REPORT DIGEST

FINANCIAL AND COMPLIANCE AUDIT
(In accordance with the
Single Audit Act and OMB
Circular A-133)
For the Two Years Ended:
June 30, 1998

Summary of Findings:

SYNOPSIS

• The Historic Preservation Agency did not have procedures in place to monitor federal grant activity by individual grant. 

• A grant awarded by the Agency lacked a final audit report and the grantee did not account for expenses incurred.

• At two historical sites internal controls were inadequate, and at two other sites, donations and fees were not submitted timely to the Central Office for deposit.

{Expenditures and Activity Measures are summarized on the reverse page.}

FY 1998

FY 1997

FY 1996

• Total Expenditures (All Funds)

OPERATIONS TOTAL
% of Total Expenditures
Personal Services
% of Operations Expenditures
Average No. of Employees
Other Payroll Costs (FICA, Retirement)
% of Operations Expenditures
Contractual Services
% of Operations Expenditures
Expendable Trust
% of Operations Expenditures
All Other Operations Items
% of Operations Expenditures

AWARDS, GRANTS AND PERMANENT
IMPROVEMENTS TOTAL
% of Total Expenditures

• Cost of Property and Equipment

$14,776,283

$12,965,121
87.7%
$8,178,041
63.1%
207
$1,481,966
11.4%
$1,615,194
12.5%
$62,976
0.5%
$1,626,944
12.5%

$1,811,162
12.3%

$94,564,567

$13,896,589

$12,634,964
90.9%
$7,772,169
61.5%
214
$1,290,304
10.2%
$1,382,249
10.9%
$95,483
0.8%
$2,094,759
16.6%

$1,261,625
9.1%

$90,469,365

$13,687,629

$12,735,629
93.0%
$7,515,009
59.0%
211
$1,232,050
9.7%
$1,283,517
10.1%
$139,720
1.1%
$2,565,108
20.1%

$952,225
7.0%

$87,912,695

FY 1998

FY 1997

FY 1996

• All State-owned Historical Sites
• Top Site:  Lincoln's New Salem
• 2nd Site:  Cahokia Mounds
• 3rd Site:  Lincoln's Tomb
• Top 1998 Revenue Site ($115,913) Galena Complex

2,832,212
688,585
340,056
320,562
120,577

2,513,059
617,972
329,550
237,890
115,110

2,547,894
525,792
359,084
270,975
117,368

The Agency did not maintain separate accounts for each grant and therefore could not readily distinguish between federal and State funds

At one site, one individual performed collections, counting, and recording of receipts

FINDINGS, CONCLUSIONS, AND RECOMMENDATIONS

INABILITY TO MONITOR FEDERAL GRANTS

 

The Historic Preservation Agency did not have procedures in place to monitor federal grant activity by individual grant. The Agency did not maintain separate accounts for each grant and therefore could not readily distinguish between federal and State funds. Proper recordkeeping would aid in the preparation of required reports and provide proper supporting documentation. (Finding 98-2, page 15). The Agency is funded on a reimbursement basis for federal expenditures, and the ability to track expenditures is important. In fiscal year 1997, the Agency improperly requested and received the entire amount for a federal grant of $585,774 prior to having expended all of the funds to qualify for full reimbursement, and at year's end, $48,377 had not been expended. (Finding 98-1, page 14)

 

We recommended the Agency maintain separate grant funds and identify each as State or federal. We also recommended the Agency implement procedures which would match drawdowns to federal expenditures. The Agency concurred with both recommendations and agreed to seek authority for separate funds.

 

MONITORING OF STATE GRANT NOT PERFORMED

 

During the two year period ending June 30, 1998, the Agency awarded nine state grants. One of the grants had a completion date that fell within our audit period. We noted the Agency had disbursed $100,000 to the grantee but had not obtained a final report. The grantee did not account for expenses incurred to achieve the tasks specified for the grant and did not furnish the Agency with budgetary data or an audit report. Further, no follow-up on this grant had been documented. (Finding 98-6, page 20)

 

We recommended the Agency perform and document proper monitoring procedures as required in the grant agreement. The Agency concurred, stating it had begun to implement steps to assure appropriate and timely follow-up of state grants they administer.

 

UNTIMELY SUBMISSIONS AND INADEQUATE CONTROLS OVER DONATIONS AT HISTORIC SITES

 

At two of five sites tested, donations and fees were not remitted timely to the Agency for deposit into the State Treasury. The Historic Preservation Agency Act requires sites to forward local bank balances on Monday of each week if they are in excess of $500. At one site, fees were consistently submitted late and donations were submitted on Wednesdays instead of Mondays. At the other site, fees were remitted from one to eight days late on various occasions. (Finding 98-3, page 17) At other sites, adequate controls over donations were lacking. There was inadequate segregation of duties at one site: one individual performed collections, counting, and recording of receipts. At another location the donation box key was left in an unlocked file cabinet allowing any employee with access to the office access to the key. (Finding 98-5, page 19).

 

We recommended the Agency strengthen controls over donations and that the submission requirements of the Historic Preservation Agency Act be followed. The Agency concurred with both recommendations and in addition, stated it will likely seek to change the statutory language to designate deposits to be weekly as opposed to a specific day of the week.

 

OTHER FINDING

 

The other finding, which dealt with the number of Board of Trustee members, was less significant. We will review progress toward implementing all recommendations in our next audit.

 

AUDITORS' OPINION

Our auditors stated the Historic Preservation Agency's financial statements as of June 30, 1997 and June 30, 1998 were presented fairly except for the effects of such adjustments, if any, as might have been determined to be necessary had they been able to examine evidence regarding year 2000 disclosures.

 

___________________________________
WILLIAM G. HOLLAND, Auditor General

WGH:KMC:pp

 

SPECIAL ASSISTANT AUDITORS

Our special assistant auditors for this audit were Olive LLP.