REPORT DIGEST

ILLINOIS DEPARTMENT OF CORRECTIONS

COMPLIANCE EXAMINATION
FOR THE TWO YEARS ENDED JUNE 30, 2018

Release Date:  September 18, 2019

FINDINGS THIS AUDIT:  46

CATEGORY:  NEW -- REPEAT -- TOTAL
Category 1:  3 -- 9 -- 12
Category 2:  7 -- 27 -- 34
Category 3:  0 -- 0 -- 0
TOTAL:  10 -- 36 -- 46

FINDINGS LAST AUDIT: 43

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
FRANK J. MAUTINO, 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 our State Compliance
Examination of the Illinois Department of
Corrections (Department) for the two years
ended June 30, 2018.  A separate Financial
Audit as of and for the year ended June 30,
2018, was previously released on April 25,
2019. In total, this report contains 46
findings, seven of which were reported in
the Financial Audit.
SYNOPSIS

• (18-09) The Department did not comply
with the required transfers of profits from
Commissary Funds to the Inmate and Employee
Benefit Funds.
• (18-10) The Department did not ensure
fiscal requirements over the Offender 360
project were controlled and documented.
• (18-11) The Department did not identify
all State laws with specific requirements
for the Department.
• (18-16) The Department did not comply
with the notification requirements of the
Murderer and Violent Offender Against Youth
Registration Act.
• (18-24) The Department failed to properly
conduct metal detector searches of inmates.

FINDINGS, CONCLUSIONS, AND RECOMMENDATIONS

NONCOMPLIANCE WITH THE REQUIRED TRANSFERS
OF PROFITS FROM DOC COMMISSARY FUNDS

The Department did not comply with the
required transfers of profits from
Commissary Funds to the Inmate Benefit Fund
and Employee Benefit Fund.

A Commissary Fund Cash Review Form (DOC
0075) is used to calculate and effectuate
the transfers.  The auditors noted some
centers did not transfer funds, used an
alternative methodology for transfers, or
provided incomplete documentation for
transfers.  Documented transfers to the
Inmate Benefit Fund and Employee Benefit
Funds were $4,564,851 and $35,833,
respectively, less than the mandated share
of profits.

The amounts due to other Departmental funds
from the DOC Commissary Funds totaled $14.1
million as of June 30, 2018 ($9.2 million
to the Inmate Benefit Fund, $.1 million to
the Employee Benefit Fund and $4.8 million
to the Salary Reimbursement Fund). (Finding
9, pages 61-63)

We recommended the Department review its
procedures for form DOC 0075 to ensure a
consistent and accurate transfer
calculation is utilized. We also
recommended the Department determine if the
current statutory language is sufficient to
allow for operations of the commissary
funds, or seek legislative changes if
needed.  We further recommended the
Department develop a plan of action to
begin decreasing the liability within the
Commissary Funds.

The Department accepted the finding and
responded they will work on revising the
Administrative Directive and DOC 0075 to
help ensure compliance.

CONTINUED LACK OF FISCAL CONTROLS OVER
OFFENDER 360 PROJECT

The Department did not ensure fiscal
requirements were controlled and
documented.  In June 2010, the Department
embarked on the development of Offender 360
in order to meet the statutory requirements
of Public Act 097-0697 to manage the
awarding of sentence credits to eligible
offenders.  Over the last eight years, the
Department has added additional
functionality to Offender 360 in the areas
of offender tracking, offense information,
security levels, offender personal and
medical information.

Since the Fiscal Year 2014 examination, the
auditors reported the Department had not
implemented controls over the fiscal
requirements related to Offender 360.
During the current examination, the
auditors continued to identify weaknesses
regarding overall costs as well as the
appropriateness of vendor payments.

During their testing, the auditors
requested from the Department documentation
supporting the cost of the Offender 360
project.  The Department provided a
spreadsheet that indicated $69,044,918 had
been paid for vendor services since Fiscal
Year 2011.  The spreadsheet did not include
the cost of Department staff and some
additional hardware and software purchases.

The auditors also reviewed contracts,
statements of work, schedules, and
amendments related to the vendor’s services
and noted the Department may have overpaid
or may have made advance payments to the
vendor totaling $1,235,686 based on the
terms of the agreements.  In addition, the
auditors reviewed 14 vendor invoices,
totaling $42,970,792, and found sufficient
detail was not provided to determine the
accuracy of the payment.  Further, the
Department could not provide documentation
to determine if all services were delivered
prior to the expiration of the lapse period
for the 14 invoices.

In addition, the auditors noted the
Department had not capitalized or
maintained sufficient records to determine
the costs for the development of Offender
360.  Based on subsequently obtained
documents and estimates, it was determined
approximately $19.4 million had not been
capitalized related to Offender 360.

