Illinois Farm Development Authority

REPORT DIGEST

ILLINOIS FARM DEVELOPMENT AUTHORITY

FINANCIAL AND COMPLIANCE AUDIT

For the Year Ended:
June 30, 1999

Summary of Findings:

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

Release Date:
March 21, 2000

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 did not perform adequate oversight of its fiscal operations to compensate for a lack of an adequate segregation of duties.

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

ILLINOIS FARM DEVELOPMENT AUTHORITY

FINANCIAL AND COMPLIANCE AUDIT

For The Year Ended June 30, 1999

ALL FUNDS FINANCIAL INFORMATION	FY 1999	FY 1998
Total Operating Expenses	$888,052	$742,339
Personal Services % of Total Expenses Average No. of Employees	$291,335 32.8% 7	$256,615 34.6% 6
Other Payroll Costs (FICA, Retirement) % of Total Expenses	$82,985 9.3%	$88,745 11.9%
Other Professional Fees and Services % of Total Expenses	$175,649 19.8%	$191,761 25.8%
Rental of Office, Utilities and Equipment % of Total Expenses	$30,353 3.4%	$29,561 4.0%
Travel % of Total Expenses	$13,749 1.6%	$27,849 3.8%
Advertising % of Total Expenses	$24,160 2.7%	$17,874 2.4%
Depreciation % of Total Expenses	$14,294 1.6%	$13,023 1.8%
Bad Debts Expenses % of Total Expenses	$226,661 25.5%	$90,076 12.1%
Other Expenses % of Total Expenses	$28,866 3.3%	$26,835 3.6%
Total Revenues	$1,300,738	$1,265,752
Cash and Investments	$13,326,009	$12,267,264
Guarantee Claims Receivable, Net	$619,314	$616,719
Cost of Property and Equipment	$109,559	$105,028

SELECTED ACTIVITY MEASURES	FY 1999	FY 1998
Revenue Bonds Issued Since Inception Number Amount Bond Principal Outstanding at June 30, Bonds Issued During Year Number Amount	2,644 $205,196,357 $121,014,888 78 $9,284,274	2,566 $195,912,083 $82,028,531 118 $14,138,025

AGENCY DIRECTOR

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

Compensating controls need to be enhanced

FINDINGS, CONCLUSIONS, AND RECOMMENDATIONS

MANAGEMENT WEAKNESSES

The Authority did not perform adequate oversight of their fiscal operations to compensate for a lack of an adequate segregation of duties.

The Authority’s Chief Financial Officer had access to all assets and either prepared or oversaw the preparation of all accounting and related books and records without adequate management oversight. There was no management oversight review of the accounting reconciliations, adjusting journal entries, quarterly fixed asset reports and payroll reports.

The limited staffing of the Authority's accounting department and the resultant lack of segregation of duties without compensating management oversight controls hindered the Authority's ability to maintain the integrity of its internal controls.

Authority officials agreed with our recommendation to review accounting reconciliations, adjusting journal entries, quarterly fixed asset reports and payroll reports prepared by the Chief Financial Officer. (Finding 3, page15)

OTHER FINDINGS

The remaining findings are less significant and the Authority’s responses indicate it is addressing the conditions. We will review progress toward implementing these recommendations in our next audit.

AUDITORS’ OPINION

Our auditors state the Illinois Farm Development Authority’s financial statements as of June 30, 1999 and for the year then ended are fairly presented in all material respects.

____________________________________

WILLIAM G. HOLLAND, Auditor General

WGH:JAF:pp

SPECIAL ASSISTANT AUDITORS

Ginoli & Company, LTD. were our special assistant auditors for this audit.