Raimo Hillger & Ripp.

DIGEST FOOTNOTE

LACK OF GRANT COMPLIANCE AUDITS (Previous Council Responses)

2000: "Agree. Audit of FY99 grants began in August 1999. Revision of the internal control policy will be accomplished before the end of FY2000. The Agency needs to discuss what changes will be consistent with good internal control and a reasonable number of audits that can be performed."

1997: "Policy was established by former Executive Director and never implemented due to change in leadership. Agency committee is currently formulating a new policy for processing final reports and auditing a sample of them. Due to the nature of IAC grants being general operating support or career awards in the case of fellowships, the compliance audit requirements will vary to correspond to characteristics of the different types of grants awarded." (Part 1 of 4-part response. The other 3 parts address other aspects of grant administration)