REPORT DIGEST

REPORT DIGEST

BIG MUDDY RIVER CORRECTIONAL CENTER

LIMITED SCOPE

COMPLIANCE ATTESTATION ENGAGEMENT

For the Two Years Ended:

June 30, 2006

Summary of Findings:

Total this audit 3

Total last audit 2

Repeated from last audit 1

Release Date:

June 20, 2007

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

Iles Park Plaza

740 E. Ash Street

Springfield, IL 62703

(217) 782-6046 or TTY (888) 261-2887

This Report Digest and Full Report is also available on

the worldwide web at

http://www.auditor.illinois.gov

SYNOPSIS

¨ The Center had inadequate controls over inventory.

¨ The Center’s inventory procedures concerning surplus commodities were not in accordance with the Department’s Administrative Directive and the Procurement Code.

¨ The Center did not maintain accurate property control records.

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

ILLINOIS DEPARTMENT OF CORRECTIONS

BIG MUDDY RIVER CORRECTIONAL CENTER

LIMITED SCOPE COMPLIANCE ATTESTATION ENGAGEMENT

For The Two Years Ended June 30, 2006

EXPENDITURE STATISTICS

FY 2006

FY 2005

FY 2004

Total Expenditures (All Appropriated Funds)......

$27,782,643

$35,254,557

$33,665,947

Personal Services......................................................

% of Total Expenditures...................................

Average No. of Employees...............................

Average Salary Per Employee..........................

Student, member and inmate Compensation.....................

% of Total Expenditures............................................

$16,458,332

59.2%

312

$52,751

$326,217

1.2%

$20,147,892

57.1%

391

$51,529

$340,769

1.0%

$19,150,974

56.8%

397

$48,239

$368,933

1.0%

Other Payroll Costs (FICA, Retirement).....................

% of Total Expenditures...................................

$2,725,676

9.8%

$4,618,950

13.1%

$4,111,057

12.2%

Contractual Services..................................................

% of Total Expenditures...................................

Commodities........................................................

% of Total Expenditures...................................

$6,286,338

22.6%

$1,771,743

6.4%

$7,687,979

21.8%

$2,183,025

6.2%

$6,885,425

20.4%

$2,754,650

8.1%

All Other Items.........................................................

% of Total Expenditures...................................

$214,337

0.8%

$275,942

0.8%

$394,908

1.5%

Cost of Property and Equipment...........................

$47,415,526

$52,892,008

$52,942,882

SELECTED ACTIVITY MEASURES (Not examined)	FY 2006	FY 2005	FY 2004
Average Number of Inmates.....................................	1,865	2,035	2,042
Ratio of Correctional Officers to Inmates...................	1/7.5	1 /6.3	1/6.3
Cost Per Year Per Inmate.........................................	$14,883	$17,324	$16,452
Rated Inmate Capacity..................................................	952	1,152	1,152
Approximate Square Feet Per Inmate.............................	32	32	32

CENTER WARDEN

During Examination Period: Mr. Gregory Lambert (7/1/04-5/31/06), Mr. Roy Bradford (6/1/06-6/30/06)

Currently: Mr. Roy Bradford

The Center’s inventory at June 30, 2006 and 2005 was overstated by $44,913 and $36,751, respectively

The Center had $37,854 of surplus inventory at June 30, 2006.

The Center’s property balance had an undeterminable understatement at June 30, 2006.

FINDINGS, CONCLUSIONS, AND RECOMMENDATIONS

INADEQUATE CONTROLS OVER INVENTORY

The Center’s inventory at June 30, 2006 and 2005 was overstated by $44,913 and $36,751, respectively, and review of inventory procedures disclosed numerous control weaknesses. We noted the following:

· 10 of 27 (37%) inventory items tested were valued incorrectly.

· Delays occurred in posting purchase requisitions and receiving reports. All 20 receiving reports and requisitions tested were entered from 4 to 95 days after issuance.

· Center personnel did not print out the Monthly Transaction Register for any month within the examination period.

· Center personnel did not perform reconciliations of the Automated Inventory Management System (AIMS) Posting Report for any month within the examination period.

Center management stated the above exceptions were the result of unintentional errors attributed to the lack of adequately trained staff. The pricing errors were caused by entering the incorrect units from receiving reports and then adjusting quantities later without adjusting per unit costs. (Finding 1, pages 10-11)

Center management accepted our recommendation to comply with the Department's Administrative Directives and institute procedures to strengthen controls over inventory, data processing, report maintenance and proper pricing. Additionally, the Department is currently in the process of implementing a real time inventory system which will address many of the issues noted in the finding.

SURPLUS INVENTORY

The Center’s inventory procedures concerning surplus commodities were not in accordance with the Department’s Administrative Directive and the Procurement Code and were insufficient to ensure adequate monitoring of excess quantities.

Per review of the Automated Inventory Management System (AIMS) Report “Listing of On-Hand Inventories over Recommended Guidelines,” we noted the following:

· At June 30, 2006, the report reflected $37,854 of overstocked inventory.

· 32 of the total 65 (49%) clothing store items had quantities on hand in excess of the previous 12 months’ usage.

Center management stated the excess clothing items were the result of an apparent failure by the clothing store clerk to assess previous usage when placing new orders. (Finding 2, pages 12-13)

The Center accepted our recommendation to comply with the Department’s Administrative Directive and the Illinois Procurement Code and institute procedures to strengthen controls over inventory ordering.

INACCURATE PROPERTY REPORTING

The Center did not maintain accurate property control records or submit accurate quarterly property reports to the Department of Corrections-Central Office resulting in an undeterminable understatement in the Center’s property balance at June 30, 2006 as reported to the Comptroller’s Office.

The following exceptions were noted during our testing of the Center’s property control records and the Agency Report of State Property (C-15):

· 1 of 15 (7%) deletions tested, totaling $7,652, was removed from the Center’s Property Control System in error,

· 1 of 16 (6%) additions tested omitted shipping charges of $329,

· 2 of 16 (13%) additions tested lacked supporting documentation to verify their value, and

· Numerous equipment items purchased through the Inmate Benefit Fund in FY06 were omitted from the Center’s Property Control System. The value was undeterminable due to the lack of supporting documentation maintained at the Center.

Center management stated the discrepancies were the result of clerical errors or oversights, in addition to communication issues relating to the Inmate Benefit Fund expenditures for equipment being assumed by the Department’s Central Office in FY06. (Finding 3, pages 14-15)

The Center accepted our recommendation to strengthen controls over State property reporting and to comply with the State Property Control Act and applicable SAMS procedures to ensure accurate reporting of State property information.

AUDITORS' OPINION

We conducted a limited scope compliance attestation engagement of the Center as required by the Illinois State Auditing Act. We also performed certain agreed-upon procedures with respect to the accounting records of the Center to assist our audit of the entire Department. Financial statements for the Department will be presented in that report.

_____________________________________

WILLIAM G. HOLLAND, Auditor General

WGH:AKS:pp

SPECIAL ASSISTANT AUDITORS

Our Special Assistant Auditors were West & Company, LLC.