REPORT DIGEST

ILLINOIS EMERGENCY MANAGEMENT AGENCY AND
OFFICE OF HOMELAND SECURITY

COMPLIANCE EXAMINATION
FOR THE TWO YEARS ENDED JUNE 30, 2023

Release Date:  Aug. 8, 2024

FINDINGS THIS AUDIT: 10

CATEGORY:  NEW -- REPEAT – TOTAL
Category 1:  2 -- 3 -- 5
Category 2:  2 -- 3 – 5
Category 3:  0 -- 0 -- 0
TOTAL:  4 -- 6 -- 10

FINDINGS LAST AUDIT: 10

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, 400 West
Monroe, Suite 306, Springfield, IL
62704-9849
(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

• (24-01) The Illinois Emergency Management
Agency and Office of Homeland Security
(Agency) did not exercise adequate controls
over its receipts and refund processing and
accounts receivable reporting.
• (24-02) The Agency did not exercise
adequate controls over State property to
ensure completeness of property records and
accurate and timely reporting to the Office
of Comptroller (Comptroller).
• (24-05) The Agency did not have a
reconciliation process to provide assurance
census data submitted to its pension and
other postemployment benefits (OPEB) plans
was complete and accurate.

FINDINGS, CONCLUSIONS, AND RECOMMENDATIONS

INADEQUATE CONTROLS OVER RECEIPTS AND
ACCOUNTS RECEIVABLE

The Illinois Emergency Management Agency and
Office of Homeland Security (Agency) did not
exercise adequate controls over its receipts
and refund processing and accounts
receivable reporting.

Receipts and Refunds

During testing of receipts and refunds
transactions and procedures, we were unable
to complete the following testing as the
Agency was unable to provide the necessary
supporting documentation:

• Testing over 2 of 10 (20%) refund receipt
transactions, totaling $ 1,206,354.

• Testing over 3 of 3 (100%) returned
checks.

• Testing over the fee rates for Radiation
Machine Inspection and Registration fees
reported on the Fiscal Year 2022 and Fiscal
Year 2023 Fee Imposition Reports.

Accounts Receivable

We performed detailed accounts receivable
testing on the following funds: the
Radiation Protection Fund (067), the Nuclear
Safety Emergency Preparedness Fund (796),
and the Low-Level Radioactive Waste Facility
Development and Operation Fund (942).

During testing of accounts receivable, we
noted the following:

• For Fund 067, various balances reported on
all quarterly Form C-98s for Fiscal Year
2022 and 2023 did not agree to the Agency’s
records. Differences were noted for various
aging categories and ranged from net
differences of $ 2,000 to $ 251,000.

• For Fund 796, various balances reported on
3 of 8 (38%) quarterly Form C-98s for Fiscal
Year 2022 and 2023 did not agree to the
Agency’s records. Differences were noted for
various aging categories and ranged from net
differences of $ 5,000 to $ 12,000.

• For Fund 942, various balances reported on
5 of 8 (63%) quarterly Form C-98s for Fiscal
Year 2022 and 2023 did not agree to the
Agency’s records. Differences were noted for
various aging categories and ranged from net
differences of $ 2,000 to $ 38,000.

• Six of the eight (75%) quarterly Form
C-99s tested did not agree to the
corresponding quarterly Form C-98s. The
amount reported for “Total of Past Due
Accounts over 180 Days” on the Form C-99 did
not agree to the amount reported for “Over
180 Days” on the corresponding C-98.
Differences ranged from overstatements of
$38,000 to $109,000. In addition, the
quarterly Form C-99s did not agree to Agency
records. Net differences ranged from $5,000
to $543,000.

Lack of Segregation of Duties

During testing, we noted one individual
performed three parts of the transaction
cycle, including:

• Initiation by generating invoices for
amounts due to the Agency,
• Custody by handling physical checks and
maintaining electronic and physical records,
and
• Recordkeeping by preparing and posting
entries.

Enterprise Resource Planning Program
Utilization

The State’s implementation of the Enterprise
Resource Planning (ERP) program centralized
the finance, procurement, grants management,
and asset management processes by replacing
outdated manual systems and technologies.
The ERP can enhance transparency of data,
reduce processing time, and improve the
timeliness of financial reporting. During
the examination period, the ERP’s processing
integrity was sufficient to enable reliance
upon ERP’s processing of transactions.
During our examination, we noted the Agency
billed entities for various services;
however, the Agency did not fully utilize
the Public Sector Collection & Disbursements
(PSCD) ERP module. Invoices and bills are
generated through the Agency’s legacy
Accounts Receivable system, which is an
internally developed system based on
Microsoft Access. During March 2023, several
types of fees were partially migrated to the
ERP system. However, invoices and bills and
customer data is still entered into the
legacy system first. The data is then mapped
over to the ERP system electronically. The
PSCD maintains transactions related to
billings, payments and accounts receivable.
During the examination period, the Agency
had billings and receipts totaling $
10,840,859,988.

Late Deposits

During the entirety of Fiscal Year 2022
through February of Fiscal Year 2023, we
noted the Agency did not utilize the PSCD
module of the ERP System to process receipts
and refunds. As such, we tested receipts and
refunds deposited outside of the PSCD module
during this period, and noted the following:

• The Agency did not deposit 3 refund items,
each exceeding $10,000, on the same day as
received.

• The Agency did not deposit 1 receipt item,
less than $500 in totality, when accumulated
to $500 or on the 1st or 15th of the month,
whichever was earlier.

