REPORT DIGEST

ILLINOIS STATE POLICE

COMPLIANCE EXAMINATION
FOR THE TWO YEARS ENDED JUNE 30, 2020

Release Date:  May 4, 2021

FINDINGS THIS AUDIT:  32

CATEGORY:  NEW -- REPEAT -- TOTAL
Category 1:  6 -- 6 -- 12
Category 2:  25 -- 5 -- 20
Category 3:  0 -- 0 -- 0
TOTAL:  21 -- 11 -- 32

FINDINGS LAST AUDIT: 14

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

INTRODUCTION

Because of the significance and
pervasiveness of the findings described
within the report, we expressed an
adverse opinion on the Illinois State
Police’s compliance with the specified
assertions which comprise a State
compliance examination.  The Codification
of Statements on Standards for
Attestation Engagements (AT-C § 205.72)
states a practitioner “should express an
adverse opinion when the practitioner,
having obtained sufficient appropriate
evidence, concludes that misstatements,
individually or in the aggregate, are
both material and pervasive to the
subject matter.”

SYNOPSIS

• (20-01) The Department did not exercise
adequate control over State property and
equipment.
• (20-02) The Department did not properly
maintain accounts receivable records and
failed to accurately report accounts
receivable on the Quarterly Summary of
Accounts Receivable Reports to the Office
of the State Comptroller.
• (20-06) The Department lacked due
diligence over the transition to the
Enterprise Resource Planning program
(ERP).
• (20-07) The Department did not timely
process Firearms Owners Identification
(FOID) and Concealed Carry applications.
• (20-08) The Department did not issue or
deny certificates of license for filings
by federal licensees as required by the
Firearms Dealer License Certification
Act.

FINDINGS, CONCLUSIONS, AND
RECOMMENDATIONS

INADEQUATE CONTROL OVER PROPERTY AND
EQUIPMENT

The Illinois State Police (Department)
did not exercise adequate control over
State property and equipment.

Due to the following process and control
deficiencies identified below, we were
unable to conclude whether the
Department’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) in
order to test the Department’s controls
over State property and equipment.

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.  Below are some of the items
noted:

• During review of the Department’s
discrepancy listings, we noted the
Department did not have adequate controls
over lost or missing property. We noted
55 of 60 (92%) items listed as lost or
missing could possibly have confidential
information stored on them. Items
included servers, computers, laptops,
tablet, and a camera with a memory card.

• When attempting to reconcile the
Department’s equipment purchase records
to the Office of the Comptroller’s
(Comptroller) record of equipment
expenditures, we noted the Department was
unable to reconcile the differences noted
between the Object Expense/Expenditures
by Quarter Report (SA02) and the Agency’s
Report of State Property (C-15) reports.
During the engagement period, the
Department had $81,877,026 in gross
equipment and electronic data processing
expenditures.  However, only $52,300,997
in gross equipment and electronic data
processing expenditures were reported.

• When attempting to reconcile the
Department’s Fiscal Year 2020 schedules
of additions, deletions, and transfers to
the Department’s Fiscal Year 2020
property control listing, we noted
$2,335,955 of unknown activity which was
not reported on the Department’s Fiscal
Year 2020 schedules of additions,
deletions, and transfers. The Department
was unable to identify the unknown
activity.

• The Department’s property records at
June 30, 2020 and 2019 did not agree to
the C-15 reports submitted to the
Comptroller by approximately $12,466,712
and $692,707, respectively. Management
attempted a reconciliation for June 30,
2020 and identified $692,707 of property
that should have been recorded to the
Department’s property records. The
Department did not attempt to prepare a
reconciliation between the Department’s
records and the C-15 reports at June 30,
2019.

• The Department’s Fiscal Year 2020 and
Fiscal Year 2019 records of additions,
deletions, and transfers did not agree to
the C-15 reports submitted to the
Comptroller by $628,528 and $17,155,753,
respectively. The Department did not
attempt to prepare a reconciliation
between the Department’s Fiscal Year 2020
and Fiscal Year 2019 records of
additions, deletions, and transfers and
the C-15 reports.

