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Commodity counts
did not agree
Supporting
documentation was not maintained
Excess inventory of
$230,957
Missing equipment
totaling $7,047
Storage area contained
damaged property
Incomplete property
records
Internal control
weakness
Noncompliance
with annual training requirements
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FINDINGS, CONCLUSIONS, AND
RECOMMENDATIONS
INADEQUATE CONTROL OVER
COMMODITIES
The Center did
not exercise adequate control over its commodities inventory. As a result of
the Center’s inadequate recordkeeping and the weaknesses noted in the
internal controls over commodities inventory, we were unable to report on the
inventory balances at June 30, 2005 and June 30, 2006.
Some of the
exceptions that we noted were as follows:
-
Forty-four
of 86 (51%) commodity counts tested did not agree to the Center’s perpetual
records.
-
Six
of 20 (30%) tested record count documents did not agree to the Center’s
final inventory.
-
Center
personnel were unable to provide the supporting documentation for 12 of
20 (60%) commodity items in our sample and as a result, we could not
recalculate the average unit costs.
-
The
Center maintained commodity inventory in excess of a historically
computed 12-month supply. Eleven
of 25 (44%) items tested were in supply in excess of 12 months resulting
in overstocked inventory of $230,957.
-
The
Center’s officer clothing store was not arranged in an orderly
manner.
We
recommended that the Center apply proper year-end inventory procedures to
reflect actual quantities on hand at the end of the fiscal year. Also, the Center should devote adequate
resources to ensure that commodity records are maintained and updated timely
and to ensure that commodities are stored in an organized manner. Further, the Center should maintain
supporting documentation for expenditures.
(Finding 1, Pages 10-12)
Department
officials accepted our recommendation and stated that the facility has
developed a plan to address the commodity inventory issues.
INADEQUATE CONTROL OVER
EQUIPMENT AND RELATED RECORDS
The
Center did not maintain adequate control over equipment and related records.
Some
of the exceptions noted follow:
-
Nine of 35 (26%) of the equipment items
tested totaling $7,047 could not be located. Additionally, 16 of 35 equipment items were located in a
different location than was recorded on the property records.
-
Four
of 35 (11%) of the equipment items tested totaling $20,250 did not
contain proper State identification tags.
-
The
Center’s property storage area was not arranged in an orderly manner and
contained damaged and out-dated property items.
-
The
auditors were not provided with complete property records and as a
result, testing of the Center’s disposals and transfers were limited to
the reporting records that were provided. (Finding 2, Pages 13-14)
We
recommended the Center adequately safeguard State equipment and adhere to
procedures to ensure that property and equipment records are properly
maintained. Further, the Center
should properly dispose of and remove from its records any assets that are
obsolete, damaged or no longer in use.
Department
officials accepted our recommendation and stated that the facility will make
every effort to ensure the property and the related accounting system in
maintained accurately and completely.
INADEQUATE SEGREGATION
OF DUTIES
The
Center lacked adequate segregation of duties in the areas of receipt
processing and check signing authority for its local funds.
We
noted that:
·
Sixty-three of
106 cash receipts tested (59%) totaling $422,701 and $255,987 for FY2005 and
FY2006, respectively, were entered into the system by the cashier who also
received the physical checks.
·
The Accountant
Supervisor prepared the bank reconciliations and had check signing authority
for local fund disbursements.
Adequate and effective internal
controls and prudent business practices require segregation of duties.
(Finding 4, Pages 17-18)
We recommended the Center segregate the duties in order to maintain
an effective internal control over the recordkeeping and accounting function.
Department officials state they have implemented our recommendation.
REQUIRED EMPLOYEE TRAINING NOT RECEIVED
The
Center’s employees lacked required training hours.
Twelve of 25 (48%) employees tested
in FY2005 did not receive the required training hours. In addition, 11 of 25 (44%) employees
tested did not receive the required hours in FY2006. Lack of employee training could result in
work inefficiencies, safety and security problems, and failure to improve the
quality of the workforce and the working environment. (Finding 5, Page 19)
We recommended Center management
ensure employees receive the required training every fiscal year.
Department officials accepted our
recommendation to ensure employees receive the required training every fiscal
year.
OTHER
FINDINGS
The remaining findings are reportedly being given attention
by the Center. We will review the
Center’s progress toward the implementation of our recommendations in our
next examination.
AUDITORS' OPINION
We conducted a compliance
attestation examination of the Center as required by the Illinois State
Auditing Act. This was a limited
scope compliance examination that also included performing certain
agreed-upon procedures with respect to the accounting records of the Center
to assist our audit of the entire Department of Corrections. Financial statements for the entire
Department will be presented in that report.
___________________________________
WILLIAM
G. HOLLAND, Auditor General
WGH:TLK:PP
AUDITORS ASSIGNED
This limited scope compliance examination was conducted by
the Auditor General’s staff.
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