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FINDINGS, CONCLUSIONS, AND
RECOMMENDATIONS
PROCEDURES FOR DISPOSAL OF CONFIDENTIAL INFORMATION NOT FOLLOWED
The Department had not ensured adequate procedures exist for
disposal of documents containing confidential and sensitive information.
As a
result of the Department’s mission, it regularly collects and maintains
confidential and personal identifiable information. As such the Department’s Employee Handbook states, “you are
required by law to safeguard the confidentiality of provider, applicant,
participant, and case information.” In addition, the Personal Information
Protection Act (Act) (815 ILCS 530/30)
states “Any
State agency that collects personal data that is no longer needed or stored at
the agency shall dispose of the personal data or written material it has
collected in such a manner as to ensure the security and confidentiality of
the material.”
We found procedures for
properly disposing of confidential information were not adequate or always
enforced. Specifically, while
performing a walkthrough of two of the Department’s buildings, we found
confidential, personal, and sensitive information in trash and recycle bins located
both inside and outside the buildings.
Some examples of the information found included:
·
Payroll
report including names, social security numbers and salaries.
·
Report
generated from the Key Information Delivery System (KIDS) which included recipient names,
social security numbers, and case numbers.
·
Benefit statements which included patient names,
account numbers, treatments received, and insurance information.
·
Bank statements with names and account numbers.
·
Sensitive legal documents.
·
Sensitive computer security information.
(Finding 1, pages 11-12)
We recommended the Department comply with the Personal
Information Protection Act and establish adequate Department-wide procedures
for properly disposing of confidential information (shredding is an
acceptable method). Once established,
the Department should effectively communicate the procedures to all
Department personnel, and enforce compliance with its procedures ensuring all
confidential information is kept secured until no longer needed, and then
properly disposed.
Department officials accepted our finding and recommendation
and stated that immediate action was taken to remind agency staff of
established procedures on the disposal and treatment of confidential
materials by:
·
Posting a notice in disposal areas
·
Instituting a Department-wide broadcast to staff.
Additionally, the Department is nearing
completion in the process of executing a contract with an outside licensed
vendor for professional, bonded, shredding services. These actions will help ensure compliance
with the Personal Information Protection Act.
TIME SHEETS NOT
MAINTAINED IN COMPLIANCE WITH THE STATE OFFICIALS AND EMPLOYEES ETHICS ACT
The
Department did not maintain time sheets in compliance with the State
Officials and Employees Ethics Act (Act).
The
Department had personnel policies in regard to timekeeping, but the
Department only required “Executive Level Staff” to maintain a daily time
sheet, which documents the time spent each day on official State
business. The Department had an
average of 2,223 employees at June 30, 2006 and only required 16 (0.7%)
employees to prepare time sheets in accordance with the Act.
The
State Officials and Employees Ethics Act (5 ILCS 430/5-5(c)) requires each
State agency to develop a written policy that includes work time requirements
and documentation of time worked.
Additionally, the Act requires State employees to periodically submit
timesheets documenting the time spent each day on official State business to
the nearest quarter hour. The Act
further requires timesheets be maintained by the fiscal office for a period
of at least two years. (Finding 2,
page 13)
We
recommended the Department amend its policies to require all employees
maintain time sheets in compliance with the Act. Further, the Department should ensure time sheets are completed
in accordance with Department policies and retained by the fiscal office for
the required statutory period.
Department
officials accepted our finding and recommendation and stated that the Department is moving forward to implement
the merit compensation process, and will again approach the union to
emphasize the need to change the bargaining union’s time sheet (HFS 163 form)
to be in compliance with the Act.
VOUCHER PROCESSING
WEAKNESSES
The Department did not exercise adequate
control over voucher processing. We
noted the following:
·
The Department did not pay interest on vouchers as
required by the State Prompt Payment Act.
The Department estimated at June 30, 2006 that approximately $10
million in interest was owed to vendors supplying medical services.
·
Twelve vouchers totaling $187,775 to one vendor for
healthcare consulting relating to the administration of the Group Health
Insurance function that was transferred from the Department of Central
Management Services on July 1, 2005 were inappropriately paid from the Public
Assistance Recoveries Trust Fund.
