REPORT DIGEST

ILLINOIS DEPARTMENT OF VETERANS’ AFFAIRS

COMPLIANCE EXAMINATION
FOR THE TWO YEARS ENDED JUNE 30, 2020

Release Date:  April 15, 2021

FINDINGS THIS AUDIT:  25

CATEGORY:  NEW -- REPEAT -- TOTAL
Category 1:  0 -- 0 -- 0
Category 2:  13 -- 12 -- 25
Category 3:  0 -- 0 -- 0
TOTAL:  13 -- 12 -- 25

FINDINGS LAST AUDIT: 15

Category 1: Findings that are material
weaknesses in internal control and/or a
qualification on compliance with State
laws and regulations (material
noncompliance).
Category 2: Findings that are significant
deficiencies in internal control and
noncompliance with State laws and
regulations.
Category 3: Findings that have no
internal control issues but are in
noncompliance with State laws and
regulations.

State of Illinois, Office of the Auditor
General
FRANK J. MAUTINO, 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
www.auditor.illinois.gov

SYNOPSIS

• (20-12) The Department did not exercise
adequate controls over the approval or
preparation of vouchers.

• (20-13) The Department had weaknesses
in performing reconciliations of
obligations, contracts, object expense/
expenditures, revenues, and
appropriations to the Illinois Office of
the Comptroller records.

• (20-14) The Department did not exercise
adequate control over the reporting,
recording, and inventorying of State
property.

• (20-15) The Department did not exercise
adequate control over a procurement as
required by the Illinois Procurement
Code.

FINDINGS, CONCLUSIONS, AND
RECOMMENDATIONS

INADEQUATE CONTROLS OVER THE APPROVAL AND
PREPARATION OF VOUCHERS

The Department did not exercise adequate
controls over the approval or preparation
of vouchers.

A few issues we noted during our
examination of the Department’s vouchers
follows:

• Seven of 180 (4%) vouchers tested,
totaling $11,966, were not approved
within 30 days.  The vouchers were
approved between one and 22 days late.

• Two of 60 (3%) vouchers tested,
totaling $35,132, were not supported by a
purchase order/requisition or receiving
report.

• Ten of 60 (17%) vouchers tested,
totaling $344,804, for a variety of
assets could not be located on the
Department’s Annual Inventory Report to
the Department of Central Management
Services (CMS). (Finding 12, pages 34-36)

We recommended the Department take action
to comply with State laws and regulation
over its voucher processing function,
including reviewing and approving or
denying vendor bills within 30 days from
receipt, ensuring vouchers are properly
supported and mathematically accurate,
ensuring voucher expenditures are
recorded in the correct fiscal year,
ensuring interest due is paid to vendors,
and ensuring purchased equipment is
appropriately added to property control
records at its correct value and properly
recorded on the Annual Inventory Reports
to CMS.

Department personnel agreed with our
recommendations and stated the Department
will ensure policies reflect requirements
to ensure tracking and processing of all
vouchers are competed in a timely manner
to meet all reporting requirements.

WEAKNESSES IN PERFORMING RECONCILIATIONS

The Department had weaknesses in
performing reconciliations of
obligations, contracts, object expense/
expenditures, revenues, and
appropriations to the Office of the State
Comptroller records.

A few issues we noted during our
examination of reconciliations performed
by the Department follows:

• The Department did not perform
reconciliations of the Monthly Expense/
Expenditure by Quarter Report (SA02)
during the examination period for any of
the veterans’ homes or the Central
Office.

• Five of 24 (21%) reconciliations of the
Monthly Appropriation Status Report
(SB01) were not performed accurately,
showing appropriation codes that did not
reconcile.

• The Department did not perform Monthly
Agency Contract Report (SC14)
reconciliations for any of the veterans’
homes or the Central Office during the
examination period. (Finding 13, pages
37-39) This finding has been repeated
since 2016.

We recommended the Department strengthen
internal controls over expenditures,
receipts, contractual and cash
reconciliations to ensure they are
performed timely and accurately.  We also
recommended the Department document the
dates all monthly reconciliations are
completed and timely notify the
Comptroller of any differences noted.

