REPORT DIGEST

ILLINOIS WORKERS’ COMPENSATION
COMMISSION

COMPLIANCE EXAMINATION
FOR TH TWO YEARS ENDED JUNE 30, 2021

Release Date:  Aug. 18, 2022

FINDINGS THIS AUDIT:  23

CATEGORY:  NEW -- REPEAT – TOTAL
Category 1:  6 -- 4 -- 10
Category 2:  5 -- 8 -- 13
Category 3:  0 -- 0 -- 0
TOTAL:  11 -- 12 -- 23

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

This digest covers the Commission’s
compliance examination for the two
years ended June 30, 2021.  A separate
digest covers the Self-Insurers
Security Fund’s financial audit as of
and for the year ended June 30, 2021.
In total, this report includes 23
findings, 2 of which were reported in
the financial audit.

SYNOPSIS

• (21-03) The Commission lacked
adequate internal control over its
cash receipts and annual Agency Fee
Imposition Report.
• (21-04) The Commission did not
sufficiently monitor and pursue
collection on accounts receivable or
properly report its accounts
receivable to the Comptroller’s
Office.
• (21-06) The Commission failed to
establish internal controls to conduct
due diligence or ensure project
management controls over the CompFile!
project.
• (21-10) The Commission lacked
adequate internal control over its
leases, resulting in leases which did
not fully protect the State’s
interests, unrecorded leasehold assets
and depreciation, a procurement
process which may not have been in the
best interests of the State, an
inability to determine the amount of
cash due to a lessor, an indeterminate
amount of rent expense recognized for
a lease, and the improper confirmation
of future lease commitments to the
Comptroller’s Office.
• (21-22) The Commission has neither
designed nor implemented internal
controls to enforce penalties imposed
by Workers’ Compensation Act.

FINDINGS, CONCLUSIONS, AND
RECOMMENDATIONS

INADEQUATE CONTROL OVER RECEIPTS

The Illinois Workers’ Compensation
Commission (Commission) lacked
adequate internal control over its
cash receipts and annual Agency Fee
Imposition Report (Report).

During testing, some of the more
significant problems we noted included
the following:

• Seven of 40 (18%) regular receipts
tested, totaling $309,282, and 1 of 18
(6%) refund receipts tested, totaling
$100, did not have the date when the
receipt was received by the
Commission. As such, we could not
determine if the receipt was deposited
timely by the Commission.

• Two of 40 (5%) regular receipts
tested, totaling $19,606, and 1 of 18
(6%) refund receipts tested, totaling
$230, were deposited after the
Commission’s 10-day extension to
deposit its receipts, between one to
three business days late.

• Four of 40 (10%) regular receipts
tested, totaling $241,894, were
charged against a receipt code which
did not reflect the purpose of the
receipt. These receipts were
erroneously reported as fines,
penalties, or violations when the
receipts were for the annual fee
collected from self-insurers under the
Workers’ Compensation Act.

• The corresponding Receipts Deposit
Transmittal Form for 2 of 40 (5%)
receipts tested, totaling $29,053,
were submitted to the Comptroller’s
Office between 40 to 45 days after
receiving the receipt’s associated
Treasurer’s Draft from the Treasurer’s
Office.

• The Commission did not have
sufficient receipt codes to
differentiate the various types of
cash collections within the Self-
Insurers Security Fund to facilitate
the preparation of its cash flows
statement.

Fiscal Year 2020 Report

• The Commission excluded June 2020
receipts from its total fees collected
during the year within the Second
Injury Fund and the Illinois Workers’
Compensation Commission Operations
Fund.

• The Commission excluded receipts
from July 2019 through May 2020 from
its total fees collected during the
year within the Rate Adjustment Fund.

Fiscal Year 2021 Report

• We noted unreconciled differences of
$2,210, $25,796, and $48,036 within
the reported fees collected for the
Second Injury Fund, Rate Adjustment
Fund, and Illinois Workers’
Compensation Commission Operations
Fund. (Finding 3, pages 20-23)  This
finding has been repeated since 2017.

We recommended the Commission review
the design and operation of its
internal controls over receipt
processing and implement corrective
action to ensure receipts are promptly
remitted to correct account within the
State Treasury, books and records are
maintained in strict compliance with
the Act, all revenue sources have a
receipt code, and the annual Report is
complete and accurate.

Commission officials agreed with the
finding.