• The Fiscal Year 2020 and Fiscal Year
2019 Annual Certification of Inventory
could be inaccurate based upon failure to
perform reconciliations of the
Department’s property records. The Fiscal
Year 2020 Annual Certification of
Inventory reported 661 missing items
totaling $2,243,766 or 0.72% of the total
inventoried items. The Fiscal Year 2019
Annual Certification of Inventory
reported 626 missing items totaling
$1,198,804 or 0.71% of the total
inventoried items.

• Seven of 60 (12%) equipment items,
totaling $23,344, were reported on both
Fiscal Year 2020 and Fiscal Year 2019
Annual Certification of Inventory as
being unable to be located. The seven
items were not removed from the
Department’s June 30, 2020 property
records.

• Nineteen of 29 (66%) leases tested were
not located on the Department’s property
listing as the Department did not record
Fiscal Year 2019 and Fiscal Year 2020
capital leases to the Department’s
property control records.  In addition,
the Department did not maintain a
detailed listing of leased equipment.

• Eighteen of 29 (62%) leases tested did
not report the correct Fair Value at
Inception on the Accounting for Leases-
Lessee (SCO-560) form.

• Two of 2 (100%) Capital Development
Board (CDB) transfer additions, totaling
$583,935, were not recorded on the
Department’s property records.  (Finding
1, pages 11-19)  This finding has been
repeated since 2002.

We recommended the Department develop
procedures to immediately assess if an
electronic device may have contained
confidential information whenever it is
reported lost, stolen, or missing during
the annual physical inventory, and
document the results of the assessment.
We also recommended the Department ensure
all equipment is accurately and timely
recorded or removed from the Department’s
property records and ensure accurate
reports are submitted to the Comptroller.
Additionally, we recommended the
Department update its property control
manual and strengthen its 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.

Furthermore, we recommended the
Department reconcile its property records
to the Comptroller’s records and proper
reviews be completed.

Department management concurred with the
finding and stated they are working to
correct their records.

INADEQUATE CONTROLS OVER ACCOUNTS
RECEIVABLE

The Illinois State Police (Department)
did not properly maintain accounts
receivable records and failed to
accurately report accounts receivable on
the Quarterly Summary of Accounts
Receivable Reports (Reports) to the
Office of the State Comptroller. We noted
the following:

• The Department was unable to provide
detailed individual accounts receivable
records for the General Revenue Fund,
Road Fund, State Garage Revolving Fund,
Illinois State Toll Highway Authority
Fund, Over Dimensional Load Police Escort
Fund, Drug Traffic Prevention Fund, and
State Police Services Fund.

• During the analytical review of the
Department’s accounts receivable
activity, billings and collections were
largely identical. The Department stated
they were recording accounts receivable
at the time of receipt of payments
instead of when the claim for future cash
was reasonably estimable and measurable.

• The Department was unable to provide
policies or procedures for handling and
reporting its accounts receivable,
tracking and monitoring complaints
received, posting delinquent accounts
receivable into the Comptroller’s
Illinois Debt Recovery Offset System or
pursuing other debt collection
procedures, and writing off uncollectible
receivables.

• Thirteen of 64 (20%) fund Reports
tested were filed between 57 to 149 days
late.

As a result of the noted weaknesses, we
were unable to conduct detailed testing
of the Department’s accounts receivable.
(Finding 2, pages 20-22)  This finding
has been repeated since 2010.

We recommended the Department maintain
accurate and detailed records of all
billings and the corresponding
collections to facilitate proper
reporting of accounts receivable
activity. We also recommended the
Department strengthen procedures and
allocate necessary resources to properly
post accounts receivables and associated
payments. Lastly, we recommended the
Department file reports timely in
accordance with SAMS.

Department management concurred and
stated they will continue to work with
the accounts receivable procedures and
processes to become compliant in this
area.

LACK OF DUE DILIGENCE OVER ERP TRANSITION

The Illinois State Police (Department)
lacked due diligence over the transition
to the Enterprise Resource Planning
program (ERP).

In January 2020, the Department
implemented the State’s ERP as its
business process management system for
the tracking of assets, contracts,
obligations, and vouchers.

As part of the Department’s transition to
the ERP, they converted data from legacy
systems. In order to determine if the
data had converted correctly, we
requested the Department’s documentation
and reconciliations. However, the
Department was unable to provide
documentation and reconciliations of
opening balances in the ERP to ensure the
correct balances were transferred.
(Finding 6, page 29)

We recommended the Department establish
controls over reconciliation and
conversion of data during system
development projects, such as the ERP.