Department personnel agreed with our
recommendations and stated they were
creating a policy to address
reconciliations and implementing
appropriate training for fiscal staff.

INADEQUATE CONTROLS OVER THE REPORTING,
RECORDING, AND INVENTORYING OF STATE
PROPERTY

The Department did not exercise adequate
control over the reporting, recording,
and inventorying of State property.

A few issues we noted during our testing
of State property follows:

• Eight of eight Agency Report of State
Property (C-15) reports were inaccurate.

• Ten of 40 (25%) equipment additions
tested were not added to the Department’s
property records timely, ranging from two
to 722 days late.  Additionally, one of
40 (3%) equipment additions was recorded
on the property records twice, resulting
in the Department’s property records
being overstated by $44,907.

• The Department reported it was unable
to locate 491 property items, totaling
$522,934, on its Fiscal Year 2019 Annual
Inventory Report to the Department of
Central Management Services (CMS), which
represented 5% of the Department’s total
property.  It reported it was unable to
locate 371 property items, totaling
$271,810, on its Fiscal Year 2020 Annual
Inventory Report to CMS, which
represented 2% of the Department’s total
property.

• Exceptions noted during our testing of
the Department’s (includes Central
Office, Homes, and Field Service Offices)
property records included items located
but not included in property records,
items not located, and items not removed
from property records despite support
showing items were transferred. (Finding
14, pages 40-45) This finding has been
repeated since 2008.

We recommended the Department strengthen
internal control over the recording and
reporting of State property by
strengthening its inventory and
recordkeeping practices to ensure
compliance with statutory and regulatory
requirements.

Department personnel agreed with our
recommendation.

INACCURATE REPORTING OF EMERGENCY
PURCHASES

The Department did not exercise adequate
control over a procurement as required by
the Illinois Procurement Code.

During our testing, we noted the
Department did not comply with emergency
purchase requirements for one of five
(20%) emergency purchases, totaling
$198,759.  The Department failed to
competitively solicit services from a
vendor for Fiscal Year 2019 services and
did not timely utilize either sole source
or emergency purchase procedures.
Further, the Department did not enter
into a contract for the Fiscal Year 2019
services until June 20, 2019, at which
time the Department declared an emergency
purchase retroactive to the beginning of
the fiscal year.  The Department received
services throughout Fiscal Year 2019 from
the vendor without a written contract in
place, during which time the Department
was billed monthly by the vendor but was
unable to issue payment.  As a result,
the Department accrued $6,626 of late
payment interest to the vendor. (Finding
15, pages 46-47) This finding has been
repeated since 2014.

We recommended the Department conduct
competitive procurements in compliance
with the Illinois Procurement Code or
follow requirements for exceptions to
competition.

Department personnel agreed with our
recommendation and stated they would
further define the standards of care to
ensure that any such services were always
under contract.

OTHER FINDINGS

The remaining findings pertain to failure
to provide requested engagement
documentation in a timely manner,
noncompliance with various State
mandates, weaknesses in the Department’s
internal audit function and over State
vehicles, employee performance
evaluations not being performed timely,
failure to ensure employees completed
mandatory training, inadequate controls
over personal services, inaccurate Agency
Workforce Reports and Agency Fee
Imposition Reports, incorrect calculation
of resident maintenance fees, untimely
deposit of receipts, inaccurate
compilation and reporting of field
service offices activities and
information, computer security
weaknesses, lack of disaster contingency
planning or testing to ensure recovery of
applications and data, lack of adequate
controls over the review of internal
controls over service providers,
weaknesses in change management, and
failure to demonstrate the completeness
and accuracy of the report components.
We will review the Department’s progress
towards the implementation of our
recommendations in our next compliance
examination.

ACCOUNTANT’S OPINION

The accountants conducted a compliance
examination of the Department for the two
years ended June 30, 2020, as required by
the Illinois State Auditing Act.  The
accountants stated the Department
complied, in all material respects, with
the requirements described in the report.

This compliance examination was conducted
by Sikich, LLP.

JANE CLARK
Division Director

This report is transmitted in accordance
with Section 3-14 of the Illinois State
Auditing Act.

FRANK J. MAUTINO
Auditor General

FJM:DMG