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FINDINGS, CONCLUSIONS, AND
RECOMMENDATIONS
PAYMENTS WERE MADE FOR EFFICIENCY INITIATIVE BILLINGS FROM IMPROPER
LINE ITEM APPROPRIATIONS
The
Department made payments for efficiency initiative billings from improper
line item appropriations. Public Act
93-0025, in part, outlines a program for efficiency initiatives to
reorganize, restructure, and reengineer the business processes of the
State. The State Finance Act details
that the amount designated as savings from efficiency initiatives implemented
by the Department of Central Management Services (CMS) shall be paid into the
Efficiency Initiatives Revolving Fund.
The Act further requires State agencies to pay these amounts from line
item appropriations where cost savings are anticipated to occur.
The
Department did not receive guidance or documentation with the billings from
CMS detailing from which line item appropriations savings were anticipated to
occur. According to Department staff,
they received no documentation or information from CMS detailing the nature
and/or type of savings that CMS anticipated.
The only guidance received was the amount of payments that should be
taken from General Revenue Funds versus other funds for the September 2003
billings. The Department used:
·
$2,840,400 from its contractual services, travel,
commodities, equipment, EDP, telecommunications, operation of automotive
equipment, and permanent improvements, lump sum and other purposes line item
appropriations to pay for the Procurement Efficiency billing.
·
$1,009,650 from its EDP and lump sums and other
purposes line item appropriations to pay for the Information Technology
billing.
·
$686,970 from its operation of automotive equipment
line item appropriation to pay for the Vehicle Fleet Management billing.
·
$111,205.50 from its contractual services line item
appropriation to pay for the Legal Services billing.
·
$71,280 from its personal services line item
appropriation to pay for the Facilities Management Consolidation billing.
The Department paid a total of $4,570,740.50 from
the General Revenue Fund and $148,765 from the LEADS Maintenance Fund for the
efficiency initiatives. (Finding 1,
pages 9-11)
We
recommended the Department only make payments for efficiency initiative
billings from line item appropriations where savings would be anticipated to
occur. Further, we recommended the
Department seek an explanation from the Department of Central Management
Services as to how savings levels were calculated, or otherwise arrived at,
and how savings achieved or anticipated impact the Department’s budget.
Department
officials concurred with our recommendation and stated the Department has
requested from CMS information on the method by which efficiency savings were
derived and that payments will only be made from those appropriation lines
that will incur a savings.
PROPERTY CONTROL AND REPORTING WEAKNESSES
The
Department did not maintain sufficient controls over the recording and
reporting of State Property. We noted
the following:
·
Three of 25 (12%) equipment vouchers tested totaling
$90,551 and five of 25 (20%) additions tested totaling $14,091 were not
included on the Department’s inventory within 30 days of acquisition. In addition, during FY04, Capital
Development Board transfers of approximately $6.5 million were not entered on
the property listing.
·
Six of 75 (8%) equipment items observed by auditors
were not located on the property listing.
·
The Quarterly Reports of State Property (C-15s) were
inaccurate. Permanent improvements of
approximately $812,517 and $305,235 during FY03 and FY04, respectively, were
incorrectly recorded as transfers on the C-15s. In addition, adjustments to existing tag numbers were also
recorded as transfers instead of additions.
Lastly, the Department’s system for fixed asset reporting does not
break down additions, deletions, and transfers between equipment, buildings,
capital leases and construction in progress but rather all transactions are
recorded in the equipment category.
·
CDB transfers of $11.5 million were improperly
classified as reconciling items on the SCO-537 and omitted from the “net
transfers” column on the Capital Assets Summary Form (SCO-538). In addition, the Department was unable to
provide auditors with supporting documentation for the additions and
deletions columns on the SCO-538.
(Finding 2, pages 12-13) This
finding was first reported in 2002.
The current finding is revised from the previous finding.
We recommended the Department ensure all equipment
is accurately and timely recorded on the property records. In addition, we recommend the Department
follow SAMS procedures for completing the Quarterly Report of State Property
and the Capital Asset Summary.
Department officials concurred with our
recommendation and stated they will develop an action plan and assign
responsibility for implementing the recommendation accordingly. (For the previous Department response, see
Digest Footnote #1.)
TELEPHONE CREDIT CARD CANCELLATION AND TELEPHONE BILL REVIEW
The Department did not have adequate controls over telephone
credit card cancellations and telephone bill reviews. We noted the following:
·
Seven of 25 (28%) terminated individual’s telephone
credit cards were cancelled between 4 and 965 days late.
·
Three of 25 (12%) telecommunications vouchers tested
did not display documentation of a supervisory review. (Finding 3, p. 14) This finding was first reported in
2002. The current finding is revised
from the previous finding.
We recommended the Department ensure a supervisory
review of telephone bills is performed and documented and telephone credit
cards are cancelled timely.
Department officials concurred with our recommendation and
stated due to the volume of the telephone and credit card changes,
cancellations do not always occur in a timely manner. Department officials also stated
supervisors who are not routinely documenting their review of telecommunications
vouchers will be identified and trained in proper procedures. (For the previous Department response, see
Digest Footnote #2.)
