REPORT DIGEST

ILLINOIS STATE POLICE - STATE ASSET
FORFEITURE FUND

LIMITED SCOPE COMPLIANCE EXAMINATION
FOR THE TWO YEARS ENDED JUNE 30, 2020

Release Date:  May 4, 2021

FINDINGS THIS AUDIT:  4

CATEGORY:  NEW -- REPEAT -- TOTAL
Category 1:  4 -- 0 -- 4
Category 2:  0 -- 0 -- 0
Category 3:  0 -- 0 -- 0
TOTAL:  4 -- 0 -- 4

FINDINGS LAST AUDIT: N/A*
*This is the first Limited Scope
Compliance Examination of the State Asset
Forfeiture Fund.

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 State Asset Forfeiture Fund’s
compliance with the specified
requirements 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.”  This is the first
Limited Scope Compliance Examination of
the State Asset Forfeiture Fund.

SYNOPSIS

• (20-001) The Department did not
maintain adequate internal controls over
receipts and reconciliations.
• (20-002) The Department did not comply
with the Seizure and Forfeiture Reporting
Act.
• (20-004) The Department did not have
adequate internal controls to demonstrate
the schedules and components (report
components) within the Department’s
Compliance Examination Report were
complete and accurate.

FINDINGS, CONCLUSIONS, AND
RECOMMENDATIONS

INADEQUATE CONTROLS OVER RECEIPTS AND
RECONCILIATIONS

The Illinois State Police (Department)
did not maintain adequate internal
controls over receipts and
reconciliations.

Controls over cash receipts

During testing, we requested the
Department provide the population of cash
receipts received by the Department
during Fiscal Years 2019 and 2020 for the
State Asset Forfeiture Fund (Fund 514) in
order to test compliance applicable to
those receipts.  In response to our
request, the Department provided a
listing of cash receipts.  We noted the
Department’s population of cash receipts
did not agree to the documentation in the
Department’s Revenue Status Report (SB04)
reconciliations for Fiscal Year 2019 or
Fiscal Year 2020.

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 tested
seven of 8 (88%) receipts, totaling
$43,430, which did not include
documentation to support the date the
check was received. Therefore, timeliness
of the deposit could not be determined.

In addition, we noted the Department did
not maintain proper segregation of
custody and recordkeeping duties over
receipt collection and processing. One
employee was responsible for:
• Preparing a log of receipts received;
• Recording receipts in the receipts
ledger; and
• Depositing funds into the State
Treasury.

Controls over cash reconciliations

During testing of Fiscal Year 2020 and
2019 reconciliations between the
Comptroller’s records and the
Department’s records for Fund 514, we
noted:

• Monthly Revenue Status Report (SB04)
reconciliations for one of 24 (4%) months
were not performed within 60 days
following the end of the month. The SB04
reconciliation was completed 25 days
late. Additionally, year-to-date SB04
reconciliations for Fiscal Years ended
June 30, 2020 and 2019 contained
unexplained reconciliation discrepancies
totaling a net amount of $624, and
$673,106, respectively.

• SB04 reconciliations for Fiscal Year
2020 were not reconciled by receipt
account; whereby each Fund was reconciled
in total.

• SB04 reconciliations for Fiscal Years
2020 and 2019 were not reviewed by an
independent person. (Finding 1, pages
9-11)

We recommended the Department establish
proper segregation of duties over the
receipts process, perform supervisory
review over all reporting and transaction
processing, strengthen procedures to
properly reconcile receipts, and maintain
accurate documentation to support receipt
activities and related reviews performed.

Department management concurred with our
finding and recommendation.

FAILURE TO COMPLY WITH THE SEIZURE AND
FORFEITURE REPORTING ACT

The Illinois State Police (Department)
did not comply with the Seizure and
Forfeiture Reporting Act (Act).

The Act (5 ILCS 810/10(d)), effective
August 3, 2018, requires the Department
to adopt rules to administer the asset
forfeiture program, including the
categories of authorized expenditures
consistent with the statutory guidelines
for each of the included forfeiture
statutes, the use of forfeited funds,
other expenditure requirements and the
reporting of seizure and forfeiture
information.  However, the Department had
not adopted rules regarding the
categorization of authorized expenditures
to ensure they were consistent with the
statutory guidelines for each forfeiture
statute.

The Act (5 ILCS 810/15) requires the
Auditor General to conduct an audit of
the State Asset Forfeiture Fund for
compliance with the requirements of the
Act.  However, due to the lack of rules
we were unable to test the disbursements
to determine if they were made in
accordance with the Act.  Furthermore, we
could not determine if the administrative
costs charged to the fund were
reasonable.  (Finding 2, page12)

We recommended the Department comply with
the Act and adopt rules regarding the
disbursements of forfeitures.

Department management concurred with our
finding and stated they are in the final
process of drafting rules, which will be
presented to the Joint Committee on
Administrative Rule this year (2021).

FAILURE TO DEMONSTRATE THE COMPLETENESS
AND ACCURACY OF THE REPORT COMPONENTS

The Illinois State Police (Department)
did not have adequate internal controls
to demonstrate the schedules and
components (report components) within the
Department’s Compliance Examination
Report were complete and accurate.

During the course of this examination, we
noted the Department’s internal controls
were inadequate to both (1) prepare the
report components and (2) demonstrate the
report components Department management
prepared were complete and accurate.
Specifically, we noted the following:

• The Schedules of Appropriations,
Expenditures, and Lapsed Balances, the
Comparative Schedule of Net
Appropriations, Expenditures, and Lapsed
Balances, the Comparative Schedule of Net
Expenditures by Major Activity, and the
Comparative Schedule of Cash Receipts and
Deposits into the State Treasury were
prepared by Department management from
their own records.  However, our review
of the Schedules, noted differences
between the Department and the Office of
the Comptroller’s records.

• The Analysis of Operations (Functions
and Planning), which comments on the
Department’s purpose, primary function
and major programs could not be prepared
due to the lack of Administrative Rules
being developed as required by the
Seizure and Forfeiture Reporting Act.

• The Analysis of Significant Variations
in Expenditures, the Analysis of
Significant Variations in Receipts, and
the Analysis of Significant Lapse Period
Spending which comments on the underlying
cause for why significant variations
occurred within various line item
expenditures, receipts and lapse period
spending during each fiscal year, as
measured by dollar amount or percentage
change, omitted several significant
variances between fiscal years 2020 and
2019.

As a result of these deficiencies, these
report components were excluded from the
Department’s Compliance Examination
Report.  (Finding 4, pages 14-16)

We recommend the Department implement
controls to ensure report components are
accurately and completely prepared in
future compliance examinations.

Department management concurred with our
finding and recommendation.

OTHER FINDING

The remaining finding pertains to
noncompliance with the Seizure and
Forfeiture Reporting Act.  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 limited scope
compliance examination of the State Asset
Forfeiture Fun 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 Findings 2020-001 through 2020-004,
the accountants stated the Department did
not materially comply with the
requirements described in the report.

This limited scope compliance examination
was 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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