REPORT DIGEST GOVERNOR’S OFFICE OF MANAGEMENT AND BUDGET COMPLIANCE ATTESTATION EXAMINATION For the Two Years Ended: June 30, 2013 Release Date: March 20, 2014 Summary of Findings: Total this audit: 3 Total last audit: 8 Repeated from last audit: 3 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 • The Office submitted inaccurate “Reports of Receipts and Disbursements for Locally Held Funds” to the Office of the Comptroller. • The Office did not exercise adequate controls over interagency agreements. FINDINGS, CONCLUSIONS, AND RECOMMENDATIONS INACCURATE LOCALLY HELD FUND REPORTS The Governor’s Office of Management and Budget (Office) did not submit accurate “Reports of Receipts and Disbursements for Locally Held Funds” to the Office of the State Comptroller. We noted discrepancies between the Locally Held Fund Reports and related bank statements for 5 of 56 (9%) reports filed during the examination period. The net misstatements totaled $36,945,465. (Finding 1, pages 11-12) We recommended the Office implement procedures to review all C-17 reports prepared for accuracy prior to submission to the Office of the Comptroller. Office officials concurred with our recommendation and noted they are taking corrective action. INADEQUATE CONTROL OVER INTERAGENCY AGREEMENTS The Office did not exercise adequate control over interagency agreements. Testing of 12 of 44 (27%) of the Office’s interagency agreements disclosed the following: • 4 of 12 (33%) were signed by the Office 4 to 6 days after the effective date of the agreement. • 1 of 12 (8%) contained a termination agreement which was signed by the Office 26 days after the date of termination. • 5 of 12 (42%) were not signed by all of the required parties by the effective date of the agreement. The signatures were obtained from the other parties to the agreements 4 to 12 days late. (Finding 3, pages 15-16) This finding was first reported in 2007. We recommended the Office ensure interagency agreements are signed by all parties before the effective date of the agreement. Further, the Office should ensure termination agreements are signed by all parties before the effective date of the termination. Office officials concurred with our recommendation. (For previous agency response, see Digest Footnote #1) OTHER FINDINGS The remaining finding pertains to inadequate controls over cash receipts and is reportedly being given attention by the Office. We will review the Office’s progress towards implementation of our recommendations in our next examination. AUDITOR’S OPINION We conducted a compliance examination of the Governor’s Office of Management and Budget as required by the Illinois State Auditing Act. The Governor’s Office of Management and Budget has no funds that require an audit leading to an opinion on financial statements. WILLIAM G. HOLLAND Auditor General WGH:cmd SPECIAL ASSISTANT AUDITORS West & Company, LLC were our special assistant auditors on this engagement. DIGEST FOOTNOTE #1 - Inadequate control over interagency agreements - Previous Agency Response 2011 - We concur with the auditor’s recommendation. The Office’s policy is to execute interagency agreements prior to their respective dates. The majority of the IGAs that were the subject of this finding were due to other agencies not signing appropriately or timely. The Office continues to maintain its policy to obtain fully executed and dated agreements prior to their effective dates to the greatest extent practicable and within its control. The Office has an internal protocol for executing interagency agreements and has added a step to improve follow-up with other parties.