FINDINGS, CONCLUSIONS, AND RECOMMENDATIONS
PAYMENTS
WERE MADE FOR EFFICIENCY INITIATIVE BILLINGS FROM IMPROPER LINE ITEM
APPROPRIATIONS
The Office made payments
for efficiency initiative billings from improper line item appropriations. Public Act 93-0025, in part, outlines a
program for efficiency initiatives to reorganize, restructure and reengineer
the business processes of the State.
The State Finance Act details that the amount designated as savings
from efficiency initiatives implemented by the Department of Central
Management Services (CMS) shall be paid into the Efficiency Initiatives
Revolving Fund. The Act further
requires State agencies to pay these amounts from line item appropriations
where cost savings are anticipated to occur.
The
Office did not receive guidance or documentation with the billings from CMS
detailing from which line item appropriations savings were anticipated to
occur. According to Office staff,
they received no documentation or information from CMS detailing the nature
and/or type of savings that CMS anticipated.
The only guidance received was the amount of payments that should be
taken from General Revenue Funds (GRF) versus Other Funds for the September
2003 billings. The Office adjusted the
billings since it did not receive any GRF appropriations for FY04.
The Office
made payments for these billings not from line item appropriations where the
cost savings were anticipated to have occurred but from line items that
simply had available monies to make payments from. For example, the Office used:
·
$100,000 from a lump sum appropriation of $450,000
(22 percent) from the Fire Prevention Fund that was “for administrative
expenses of the Elevator Safety and Regulation Act.” The payment was applied to the Procurement
Efficiency Initiative billing.
·
$78,756 from the personal services line item
appropriation was used to make payments for the Procurement Efficiency,
Information Technology, and Vehicle Fleet Management initiatives. Office staff reported they used these
funds because they could control cutbacks and reduce costs in this line.
The
Office paid a total of $223,756 for the efficiency initiative from the Fire
Prevention Fund and the Underground Storage Tank Fund. (Finding 1, pages
9-11)
We recommended that the Office only
make payments for efficiency initiative billings from line item
appropriations where savings would be anticipated to occur. Further, the Office should seek an
explanation from the Department of Central Management Services as to how
savings levels were calculated, or otherwise arrived at, and how savings
achieved or anticipated impact the Office’s budget.
Office
officials accepted the finding and stated they would work with Central
Management Services and the Office of Management and Budget in order to
comply with the recommendation.
INADEQUATE CONTROLS OVER EMPLOYEES
The Office
employed 129 employees as of June 30, 2004.
Furthermore, the Office had five divisions with 63 field employees
either working from their homes or a field office. These employees consisted of 20 inspectors, 16 investigators,
24 specialists and three administrative staff. During our review of internal controls, we noted the following
problems:
·
There was no method to determine that employees worked
during reported hours;
·
There was not sufficient timekeeping documentation
for State employees;
·
There was no method to track where employees should
be at any point in time;
·
Office personnel did not perform spot checks on
employees;
·
The Office did not appear to have adequate oversight
over employees assigned to all locations; and
·
There was an apparent lack of supervision over field
employees. (Finding 2, pages 12-13)
We recommended the Office establish and
enforce formal administrative controls over its employees, which include
employee tracking, timekeeping, and spot checks of all employees.
Office officials concurred with the finding and stated they were
reviewing their polices for purposes of implementing new procedures for field
staff and new timesheets for office personnel.
INADEQUATE CONTROLS OVER DEVELOPMENT/CHANGES
TO COMPUTER APPLICATION
The Office
had not established adequate controls over third party development/changes to
computer applications.
The Office’s
Boiler and Pressure Vessel Accounts Receivable Application and the Storage
Tank Registration Application were developed and are maintained by a third
party vendor. During fieldwork we
noted:
·
Documentation did not exist regarding the development
of the applications.
·
Documentation did not exist relating to the data
conversion of the Boiler and Pressure Vessel Accounts Receivable data. Additionally, there were noted
inconsistencies of converted data.