INADEQUATE CONTROLS OVER CONTRACTUAL PAYROLL
EXPENDITURES
The
Department did not maintain adequate documentation to substantiate payments
to a contractual employee. The
Department paid $50,004 for a legislative consultant during FY04 to provide
legislative services and assist in communicating the Department’s position on
various issues being considered by the Legislature. However, the Department did not formally monitor the employee’s
activities or require the contractual employees to submit any documentation
of the number of hours worked or invoices or other supporting documentation
of activities. (Finding 4, p. 15)
We recommended the Department require and maintain sufficient
documentation to ensure expenditures are reasonable and necessary.
Department officials concurred with our recommendation and
stated that the contractual employee, although not required to submit any
documentation, was monitored and reported to and took direction from the
Chief of Governmental Affairs. In
addition, the Department will immediately require the contractual employee to
submit weekly written reports summarizing the services performed.
NONCOMPLIANCE WITH SCHOOL CODE
The Department did not comply with
certain requirements set forth in the School Code. We noted the following:
¨
The Department did
not prescribe the manner and frequency of form for school districts to report
drug-related incidents occurring in a school or on school property.
¨
The Department did
not send an annual statistical compilation and related data associated with
drug-related incidents in schools to the State Board of Education. (Finding 6, pages 17-18)
We recommended the Department comply with the requirements of the
School Code or seek legislative remedy to this statutory requirement.
Department officials concurred with our recommendation and stated
they will meet with the State Board of Education to develop a mutually
workable form, manner, and frequency for reporting drug-related incidents to
the Illinois State Police and to determine whether amendments to 105 ILCS
5/10-27.1B are advisable. The
Department will also maintain incidents reported by the school districts for
compilation into an annual summary report to the State Board of Education.
LACK OF INDEPENDENT REVIEWS OF COMPUTER SYSTEMS
The Department did not perform independent and mandated
reviews of the Department’s computer systems.
During the examination period, the Department had significant
computer system development activities and classified the following system
development projects as major: Kane
County Project, Traffic Stop Study Project, and the FOID Card Processing
Project. Independent reviews of these
computer system development projects or major modifications to these computer
systems was not performed. (Finding
9, pages 23-24)
We recommended the Department ensure independent reviews of
major new and major modifications to computer systems be performed. We also recommended the Department ensure
the Illinois Office of Internal Audit (IOIA) is informed of all major
computer system development changes if they are to perform the reviews.
Department officials concurred with our recommendation and
stated they have met with IOIA to review a process for notifying internal
auditors when major computer system development projects are initiated and
for notifying IOIA thereafter of significant project milestones. (For the previous Department response, see
Digest Footnote #3.)
OTHER FINDINGS
The remaining
findings are less significant and are reportedly being given attention by the
Department. We will review the
Department's progress toward implementation of our recommendations in our
next examination.
AUDITORS’ OPINION
We conducted
a compliance examination of the Department as required by the Illinois State
Auditing Act. We have not audited any
financial statements of the Department for the purpose of expressing an
opinion because the Department does not, nor is it required to, prepare
financial statements.
____________________________________
WILLIAM
G. HOLLAND, Auditor General
WGH:JSC:pp
AUDITORS ASSIGNED
The
compliance examination was conducted by the Auditor General’s staff.
DIGEST FOOTNOTES
#1 – PROPERTY CONTROL AND REPORTING WEAKNESSES –
Previous Department Response
2002:
Concur. The ISP will put
together a team to address this finding/recommendation. An action plan will be developed and
responsibility for implementing the recommendation will be assigned
accordingly.
#2 – TELEPHONE CREDIT CARD CANCELLATION AND
TELEPHONE BILL REVIEW – Previous Department Response
2002:
Concur. The ISP will put
together a team to address this finding/recommendation. An action plan will be developed and
responsibility for implementing the recommendation will be assigned
accordingly.
#3 – INTERNAL AUDIT DEFICIENCIES – Previous
Department Response
2002: Concur
in part. I&A concurs with the
statement that only three of the six IT audits listed in the FY01 – FY02
audit plans were completed. One
auditor holds the responsibility for conducting all of the IT audits in which
the office is involved. This issue
has been resolved by restructuring the I&A’s two-year audit plan.
We
concur only in part with the statement indicating our lack of involvement in
system development projects and major system enhancements. We were not involved in all of these
projects; however, the I&A was not made aware of some of the projects, and
in other situations could not participate due to audit scheduling
conflicts. ISB staff have implemented
a procedure to ensure the I&A is notified, and the I&A will expend
every effort to participate when possible.
The
I&A involvement in these types of projects is limited to “type 3” audits
as outlined in the COBIT standards which are defined as “…participation as
“control advisor” throughout the development and implementation
process.” Therefore, although there
are no formal work papers associated with these projects, our IT auditor
maintains documents of involvement or attempted involvement in which each one
participated.
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