·
Eight of 34 (24%) internal service vouchers tested,
totaling $93,926, were approved for payment from 3 to 56 days late. (Finding 3, pages 14-15)
We recommended the Department comply with the Illinois
Administrative Code and the State Prompt Payment Act and implement controls
to ensure vouchers are approved within the required time frame and to
automatically pay interest of $50 or more on all vouchers not paid within 60
days. Further, the Department should
implement controls to ensure all expenditures are paid from the proper funds.
The Department accepted our
finding and recommendation and stated that the Department has been automating the process to generate payments for
automatic interest as prescribed by the State Prompt Payment Act and its
rules. It is expected all automatic
interest for FY00 through FY05 will be paid by the end of FY07. All automatic interest for the first half
of FY07 may be paid by the end of FY07 or early FY08.
In addition, staff have been notified in
writing that they should be familiar with both fund authorization statutes
and line-specific appropriation language prior to assigning funding sources
to contracts.
Further, notification will be circulated
with the telephone billings that will emphasize the need to timely review and
remit approvals or exceptions within 30 days from the billings are received.
PREMIUMS
NOT BILLED FOR ALL REQUIRED CHILDREN
The Departments’ All Kids application system did not properly
bill premiums for all required children.
During FY06 the Department embarked on a significant project
in order to implement the All Kids program which began on July 1, 2006. During our review of this project, it was
noted the premium calculation process of the application contained a program
error, in which recipients enrolled were not billed monthly premiums. Specifically, the All Kids application
passes records to the billing system with zero amounts for premiums. Thus, recipients have been enrolled, but
were not appropriately billed monthly premiums.
The Department was unable to determine the number of enrolled
recipients with zero payment amounts, the total dollar amount of unbilled
premiums, or the reason for the error at the time of our fieldwork. The problem was reported to the
Department’s Bureau of Information Services on June 29, 2006; however, there
was no estimated completion date to fix the problem. Thus, the Department continued to provide
services during FY07 to some enrolled recipients without receiving the
appropriate premium.
After the completion of the testing, the
Department stated there were 54,251 children, which were required to make
premium payments, of which 623 children had their premium payment affected by
the program error. As of November 2,
2006, the Department had not made a determination as to the collection of
back premiums. (Finding 4,
pages 16-17)
We recommended that the Department ensure the All Kids
application system meets its needs and promotes compliance with mandated
requirements. The Department should
work diligently to determine the problem in the All Kids application and
resolve it. Additionally, the
Department should conduct an analysis to determine the financial effects on
the All Kids Program and whether unbilled premiums should be collected.
Department
officials accepted our finding and recommendation and stated that the
Department has reviewed the incoming data files for this program and has
corrected the situation within HFS’ systems.
The Department will work with the Department of Human Services to
synchronize the systems. In addition,
the Department has determined the financial impact on the All Kids program
was negligible and is considering whether unbilled premiums should be collected.
INADEQUATE CONTROLS OVER PERSONNEL SERVICES
The
Department did not have adequate controls over personnel services. We noted the following:
·
The Department did not conduct annual or probationary
employee performance evaluations during fiscal year 2006 for 7 of 60 (12%)
employees tested.
·
Documentation in a personnel file was inconsistent
with the actual job duties that were performed and location for an employee
hired September 22, 2005 at a salary of $9,487/month. A new position was created on a Personnel
Action Request Form that indicated this position was located at the
Department’s Office of Energy Assistance in Springfield. However, the Department’s Employees by
Office Location report indicated that the employee worked in the Director’s
Office in Chicago. During fieldwork,
the auditors observed that the individual’s office was located in the
Governor’s Office of Management and Budget in Chicago. The employee’s position description dated
May 16, 2006 indicated that an estimate of 20% of the employee’s time should
be spent supervising staff, assigning work, approving time off, and providing
guidance and training for the Office of Energy Assistance. It was noted during fieldwork that this
employee did not perform any of these functions during fiscal year 2006.
(Finding 6, pages 20-21)
We recommended the
Department follow current procedures and comply with the Illinois
Administrative Code by conducting employee performance evaluations in a
timely manner. Further, the
Department should ensure the duties and locations of all personnel are proper
and agree to documentation maintained in the personnel files.