INADEQUATE CONTROLS OVER ACCOUNTS
RECEIVABLE

The Commission did not sufficiently
monitor and pursue collection on
accounts receivable or properly report
its accounts receivable to the
Comptroller’s Office.  The following
is some of the more significant
problems we noted during our testing.

During testing of 40 accounts
receivable and 16 tested recipients of
benefits paid from the Rate Adjustment
Fund and/or the Second Injury Fund, we
noted the following:

• Sixteen of 40 (40%) delinquent
accounts receivable tested, totaling
$139,915, were not actively monitored
and pursued for collection, as
follows:

— Two (5%) tested accounts, totaling
$94,784, were deferred payment plans
arising from settlement agreements for
the Injured Workers’ Benefit Fund
between the debtor employer and the
Commission where the employers had not
followed the payment plan. We noted
these employers had not made any
payments during the examination period
and the Commission had not referred
these receivables to either the IDROP
system at the Comptroller’s Office and
the Department of Revenue’s Debt
Collection Bureau (Bureau).

— Fourteen (35%) tested accounts,
totaling $45,131, were overpayments by
the Commission of benefits from the
Rate Adjustment Fund and/or the Second
Injury Fund. We noted the Commission
had not referred these receivables to
either the IDROP system at the
Comptroller’s Office or the Bureau.
Further, the Commission did not send
timely second notices to 11 of these
debtors, as the second notice was
provided between 6 and 79 months after
the first notice.

— Five of 16 (31%) recipients of
benefits from the Rate Adjustment Fund
and/or the Second Injury Fund tested
had net overpayments, totaling
$10,260, outstanding when their
eligibility was terminated. We noted
three of the five (19% of the total
tested accounts) had outstanding
balances where the Commission had not
sent out a second notice between 6 to
17 months after the date of the first
notice.

In response to these exceptions,
Commission officials wrote they do not
believe the collection of benefit
overpayments paid from the Rate
Adjustment Fund and/or Second Injury
Fund is good public policy because
these persons are typically low
income.

• Eight of eight (100%) quarterly
reports for the Self-Insurers Security
Fund did not include all accounts
receivable, including accounts
receivables for assessments, excess
insurance, and miscellaneous sources,
in the reports. Additionally, it does
not appear the Commission makes use of
all information available, such as
reports filed by employers for
assessments due to other Commission
funds, to record and collect on
assessments receivable. (Finding 4,
pages 24-26)

We recommended the Commission review
the design and operation of its
internal controls over accounts
receivable to ensure it timely pursues
and attempts to collect amounts due to
the Commission, including by referring
amounts due to IDROP and the Bureau.
In addition, we recommended he
Commission implement controls to
ensure its quarterly accounts
receivable reports are complete and
accurate.

Commission officials agreed with our
recommendation.

FAILURE TO ESTABLISH PROJECT
MANAGEMENT INTERNAL CONTROLS

The Commission failed to establish
internal controls to conduct due
diligence or ensure project management
controls over the CompFile! project.

In order to modernize the Case
Management System, the Commission
executed two contracts for the
development and oversight of
CompFile!, totaling $6,405,934. As of
June 30, 2021, the Commission had
implemented three releases which
consisted of registration,
settlements, and case maintenance. As
part of our testing, we requested
documentation to determine if
CompFile! had been developed to meet
the Commission’s requirements and
contractual requirements.  During
testing, we noted the following:

• A project management framework had
not been implemented to ensure the
development met the Commission’s
requirements. Specifically, the
Commission had not developed:
— a project charter documenting the
project’s scope, expenditures,
feasibility study, risk analysis, and
approval;
— a governance plan documenting the
roles, responsibilities, objectives,
and strategies for implementing the
project;
— system security requirements; or,
— a transition plan documenting the
movement of CompFile!’s control from
the development vendor to the
Commission.

•CompFile!’s master plan did not
document the correct development
vendor or the technology being
utilized for the development.

•Contract management had not been
implemented to ensure the project
conformed with the Statements of Work
(SoWs) requirements. We noted:
— the backlogs of requirements were
not provided or were incomplete;
— 4 of 23 (17%) deliverables were not
reviewed and approved;
— 5 of 23 (22%) deliverables were not
provided or were incomplete; and,
— 1 of 4 (25%) SoWs did not follow the
documented change process.

• CompFile’s system testing was
inadequate and did not comply with
development requirements, including:
— all required functional, process,
unit, and end-to-end testing scripts
were not ran;
— test scripts which failed did not
have documentation of a resolution;
— testing results were not reviewed
and approved; and,
— a process for reporting and
rectifying defects had not been
developed.

