REPORT DIGEST

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

FINANCIAL AUDIT
FOR THE YEAR ENDED JUNE 30, 2024

Release Date:  March 13, 2025

FINDINGS THIS AUDIT: 1

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

FINDINGS LAST AUDIT: 1

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, 400 West
Monroe, Suite 306, Springfield, IL
62704-9849
(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 the Department of Central
Management Services (Department), Community
College Health Insurance Security Fund
financial audit as of the year ended June
30, 2024.

SYNOPSIS

• (24-1) The Department failed to determine
premiums that will allow for the
establishment of an actuarially 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 first reported the
Department had failed to determine premiums
that would allow for the establishment of an
actuarially sound reserve. During Fiscal
Year 2024 testing, we continued to identify
exceptions, as noted below:

• The State Employees Group Insurance Act of
1971 (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 12.23% of the
total insurance rate for benefit recipients.
The projected total additional cost to the
Fund was $306,092.

• 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 Program.
As of June 30, 2024, the Program had a fund
deficit of $103.625 million. The Program
does not have an actuarially sound reserve.
(Finding 1, pages 26-27). This finding has
been reported since 2021.

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 (GOMB) to obtain the
necessary appropriation to supplement the
Program or seek legislative relief from the
statutory requirement.

The Department stated it accepted the
finding and recommendation and has worked
with GOMB to enact legislation that will
allow for increases to the contributions
provided by active employees, districts, and
the General Revenue Fund. Additionally, the
Department stated it worked with GOMB to
provide for an additional $50 million in
transfers to the fund which was used to
reduce the payment back log. Lastly, the
Department stated that these two remedies,
based upon current projections, are expected
to completely eliminate the back log by
Fiscal Year 2032.
Subsequently, revenues will be accrued in
order to establish a sound reserve balance.

AUDITOR’S OPINION

The auditors stated the financial statements
of the Department of Central Management
Services, Community College Health Insurance
Fund as of and for the year ended June 30,
2024, are fairly stated in all material
respects.

This financial audit was conducted by Skich
CPA LLC.

COURTNEY DZIERWA
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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