REPORT DIGEST

DEPARTMENT OF CORRECTIONS – CORRECTIONAL
INDUSTRIES

FINANCIAL AUDIT
For the Year Ended June 30, 2014

Compliance Examination:
For the Two Years Ended June 30, 2014

Release Date:  January 29, 2015

FINDINGS THIS AUDIT:  6

CATEGORY:  NEW -- REPEAT -- TOTAL
Category 1:  0 -- 0 -- 0
Category 2:  2 -- 4 -- 6
Category 3:  0 -- 0 -- 0
TOTAL:  2 -- 4 -- 6

FINDINGS LAST AUDIT: 13

Category 1:   Findings that are material
weaknesses in internal control and/or a
qualification on compliance with State laws
and regulations (material noncompliance).
Category 2:   Findings that are significant
deficiencies in internal control and
noncompliance with State laws and regulations.
Category 3:   Findings that have no internal
control issues but are in noncompliance with
State laws and regulations.

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 are also
available on the worldwide web at
www.auditor.illinois.gov

INTRODUCTION

This digest covers the financial audit for the
year ended June 30, 2014 and the compliance
examination for the two years ended June 30,
2014.  Correctional Industries is a division
of the Department of Corrections and operates
manufacturing and services industries within
the adult correctional centers.

SYNOPSIS

• (14-1) Correctional Industries had not
ensured controls over the Information
Technology environment provided sufficient
protection.
• (14-2) Correctional Industries failed to
submit to the Office of the Comptroller a
listing of all interagency receivables written
off.

FINDINGS, CONCLUSIONS, AND RECOMMENDATIONS

LACK OF CONTROLS OVER INFORMATION TECHNOLOGY

Correctional Industries (Industries) had not
ensured controls over the Information
Technology environment provided sufficient
protection.

As a division of the Department of
Corrections, Industries relied upon the
controls implemented within the Department of
Corrections’ IT environment.  However, as part
of the financial statement audit of the
Department of Corrections for the period ended
June 30, 2014, the Department of Corrections’
auditors noted the Department of Corrections
had not implemented or documented controls
over its IT environment.

The inability of Department of Corrections to
provide detailed information prevented the
Department of Corrections’ auditors from
performing required tests to determine the
adequacy of the control environment.  As such,
Industries’ auditors were unable to rely upon
the IT environment controls.  (Finding 1, page
13)

We recommended Industries work with
Corrections to ensure controls are implemented
and documented over the IT environment and the
controls provide sufficient protection.

Industries officials accepted our
recommendation and stated they will make
efforts to communicate with the Department of
Corrections the need for controls to be
implemented and documented over the IT
environment.

FAILURE TO SUBMIT REPORT TO OFFICE OF THE
COMPTROLLER

Correctional Industries (Industries) failed to
submit to the Office of the Comptroller a
listing of interagency accounts receivable
written off.

During our review, we noted Industries had not
submitted to the Office of the Comptroller a
listing of all interagency receivables written
off.  As of June 30, 2013 and 2014, total
receivables written off were $122,834 and
$1,638,203 respectively.  (Finding 2, page 14)

We recommended Industries work with the Office
of the Comptroller to file the report on
interagency accounts receivable written off
within 60 days of being written off.

Industries officials accepted our
recommendation and stated they will make
effort to file the required report of
interagency write-offs with the Office of the
Comptroller within 60 days of writing off
interagency receivables.

OTHER FINDINGS

With regards to the other findings noted in
our report, Correctional Industries management
indicated they are being given attention.  We
will review the progress towards the
implementation of our recommendations during
our next audit.

AUDITOR’S OPINION

Our auditors stated the financial statements
of Correctional Industries as of June 30,
2014, and for the year then ended, are fairly
stated in all material respects.

A compliance examination of Correctional
Industries was also conducted as required by
the Illinois State Auditing Act.  The
Auditor’s Report noted Correctional Industries
did not comply with certain requirements
regarding applicable laws and regulations.

WILLIAM G. HOLLAND
Auditor General

WGH:MKL

AUDITORS ASSIGNED

West & Company, LLC were our special assistant
auditors for this audit.