REPORT DIGEST DEPARTMENT OF STATE POLICE COMPLIANCE EXAMINATION For the Two Years Ended June 30, 2012 Release Date: April 11, 2013 Summary of Findings: Total this audit: 14 Total last audit: 8 Repeated from last audit: 7 State of Illinois, Office of the Auditor General WILLIAM G. HOLLAND, 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 • The Department did not exercise adequate control over the recording and reporting of its State property and equipment. • The Department could not provide support for payroll expenditures as required under a contract with the Illinois Toll Highway Authority. • The Department recorded and reported inaccurate accounts receivable information on the Quarterly Summary of Accounts Receivable Reports. • The Department’s collection attempts of accounts receivable balances were not aggressively pursued and properly referred to the Comptroller’s Offset System. • The Department lacked an adequate process to monitor interagency agreements. • The Department did not comply with the Missing Persons Identification Act. • The Department did not exercise adequate controls over voucher processing. FINDINGS, CONCLUSIONS, AND RECOMMENDATIONS NEED TO IMPROVE CONTROLS OVER PROPERTY AND EQUIPMENT The Department of State Police (Department) did not exercise adequate control over the recording and reporting of its State property and equipment. We noted the following: • The Department did not update their inventory records within 30 days of acquisition, change, or deletion of equipment items. We noted 23 of 60 (38%) items were added to the Department inventory records between three and 177 days late and 18 of 60 (30%) items were deleted from Department inventory records one to 196 days late. We also noted one of 60 (2%) vouchers had items that were not added to the Department’s inventory system. • The Department did not maintain documentation to support the cost of equipment added to their inventory records. • The Department could not locate five of 60 (8%) items, totaling $14,992. • The Department failed to require its employees to complete quarterly property verification sheets. • Two of 19 (11%) Accounting for Leases-Lessee Forms (SCO-560s) tested were not filled out properly. • The Department did not have adequate controls over lost or missing property. We noted 43 of 88 (49%) items listed as lost or missing could possibly have confidential information stored on them. (Finding 1, pages 8-11) This finding was first reported in 2002. We recommended the Department continue to strengthen controls over the recording and reporting of its State property and equipment by reviewing their inventory and recordkeeping practices to ensure compliance with statutory and regulatory requirements. We also recommended the Department ensure all equipment is accurately and timely recorded on the Department’s property records and properly valued and that quarterly property verifications are completed as required. Lastly, we recommended the Department develop procedures to ensure the safe disposal of information as required by the Personal Information Protection Act. Department management concurred and stated they continue to struggle with the effects of the central property control unit being located outside of the agency within the Public Service Shared Services Center (PSSSC) therefore delaying processing of paperwork as well as removing property control subject matter experts from the agency. (For the previous Department response, see Digest Footnote #1.) INADEQUATE DOCUMENTATION TO SUPPORT PAYROLL EXPENDITURES The Department could not provide support for payroll expenditures as required under a contract dated April 20, 2007 with the Illinois Toll Highway Authority (Tollway). Under the contract, the Tollway is responsible for reimbursing the Department for the salaries of Department employees assigned to patrol interstate tollways on a full-time basis. The Department must supply the Tollway with adequate documentation including payroll vouchers to support the cost of performing police services. Under the current procedures, for each payroll cycle the Department must prepare a summary payroll voucher of individual employee payroll disbursements, certify the voucher for accuracy on behalf of the Tollway Director, and provide a voucher to the Tollway for reimbursement. Each Department employee assigned to the Tollway was paid $16 more per pay period than the salary amount per the employee agreement as a uniform and food per diem. However, the Department does not maintain and could not provide the Tollway with adequate support to justify the additional pay. (Finding 2, pages 12-13) We recommended the Department either discontinue the practice of paying more than the employee agreement or implement procedures to retain supporting documentation for all amounts to be reimbursed by the Tollway. Department management concurred and stated the practice of paying ISP Tollway employees an additional $16 per pay period was discontinued December 1, 2012. INADEQUATE CONTROLS OVER ACCOUNTS RECEIVABLE REPORTING The Department did not accurately record and report accounts receivable noted on the Quarterly Summary of Accounts Receivable Reports (Reports). During testing, we noted 13 of 112 (12%) Reports were inaccurate and did not agree to the support provided by the Department. We noted differences in accounts receivable amounts (i.e. payments, adjustments, beginning and ending balances). Gross accounts receivable totaled $3,374,000 in Fiscal Year 2011 and $2,816,000 in Fiscal Year 2012. (Finding 3, page 14) We recommended the Department keep accurate and detailed records of all billings and the corresponding collections to facilitate proper reporting of accounts receivable activity. Department management concurred and stated the accounts receivable reporting is a function of the PSSSC and they will continue to work with the PSSSC to ensure reporting is completed accurately and in a timely manner. COLLECTION OF DELINQUENT ACCOUNTS RECEIVABLE NOT PURSUED The Department did not aggressively pursue the collection of accounts receivable and did not properly refer delinquent accounts receivable to the Comptroller’s Offset System. The