REPORT DIGEST
ILLINOIS DEPARTMENT OF JUVENILE JUSTICE
COMPLIANCE EXAMINATION
For the Two Years Ended June 30, 2010
Release Date: August 18, 2011
Summary of Findings:
Total this audit: 16
Total last audit: 25
Repeated from last audit: 14
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
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SYNOPSIS
• The Department of Juvenile Justice (Department) did not
maintain accurate and adequate equipment and capital asset records.
• The Department did not comply with statutory contracting
requirements in providing commissary / concession type services to residents at
five Youth Centers.
• The Department’s Youth Centers inadequately administered
locally held (bank accounts) funds during the examination period.
• The Department’s payroll timekeeping system is not
automated.
• The Department failed to ensure proper controls were
established in the administration of its contracts during the examination
period.
INTRODUCTION
Effective June 1, 2006, Public Act 94-0696 established the
Department of Juvenile Justice (Department).
This Act transferred certain rights, powers, duties, and functions that
were exercised by the Juvenile Division of the Department of Corrections (DOC). Effective July 1, 2006, DOC’s school district
was transferred to the Department.
This report presents our compliance attestation examination
of the Department’s operations for the two years ended June 30, 2010. During the two years ended June 30, 2010 the
Department administered 8 youth centers.
FINDINGS, CONCLUSIONS, AND RECOMMENDATIONS
INACCURATE AND INADEQUATE EQUIPMENT AND CAPITAL ASSET
RECORDKEEPING
The Department did not maintain accurate and adequate
equipment and capital asset records.
Auditors tested a sample of equipment invoice vouchers
during the examination period and noted the following exceptions:
• Items purchased from ten of the invoice vouchers tested
totaling $55,566 were not recorded in the property listings and were not issued
property control tags.
• The Department could not provide property reports for the
first seven months of the examination period and for several months thereafter,
the Department could not provide the reports for several divisions. As a result, the auditors were unable to
trace 14 items selected for testing to a relevant property control system
report.
• The Department purchased $71,699 of beds and furniture to
replace beds and furniture deemed to be a danger to the health and safety of
the youth. The Department was unable to
document they removed the cost of the replaced beds and related furniture from
their property control records.
Auditors also identified the Department utilizes a summary
worksheet to prepare its State property form for submission to the Office of
the Comptroller. The worksheet does not
provide individual transaction detail to support the summarized totals. The Department was unable to provide detailed
information supporting the summary worksheets and, as such, auditors were unable
to test the composition of the transactions reported on the State property
form. Additionally, due to the significant number of property control system
reports which were unavailable, auditors were unable to adequately test amounts
included on the summary worksheets.
Department management indicated the limitations inherent in
the 30 year old property control system create difficulties in
recordkeeping. This inherent problem
causes the Department to maintain several manual spreadsheets and files. Management further indicated, at this time,
there is no funding to purchase a new property control system. (Finding 2, pages 16 - 18)
We recommended the Department strengthen its procedures over
property and equipment to ensure accurate recordkeeping and accountability for
all State assets.
Department officials
accepted our recommendation and responded they will continue devoting the
resources necessary within the limitations of the existing Automated Property
Control System (APCS) to ensure that property and equipment information is
properly recorded and maintained.
NONCOMPLIANCE WITH STATUTORY REQUIREMENTS IN PROVIDING
COMMISSARY/CONCESSION TYPE SERVICES TO RESIDENTS OF YOUTH CENTERS
The Department’s St. Charles Youth Center entered into a
contract with a vendor to provide commissary / concession services. Five other Youth Centers (Chicago,
Harrisburg, Joliet, Pere Marquette and Warrenville) decided to use the same
vendor to provide commissary / concession services but are not a party to the
contract between the vendor and the St. Charles Youth Center and do not have a
formal written contract with the vendor.
Based on information provided by the Department, the vendor for the six
Youth Centers noted above was paid approximately $262,000 and $205,000 by the
residents, respectively for fiscal years 2009 and 2010 for commissary /
concession goods.
