REPORT DIGEST

DEPARTMENT OF STATE POLICE

COMPLIANCE EXAMINATION

For the Two Years Ended:

June 30, 2006

Summary of Findings:

Total this audit                        12

Total last audit                        11

Repeated from last audit           4

Release Date:

April 3, 2007

State of Illinois

Office of the Auditor General

WILLIAM G. HOLLAND

AUDITOR GENERAL

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Office of the Auditor General

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740 E. Ash Street

Springfield, IL 62703

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This Report Digest and the Full Report are also available on

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SYNOPSIS

·        The Department did not maintain sufficient controls over the recording and reporting of State Property.

·        The Department did not maintain adequate controls over its contractual agreements.

·        The Department had not maintained adequate documentation to substantiate payments to a contractual employee.

·        The Department’s contractual payroll reports were not independently approved.

·        The Department did not maintain time sheets in compliance with the State Official and Employees Ethics Act.   

(Expenditure and Activity Measures are summarized on the next page.)

Insufficient controls over recording and reporting of State Property

Numerous equipment items not added within 30 days of acquisition

6 of 8 Quarterly Reports were inaccurate

Contracts approved after start date of contract period

Contracts did not include all required content

$99,468 paid for contractual employee without requiring documentation to support work performed

Contractual payroll totaling $1,277,907 in FY05 and $1,893,833 in FY06 not independently reviewed

Time sheets did not document time spent each day on official State business

FINDINGS, CONCLUSIONS, AND

RECOMMENDATIONS

PROPERTY CONTROL AND REPORTING WEAKNESSES

The Department did not maintain sufficient controls over the recording and reporting of State Property.  We noted the following:

·        Twenty-three of 65 (35%) equipment items tested, totaling $7,387,279 were added to the Department’s inventory records between 4 and 405 days late.   

·        Two hundred seventy four computers totaling $247,720 and 203 Mobile Data Center computers totaling $1,084,832 were not added to the Department’s inventory records within 30 days of acquisition.   

·        One hundred thirteen equipment items, totaling $173,904 were noted as discrepancies on the annual property certifications for three consecutive years. 

·        Seventeen equipment items, totaling $60,255 were observed to be obsolete.  Most of these items were computers that were over 10 years old.

·        Four of four (100%) FY05 Quarterly Reports of State Property (C-15s) and two of four (50%) FY06 C-15’s submitted to the Office of the State Comptroller were inaccurate. 

·        Three of 75 equipment items tested, totaling $8,873 were not found in the location indicated on the Department’s inventory listing, one item totaling $2,578 could not be located, and one item did not match the description on the Department’s property listing.

·        One item totaling $10,262 was installed without being tagged and one item was being used in a district office but was not on the Department’s inventory listing.  (Finding 1, pages 10-12)  This finding was first reported in 2002.        

We recommended the Department ensure all equipment is accurately and timely recorded on the property records.  We further recommended 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 have advised the responsible parties of the need to promptly supply the necessary information to add the equipment to the inventory system and they have hired a new accountant to alleviate the backlog in the property control unit.  Department officials also stated the quarterly reports will be completed in accordance with the SAMS manual.  (For the previous Department response, see Digest Footnote #1.)

INADEQUATE CONTROLS OVER CONTRACTUAL AGREEMENTS

      The Department did not maintain adequate controls over its contractual agreements.  We noted the following:

·        Three of 30 (10%) contracts tested, totaling $277,791, were approved between 47 and 267 days after the start date of the contract period.

·        Eight of 13 (62%) EDP contracts reviewed, totaling $217,758, were approved between 13 and 323 days after the start date of the contract period.

·        Two of 30 (7%) contracts tested, totaling $138,830, did not contain the “subject to appropriation clause” and three of 30 (10%) contracts tested, totaling $373,141, contained incomplete disclosure of financial interest statements.  (Finding 2, pages 13-14)

      We recommended the Department ensure all contracts are approved prior to the execution of the contract period and include all required content.

      Department officials concurred with our recommendation and stated they have created a procedure requiring a written request from the division head if the start date of a contract is before the execution.  In addition, prior to the Director’s approval/signature, all contracts will be reviewed by the Fiscal Management Bureau to ensure the appropriate contingency clause is included as well as the disclosure of the financial interest of the vendor.  

INADEQUATE CONTROLS OVER CONTRACTUAL PAYROLL EXPENDITURES

      The Department did not maintain adequate documentation to substantiate payments to a contractual employee.  The Department employed an Executive Protection Detail Supervisor during FY05 and FY06 to lead a team of Executive Protection Officers, which provides security to a specific Constitutional Officer.  The Department paid the contractual employee $99,468 annually during both FY05 and FY06 but did not formally monitor the employee’s activities.  In addition, the contractual employee was not required to submit documentation of the number of hours worked or invoices or other supporting documentation of activities.  (Finding 3, page 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 since August 2006, all contractual employee timesheets are maintained at the work location. 

LACK OF INDEPENDENT REVIEW OF PAYROLL

      The Department’s contractual payroll reports were not independently approved.  The payroll clerk enters the approved time into the Central Payroll System which generates the contractual payroll voucher and employee paychecks.  The payroll clerk also reviews the payroll, makes changes and reviews the final report.  Contractual payroll totaled $1,277,907 in FY05 and $1,893,833 in FY06.  (Finding 6, page 19)

      We recommended the Department ensure a person independent of the contractual payroll voucher preparation verify its accuracy.

      Department officials concurred with our recommendation and stated they implemented a new procedure on February 1, 2007 requiring an additional review by a person not responsible for initially entering the information.

NONCOMPLIANCE WITH STATE OFFICIALS AND EMPLOYEES ETHICS ACT

      The Department did not maintain time sheets in compliance with the State Officials and Employees Ethics Act.  The Department required Code employees to submit time sheets during the examination period; however, the time sheets did not document the time spent each day on official State business to the nearest quarter hour.  In addition, Sworn employees did not submit time sheets during the examination period nor document the time spent each day on official State business to the nearest quarter hour; however, the officers radio into their headquarters periodically throughout the day with their status and headquarters records this information in electronic format. 

      The State Officials and Employees Ethics Act (5 ILCS 430/5-5(c)) requires State employees to periodically submit time sheets documenting the time spent each day on official State business to the nearest quarter hour.  (Finding 8, page 22)

      We recommended the Department amend its policies to require all Code employees to maintain time sheets in compliance with the Act.

      Department officials concurred with our recommendation and stated they will participate as a test agency for the new timekeeping system being obtained by the Public Safety Shared Services Center.  The rollout of this system is expected the summer of 2007.

OTHER FINDINGS

The remaining findings 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

2004:  Concur.  The Department will develop an action plan and assign responsibility for implementing the recommendation.