REPORT DIGEST STATE POLICE MERIT BOARD COMPLIANCE EXAMINATION FOR THE TWO YEARS ENDED JUNE 30, 2020 Release Date: February 9, 2022 FINDINGS THIS AUDIT: 9 CATEGORY: NEW -- REPEAT -- TOTAL Category 1: 3 -- 2 -- 5 Category 2: 4 -- 0 -- 4 Category 3: 0 -- 0 -- 0 TOTAL: 7 -- 2 – 9 FINDINGS LAST AUDIT: 2 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 State Police Merit Board’s compliance with the specified requirements which compromise 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 State Police Merit Board (Board) did not have adequate controls over personal services. • (20-02) The Board did not exercise adequate controls over voucher processing. FINDINGS, CONCLUSIONS, AND RECOMMENDATIONS INADEQUATE CONTROLS OVER PERSONAL SERVICES The State Police Merit Board (Board) did not have adequate controls over personal services. We noted the following weaknesses during testing of personal services: • Thirty-one of 51 (61%) payroll vouchers tested, totaling $1,584,016, were paid from the State Police Merit Board Public Safety Fund (Fund 0166), a special State fund, but did not include applicable employer group insurance cost remittance, required to be paid to the Department of Central Management Services (DCMS). • During testing of five employees, we noted the following: — Three (60%) employees were paid for overtime hours, totaling $22,475, which were not approved by the Executive Director. — For two (40%) employees, the amount of paid overtime did not agree to the amount of overtime worked. The differences totaled an overpayment of $526 and an underpayment of $458. — The Board does not have an adequate policy for paying overtime and/or granting compensatory time to ensure overtime compensation was for time worked. Specifically, the policy has not been updated since 2014, does not specify the job titles which are allowed payment of overtime, and does not have adequate controls to ensure overtime compensation was for time actually worked. — Three (60%) employees used leave time, totaling 169 hours, which was not approved by the Executive Director. The leave time included sick, personal, vacation, and compensatory time. — For two (40%) employees, attendance records did not agree from the monthly attendance sheets to the annual attendance report. — Two (40%) employee files tested did not contain a U.S. Citizenship and Immigration Service (USCIS) I-9 Employment Eligibility Verification Form (Form I-9). — One (20%) employee did not have fringe benefit value for the personal use of a State vehicle included in their employee taxable income during two quarters of the examination period. — One (20%) employee file did not include a signed employment application. In addition, the education section of the employee’s application was incomplete. • For one of three leaves of absence tested, the leave of absence authorization form was not retained in the employee’s personnel file. • During the testing of Agency Workforce Reports (Report), we noted the following: — Inaccurate information was included on the Fiscal Year 2018 and Fiscal Year 2019 Reports. The Reports included inaccurate classifications of professional employees and incorrect percentages. — The Board did not file its Fiscal Year 2018 Report with the Office of the Governor. — The Board did not file a corrected Report for Fiscal Year 2017 with the Secretary of State and Office of the Governor within 30 days of release of the prior compliance report. • During the testing of the Board’s training policies, we noted Board employees with access to social security numbers in the course of performing their duties were not annually trained in the protection and the confidentiality of social security numbers. (Finding 1, pages 10-15) We recommended the Board strengthen controls over personal services to ensure the proper approvals and reporting. The Board agreed with the finding and is taking actions to remediate the issues noted. VOUCHER PROCESSING WEAKNESSES The Board did not exercise adequate controls over voucher processing. During testing of non-payroll expenditures, we noted the following: • Sixteen of 153 (10%) vouchers selected for testing, totaling $57,448, were unable to be located by the Board. As a result, we were unable to determine if the supporting documentation was proper or if the vouchers were approved and paid timely. • Fifty-one of 153 (33%) vouchers tested, totaling $703,497, were not approved within 30 days of receipt. The vouchers were approved between 1 and 390 days late. • For 11 of 153 (7%) vouchers tested, totaling $5,718 the invoices were not vouchered for payment within 30 days of receipt. Invoices were processed between 13 and 278 days late. • For 7 of 153 (5%) vouchers tested, totaling $12,546, the related invoices were not date stamped when received by the Board. As a result, the auditors were unable to determine if the invoices were approved within 30 days after receipt of the bill or goods/ services. • For 17 of 153 (11%) vouchers tested, totaling $339,198, the Board failed to pay prompt payment interest due to vendors, totaling $16,633. • Forty-eight of 153 (31%) vouchers tested, totaling $198,772, were coded with the incorrected Statewide Accounting Management System (SAMS) detail object code. • During the reconciliation of the Board’s expenditure records to the Office of Comptroller’s (Comptroller) reports, we found 3 of 153 (2%) vouchers tested, totaling $37,011, had conflicting SAMS detail object codes when compared between the Board’s expenditure records and the Comptroller’s data. • Four of 153 (3%) vouchers tested, totaling $59,960, included invoices for services provided during a different fiscal year appropriation from which the voucher was being paid. The combined amount paid from the incorrect fiscal year totaled $18,815. In addition, two of 153 (1%) vouchers tested, totaling $5,907, were not paid from the correct fiscal year. • The support for 7 of 153 (5%) vouchers tested, totaling $5,797, did not include vehicle charge tickets. As a result, we were unable to determine the specific details of the purchases and if the purchases were reasonable. Specifically, we were unable to determine if the purchase was for a Board vehicle, the date and quantity purchased, or the employee who made the purchase. • Four of 153 (3%) vouchers tested, totaling $6,828, were duplicate payments for the same expense, resulting in total overpayment of $3,414. No documentation was provided to support the Board pursued repayment of funds. (Finding 2, pages 16-19) We recommended the Board strengthen controls over voucher processing. The Board agreed with the recommendation. OTHER FINDINGS The remaining findings pertain to inadequate controls over contracts, petty cash, property, procedures, information systems, reconciliations, and travel. We will review the Board’s progress towards the implementation of our recommendations in our next compliance examination. ACCOUNTANT’S OPINION The accountants conducted a compliance examination of the Board for the two years ended June 30, 2020, as required by the Illinois State Auditing Act. Because of the effect of noncompliance described in Findings 2020-001 through 2020-005, the accountants stated the Board did not materially comply with the requirements described in the report. This compliance examination was conducted by the Office of the Auditor General’s staff. 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 FJM:SDW