• The Change Management Plan
documented the incorrect vendor and
did not document the actual change
process followed.

• Management’s go-live review and
approval to move for release #2 into
production was not provided.

• Although data had been converted
from the Commission’s legacy system
during release #1 and release #2,
documentation of reconciliations
between the legacy system and
CompFile! was not provided. Further,
the reconciliation for release #3 was
incomplete. Finally, the Commission
did not provide documentation
demonstrating the converted data had
been tested to ensure its accuracy.

• Incident management procedures had
not been developed.

• The Commission had not conducted a
pre-implementation review prior to
moving CompFile! into production.
(Finding 6, pages 32-35)

We recommended the Commission develop
and implement internal controls over
its due diligence and project
management of information systems
projects. Specifically, the
Commission should:
• develop a project management
framework to ensure the development
meets the Commission’s requirements;
• implement internal controls to
ensure the project complies with the
requirements of the contract and SoWs;
• ensure all system testing complies
with the development requirements;
• update its Change Management Plan to
document the correct development
vendor and the actual change process
followed;
• conduct a review and approve of each
release go-live;
• conduct detailed reconciliations
each time data is converted from a
legacy system and maintain
documentation of these
reconciliations; and,
• develop incident management
procedures.

Commission officials partially agreed
with the finding, noting they fully
accepted the recommendation, but
believed sufficient internal controls
existed on the CompFile! project.
They noted the Commission complied
with the requirements of the SoWs for
the CompFile! project and obtained,
reviewed, and accepted all required
deliverables to ensure the project met
the Commission’s needs. As a multi-
release project, certain deliverables
were considered living documents that
were updated throughout the project.
Any changes to these deliverables
after formal acceptance were done at
the Commission’s request or to refine
assumptions made during solution
modeling. Finally, the Commission
helped guarantee the success of the
CompFile! project through rigorous
testing and a comprehensive review of
each release prior to its deployment
into production.

In an accountant’s comment, we stated
are unsure how the Commission can
state there were sufficient internal
controls over the CompFile! project
when a project management framework
had not been implemented, deliverables
had not been provided or were
incomplete, and deliverables had not
been reviewed.

Further, if the Commission had
completed rigorous testing and a
comprehensive review of each release,
then why was documentation not
provided to us to demonstrate this
rigorous testing and the comprehensive
reviews?

FAILURE TO EXERCISE APPROPRIATE
CONTROLS OVER LEASES

The Commission lacked adequate
internal control over its leases,
resulting in leases which did not
fully protect the State’s interests,
unrecorded leasehold assets and
depreciation, a procurement process
which may not have been in the best
interests of the State, an inability
to determine the amount of cash due to
a lessor, an indeterminate amount of
rent expense recognized for a lease,
and the improper confirmation of
future lease commitments to the
Comptroller’s Office.

During testing, some of the more
significant problems we noted included
the following:

• The Commission entered into two
lease agreements which did not fully
protect the State’s interests. We
noted:

— The Commission entered into a 10-
year real property lease for 1.008% of
the useable square feet of the Richard
J. Daley Center (Daley Center) with
the Public Building Commission of
Chicago (PBCC), effective October 1,
2020. Under the terms of this
completely variable lease, the PBCC
will adopt an (1) annual operating
budget and (2) annual capital budget
around October of each year and the
annual rent due from the Commission
for this space over the period from
that October through the next
September will be 1.008% of the total
budgeted amounts, regardless of
whether the PBCC actually spends its
full budget amount, without any
limitation on the amount of the amount
of these budgets set completely by the
PBCC.

— The Commission entered into a 10-
year real property lease for 3.27% of
the useable space of the George W.
Dunne Building (Dunne Building) from
Cook County, effective December 1,
2020. The payment terms of this lease
include an annual fixed component and
a completely variable component. The
variable amount has no limit and
represents 3.27% of the Dunne
Building’s capital, operating, and
maintenance costs incurred or paid by
Cook County to operate and maintain
the Dunne Building and its adjacent
plaza, which may then be increased at
Cook County’s discretion in any year
when the occupancy rate of the Dunne
Building falls below 95%.

• The Commission made tenant
improvements and modifications to its
space at the Daley Center between
October 2020 and mid-April 2021
without (1) capitalizing any of these
leasehold improvements and (2)
starting to recognize depreciation
expense for these assets over the
remaining 113.5 months of the lease
between the Commission and PBCC
beginning in mid-April 2021.

