REPORT DIGEST

ILLINOIS DEVELOPMENT FINANCE AUTHORITY

FINANCIAL AND COMPLIANCE AUDIT
(In accordance with the Single Audit Act of 1984 and OMB Circular A-128)
For the Year Ended:
June 30, 1996

Summary of Findings:

Release Date:

April 15, 1997

State of Illinois
Office of the Auditor General

WILLIAM G. HOLLAND
AUDITOR GENERAL

Iles Park Plaza
740 E. Ash Street
Springfield, IL 62703
(217) 782-6046

SYNOPSIS

• The Authority did not submit an annual report to the Secretary of State as required by the State Employment Records Act.

• The Authority did not adequately monitor grant funds disbursed to the City of Chicago under the Illinois Housing Partnership Program. This condition has existed since 1994.

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

FY 1996

FY 1995

• Total Operating and Non Operating Revenue
  Interest or Gains on Investments/Partnerships
  % of Total Revenues
  Application Fees
  % of Total Revenues
  Annual Fees
  % of Total Revenues
  Interest and Other Income
  % of Total Revenues
• Total Expenses/expenditures
  Interest Expense or Losses on Investments
  % of Total Expenses
  Salaries and Benefits
  % of Total Expenses
  Average No. Of Employees
  Contractual Services
  % of Total Expenses
  All Other Expenses
  % of Total Expenses

Property and Equipment (at cost)

$4,914,262
$1,443,838
29.4%
$267,018
5.4%
$1,839,259
37.4%
$1,364,147
27.8%
$2,854,302
$120,230
4.2%
$1,321,770
46.3%
25
$940,329
33.0%
$471,973
16.5%

$571,044

$7,205,640
$2,636,421
36.7%
$118,675
1.6%
$2,569,199
35.6%
$1,881,345
26.1%
$6,635,638
$1,967,604
29.6%
$1,030,752
15.6%
19
$2,462,883
37.1%
$1,174,399
17.7%

$497,832

FY 1996

FY 1995

• Total Assets
• Cash
• Investments
• Liabilities
• Fund Equity

$43,173,077
$17,535,895
$13,092,913
$6,428,022
$36,745,055

$44,551,959
$17,486,070
$10,782,496
$9,866,864
$34,685,095

FY 1996

FY 1995

• Total Direct Loan Amounts Closed
• Jobs Created or Retained by Direct Loans
• Industrial Revenue Bond (IRB) Amounts Closed
• Jobs Created or Retained by IRB
• FMHAA Amounts Closed
• Jobs Created or Retained by FMHAA

$641,000
203
$187,129,000
1,122
$100,000
10

$509,776
252
$155,220,000
1,797
$467,000
19

During the Audit Period: Mr. Bobby J. Wilkerson, Executive Director
Currently: Mr. Bobby J. Wilkerson, Executive Director

The Authority did not submit the annual report required by the State Employment Records Act, 5 ILCS 410/1

The Authority did not adequately monitor grant funds provided under the Illinois Housing Partnership Program

FINDINGS, CONCLUSIONS, AND
RECOMMENDATIONS

NON-COMPLIANCE WITH STATE EMPLOYMENT RECORDS ACT

The Authority did not submit the annual report that provides information on Authority employees including the number of women, disabled, and minorities. The State Employment Records Act required the Authority to submit this report to the Governor and the Secretary of State by January 1, 1996. (Finding Code 96-1)

The Authority did not file the report because management did not believe employees were included under the definition of the State Workforce. In October, 1996, the Authority filed the State Workforce Report. In its response, the Authority repeated the position that the law is inapplicable to it, but agreed to comply in the future.

INADEQUATE MONITORING OF GRANTS

The Authority receives and disburses grants through various programs including the Illinois Housing Partnership Program (IHPP). Auditors found the Authority did not adequately monitor grants disbursed to the City of Chicago under the IHPP. This finding has been repeated since 1994. (Finding Code 94-12)

The Authority has not obtained semi-annual reports from the City of Chicago and thus the Authority lacks information on the funds disbursed by project, principal outstanding on each loan, residential units available, and the income levels of residents.

In addition, any new projects undertaken by the City with loan repayments must be approved by the Authority. Without the proper reporting by the City, the Authority has no knowledge of proposed or new projects. Authority management stated the agency has attempted to obtain the required reports from the City without success.

We recommended the Authority continue to attempt to obtain the required reports from the City in order to adequately monitor the grant funds. The Authority responded that it has made and will continue to make every effort to collect the reports. (For previous agency responses, see Digest Footnote 1.)

AUDITORS' OPINION

Our auditors state the Agency's financial statements for the year ending June 30, 1996 are fairly presented.

 

____________________________________
WILLIAM G. HOLLAND, Auditor General

WGH:JAW:pp

SPECIAL ASSISTANT AUDITORS

Arthur Andersen LLP were our special assistant auditors on this audit.

DIGEST FOOTNOTES

#1 INADEQUATE MONITORING OF GRANTS - Previous Agency Responses

1995: "We agree. The Authority is presently reviewing the general grant requirements so that we can notify the City of Chicago of required information needed for the Authority's review. The City will be notified by March 31, 1996 of its responsibilities and our expectation for reporting consistently with the grant requirements."

1994: "Not accepted. The Authority is merely a conduit for these grant funds, as determined by the General Assembly. The IDAG program granted money to the City of Chicago, which loaned it to support housing, commercial and industrial projects. This IDAG program was completed in 1986 and 1987. All grants were recorded in the minutes of the Board of Directors' meetings. The City of Chicago Planning Department has a list of all loans approved. Also, a list exists in the Authority files form that time period. The Authority works only with the City of Chicago on the IDAG program, not the ultimate loan recipients, with whom the city works. The rules of the program at 14 Ill. Adm. Code 1200 state that only municipalities, as defined, are eligible for grants. The only grants were to the City of Chicago. Therefore, the list of grant recipients consists of only the City of Chicago. The second list of loan recipients from the City also exists."