INTRODUCTION
The State Fiscal Year 1997 financial statements and
accompanying notes will be the last statements prepared
for the Illinois Department of Rehabilitation Services -
Illinois Center for Rehabilitation and Education (ICRE).
In July 1996, Governor Jim Edgar signed into law House
Bill 2632 merging most of Illinois' human services
functions into a new Department of Human Services (DHS)
effective July 1, 1997. The Department of Rehabilitation
Services transferred all of its rights, powers, duties
and functions to the DHS on July 1, 1997 as prescribed by
Public Act 89-507.
FINDINGS, CONCLUSIONS, AND
RECOMMENDATIONS
INADEQUATE MAINTENANCE OF PROPERTY RECORDS
The Center (ICRE) did not maintain fully adequate
property records.
Overall, we noted ICRE-Wood and ICRE-Roosevelt lacked
segregation of duties over the maintenance of property
records and did not maintain detailed records to fully
support additions, deletions and transfers. In addition,
the property records were not updated to reflect certain
items noted as present during the physical inventory.
(Finding 1, page 14) This finding has been repeated
since 1992.
We recommend ICRE maintain adequate property records
as required by the State Property Control Act and CUSAS.
ICRE responded it will maintain and record property as
required by the State Property Control Act and CUSAS.
(For previous agency responses, see Digest Footnote 1.)
LACK OF PHYSICAL CONTROL OVER PROPERTY
ICRE did not have adequate physical control over all
of its property.
Overall, we noted ICRE-Wood and ICRE-Roosevelt failed
to utilize transfer sheets to document movement of
property. In addition, we noted property records are
separated by general location but do not specify
room/employee assignments. Specifically, we noted items
that were not tagged or did not trace by location or tag
number to the property records. (Finding 2, page 17)
We recommend ICRE maintain property as required by the
State Property Control Act. Specifically, the Center
should improve documentation of the transfer of property
within its locations and should establish specific
locations for items on the property records.
ICRE responded it will review procedures and revise
them where necessary. In addition, equipment items will
be properly tagged and transfers recorded timely.
LOSS OF FEDERAL REIMBURSEMENTS
ICRE-Roosevelt did not maintain adequate control over
reimbursements for breakfast and lunch programs.
- ICRE-Roosevelt did not utilize an appropriate
method to count and report meals served or meals
prepared and taken off the premises.
- ICRE-Roosevelt did not verify that its
application for the "Severe Need Breakfast
Program" had been received and accepted by
the State Board of Education. Also,
ICRE-Roosevelt failed to realize that
reimbursements for this program were not being
received. This resulted in the loss of
approximately $2,400 in reimbursements. (Finding
3, page 19)
We recommend ICRE-Roosevelt establish procedures to
take an actual meal count for completion of monthly claim
forms and monitor reimbursements to verify all eligible
reimbursements are received. This finding has been
repeated singe 1990.
ICRE-Roosevelt responded it has submitted the
application for the "Severe Need Breakfast
Program" and reimbursements are being monitored. In
addition, ICRE-Roosevelt stated it will work with the
food contractor to insure accurate meal counts are taken.
(For previous agency responses, see Digest Footnote 2.)
FAILURE TO OBTAIN SIGNED CONTRACTS
ICRE did not always obtain signed contracts prior to
the effective date for the performance of services. We
noted the following:
- Four contracts at ICRE-Wood were approved between
13 and 53 days after the effective date.
- One contract at ICRE-Roosevelt was approved 30
days after the effective date. (Finding 4, page
21)
We recommend ICRE coordinate procedures with the
Department of Rehabilitation Services to allow sufficient
time to obtain approval prior to the effective date of
the contract. This finding has been repeated since
1990.
ICRE responded it will coordinate contract activities
with the Department to allow sufficient time for approval
prior to the effective date. (For previous agency
responses, see Digest Footnote 3.)
OTHER FINDINGS
The remaining findings are less significant and are
being given appropriate attention by ICRE. We will review
progress toward implementing these recommendations in our
next audit. Responses to the recommendations were
provided by Mr. James Donkin, Chief Internal Auditor for
the Department of Human Services.
AUDITOR'S OPINION
We have stated the financial statements for the
Locally Held Funds of the Illinois Department of
Rehabilitation Services-Illinois Center for
Rehabilitation and Education as of and for the year ended
June 30, 1997 are fairly presented in all material
respects.
