REPORT DIGEST GOVERNOR’S OFFICE OF MANAGEMENT AND BUDGET COMPLIANCE EXAMINATION FOR THE TWO YEARS ENDED JUNE 30, 2015 Release Date: April 21, 2016 FINDINGS THIS AUDIT: 2 CATEGORY: NEW -- REPEAT -- TOTAL Category 1: 0 -- 0 -- 0 Category 2: 1 -- 1 -- 2 Category 3: 0 -- 0 -- 0 TOTAL: 1 -- 1 -- 2 FINDINGS LAST AUDIT: 3 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 SYNOPSIS • (15-1) The Office submitted inaccurate “Reports of Receipts and Disbursements for Locally Held Funds” to the Office of the State Comptroller. • (15-2) The Office did not maintain adequate controls over monthly appropriation reconciliations. FINDINGS, CONCLUSIONS, AND RECOMMENDATIONS INACCURATE LOCALLY HELD FUND REPORTS The Governor’s Office of Management and Budget (Office) did not submit accurate “Report of Receipts and Disbursements for Locally Held Funds” (C-17) reports to the Office of the State Comptroller. We noted the following: • Seven of 56 (13%) C-17s filed reported incorrect amounts, ranging from $5,657 to $26,646,526. • Eleven of 24 (46%) monthly disclosures on the Office’s website reported incorrect amounts, ranging from $53 to $83,634,346. (Finding 1, pages 9-10) This finding was first reported in 2011. We recommended the Office implement procedures to review all C-17 reports for accuracy prior to submission to the State Comptroller. Also, we recommended the Office implement procedures to review all monthly disclosures for accuracy prior to posting on the Office’s website. Office personnel agreed with our recommendation and stated they have fully implemented corrective action to resolve the finding. (For the previous Office response, see Digest Footnote #1.) INADEQUATE CONTROLS OVER MONTHLY RECONCILIATIONS The Office is responsible for reconciling fourteen appropriations each month. The Office did not have adequate controls over monthly appropriation reconciliations. We noted the following: • 9 of 40 (23%) reconciliations were not properly completed whereby reconciling items were not identified. • 26 of 40 (65%) reconciliations completed during the examination period were not fully documented timely. The documentation for the reconciliations was compiled between 40 and 140 days after the close of the reconciling month. • Testing of the reconciliations during Fiscal Years 2014 and 2015 did not show documentation of the date or sign off by the reviewer of the reconciliations. (Finding 2, pages 11-12) We recommended the Office timely and properly prepare and document expenditure and appropriation reconciliations and document the supervisory review as required by the Statewide Accounting Management System. Office personnel agreed with our recommendation and stated they have fully implemented corrective action to resolve the finding. ACCOUNTANT’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 accountants stated the Office complied, in all material respects, with the requirements described in the report. FRANK J. MAUTINO Auditor General FJM:cmd SPECIAL ASSISTANT AUDITORS Our Special Assistant Auditors for this examination were West & Company, LLC. DIGEST FOOTNOTES #1 – Inaccurate locally held fund reports – Previous Agency Response 2013 – We concur with the auditor’s recommendation. Currently an Office analyst prepares the C-17 reports, but a manager will review and approve these reports prior to their submission to the Office of the Comptroller. Each of these mistakes was corrected in the subsequent quarter or at the end of the fiscal year during the GAAP package preparation.