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FINDINGS, CONCLUSIONS, AND
RECOMMENDATIONS
TRANSFERS TO GENERAL REVENUE FUND NOT IN ACCORDANCE WITH STATE LAW
Transfers were made to the General Revenue Fund (GRF)
totaling $4,561,000 in fiscal year 2006 from the Tourism Promotion Fund and
the Coal Technology Development Assistance Fund which were not in accordance
with State law.
Public Act 94-839 (30 ILCS 105/8h) states, “The total
transfer under this Section from any fund in any fiscal year shall not exceed
the lesser of (i) 8% of the revenues to be deposited into the fund during
that fiscal year or (ii) an amount that leaves a remaining fund balance of
25% of the July 1 fund balance of that fiscal year.”
For these two funds, 8% of the revenues was less than 25% of
the July 1 fund balance, so the revenue calculation was used. However, the revenues for the calculation
included interfund transfers, which are not revenues. NCGA Statement 1 – Governmental Accounting
and Financial Reporting Principles, paragraph 109 states, “The term
“revenues” means increases in (sources of) fund financial resources other
than from interfund transfers” (emphasis added).
The
Department included all $43,671,000 of interfund transfers into the Tourism
Promotion Fund as revenue, therefore all $3,153,000 in transfers to GRF were
excess transfers. The Department
included $17,207,000 of interfund transfers into the Coal Technology
Development Fund as revenue. Actual
revenues were $5,199,000. Therefore
$1,408,000 of transfers from this fund to GRF were excess transfers. (Finding 1, pages 11-12)
We recommended the Department work with Governor’s Office of
Management and Budget (GOMB) to return these transfers to the Tourism
Promotion Fund and the Coal Technology Development Assistance Fund. Further, the Department should work with
GOMB to ensure future transfers do not violate State law.
Department management accepted our recommendations and stated
they would work with GOMB to address the finding and take appropriate action.
CONTRACTS AND INTERAGENCY AGREEMENTS NOT TIMELY EXECUTED AND NOT
TIMELY FILED WITH THE ILLINOIS OFFICE OF THE COMPTROLLER
The Department did not execute contracts with vendors and
interagency agreements with other State agencies in a timely manner. Also, the Department did not timely file
contracts with the Illinois Office of the Comptroller.
We noted 19 of 60 (31.7%) contracts tested totaling
$6,621,994 that were not executed prior to the commencement of services. Professional and Artistic affidavits were
filed for 15 of these contracts.
We reviewed 9 of the 34 interagency agreements (26.5%)
totaling $4,150,087 and noted services began prior to the completion of an
executed agreement for 5 of the 9 (55.6%) agreements tested. Additionally, we could not determine
whether 1 of the 9 (11.1%) agreements was executed in a timely manner because
the signed interagency agreement was not dated.
For 7 of the 60 (11.7%) contracts tested Late Filing
Affidavits were filed with the Comptroller.
While the Procurement Code permits the use of affidavits to justify
noncompliance with the 15 day filing requirement, and the Department
submitted late filing affidavits when required to do so, its use should be
limited and not routine. (Finding 2,
pages 13-14)
We recommended the Department take the necessary steps to
improve the timeliness in reducing contracts and interagency agreements to
writing and filing them with the Comptroller.
Department management agreed with the finding and stated they
would improve processes to improve the timeliness in reducing contracts and
interagency agreements to writing and filing them with the Comptroller.
CONTROLS OVER EMPLOYEE TIMEKEEPING NEED
IMPROVEMENT
The Department does not have adequate
policies to require all of its employees to 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 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 444 employees at June 30, 2006 and
the Department only required 59 (13.3%) to prepare timesheets.
The State Officials and Employees Ethics
Act (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 3, page 15)
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 management agreed with the finding and stated that
it uses the CMS timekeeping system.
The Department stated it is currently working with the Governor’s Office
of Management and Budget on the Shared Services Center Project. One of the initiatives of this project is
to implement an automated timekeeping system which will also meet the
requirements of the Act.
FAILURE TO ENSURE APPLICATIONS FOR LOCAL TOURISM AND CONVENTION
BUREAU PROGRAM WERE COMPLETE
The Department failed to ensure applications for the Local
Tourism and Convention Bureau (LTCB) program were complete.
Our testing of the certification applications for 10 LTCB
grantees noted the following results:
·
4 were missing the tourism-related experience of the
CEO;
·
3 were missing the duties of the CEO; and
·
2 were missing copies of the bylaws.
Our testing of the funding applications for 10 LTCB grantees
noted the following results:
·
7 were missing fund account numbers for grant and
matching funds; and
·
2 were missing proper certified letters from
municipalities specifying the amount of matching funds provided to the
applicant.
(Finding 5, pages 17-18)
We recommended the Department comply with the certification
and funding application requirements of the Illinois Administrative
Code. Further, if the Department
determines that the current rules do not allow for the most efficient and
effective operation of the LTCB program, the Department should seek the
necessary rule changes.