Department is owed money from various individuals and companies for items such as drug fines, over- dimensional load police escorts, property vehicles, forfeited items and other miscellaneous items. We tested ten receivable accounts with a balance of $100,501. We noted two accounts, totaling $1,680 were paid off as of June 30, 2012. Of the remaining eight accounts, five had balances greater than $1,000 and three had balances less than $1,000. The last activity dates (i.e. last time Department attempted to collect) for these eight accounts ranged from October 31, 2007 through July 21, 2011. (Finding 6, pages 19-20) We recommended the Department strengthen procedures and allocate necessary resources to properly report and fully pursue collections on delinquent accounts receivable. We further recommended all eligible delinquent accounts be referred to the Comptroller’s Offset System. Department management concurred and stated the collection of delinquent accounts was transferred to the PSSSC within the accounts receivable function and they will work with the PSSSC to ensure the agency has provided sufficient documentation to the PSSSC and the accounts are being worked in accordance with all applicable rules and laws. INADEQUATE MONITORING OF INTERAGENCY AGREEMENTS The Department did not have an adequate process to monitor interagency agreements. We noted three of 14 (21%) interagency agreements were not signed by all necessary parties before the effective date. The agreements were signed two and 42 days late. In addition, for one of fourteen (7%) interagency agreements reviewed, the Department did not submit quarterly progress reports to the grantor. (Finding 10, pages 27-28) We recommended the Department ensure all interagency agreements are approved by an authorized signor prior to the effective date of the agreement and all reporting requirements are adhered to. Department management concurred and stated the Division of Operations has instituted a tracking mechanism to monitor interagency agreements to ensure their approval prior to the effective date. NONCOMPLIANCE WITH THE MISSING PERSONS IDENTIFICATION ACT The Department did not comply with the Missing Persons Identification Act. We noted the Department could not provide proper documentation showing information was uploaded into the National Crime Information Center (NCIC) within 72 hours. We also noted the Department did not enter information sought by the Violent Criminal Apprehension Program (ViCAP) database as soon as practicable. (Finding 12, pages 30-31) We recommended the Department comply with the Missing Persons Identification Act by uploading the information to the State and federal databases within the required time frames. Department management concurred and stated appropriate work unit commanders will be provided with a copy of this audit and tasked with ensuring officers in their respective work units are adhering to submission requirements and procedures within the prescribed timeframe. VOUCHER PROCESSING WEAKNESSES The Department did not exercise adequate controls over voucher processing. We noted 29 of 319 (9%) vouchers tested, totaling $1,134,314, were approved for payment from two to 147 days late. We also noted 36 of 319 (11%) vouchers tested, totaling $1,200,773 accrued a required interest payment of $23,119 which was not paid by the Department. (Finding 14, page 34) This finding was first reported in 2004. We recommend the Department comply with the Illinois Administrative Code and the State Prompt Payment Act to ensure vouchers are approved within the required time frame and the required interest is paid. Department management concurred and stated they continue to struggle with the effects of reduced staffing, particularly administrative staff responsible for review and preparation of vouchers for payment. (For the previous Department response, see Digest Footnote #2.) OTHER FINDINGS The remaining findings pertain to: 1) lack of documentation for Agency Fee Imposition Reports, 2) inaccurate Agency Workforce Report, 3) lack of project management, 4) failure to maintain security controls over confidential information, 5) weaknesses in change management of computer systems, 6) noncompliance with State Officials and Employees Ethics Act, and 7) lack of documentation in Criminal History Reports. We will follow up on these findings during our next examination of the Department. AUDITORS' OPINION We conducted a compliance examination of the Department as required by the Illinois State Auditing Act. The Department has no funds that require an audit leading to an opinion of financial statements. JOHN KUNZEMAN Deputy Auditor General JWK:jsc AUDITORS ASSIGNED: This examination was performed by the Office of the Auditor General’s staff. DIGEST FOOTNOTES #1 – INADEQUATE CONTROL OVER PROPERTY AND EQUIPMENT – Previous Department Response 2010: The ISP concurs. The Property Control Unit has continued to face issues related to insufficient staffing as well as system malfunctions. The ISP will work closely with the Public Safety Shared Services Center (PSSSC) to ensure property is added to the inventory system in a timely manner and required reporting to the IOC is completed accurately. The PSSSC has sent emails to all Property Custodians stating all information must be complete on surplus delivery forms. #2 – VOUCHER PROCESSING WEAKNESSES – Previous Department Response 2010: The ISP concurs. We continue to struggle with the effects of reduced staffing. Specifically, many work units have been faced with a decrease or complete loss of administrative support staff. These administrative support staff are the individuals responsible for review and initial preparation of vouchers for payment. The ISP will reinforce the importance of approving vouchers in a timely manner. Additionally, the responsibility of final submission of vouchers to the IOC was transferred to the Public Safety Shared Services Center (PSSSC) on October 1, 2008. The ISP will work with the PSSSC to ensure the review and approval of vouchers by the PSSSC occurs in a timely manner. Additionally, the ISP will continue to work with the PSSSC regarding payment of all prompt payment penalties owed.