REPORT DIGEST OFFICE OF THE STATE FIRE MARSHAL Compliance Examination For the Two Years Ended June 30, 2014 Release Date: March 5, 2015 FINDINGS THIS AUDIT: 5 CATEGORY: NEW -- REPEAT -- TOTAL Category 1: 0 -- 0 -- 0 Category 2: 0 -- 5 -- 5 Category 3: 0 -- 0 -- 0 TOTAL: 0 -- 5 -- 5 FINDINGS LAST AUDIT: 13 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 WILLIAM G. HOLLAND, 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 SYNOPSIS • (14-2) The Office conducted inspections of boilers and pressure vessels in an untimely manner. • (14-3) The Office exercised inadequate controls over the purchase, recording and reporting of State property. • (14-5) The Office did not accurately report accounts receivable information to the Office of the Comptroller via its Quarterly Summary of Accounts Receivable. FINDINGS, CONCLUSIONS, AND RECOMMENDATIONS INSPECTIONS OF BOILERS AND PRESSURE VESSELS NOT PERFORMED TIMELY The Office did not conduct inspections of boilers and pressure vessels in a timely manner. We noted 15 of 50 boiler and pressure vessel inspections were performed between 2 and 106 days late. (Finding 2, page 9). This finding has been repeated since 2002. We recommended the Office implement necessary controls to identify and perform inspections in a timely manner. Office officials agreed with our recommendation and stated the Boiler and Pressure Vessel Safety Administrative rules were changed on August 1, 2013. This change allows for a 90 day inspection window after the expiration date of the inspection certificate. If the rule change was in effect during the audit period, only one late boiler exception would have been noted. (For the previous Office response, see Digest Footnote #1.) INADEQUATE CONTROL OVER THE PURCHASE, RECORDING AND REPORTING OF STATE PROPERTY The Office did not exercise adequate control over the purchase, recording and reporting of State property. We noted the following during testing: • The Office did not timely resolve or remove 3 items, totaling $5,176, noted as missing during the Fiscal Year 2014 annual inventory certification process. • For 2 of 25 equipment additions tested, totaling $6,272, the inventory was purchased and put into service in Fiscal Year 2012, but were listed as Fiscal Year 2013 additions on the Agency Report of State Property. • 1 of 19 automobiles sent to surplus during Fiscal Year 2013 and Fiscal Year 2014 was not removed from the inventory listing timely. (Finding 3, pages 10-11). This finding has been repeated since 2004. We recommended the Office strengthen internal controls over the recording and reporting of State property by reviewing their inventory and recordkeeping practices to ensure compliance with statutory and regulatory requirements. Further, the Office should ensure all equipment is accurately and timely recorded on the Office’s property records. Office officials agreed with our recommendation and stated the Office is in the process of implementing a new inventory system. They further stated that this should speed up the process for both the Office and Shared Services. (For the previous Office response, see Digest Footnote #2.) INADEQUATE REPORTING OF ACCOUNTS RECEIVABLE The Office did not accurately report accounts receivable information to the Office of the Comptroller via its Quarterly Summary of Accounts Receivable (C-97 and C-98 Reports.) We noted 2 of 8 C-97 and C-98 Reports filed with the Comptroller did not contain the estimated uncollectible amount. Additionally, the Reconciliation for Comptroller’s Offset Compliance was not completed. (Finding 5, page 13). This finding has been repeated since 1990. We recommended the Office carefully prepare and review accounts receivable reports to ensure accounts receivable are reported in accordance with the Statewide Accounting Management System procedures. Office officials agreed with our recommendation and stated the Office now includes the estimated uncollectible amounts on its quarterly accounts receivable reporting. (For the previous Office response, see Digest Footnote #3.) OTHER FINDINGS The remaining findings pertain to untimely approval of payments and employee evaluations being performed late. We will review the Office’s progress toward implementation of our recommendations during our next examination. AUDITOR’S OPINION We conducted a compliance examination of the Office as required by the Illinois State Auditing Act. The Office has no funds that require an audit leading to an opinion of financial statements. WILLIAM G. HOLLAND Auditor General WGH:md SPECIAL ASSISTANT AUDITORS Our Special Assistant Auditors for this examination were Winkel, Parker & Foster, CPA PC. DIGEST FOOTNOTES #1 – INSPECTIONS OF BOILERS AND PRESSURE VESSELS NOT PERFORMED TIMELY - Previous Agency Response 2012: Office officials agreed with our recommendation and stated they will be recommending changes to the administrative rules to allow leeway from the time of expiration of the inspection certificate until the inspection can be completed. #2 – INADEQUATE CONTROL OVER THE PURCHASE, RECORDING AND REPORTING OF STATE PROPERTY – Previous Agency Response 2012: Office officials agreed with our recommendation and state that items would be removed in a timely manner and deletion forms would be properly completed. #3 – INADEQUATE REPORTING OF ACCOUNTS RECEIVABLE – Previous Agency Response 2012: Office officials agreed with our recommendation and stated a contractor had been hired to provide assistance to the Office in preparing the quarterly accounts receivable reports.