REPORT DIGEST ILLINOIS DEPARTMENT OF PROFESSIONAL REGULATION FINANCIAL AND COMPLIANCE AUDIT For the 2 Years Ended: June 30, 1995 Summary of Findings: This Audit Prior Audit Total 17 26 Repeated 9 10 Not Repeated 17 11 Release Date: May 1, 1996 State of Illinois Office of the Auditor General WILLIAM G. HOLLAND AUDITOR GENERAL Iles Park Plaza 740 E. Ash Street Springfield, IL 62703 (217) 782-6046

SELECTED ACTIVITY MEASURES	FY 1995	FY 1994	FY 1993
Number of Licenses Granted	71,588	64,681	65,426
Number of Licenses Renewed	200,635	239,818	224,743
Total Active Licensees	572,342	549,549	507,888
Number of Complaints Accepted (Medical - including assistants)	8,965 (1,697)	7,785 (1,680)	8,297 (1,610)
Number of Investigations Closed (Medical - including assistants)	7,846 (1,457)	8,000 (1,573)	8,657 (1,658)
Total Receipts Collected	$16,685,077	$30,194,286	$16,782,786

AGENCY DIRECTOR(S)

During Audit Period: Ms. Nikki Zollar Currently: Ms. Nikki Zollar

 

FINDINGS, CONCLUSIONS, AND RECOMMENDATIONS CASE ENFORCEMENT PROCESS NOT ADEQUATE There are numerous deficiencies in the enforcement process including untimely activity in the investigation and prosecution function and the circumvention of Enforcement Case Tracking System (ECTS) controls. In testing the investigation and prosecution of cases, we found: 12 of 25 medical cases reflected excessive time delays, ranging from 30 to 490 days between receipt of a complaint and the date of the first follow-up activity. 14 of 16 medical cases referred for investigation had excessive periods of inactivity, ranging from 30 to 265 days. 6 of 11 medical cases referred for prosecution had periods of no substantial activity ranging from 60 to 305 days. In addition, there were delays of veterinary and controlled substance cases and delays for cases referred to the Medical Coordinator, as well as instances of improper use of ECTS activity codes to circumvent controls. (Finding #1, page 11) Also, we noted that in some cases the statute of limitations date had passed before required prosecutorial activity was initiated and that in 8 of 11 cases checked, the Statute of Limitations date was incorrectly entered into the ECTS system. (Finding #2, page 14) We recommended the Department establish better procedures over investigative and prosecutorial activities and ensure that required prosecutorial activity is commenced prior to the expiration of the statute of limitations. The Department concurred with the recommendations, stating that case file review procedures had been initiated and that responsibility for compliance with statute of limitations provisions had been placed with Unit supervisors and the prosecution attorney. On February 5, 1996, subsequent to completion of this audit, the Legislative Audit Commission adopted Resolution Number 107 directing the Auditor General to conduct a program audit of the Department of Professional Regulation's effectiveness in investigating complaints against physicians licensed under the Medical Practice Act of 1987. INADEQUATE REVIEW OF DISCIPLINARY ACTIONS The Department does not have adequate procedures to ensure that disciplinary orders are accurate or that disciplinary actions are properly reported in the licensure system. During fiscal year 1994, the Department's Internal Audit unit reviewed 2,618 disciplinary orders and the related Registrant system data base and found that about 10% of the orders contained one or more errors. A similar review in fiscal year 1995 found about 25% of the orders contained one or more errors. Such errors included incorrect respondent names and license numbers, name discrepancies, incorrect effective dates, licensure status inaccurately reported in the Registrant system, and probation or suspension periods inaccurately reported in the system. (Finding #3, page 16) We recommended the Department provide training to responsible personnel and implement adequate review and approval procedures to ensure accuracy. The Department did not concur with our recommendation, stating it mirrored what the Department had already put into place. However, the Department's action was initiated subsequent to the audit period and was not subjected to review. INADEQUATE DOCUMENTATION OF CASE ACTIVITY The Division of Enforcement has not maintained adequate documentation for case activity. Each time a case is worked on, the activity is supposed to be entered into the Enforcement Case Tracking System (ECTS). In 24 of 100 files reviewed, we noted case activity was documented in the files but was not recorded in the ECTS, and, in 14 files, there was activity listed in the ECTS but not documented in the files. We recommended that the Department establish and enforce procedures for appropriate use of the ECTS. (Finding #4, page 18) This finding has been repeated since 1991. The Department concurs with this recommendation and has issued memoranda to investigators and prosecutorial staff on the need to enter activities correctly and timely. (For previous Department responses, see Digest footnote 1.) PROBATION FOR SOME LICENSEES NOT ENFORCED The Department is not enforcing probation requirements for non-health related professions. One adverse action which can be taken by the Department on licensees who are in violation of statute is to place a license on probation for a certain period of time and require the licensee to meet certain conditions. The Department ensures that probation requirements are met for health-related professions, such as physicians, nurses, dentists, and occupational therapists, but does nothing to ensure licensees of other professions comply with the terms of their probation. (Finding #5, page 20) We recommended the Department monitor and enforce probationary requirements for all licensees. The Department did not agree with our finding and recommendation stating that the current system was functioning in accordance with management directives and that the vast majority of non-health related professions required no monitoring. INADEQUATE PROCEDURES FOR COLLECTING FINES The Division of Enforcement did not have adequate procedures for collecting fines. Over one third of the $364,000 in fines outstanding at June 30, 1995 was over six months past due or considered uncollectible. During