REPORT DIGEST

ILLINOIS COMMERCE COMMISSION

COMPLIANCE EXAMINATION
FOR THE TWO YEARS ENDED JUNE 30, 2021

Release Date:  May 18, 2022

FINDINGS THIS AUDIT:  9

CATEGORY:  NEW -- REPEAT – TOTAL8
Category 1:  0 -- 2 -- 2
Category 2:  2 -- 5 -- 7
Category 3:  0 -- 0 -- 0
TOTAL:  2 -- 7 -- 9

FINDINGS LAST AUDIT: 9

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

• (21-01) The Commission lacked
adequate control over its accounts
receivable.
• (21-02) The Commission did not
maintain adequate controls over
monthly reconciliations.
• (21-06) 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 CONTROLS OVER ACCOUNTS
RECEIVABLE

The Commission lacked adequate control
over its accounts receivable.  As of
June 30, 2021, the Commission reported
accounts receivable of $43.8 million
(net of estimated uncollectible
accounts, totaling $23.7 million) to
the Office of Comptroller.

Inadequate Collection Attempts

During testing, we noted the
Commission did not make adequate
collection attempts for 36 of 60 (60%)
accounts receivable tested.  We noted
the following:

• 36 (60%) of the tested accounts,
totaling $17,894,992, were not
referred to the Department of
Revenue’s Debt Collection Bureau.

• 36 (60%) of the tested accounts,
totaling $17,894,992, were not
referred to the State Comptroller’s
Offset System.

Uncollectible Accounts Not Referred
for Write-Off

During testing of 60 accounts
receivable, we noted 18 (30%)
accounts, totaling $16,430,940,
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.

Accounts Receivable Not Properly
Supported

• During testing of 60 accounts
receivable, the Commission was unable
to provide supporting documentation
for 5 (8%) account samples, totaling
$25,082.

• During our review of the Quarterly
Summary of Accounts Receivable –
External Collections Activity for
Accounts Over 180 Days Past Due
(FormC-99) Reports as of June 30, 2020
and 2021, the Commission was unable to
provide documentation to support the
Accounts with the Attorney General’s
Office, totaling $315,000, and
Accounts with Private Collection
Firms, totaling 636,000.

Internal Procedures Conflict with
State Law

During testing, we noted § 6(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)
Manual (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 Manual
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 11-13)  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, we recommended
the Commission report uncollectible
amounts to the Attorney General.
Finally, we recommended the Commission
retain documentation to support
accounts receivable balances and
ensure its internal procedures comport
with State law.

Commission officials agreed with the
finding and stated they will review
their processes to ensure (and affirm
with staff the importance of) proper
controls over accounts receivable.
Additionally, Commission officials
stated progress is currently being
made towards disposition of the
specific accounts noted above.


INADEQUATE CONTROLS OVER MONTHLY
RECONCILIATIONS

The Commission did not maintain
adequate controls over monthly
reconciliations. The Commission
expended $39.1 million and $40.9
million from five funds in Fiscal
Years 2020 and 2021, respectively. The
Commission collected total revenues of
$29.3 million and $27.4 million which
were deposited into four funds in
Fiscal Years 2020 and 2021,
respectively.

During testing of the Commission’s
monthly reconciliations, we noted the
following:

• Three of 30 (10%) monthly
reconciliations of the Commission’s
internal records to the Office of
Comptroller’s Monthly Appropriation
Status Report (SB01) were not
performed.

• Fifteen of 15 (100%) monthly
reconciliations of the Commission’s
internal records to the Office of
Comptroller’s Object Expense/
Expenditures by Quarter Report (SA02)
were not performed during Fiscal Year
2020.

• Fifteen of 30 (50%) monthly
reconciliations of the Commission’s
internal records to the Office of
Comptroller’s Monthly Appropriation
Transfer Report (SB03) were not
performed.

• Eight of 30 (27%) monthly
reconciliations of the Commission’s
internal records to the Office of
Comptroller’s SB03 were not initialed
and dated. As a result, we were unable
to determine whether the
reconciliation was timely performed.

• Twenty-four of 24 (100%) monthly
reconciliations of the Commission’s
internal records to the Office of
Comptroller’s Cash Report (SB05) were
not performed.

• Twelve of 15 (80%) monthly
reconciliations of the Commission’s
internal records to the Office of
Comptroller’s Agency Contract Report
(SC-14) were not performed in Fiscal
Year 2020.

• Three of 15 (20%) monthly
reconciliations of the Commission’s
internal records to the Office of
Comptroller’s Obligation Activity
Report (SC-15) were not performed in
Fiscal Year 2020.

• One of 15 (7%) monthly
reconciliations of the Commission’s
internal records to the Office of
Comptroller’s SC-14 or SC-15 were not
performed in Fiscal year 2021.
(Finding 2, pages 14-15)

We recommended the Commission ensure
all required monthly reconciliations
are performed, documented, and
reviewed timely.

Commission officials agreed with the
finding and stated additional
resources have been added to the
Administrative Services Division and
the Commission is working to automate
the required components within the
accounting system to enable the
completion of noted monthly
reconciliations.

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 2019 and
2020.  The Commission instead
determined required amounts in June
2019 and 2020.  (Finding 6, pages
25-26)

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 as the requirement is
directory rather than mandatory and
would frustrate the law. The
Commission entered its Order in Docket
No. 18-0375 on May 31, 2018,
concluding the “docketed proceeding”
referred to in 220 ILCS 5/2-202(i-5).
In its Order, the Commission found
that the provision purportedly
requiring that the Commission make the
determinations in question in October
of each year was: (a) consistent with
Illinois caselaw, 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 future be made
on June 30 of each year. This language
change is currently moving through
legislative approval and is expected
to be signed before June 30, 2022.

In an accountant’s comment we stated
as legislative post-auditors, and as
stated in the prior examination, 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 controls over receipts,
personal services, state vehicles,
noncompliance with the Collateral
Recovery Act, failure to provide
proper notification of impending
expiration of licenses and recovery
permits, and failure to ensure reports
filed as required.  We will review the
Agency’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 Agency
for the two years ended June 30, 2021,
as required by the Illinois State
Auditing Act.  The accountants
qualified their report on State
compliance for Findings 2021-001 and
2021-002.  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 State compliance examination was
conducted by Adelfia LCC.

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:JAC