REPORT DIGEST

ILLINOIS STATE POLICE, STATE ASSET
FORFEITURE FUND

LIMITED SCOPE COMPLIANCE EXAMINATION
FOR THE TWO YEARS ENDED JUNE 30, 2022

Release Date:  April 13, 2023

FINDINGS THIS AUDIT: 4

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

FINDINGS LAST AUDIT: 4

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 Asset Forfeiture
Fund’s compliance with specified
requirements which comprise a limited
scope compliance examination.   The
Codification of Statements on
Standards for Attestation Engagements
(AT-C § 205.74) states a practitioner
“should express an adverse opinion
when the practitioner, having obtained
sufficient appropriate evidence,
concludes the misstatements,
individually or in the aggregate, are
both material and pervasive to the
subject matter.”

SYNOPSIS

• (22-01) The Department did not
maintain adequate internal controls
over receipts and reconciliations.
• (22-02) The Department did not
comply with the Seizure and Forfeiture
Reporting Act.

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 2021
and 2022 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 2021
or Fiscal Year 2022.

Due to these conditions, we were
unable to conclude 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 § 205.36) to
test the Department’s compliance
relative to cash receipts.

Additionally, 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 reconciliations

During testing of Fiscal Year 2022 and
2021 reconciliations between the
Comptroller’s records and the
Department’s records for Fund 514, we
noted:

• Monthly SB04 reconciliations for
Fiscal Years ended June 30, 2022 and
2021 contained unexplained
reconciliation discrepancies totaling
a net amount of $563 and $896,
respectively.

• SB04 reconciliations for Fiscal Year
2021 were not reconciled by receipt
account; whereby each Fund was
reconciled in total.

• Monthly Appropriation Status Report
(SB01) and Object Expense/Expenditure
by Quarter Report (SA02) final lapse
period reconciliations for the Fiscal
Years Ended June 30, 2022 and 2021
contained unexplained and uncorrected
reconciliation discrepancies. The net
discrepancies shown on the September
30, 2021 and August 31, 2022 SB01 and
SA02 reconciliations totaled $563 and
$1,810, respectively.

• Five of 29 (17%) monthly SB01 and
SA02 reconciliations were not
performed within 60 days following the
end of the month. The SB01
reconciliations were completed 1 to
446 days late.

• Three of 29 (10%) monthly SB01 and
SA02 reconciliations did not have
documentation retained to indicate the
date prepared and supervisor review of
the reconciliation.

• Seven of 24 (29%) Monthly Cash
Report (SB05) reconciliations were not
performed within 60 days following the
end of the month. The SB05
reconciliations were completed 1 to 82
days late.

• Four of 24 (17%) SB05
reconciliations were not reviewed by a
supervisor or an independent person.
In addition, one of four SB05
reconciliations did not indicate when
the reconciliation was prepared.
(Finding 1, pages 9-11)

We recommended the Department
establish and document proper
segregation of duties over the
receipts process, establish internal
controls to ensure receipts and
expenditures are properly reconciled
and records are timely corrected, and
accurate documentation is maintained
to support receipt activities and
related reviews performed.

Department management concurred with
the finding and stated they had made
progress in the timeliness of the
reconciliations between Fiscal Years
2021 and Fiscal Years 2022; however,
turnover and system errors remained a
barrier.   Additionally, the
Department is developing a plan to
provide additional support for
reconciliations and will continue to
work with the Department of Innovation
and Technology to address errors in
the reports produced by the financial
system.

FAILURE TO COMPLY WITH THE SEIZURE AND
FORFEITURE REPORTING ACT

The 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.

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, page
12)

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

The Department concurred with the
finding and stated they had begun the
process of revising the rules
associated with 5 ILCS 810/10 in
August 2021.  The Department has now
completed responses to questions
received during public comment and
returned them to the Joint Committee
on Administrative Rules.  While the
rest of the process is outside of the
control of the Department, it is hoped
that final rules will be published by
early Fiscal Year 2024.

OTHER FINDINGS

The remaining findings pertain to
noncompliance with the Seizure and
Forfeiture Reporting Act and voucher
processing weaknesses.  We will review
the Department’s progress towards the
implementation of our recommendations
in our next limited scope compliance
examination.

ACCOUNTANT’S OPINION

The accountants conducted a limited
scope compliance examination of the
Illinois State Police State Asset
Forfeiture Fund for the two years
ended June 30, 2022, as required by
the Act and the Illinois State
Auditing Act.  Because of the effect
of noncompliance described in findings
2022-001 through 2022-004, 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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