The practice of paying expenditures of other Correctional facilities distorts operating
statistics and circumvents the appropriation control of the Legislature. Further, this
practice does not comply with the payroll and voucher certification clauses contained in
the State Finance Act. (Finding Code 00-3, pages 16-17)
The Department accepted our recommendation to either comply with the language of the
existing appropriation act or work with the General Assembly to modify future wording to
permit the Department's current practice. According to its response, a realignment of the
Lincoln and Logan business offices began in fiscal year 2000, but the separation had not
yet been completed.
NEED TO IMPROVE Business Office Staffing and Training
Due to numerous vacancies and a lack of relevant staff training, the Center’s
Business Office did not have consistent, reliable accounting records for certain office
operations. We noted numerous errors and a lack of consistent, reliable financial
information.
Further, no one had updated the Center’s general ledgers for general revenue
transactions between May 1999 and August 2000. Therefore, the Center staff could not
properly reconcile its sub-ledgers for its commodities or equipment inventories. This
situation adversely affected management’s ability to evaluate the Center’s
financial position, predict future needs and available resources, and evaluate the
effectiveness in disbursing funds.
We recommended the Department reallocate resources to ensure the Center’s Business
Office is adequately staffed and employees properly trained. The Center’s general
ledger should be maintained, as necessary, in compliance with internal directives.
(Finding Code 00-1, pages 11-12)
According to the response, the Department accepted and has partially implemented the
finding. All business office positions had been filled, effective January 2001. Staff will
be trained on-site, at other facilities with staff in comparable positions, and through
various training sessions.
NEED TO IMPROVE PHYSICAL COUNTS AND RECORDKEEPING FOR COMMODITIES INVENTORIES
Numerous errors were detected in the Center’s year-end physical counts of
commodities on hand and in its perpetual records.
Our initial testing of the Center’s year-end inventory counts disclosed a 24%
error rate. This situation was due to a lack of sufficient training, inefficient physical
arrangement of the goods, and employee errors in counting and pricing. Similarly, our
initial testing of the Center’s perpetual records disclosed an 80% error rate, caused
by untimely data input.
Due to the extent of errors, we increased sample sizes and expanded our testing. We
determined that commodities acquisitions were not recorded until about 19 days after goods
had been received. Commodities issued were not removed from the inventory records until
about 16 days later.
These errors had not previously been detected. No one was reconciling the computerized
inventory records monthly or at year-end, since the general ledger was not up-to-date. The
reconciliation process is crucial to the Center’s completion of reliable, timely
accounting information, for submission to the Department's General Office.
Management had not placed priority on the need to properly train staff or to promptly
record all inventory transactions. In addition, management had not ascertained that
physical counts taken were reliable. Errors and untimely recordkeeping could result in
inventory misstatements or undetected losses. After we found these problems, management
took corrective action to assure the final year-end balances reported would be reliable.
The Department accepted our recommendations and stated responsible inventory staff will
be trained, inventories supervised, and the general ledger will be maintained and
reconciled as required. (Finding Code 00-2, pages 13-15)
OTHER FINDING
The remaining finding and recommendation was less significant and is being given
attention by Department management. We will review progress toward implementation of our
recommendations during our next audit.
Responses were provided by Mr. Mark B. Krell, CIA, on January 21, 2001.
AUDITORS' OPINION
We conducted a compliance audit of the Center as required by the Illinois State
Auditing Act. We also performed certain agreed upon procedures with respect to the
accounting records of the Center to assist our audit of the entire Department. Financial
statements for the Department will be presented in that report.
_____________________________________
WILLIAM G. HOLLAND, Auditor General
WGH:JHL:pp
SPECIAL ASSISTANT AUDITORS
Our special assistant auditors were Kula, Cowan & Barnes, P.C.