Department management agreed with the finding and stated they
would develop revised policies and procedures to ensure that all applications
are complete and in compliance with the rule requirements.
TOURISM GRANT APPLICANTS NOT PROPERLY NOTIFIED
The Department did not timely notify Tourism grant applicants
of their application status.
During our detail testing of 35 Tourism grant applications,
we noted the following:
·
The Department did not notify 10 of 10 (100%) Local
Tourism and Convention Bureau Program grant applicants of their certification
application status.
·
The Department did not notify 3 of 5 (60%) Tourism
Attraction Development Grant and Loan Program grant applicants tested whether
their applications were complete. One
of the 2 (50%) remaining application status letters was sent 141 days
late.
·
The Department did not acknowledge the date that the
applications for 5 of 5 (100%) International Tourism Program grant applicants
tested were received.
·
The Department did not notify 3 of 5 (60%) Tourism
Private Sector Grant Program applicants tested whether their applications
were complete. One of the 2 (50%)
remaining application status letters was sent 20 days late.
The Department’s response to this previous finding stated
they would comply with the Administrative Code or seek a rule change to the
Code. Department management stated
they did not seek a change to the Code during the engagement period. (Finding 6, pages 19-20)
We recommended the Department comply with the Illinois
Administrative Code and send the required notification letters to the
applicants or seek a rule change to the Illinois Administrative Code.
Department management agreed with the finding and stated
Tourism staff will send the required notification letters to comply with the
Code and may seek rule changes to make the process more efficient.
NEED TO ASSIST AND ENCOURAGE EMPLOYERS TO REHIRE EMPLOYEES
The Department failed to assist and encourage employers to
rehire employees as required by law when the employer was involved in a
Department developed training or retraining program.
During the examination period the Department failed to assist
and encourage employers to make every effort to reemploy individuals previously
employed when the employer was involved in a Department developed a federal
or State funded training or retraining program. The Department did not provide a list of those employees to the
employer for consideration for reemployment as required by the Civil
Administrative Code (20 ILCS 605/605-810).
(Finding 12, page 27)
We recommended the
Department assist and encourage employers involved in training or retraining
programs to consider persons previously employed at the facility for
reemployment. Further, the Department
should provide a list of those employees to the employer, as required by law.
Department management
agreed with the finding and stated they would develop a process for job
training and retraining programs administered by the Department to comply
with the requirements of this statutory provision.
STATUS OF THE DEPARTMENT’S
PROGRESS IN IMPLEMENTING MANAGEMENT AND PROGRAM AUDIT RECOMMENDATIONS
In February 2006, the Office of the Auditor
General released its report of the Management and Program Audit of the
Illinois Department of Commerce and Economic Opportunity (Department) –
Administration of its Economic Development Programs. The audit included 14 recommendations for
improvement, 8 of which we followed up on during the compliance
examination. The Department did not
have adequate time to implement corrective action for the remaining 6
recommendations. (Recommendations
1-4, 9 and 11)
During fiscal year 2006,
we noted the Department had made progress in implementing 7 of the 8
recommendations. The remaining
recommendation was only partially implemented and resulted in a finding as a
part of our compliance examination. A
summary of the Department’s corrective action follows:
·
The Department
appears to have implemented a structured process to review performance
measures on a periodic basis.
(Recommendation 5)
·
The Department
appears to have implemented procedures to ensure that performance measures
are calculated correctly and adequately supported by underlying documentation. (Recommendation 6)
·
The Department
eliminated a net 29 performance measures as a result of implementing a new
Performance Measurement Policy and Procedure. (Recommendation 7)
·
The Department
has implemented controls to ensure monitoring reports from grant recipients
are accurate and reviewed in a timely manner. (Recommendation 8)
·
The Department
has implemented procedures to periodically review both the efficiency and the
effectiveness of economic development programs. (Recommendation 10)
·
The Department
tracks required statutory reporting requirements. However, the Department did not ensure all 2006 statutory
reports were filed in a timely manner.
The Department appeared to have a proactive mechanism in place to
facilitate future timely submissions.
(Recommendation 12)
·
The Department
did not fully staff the Coal Development Board. (Recommendation 13)
(See Finding 10, page 24)
·
The Department has implemented several changes to
ensure that all reports required under the Corporate Accountability for Tax Expenditures
Act include all of the required information and that data reported is
complete and meaningful.
(Recommendation 14) (See
Status of Management and Program Audit Recommendations, pages 33-35)
OTHER FINDINGS
Other findings are reportedly being given attention by
Department management. We will review
progress toward implementation of our recommendations in our next
examination.
AUDITORS’ OPINION
We
conducted a compliance examination of the Department 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 has not, nor is required to,
prepare financial statements.
___________________________________
WILLIAM
G. HOLLAND, Auditor General
WGH:JAF:pp
AUDITORS ASSIGNED
Sikich LLP were our special assistant auditors for this
engagement.
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