INTRODUCTION
Our audit of the Department of Central Management Services is issued in two
reports. The Compliance Audit Report contains the audit findings and the supplementary
financial information. The Financial Audit Report contains the financial statements and
opinions on the Department's individual nonshared funds.
FINDINGS, CONCLUSIONS, AND RECOMMENDATIONS
PROPERTY AND EQUIPMENT OMITTED FROM DEPARTMENT RECORDS
The Department did not maintain complete property and equipment records,
which resulted in an understatement of fixed assets. Specifically, property and equipment
transferred from the Capital Development Board ($13,272,000) was not included on the
Department’s fixed asset records. Further, real property which is being used by other
agencies, but which is titled to the Department ($8,864,000), was also excluded from the
Department’s fixed asset records.
Department officials indicated that the asset omissions were the result of a lack of
understanding of the reporting process.
We recommended, and the department concurred, to record all fixed assets under its
jurisdiction and control on its fixed asset records. Further, Department officials
indicated that all the necessary adjustments to the fixed asset records for the items
described above have been made. (Finding 1, page 9)
EXCESS VACATION CARRIED FORWARD
The Department allowed some of its employees to carry forward vacation
balances beyond the limit allowed by the Personnel Rules.
We performed a search of the Department’s Employee accrued vacation records (100%)
in search of employees whose accrued vacation balances were in excess of the established
limits. We noted 14 employees whose vacation balances included hours that were not used
within 24 months of the calendar year in which they were earned, as required by the
Personnel Rules. Excess accrued hours carried over beyond the allowable time period ranged
from 15 to 116 hours as of December 31, 2001. In all 14 cases letters were obtained from
the Director or his designee approving the employees' requests to carryover unused
vacation into the next calendar year.
The Personnel Rules (80 Ill. Adm. Code 303.270) stipulate when establishing vacation
schedules, the agency shall consider both the employee’s preference and the operating
needs of the agency. However, in any event, upon request, vacation time must be scheduled
so that it may be taken not later than 24 months after the end of the calendar year in
which it was earned. Additionally, if an employee does not request and take accrued
vacation within this time frame, such vacation time will be lost.
Department officials indicated that the Department has interpreted these rules to
provide for exceptions to the rules under certain circumstances. However, the Department
did not adequately document the exceptions granted.
We recommended the Department comply with the Personnel Rules and require its employees
to use accrued vacation within the required time. We further recommended, in situations
where it is in the best interest of the Department to deny vacation requests, that the
Department document such denials and work with the employees to set up an acceptable plan
to use the excess vacation in a timely manner. (Finding 2, pages 10-11)
Department officials indicated that as of December 31, 2002, there were only 5
employees carrying excess vacation. Department officials also indicated that these 5
individuals were considered essential employees to the Department’s operations, and
that plans for use of the excess vacation have been requested.
UNREPORTED AND UNRECORDED LOCALLY HELD FUND
The Department operated a locally held bank account without statutory
authority, without filing reports with the State Comptroller, and without reporting the
fund to the Auditor General.
The Department used excess rent receipts totaling $467,292 from a re-negotiated rental
agreement to open a locally held escrow trust account. The locally held account was used
for paying remodeling costs of certain space in the James R. Thompson Center.
The Department lacked statutory authority to create this locally held fund, did not
notify the Auditor General of the existence of the fund, did not file any quarterly
reports of Receipts and Disbursements (C-17’s) for this fund, and did not include the
locally held fund in its GAAP reporting package for the year ended June 30, 2001. The fund
balance of $58,000 at June 30, 2002 was transferred into the General Revenue Fund.
Department officials indicated that the locally held fund was created to ensure
sufficient funds were available for the remodeling costs. They further indicated that
failure to obtain authority and failure to report and record the locally held fund was an
oversight. (Finding 3, pages 12-13)
Department officials agreed to our recommendation to comply with the applicable laws
with respect to reporting and recording fund activities. Department officials also
indicated that a policy is being established to require that the accounting department be
notified when any new account is created.
DEBT SERVICE PAYMENT MADE LATE AND CONTROLS WERE INADEQUATE
The Department lacked specific controls over the funding of debt service
payments, resulting in one interest payment being made late. Additionally, required
notifications to the Office of the Comptroller regarding bond payments were not made on a
timely basis.
The Department, on behalf of the Illinois Department of Public Aid (IDPA), entered into
an arrangement for the installment purchase of certain land, a 7-story building and
related facilities. The terms of the agreement required that the State make an interest
payment within 10 days of January 1, 2001. The interest payment in the amount of $469,975
was not made until February 5, 2001.
Additionally, during our testing we noted that the Department did not notify the Office
of the Comptroller of certain debt service payments made as required by the Statewide
Accounting and Management System (SAMS Procedure 31.30.20). This procedure requires the
Department to notify the Office of the Comptroller of periodical principal and interest
payments within 30 days of payment. We noted on one occasion the notification was made 90
days late, and on two other occasions, the notification was not made.
Department officials stated that the payments required by this bond issue are funded by
another state agency and that the Department lacks control to ensure debt service payments
are made on a timely basis. Additionally, the Department did not establish adequate
controls to ensure the bond trustee complies with the requirements for notification of
principal and interest payments.
The Department agreed to our recommendation to institute procedures to more effectively
monitor debt service payments to ensure timely deposit of installment payments and timely
notification of all bond principal and interest payments. (Finding 4, pages 14-15)
ADMINISTRATIVE COSTS OF WETSA PROGRAM NOT PROPERLY ACCOUNTED FOR
The Department’s procedures for determining administrative costs of the
Wireless Emergency Telephone Safety Act (WETSA) program were inadequate to ensure
compliance with provisions of the Act. The Department did not adjust administrative costs
to actual costs or reconcile such costs annually as required by the Illinois
Administrative Code (Code).
The Code (83 Ill. Admin. Code Chapter I, Section 1000.320) requires administrative
costs to be billed proportionately to the Wireless Carrier Reimbursement Fund and the
Wireless Service Emergency Fund on a monthly basis. Furthermore, the fees established
shall be adjusted periodically based on actual costs, and reconciled at least annually.
The first reconciliation was performed by the Department in September 2001 for the
period ended December 2000. The second reconciliation was performed in September 2002 for
the period from December 2000 through April 2002, a period of 16 months. Based on the
Department’s calculations, the funds were overcharged approximately $203,000 during
that 16-month period.
Furthermore, the Department did not reimburse the Communications Revolving Fund and the
Statistical Services Revolving Fund in a timely manner. As such, the Department’s
financial reporting to the Office of the State Comptroller did not accurately reflect the
actual administrative costs that were owed to these funds at June 30, 2002. Administrative
costs of $225,000 for the months of March through June were not included in the
Department’s generally accepted accounting principles (GAAP) reports sent to the
State Comptroller.
We recommended and the Department officials agreed to establish adequate procedures to
ensure the timely reconciliation of administrative costs of the WETSA program. Department
officials also agreed to establish procedures for the proper reporting of administrative
cost reimbursements owed at year-end for the GAAP reporting purposes. (Finding 6, pages
17-18)
AUDITORS’ OPINION
Our auditors stated the financial statements of the Department’s
individual non-shared funds as of and for the year ended June 30, 2002 are fairly
presented in all material respects.
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WILLIAM G. HOLLAND, Auditor General
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SPECIAL ASSISTANT AUDITORS
Sikich Gardner & Co. LLP were our special assistant auditors for this
audit.
