REPORT DIGEST

DEPARTMENT OF HEALTHCARE AND FAMILY SERVICES -

LOCAL GOVERNMENT HEALTH INSURANCE RESERVE FUND

FINANCIAL AUDIT

For the Year Ended: June 30, 2009

Summary of Findings:

Total this audit: 1

Total last audit: 1

Release Date: May 11, 2010

State of Illinois

Office of the Auditor General

WILLIAM G. HOLLAND

AUDITOR GENERAL

To obtain a copy of the Report contact:

Office of the Auditor General, Iles Park Plaza, 740 E. Ash Street, Springfield, IL 62703

(217) 782-6046 or TTY (888) 261-2887

This Report Digest and Full Report are also available on the worldwide web at http://www.auditor.illinois.gov

SYNOPSIS

• The Department’s year-end financial reporting was not completed timely.

INTRODUCTION

This digest covers the financial audit of the Local Government Health Insurance Reserve Fund for the year ended June 30, 2009. The financial audit report includes one significant deficiency in internal control finding.

FINDINGS, CONCLUSIONS, AND RECOMMENDATIONS

FINANCIAL STATEMENT PREPARATION

The Department’s year-end financial reporting in accordance with generally accepted accounting principles (GAAP) to the Illinois Office of the Comptroller (Comptroller) was not completed timely for the Local Government Health Insurance Reserve Fund (Fund).

During our audit of the June 30, 2009 Fund’s GAAP Reporting Package, we noted the GAAP Reporting Package was not submitted to the Comptroller in a timely manner. The GAAP Reporting Package was submitted to the Comptroller 12 days late. In addition, the Comptroller submitted to the Department review comments for the GAAP Reporting Package on September 28, 2009; however, the Department did not provide a response to those review comments until October 23, 2009. Further, the Fund’s financial statements were not provided to the auditors until December 8, 2009, five months after the year end. (Finding 1, pages 19-20)

We recommended the Department implement additional internal control procedures to ensure GAAP Reporting Packages are prepared in a timely manner.

Department officials concurred with our recommendation and stated that they are continually assessing the financial reporting process and implementing procedures to improve upon timeliness and accuracy. As an ongoing effort the Department continues to strive to meet the mandated deadlines, which resulted in the GAAP Reporting Package being submitted in a more timely manner than in prior years.

AUDITORS’ OPINION

Our auditors state the financial statements of the Local Government Health Insurance Reserve Fund as of June 30, 2009, are fairly presented in all material respects.

WILLIAM G. HOLLAND, Auditor General

WGH:TLD:pp

AUDITORS ASSIGNED

This audit was performed by the staff of the Office of the Auditor General.