|
Board did not
receive guidance or documentation with the billings from CMS
Staff indicated no
savings have been evident
Efficiency
initiative payments totaled $5,084
Board disagreed
with finding
Auditor comment
regarding Board's response
Evidence of savings
not provided
Lack of statutory
authority
Internal controls
over record keeping were inadequate
An employee was
able to obtain $1,050 from the fund and records prior to November 2001 could
not be located
Board paid
contractor $546,000 for failed project
The five contracts
totaled $124,900
Procurement Code
requires use of competitive request for proposal process
Board disagreed
with finding
Auditor comment
regarding the Board's response
82 CDB employees
paid from bond proceeds in FY 04
CDB had not used
bond funds to pay employee salaries prior to FY 04
|
INTRODUCTION
The
Capital Development Board (Board) serves as the non-road, construction
management arm of the Illinois government.
FINDINGS,
CONCLUSIONS AND RECOMMENDATIONS
PAYMENTS WERE MADE FOR EFFICIENCY INITIATIVE BILLINGS FROM IMPROPER
LINE ITEM APPROPRIATIONS
The Board made payments for efficiency
initiative billings from improper line item appropriations and funds. The State Finance Act requires that the
amount designated as savings from efficiency initiatives implemented by the
Department of Central Management Services (CMS) shall be paid into the
Efficiency Initiatives Revolving Fund.
The Act further requires “State agencies shall pay these amounts…from
the line item appropriations where the cost savings are anticipated to
occur.”
The Board did not receive guidance or
documentation with the billings from CMS detailing from which line item
appropriations savings were anticipated to occur. According to Board staff, they received no documentation or
information from CMS detailing the nature and/or type of savings that CMS anticipated. Additionally, Board staff indicated that
no savings for the Board have been evident to date. The only guidance received was the amount of payments that
should be taken from General Revenue Funds versus Other Funds for the
September 2003 billings. While the
CMS billings directed the Board to make payment from General Revenue Funds,
this was changed after the Board reported it “had no GRF operational
appropriations.”
The Board used $5,084 from its appropriations from the
Capital Development Board Revolving Fund to make all of its efficiency
payments for Information Technology and Vehicle Fleet Management. State law allows the Board to use the
moneys in the Fund for multiple purposes, including electronic data
processing expenses. The law further
states “Unexpended moneys in the Fund shall not be transferred or allocated
by the Comptroller or Treasurer to any other fund, nor shall the Governor
authorize the transfer or allocation of those moneys to any other fund.” (Finding 1, Pages 10-12)
We recommended that the Board only make payments for
efficiency initiative billings from line item appropriations where savings
would be anticipated to occur.
Further, the Board should seek an explanation from CMS as to how
savings levels were calculated, or otherwise arrived at, and how savings
achieved or anticipated impact the Board’s budget.
Board officials disagreed with the finding
and responded that when CDB inquired into the GRF billing, CMS responded that
the fund should be the CDB Revolving Fund since bond funds as a source were
not appropriate. Also, the EDP line
used to pay the Information Technology billing was a proper line in the
Board’s opinion. Further, the Vehicle
Fleet Management billings were paid from the Operational Purposes line since
that line had been used in FY02 and FY03 to make payments for operation of
autos. Finally, the Board agreed that
the billings lacked detail and responded more detailed back-up would be
sought before making future payments.
In
an auditor’s comment, we noted that information provided by a Board official
stated the Fiscal Officer contacted GOMB (Governor’s Office of Management and
Budget), not CMS, for direction on billings.
The State Finance Act directs CMS, and not GOMB, to be responsible for
implementing efficiency initiatives and determining the amount of savings
that agencies shall pay into the Efficiency Initiatives Revolving Fund.
Further,
our auditor’s comment noted that when we asked the Board for evidence of
savings provided for the amounts billed, the Board responded that none had
been provided. Additionally, when we
asked whether the Board had experienced any savings from the efficiency
initiatives for which it was billed, the Board responded there was none that
was evident to date. Without specific
guidance from CMS regarding the nature and type of savings initiatives, it is
unclear whether these payments were appropriate.
LACK OF AUTHORITY AND INTERNAL CONTROL FOR
LOCALLY HELD FUND
The Board maintained a locally held fund
without statutory authority or proper internal controls relating to
transactions of the fund. The fund
was used for ticket sales, contributions, and expenses of the Board’s State
Fair exhibition and an awards program which honored outstanding team efforts
on Board projects.
During
a 2003 internal review, it was determined an employee was able to obtain
$1,050 from the fund. In addition,
records of transactions prior to November 2001 could not be located. As a result of the internal review, the
matter was investigated, corrective action was taken, and the matter referred
to the State's Attorney for follow-up.
(Finding 2, Pages 13-14)
We
recommended the Board continue efforts to obtain statutory authority prior to
resuming any activities of this or any future locally held funds. Further, the Board should establish
appropriate internal controls.
OTHER FINDINGS
The
remaining findings are less significant and are reportedly being given
attention by the Board. We will
review the Board’s progress toward the implementation of our recommendations
in our next examination.
Janet
Grimes, Acting Executive Director, provided the responses to our
recommendations.
EMPLOYEES PAID FROM BOND PROCEEDS
A portion of the Board’s FY04 operational expenditures
for personal services were paid from the Capital Development Fund (141),
which receives its funding from bond proceeds. In accordance with the FY04 appropriation bill, 82 Board
employees assigned to work directly with construction projects were paid
$3,977,403 from Fund 141. Prior to
FY04, these employees were paid from appropriations to the General Revenue
Fund. The Board had not used bond
funds to pay employee salaries prior to FY04. (Page 90)
AUDITORS’ OPINION
Our auditors stated the financial statements of
the Capital Development Board for the year ended June 30, 2004 are fairly
presented in all material respects.
____________________________________
WILLIAM G. HOLLAND, Auditor General
WGH:LKW:pp
SPECIAL
ASSISTANT AUDITORS
Clifton Gunderson LLP were our special assistant
auditors for this engagement.
|
