REPORT DIGEST

OFFICE OF THE GOVERNOR

COMPLIANCE EXAMINATION
FOR THE TWO YEARS ENDED JUNE 30, 2021

Release Date:  March 17, 2022

FINDINGS THIS AUDIT:  11

CATEGORY:  NEW -- REPEAT -- TOTAL
Category 1:  0 -- 8 -- 8
Category 2:  1 -- 2 -- 3
Category 3:  0 -- 0 -- 0
TOTAL:  1 -- 10 – 11

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
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

INTRODUCTION

Because of the significance and
pervasiveness of the findings
described within the report, we
expressed an adverse opinion on the
Office of the Governor’s compliance
with the specified requirements which
comprise a State Compliance
Examination.  The Codification of
Statements on Standards for
Attestation Engagements (AT-C §205.72)
states a practitioner “should express
an adverse opinion when the
practitioner, having obtain sufficient
appropriate evidence, concludes that
misstatements, individually or in the
aggregate, are both material and
pervasive to the subject matter.”

SYNOPSIS

• (21-001) The Office lacked adequate
controls over the Illinois Governor’s
Mansion property and receipts.
• (21-002) The Office did not maintain
adequate controls over the recording
and reporting of State property.
• (21-005) The Office did not maintain
adequate controls over receipts
processing.

FINDINGS, CONCLUSIONS, AND
RECOMMENDATIONS

INADEQUATE CONTROLS OVER THE ILLINOIS
MANSION PROPERTY AND RECEIPTS

The Office of the Governor (Office)
lacked adequate controls over the
Illinois Governor’s Mansion (Mansion)
property and receipts.

During testing of the Mansion’s
property, we noted:

• The Mansion underwent extensive
renovations, which were completed in
July 2019. The renovations were
contracted, overseen, and funded by
the Illinois Governor’s Mansion
Association (Association), a not-for-
profit tax exempt 501(c)(3)
organization. As noted in the previous
examination, the Office lacked
supporting documentation on
renovations recorded to fixed assets
records and had not performed a
reconciliation between the
Association’s renovation expenditures
and the Office’s additions recorded in
the property records or reported on
the Office’s quarterly Agency Report
of State Property (Form C-15).  During
the current examination period, we
noted:

– The Office recorded an adjustment,
totaling $145,881 on the June 30, 2020
quarterly Form C-15 to agree the
building and building improvement
balance to the amount recorded in
their property records. However, the
Office did not perform an analysis
between the Associations expenditures
and the Office’s records to determine
the correct value of the renovations
completed in July 2019.
– The June 30, 2021 Form C-15 balance
of $8,981 in Site Improvements was not
recorded in the Office’s property
records.

As such, we were unable to determine
the total amount of renovations
completed on the Mansion, which were
to be recorded in the Office’s
property records and on Form C-15’s.

During testing of the Mansion’s
receipts, we noted:

• During Fiscal Years 2020 and 2021,
various events were held at the
Mansion which were coordinated by the
Association. The Office lacked
documentation of controls over the
charge and collection of fees for
usage of the facility in order to
ensure all fees were collected for the
events held.
• The Office did not maintain an
itemized account of all ‘Executive
Mansion fees’ received during Fiscal
Years 2020 and 2021.
• The Office reported $9,450 and $800
in ‘Executive Mansion fees’ collected
during Fiscal Years 2020 and 2021,
respectively, on its Agency Fee
Imposition Report (Report). However,
with the lack of controls mentioned
above, we were unable to determine if
the fees reported were accurate and
included all fees charged.

Even given the population limitations
noted above, which hindered our
ability to conclude whether selected
samples were representative of the
population as a whole, we performed
testing of the Office’s property and
receipts and noted these matters
described in Findings 2021-002 and
2021-005.  (Finding 1, pages 10-12)

We recommended the Office:

• Evaluate the procedures and
strengthen the controls over property
and equipment purchased by the
Association and then donated to the
State, to ensure accurate record
keeping and reporting of all State
assets;
• Ensure balances reported on the Form
C-15 accurately reflect Office
records;
• Maintain adequate records and
documentation of Office property
activities; and,
• Ensure controls are implemented and
documented to ensure all fees
collected by the Association on behalf
of the Office are remitted.

