REPORT DIGEST

DEPARTMENT OF CENTRAL MANAGEMENT SERVICES
- COMMUNITY COLLEGE HEALTH INSURANCE
SECURITY FUND

FINANCIAL AUDIT
FOR THE YEAR ENDED JUNE 30, 2016

Release Date:  February 23, 2017

FINDINGS THIS AUDIT:  1

CATEGORY:  NEW -- REPEAT -- TOTAL
Category 1:  1 -- 0 -- 1
Category 2:  0 -- 0 -- 0
Category 3:  0 -- 0 -- 0
TOTAL:  1 -- 0 -- 1

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

INTRODUCTION

This digest covers our financial audit of
the Community College Health Insurance
Security Fund for the year ended June 30,
2016.  At June 30, 2016 the Net Position
Held in Trust for Other Postemployment
Benefits reflected a deficit of
$29,413,000.  Further, the Schedule of
Funding Progress reflects an Unfunded
Actuarial Accrued Liability of
$1,680,761,000.

SYNOPSIS

• (16-1) The Department failed to record
employer and member State Universities
Retirement System contributions receivable
resulting in a $370 thousand
understatement of receivables and
contributions at June 30, 2016.

FINDINGS, CONCLUSIONS, AND RECOMMENDATIONS

WEAKNESSES IN INTERNAL CONTROL OVER
FINANCIAL REPORTING

The Department’s year-end financial
reporting in accordance with Generally
Accepted Accounting Principles (GAAP) to
the Illinois Office of the State
Comptroller contained a material error in
the determination of certain year-end
account balances for the Community College
Health Insurance Security Fund.

The Department understated receivables and
contributions by $370 thousand due to the
failure to record employer and member
State Universities Retirement System
(SURS) contributions receivable.  The
Department revised the applicable
financial statements for this error.
(Finding 1, pages 20-21)

We recommended the Department implement
procedures and cross-training measures to
ensure required financial information is
prepared in a timely, accurate and
complete manner.  This should include
allocating sufficient staff resources and
the implementation of formal procedures to
ensure accurate and reliable financial
information is prepared and submitted to
the Office of the State Comptroller.
These procedures should address all
elements of the Department’s financial
reporting process including, but not
limited to, accruals for liabilities,
supervisory review of supporting
spreadsheets for data accumulation, and
the preparation of management estimates.

Department management agreed with our
recommendation and stated it will continue
to update its financial reporting
procedures to help ensure accurate and
reliable financial information is prepared
and submitted to the Office of the
Comptroller.

AUDITOR’S OPINION

Our auditors stated the financial
statements of the Community College Health
Insurance Security Fund as of June 30,
2016, and for the year then ended, are
fairly stated in all material respects.

FRANK J. MAUTINO
Auditor General

FJM:SKM

SPECIAL ASSISTANT AUDITORS

Our Special Assistant Auditors for this
audit were Sikich, LLP.