REPORT
DIGEST

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

Summary of Findings:

SYNOPSIS

• The Center lacked appropriate controls to ensure that necessary accounting reconciliations were completed and that necessary adjusting entries were made to correct account balances.

• The Center lacked appropriate internal controls to detect uninsured locally held funds on deposit at one financial institution.

{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
% 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

$25,003,725

$15,611,791
62.44%
418
$37,349

$418,652
1.67%

$1,948,936
7.79%

$3,571,692
14.29%

$3,452,654
13.81%

$45,241,331

$24,238,277

$15,205,884
62.73%
423
$35,948

$423,296
1.75%

$1,875,417
7.74%

$3,360,321
13.86%

$3,373,359
13.92%

$42,622,425

$23,458,808

$14,666,818
62.53%
432
$33,951

$354,779
1.51%

$1,776,305
7.57 %

$3,378,707
14.40%

$3,282,199
13.99%

$42,425,098

FY 1998

FY 1997

FY 1996

1,869

1,863

1,817

1/ 5.88

1/ 5.88

1/ 5.56

$13,310

$12,944

$12,843

1,046

1,046

1,046

34

35

35

Inadequate internal controls

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

FINDINGS, CONCLUSIONS, AND RECOMMENDATIONS

INADEQUATE ACCOUNTING CONTROLS

Three findings involved inadequate accounting controls to ensure reconciliations were completed and necessary adjusting entries were made to correct account balances.

• First, we found the due to/due from accounts between the employee and inmate commissary and benefit funds did not agree. This was due to the quarterly profit entry not being made before the fiscal year was closed. This resulted in the due from on the Employee Benefit Fund being understated by $6,998 and the due from on the Inmate Benefit Fund being understated by $51,248. (Finding 1, page 9)
• Second, we noted that the Inmate Benefit Fund cash balance was incorrect because approximately $7,000 in July, 1998 checks were posted to the year end June 30, 1998 balance. (Finding 2, pages 9-10)
• Finally, the Center's fixed asset balances and the accounts payable balance were understated by $10,478. Two items of equipment were received before June 30, 1998 but were not recorded at the fiscal year ended June 30, 1998. (Finding 4, page 11)

Center officials responded that corrections have been made to eliminate a recurrence of these problems.

UNINSURED LOCALLY HELD FUNDS

The sum of locally held funds on deposit at one financial institution exceeded the Federal Deposit Insurance limits and pledged collateral by $6,213 at June 30, 1997 and by $69,517 at June 30, 1998. This was due to the lack of appropriate internal controls which would detect when more collateral should be pledged to cover uninsured balances. This type of oversight could result in a possible loss due to uninsured balances or to balances not fully collateralized. (Finding 3, page 10)

Center officials responded that additional collateral was secured and stated that cash balances will be more closely monitored in the future.

_____________________________________
WILLIAM G. HOLLAND, Auditor General

WGH:TEE:pp

SPECIAL ASSISTANT AUDITORS

Our special assistant auditors were Kerber, Eck & Braeckel LLP.