Department management concurred and
stated they will diligently try to take a
larger role in any future conversions to
ensure accuracy over records.

FAILURE IN PROCESSING OF FOID AND
CONCEALED CARRY APPLICATIONS TIMELY

The Department did not timely process
Firearm Owners Identification (FOID) and
Concealed Carry applications. We noted
the following:

• Thirteen of 15 (87%) FOID applications
were not processed within 30 days, with
delays ranging from 2 to 363 days.

• Nine of 15 (60%) FOID card renewal
applications were not processed within 60
business days, with delays ranging from
10 to 214 days.

• The Department could not provide
documentation to demonstrate the FOID
card application fees were deposited in
accordance with the Firearm Owners
Identification Card Act.  During Fiscal
Years 2019 and 2020, the Department
reported collecting FOID application and
renewal applications fees totaling
$3,834,625 and $3,293,655, respectively.

• 13 of 30 (43%) Concealed Carry
applications were not processed timely,
with delays ranging from 28 to 70 days
late.

• The Department could not provide
documentation to demonstrate the
Concealed Carry application fees were
deposited in accordance with the Firearm
Concealed Carry Act.  (Finding 7, pages
30-31)

We recommended the Department allocate
the necessary resources to process
applications in a timely manner and
ensure documentation fees are deposited
in accordance with the Acts.

Department management concurred and
stated the Department will begin taking
the necessary steps to develop an action
plan which identifies a solution to
rectify these findings and ensure they
are resolved.

FAILURE TO COMPLY WITH FIREARMS DEALER
LICENSE CERTIFICATION ACT

The Department did not issue or deny
certificates of license for fillings by
federal licenses as required by the
Firearm Dealer License Certification Act.

According to the Department’s records,
beginning May 2019 through June 2020,
1,138 federal firearms licenses were
filed for certification. Additionally,
the Department’s records stated the 1,138
federal firearm licenses were in “review
status pending.”

According to the Department, due to the
lack of a definition of what an “initial
certification” was to entail, a
compliance letter was sent for each
submission.  The compliance letter stated
the Department was in “receipt of a copy
of your Federal Firearms License and
affidavit attesting to its validity in
compliance with 430 ILCS 68/5-10 of the
Firearm Dealer Certification Act.”
However, we could not determine if a
compliance letter had been sent to the
1,138 federal firearm licenses within 30
days due to a lack of information.

In addition, effective January 3, 2020,
emergency administrative rules (20 Ill.
Admin. Code 1232) were adopted creating a
process for the verification of the
federal firearms license information
submitted for certification.  However,
the Department did not comply with the
emergency administrative rules.

Department management stated it was
determined the emergency administrative
rules, prepared by the Department, were
“unfair” to the dealers; therefore, they
were not followed.  Department management
further stated they have subsequently
worked with various parties to modify the
emergency administrative rules (Finding
8, pages 32-33).

We recommended the Department issue
certificates of licenses to applicants
within the timeframe established by
Firearm Dealer Certification Act and
comply with the administrative rules.

Department management concurred in part
with the finding and stated that they
postponed enforcing the emergency
administrative rules since they were
subject to change and could result in
significant financial impact to dealers.

In an accountant’s comment, we noted the
Department disputes the statement in the
finding that the Department did not
follow its emergency administrative rules
because the Department determined those
rules were unfair to the dealers.  This
information was provided by Department
management to the auditors in a phone
conversation on March 26, 2021.  Although
we understand the Department no longer
agrees with this statement, the finding
accurately represents the Department’s
position at the time of our fieldwork.

The auditors would further point out that
adoption of rules is optional and not
necessary for the Department to carry out
its responsibilities under the Act and,
therefore, the absence of rules does not
excuse its non-performance.

OTHER FINDINGS

The Department had many other findings
described within its Compliance
Examination Report.  We will review the
Department’s progress towards the
implementation of our recommendations in
our next compliance examination.

ACCOUNTANT’S OPINION

The accountants conducted a compliance
examination of the Department for the two
years ended June 30, 2020, as required by
the Illinois State Auditing Act.  Because
of the effect of the noncompliance
described in Finding 2020-001 through
Finding 2020-032, the accountants stated
the Department did not materially comply
with the specified requirements described
in the report.

This compliance examination conducted by
West & Company, LLC.

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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