|
FINDINGS, CONCLUSIONS, AND
RECOMMENDATIONS
PAYMENTS WERE MADE FOR EFFICIENCY INITIATIVE BILLINGS FROM IMPROPER
LINE ITEM APPROPRIATIONS
The Department made payments for efficiency initiative
billings from improper line item appropriations.
Public Act 93-0025, in part,
outlines a program for efficiency initiatives to reorganize, restructure, and
reengineer the business processes of the State. The State Finance Act details that the amount designated as
savings from efficiency initiatives implemented by the Department of Central
Management Services (CMS) shall be paid into the Efficiency Initiatives
Revolving Fund. The Act further
requires State agencies to pay these amounts from line item appropriations
where cost savings are anticipated to occur.
The
Department did not receive guidance or documentation with the billings from CMS
detailing from which line item appropriations savings were anticipated to
occur. The only guidance received was
the amount of payments that should be taken from General Revenue Funds versus
other funds for the September 2003 billings.
However, the Department questioned this breakdown with the Governor’s
Office of Management and Budget (GOMB).
The
Department made payments for billings not from line item
appropriations where the cost savings were anticipated to have occurred but
according to Department staff, “given the ambiguous parameters of how the
savings were to be realized, the agency felt it was most appropriate to
spread the savings to be realized among the program funds over which it
controls.” The Department planned to
reconcile budgeted savings to actual savings based on periodic reports to be
provided by CMS; however, those periodic reports were not provided by CMS to
the Department. The Department used:
·
$456,000 from appropriations from the Tourism
Promotion Fund (Fund #0763) to make payments for invoices relative to savings
from Procurement and Information Technology Efficiency Initiatives
·
$91,000 from appropriations from the Tobacco
Settlement Recovery Fund (Fund #0733) to make payments relative to the
Information Technology Efficiency Initiative
·
$50,000 from an appropriation “For Expenses Relating
to Compliance with the Belgium Social Security System” to make payments for
the Procurement Efficiency Initiative
·
$32,685 from appropriations from the Renewable Energy
Resources Trust Fund (Fund #0564) to make a payment for the Procurement
Efficiency Initiative
·
$68,938 from appropriations from the Energy
Efficiency Trust Fund (Fund #0571) to make a payment for the Procurement
Efficiency Initiative.
The Department paid a total of $1,706,013 for the efficiency
initiative billings. (Finding 1,
pages 10-13)
We recommended that the Department only make payments for
efficiency initiative billings from line item appropriations where savings
would be anticipated to occur.
Further, the Department should seek an explanation from the Department
of Central Management Services as to how savings levels were calculated, or
otherwise arrived at, and how savings achieved or anticipated impact the
Department’s budget.
Department officials accepted our finding and recommendation
and stated they will only make Efficiency Initiative Revolving Fund payments
from appropriations where savings are anticipated to occur.
CUSTOMER INFORMATION SYSTEM DOES NOT MEET
DEPARTMENT NEEDS
In the prior audit, the Department did not ensure compliance with the
Application System Development Standards (Standards) and had not determined
the total estimated cost of the complete Customer Information System (CIS)
project.
In the current examination, CIS did not meet the needs of the
Department and was still not adequately documented. Since its inception, the Department has invested approximately
$4 million in CIS, and has spent over $2.2 million on contractors to develop
and maintain CIS. The following
contractual expenditures were incurred during fiscal years 2003 and 2004:
·
In 2003, the Department spent $948,370 for 8,769
contract hours.
·
In 2004, the Department spent $502,920 for 4,567
contract hours. (Finding 2, pages
14-15) This finding was first
reported in 2002.
We
recommended that the Department conduct an extensive study to determine the
feasibility and effectiveness of CIS, and whether the system will meet its
long term needs. A final decision
regarding a solution to the CIS situation should be made as soon as possible,
to reduce the time and funds invested in a system that does not meet the
Department’s needs, and to ensure funds are expended in an effective
manner. We further recommended, that
the Department ensure all future projects are developed in accordance with
acceptable system development standards, and include total cost projections
and adequate documentation.
Department officials accepted our finding and recommendation
and stated that the Department weighed the options of whether to complete the
initial Customer Information System (CIS) design, upgrade the system or
replace the system. The Department’s
Information Technology Steering Committee decided to replace and phase out
CIS. In July 2004, the requirements
and processes necessary to reengineer the CIS Application to a Microsoft.NET
platform were formulated.