·
Documentation did not exist of changes made to the
applications.
The Office did not have
adequate controls over third party vendor developments; however, IT
management stated its intentions to develop policies and procedures to guide
development/changes to computer applications. (Finding 3, pages 14-15) This finding was first reported in
2002.
We
recommended the Office develop standards to monitor vendors over the
development and maintenance of computer applications. The Office should include clear and
thorough contract provisions specifying expected contract deliverables
including the provision for adequate system, program, and user documentation
be developed for all components under development. Continuous monitoring of compliance with contract provisions
should be performed to ensure the contract is being adhered to, and to ensure
system development is completed as specified.
Office officials responded they acknowledged the finding and were
reviewing polices of other agencies for the purpose of implementing an
internal policy for the development of computer applications. (For previous
office response, see Digest Footnote #1.)
BACKLOG OF BOILER AND
PRESSURE VESSEL INSPECTIONS
The
Office had a high number of past due inspections of Boiler and Pressure
Vessels. Of the 38,726 boilers and
pressure vessels required to be inspected by the Office, there was an
inspection backlog of 17.2% as of June 30, 2004. In addition, the percentage
of past due inspections has been steadily increasing over the past several
years, as indicated below:
Date
|
Past Due
Inspections by Office Personnel
|
Total Boilers and Vessels to be
Inspected by the Office
|
Percent Past
Due
|
|
6/30/99
|
2,042
|
34,695
|
5.9%
|
|
6/30/00
|
3,265
|
35,453
|
9.2%
|
|
6/30/01
|
4,162
|
35,902
|
11.6%
|
|
6/30/02
|
6,936
|
47,373
|
14.6%
|
|
6/30/03
|
7,411
|
43,765
|
16.9%
|
|
6/30/04
|
6,679
|
38,726
|
17.2%
|
 Furthermore,
some of the required inspections are over two years past due. The following
chart illustrates the range of days past due for the 6,679 past due
inspections as of June 30, 2004:
(Finding 4,
pages 16-17) This finding was first reported in 2002.
We recommended the Office designate
appropriate resources to reduce the backlog of inspections.
Office
management accepted the finding and stated that they were in the process of
hiring additional inspectors and had requested to fill all of its vacancies in
the FY06 budget request in order to comply with the recommendations. (For the
previous office response, see Digest footnote #2.)
NONCOMPLIANCE WITH THE ELEVATOR SAFETY ACT
The Office did not enforce the Elevator Installation Act.
The Elevator
Installation Act sets forth specific requirements for the installation and
operation of all hospital elevators over 55 feet high and elevators over 80
feet high in offices, hotels, factory buildings and residential buildings.
The Office estimates that between 20,000 and 25,000 elevators in Illinois meet
the criteria of the Act. In addition, the Act requires that “the provisions
of this Act shall be enforced by the State Fire Marshal.” (Finding 5, page 18)
This finding has been repeated since 2002.
We recommended the
Office ensure the Elevator Installation Act is enforced.
Office officials responded they acknowledge the finding and stated that the
Division of Elevator Safety will enforce the Act at such time as the Joint
Committee of Administrative Rules approves their administrative rules and the
inspection staff is hired. (For previous office response, see Digest Footnote
#3.)
INSPECTORS DID NOT PROVIDE BONDS
The Chief and Deputy Inspectors in the Boiler and Pressure Vessel Safety
Division did not obtain bonds of $5,000 and $2,000, respectively.
The Chief and Deputy Inspectors are required by the Boiler and Pressure Vessel
Safety Act to furnish a bond conditioned upon the faithful performance of
their duties and upon a true account of moneys handled by them and the payment
thereof to the proper recipient. Office personnel stated inspectors no longer
handle cash as part of their duties.
(Finding 6, page 19) This finding was first reported in 2002.
We recommended that the Office ensure that
the Chief and Deputy Inspectors provide bonds in the appropriate amounts to
comply with the Act or seek legislative remedy for this statutory
requirement.
