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An average of $3.62 for the year per inmate was reimbursed to the Department for
the cost of incarceration
Adult Transition Center inmates reimbursed the Department $1,703,565
$92,409 was collected from one inmate as a result of lottery winnings
The Department has no procedures to identify assets or income maintained by an
inmate outside of their Department trust funds.
Department did not report income as required by the IRS
Accounting record exceptions at adult transition centers
No formalized procedure to ensure the Department has addressed all issues when an
employee ceases employment with the Department
Need to develop an automated payroll timekeeping system |
INTRODUCTION
This report presents our financial audit for the whole Department and
compliance audit of the Department’s General Office operations. The Department
administers 35 correctional centers, which are comprised of 27 adult centers and 8 youth
centers. In addition, the Department operates 11 adult transition centers.
FINDINGS, CONCLUSIONS, AND RECOMMENDATIONS
COSTS OF INCARCERATION NOT BEING COLLECTED FROM INMATES
During fiscal year 2000, the direct cost of incarcerating inmates at Juvenile and
Adult facilities totaled almost $871 million. Reimbursements from inmates incarcerated at
these institutions, excluding fees collected from Adult Transition Centers (ATC) and
Electronic Detention (ED) totaled only $162,900; an average of $3.62 per inmate per year
and .02% of the direct cost of incarceration.
The Department collected reimbursements for the cost of incarceration from four sources
during the audit period, three of the sources were "inside" the Department:
- Inmates working for Correctional Industries at adult institutions reimburse the
Department 3% of monthly wages in excess of $25 per month. During fiscal year 2000 the
Department received $70,491 from inmates working for Correctional Industries.
- Inmates at ATC’s are required to remit 20% of their earnings from private employers
as "maintenance fees." These fees totaled $1,703,565 in fiscal year 2000.
- Inmates on ED are required to remit 20% of their earnings from private employers as
"maintenance fees." These fees totaled $271,154 in fiscal year 2000.
- During fiscal year 2000, the Department collected a total of $92,409 from one inmate who
had previously won the lottery.
The Unified Code of Corrections states: "Convicted persons committed to Department
correctional institutions or facilities shall be responsible to reimburse the Department
for the expenses incurred by their incarceration at a rate to be determined by the
Department."
The Department has procedures to recover costs from inmate assets on deposit in
Department held trust funds in excess of $2,000; however, inmates are aware of Department
procedures and rarely keep more than $2,000 in their trust funds. Presently, the
Department has no formal procedures to identify assets or income maintained by an inmate
outside of their Department trust fund. We noted the following:
- There are no procedures at the time of inmate intake to identify assets, no survey or
analysis of assets is performed, no financial analysis is conducted, no credit check is
obtained, and there is no identification of potential responsible parties performed.
- There are no procedures for billing inmates or responsible parties.
- The Department does not look beyond the inmate’s trust fund for money that can be
used as reimbursement.
Department officials stated the new intake and receiving center that is being
constructed at Stateville will have "newer technology" that should be able to
let them "find out more" about an inmates accounts. Department officials
indicated the new intake and receiving center is expected to be operational by March 2002.
(Finding 1, pages 13-14) This finding was first reported in 1999.
We recommended the Department look beyond an inmate’s individual trust fund
and make an effort to recover as much money as possible for the cost of incarceration in
compliance with the State statute.
Department officials accepted the recommendation and indicated they are reviewing the
statute to determine the Department’s specific responsibilities in the overall
recovery process.
STATE HOUSING BENEFITS NOT PROPRELY REPORTED AS INCOME
The Department has approximately 263 employees living in State-owned dormitory
rooms and 49 employees living in housing located on Department property. The Department
charges up to $120 per month for employee houses and $27 per month for guard dormitory
rooms and pays all utility costs. The Department could not provide a fair market value for
this housing.
Although the practice of renting housing to employees below market value appears
proper, the Department failed to report the value of the housing that was not paid for by
the employee as income to those employees, as required by Internal Revenue Service
regulations.
Department officials stated housing is provided as a benefit to many of its guards and
wardens and they do not feel they should have to report the value as income. (Finding 2,
pages 15-16) This finding was first reported in 1999.
We recommended the Department determine the fair market value of the housing
benefits provided and report the excess value of State housing benefits to employees as
required by Internal Revenue Service regulations.
Department officials accepted our recommendation and responded that the Department is
reviewing revisions to the agency’s State housing directive that will be consistent
with Internal Revenue Service regulations.
EXCEPTIONS AT ADULT TRANSITION CENTERS
In addition to 35 correctional centers, the Department operates a work release
program for approximately 1,329 inmates who are housed in 11 adult transition centers.
During our audit fieldwork at the transition centers, we noted the following
exceptions:
- Financial information sent to the General Office to compile Department-wide financial
statements did not agree to accounting records maintained at the transition center.
- Bank reconciliations were not properly prepared.
- Due to/due from accounts in the Residents’ Benefit Fund and Residents’ Trust
Fund did not balance.