NEED TO IMPROVE CONTROLS OVER FRINGE BENEFITS FOR THE
PERSONAL USE OF A STATE VEHICLE
The Department did not
have adequate policies and procedures in place to ensure employees assigned
State vehicles for their personal use were charged the correct amount for
fringe benefits. Three employees that
were assigned a State vehicle for their personal use were not charged for the
fringe benefit during FY03 or FY04.
The three employees should have been charged a total of $2,652 for
fringe benefits during FY03 and FY04.
(Finding 5, pages 20-21)
We
recommended the Department comply with the Internal Revenue Service
Publication and the Comptroller’s Bulletin 3-85 and implement controls to
ensure employees complete the proper documentation and are charged the
correct amount of fringe benefits on payroll warrants.
The Department does not
have adequate policies to require all of the Department’s employees complete
daily timesheets.
The Department had personnel policies in regard to timekeeping, but the
Department only required “Senior Staff and Policy Making Employees” to
maintain a daily timesheet which documents the time spent each day on
official State business. The
remainder of the Department’s employees were not required by the Department
to maintain any daily timesheet. The
Department had an average of 519 employees at June 30, 2004 and the
Department only required 65 (13%) employees to prepare timesheets.
The State Officials and Employees Ethics Act (5 ILCS 430/5-5) requires
each State employee to periodically submit timesheets documenting the time
spent each day on official State business to the nearest quarter hour.
(Finding 6, page 22-23)
We recommended the Department comply with the
timekeeping requirements of the State Officials and Employees Ethics Act by
preparing and maintaining the required timesheets for all State employees.
Department
officials stated that the Department uses the Department of Central
Management Services’ (CMS) timekeeping system to maintain accurate daily
attendance and timekeeping records for all employees. The Department was operating under the
assumption that CMS’ timekeeping system was adequate in terms of compliance
with the intent of the State Officials and Employees Ethics Act (the Act) for
non-management employees. The
Department’s management employees have kept separate timesheets for the Act
in addition to the timesheets required for CMS’ timekeeping system. Section 5-5(a) of the Act requires the
Governor to adopt and implement policies for all State employees of the
executive branch under his jurisdiction.
The Department has notified the Governor’s Office of this finding and
will continue to work with them to determine an appropriate course of action
to comply with the intent of the Act.
UNTIMELY
REVIEWS OF GRANTEE AUDIT REPORTS
The Department did not
review audit reports for Technology and Industrial Program grants in a timely
manner. During detail testing, we
noted the following:
·
Two of ten
(20%) grantees’ audit reports, totaling $3,554,816, were reviewed late. One review was 9 days late; the other
audit report had not been reviewed at all.
·
One of ten
(10%) grantees, totaling $316,589, submitted its audit report to the
Department 238 days late. The
submitted audit report consisted of a photocopy of the 2002 balance sheet,
which does not meet the requirements set forth by the grant agreement. This inadequacy went unnoticed by the
Department. (Finding 10, page
30)
We
recommended the Department comply with the Department’s Audit Management and
Resolution Procedures to ensure audit reports are reviewed timely. We further recommended the Department
ensure that all deliverables received from grantees complies with the grant
agreement requirements.
Department officials accepted our finding and recommendation
and stated that the Department agrees the audits identified in the finding
were not reviewed in a timely manner due to staffing shortfalls. Additional staff have been added to this
unit to address the audit review backlog.
OTHER FINDINGS
The remaining findings were less significant and are
reportedly being given attention by the Department. We will review the Department’s progress toward implementation
of our recommendations in our next compliance examination.
Mr. Scott Harry, Chief Financial Officer of the Department of
Commerce and Economic Opportunity provided the Department's responses.
AUDITORS’ OPINION
We conducted a compliance examination of the Department of
Commerce and Economic Opportunity as required by the Illinois State Auditing
Act. We have not audited any
financial statements of the Department for the purpose of expressing an opinion
because the Department does not, nor is it required to, prepare financial
statements.
___________________________________
WILLIAM
G. HOLLAND, Auditor General
WGH:TLD:pp
AUDITORS ASSIGNED
This examination was performed by the Office of the Auditor
General’s staff.
DIGEST FOOTNOTES
#1 CUSTOMER INFORMATION SYSTEM DOES NOT MEET DEPARTMENT NEEDS –
Previous Department Response
2002: The Department partially agrees with this
recommendation. The Department
believes it met the criteria for a quality assurance team and for adequate
documentation. The Department is in
the process of preparing an updated long-range cost estimate and analysis for
the Customer Information System project.
|