• The Agency did not deposit 2 receipt
items, totaling $19,504, within 7 days of
receipt, as required per the Agency’s
deposit extension approval.

From March of Fiscal Year 2023 through the
end of the fiscal year, the Agency utilized
the PSCD module for certain receipts and
refunds. We conducted an analysis of the
Agency’s receipts data for the period of
Fiscal Year 2023 that the Agency utilized
the ERP system for receipts and refunds to
determine compliance with the State Officers
and Employees Money Disposition Act (Act)
(30 ILCS 230/2(b)), noting the following
noncompliance:

• The Agency did not deposit 11 receipts
items, each exceeding $10,000, on the same
day as received.

• The Agency did not deposit 61 receipt
items, exceeding $500 but less than $10,000
in totality, within 48 hours.

• The Agency did not deposit 736 receipt
items, less than $500 in totality, when
accumulated to $500 or on the 1st or 15th of
the month, whichever was earlier.

• We were unable to determine the timeliness
of deposit for 9 receipt items, (Finding 1,
pages 9-14)  This finding has been reported
since 2019.

We recommended the Agency implement the
necessary controls to: facilitate timeliness
of deposits; ensure accuracy of accounts
receivable reporting; ensure adequate
segregation of duties; and ensure ERP is
fully implemented and utilized by the
Agency.

The Agency agreed with the finding and
recommendation and stated it began using the
PSCD module during FY23 and this will
increase visibility of deposit timeliness
and provide adequate support for accounts
receivable reports. Further, the Agency
stated it is in the process of actively
filling positions in the accounts receivable
unit as vacancies exist.

PROPERTY CONTROL WEAKNESSES

The Agency did not exercise adequate
controls over State property to ensure
completeness of property records and
accurate and timely reporting to the Office
of Comptroller (Comptroller).

Inaccurate Reporting

During our testing of all Fiscal Year 2022
and 2023 quarterly Agency Reports of State
Property (Form C-15), we noted the
following:

• For Fiscal Year 2023, the Agency
duplicated a transaction for building and
building improvements for $63,842. The
transaction was recorded twice on the third
quarter Form C-15, causing the ending
property balance to be overstated by the
duplicated amount. The beginning balance on
the fourth quarter Form C-15 was also
overstated, as the balance included the
duplicate transaction.

• For Fiscal Year 2023, we noted a
difference of $7,378 between the asset
additions reported on the fourth quarter
Form C-15 and the Agency’s property control
records.

Equipment Additions and Deletions Testing

• During our testing of equipment additions
and deletions for Fiscal Year 2022 and 2023,
we noted for 3 of 60 (5%) equipment
additions selected for testing, totaling $
8,989, the Agency did not retain sufficient
support for the addition of equipment to the
Agency’s property listing.

• For 3 of 60 (5%) equipment additions
totaling $ 5,967 selected for testing,
freight and installation charges, totaling $
93, were not added to the value of the
equipment item purchased during the
examination period.

• For 3 of 60 (5%) equipment additions
selected for testing, totaling $ 7,577, the
Office did not assign a property
identification number to the item when it
was added to the Agency’s property listing.

Forwards and Backwards Testing

During our testing of property, we noted:

• 8 of 98 (8%) equipment items selected for
forwards (list to-floor) testing, totaling $
3,234, could not be located at the location
indicated on the Office’s property listing.

• 11 of 87 (13%) equipment items selected
for backwards (floor-to-list) testing, could
not be traced to the Office’s property
listing. (Finding 2, pages 15-17)

We recommended the Agency strengthen its
internal controls over State property to
ensure property records are complete,
reconciled, and updated timely to facilitate
accurate and timely reporting to the
Comptroller.

The Agency agreed with the finding and
recommendation and stated that during FY24,
the Agency hired staff within the property
unit. Further, the Agency stated additional
staff will help ensure property records are
complete and in accordance with the audit
recommendations.

INADEQUATE CONTROLS OVER CENSUS
RECONCILIATION

The Agency did not have a reconciliation
process to provide assurance census data
submitted to its pension and other
postemployment benefits (OPEB) plans was
complete and accurate.

During testing, we noted the following:

• The Agency has not performed an initial
complete reconciliation of its census data
recorded by SERS and CMS to its internal
records to establish a base year of complete
and accurate data.

• Since a base year was not established, the
Agency has not developed a process to
annually obtain from SERS and CMS the
incremental changes recorded by SERS and CMS
in their census data records and reconcile
these changes back to the Agency’s internal
supporting records. (Finding 5, pages 23-24)

We recommended the Agency implement internal
controls over the census reconciliation
process by conducting a baseline census
reconciliation and subsequently reconciling
changes in census data annually thereafter.

The Agency stated it agrees with the finding
and recommendation, and stated it has
appropriately staffed the Human Resources
Division and is taking pro-active measures
to ensure that the deficiency in Census
Reconciliation will be remediated, and a
process will be established to ensure
ongoing compliance with this requirement.

OTHER FINDINGS

The remaining findings are reportedly being
given attention by Agency personnel. We will
review the Agency’s progress towards the
implementation of our recommendations in our
next examination.

ACCOUNTANT’S OPINION

The accountants conducted a State compliance
examination of the Agency for the two years
ended June 30, 2023, as required by the
Illinois State Auditing Act.  The
accountants qualified their report on State
compliance for Findings 2023-001, 2023-002,
2023-005, 2023-008, and 2023-010.  Except
for the noncompliance described in these
findings, the accountants stated the Agency
complied, in all material respects, with the
requirements described in the report.

This State compliance examination was
conducted by Kerber,
Eck & Braeckel 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

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