- Errors were noted depositing receipts in a timely manner into the Residents’
Benefit Fund and Residents’ Trust Fund.
- Resident financial folders did not contain all required documents.
Department personnel stated these problems result from a combination of performance
deficiencies, lack of training for the accountants and Center supervisors, and a lack of
monitoring and follow-up by Department management to ensure that these weaknesses are
corrected. This finding has been repeated since 1994. (Finding 5, pages 22-24)
We recommended the Department improve controls over accounting functions and resident
files at adult transition centers.
Department officials accepted our recommendation and stated specific training on the
proper preparation of accounting records would be given to staff. In addition, Fiscal
Services now has a field employee dealing with ATC contacts and operations on a full-time
basis. (For previous Department responses, see Digest footnote #1.)
NO STANDARDIZED PROCEDURES FOR TERMINATED EMPLOYEES
We noted the Department has no standardized procedures, either through
Administrative Directive or formal checklist, to ensure all issues affecting terminated
employees are addressed.
Specifically we noted 6 instances where telephone credit cards were not cancelled
timely upon the employee leaving the Department. The credit cards were cancelled more than
45 days after the employees left the Department. In addition, we noted there were not
adequate files to ensure an employee’s work commitment was satisfied if the
Department had paid for the employee’s tuition and fees. If the work commitment is
not fulfilled, the Department has the option of recovering tuition and fees.
Without formalized procedures at the time an employee leaves the Department, issues
affecting the return of State property or timely calculation of benefits may not be
adequately addressed.
Department officials indicated supervisors were to perform these duties, but did not
realize the need for formal procedures. (Finding 6, pages 25-26)
We recommended the Department prepare a thorough exit conference checklist and require
its completion upon the termination of any employee.
Department officials accepted our recommendation and indicated an exit interview
checklist will be developed.
OUTDATED MANUAL PAYROLL SYSTEM
The Department-wide payroll timekeeping system is not automated. Each of the
correctional centers employs several hundred employees, and the related timekeeping system
is maintained manually. Facility employees sign in and out, and the sign-in sheets are
sent to the timekeeping clerk. Other information, including notification of absence and
call-in reports, is also forwarded to the timekeepers. No automation is involved except
for the processing of payroll warrants. Officials indicate there are insufficient funds
available to develop a Department-wide system to replace the outdated manual system used
for over 18,000 employees.
Prudent business practices suggest that controls available through an automated
timekeeping system can provide greater efficiency and reduce the potential for costly
errors or employee abuse. (Finding 9, page 29) This finding was first reported in 1998.
We recommended the Department implement an automated timekeeping system.
The Department accepted our recommendation and noted a Department-wide automated
timekeeping system is a function of the new accounting and financial reporting system that
the Department is trying to acquire. (For previous Department responses, see Digest
footnote #2.)
OTHER FINDINGS
The remaining findings are less significant and are being given attention by the
Department. We will review the Department’s progress toward the implementation of our
recommendations in our next audit.
Mr. Mark Krell, Chief Auditor of the Department of Corrections, provided the
agency’s responses.
AUDITORS’ OPINION
Our auditors stated the Department’s financial statements as of and for
the year ended June 30, 2000 were fairly presented in all material respects.
_____________________________________
WILLIAM G. HOLLAND, Auditor General
WGH:RPU:pp
SPECIAL ASSISTANT AUDITORS
Sikich Gardner & Co, LLP were our special assistant auditors.
DIGEST FOOTNOTES
#1 EXCEPTIONS AT ADULT TRANSITION CENTERS – Previous Department Responses
1999: Recommendation partially accepted. A comparison of this year’s finding
at the community correctional centers with those of prior years will show that substantial
improvements have been made. Currently reported deficiencies are isolated to performance
weaknesses at one or two centers and do not represent a lack of training. Under the
Department’s reorganization, the community correctional centers will be reclassified
as adult transition centers and will be satellites of correctional centers. This
organizational structure will provide more resources for oversight of the business
operations of the centers and will also provide for more effective back-up coverage for
vacancies or extended absences.
1998: Recommendations accepted. The Department has established a central business
office for the Community Services Division (CSD). The CSD business administrator will
implement monitoring and follow-up procedures to ensure better performance and greater
accountability by field accounting personnel. In addition, the Department will ensure that
financial folders are maintained for each resident and that proper documents are
maintained in the residents’ financial folders.
1996: Recommendations accepted: The Department indicated that corrective action had
been addressed relating to many of the exceptions identified in the findings.
1994: Recommendations accepted: The Department indicated that corrective action had
been addressed relating to many of the exceptions identified in the findings.
#2 PAYROLL TIMEKEEPING SYSTEM NOT AUTOMATED –Previous Department Responses
1999: Recommendation accepted: Funding for the automation of department-wide
timekeeping has been included in the fiscal year 2001 budget request.
1998: Recommendation accepted: The Department will continue to pursue an automated
timekeeping system as resources become available subsequent to completion of the Year 2000
projects.
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