REPORT
DIGEST

COMPLIANCE AUDIT
For the Two Years Ended:
June 30, 1998

Summary of Findings:

SYNOPSIS

• The Center's perpetual inventory balance did not reconcile to the physical inventory count.

• The Center exercised inadequate controls over phone usage.

{Expenditures and Activity Measures are summarized on the reverse page.}

FY 1998

FY 1997

FY 1996

• Total Expenditures (All Appropriated Funds)

Personal Services
% of Total Expenditures
Average No. of Employees
Average Salary Per Employee

Inmate Compensation (If Applicable)
% of Total Expenditures

Other Payroll Costs (FICA, Retirement)
% of Total Expenditures

Contractual Services
% of Total Expenditures

All Other Items
% of Total Expenditures

• Cost of Property and Equipment

$17,474,617

$11,008,936
63.00%
302
$36,453

$240,494
1.38%

$2,641,240
8.41%

$2,650,428
15.17%

$2,205,087
12.61%

$26,250,698

$16,885,037

$10,498,367
62.17%
293
$35,831

$227,243
1.35%

$2,471,420
8.29%

$2,648,429
15.69%

$2,220,696
13.15%

$26,191,869

$16,069,036

$9,847,488
61.28%
289
$34,074

$227,449
1.42%

$1,189,605
7.40 %

$2,738,664
17.04%

$2,065,830
12.86%

$26,051,495

FY 1998

FY 1997

FY 1996

1,171

1,147

1,154

1/ 5.55

1/ 5.55

1/ 5.55

$14,826

$14,618

$13,860

600

600

600

29

29

29

Audit tests revealed over 60 unauthorized long distance telephone calls were placed from the Center's TTD phone

INTRODUCTION

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 in our single audit of the entire Department. Financial statements for the Department will be presented in that report.

FINDINGS, CONCLUSIONS, AND RECOMMENDATIONS

INVENTORY ADJUSTMENT TO THE PERPETUAL INVENTORY SYSTEM

The Center's perpetual inventory balance did not reconcile to the physical inventory count at June 30, 1998 or 1997. As a result, the Center adjusted its records to agree with the physical counts taken. In total, these inventory reductions were $1,309 and $3,093 in FY98 and FY97, respectively. The single largest adjustment posted in each year was to the Inmate Clothing store inventory. (Finding 98-2, page 12)

We recommended that large adjustments be investigated. Further, reasons for adjustments should be documented and maintained to identify trends of questionable nature.

Center personnel stated that all material inventory adjustments will be investigated to determine the possible cause. Furthermore, a complete physical inventory of the clothing store will be done quarterly until the cause of the significant discrepancies is determined and corrected.

INADEQUATE CONTROLS OVER PHONE USAGE AND INADEQUATE REVIEW OF TELEPHONE BILLS

We reviewed 25 of 63 (40%) telecommunication vouchers processed by the Center, and we identified 62 long distance phone calls that were greater than 45 minutes in length and were not of a business nature. The phone calls originated in a counselor's office from a TTD phone designed for the hearing or speech impaired. Several other phone calls under 45 minutes in length but to the same phone numbers were also noted.

The dollar value of the calls, including the cost of the calls less than 45 minutes in length to the same phone numbers, was $2,039 and $103 for FY98 and FY97, respectively. (Finding 98-4, page 16)

We recommended that unsupervised or limited supervision calls be limited to telephones that do not allow long distance calls to be placed without the assistance of the armory.

The Center stated the TTD phone would be installed in a housing unit where it can be monitored and controlled by the correctional officers. Additionally, all TTD calls will be routed through a service provider's system that will only allow collect calls to pre-approved numbers.

OTHER FINDINGS

The remaining findings are of lesser significance and are being given appropriate attention by the Center. We will review the Center's progress towards the implementation of our recommendations in our next audit.

Responses to the findings were provided by Mr. Mark Krell in a letter dated November 17, 1998.

_____________________________________
WILLIAM G. HOLLAND, Auditor General

WGH:KAL:pp

SPECIAL ASSISTANT AUDITORS

Our special assistant auditors were Kemper CPA Group, LLC.