(In accordance with the Single Audit Act and OMB Circular A-133)

For the Year Ended:
June 30, 1998

Summary of Findings:

Total this audit 4
Total last audit 1
Repeated from last audit 0

Release Date:
April 27, 1999

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State of Illinois
Office of the Auditor General

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  • The Authority did not have adequate controls over certain employee expenses charged to travel. A number of exceptions to travel regulation requirements were noted.
  • The Authority paid various expenses totaling $3,058 for an event held in Southern Illinois to honor an employee who was leaving the Authority. We questioned the business purpose of these expenditures.

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


For The Year Ended June 30, 1998


FY 1998

FY 1997

  • Total Revenues

Application Fee
% of Revenues

Annual Fees
% of Revenues

Loan Interest
% of Revenues

Other Income
% of Revenues

  • Total Expenses

Salaries and Benefits
% of Expenses
Average No. of Employees

Contractual Services
% of Expenses

Other Items
% of Expenses

  • Net Income
  • Cost of Property and Equipment






















FY 1998

FY 1997

  • Total Number of Bond Issues and Loans Outstanding at June 30,
  • Total Number of New Bond Issues and Loans
  • Total Bond and Loan Value Outstanding (in millions)
  • Jobs Created or Retained during Year



During Audit Period: Mr. Bobby J. Wilkerson
Currently: Mr. Bobby J. Wilkerson


Exceptions to travel regulation requirements were noted

No detailed written marketing plan or budget to support charges

Personal use of government charge card

Authority has established additional controls

The business purpose of an Authority event was not clear




The Illinois Development Finance Authority (IDFA) did not have adequate controls over certain employee expenses charged to travel. Under the State Finance Act, the Authority is required to follow the travel reimbursement guidelines established by the Governor’s Travel Control Board.

The Authority states that it finds it essential to conduct business meetings and generate contacts in an environment that is generally accepted by the financial community. Such meetings are often conducted outside of the office at luncheons or dinners. As a result, certain expenditures were incurred that the Authority believes fall outside of the travel reimbursement guidelines. However, the Authority did not request exceptions to the rules for these expenditures, and policies of the Board did not support the manner in which these expenditures were approved and reimbursed.

During our audit, we tested all travel vouchers and travel-related credit card charges for one employee for Fiscal Year 1998. We noted the following exceptions:

  1. There were no receipts for expenditures totaling $7,083 charged to a credit card and on reimbursement reports. Receipts are required for expenses exceeding $10. While the Authority agreed that actual, carbon copy receipts were not always attached, IDFA maintained that it has photocopies of all credit card charges sufficient to demonstrate full accountability for its business and marketing expenses.
  2. Meals totaling $3,321 charged on a credit card and meals totaling approximately $1,939 charged to a private club did not always list the business purpose of the meeting or the person in attendance. IDFA agreed that it did not always include the business purpose and persons in attendance on the prescribed travel forms, but responded that sufficient documentation in other acceptable accounting formats is available to demonstrate full accountability.

    However, we were not furnished the additional documentation in other formats referred to in the Authority’s response, and regardless of such other documentation, the failure to list the business purpose of the meeting or the person in attendance at the meal is a clear violation of the travel regulations and/or good business practices.
  3. There were 28 instances in which per diem was claimed in addition to meals charged on credit cards. IDFA stated that it contests the implication that because IDFA has a marketing expense budget, it has somehow deliberately double billed for meals. IDFA agreed that a few clerical errors were made; however, IDFA noted that a complete analysis of the expense reports submitted by the employee has been completed and the employee, according to audit review, did not receive $263 to which the employee was entitled. At this point, a full reconciliation has been made and no amounts are due to/from the employee.

    Nevertheless, we stand by our finding. In 28 instances, meals were charged on credit cards in addition to per diem being charged. This constitutes double billing. Further, the Authority did not produce a written detailed marketing plan or an approved detailed marketing budget to support the specific credit card charges in question.
  4. Meals totaling $180 for State employees and officers which were not reimbursable under travel regulations were charged on a credit card. IDFA agreed that the expenses were incurred; however, they state they were marketing expenses, not travel expenses subject to the travel guidelines. IDFA stated it has appropriated funds for marketing expenses to enable its employees to conduct meetings with professionals at luncheons and dinners when the purpose of such meetings is related to official IDFA business.
  5. Charges for Friday night stays at employee-owned lodging in Springfield totaling $300 were not adequately supported. IDFA indicated that the employee worked on Saturday and they provided documentation intended to support the business purpose of the Friday night stays as necessary to conduct official business.

    In fact, the itineraries provided for review did not indicate that the employee worked on Saturday. Also, the Authority did not provide any additional information to support that the employee worked on Saturday, and per diem was not claimed for the time claimed to be worked on Saturday.
  6. On one occasion, the Authority was charged $74 for a "no show" at a hotel. Travel regulations do not allow for room guarantee charges. IDFA agreed that this was a clerical error.
  7. The Governor’s Travel Control Board states that a government charge card may only be used for business related travel expenses, but there were personal charges on the government credit card. However, the Authority did not reimburse the employee for personal charges. To avoid this problem in the future, IDFA stated it has canceled its government charge card.

We recommended the Authority comply with the travel regulations of the Travel Regulation Council and the Governor’s Travel Control Board and reimburse only those travel expenses that are allowable, adequately supported, reasonable, and necessary. Exceptions to specific provisions of the travel regulations should be requested and approved in advance from the Travel Control Board. Further, marketing expenses should comply with good business practices by being supported with adequate documentation of the purpose of the expenditures. (Finding 98-1, pages 15-20)

In its response the Authority points out that it has statutory authorization to establish its own budget for allowable expenditures. The Authority states that it has established additional controls and that it has revised its reimbursement forms to include the business purpose of meetings, names of persons in attendance, and certification that the expenditure does not cover alcoholic beverages. Separate forms are being established for marketing and travel expenditures. Also, the Governor’s Travel Control Board has been contacted for a review of the Authority’s procedures.


The Authority paid various expenses totaling $3,058 for an event held in Southern Illinois to honor a senior Authority employee who was leaving the Authority after 25 years of employment.

Travel expenses totaling $1,368 were reimbursed to 12 employees. Related expenses for the event totaling $1,393 were paid by the Authority for car rentals, a band, room rental, and food for attendees. In addition, the Authority paid $297 towards the purchase of a watch for the retiring employee. The State Finance Act states that all reimbursed travel expenses must be defined for a valid business purpose. The business purpose associated with this event is unclear. (Finding 98-2, page 20)

We recommended the Authority adhere to the State’s requirements for reimbursement of only travel expenses and related expenses that are business related.

The Authority disagreed with the finding and stated that it believed the business/marketing purpose of this meeting was clear. The Authority agreed that as part of this event an employee was honored for his 25 years of service to the Authority, but the Authority stated it authorized the event and payments of related costs as a marketing opportunity for the Authority to meet and discuss financing services with a large and targeted audience in Southern Illinois.


The remaining findings are less significant and are being given appropriate attention by the Authority. We will review progress toward implementing these recommendations in our next compliance audit. The responses were provided by the Authority’s Executive Director, Mr. Bobby J. Wilkerson.


Our auditors state the June 30, 1998 financial statements of the Authority are fairly presented.


WILLIAM G. HOLLAND, Auditor General



KPMG Peat Marwick, LLP were our special assistant auditors for this audit.