Department officials accepted our
finding and recommendation and stated that the Department agrees that all employees are to be evaluated
annually. The Division of Personnel
and Administrative Services will continue to send out notifications to the
Division Administrators and Personnel Liaisons indicating when evaluations
are due. Past due reminders will also
be sent out by the Division of Personnel and Administrative Services. As the evaluations are completed and
submitted to the Division of Personnel and Administrative Services, the
records will be marked as received and filed in the employee’s personnel
file. Personnel will continue to
track employee evaluations in an effort to reduce the number that are not
completed and signed in a timely manner. The Agency will not process any
merit compensation personnel transactions (i.e., promotions, separations,
transfers, etc.), with the exception of address changes, if the employee’s
performance appraisal is past due.
The Department also agreed that good
business practices require appropriate job descriptions be used. Therefore, a geographical transfer was processed
and an interagency agreement was entered into between Healthcare and Family
Services and the Governor’s Office regarding energy assistance.
GRANTS NOT APPROVED OR CLOSED OUT TIMELY
The
Department did not approve or close out Low Income Home Energy Assistance
Program (LIHEAP) and Illinois Home Weatherization Assistance Program (IHWAP)
grants in a timely manner. We noted
the following during detail testing of LIHEAP and IHWAP grant agreements:
·
Forty-five of 46 (98%) LIHEAP and IHWAP grant agreements
were not signed by the Director of the Department until 31 to 63 days after
the effective date of the grant agreement.
·
Thirteen of 25 (52%) close out packages
submitted to the Department by grantees were not reviewed by the Department
until 95 to 216 days after the close out date. (Finding 7, page 22)
We recommended the Department ensure
written agreements are executed in a timely manner. Further, the Department should implement procedures to ensure
all closeout packages submitted by grantees are timely reviewed and approved.
Department officials accepted our
finding and recommendation and stated that increased effort will be made to
ensure that all future grant agreements are processed in a timely
fashion. Office of Energy Assistance
is also in the process of attempting to add additional accounting staff with
the proper expertise in the area of grant closeouts to ensure that the
closeouts are processed in a timely fashion.
INADEQUATE CONTRACT TERMS AND SUPPORTING DOCUMENTATION
The Department entered into contracts without adequate terms
and did not maintain adequate documentation to support professional
expenditures to consultants for Healthcare Purchasing.
During
detail testing of contracts we noted the following:
·
The Department entered into a contract for $175/hr for which the
Department expended $187,775 during fiscal year 2006 for consulting
services. The description of services
on the contract was vague and stated “the services were to be for all matters
relating to the transfer and administration of group health insurance
functions and healthcare purchasing from DCMS to the Department, but not
limited to procurement development, rate development and negotiation.” The only documentation submitted by the
consultants was the total number of hours and the time period. The supporting documentation was not
approved by an individual within the Department indicating that the
consultant actually worked the number of hours indicated on the support.
·
The Department entered into a contract for $200/hr totaling $25,000
for management consulting for the Local Government Health Plan with the
description “Medical Consulting for Healthcare Purchasing.” Two invoices totaling $25,000 did not
contain adequate documentation to substantiate the hours worked or work
product completed. A list of hours
and tasks completed was submitted with the invoices, but no dates or
Department review and approval of the services was maintained. (Finding 9, pages 25-26)
We recommended the Department require and maintain sufficient
documentation to ensure services contracted for have been provided and that
the expenditures are reasonable and necessary.
Department officials accepted our
finding and recommendation and stated that the Office of Healthcare Purchasing’s
contract administrators are closely monitoring the contract(s) usage and the
required detail supporting documentation that is required from the
consultant. The contract
administrators are taking all steps to make sure the documents are detailed
and accurate prior to the approval and payment of services.
OTHER FINDINGS
The remaining findings are reportedly
being given attention by the Department.
We will review the progress towards the implementation of our
recommendations in our next compliance examination.
AUDITORS’ OPINION
Our auditors stated the
financial statements of the Department as of June 30, 2006, and for the year
ended, are fairly presented in all material respects.
___________________________________
WILLIAM
G. HOLLAND, Auditor General
WGH:TLD:pp
AUDITORS ASSIGNED
This audit was performed by the Office of the Auditor
General's staff.
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