Illinois Farm Development Authority 2001 Audit

REPORT DIGEST

ILLINOIS FARM DEVELOPMENT AUTHORITY

FINANCIAL AND COMPLIANCE AUDIT

For the Year Ended:
June 30, 2001

Summary of Findings:

Total this audit 4
Total last audit 3
Repeated from last audit 2

Release Date:
April 3, 2002

State of Illinois
Office of the Auditor General

WILLIAM G. HOLLAND

AUDITOR GENERAL

To obtain a copy of the Report contact:
Office of the Auditor General
Attn: Records Manager
Iles Park Plaza
740 E. Ash Street
Springfield, IL 62703

(217)782-6046 or TDD (217) 524-4646

This Report Digest is also available on
the worldwide web at
http://www.state.il.us/auditor

SYNOPSIS

The Authority lacks an adequate policies and procedures manual.
The Authority failed to remit Treasurer Drafts on a timely basis.

{Expenditures and Activity Measures are summarized on the next page.}

ILLINOIS FARM DEVELOPMENT AUTHORITY
FINANCIAL AND COMPLIANCE AUDIT
For The Year Ended June 30, 2001

ALL FUNDS FINANCIAL INFORMATION	FY 2001	FY 2000
Total Operating Expenses	$1,065,340	$727,202
Personal Services % of Total Expenses Average No. of Employees	$345,347 32.4% 7	$337,455 46.4% 7
Other Payroll Costs (FICA, Retirement) % of Total Expenses	$98,669 9.3%	$92,409 12.7%
Other Professional Fees and Services % of Total Expenses	$269,713 25.3%	$205,580 28.3%
Rental of Office, Utilities and Equipment % of Total Expenses	$33,095 3.1%	$30,689 4.2%
Travel % of Total Expenses	$15,549 1.5%	$23,465 3.2%
Advertising % of Total Expenses	$16,209 1.5%	$13,445 1.8%
Depreciation % of Total Expenses	$12,099 1.1%	$13,657 1.9%
Bad Debts (Recoveries) % of Total Expenses	$246,731 23.2%	$(16,244) (2.2)%
Other Expenses % of Total Expenses	$27,928 2.6%	$26,746 3.7%
Total Revenues	$1,697,988	$1,300,478
Cash and Investments	$23,030,758	$17,512,224
Guarantee Claims Receivable, Net	$484,042	$453,651
Cost of Property and Equipment	$109,829	$109,709

SELECTED ACTIVITY MEASURES	FY 2001	FY 2000
Revenue Bonds Issued Since Inception Number Amount Bond Principal Outstanding at June 30, Bonds Issued During Year Number Amount	2,834 $229,038,762 $ 91,804,834 98 $11,756,702	2,736 $217,282,060 $ 88,300,302 92 $12,085,703

AGENCY DIRECTOR

During Audit Period: David Wirth, Executive Director
Currently: David Wirth, Executive Director

Agency personnel stated that they have been unable to devote sufficient resources to completing the policies and procedures manual

Treasurer Drafts totaling $388,735 were not sent to the State Comptroller’s Office until on average 64 days after the receipts were deposited

FINDINGS, CONCLUSIONS, AND RECOMMENDATIONS

NEED TO DEVELOP A COMPREHENSIVE POLICIES AND PROCEDURES MANUAL

The Authority does not have a sufficiently detailed policies and procedures manual to ensure consistency in the Authority’s operations.

The State Records Act (5 ILCS 160/8) requires that "the head of each agency shall cause to be made and preserved records containing adequate and proper documentation of the organization, functions, policies, decisions, procedures, and essential transactions of the agency."

Authority personnel stated the policies and procedures manual has not been completed because they have not been able to devote sufficient resources to the project. (Finding 1, page 13) This finding was first reported in 1999.

Authority officials agreed with our recommendation to develop and adopt a comprehensive policies and procedures manual and they stated they will continue to work towards its completion. (For previous Authority responses, see digest footnote #1.)

NEED TO REMIT TREASURER DRAFTS TO THE COMPTROLLER ON A TIMELY BASIS

Treasurer Drafts are the State’s equivalent to a "deposit slip". They are prepared by the agencies using the "Receipt Deposit Transmittal" form as evidence of a deposit of funds into the State Treasury. Five copies are then forwarded to the Office of the Comptroller so that they may order the deposit into the appropriate State Funds.

While all deposits were made on a timely basis we noted that 28 Treasurer Drafts totaling $388,735 were not sent to the Comptroller’s Office for an average of 64 days after the receipts were deposited. The Authority stated the Treasurer Drafts were not submitted timely because several drafts were combined before completing the Receipt Deposit Transmittal form.

The State Officers Money Disposition Act (30 ILCS 230/2) states that Treasury Drafts shall be provided to the State Comptroller to allow deposit into the appropriate fund. (Finding 3, page 15)

Authority officials agreed with our recommendation to remit all Treasurer Drafts on a timely basis.

OTHER FINDINGS

The remaining findings are less significant and the Authority’s response indicates that it is addressing the conditions. We will review the Authority's progress toward implementation of our recommendations in our next audit.

Ms. Laura Lanterman, Chief Fiscal Officer, provided the Authority's responses to our findings and recommendations.

AUDITORS’ OPINION

Our auditors state the financial statements of the non-shared enterprise funds of the Illinois Farm Development Authority as of and for the year ended June 30, 2001 are fairly presented in all material respects.

____________________________________

WILLIAM G. HOLLAND, Auditor General

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SPECIAL ASSISTANT AUDITORS

Cameron, Smith & Company were our special assistant auditors for this audit.

DIGEST FOOTNOTE

#1 LACK OF POLICIES AND PROCEDURES MANUAL – Previous Department Responses

2000: It is true that the Authority does not have an official Policies and Procedures manual that covers all areas. However, nearly all areas are addressed in other places. For example, the Authority maintains a file on the Procurement Code. The Authority is still working on the manual per previous audit recommendations. Unfortunately, the process is taking more time than expected. We desire to comply and have written policies and procedures and propose to cross-reference items such as the state’s procurement code to avoid duplicating the procurement code.

1999: The Authority agrees with this finding. The Authority is working to develop policies and procedures manuals.