REPORT DIGEST ILLINOIS FINANCE AUTHORITY FINANCIAL AUDIT FOR THE YEAR ENDED JUNE 30, 2017 Release Date: December 21, 2017 FINDINGS THIS AUDIT: 1 CATEGORY: NEW -- REPEAT -- TOTAL Category 1: 0 -- 0 -- 0 Category 2: 1 -- 0 -- 1 Category 3: 0 -- 0 -- 0 TOTAL: 1 -- 0 -- 1 FINDINGS LAST AUDIT: 1 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 INTRODUCTION This digest covers the Illinois Finance Authority’s financial audit as of and for the year ended June 30, 2017. The Authority’s Compliance Examination for the two years ending June 30, 2017 will be issued at a later date. SYNOPSIS • (17-1) The Authority did not reconcile and record cash received in a bank account pertaining to fiscal year 2018 interest income received in advance from local governments in fiscal year 2017. FINDINGS, CONCLUSIONS, AND RECOMMENDATIONS FAILURE TO RECONCILE AND RECORD CASH RECEIVED The Illinois Finance Authority (Authority) did not reconcile and record cash received in a bank account pertaining to fiscal year 2018 interest income received in advance from local governments in fiscal year 2017. During testing, the auditors confirmed all outstanding bank account balances held by the Authority at year-end and noted the ending cash balance for the Local Government Borrowing Fund was understated by $36,411 relating to advances of interest income that related to fiscal year 2018. This revenue relates to prepayments of interest due August 1, 2017 and according to the Authority’s accounting policies, is accrued ratably over six months. As of June 30, 2017, the Authority had accrued $30,343 as accrued interest receivable. Thus, this resulted in an overstatement of accrued interest receivable of $30,343 and an understatement of unearned revenue of $6,068. No statement of revenue, expenses, and changes in net position were affected. We recommended the Authority reconcile all bank accounts and record financial transactions in the correct fiscal year. (Finding 1, pages 72-73) Authority officials accepted the finding. AUDITOR’S OPINION The auditors stated the financial statements of the Illinois Finance Authority as of and for the year ended June 30, 2017, are fairly stated in all material respects. The financial audit was conducted by RSM US 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 FJM:TLK