REPORT DIGEST

DEPARTMENT OF VETERANS’ AFFAIRS – CENTRAL OFFICE

COMPLIANCE AUDIT

For the Two Years Ended:

June 30, 2002

Summary of Findings:

Total this audit 2
Total last audit 4
Repeated from last audit 0

Release Date:
April 3, 2003

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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 did not have adequate controls over its property and equipment.
  • The Department’s Office of Internal Audits did not audit all its major systems of internal administrative and accounting controls during fiscal years 2001 and 2002.

 

 

 

 

 

 

 

 

 

 

 

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

 

DEPARTMENT OF VETERANS’ AFFAIRS
COMPLIANCE AUDIT
For The Two Years Ended June 30, 2002
EXPENDITURE STATISTICS

FY 2002

FY 2001

FY 2000

Total Expenditures (All Funds)

$9,387,734

$9,451,159

$10,316,829
OPERATIONS TOTAL
% of Total Expenditures
Personal Services
% of Operations Expenditures
Average No. of Employees

$7,244,263
77%
$4,544,123
63%
113

$7,329,521
78%
$4,551,825
62%
116

$7,071,931
69%
$4,439,631
63%
114
Other Payroll Costs (FICA, Retirement)
% of Operations Expenditures

$1,007,965
14%

$1,004,319
14%

$956,924
14%
Contractual Services
% of Operations Expenditures

$698,322
9%

$698,637
9%

$702,173
10%
All Other Items
% of Operations Expenditures

$993,853
14%

$1,074,740
15%

$973,203
13%
GRANTS TOTAL
% of Total Expenditures

$2,134,471
23%

$2,121,638
22%

$3,244,898
31%
Cost of Property and Equipment

$1,562,046

$1,988,612

$1,780,368

SERVICE EFFORTS AND ACCOMPLISHMENTS (Unaudited)

FY 2002

FY 2001

FY 2000

Field Services
Number of veterans and dependents served
Grants
Number of claims processed, including war bonuses 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


167,040

7,026

 

627


168,344

7,044

 

555


175,400

9,844

 

478
AGENCY DIRECTOR
During Audit Period: Mr. John Johnston
Currently: Mr. Roy L. Dolgos
 

 

 

Lack of controls over property and equipment

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Grants, locally held funds and information systems not audited within the two-year audit period

 

 

 

 

 

 

 

 

 

 

 

FINDINGS, CONCLUSIONS, AND RECOMMENDATIONS

EQUIPMENT CONTROL DEFICIENCIES

The Department did not have adequate controls over its property and equipment. We noted the following:
  • The Department could not provide documentation of property and equipment assets under the capitalization threshold. These deletions totaled approximately $14 million.
  • Item descriptions for 2 out of 8 items selected for testing did not match the Department’s property control inventory records.
  • 3 out of 25 items deleted from Department records were not properly reported to the Department of Central Management Services.
  • An item of software was removed from the Department’s property records at its recorded value. However, its recorded amount did not agree to the original invoice amount.
  • 5 out of 50 items selected for testing did not contain proper identification or equipment tags.

We recommended the Department comply with the State Property Control Act and Statewide Accounting Management System procedures to ensure property records are complete and accurate. Further, the Department should retain all supporting documentation to support its property and equipment numbers reported to the State Comptroller. (Finding 1, pages 10-11)

Department officials agreed with our recommendation and stated most errors noted were due to the departure of key staff members in the Fiscal Department resulting in reassignment of functions to staff in the general accounting systems of the Fiscal Office and the Quincy Veterans’ Home. Department officials also stated they have since filled vacancies, redistributed duties and implemented additional procedures to ensure the Department’s records comply with the State Property Control Act, and that accurate reports are produced in accordance with applicable procedures of the Statewide Accounting Management System.

NONCOMPLIANCE WITH INTERNAL AUDIT REQUIREMENTS

The Department’s Office of Internal Audits did not audit all major systems of internal administrative and accounting controls during fiscal years 2001 and 2002 as required by the Fiscal Control and Internal Auditing Act. Major areas that were not audited during the two-year period include grants, locally held funds and information systems.

We recommended the Department comply with the requirements of the Fiscal Control and Internal Auditing Act.

(Finding 2, page 12)

Department officials agreed with our recommendation and stated the Office of Internal Audits had one staff member and this position was left vacant December 31, 2002 from early retirement. The Department is attempting to fill the position and has requested an exemption from the hiring freeze.

Responses to the findings were provided by Mr. Curt Stephens, Chief Fiscal Officer, in a letter dated February 26, 2003.

AUDITORS’ OPINION

We conducted a compliance audit of the Department as required by the Illinois State Auditing Act. We have not audited any financial statements of the Department for the purpose of expressing an opinion because the Department does not, nor is it required to, prepare financial statements.

 

___________________________________

WILLIAM G. HOLLAND, Auditor General

WGH:JSC:pp

AUDITORS ASSIGNED

Our special assistant auditors for this audit were McGladrey & Pullen, LLP.