REPORT DIGEST

REPORT DIGEST

JOINT COMMITTEE ON ADMINISTRATIVE RULES

COMPLIANCE EXAMINATION

For the Two Years Ended:

June 30, 2004

Summary of Findings:

Total this audit 2

Total last audit 2

Repeated from last audit 2

Release Date:

February 24, 2005

State of Illinois

Office of the Auditor General

WILLIAM G. HOLLAND

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 is also available on

the worldwide web at

http://www.state.il.us/auditor

SYNOPSIS

¨ JCAR did not fully comply with the Illinois Administrative Procedure Act which requires the evaluation of all agency rules at least once every five years.

¨ JCAR did not file its required Annual Reports to the General Assembly timely.

{Expenditures and Activity Measures are summarized on the reverse page.}

JOINT COMMITTEE ON ADMINISTRATIVE RULES

COMPLIANCE AUDIT

For The Two Years Ended June 30, 2004

EXPENDITURE STATISTICS

FY 2004

FY 2003

FY 2002

! Total Expenditures (All Funds)...................

$944,955

$1,006,538

$955,277

OPERATIONS TOTAL.................................

% of Total Expenditures.........................

$944,955

100.00%

$1,006,538

100.00%

$955,277

100.00%

Personal Services...................................

% of Operations Expenditures...........

Average No. of Employees...............

$728,474

77.09%

$763,584

75.86%

$731,213

76.54%

Other Payroll Costs (FICA,

Retirement)....................................................

% of Operations Expenditures...........

$150,961

15.98%

$165,246

16.42%

$156,875

16.42%

Contractual Services..............................

% of Operations Expenditures...........

$29,874

3.16%

$27,976

2.78%

$25,873

2.71%

All Other Operations Items.....................

% of Operations Expenditures...........

$35,646

3.77%

$49,732

4.94%

$41,316

4.33%

! Cost of Property and Equipment.................

$148,905

$153,540

$145,005

SELECTED ACTIVITY MEASURES*

2004

(as of 7/26/04)

2003

2002

Rules received.........................................................

Rules reviewed........................................................

Recommendations made..........................................

Objections...............................................................

* calendar year basis

285

280

509

483

618

595

AGENCY DIRECTOR

During Audit Period: Ms. Vicki Thomas

Currently: Ms. Vicki Thomas

Evaluation of agency rules

Annual Reports filed 60 and 94 days late

FINDINGS, CONCLUSIONS, AND RECOMMENDATIONS

NONCOMPLIANCE WITH ILLINOIS ADMINISTRATIVE PROCEDURE ACT

The Joint Committee on Administrative Rules (JCAR) did not fully comply with the Illinois Administrative Procedure Act (5 ILCS 100 et seq.). The Act requires the evaluation of all rules of each agency at least once every five years. The Act also requires JCAR to perform a systematic and continuing study of existing rules or the existing rulemaking process of agencies and to make periodic investigations of the rulemaking activities of all agencies. We noted that JCAR was not in compliance with these provisions of the Act.

We recommended JCAR either develop and implement a formal long range plan which addresses methods to bring its operations into compliance with these statutory requirements or seek appropriate legislative remedy. (Finding 1, pages 8-10)

JCAR officials responded they will again consider legislative changes when it devises its legislative recommendations for 2005. This finding was first reported in 1988. (For the previous agency response, see Digest Footnote 1.)

FAILURE TO TIMELY REPORT TO THE GENERAL ASSEMBLY

The Joint Committee on Administrative Rules (JCAR) did not file its Annual Reports to the General Assembly in a timely manner. The 2002 Annual Report was filed 60 days late and the 2003 Annual Report was filed 94 days late.

We recommended JCAR submit to the General Assembly a report of its findings, conclusions and recommendations, including suggested legislation, by February 1 of each year as required by statute. (Finding 2, p. 11)

JCAR officials responded that they have greatly improved upon their compliance with the annual report requirement given the staff shortage they have been operating under for more than the past two years. However, they will continue to strive for compliance in the future. This finding was first reported in 1994. (For the previous agency response, see Digest Footnote 2.)

Ms. Vicki Thomas, Executive Director, provided responses to our findings and recommendations.

AUDITORS’ OPINION

We conducted a compliance examination of the Joint Committee on Administrative Rules (JCAR) as required by the Illinois State Auditing Act. We have not audited any financial statements of the JCAR for the purpose of expressing an opinion because the JCAR does not, nor is it required to, prepare financial statements.

____________________________________

WILLIAM G. HOLLAND, Auditor General

WGH:JSC:pp

ASSIGNED AUDITORS

The compliance examination was conducted by the Auditor General’s staff.

DIGEST FOOTNOTES

#1: NONCOMPLIANCE WITH ILLINOIS ADMINISTRATIVE PROCEDURE ACT - Previous Agency Response

2002: "JCAR acknowledges that is has not been able to carry out the statutory requirement that it conduct a five-year review of all the rules of all State agencies. During four years early in JCAR's history (1980-83), an attempt was made to conduct these reviews, but that effort had to be abandoned for lack of adequate staff resources to conduct both on-going review of new regulations and the five-year periodic review. To responsibly fulfill both of these mandates would require at least twice the staff resources that have been available to JCAR.

In view of the present levels of staffing, JCAR like every other State agency with limited resources, has had to set priorities. It has chosen to give more priority to ongoing review of new rules and amendments to existing rules than to a structured five-year review for several reasons.

First, a review of all existing rules every five years would have the main advantage of removing from the Code any rules that are no longer necessary, streamlining rules that have been adopted piecemeal over the years, and updating language to the currently preferred plain language style. However, those rules have been in existence for several years without cataclysmic results. In recognition of this, JCAR believes it has acted responsibly in giving priority to reviewing new rules and new regulatory schemes, the reasonableness of which has not been tested by time.

Second, the goals of culling outdated rules, streamlining rules and improving their readability is served to a great degree within the on-going review program. Some agencies initiate this type of cleanup with diligence, and JCAR promotes review of existing text as part of its review of every amendatory rulemaking.

Third, the initial responsibility for Code cleanup lies not with JCAR, but with the administrative agencies. They created the regulations and they work continually with the affected public in their implementation of those regulations. JCAR’s conduct of a five-year review would serve mainly to force an agency to periodically give priority to initiating a self-review and cleanup if it has not been able to do so in the course of its normal activities. The absence of formal five-year review does not mean that existing rule is not reviewed, because many agencies are commendably responsible in continually reviewing their own rules.

Fourth, JCAR gives strong priority to its complaint review program as well as its proposed rule review program. If, after an existing regulation has been time tested, any member of the public brings a complaint about the regulation to JCAR, staff will initiate a preliminary review and report the issue to the JCAR membership. JCAR can then vote to officially pursue the issue with the agency. In partnership with the affected public, JCAR has been able to concentrate its limited resources on existing rules that are problematic, rather than dedicating countless hours to review of adequate and responsible rules.

The auditors recommend that if JCAR cannot conduct five-year review, it seek an amendment to the Administrative Procedure Act to change the current mandatory requirement for such review. As this finding points out, such legislation has been initiated in the past, but without passage. JCAR will again consider this issue when it devises its legislative recommendations for 2003.

#2: FAILURE TO REPORT TO GENERAL ASSEMBLY - Previous Agency Response

JCAR did not file a report in February 2001; that report was combined with the annual report due in 2002, which was filed in March rather than February. The personnel responsible for this report has been changed, and JCAR anticipates that its 2003 report will be submitted in a timely manner.