REPORT DIGEST OFFICE OF THE ATTORNEY GENERAL COMPLIANCE EXAMINATION FOR THE TWO YEARS ENDED JUNE 30, 2020 Release Date: March 4, 2021 FINDINGS THIS AUDIT: 3 CATEGORY: NEW -- REPEAT -- TOTAL Category 1: 0 -- 1 -- 1 Category 2: 2 -- 0 -- 2 Category 3: 0 -- 0 -- 0 TOTAL: 2 -- 1 -- 3 FINDINGS LAST AUDIT: 1 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 SYNOPSIS • (20-1) The Office did not exercise adequate control over the recording and reporting of its State property and equipment. • (20-2) The Office did not exercise adequate timekeeping controls over attendance for employees working remotely. FINDINGS, CONCLUSIONS, AND RECOMMENDATIONS INADEQUATE CONTROLS OVER PROPERTY AND EQUIPMENT The Office did not exercise adequate control over the recording and reporting of its State property and equipment. Recording and reporting weaknesses were identified during testing of property and equipment items as follows: • The Agency Report of State Property (C-15) form for the quarter ending September 30, 2018 overstated additions by $515, misstated net transfers by $26,300, and reported deletions as increase of $11,657 rather than a decrease. • The C-15 for the quarters ended June 30, 2019 and June 30, 2020 overstated the year-end balance by $9,240 and $933,397, respectively. • The Schedule of Changes in Property reported adjustments totaling $48,119 in Fiscal Year 2019 and $9,915 in Fiscal Year 2020, representing unknown reconciling items between the C-15’s and property records. • Ten of 40 (25%) additions tested totaling $171,656 were added to the property records 5 to 57 days late. • Six of 40 (15%) items tested, totaling $47,581, were removed from property records 9 to 57 days late. • Four of 40 (10%) items tested, totaling $51,724, reported acquisition dates on Surplus Property Delivery Forms which were 2 to 45 months after the acquisition dates recorded in property records. • Three of 40 (8%) items could not be physically located. • One of 40 (3%) items was not tagged until 113 days after receipt. • The Office failed to adopt a formal policy for delineating categories of equipment subject to theft. Any items with a value of $1,000 or less that could be considered subject to theft, such as portable electronic office equipment like laptops, were not identified, tagged or tracked. (Finding 1, pages 9-11) We recommended the Office strengthen controls and procedures to ensure accurate C-15 reports, property records and schedules are prepared, property and equipment additions are appropriately tagged and timely recorded in property records, property items are timely removed from property records, and Surplus Property Delivery Forms are properly completed. We further recommend the Office adopt a formal policy for delineating categories of equipment considered to be subject to theft. The Office accepted this finding and stated staff will work to strengthen internal controls to increase the accuracy of C-15 reports and property records, and ensure that all related equipment transactions occur in a timely manner. The Office further responded it will develop and implement a formal policy for delineating categories of equipment considered to be subject to theft. INADEQUATE CONTROLS OVER REMOTE EMPLOYEE ATTENDANCE The Office did not exercise adequate timekeeping controls over attendance for employees working remotely. Employees who worked off-site from March 16, 2020 through June 30, 2020 were unable to records hours worked in the system used for employee timekeeping, and the Office did not require any other method to keep records of hours worked. Management suspended timekeeping requirements for employees working off- site when the majority of employees worked remotely during this timeframe. During Fiscal Year 2020, the Office employed an average of 767 full-time employees. (Finding 2, pages 12-13) We recommended the office ensure compliance with the State Officials and Employees Ethics Act by requiring and providing a mechanism for State employees working remotely to periodically submit time sheets documenting the time spent each day on official State business to the nearest quarter hour. The Office accepted the recommendation and stated corrective action was implemented effective July 31, 2020. OTHER FINDING The remaining finding pertains to weaknesses in cybersecurity programs and practices. We will review the Office’s progress towards the implementation of our recommendations in our next compliance examination. ACCOUNTANT’S OPINION The accountants conducted a compliance examination of the Office for the two years ended June 30, 2020, as required by the Illinois State Auditing Act. The accountants qualified their report on State compliance for Finding 2020-001. Except for the noncompliance described in this finding, the accountants stated the Agency complied, in all material respects, with the requirements described in the report. This compliance examination was conducted by West & Company, 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:lkw