REPORT DIGEST
ILLINOIS GRAIN INSURANCE CORPORATION
FINANCIAL AUDIT AND
COMPLIANCE EXAMINATION
For the Two Years
Ended: June 30, 2011
Release Date: March 27,
2012
Summary of Findings:
Total this audit: 2
Total last audit: 2
Repeated from last audit: 1
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
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INTRODUCTION
The Illinois Grain Corporation, a component unit of the
State of Illinois, was created for the purpose of providing the economic
stability of agriculture by establishing funds to pay grain producers and other
claimants for losses incurred by the failure of a grain dealer or
warehouseman. Fiscal support to carry
out the responsibilities of the Corporation is provided by the Department of
Agriculture.
SYNOPSIS
• The Corporation has not established the $2,000,000 Grain
Insurance Reserve Fund as required by the Grain Code.
• The Corporation’s accounting system had several errors
relating to receivables.
FINDINGS, CONCLUSIONS, AND RECOMMENDATIONS
GRAIN INSURANCE FUND NOT FUNDED
The Illinois Grain Insurance Corporation has not funded the
$2,000,000 Grain Insurance Reserve Fund required by the Grain Code.
As of the end of examination fieldwork, the Corporation had
not established the $2,000,000 Grain Insurance Reserve Fund.
The Corporation’s management indicated the Grain Insurance
Reserve Fund was not funded because the funds were not appropriated. Management also indicated they did not
request an appropriation in fiscal years 2010 and 2011 because of budgetary
constraints on the General Revenue Fund. (Finding 1, page 11) This finding has been repeated since 2005.
We recommend the Corporation comply with the law by working
with the Office of Management and Budget to obtain the necessary appropriation
to fund the Grain Insurance Reserve Fund or seek legislative relief from the
statutory requirement.
Corporation officials agreed with our recommendation and
stated they will request the appropriation in future budget years. (For
previous agency response, see Digest Footnote 1)
ERRORS NOTED IN ASSESSMENT ACCOUNTING SYSTEM
The Illinois Grain Insurance Corporation’s accounting system
had several errors relating to assessment receivables that required
adjustments.
When testing receivables, we noted the subsidiary receivable
ledger had 28 accounts netting a balance of $1,525 even though the trial
balance indicated a balance of zero.
Account errors ranged from a few cents to over $2,000.
The Corporation’s management stated that staff was unaware
of the need to adjust the subsidiary receivable as well as the trial balance.
We recommended the Corporation provide necessary training
and develop procedures to facilitate proper posting and reconciliation of its
accounting system.
Corporation officials agreed with our recommendation and
will review both the system and its procedures for correcting errors in the
receivables.
AUDITORS’ OPINION
Our auditors state the June 30, 2011 financial statements of
the Grain Insurance Corporation are presented fairly in all material respects.
WILLIAM G. HOLLAND
Auditor General
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SPECIAL ASSISTANT AUDITORS
Sikich, LLP was our special
assistant auditors for this audit and examination.
Digest Footnotes
2009: “The Agency agrees with the finding and will attempt to obtain appropriation to fund the Grain Insurance Reserve Fund.”