The following exceptions were noted with the commissary /
concession services contract and operations:
• The contract entered into with the vendor was not prepared
in a standard contract format and did not provide complete information. The contract was prepared by piecing together
a request for proposal from the vendor to which the contract was awarded. In addition, the witness area, description of
contractual purpose, date an invitation for bid was issued and description of
contractual needs being addressed on the signature page were not completed.
• The original contract was not approved by the Department
Director, which at the time would have been the Director of the Department of
Corrections. The Assistant Warden of
Operations signed the contract both on behalf of the St. Charles Youth Center
and the Department. The subsequent
renewal of the vendor contract was signed by the St. Charles Youth Center
Superintendent, but was not signed by the Director of the Department.
• Neither the solicitation for the commissary / concession
service nor the subsequent notice of contract award was publicized in the
Illinois Procurement Bulletin.
Documentation was provided that proposals were received from three
companies, but it was unclear sufficient publication and distribution of the
request for proposal had been made. In
addition, the contract file did not contain information indicating the basis on
which the award was made or that the contract was awarded to the company with
the most advantageous proposal to the State.
• The prices charged the residents include a mark-up on the
item to provide a 25% profit to be retained in the Youth Center resident’s
benefit fund. The Youth Centers, through the vendor, collect the 25%
commission. There is no statutory
guidance on what a reasonable markup / commission is on goods to be sold to the
residents.
The Department indicated it is continuing to work to correct
the problem and the Procurement Business Case for Department concessions was
not approved by the Governor’s Office of Management and Budget until subsequent
to fiscal year 2010. (Finding 4, pages
21 - 23)
We recommended the Department comply with the statutory and
Illinois Administrative Code requirements for selecting, awarding and
contracting for commissary / concession service to the Youth Centers. In addition, we also recommended the Department
review the process for pricing goods sold to residents to ensure equitable
pricing between Youth Centers that are in close proximity as well as
determining a reasonable amount to collect as commission on the commissary /
concession sales.
Department officials accepted our recommendation and
indicated they will continue to work to comply with the requirements for
selecting, awarding and contracting for commissary/concession service to the
Youth Centers. The Department officials
also noted they will re-evaluate the current process for pricing goods sold at
the commissaries / concessions.
INADEQUATE ADMINISTRATION OF LOCALLY HELD FUNDS AT YOUTH
CENTERS
During testing of the Department’s Juvenile Justice
Commissary Fund (Commissary Fund), Juvenile Justice Inmate Trust Funds (Trust
Fund), and the Juvenile Justice Benefit Funds (Resident Benefit Funds and
Employee Benefit Funds) auditors noted a number of exceptions where the Youth
Centers were not following Department Administrative Directives and / or State
statute. Some of the exceptions noted in
testing at the Youth Centers are as follows:
• Auditors noted instances at 2 Youth Centers where the
required committees did not officially meet to discuss and approve
expenditures; did not maintain minutes of the meetings; and failed to document
approvals of expenditures.
• Two Youth Centers did not deposit locally held fund
receipts timely.
• One Youth Center did not timely disburse 19 discharged
resident trust fund account balances tested due to the absence of a key
employee from November 2008 through mid-March 2009. The tested disbursements ranged from 35 to
223 days late and totaled $4,272.
• Two Youth Centers did not deposit earned interest to
individual resident accounts for balances in excess of $200 nor did they
deposit any residents’ locally held trust fund accounts in excess of $200 into
individual interest bearing savings accounts in which all interest is to accrue
to that account.
• Seven Youth Centers utilized store gift/purchase cards to
buy items as opposed to having the store bill the Youth Centers and process the
payment through the normal expenditure process.
Auditors noted the Youth Centers had made purchases on the gift/purchase
cards during the examination period of approximately $8,400. The Department does not have a written
administrative directive relating to the use, reporting, and safeguarding of
gift/purchase cards.
Department management indicated the exceptions noted were
due to staffing limitations at the Youth Centers and staff errors. (Finding 9,
pages 33 to 34)
We recommended the Department remind the Youth Center staff
of the requirements related to the locally held fund administration as set
forth in the administrative directives.
We also recommended the Department prepare a formal administrative
directive to cover the overall gift / purchase card process.