___________________________________
WILLIAM G. HOLLAND, Auditor General
WGH:PH:ak
AUDITORS ASSIGNED
This audit was performed by the Office of the Auditor
General's staff.
DIGEST FOOTNOTES
#1: INADEQUATE MAINTENANCE OF
PROPERTY RECORDS - Previous Agency Responses
1996: "We concur with this finding
and we are revising procedures to ensure that property
records are updated and maintained on current basis.
The Business Administrator is
responsible for supervising the updating of the property
and equipment listing and the responsibility for entry of
transactions onto the system has been assigned to the
Accountant III in the Business Office.
Additionally, the Business
Administrator has identified a method to list inventory
by room location. This will reduce the time required to
complete a physical count. This time savings will be
utilized to work with DORS Central Office Staff to
improve inventory record maintenance."
1994: "We concur with the finding.
Extra effort needs to be made to assure all property and
equipment records are completed timely and accurately at
ICRE-Roosevelt and Wood. We will conduct an overall
review of the equipment and property management at both
locations to determine what course of action is best
suited to resolve the problem. This review will be done
by Center staff, Central Office Agency staff and Internal
Audit staff and recommendations will be made and
implemented.
Procedures have already been developed
and disseminated by Central Office to all facilities for
uniform property control. We will make sure that these
procedures are given to the appropriate staff at ICRE. In
addition, the Business Office Operating Manual (BOOM)
reiterates the proper procedures for the recording of
property transactions. ICRE staff will be reminded to
follow BOOM procedures."
1992: "The School concurs."
#2: LOSS OF FUNDS THROUGH FEDERAL
REIMBURSEMENT-Previous Agency Responses
1996: "We concur with this finding
and action is being taken to correct this problem. The
Business Administrator is responsible for ensuring the
accurate and timely filing of Federal reimbursement claim
forms. He will review and approve (in writing) all forms
prior to submission and he will also maintain a file of
completed forms."
1994: "We concur with this
finding. However, the problems reported were for the
early part of the audit period and procedures have been
implemented to prevent future occurrences. An overall
review of the Center's National School Lunch Program,
conducted on December 6, 1994 by the Illinois State Board
of Education, was found to be in compliance with their
requirements.
The Center has instituted internal
control procedures to ensure that all future claim forms
will be accurately completed, properly submitted and
requested reimbursements tracked to avoid recurrence of
this problem. Staff are in the process of researching
whether the reimbursements for 7/92, 6/93, 7/93 and 8/93
are still recoverable. If so, these billings will be
resubmitted to collect these funds."
1992: "The School concurs and
accepts the recommendation."
1990: "We concur with the finding.
Procedures will be augmented to ensure the timely
submission of the federal grant application."
#3: PERFORMANCE OF CONTRACTS
PRIOR TO OBTAINING SIGNATURE - Previous Agency Responses
1996: "We concur with this finding
and will initiate contract processing early enough to
allow sufficient time to obtain appropriate signatures
prior to the performance of the contracts.
ICRE-Roosevelt will initiate the
contract process for FY98 during January 1997. This will
allow sufficient lead time to allow the contracts to be
completed and filed prior to the start date of the
contracts. Additionally, the Business Administrator will
work with Central Office staff to avoid late signing of
contracts.
At ICRE-Woods, a breakdown in
communications, after a change in contract procedures,
contributed to the late filing of contracts. Procedures
between ICRE-Woods/Bureau of Blind Service and Central
Office have been established regarding communication of
procedural changes. This has resolved this issue.
Additionally, the Business Administrator will work with
Central Office staff to avoid late signing of
contracts."
1994: "We concur with the finding.
The Agency has implemented a contract tracking system
that allows us to follow contracts and monitor their
progress. The Agency will continue to monitor contract
progress and work toward reducing or eliminating this
problem. Additionally, we will work with staff and
contractees to aid in the timely completion and
submission of contracts.
While we will continue to work on
improvement in this area, there will always be some
circumstances whereby contracts will be filed late. CUSAS
provides for the filing, obligation and payment of
contracts by both parties after the effective date by use
of affidavits."
1992: "The Department concurs and
will commence a comprehensive review of relevant planning
procedures."
1990: "We concur with the
statement that signing a contract prior to commencement
of work is a sound business practice. However, we did
follow affidavit procedures which were designed by the
Comptroller to deal with situations where this is not
possible."
"We are installing procedures
developed to speed up contract processing."
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