• The Commission did not receive the
adopted operating and capital budgets
of the PBCC for the Daley Center for
Calendar Year 2020 and Calendar Year
2021 until after we requested this
information to recalculate the amount
due to the PBCC.

• We were unable to determine or
recalculate the amount of rent due to
the PBCC for its lease at the Daley
Center. During Fiscal Year 2021, the
Commission paid $177,408 in rent to
the PBCC. We recalculated the total
amount due during Fiscal Year 2021 was
$171,272, which consisted of rent from
October 2020 through December 2020 of
$57,492 and rent from January 2021
through June 2021 was $113,780. As
such, the unreconciled difference was
$6,136.

• The Commission did not seek nor
receive approval from the Chief
Procurement Officer to forego the
request for information (RFI)
procurement process for its Daley
Center and Dunne Building leases.

• The Commission did not ensure its
Contract-Obligation Document (Form
C-23) for its Daley Center and Dunne
Building leases filed with the
Comptroller’s Office were complete and
accurate. We noted included the
following:

— The Commission’s reported activity
charged against its obligation at the
Comptroller’s Office for its Daley
Center lease does not make sense. We
noted the Comptroller’s records show
the Commission charged $466,876 in
expenditures against its maximum
contractual obligation during Fiscal
Year 2021 of $540,000. However, this
$466,876 balance did not agree with
the rent payments of $177,408,
leasehold improvements paid for by the
Commission of $459,744, or the
combination of the rent and leasehold
improvements paid of $637,152 during
Fiscal Year 2021.

— The Commission’s initial Form C-23s
filed for both its Daley Center and
Dunne Building leases did not reflect
a fair and reasonable estimate for the
amount due as of the date the
Commission prepared each Form C-23.

— While the Commission entered into an
agreement to not pay rent for its
Dunne Building lease until the rent
commencement date on July 1, 2021, the
Commission did not file an amended
Form C-23 reflecting the change
associated with this agreement.

• As part of preparing the State’s
Annual Comprehensive Financial Report
(ACFR), the Comptroller’s Office
pulled the total future year lease
commitments beyond June 2021 for real
property leases from the Commission’s
Form C-23s filed with the
Comptroller’s Office, which are
included within the State’s total
balance of future year lease
commitments reported in the State’s
ACFR. Due to the valuation estimation
problems noted above, Commission staff
should have known the future year
lease commitment valuations for its
Daley Center and Dunne Building leases
picked up by the Comptroller and
reported to the Commission for
confirmation did not accurately
reflect the future cash flows
associated these leases as of June 30,
2021. We noted Commission staff
incorrectly confirmed the current
balance of outstanding future year
lease commitments with no changes to
the Comptroller on July 14, 2021.
(Finding 10, pages 41-46)

We recommended the Commission
implement controls to:
1) ensure future lease agreements
include either meaningful State
involvement in establishing rent rates
or contractual limitations on the
maximum due under the contract to help
protect the State’s interests;
2) leasehold building improvements are
properly capitalized and depreciated;
3) ensure information necessary to
support the amount of rent due is
obtained, used to recalculate and
substantiate the amount of rent paid,
and retained in adherence with the
State Records Act;
4) real property leases are either
procured through the RFI process or
submitted to the Chief Procurement
Officer for the Chief Procurement
Officer’s determination the RFI
process is not in the best interests
of the State when the lessor is
another governmental unit;
5) Form C-23s filed with the
Comptroller’s Office are complete and
accurate, with amendments to
previously filed Form C-23s submitted
when the Commission enters into an
amendment to a preexisting contractual
agreement or when the facts and
circumstances of the amount due under
the contract change; and,
6) confirmations submitted to other
parties are complete, accurate, and
reflect all currently known facts and
circumstances.

Commission officials disagreed with
the finding, noting:
1) Per an official at the Department
of Central Management Services, these
lease agreements are actually
intergovernmental agreements (IGAs)
for space sharing and fall under the
Intergovernmental Cooperation Act (5
ILCS 220). As such, these leases were
exempt from the Illinois Procurement
Code, so approval by the Chief
Procurement Officer was not necessary.

2) The Commission does not pay rent –
just the proration of the operating
expense. Operating costs cannot be
fixed in leases, as they are
changeable costs and the tenant pays a
portion of the actual cost as deemed
appropriate. This is an industry
standard and how leases and IGAs are
procured and negotiated. For the Dunne
Building, the Commission pays 35%
below market rate and this IGA is
definitely in the best interest of the
State.