Moreover, in March 2018, the Department
embarked on a development to replace their
locally held funds system with A360, a
module of Offender 360.  In June 2018, the
Department discontinued this development.
During the application development period,
the Department expended $1.5 million.
Costs incurred during the preliminary
project stage of A360 could not be
determined.  (Finding 10, pages 64-65)
This finding was first reported in 2014.

We recommended the Department implement
controls to ensure expenditures are made in
accordance with State statute, terms of the
contract, and are properly documented.  We
also recommended the Department ensure that
costs related to internally developed
software be adequately tracked by
development stage and analyzed for accurate
calculation of costs to be capitalized.

The Department accepted the finding and
stated it will strengthen its internal
controls over the development and support
of its information technology environment.
The Department also stated a central
repository of information will be
established, deliverables and performance
will be tracked and monitored, and an
exhaustive review of all information
technology expenditures will be completed
with appropriate action being taken for
billing irregularities.

INABILITY TO IDENTIFY ALL APPLICABLE
AGENCY-SPECIFIC LAWS

The Department was unable to provide a
complete list of statutes with specific
requirements for the Department during the
examination period.

The Department identified 11 of the major
statutes establishing mandates specific to
their agency.  However, the Department did
not identify an additional 39 applicable
laws with specific mandates significant to
the Department.  (Finding 11, page 66)

We recommended the Department strengthen
its controls to identify, ensure compliance
and monitor all applicable statutory
mandates.

The Department accepted the finding and
responded it will work to create an online
database of agency specific laws identified
in the Illinois Compiled Statutes.

NONCOMPLIANCE WITH THE MURDERER AND VIOLENT
OFFENDER AGAINST YOUTH REGISTRATION ACT

The Department did not comply with the
notification requirements of the Act.

The Act requires any violent offender
against youth, prior to discharge, parole,
or release from a Department facility,
shall be informed of his or her duty to
register in person within five days of
release. Auditors noted the following
weaknesses at six different Centers:

• Notification forms for 5 of 9 (56%)
applicable offenders were incomplete at two
Centers.

• One Center was unable to provide
documentation of required notification
forms for 1 of 5 (20%) applicable offenders
tested.

• Auditors noted the computer system that
tracks Violence Against Youth (VAY)
Offenders, Offender 360, did not properly
track inmates who were violent offenders
against youth.  Auditors noted 23 of 53
(43%) of the Offender 360 population of VAY
offenders released from one Center during
the examination period were not violent
offenders against youth.

• Two inmates were incorrectly listed on
the original Offender 360 report the
auditor received at a Center and should not
have been classified as violent offenders
against youth.

• An offender at a Center was not labeled
as a VAY offender upon release and
therefore did not sign a form confirming he
was notified of his duty to register with
the police upon being released.  (Finding
16, pages 74-75)

We recommended the Department comply with
the requirements of the Act. We
specifically recommended the Department
ensure timely notification, proper
completion, and maintenance of the Murderer
and Violent Offender Against Youth
Registration Notification Form and review
records in Offender 360 to ensure accuracy.

The Department accepted the finding and
stated it will work to ensure compliance
with the Act is achieved. Further, the
Department stated to help achieve this
outcome, it will work to have the proper
documentation filed and its Information
Technology platform provide reliable and
accurate information.

FAILURE TO PROPERLY CONDUCT METAL DETECTOR
SEARCHES OF INMATES

The Department failed to properly conduct
metal detector searches of inmates.

Auditors noted at six centers, inmates
assigned to mechanical and kitchen areas
where tools and metal were present were not
subjected to searches with metal detectors
upon exiting the area. (Finding 24, page
86)  This finding was first reported in
2014.

We recommended the Department properly
conduct metal detector searches of inmates
who are assigned to mechanical areas where
tools and metals are present, in accordance
with the Department’s Administrative
Directive.

The Department accepted the finding and
responded it will work to allocate
resources so that its facilities properly
conduct metal detector searches of its
offenders.  The Department also stated
staff will conduct a survey identifying the
need for additional metal detectors,
complete a system-wide security check to
test for potential vulnerabilities and
review the Departmental policy pertaining
to tools and assignments that would be
subject to metal detection.

OTHER FINDINGS

The remaining findings pertain to internal
control and compliance matters.   We will
review the Department’s progress towards
the implementation of our recommendations
in our next compliance examination.

ACCOUNTANT’S OPINION

The accountants conducted a compliance
examination of the Department for the two
years ended June 30, 2018, as required by
the Illinois State Auditing Act.  The
accountants qualified their report on State
compliance for Findings 2018-001 through
2018-012.  Except for the noncompliance
described in these findings, the
accountants stated the Agency complied, in
all material respects, with the
requirements described in the report.

This compliance examination was conducted
by Adelfia LLC.

JANE CLARK
Division Director

This report is transmitted in accordance
with Section 3-14 of the Illinois State
Auditing Act.

FRANK J. MAUTINO
Auditor General

FJM:LKW