|
REPORT DIGEST
FINANCIAL
AUDIT AND COMPLIANCE EXAMINATION (In Accordance with the Single Audit Act and OMB Circular A-133) For the Year Ended: June 30, 2008 Summary of Findings: Relea June 11, 2009
State of
Office of the Auditor General WILLIAM G. HOLLAND AUDITOR GENERAL
To obtain a copy of the
Report contact: Office of the Auditor
General
(217) 782-6046 or TTY (888)
261-2887 This Report Digest and the
Full Report are also available on the worldwide web at http://www.auditor.illinois.gov
|
SYNOPSIS¨ The Authority did not have a complete listing of statutory mandates that are applicable to the Authority. ¨ The Authority did not have a policy to comply with the Farmers Home Administration program requirements for nondiscrimination. ¨ The Authority did not report required revenue bond information to the Illinois Office of the Comptroller. ¨ The Authority has not adopted rules for the fire sprinkler dormitory revolving loan program.
{Revenue, Expenditures and Activity Measures are summarized on the next page.} |
|
FINANCIAL INFORMATION |
FY2008 |
FY2007 |
|
·
Total Revenues......................................... |
$42,638,022 |
$14,739,091 |
|
Transfers
from other state funds...................
% of
Revenues.......................................... |
$13,000,000
30.5% |
-
0.0% |
|
Interest on
Loans.........................................
% of
Revenues.......................................... |
$10,121,129
23.7% |
$3,666,594
24.9% |
|
Interest
and investment income.....................
% of
Revenues.......................................... |
$8,942,648
21.0% |
$2,793,615
19.0% |
|
Administrative
Service Fees..........................
% of
Revenues.......................................... |
$7,140,725
16.7% |
$6,632,365
45.0% |
|
Grants.........................................................
% of
Revenues.......................................... |
$2,000,000
4.7% |
-
0.0% |
|
Other
Revenues...........................................
% of
Revenues.......................................... |
$1,433,520
3.4% |
$1,646,517
11.1% |
|
·
Total Expenses.......................................... |
$21,859,760 |
$10,749,742 |
|
Interest
Expense..........................................
% of
Expense.............................................. |
$15,401,759
70.5% |
$2,767,195
25.7% |
|
Employee
Related Expenses.........................
% of
Expenses........................................... |
$3,444,591
15.7% |
$3,638,102
33.9% |
|
Average No.
of Employees...........................
Average
Cost per Employee......................... |
31
$111,116 |
28
$129,932 |
|
Professional Services................................... % of Expenses........................................... |
$1,837,280
8.4% |
$2,642,074
24.6% |
|
Other
Expenses...........................................
% of
Expenses........................................... |
$1,176,130
5.4% |
$1,702,371
15.8% |
|
·
Excess of Revenues over Expenses......... |
$20,778,262 |
$3,989,349 |
|
·
Cash...........................................................
·
Investments...............................................
·
Conduit debt outstanding.......................... |
$75,675,753
$136,170,456
$22,613,213,811 |
$41,125,776
$18,997,064
$21,638,350,000 |
|
SELECTED ACTIVITY
MEASURES |
FY2008 |
FY2007 |
|
·
Federal Program Loans
Outstanding.............. |
$820,816 |
$546,455 |
|
·
Total Number of Bond
Issues and Loans Outstanding at June 30, (Unaudited).............. |
1,023 |
1,058 |
|
·
Total Number of New Bond
Issues and Loans (Unaudited)................................................. |
88 |
120 |
|
·
Total Jobs Created or
Retained (Unaudited)... |
16,389 |
9,232 |
|
AGENCY EXECUTIVE DIRECTOR |
||
|
During Audit Period: Ms. Kym Hubbard Currently: Mr. John Filan |
||
|
Authority did not maintain list of mandates
Authority should develop a process to identify and
monitor laws
Authority agrees with auditors
Loans totaled $516,250 for this program
Authority agrees with auditors
Outstanding conduit debt was $22 billion
Notices not filed timely
Dates did not match
Forms were missing
The Authority cited a discrepancy in records
Authority agrees with auditors
The Fire Sprinkler Dormitory Act was effective January
1, 2005
Rules have not been adopted
Authority agrees with auditors |
INTRODUCTION The mission of the Authority
is to foster economic development to the public and private institutions that
create and retain jobs, and improve the quality of life in
FINDINGS, CONCLUSIONS, AND
RECOMMENDATIONS FAILURE TO PROVIDE A LISTING
OF LAWS AND REGULATIONS APPLICABLE TO THE AUTHORITY The Authority did not have
a complete listing of statutory mandates that are applicable to the
Authority. During our audit, we
requested the Authority to provide us with a list of laws and regulations
applicable to the Authority. The
Authority was unable to provide us with the requested list. Adequate controls over
compliance with laws and regulations would require the Authority to develop a
process identify and monitor federal, state and local laws and regulations
that apply to the Authority in order to ensure that the Authority is
complying with those laws and regulations.
