REPORT DIGEST

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

FINANCIAL AUDIT
FOR THE YEAR ENDED JUNE 30, 2021

Release Date:  June 9, 2022

FINDINGS THIS AUDIT:  1

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

This digest covers the Department of
Central Management Services
(Department), Community College Health
Insurance Security Fund financial
audit as of and for the year ended
June 30, 2021.

SYNOPSIS

• (21-01) The Department failed to
determine premiums that will allow for
the establishment of an actuarial
sound reserve for the Community
College Health Insurance Program.

FINDINGS, CONCLUSIONS, AND
RECOMMENDATIONS

FAILURE TO DETERMINE PREMIUMS THAT
ALLOW FOR ESTABLISHMENT OF ACTUARIAL
SOUND RESERVE

The Department of Central Management
Services (Department) failed to
determine premiums that will allow for
the establishment of an actuarially
sound reserve for the Community
College Health Insurance Program
(Program).

In the Fiscal Year 2018 and 2019
compliance examination, we reported
the Department had failed to determine
premiums that would allow for the
establishment of an actuarially sound
reserve. During Fiscal Year 2021
testing, we continued to identify
exceptions, as noted below:

• The State Employees Group Insurance
Act of 1971(5 ILCS 375/6.9(e)(1)
(Act)) states, for a community college
benefit recipient, up to 75% of the
total insurance rate shall be paid
from the Community College Health
Insurance Security Fund (Fund). During
testing, we noted the Fund covered
75.044% of the total insurance rate
for benefit recipients. The projected
total additional cost to the Fund was
$10,846.

• The Act (5 ILCS 375/6.(e)(2)) states
the balance of the rate of insurance,
including the entire premium for any
coverage for community college
dependent beneficiaries that has been
elected, shall be paid by deductions
authorized by the community college
benefit recipient. During testing, we
noted the Fund covered 1.619% of the
total insurance rate for benefit
recipients. The projected total
additional cost to the Fund was
$38,633.

Additionally, the Act (5 ILCS
375/6.9(e)) requires the Department to
determine premiums that will allow for
the establishment of an actuarially
sound reserve for the Community
College Health Insurance Program. At
June 30, 2021 the Program had a fund
deficit of $104.136 million and the
Program experienced a loss of $16.165
million. The Program does not have an
actuarially sound reserve.  (Finding
1, pages 24-26)

We recommended the Department ensure
premium rates meet the requirements
established by the Act. Additionally,
we recommended the Department either
comply with the law by working with
the Governor’s Office of Management
and Budget to obtain the necessary
appropriation to supplement the
Community College Health Insurance
Program or seek legislative relief
from the statutory requirement.

The Department accepted the finding
and recommendation and stated that
with the passage of the Fiscal Year
2023 budget, there was established an
additional $25M appropriation from the
General Revenue Fund for deposit into
the Community College Health Insurance
Security Fund. The Department stated
that while this will not completely
eliminate the backlog of payables, it
will provide some reduction.
Additionally, the Department stated it
will continue to work with the
Governor’s Office, the Governor’s
Office of Management and Budget, the
General Assembly, and the various
constituency representative to develop
a legislative solution to the funding
issues of the program.

AUDITOR’S OPINION

The auditors stated the financial
statements of the Department of
Central Management Services, Community
College Health Insurance Security Fund
as of and for the year ended June 30,
2021, are fairly stated in all
material respects.

This financial audit was conducted by
Sikich LLP.

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

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