3) The inadvertent omission of
capitalized leaseholder improvements
was corrected in Fiscal Year 2022.

4) The PBCC’s staff was slow to
respond to our request for its annual
budget and we will communicate more
appropriately with them going forward.

5) In regards to the issue of
Commission staff incorrectly
confirming the current balance of
outstanding future year lease
commitments with no changes made to
the Comptroller, we note that this
will no longer be an issue going
forward as these leases will now be
reported under the Governmental
Accounting Standards Board’s new lease
standards.

In an accountant’s comment, with
regards to #1 and #2 above, we noted
the Illinois Procurement Code (30 ILCS
500/1-10(b)(1)) states:

This Code shall not apply to contracts
between the State and its political
subdivisions or other governments, or
between State governmental bodies,
except as specifically provided in
this Code.” (emphasis added)

As paraphrased in the finding and in
full below, the Illinois Procurement
Code (30 ILCS 500/40-15(c)) states:

Leases with other governmental units
may be negotiated without using the
request for information process when
deemed by the chief procurement
officer to be in the best interest of
the State. (emphasis added)

As such, in our opinion, the portion
of the Code cited within this finding
is applicable to the Commission’s
leases at the Daley Center and Dunne
Building with the PBCC and Cook
County, respectively. In the event
Commission officials continue to
disagree, they should seek a formal
written opinion from the Attorney
General on the matter.

Further, with regards to whether the
lease is in the best interests of the
State, it is the duty of the Chief
Procurement Officer to make this
determination, not the Commission.
Also, as the Commission’s leases have
significant variable components for
both capital and operating
expenditures that will only become
known over the next nine years, it is
not possible to say with certainty if
the State will either realize cost
savings or incur excessive costs over
the life of the lease agreement.

Finally, regarding the portion of the
Commission’s response noted as #5 on
the preceding page, at least for the
Commission’s Daley Center lease, the
Governmental Accounting Standards
Board’s new lease guidance will not
apply as the rent payment does not
contain any fixed amounts, a variable
payment which depends on an external
index or rate, or a fixed in substance
variable payment. In this case, the
Commission’s future obligations will
need to be considered by the
Comptroller’s Office when preparing
the commitments footnote disclosure
within the State’s ACFR.

FAILURE TO DESIGN AND IMPLEMENT
CONTROLS OVER PENALTIES AND FINES

The Commission has neither designed
nor implemented internal controls to
enforce penalties imposed by Workers’
Compensation Act (Act).

The Act (820 ILCS 305/7) established
the Rate Adjustment Fund to make cost-
of-living adjustment payments to
injured workers with a final decision
awarding permanent total disability or
death benefits. To pay these benefits,
the Act requires the Commission assess
all self-insured employers and
insurers to pay up to 1.25% of its
workers’ compensation payments, less
hospital, surgical, and rehabilitation
payments, for first six months and the
second six months of the year.
Similarly, the Act (820 ILCS 305/7 and
820 ILCS 305/8) established the Second
Injury Fund to pay the differential
between the complete loss of a second
member (a hand, a foot, a leg, or an
eye) and a permanent total disability
for workers which had already suffered
the loss of a member. To pay these
benefits, the Act requires the
Commission assess all self-insured
employers and insurers to pay up to
0.125% of its workers’ compensation
payments, less hospital, surgical, and
rehabilitation payments, for first six
months and the second six months of
the year. The Commission mails all
registered self-insured employers and
insurers notice of the preceding
period’s assessment in February and
August, along with a form to calculate
the amount due. Each self-insured
employer and insurer must submit their
full payment, along with the form, to
the Commission no later than March 15
and September 15.

In the event the Commission, after
notice and a hearing, finds an
employer willfully and knowingly
either (1) failed to pay the proper
amounts due to either the Rate
Adjustment Fund or the Second Injury
Fund or (2) did not make their payment
within the time period prescribed by
law, the employer must pay an
additional 20% of the amount due or
$2,500, whichever is greater, as a
penalty under the Act (820 ILCS
305/7). Further, the Act (820 ILCS
305/7) authorizes the Commission, for
good cause shown, to waive the
penalty.

During testing of the Commission’s
receipt codes, we noted the Commission
did not have a receipt source code
within the State’s Chart of Accounts
for these penalties collected by the
Commission. In following up on this
matter with Commission officials, they
indicated the Commission did not need
a code for this type of receipt as the
Commission never imposes this penalty.