Authority management
stated it only maintains a comprehensive list of substantive statutes most
directly applicable to its regular operations. (Finding 2, page 14) We recommended that the
Authority establish procedures to monitor laws and regulations applicable to
the Authority. Authority officials
accepted our recommendation and indicated that they are working to create a
more complete system to track and monitor the applicable statutory
mandates. NEED TO DEVELOP POLICY ON
NONDISCRIMINATION The Authority did not have
a policy to comply with the Farmers Home Administration program requirements
for nondiscrimination. During our testing of
compliance with the Farmers Home Administration program, we noted the
Authority did not have a formal policy to notify applicants of the
requirements for nondiscrimination. During
fiscal year 2008 the Authority made three loans totaling $516,250 under this
program. (Finding 3, page 15) We recommended that the
Authority implement a formal policy against discrimination that will inform
applicants that the Authority does not discriminate based on the requirements
of the program. Authority officials
accepted the recommendation and stated that posting of the policy was
implemented after the audit period. BOND INFORMATION NOT REPORTED
TO THE The Authority did not
report required revenue bond information to the Illinois Office of the
Comptroller. During the fiscal year
ended June 30, 2008 the total outstanding balance of conduit debt that was in
the care of the Authority was $22 billion. During our detailed
testing, we selected a sample of 23 delinquent records from the Comptroller’s
listing. We noted that according to
the Authority’s records 8 (35%) of the “Notice of Payment of Bond Interest
and/or Principal” C-08 notice forms were not submitted to the Comptroller
timely. We also selected 30 newly
issued bonds for detailed testing. We
noted the following:
·
For 2
of the 30 (7%) bonds tested the bond issue dates did not match the “Bond
Interest and Redemption Schedule” C-05 form.
·
For 2
of the 30 (7%) bonds tested 2 of 11 required C-08’s forms were missing.
·
2 of
the 30 (7%) bonds tested were missing the bond interest and redemption
schedule required to be filed with the Comptroller on form C-05. Authority management
stated that this repeat finding is due to discrepancies among records and
receipt dates maintained by the Illinois Office of the Comptroller, the
individual bond trustees and the Authority.
(Finding 4, pages 16-17) This finding was first reported in
2005.
We recommended the
Authority review its procedures to ensure that the C-05 and C-08 forms are
submitted timely to the Comptroller’s Office and that the information is
complete and accurate. Authority officials stated that they continue to work with the Illinois Office of the Comptroller on at least a monthly basis to provide the timely, accurate and complete information required under Statewide Accounting Management Systems procedures. (For the previous Authority response, see Digest footnote #1.)
NEED TO ESTABLISH RULES TO ADMINISTER LOAN PROGRAM The Authority has not
adopted rules for the fire sprinkler dormitory revolving loan program. The Fire Sprinkler
Dormitory Act (110 ILCS 47/15) effective As of June 30, 2008, the
Authority had not adopted rules to administer the fire sprinkler dormitory
loan program. No appropriation was
requested by the Authority for the program in fiscal year 2008 and the
program was not appropriated funds in fiscal year 2008. During fiscal year 2008 the Authority
adopted rules for the ambulance revolving loan program that was part of the
prior year’s finding. Authority management
stated that no rules have been adopted because the program has never received
any state appropriation. (Finding 5, page
18) Authority official’s accepted our recommendation to prepare rules to administer the fire sprinkler dormitory revolving loan program. OTHER FINDINGS The remaining findings are reportedly being
giving attention by the Authority. We
will review progress toward implementing our recommendations in our next audit
and examination. AUDITORS’ OPINION
The auditors stated the financial statements for the Illinois Finance Authority for the year ended June 30, 2008 were fairly stated in all material respects. ____________________________________ WILLIAM G. HOLLAND, Auditor General WGH:JAF:pp SPECIAL ASSISTANT AUDITORS McGladrey & Pullen, LLP were our special assistant auditors for this engagement. DIGEST
FOOTNOTE #1– BOND INFORMATION NOT REPORTED
TO THE 2007: The
Authority accepts the recommendation. In
order to file the maturity schedule with the Office of the Comptroller within
the 30 days subsequent to the closing date, which is required, the Authority
has to rely on the bond information provided by outside parties. The bond transcript is usually not
available to the Authority until 60 to 90 days after a bond closing. The Authority is currently reviewing ways
to strengthen its policies to ensure that repayment schedules reported to the
Comptroller match the bond transcripts.
In addition the Authority will increase the frequency of
correspondence with the Comptroller’s Office and its bond trustees from
annually to quarterly to improve the accuracy and timeliness of the required
revenue bond reporting. |
|
|
|