Fiscal Year 1995, the probation unit attempted collection on only 17 fines totaling $15,520. Part of the problem may stem from allowing installment debtors to fall behind on installment payments and from the difficulty in collecting fines and exerting pressure against individuals who no longer hold a license. We recommended the Department implement policies and procedures to ensure collection of fines on a timely basis. (Finding #6, page 22) The Department did not agree that procedures in place were inadequate and stated that in February, 1995, directives were issued to deal with collections. The Department feels that it has adequate procedures in place not only to collect fines, but also to greatly reduce or eliminate accounts receivable. The procedures claimed to be established by the Department were not implemented during the period under audit and were not subject to audit review. GENERAL REVENUE AND DEDICATED FUND SUBSIDIES In fiscal year 1995, the Department had 15 dedicated funds for the administration of various regulated professions. The Department has not complied with many statutory provisions mandating that moneys deposited into these funds be expended only for the cost necessary for the administration of the Acts creating them. In fiscal year 1995, 7 of these funds were charged unrelated expenses totaling over $1.1 million, and in fiscal year 1994, subsidies totaling over $2.2 million were provided to 8 funds. The professions were not being charged expenses proportionate to their cost of services -- the charges were based substantially on the ability to pay. Effective July 1, 1995, Public Act 89-204 gave the Department increased statutory authority to charge the various professions for costs incurred to provide services. We recommended that the Department implement an effective cost allocation methodology and charge the various dedicated professions all appropriate costs. (Finding #7, page 25) This finding has been repeated since 1991. The Department concurred with this recommendation and stated that the Act has provided a mechanism for reconciling cost to spending, ultimately ensuring each fund pays the proper amount for regulation with one caveat: professions not producing enough revenues to cover costs must incur an increase in their fees. (For previous Department responses, see Digest footnote #2.) POOR INTERNAL CONTROL OVER CASH RECEIPTS The Department's internal control over cash receipts needs to be improved. In fiscal years 1994 and 1995, the Department collected $30,194,286 and $16,685,077, respectively. There is considerable variance between years due to differing renewal periods for professional licenses, fee changes, and changes in professional titles. Receipts were mostly in checks which ranged in value from $5.00 to $100.00. We found that: checks were not restrictively endorsed when received in the mail; controls were not in place to safeguard opened mail that accumulated; and documentation of controls to ensure that all revenue was deposited was lacking. We recommended the Department promptly endorse checks and design controls to prevent or detect shortages in deposits. (Finding #14, page 36) This finding has been repeated since 1987. The Department partially concurred. In October 1995, checks began to be restrictively endorsed upon opening, and a high speed remittance processing system was installed in April, 1995. The Department does not agree that more controls are necessary. (For previous Department responses, see Digest footnote #3.) OTHER FINDINGS The remaining findings are less significant and are being given appropriate attention by the Department. We will review progress toward implementing these recommendations in our next audit. Responses to the recommendations were provided by Director Nikki Zollar. AUDITORS' OPINION Our auditors state that the Department's financial statements for the two years ending June 30, 1995 are fairly presented. ______________________________________ WILLIAM G. HOLLAND, Auditor General WGH:KMC:pp SPECIAL ASSISTANT AUDITORS Sikich Gardner & Co, LLP were our special assistant auditors for this audit. DIGEST FOOTNOTES #1: INADEQUATE DOCUMENTATION OF CASE ACTIVITY - Previous Agency Responses. 1993: "Concur. The Deputy Director of Statewide Enforcement will review current policies and revise to incorporate the use of the Enforcement Case Tracking System." (Response goes on to detail some of the steps that will be taken.) 1991: "Concur. The Division concurs Policy Manual revisions should be completed and reissued." (Response goes on to detail the status of the revisions as of early 1991.) #2: GENERAL REVENUE AND DEDICATED FUND SUBSIDIES - Previous Agency Responses. 1993: "Concur. The Department has always recognized that proper cost allocation is of the utmost importance. In recognizing this problem we introduced legislation in 1992 to correct the situation through establishment of an administrative fund. Unfortunately, the legislation was not approved by the legislature." (Response continues with explanations of other past efforts and efforts to be undertaken.) 1991: "Concur. However, the Department has proceeded during the past two years to lessen the amount of subsidization. (Response also discusses 1989 and 1990 analyses and 1991 expectations.) #3: INTERNAL CONTROLS OVER CASH RECEIPTS - Previous Agency Responses. 1993: "Concur. The agency has been in the process of updating the Cash area via automation. However, funding problems have delayed this process for the past two (2) years. We will continue to seek funding to correct the situation." 1991: "Concur. Corrective action is under way to re-design and automate the cash receipts process." 1989: "The Department concurs with the finding. Over the past fiscal year, we have been actively seeking a solution through automation of the cash receipts process. Funding has been requested for design and implementation of an adequate system in the fiscal 1991 budget request." 1987: "The Department agrees that its cash processing systems should be reviewed. The Department's aim will be in the direction of an automated system. If an automated system proves to be cost efficient, the deficiencies cited by the auditors will be addressed and corrected."