Office officials accepted the finding and
responded they will seek a legislative remedy in order to repeal the bonding
requirement. (For previous office response, see Digest Footnote #4.)
INADEQUATE COLLECTION
AND ACCOUNTING FOR ACCOUNTS RECEIVABLE
The Office did not sufficiently monitor
and pursue collections on accounts receivable or timely send billings or post
write-offs, payments or adjustments to their accounts receivable system.
We noted the
following:
·
The formal accounts receivable collection procedures were not
adequate to ensure proper collection of fees due to each fund. The Office had
no formal procedures to further pursue collection on past due accounts
receivables after sending two invoices. In addition, no past due receivables
were referred to the Comptroller’s offset system.
·
After February 2003, no invoices were generated in the
Underground Storage Tank Division, although eleven new accounts totaling
$8,200 were included in the accounts receivable balance.
·
The Office did not timely post write-offs, payments, or
adjustments to the accounts receivable system in the Underground Storage Tank
Division. Transactions totaling $7,500 for 5 of the 10 (50%) Underground
Storage Tank Division past due accounts were not posted as a write off or an
adjustment until 398 to 1,279 days after the transactions occurred. (Finding
9, pages 23-24) This finding has been repeated since 1990.
We
recommended the Office send regular billings for all accounts, refer
delinquent accounts to the Comptroller’s Offset System, pursue other
collection methods, and maintain accurate accounts receivable records.
Office
officials accepted the recommendation and stated they will investigate the use
of the Comptroller and/or the Attorney General for collections. (For previous
Office response, see Digest Footnote #5.)
RECOMMENDATIONS FROM THE 1999 MANAGEMENT AUDIT
OF FIRE INVESTIGATIONS NOT FULLY IMPLEMENTED
The Office had not fully implemented two
recommendations made in the Management Audit of the State Fire Marshal’s Fire
Investigations (June 1999):
·
The second recommendation in the management audit stated that
the Fire Marshal should review the method of assigning cases to reduce the
disparity in arson investigators’ caseloads and should document all requests
for arson investigators. Management stated they assigned investigation teams
when needed and maintained a log of fire calls received and investigators
assigned. However, the disparity in arson investigators’ caseloads has
increased since fiscal year 1999. Investigator caseloads ranged from 15 to 118
cases during calendar year 2002 and
between 3 to 178 cases in calendar year 2003. The average number of
investigations per investigator for calendar year 2003 was 68 compared to 57
in calendar year 2002.
·
The sixth management audit
recommendation stated that the Office should inform all local fire departments
to submit data required by the Fire Investigation Act and should monitor to
ensure that complete data is submitted in a timely manner. The Office has
started using the Fire Truck Revolving Loan Program as an enforcement tool.
Overall, even though the Office has been receiving reports, the reports are
not always timely and the Office does not monitor to ensure that all reports
are complete. (Prior Findings 1 and 2, pages 26-27) These findings were
first reported in 1999.
We
recommended the Office continue it’s efforts to implement recommendations made
in the 1999 Management Audit of Fire Investigations. Specifically, we
recommended:
·
The Office should review the data collected on requests for
arson investigators and review the caseloads of individual investigators, then
reconsider the method of assigning cases to reduce the disparity in arson
investigators’ caseloads.
·
The Office should routinely
monitor fire data reported by local fire departments to ensure that data is
complete and timely reported. In addition, the Office should follow up when
data is not reported or significant variances in historical data are noted.
Furthermore, the Office should document its efforts to monitor and follow up
on fire data reported.
Office
management responded they acknowledged the findings and stated that they are
investigating other options to assign cases, attempting to secure additional
headcount to employ additional investigators, and investigating other means to
secure compliance with fire reporting. (For the previous Office response, see
Digest Footnote #6.)
