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FINDINGS,
CONCLUSIONS, AND RECOMMENDATIONS
PAYMENTS MADE FROM IMPROPER
LINE ITEM APPROPRIATIONS
The Commission
made payments for efficiency initiative billings from improper line item
appropriations.
Public Act
93-0025, in part, outlines a program for efficiency initiatives to
reorganize, restructure and reengineer the business processes of the State.
The Commission received one billing in FY05 for $1,597 from the Department of
Central Management Services for savings from procurement efficiency
initiatives. CMS billing documentation showed printing and office supplies
as the detailed object codes where procurement efficiencies were expected to
occur. The Commission made payments for these billings not from line
item appropriations where the cost savings were anticipated to have occurred,
but from line items where Commission staff determined there were available
funds (contractual services). (Finding 1, pages 11-12)
We recommended the
Commission only make payments for efficiency initiative billings from line
item appropriations where savings would be anticipated to occur. The
Commission’s response indicated they would do this in the future.
OFFICIAL HEADQUARTERS REPORT DEFICIENCIES
The Commission did not
submit Official Headquarters Reports to the Legislative Audit Commission in
accordance with statute. Additionally, the Commission did not follow State
rules concerning Agency Head’s headquarters designation.
We noted the following:
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The Commission did not file Official Headquarters Reports (TA-2
reports) with the Legislative Audit Commission as required by statute.
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TA-2 reports that were filed reflected the Chairman’s official
headquarters as Collinsville. Since the TA-2 reports are designed to reflect
only these officials and employees whose official headquarters are designated
at a location other than where those persons are required to spend the
largest part of their working time, this filing constitutes an
acknowledgement by the Commission that, while the Chairman’s official
headquarters are designated as Collinsville, he does not spend the largest
part of his or her working time there. Under the Governor’s Travel Control
Board rules, “[a]11 Agency Heads shall
be headquartered at the location where official duties require the largest
part of their working time…”unless an exception is requested in writing by
the Agency Head and approved by the Governor’s Travel Control Board. The
designation of official headquarters is important in determining whether and
to what extent travel expenses will be reimbursed by the State.
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Incomplete timesheets made it difficult for auditors to determine
where the Chairman spent the largest part of his working time. Because his
headquarters was designated as Collinsville (his place of residence), the
Commission reimbursed the Chairman travel expenses of $45,101 for mileage,
lodging, meals, and airfare in fiscal years 2004 and 2005 for travel to the
Commission’s four other offices, including Chicago, the Commission’s main
office. (Finding 2, pages 13-15)
We recommended the
Commission file official headquarters reports with the Legislative Audit
Commission as required by law and that the Commission either designate the
Chairman’s headquarters as the location where he spends the largest part of
his working time or seek approval from the Governor’s Travel Control Board
for any alternate designation.
Commission
officials concurred that the TA-2’s were filed late and that three of the
Chairman’s timesheets were missing; however, they believe the Chairman is
appropriately headquartered in Collinsville as that is where he spends the
largest part of his working time, and no exemption is needed from the
Governor’s Travel Board.
FAILURE TO FILE FCIAA CERTIFICATION
The Commission was not in compliance with
the Fiscal Control and Internal Auditing Act (FCIAA).
The Commission did not
file the Fiscal Control and Internal Auditing Act certification for fiscal
years 2004 and 2005. Furthermore, no internal audits were performed,
including no audit of the petty cash fund (Finding 3, page 16-17) This
finding was first reported in 2001.
The Commission concurred
with our recommendation to comply with the requirements of the Fiscal Control
and Internal Auditing Act. (For previous agency responses, see Digest
Footnote #1.)
INADEQUATE PROPERTY CONTROL
RECORDS
Property and equipment were not adequately
reported in the Commission’s records. The Commission’s property and
equipment balance was $1,439,765 as of June 30, 2005.
The following exceptions were
noted:
- The
Commission conducted a complete physical inventory, in conjunction with the
update of their inventory record, in 2005. The previous physical inventory
was performed in June 2001. State agencies are required to conduct
inventories annually.
- Twenty-six
of 26 items purchased in fiscal years 2004 and 2005, totaling $74,661, could
not be located.
In addition, 14 of the 26 (54%)
equipment purchases tested, totaling $34,967, could not be traced to
inventory records because they were fiscal year 2005 purchases that had not
been added to the Commission’s property records.
-Twenty-two
of 30 (73%) equipment items physically observed at Commission offices could
not be traced to the property control records. The items had been retagged
but the property records did not include the new numbers.
-Twenty of
23 equipment items (87%) selected from the property records, totaling
$18,058.47, could not be located and physically observed. (Finding 5, pages
20-21) This finding has been repeated since 1987.
Commission officials
concurred with our recommendation to implement procedures to strengthen the
accounting for property and
equipment. (For previous agency responses, see Digest Footnote #2.)
LACK OF SYSTEM DEVELOPMENT AND CHANGE CONTROL
STANDARDS
The Commission had not
established a formal System Development Methodology or Change Control
Procedures.
The Commission had
thirteen computer applications that were critical for completing its
mission. However, there was no formal methodology to assist in the planning,
development, testing, implementation and modification of computer
applications. (Finding 8, pages 26 – 27) This finding has been repeated
since 2001.
Commission officials
concurred with our recommendation to develop and implement a formal systems
development methodology to assist in planning, developing, testing and
implementing new system developments or modifications to existing systems.
(For previous agency responses, see Digest Footnote #3.)
COMPUTER SECURITY ADMINISTRATION DEFICIENCIES
The Commission had not
established adequate security policies to control computer operations.
The Commission had
not established adequate security policies over its computer environment. The
Commission relied on its mainframe and local area network (LAN) to meet its
mission. The current computer policy was outdated and did not provide
details with regards to computer operations at the Commission. (Finding 9,
page 28-29)
The Commission concurred
with our recommendation to establish comprehensive policies and procedures
that outline general security provisions, appropriate use of computer
resources, backup and care of data, and other appropriate policies to help
ensure that effective controls exist.
OTHER FINDINGS
The
remaining findings are reportedly being given attention by Commission
management. We will review the progress toward implementation of our
recommendations during our next audit.
AUDITORS’ OPINION
Our auditors state the
financial statements present fairly, in all material respects, the respective
financial position of the Self-Insurers’ Security Fund of the State of Illinois
Workers’ Compensation Commission, as of June 30, 2005, and the changes in
financial position and cash flows, where applicable, thereof for the year
then ended.
___________________________________
WILLIAM
G. HOLLAND, Auditor General
WGH:KMC:drh
SPECIAL
ASSISTANT AUDITORS
Our special assistant
auditors for this audit were Martin & Shadid, P.C.
DIGEST FOOTNOTES
#1 – FAILURE TO FILE FCIAA
CERTIFICATION - Previous Agency Responses (Since 2001)
2003: “The Commission concurs with the
recommendation. We will refocus our attention to internal audit issues with
the assistance of the Office of Internal Audit within the Department of
Central Management Services.”
#2 – INADEQUATE PROPERTY CONTROL
RECORDS – Previous Agency Responses (Since 1987)
2003: “The Commission concurs with the
recommendation. We will complete the physical inventory by the end of
February 2004. This inventory process will allow us to include specific room
locations in our records, in addition to the official location code used by
CMS.”
#3 – LACK OF SYSTEM DEVELOPMENT
AND CHANGE CONTROL STANDARDS – Previous Agency Responses (Since 2001)
2003: “The Commission concurs and will comply
with this recommendation.”
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