The Office accepted the finding and
stated they had put new procedures in
place to strengthen fiscal controls
and the segregation of duties
regarding Mansion inventory and
receivables.   The Office also stated
they will work with the Mansion
Association to reconcile the
difference between Agency and Mansion
Association records and will ensure
that all future improvements are
accurately recorded.

INADEQUATE CONTROLS OVER STATE
PROPERTY

The Office did not maintain adequate
controls over the recording and
reporting of State property.

Due to the process and control
deficiencies identified below and as
noted in Finding 2021-001, we were
unable to conclude whether the
Office’s population records were
sufficiently precise and detailed
under the Attestation Standards
promulgated by the American Institute
of Certified Public Accountants (AT-C
§ 205.35) in order to test the
Office’s controls over State property
and equipment. Even given the
population limitations noted above,
which hindered our ability to conclude
whether selected samples were
representative of the population as a
whole, we performed the following
tests:

RECORDING AND REPORTING DEFICIENCIES

During testing of the Office’s
quarterly Agency Report of State
Property (Form C-15) we noted
inaccurate, unsupported balances, and
reporting deficiencies. Specifically:

• We noted an unknown difference,
totaling $316, between the Office’s
June 30, 2021 property listing and the
June 30, 2021 C-15 balance.
• One of 8 (13%) quarterly Form C-15
was filed with the Office of
Comptroller four days late.

During testing of property additions
and deletions, we noted:

• Two of 4 (50%) additions tested,
totaling $5,724, were recorded in the
Office’s property records 296 and 667
days late.
• Four of 60 (7%) deletions tested,
totaling $7,694, the Office did not
maintain supporting documentation.

During testing of the Office’s annual
certification of inventory, we noted
the following:

• The Office did not appear to take
appropriate measures to verify the
property listing was accurate during
the Fiscal Year 2020 annual physical
inventory. The Office noted zero
discrepancies on the certification,
however our testing of property items
noted instances of un-located property
and property which could not be traced
to the Office’s records.

During testing of the Office’s
expenditure vouchers, we noted two of
10 (20%) vouchers for equipment items
were not properly added to property
records. One equipment voucher,
totaling $7,000, was not added to the
property records. The other voucher
for furniture, totaling $3,902 was
added to the property records twice.

Additionally, the Office failed to
implement a policy delineating the
categories of equipment considered
subject to theft.

We obtained a listing of electronic
storage media items disposed during
the examination period noting 69 items
on the listing that were identified as
electronic media.  We requested
documentation in order to determine if
the Office had ensured and documented
the items were properly erased, wiped,
sanitized, or destroyed in accordance
with the destruction process required
by the State of Illinois, Department
of Innovation & Technology, Enterprise
Information Security Policy, Media
Protection Policy (Policy).  However,
the Office did not provide supporting
documentation.

PROPERTY OBSERVATION

The Office did not ensure the physical
locations of property items were
accurate based on the Office’s
property listing. Specifically, during
our inspection of 60 property items,
we noted:

• Two (3%) property items were not
tagged. The items consisted of
furniture totaling $9,800.
• Eight (13%) property items, totaling
$13,728, were not located at the
Office. We determined four of the
items were previously disposed and not
removed from Office property records.
The items included a grill, floor
scrubber, ice maker, and whiteboard.
The other four missing items consisted
of office furniture and equipment,
including two computers. Additionally,
the Office was unable to provide
documentation to determine if an
assessment had been completed to
conclude if the computers contained
confidential information.
• Three (5%) property items selected
at the Office were not located in the
property records. The items consisted
of furniture and office equipment.

PROPERTY LEASES

The Office failed to maintain adequate
controls over equipment leases. We
tested 48 monthly lease payments for a
sample of two agreements, noting:

• Three (6%) monthly lease payments,
totaling $472, lacked a supporting
invoice.
• One (2%) monthly lease payment,
totaling $150 was paid twice.
(Finding 2, pages 13-16)
This finding has been repeated since
2011.