In following up on this matter with
the Commission’s legal staff, they
indicated the Act’s penalty was
designed as a deterrent and that the
lack of penalties imposed was evidence
of the success of the Commission’s
efforts to collect amounts due by
making responsible parties aware of
their obligations to pay their
assessments. In response, we inquired
if the Commission had policies and
procedures for its staff to identify
and refer potential cases where a
penalty may be appropriate, to which
the Commission’s legal staff stated
they did not believe any guidance
outside of the statute was necessary.

In following up on whether responsible
parties were timely paying their
obligations due to the Commission, we
were unable to review complete and
accurate accounts receivable
information for the Rate Adjustment
Fund and the Second Injury Fund, which
would include the age and amount of
past due accounts receivable to
validate management’s assertion, due
to the conditions noted in Finding
2021-004. However, our review of the
Commission’s cash receipts records
indicates the following cash
collections on very old receivables
occurred during the examination
period:

(Finding 22, pages 72-74)

We recommended the Commission
implement and maintain a control
environment to enforce penalties for
those parties who willfully and
knowingly either delay or fail to pay
their assessments to the Rate
Adjustment Fund and the Second Injury
Fund in accordance with the Act.

The Commission disagreed with the
finding, noting the wording of the
statute (820 ILCS 305/7) is “willfully
and knowingly” failing to pay
assessments. In choosing this
language, the General Assembly
deliberately created a very high bar
to meet before penalties should or
even could be assessed. Additionally,
the Commission must make “a finding .
. . after reasonable notice and
hearing.” The Commission would need
compelling evidence (1) an employer
was aware it needed to pay an
assessment for the Rate Adjustment
Fund and the Second Injury Fund, (2)
the employer was aware of the “proper
amounts” it needed to pay, and (3) the
employer chose not to pay those
amounts. Despite its aggressive
management and supervision of the
assessment process, the Commission has
not encountered a situation where it
had evidence an employer was aware of
the assessment amount and that
employer refused to pay.

In an accountant’s comment, we noted
the Commission’s poor internal
controls over accounts receivable
hinder its ability to (1) identify all
self-insured employers and insurers,
(2) determine if they owe assessments
or have been responsive to the
Commission’s communications, and (3)
collect assessments due. As such, it
is difficult to see how the Commission
exercised “aggressive management and
supervision of the assessment process”
and conclude knowledgeable employers
are always paying their assessments
when due. In addition, while we do not
disagree “willfully and knowingly” is
a high bar, the Commission still does
not even have a process to determine
if the cash receipts they collected on
assessments from up to 11 years ago
warranted the imposition of a penalty
under the Act under this high bar, let
alone a process to identify and
potentially assess penalties for as of
yet unpaid assessments.

As of now, the Commission will accept
extremely tardy payments without
questioning whether the party should
receive a penalty, which does not
encourage the timely collection of
cash to fund benefits paid to injured
employees from the Rate Adjustment
Fund and the Second Injury Fund and
may increase the rates paid by all
employers to accommodate the Rate
Adjustment Fund and the Second Injury
Fund not receiving timely cash
payments from tardy employers. Such a
process neither protects the injured
workers or responsible employers.

OTHER FINDINGS

The remaining findings pertain to (1)
inadequate controls over property,
service providers, telecommunication
devices, performance evaluations,
workforce reporting, monthly
reconciliations, voucher processing,
and employee training; (2) lack of
fiscal controls over the CompFile!
project; (3) inadequate information
technology access controls; (4)
weaknesses in cybersecurity programs
and practices, change controls, and
disaster contingency planning; (5)
lack of a detailed agreement regarding
security requirements; (6)
noncompliance with report and
publication requirements; and, (7)
failure to seek a judgment in Circuit
Court.  We will review the
Commission’s progress towards the
implementation of our recommendations
in our next State compliance
examination.

ACCOUNTANT’S OPINION

The accountants conducted a State
compliance examination of the
Commission for the two years ended
June 30, 2021, as required by the
Illinois State Auditing Act.  The
accountants qualified their report on
State compliance for Finding 2021-001
and Findings 2021-003 through
2021-011.  Except for the
noncompliance described in these
findings, the accountants stated the
Commission complied, in all material
respects, with the requirements
described in the report.

This State compliance examination was
conducted by Roth & Co., LLP.

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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