REPORT DIGEST

ILLINOIS COMMERCE COMMISSION

COMPLIANCE EXAMINATION
FOR THE TWO YEARS ENDED JUNE 30, 2019

Release Date:  December 8, 2020

FINDINGS THIS AUDIT:  9

CATEGORY:  NEW -- REPEAT -- TOTAL
Category 1:  2 -- 1 -- 3
Category 2:  4 -- 2 -- 6
Category 3:  0 -- 0 -- 0
TOTAL:  6 -- 3 -- 9

FINDINGS LAST AUDIT: 6

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

• (19-01) The Commission lacked adequate
control over its accounts receivable.
• (19-02) The Commission lacked adequate
internal control over its transcripts of
meetings.
• (19-04) The Commission failed to
determine the projected surplus (deficit)
on a budgetary cash basis of the Public
Utility Fund during the specified
timeframe.

FINDINGS, CONCLUSIONS, AND
RECOMMENDATIONS

INADEQUATE CONTROL OVER ACCOUNTS
RECEIVABLE

The Commission lacked adequate control
over its accounts receivable.  As of June
30, 2019, the Commission reported
accounts receivable of $36.451 million
(reported net of estimated uncollectible
accounts, totaling $11.830 million) to
the Office of the State Comptroller.

Inadequate Collection Attempts
During testing, we noted the Commission
did not make adequate collection attempts
on 55 of 57 (96%) accounts receivable
tested.  We noted the following:

• 55 (96%) of the tested accounts,
totaling $43,917, were not referred to
the Department of Revenue’s Debt
Collection Bureau.

• 55 (96%) of the tested accounts,
totaling $43,917, were not referred to
the State Comptroller’s Offset System.

Uncollectible Accounts Not Referred for
Write-Off
During testing of 57 accounts receivable,
we noted 54 (95%) tested accounts,
totaling $704,510, appeared to be
uncollectible; however, the Commission
had not referred these accounts to the
Office of the Attorney General for
certification the debt was uncollectible.

Internal Procedures Conflict with State
Law
During testing, we noted § 5(B)(2) of the
Commission’s internal procedures
conflicts with the Illinois State
Collection Act of 1986 (Act) (30 ILCS
210/5(c-1)) and the Statewide Accounting
Management System (SAMS) (Procedure
26.40.20).  While the procedures of the
Commission call for all debts greater
than $1,000 and more than 90 days old to
be placed into the State Comptroller’s
Offset System, the Act and SAMS require
all debts over $250 and more than 90 days
past due to be placed in the State
Comptroller’s Offset System (Finding 1,
pages 13-14).  This finding has been
repeated since 2013.

We recommended the Commission pursue all
reasonable and appropriate measures to
collect on outstanding debts as required
by State laws and regulations.  Further,
the Commission should report
uncollectible amounts to the Attorney
General.  Finally, the Commission should
ensure its internal procedures comport
with State law.

Commission officials agreed with the
finding and indicated they will assign
staff to pursue the referral and
reporting issues related to accounts
receivable and update internal policies
to comport with State law.

INADEQUATE CONTROL OVER MEETING
TRANSCRIPTS

The Commission lacked adequate internal
control over its transcripts of meetings.

During testing, we noted the Commission
did not maintain a complete record of its
meeting minutes.  Several transcripts of
meetings were not included on the
Commission’s website.

Due to these conditions, we were unable
to conclude whether the Commission’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
Commission’s meeting transcripts.

Even given the population limitations
noted above which hindered the ability of
the accountants to conclude whether
selected samples were representative of
the population as a whole, we performed
testing which noted the following
exceptions:

• Two of 22 (9%) meeting minutes tested
were not approved prior to being posted
to the Commission’s website.

• Five of 22 (23%) meeting minutes tested
were not approved within 30 days of the
meeting.  These meeting minutes were
approved 3 to 10 days late.

• Two of 22 (9%) meeting minutes tested
were not posted to the Commission’s
website the same day they were approved.
These meeting minutes were posted 7 and
35 days late.  (Finding 2, pages 15-16)

We recommended the Commission ensure all
meeting transcripts are timely approved
and posted to the Commission’s website on
the day of approval.

Commission officials agreed with the
finding and indicated they will, going
forward, strive to have all meeting
transcripts timely approved and posted.

NONCOMPLIANCE WITH THE PUBLIC UTILITIES
ACT

The Commission failed to determine the
projected surplus (deficit) on a
budgetary cash basis of the Public
Utility Fund (Fund) during the specified
timeframe.

During testing, we noted the Commission
failed to determine the Fund’s projected
surplus (deficit) during the months of
October 2017 and 2018.  The Commission
instead determined required amounts in
July 2017 and June 2018.  (Finding 4,
pages 19-20)

We recommended the Commission comply with
State law as written or seek a
legislative remedy to change the month
during which these amounts are to be
determined.

Commission officials disagreed with the
finding and provided the following
response.

The Commission disagrees with the
finding.  In Docket No. 18-0375,
conducted pursuant to the Public
Utilities Act (220 ILCS 5/2-202(i-5)),
the Commission concluded the provision
requiring that the Commission make the
determinations in question in October of
each year was: (a) consistent with
Illinois case law, directory rather than
mandatory, such that the Commission could
lawfully fix a different date for
apportionment by its Order; (b) only
applied by its terms to any assessments
conducted prior to the conclusion of the
docketed proceeding; and (c) would, if
followed, frustrate legislative intent.
The Commission ordered that apportionment
would in the future be made on June 30 of
each year.  Lastly, Commission officials
indicated they would, nevertheless,
pursue a legislative change seeking a
change to the referenced date.

As legislative post-auditors, our
responsibility is to test the
Commission's compliance with State law as
written.  The plain language of the Act
requires the Commission to make this
determination in October.  Additionally,
as the Fund's beginning budgetary basis
balance is not known until after all of
the closing fiscal year's Lapse Period
transactions have been recorded, attempts
to ascertain this balance must rely upon
estimates and not actual results
typically known by October. These
estimates hinder the precise calculation
of the beginning balance, as such
precision would not have been possible in
June or July because of the inherent
limitations in the accounting measurement
process.  We continue to recommend the
Commission comply with State law as
written, or seek a legislative remedy.

OTHER FINDINGS

The remaining findings pertain to
inadequate control over monthly
reconciliations, revenues, State
vehicles, personal services, and
timekeeping and noncompliance with the
Collateral Recovery Act.  We will review
the Commission’s progress towards the
implementation of our recommendations in
our next compliance examination.

ACCOUNTANT’S OPINION

The accountants conducted a compliance
examination of the Commission for the two
years ended June 30, 2019, as required by
the Illinois State Auditing Act.  The
accountants qualified their report on
State compliance for Findings
2019-001 through 2019-003.  Except for
the noncompliance described in these
findings, the accountants stated the
Commission complied, in all material
respects, with the requirements described
in the report.

This compliance examination was conducted
by the Office of the Auditor General’s
staff.

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

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