REPORT DIGEST

CHESTER
MENTAL HEALTH CENTER

COMPLIANCE AUDIT
For the Two Years Ended:
June 30, 1997

Summary of Findings:

Release Date:
March 12, 1998

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

SYNOPSIS

• Commissary gross profit margins declined, resulting in increased operating losses.

{Expenditures and Activity Measures are summarized on the reverse page.}

FY 1997

FY 1996

FY 1995

• Total Expenditures (All Appropriated Funds)

OPERATIONS TOTAL
% of Total Expenditures
Personal Services
% of Operations Expenditures
Average No. of Employees
Average Salary Per Employee

Other Payroll Costs (FICA, Retirement)
% of Operations Expenditures
Contractual Services
% of Operations Expenditures
All Other Items
% of Operations Expenditures

GRANTS TOTAL
% of Total Expenditures

• Cost of Property and Equipment
• Cost of Inventories on hand

$23,321,850


$23,317,050
99.98%
$18,909,153
81.1%
515
$36,716

$2,265,625
9.7%
$1,230,636
5.3%
$911,636
3.9%

$4,800
.02%

$16,300,270
$190,659

$22,102,044


$22,097,244
99.98%
$17,946,516
81.2%
504
$35,608

$2,103,233
9.5%
$1,206,740
5.5%
$840,755
3.8%

$4,800
.02%

$15,687,227
$171,570

$20,593,437


$20,588,637
99.98%
$16,941,654
82.3%
492
$34,434

$1,869,131
9.1%
$1,055,754
5.1%
$722,098
3.5%

$4,800
.02%

$14,758,610
$186,807

FY 1997

FY 1996

FY 1995

• Average Number of Residents
• Ratio of Employees to Residents
• Cost Per Year Per Resident
• Department's progress in reducing employees' injuries
  (Workers' Compensation Claims)

330
1.56/1
$88,744


163

308
1.63/1
$89,523


178

296
1.66/1
$86,201


177

During Audit Period: Stephen L. Hardy, Ph.D.
Currently: Stephen L. Hardy, Ph.D.

Commissary net losses increased about $9,000 a year

FINDINGS, CONCLUSIONS, AND RECOMMENDATIONS

The one compliance finding in this report concerns declining gross profit margins in the commissary operation. During the last two Fiscal Years, gross profit percentages declined from 26.75% of sales to 16.74%, resulting in increased net losses of about $9,000 a year. We recommended that the Center develop a pricing policy that will enable the commissary to operate more closely to a "no loss" basis; that physical access to commissary inventory be restricted; and that gross profits continue to be monitored and variances from expected levels be investigated. The Center accepted this finding and agreed to take appropriate action. We will review progress made toward corrective action in our next audit of the Center.

AUDITORS' OPINION

We conducted a compliance audit of the Center as required by the Illinois State Auditing Act. We also performed certain agreed upon procedures with respect to the accounting records of the Center to assist our single audit of the entire Department. Financial statements for the Department will be presented in that report.

_____________________________________
WILLIAM G. HOLLAND, Auditor General

WGH:KMC:pp

SPECIAL ASSISTANT AUDITORS

Our special assistant auditors were Scheffel & Company, P.C.