REPORT DIGEST

ENVIRONMENTAL PROTECTION AGENCY —WATER
REVOLVING FUND

FINANCIAL AUDIT
FOR THE YEAR ENDED JUNE 30, 2022

Release Date:  June 6, 2023

FINDINGS THIS AUDIT: 1

CATEGORY:  NEW -- REPEAT -- TOTAL
Category 1:  0 -- 1 -- 1
Category 2:  0 -- 0 -- 0
Category 3:  0 -- 0 -- 0
TOTAL:  0 -- 1 -- 1

FINDINGS LAST AUDIT: 2

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


This digest covers the Agency’s
financial audit as of and for the year
ended June 30, 2022.  The Agency’s
State Compliance Examination covering
the two years ended June 30, 2022 will
be separately released at a later
date.

SYNOPSIS

• (22-01) The Agency did not take
sufficient measures to ensure all
census data submitted to its pension
and other postemployment benefits
plans was complete and accurate.

FINDINGS, CONCLUSIONS, AND
RECOMMENDATIONS

INADEQUATE INTERNAL CONTROLS OVER
CENSUS DATA

The Agency did not take sufficient
measures to ensure all census data
submitted to its pension and other
postemployment benefits (OPEB) plans
was complete and accurate for the
Water Revolving Fund (Fund).

The Agency performed an initial
reconciliation of its census data
recorded by the State Employee’s
Retirement System (SERS) to its
internal records in order to establish
a base year of complete and accurate
census data. During our testing of a
sample of 40 transactions reported by
the Agency to SERS, we noted two (5%)
reporting errors, which the Agency did
not identify and correct in its
reconciliation.  We also noted the
Agency did not maintain sufficient
documentation that a complete
reconciliation was properly performed
(Finding 1, pages 51-53).  This
finding was first reported in 2020.

We recommended the Agency ensure
reconciliation of its active members’
census data from its underlying
records to a report of the census data
submitted to each plan’s actuary is
complete and accurate.  We further
recommend the Agency re-evaluate the
data for the base year ended June 30,
2021 to identify any other instances
where data discrepancies may still
exist and work with SERS to correct
all such unresolved errors in the full
reconciliation of Agency and SERS
records.

Agency officials stated the census
reconciliation of employee data was
performed screen by screen along with
personnel (paper) file documents.
Officials also stated the State Record
Act requirements are encompassed in
the employees’ system record and HR
file, which have been retained in
accordance with the Records Act.
Agency officials also stated the two
errors found could not have skewed
reliance on actuarial statistics when
combined with all other agencies’
employee data. Agency officials also
responded that both errors have been
corrected and stated they will ensure
personnel record data is correct.

In an Auditor’s Comment, we noted the
Agency did not provide the auditors
documentation to support each
employee’s information was verified
using the source documents indicated
in the SERS reconciliation guidance
(Guidance). The Guidance also requires
Agency staff to verify, for each
employee in service on June 30, 2021,
that the employee’s personnel file
contents match the SERS census data
extract provided and the Agency’s
personnel and payroll systems. The
State Records Act (5 ILCS 160/8)
requires the Agency to make and
preserve records containing adequate
and proper documentation of its
essential transactions, which would
also include documentation of the
Agency’s complete base year
reconciliation and verification of
agency and Plan records.

The errors identified in our sample
indicated there could be other
uncorrected errors in the census data,
and the reconciliation performed was
not effective in detecting and
correcting all errors. As a result,
assurance could not be obtained
regarding the accuracy and reliability
of the census data the plan actuaries
used to calculate pension and OPEB
balances used for both the Agency’s
and the State’s financial statements.

We will review the Agency’s progress
towards the implementation of our
recommendations in our next financial
audit.

AUDITOR’S OPINION

The auditors stated the financial
statements of the Agency’s Water
Revolving Fund as of and for the year
ended June 30, 2022, are fairly stated
in all material respects.

This financial audit was conducted by
Roth and Company, 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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