OTHER FINDINGS
The remaining findings are less
significant and are reportedly being given attention by the Office. We will
review progress toward implementing those recommendations in our next
examination. Responses to the recommendations were provided by J.T. Somer,
State Fire Marshal.
AUDITOR’S OPINION
We conducted a
compliance examination of the Office as required by the Illinois State
Auditing Act. We have not audited any financial statements of the Office for
the purpose of expressing an opinion because the Office does not, nor is it
required to, prepare financial statements.
____________________________________
WILLIAM G. HOLLAND, Auditor General
WGH:LKW:mec/js
SPECIAL ASSISTANT AUDITORS
The
Auditor General’s staff performed this compliance examination.
DIGEST FOOTNOTE
#1 INADEQUATE CONTROLS OVER DEVELOPMENT/CHANGES
TO COMPUTER APPLICATIONS – Previous Office Response
2002: The Agency accepts the finding and will
implement the recommendations when dealing with third party vendors. The
Boiler and Pressure Vessel System (Jurisdiction Online) was reviewed by Agency
staff before acceptance. Additional work for the Petroleum and Chemical
Safety system will also be thoroughly reviewed and standards developed. A
formal policy will be developed and implemented for monitoring third party
vendors and maintaining documentation.
#2 BACKLOG OF BOILER AND PRESSURE VESSEL
INSPECTIONS – Previous Office Response
2002: The Agency accepts the finding and will
do everything within its means to address this issue, subject to
appropriations approved by the General Assembly and the Governor. There are
other factors to be considered in creating the backlog, however. The loss of
inspectors due to hiring freezes and early retirement has severely hampered
the Agency’s ability to address the backlog issue. Another factor is the
increase in the number of items requiring inspection. Finally, another factor
is the requirement that the State must pick up inspections of facilities where
insurance was cancelled (leaving no insurance company responsible to perform
inspections). The State is ultimately responsible to make sure inspections are
completed, and the Agency will do what it can with what is available.
#3 NONCOMPLIANCE WITH THE ELEVATOR SAFETY ACT –
Previous Office response
2002: The Agency accepts the finding.
Inspections are done by local units of government; however, the process is
not fully under the oversight of the Agency as required by law. The Agency
will pursue appropriate means to affect changes in the current statute.
#4 CHIEF AND DEPUTY INSPECTORS DID NOT PROVIDE
BONDS – Previous Office Response
2002: The Agency accepts the finding. For many
years now, boiler inspectors have not received payment for inspections;
instead, these are billed directly by the Agency and mailed by the companies
to the Agency. This has eliminated the need for inspectors to be bonded. The
Agency has continually sought to delete the bonding requirement from the
statutes and will again seek to have the requirement eliminated from statutes.
#5 INADEQUATE COLLECTION AND ACCOUNTING FOR
ACCOUNTS RECEIVABLE - Previous Agency Responses
2002: The Agency accepts the finding. The
Agency has worked toward implementing prior recommendations regarding this
finding, which has been a continuing source of discussion. The Agency has
discussed the collection of past due accounts with a number of collection
agencies recommended by the Debt Collection Board. However, due to the small
amounts of the individual accounts (typically less than $50), the firms were
reluctant to take responsibility for collection. As such, the Agency has
formally designated an individual within the Boiler and Pressure Vessel Safety
Division to review all accounts on a monthly basis and follow up with
additional correspondence beyond the issuance of a second notice. After
reasonable means of collection have been exhausted, the Agency will refer
delinquent accounts to the Comptroller’s Offset System as appropriate. In
addition, an individual will be designated within the Petroleum and Chemical
Safety Division (Underground Storage Tank Division) to review all accounts on
a monthly basis and follow up with additional correspondence.
#6 STATUS OF PARTIALLY IMPLEMENTED ITEMS FROM
THE 1999 MANAGEMENT AUDIT OF ARSON INVESTIGATIONS
2002: The
Agency accepts the finding that these recommendations have been partially
implemented. We will continue to review and monitor all data collected and
work towards full implementation.
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