REPORT DIGEST OFFICE OF THE GOVERNOR COMPLIANCE EXAMINATION For the Two Years Ended: June 30, 2013 Release Date: February 20, 2014 Summary of Findings: Total this audit: 4 Total last audit: 4 Repeated from last audit: 4 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 of the Governor did not exercise adequate control over the recording and reporting of State Property. • The Office of the Governor failed to make all required appointments to various boards and commissions. FINDINGS, CONCLUSIONS, AND RECOMMENDATIONS INADEQUATE CONTROLS OVER STATE PROPERTY The Office of the Governor did not maintain adequate control over the recording and reporting of State property. Some of the matters noted during our testing follow: • The Office incorrectly reported transfers as deletions on C-15 property reports. The Office transferred equipment items to other agencies totaling $12,689 and $18,870 in fiscal years 2012 and 2013, respectively. • The Office did not correctly report transfers in from the Capital Development Board (CDB) totaling $235,597 in fiscal year 2013. • Sixteen equipment items totaling $2,522 were transferred to CMS as surplus equipment in the 4th quarter of fiscal year 2013 but were not reported on the Office’s C-15 property report. • A capital lease for a copy machine totaling $10,900 was recorded twice in two C-15 property reports during 2012. This error was subsequently corrected in fiscal year 2013. • The Office could not locate 7 pieces of computer equipment totaling $4,308. Although some of the data contained on these devices was encrypted, the Office could not determine what type of information was stored on the other computer equipment. (Finding 1, pages 9-11) We recommended the Office properly review and monitor the submission of required reports to the State Comptroller’s Office to ensure compliance with the requirements of the Statewide Accounting Management System. We also recommended the Office evaluate the procedures and strengthen the controls over inventory of State property and perform an assessment whether unencrypted missing computers contained confidential information for proper disposition in compliance with the Personal Information Protection Act. Officials in the Office of the Governor agreed with the recommendation and stated they will continue to exercise sound fiscal management, implement new strategies and increase internal controls to correct the circumstances which created these issues. APPOINTMENTS OF MEMBERS TO BOARDS, COMMISSIONS, COUNCILS AND COMMITTEES The Office of the Governor did not make all required appointments to the various boards, commissions, councils and committees. Twenty of 55 (36%) of the Boards, Commissions, Councils and Committees tested did not have the required number of members. (Finding 2, pages 12-15) This finding was first reported in 2007. We recommended the Office appoint qualified members to these Boards, Commissions, Councils, and Committees as required by the applicable statutory mandates and reappoint applicable members in a timely manner. Officials in the Office of the Governor agreed with our recommendation and stated the Governor’s Office of Executive Appointments has strived to maintain compliance by making appointments, reappointments, and advancing legislation to officially repeal the act creating the entity for those that have been identified as duplicative or to have fulfilled their mission. The Office issued an Executive Order in 2013 (E.O. 13-05), eliminating dozens of boards and commissions, which the Illinois Senate rejected by approving Senate Resolution 357. (For previous Office response, see digest footnote #1) OTHER FINDINGS The remaining findings pertain to noncompliance with statutorily mandated responsibilities and inadequate monitoring of interagency agreements and are reportedly being given attention by the Office. We will review the Office’s progress towards the implementation of all our recommendations during the next engagement. AUDITORS’ OPINION We conducted a compliance examination of the Office of the Governor 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:CAE SPECIAL ASSISTANT AUDITORS Our special assistant auditors on this examination were E.C. Ortiz & Co., LLP. DIGEST FOOTNOTE #1 Appointments of members to Boards, Commissions, Councils and Committees. 2011: Officials in the Office of the Governor agreed with our recommendation and stated the Governor’s Office of Executive Appointments has taken dramatic steps to revamp the State’s 300+ boards and commission’s appointment process by increasing transparency and reducing the staggering number of vacancies and expired terms inherited from the previous administration.