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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 and funds.
Public Act 93-0025, in part, outlines a program for efficiency
initiatives to reorganize, restructure and reengineer the business process 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 the 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.
According to Department staff, the Department was not provided any
evidence of savings by CMS. The only
guidance received was all payments should be taken from other funds for the
September 2003 billings.
During FY04, the Department received three billings and made
payments totaling $114,944 from CMS for savings from efficiency
initiatives. Based on our review, we
question whether the appropriate appropriations, as required by the State
Finance Act, were used to pay for the anticipated savings.
We
found that the Department made payments for these billings not from line item
appropriations where the cost savings were anticipated to have occurred but
from line items that simply had known available funds. The Department paid the entire $114,944
from personal services related line item appropriations. These monies were applied to the
Procurement Efficiency, Information Technology, and Vehicle Fleet Management
initiatives.
We recommended 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 CMS as to how
savings levels were calculated, or otherwise arrived at, and how savings
achieved or anticipated impact the Department’s budget. (Finding 04-1, pages 9-11)
Department officials concurred with our recommendation and
stated pursuant to the provisions of Public Act 93-0025 and recommendations
of the Governor’s Office of Management and Budget, the Department made efficiency
initiative payments from line items where the anticipated savings would have
the least affect on the Department’s ability to meet its statutory
requirements. The Department will
also seek from Department of Central Management Services specific information
identifying these savings
NONCOMPLIANCE
WITH THE STATE OFFICIALS AND EMPLOYEES ETHICS ACT
The Department of Financial
Institutions (Department) was not
maintaining time sheets for its employees in compliance with the State
Officials and Employees Ethics Act (Act).
Employees’ time was tracked using a “negative” timekeeping system
whereby the employee is assumed to be working unless noted otherwise.
The Act requires the Department to
adopt personnel policies consistent with the Act. The Act notes policies shall require State employees to
periodically submit time sheets documenting the time spent each day on
official State business. No time
sheets documenting the time spent each day on official State business were maintained.
Department officials stated they relied
on advice from the Governor’s Office staff who initially stated that agencies
using the Department of Central Management Services payroll system, which the
Department uses, would be in compliance with the Act.
We recommended the Department amend its
policies to require employees to maintain time sheets in compliance with the
Act. (Finding 04-2, page 12)
Department management concurred with our recommendation and
noted that beginning with fiscal year 2005, Financial Institutions resides as
a division of the Illinois Department of Financial and Professional
Regulation (IDFPR). IDFPR will work
to implement a system that will address the issue outlined above.
Ms. Michele
V. Latz, Director, Division of Financial Institutions, Department of
Financial and Professional Regulation provided the Department's
responses.
AUDITORS’ OPINION
We conducted a compliance attestation
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 does not, nor is it required to prepare
financial statements.
____________________________________
WILLIAM
G. HOLLAND, Auditor General
WGH:RPU:pp
SPECIAL ASSISTANT AUDITORS
The accounting firm of Sikich Gardner & Co, LLP served as
our special assistant auditors for the engagement.
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