REPORT
DIGEST

DEPARTMENT OF VETERANS' AFFAIRS - CENTRAL OFFICE

FINANCIAL AND COMPLIANCE AUDIT
(In accordance with the Federal Single Audit Act and OMB Circular A-133)
For the Two Years Ended:
June 30, 1998

Summary of Findings:

Total this audit 7
Total last audit 7
Repeated from last audit 3

Release Date:
April 15, 1999


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 develop or institute policies, procedures, or guidelines to effectively manage and control information systems.
  • The Department's internal audit program did not comply with the Fiscal Control and Internal Auditing Act, and audit reports and workpapers prepared by the Department's Internal Audit unit were not in accordance with professional standards.

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

 

DEPARTMENT OF VETERANS' AFFAIRS
FINANCIAL AND COMPLIANCE AUDIT
For The Two Years Ended June 30, 1998

EXPENDITURE STATISTICS

FY 1998

FY 1997

FY 1996

  • Total Expenditures (All Funds)

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

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

$8,092,939

$6,643,312
82%
$4,151,463
62%
116

$749,444
11%

$640,927
10%

$1,101,478
17%

$1,449,627
18%

$1,673,829

$7,681,776

$6,231,624
81%
$4,024,559
65%
116

$663,728
10%

$619,210
10%

$924,127
15%

$1,450,152
19%

$1,361,887

$7,267,251

$5,939,956
82%
$3,909,981
66%
117

$637,927
11%

$619,502
10%

$772,546
13%

$1,327,295
18%

$1,241,962

 

SERVICE EFFORTS AND ACCOMPLISHMENTS (Unaudited)

FY 98

FY 97

Field Services
Number of veterans and dependents served
Number of hunting licenses issued
Number of camping permits issued
Grants
Number of claims paid
Number of headstones erected
State Approving Agency (based on Federal Fiscal Year)
Number of visits made to ensure continued approval of federal programs
Number of new federal programs approved


78,187
8,152
581

10,206
57,069

465
121


55,239
7,787
570

10,996
68,085

418
100

 

AGENCY DIRECTOR
During Audit Period: Mr. Robert Foster
Currently: Mr. John Johnston (effective February 1, 1999)

 










Responsibilities and reporting structure between the Central Office and the Homes was not clear


















Internal audit function did not meet objectives

FINDINGS, CONCLUSIONS, AND
RECOMMENDATIONS

OVERSIGHT AND CONTROL OF INFORMATION SYSTEMS IS LACKING

The Department did not develop or institute policies, procedures, or guidelines to effectively manage and control information systems.

We noted the following weaknesses:

  • Policy and procedure manuals had not been updated since December, 1994, although the Department's computing environment had changed dramatically.
  • Computer-related practices instituted at the Central Office and the Veterans' Homes were inconsistent and did not provide adequate control regarding disaster recovery plans and computer security.

These weaknesses resulted from the lack of understanding of responsibilities and reporting structure between the Central Office and the Homes. (Finding 98-1, pages 13 and 14)

We recommended the Department formalize the Central Office's responsibilities to direct, provide guidance, and monitor the Veterans' Homes' and Field Offices' computer-related issues by developing appropriate policies. Such policies should be distributed Department-wide.

Department officials agreed with the recommendation, and stated a plan was under development which would be implemented within the next year.

NONCOMPLIANCE WITH INTERNAL AUDIT LAWS AND REGULATIONS

The Department's internal audit program did not comply with the Fiscal Control and Internal Auditing Act (Act) (30 ILCS 10/2001 et seq.).

Specifically, the two-year audit plans submitted to the director did not include all major systems of internal accounting and administrative controls, there was no indication that the two-year audit plan for FY97/98 was approved by the director, and a written report was not submitted to the Director detailing how the audit plan for the prior year was carried out. (Finding 98-2, pages 15 and 16)

Furthermore, we noted the internal audit reports and workpapers prepared by the Department's Internal Audit unit were not in accordance with the professional standards of the Institute of Internal Auditors. (Finding 98-3, pages 17 and 18)

We recommended the Department's internal audit program comply with the Fiscal Control and Internal Auditing Act and that the resulting reports and audit workpapers be prepared in accordance with the standards of the Institute of Internal Auditors.

The Department agreed with our recommendations. Department officials stated an audit plan for FY99/00, which contains all required elements, has been submitted to the Director for approval. Furthermore, a report detailing how the plan for FY98 was carried out was also submitted to the Director.

OTHER FINDINGS

The remaining findings are less significant and the Department responded that corrective action is in process. We will review the Department's progress towards 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 December 18, 1998.

AUDITORS' OPINION

We have stated the financial statements of the Department of Veterans' Affairs as of and for the years June 30, 1998 and June 30, 1997 are fairly presented in all material respects.



_____________________________________
WILLIAM G. HOLLAND, Auditor General

WGH:GSS:pp

AUDITORS ASSIGNED

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