REPORT DIGEST

DEPARTMENT OF VETERANS’ AFFAIRS - CENTRAL OFFICE

FINANCIAL AND COMPLIANCE AUDIT

For the Year Ended:
June 30, 2000

Summary of Findings:

Total this audit 4
Total last audit 6
Repeated from last audit 2

Release Date:
April 26, 2001

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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
Attn: Records Manager
Iles Park Plaza
740 E. Ash Street
Springfield, IL 62703

(217)782-6046 or TDD (217) 524-4646

This Report Digest is also available on
the worldwide web at
http://www.state.il.us/auditor

 

 

 

 

 

SYNOPSIS
  • The Department was operating its Residents' Trust Funds under conflicting statutes during the audit period.
  • The Department did not have a written investment policy as required by State law.

 

 

 

 

 

 

 

 

 

 

 

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

 

 


DEPARTMENT OF VETERANS’ AFFAIRS
FINANCIAL AND COMPLIANCE AUDIT
For The Year Ended June 30, 2000
EXPENDITURE STATISTICS

FY 2000

FY 1999

FY 1998

Total Expenditures (All Funds)

$10,316,829

$8,441,018

$8,092,939
OPERATIONS TOTAL

% of Total Expenditures
Personal Services

% of Operations Expenditures
Average No. of Employees

$7,071,931

69%
$4,439,631

63%
114

$6,852,001

81%
$4,208,185

62%
115

$6,643,312

82%
$4,151,463

62%
116
Other Payroll Costs (FICA, Retirement)

% of Operations Expenditures

$956,924

14%

$902,639

13%

$749,444

11%

Contractual Services

% of Operations Expenditures

$702,173

10%

$706,508

10%

$640,927

10%

All Other Items

% of Operations Expenditures

$973,203

13%

$1,034,669

15%

$1,101,478

17%
GRANTS TOTAL

% of Total Expenditures

$3,244,898

31%

$1,589,017

19%

$1,449,627

18%
Cost of Property and Equipment

$1,780,368

$1,537,055

$1,673,829

SERVICE EFFORTS AND ACCOMPLISHMENTS (Unaudited)

FY 00

FY 99 *

Field Services
Number of veterans and dependents served
Grants
Number of claims processed, including war bonuses and and headstones erected
State Approving Agency (based on Federal Fiscal Year)
Number of visits made to ensure continued approval of programs for Veterans' Educational Benefits
* The reporting requirement changed in FY00 by direction of the Governor. The FY 99 figures have been restated for comparative purposes.


175,400


9,844


478


198,514


6,968


541
AGENCY DIRECTOR
During Audit Period: Mr. John Johnston
Currently: Mr. John Johnston
 

 

 

 

 

State law and the Code of Federal Regulations are not consistent regarding the treatment of Residents' Trust Fund interest

 

 

 

 

 

 

 

 

 

 

As of January 1, 2000, the Department was required to have an investment policy in place for its 15 locally-held accounts

 

 

 

 

 

 

 

 

 

 

 

FINDINGS, CONCLUSIONS, AND RECOMMENDATIONS

CONFLICTING LAWS REGARDING USE OF RESIDENTS' TRUST FUND INTEREST

The Department was operating under conflicting laws during the audit period with regard to the use of interest accruals from the Residents' Trust Fund.

The Department of Veterans' Affairs Act states that money received as interest and income on funds deposited for residents of an Illinois Veterans' Home shall be placed in the members' benefit fund. The Code of Federal Regulations requires that all interest earned on residents' funds be credited to the residents' accounts. In cases of pooled accounts, there must be a separate accounting for each resident's share.

This change in federal law was effective during FY00, and compliance with it is required for the Department to receive federal reimbursements for nursing home care. The Department is currently in compliance with the Code of Federal Regulations. (Finding 3, page 16)

Department officials concurred with our recommendation to seek a legislative change to the Department of Veterans' Affairs Act regarding interest on Residents' Trust Funds, and stated that a legislative proposal has been developed.

ABSENCE OF A WRITTEN INVESTMENT POLICY

The Department did not have a written investment policy as required by the Public Funds Investment Act (Act). The Act states that the policy should address the safety of the principal, liquidity of funds, and return on investment and should require that the investment portfolio be structured in such a manner as to provide sufficient liquidity to pay obligations as they come due. (Finding 00-4, page 17)

Department officials concurred with our recommendation to develop and adopt a written investment policy in accordance with the requirements of the Act, and stated that a policy is currently being developed.

OTHER FINDINGS

The remaining findings were less significant, and according to Department personnel, have been given appropriate attention by the Department. We will review the Department’s progress toward the implementation of our recommendations in our next audit.

Responses to the findings were provided by Mr. Don Bullerman, Chief Internal Auditor, in a letter dated March 19, 2001.

AUDITORS’ OPINION

The financial statements of the Department of Veterans’ Affairs as of and for the year ended June 30, 2000 are fairly presented in all material respects.

___________________________________

WILLIAM G. HOLLAND, Auditor General

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AUDITORS ASSIGNED

This audit was performed by the Auditor General’s staff.