We recommended the Office:

• Properly review and monitor the
submission of the Form C-15 to the
Office of Comptroller to ensure
compliance with the requirements of
SAMS.
• Evaluate the procedures and
strengthen the controls over property,
equipment, and leases to ensure proper
safekeeping and accurate and timely
recordkeeping of all assets.
• Strengthen the controls over
reporting the Office’s annual
certification of inventory.
• Implement a policy clearly
delineating the categories of
equipment considered subject to theft.
• Ensure and document electronic data
processing equipment is properly
erased, wiped, sanitized, or destroyed
before removal from property control.
• Maintain adequate records and proper
documentation of the Office capital
asset activities.

The Office accepted the finding and
stated they would ensure that all
inventory certifications and inventory
transactions are completed in a timely
and accurate manner and that they have
put new procedures in place to ensure
that all electronic media is erased
and/or destroyed according to DoIT
policy.   The Office also stated they
have added additional training and
procedures to ensure that all invoices
are paid timely and with supporting
documentation attached and that they
will implement a formal written policy
stating what items are considered to
be high theft.

INADEQUATE CONTROLS OVER RECIEPTS
PROCESSING

The Office did not maintain adequate
controls over receipts processing.

Due to the following process and
control deficiencies identified below
and as noted in 2021-001, we were
unable to conclude whether the
Office’s population records were
sufficiently precise and detailed
under the Attestation standards
promulgated by the American Institute
of Certified Public Accountants (AT-C
§ 205.35) to test the Office’s control
over receipts.

Even given the population limitations
noted above which hindered our ability
to conclude whether selected samples
were representative of the population
as a whole, we performed the following
tests of receipts and noted:

• The Office did not maintain adequate
segregation of duties over cash
receipts during Fiscal Years 2020 and
2021. One employee had the authority
to receive revenues, make deposits and
maintain the cash receipts listing.
• The Office did not maintain a
detailed itemized account of all
moneys received during Fiscal Year
2021. The Office’s detailed itemized
account of all moneys received during
Fiscal Year 2020 did not contain all
of the money received and omitted the
dates of receipt and payer information
on the money received. The Office of
Comptroller’s records documented
receipts totaling $126,983 and $17,246
for Fiscal Year 2021 and 2020,
respectively.
• Three of 6 (50%) receipts tested,
totaling $2,000 were deposited between
4 and 60 days late.
• One of 4 (25%) refunds, totaling
$84, did not have documentation to
demonstrate monies received were
deposited timely.
• One of 4 (25%) refunds, totaling
$106, was deposited 5 days late.
(Finding 5, pages 24-25)
This finding has been repeated since
2017.

We recommended the Office allocate
sufficient personnel in order to
maintain effective internal control
over the authorization, custody, and
record keeping over receipts. In
addition, we recommended the Office
maintain detailed itemized records of
its receipts and supporting
documentation and deposit receipts and
refunds timely in accordance with the
State Officers and Employees Money
Disposition Act.

The Office accepted the finding and
stated additional policies have been
developed to further strengthen
segregation of duties in the receipt
process and additional staff has been
hired and trained to ensure that
receipts and refunds are deposited
timely and accurately.  The Office
also stated they have initiated a
formal check deposit register to allow
for proper documentation of all
receipts.

OTHER FINDINGS

The remaining findings pertain to
appointments, mandated
responsibilities, reconciliations,
voucher processing, personal services
functions, cybersecurity, and
interagency agreements.  We will
review the Office’s progress towards
the implementation of our
recommendations in our next State
compliance examination.

ACCOUNTANT’S OPINION

The accountants conducted a State
compliance examination of the Office
for the two years ended June 30, 2021,
as required by the Illinois State
Auditing Act.  Because of the effect
of noncompliance described in Findings
2021-001 through 2021-008, the
accountants stated the Office did not
materially comply with the
requirements described in the report.

The compliance examination was
conducted by West & Company, LLC.

JANE CLARK
Division Director

This report is transmitted in
accordance with Section 3-14 of the
Illinois State Auditing Act.

FRANK J. MAUTINO
Auditor General

FJM:MKL