REPORT DIGEST

DEPARTMENT OF CORRECTIONS - CORRECTIONAL INDUSTRIES

FINANCIAL AUDIT

For the Year Ended:

June 30, 2005

Release Date:

March 2, 2006

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 is also available on

the worldwide web at

http://www.state.il.us/auditor

INTRODUCTION

This digest covers our financial audit of the Illinois Correctional Industries (ICI) for the year ended June 30, 2005. ICI is a component of the adult division of the Illinois Department of Corrections. ICI operates manufacturing, service and agricultural industries within the adult correctional centers.

AUDITORS’ OPINION

Our auditors stated the June 30, 2005 financial statements of the Illinois Correctional Industries are fairly presented in all material respects.

____________________________________

WILLIAM G. HOLLAND, Auditor General

WGH:CML:pp

SPECIAL ASSISTANT AUDITORS

Our special assistant auditors for this engagement were E.C. Ortiz & Co., LLP.

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

ILLINOIS DEPARTMENT OF CORRECTIONS

CORRECTIONAL INDUSTRIES

FINANCIAL AUDIT

For the Year Ended June 30, 2005

FINANCIAL OPERATIONS		FY 2005	FY 2004
OPERATING REVENUES
Operating Revenues.....................................................................		$39,899,000	$43,695,000
OPERATING EXPENSES
Operating Expenses........................................................................		41,166,000	41,338,000
Operating Income (Loss).......................................................		($1,277,000)	$2,357,000
NONOPERATING REVENUES (EXPENSES)
Rental Income...............................................................................		$345,000	$313,000
Operation Ceasefire.....................................................................		(1,250,000)	0
Loss on Disposal of Fixed Assets..................................................		(58,000)	(39,000)
Interest Expense.........................................................................		(5,000)	(7,000)
Miscellaneous Income (Expense)................................................		(40,000)	29,000
Net Nonoperating Revenues (Expenses)		($1,008,000)	$296,000

Transfers to Other Funds..........................................................		(15,878,000)	(4,000,000)
Net Income/(Losses).........................................................		($18,163,000)	($1,347,000)

Net Assets, Beginning of Year.................................................		41,152,000	42,499,000
Net Assets, End of Year.........................................................		$22,989,000	$41,152,000

SELECTED ACCOUNTS, AS OF JUNE 30,		2005	2004
Cash...............................................................................................		$3,786,000	$23,650,000
Accounts Receivable....................................................................		$580,000	$394,000
Due From Other Funds......................................................................		$5,294,000	$3,392,000
Inventories.......................................................................................		$9,568,000	$10,243,000
Property, Equipment and Livestock, Net of Depreciation.........................................................................		$7,564,000	$7,457,000
Net Assets – Unrestricted...............................................................		$15,437,000	$33,721,000
	CORRECTIONAL INDUSTRIES' CHIEF EXECUTIVE OFFICER
During Audit Period: James R. Underwood, Chief Executive Officer Currently: James R. Underwood, Chief Executive Officer