Department officials accepted our recommendation and noted
they will make every effort to ensure Youth Center’s comply with the
requirements related to locally held fund administration and will make any
changes or revisions to the administrative directives, as necessary.
PAYROLL TIMEKEEPING SYSTEM NOT AUTOMATED
The Department-wide payroll timekeeping system is not fully
automated. During the previous
engagement period the Department’s human resources responsibilities were
consolidated with a number of other State agencies as part of the Public Safety
Shared Services Center (PSSSC). The
PSSSC was scheduled to create / implement an automated timekeeping system, but
it was not created.
The Department maintains a manual timekeeping system for
several hundred employees. Most Department
employees sign in and out, and sign-in sheets are sent to timekeeping
clerks. Other information, including
notification of absence and call-in reports, are also forwarded to the
timekeepers. No automation is involved
except for the processing of payroll warrants.
In addition, during testing of the Department’s manual
timekeeping system, timesheets for 60 employees were selected and auditors
noted exceptions related to 58 of the employee timesheets. Exceptions identified were related to
timesheets not submitted in accordance with the State Officials and Employees
Ethics Act (Act).
During the current engagement it was noted the Department of
Central Management Services and Capital Development Board initiated work on a
statewide automated timekeeping system.
The State entered into a contract with a vendor and expended $1.6
million to the vendor. As of the end of
the engagement fieldwork nothing else had been done towards implementation of
the timekeeping system at the Department.
Department management indicated they do not have the resources to
purchase a new timekeeping system, but would participate in a new statewide
system should one be purchased. (Finding
10, pages 35 - 36)
We recommended the Department implement an automated
timekeeping system and comply with the State Officials and Employees Ethics
Act.
Department officials accepted the recommendation and noted
at this time they do not have the resources to purchase a new timekeeping
system, however, will participate in a new statewide system should one be
purchased. In addition, Department
officials also noted they will make every effort to comply with the State
Officials and Employees Ethics Act.
WEAKNESSES IN CONTRACT ADMINISTRATION
During testing of contractual agreements, auditors noted
weaknesses in contract administration.
Some of the weaknesses noted are as follows:
• Five contracts totaling $230,825 did not include all of
the certifications, disclosures, and clauses required by Section 15 of the
Statewide Accounting Management System (SAMS) manual and various sections of
the Illinois Compiled Statutes.
• One contract provided by the Department for testing, for
$10,968, did not contain the signature of the Department Director.
• The Department could not demonstrate adequate contract
monitoring for 22 of the contracts tested, totaling $12,519,969. Specifically, the auditors noted the
Department could not provide the deliverables specified for 16 contracts, the
deliverables provided for 1 contract did not include all information required,
and for 5 contracts totaling $1,166,690 the Department did not document their
monitoring.
In addition, during testing of emergency purchases auditors
noted one emergency purchase totaling $64,668 was not published in the Illinois
Procurement Bulletin and the related affidavit was not filed within 10 days
after the procurement occurred as required by the Illinois Procurement
Code.
Department management indicated the failure to ensure proper
controls were established in the administration of contracts was due to
employee oversight, human error, lack of resources and inadequate communication
within the Department. (Finding 10-14,
pages 42 - 44)
We recommended the Department implement the necessary
controls to adequately administer its contractual agreements and ensure
compliance with applicable statutes and Department Administrative Directives.
The Department accepted the recommendation and noted they
will implement the necessary controls to ensure contracts are properly
administered and in compliance with applicable laws and regulations.
OTHER FINDINGS
The remaining findings are reportedly being given attention
by the Department. We will review the
Department’s progress towards the implementation of our recommendations in our
next engagement.
AUDITORS’ OPINION
The auditors conducted a compliance examination of the
Department for the two years ended June 30, 2010 as required by the Illinois
State Auditing Act. The Accountants’
Report does not contain any scope limitations, disclaimers or other significant
non-standard language.
WILLIAM G. HOLLAND
Auditor General
WGH:RPU:pp
SPECIAL ASSISTANT AUDITORS
Sikich LLP were our Special Assistant Auditors for this
engagement.