REPORT DIGEST

 

ILLINOIS ARTS COUNCIL

 

COMPLIANCE AUDIT

For the Two Years Ended:

June 30, 2003

 

Summary of Findings:

 

Total this audit                         3

Total last audit                         4

Repeated from last audit         2

 

Release Date:

April 6, 2004

 

 

 

 

 

 

 

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 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 grant compliance audits during Fiscal Year 2003.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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

 

 

                                          ILLINOIS ARTS COUNCIL

 

                                              COMPLIANCE AUDIT

                                  For The Two Years Ended June 30, 2003

 

EXPENDITURE STATISTICS

FY 2003

FY 2002

FY 2001

  • Total Expenditures (All Funds)

$18,588,741

$20,099,316

$20,302,345

OPERATIONS TOTAL

       % of Total Expenditures

       Personal Services

       % of Operations Expenditures

$1,787,021

9.6%

$1,200,698

67.2%

$1,799,190

9.0%

$1,120,576

62.3%

$1,636,731

8.1%

$1,061,577

64.9%

       Other Payroll Costs (FICA, Retirement)

       % of Operations Expenditures

       Average No. of Employees

$263,720

14.8%

23

$241,720

13.4%

22

$225,640

13.8%

21

       Contractual Services

       % of Operations Expenditures

$181,433

10.1%

$264,883

14.7%

$155,973

9.5%

       All Other Items

       % of Operations Expenditures

$141,170

7.9%

$172,011

9.6%

$193,541

11.8%

GRANTS TOTAL

       % of Total Expenditures

$16,801,720

90.4%

$18,300,126

91.0%

$18,665,614

91.9%

  • Cost of Property and Equipment

$184,916

$174,026

$173,220

SELECTED ACTIVITY MEASURES

FY 2003

FY 2002

FY 2001

! Federal Grant Receipts

$678,400

$626,870

$633,430

! Grant Applications Received

2,480

2,869

2,800
EXECUTIVE DIRECTOR      

During Audit Period: Ms. Rhoda Pierce (7/1/01 - 4/30/03)

    9; Richard Carlson, Acting Interim Executive Director (5/1/03 to 6/30/03)

Currently:   9; Richard Carlson, Acting Interim Executive Director

 

 

 

 

 

 

 

 

 

 

 

 

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

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

No audit of grants totaling $16.8 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 $684,829 for Fiscal Year 2003 and $630,931 for Fiscal Year 2002. Year end balances were not reconciled to the Illinois State Comptroller records and monthly reconciliations were not done at all. (Finding 1, page 11) This finding has been repeated since 1999.

We recommended the Agency perform monthly cash receipt reconciliations. The Arts Council agreed with our recommendation and stated staff will perform reconcilia-tions of cash receipts with Comptroller records. (For previous Council responses, see Digest Footnotes.)

LACK OF GRANT COMPLIANCE AUDITS
Grant compliance audits were not performed by the Agency during Fiscal Year 2003.

The Agency’s fiscal and grant departments did not perform grant compliance audits during Fiscal Year 2003. Total grants awarded were $16,802,000 (1,428) in Fiscal Year 2003. This finding has been repeated since 1997.
Agency management stated that grant audits were performed during Fiscal Year 2002; however, Fiscal Year 2003 grant audits were not performed because of staff shortages due to early retirement of fiscal personnel. (Finding 2, page 12)

The Arts Council agreed with our recommendation, to resume performing grant audits. (For previous Council responses, see Digest Footnotes.)

 

OTHER FINDING
 
The remaining finding dealt with untimely deposits of cash
receipts. We will review progress toward implementation of
all recommendations during the next audit.
 

          

 

 

                     __________________________________

WILLIAM G. HOLLAND, Auditor General

WGH:KMC:drh

 

SPECIAL ASSISTANT AUDITORS

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

 

DIGEST FOOTNOTES

LACK OF RECONCILIATION OF AGENCY RECORDS TO THE COMPTROLLER (Previous Council Responses)

2001: "Agree. Reconciliation of cash receipts each month is essential to proper internal control procedures and security of cash receipts and balances. This process has been reinstated immediately."

1999: "Agree. Monthly reconciliation of the federal receipt account, appropriations, expenditures, unexpended funds and the Foundation general ledger cash account has begun with reporting of November statements."

LACK OF GRANT COMPLIANCE AUDITS (Previous Council Responses)

2001: "Agree. 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."

1999: "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)