INTRODUCTION
The Office of the Lieutenant Governor is an elected position
for a four-year term. During the
examination period, the Honorable Patrick Quinn serviced as Lieutenant
Governor starting January 13, 2003.
FINDINGS, CONCLUSIONS AND
RECOMMENDATIONS
PAYMENTS WERE MADE FOR EFFICIENCY INITIATIVE BILLINGS FROM IMPROPER
LINE ITEM APPROPRIATIONS
The Office 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 State Finance Act details that the amount designated as
savings from efficiency initiatives implemented by the Department of Central
Management Services (CMS) shall be paid into the Efficiency Initiatives
Revolving Fund. The Act further
requires State agencies to pay these amounts from line item appropriations
where cost savings are anticipated to occur.
The Office stated that while they did contact their
budget analyst about the billing, there was no written documentation
maintained. The only guidance
indicated on the billing invoice was the amount of payments that should be
taken from General Revenue Funds versus other funds for the billings.
The Office made payments for billings not from
line item appropriations where the cost savings were anticipated to have
occurred but, according to Office staff, they made payments from where they
had determined there were excess appropriations. The Office used:
·
$19,580 from appropriations for contractual services
from the General Revenue Fund for an invoice relative to savings from
Procurement Efficiency Initiatives.
·
$9,790 from appropriations for electronic data
processing from the General Revenue Fund for an invoice relative to savings
from Procurement Efficiency Initiatives.
The Office paid a total of $29,370 for the efficiency
initiative billings. (Finding 1,
pages 8-10)
We recommended that the Office only make payments for
efficiency initiative billings from line item appropriations where savings
would be anticipated to occur.
Additionally, we recommended that the Office maintain documentation related
to savings as the support for payment of the efficiency invoices. Further, the Office should seek an
explanation from the Department of Central Management Services as to how
savings levels were calculated, or otherwise arrived at, and how savings achieved
or anticipated impact the Office’s budget.
Office officials did not accept our finding and
recommendation and stated that they were billed a total of $29,370 for the Office’s share of efficiencies. Given the timing of the billing and the
number of appropriation lines, contracts and EDP were chosen. Old and outdated computers were scheduled
to be replaced. Given the reality, no
more funds from the EDP line could be allocated. Funds from the Equipment line were allocated for replacing
broken chairs and file cabinets.
Commodities could have contributed some of the monies for the
efficiencies. However, during FY04
the Lieutenant Governor’s Office was billed $25,000 for statistical service
and payroll charges provided by CMS.
These services are shared instead of each office providing them
individually. Along with CMS
providing computer help desk support, servers and website service, charging
efficiencies to the Contractual line was appropriate.
In an Auditors’
Comment we noted that the Office’s response states, “Given the timing of
the billing and the number of appropriation lines, contracts and EDP were
chosen. Old and outdated computers
were scheduled to be replaced.” The
billings were sent 11/13/03 and the Office processed payment eleven days
later on 11/24/03. Documentation
provided by the Office showed that computers were purchased in August 2004 –
nine months after the efficiency payment was processed to CMS. Also, the response states, “no more funds
from the EDP line could be allocated” yet that appropriation lapsed over
$26,000 in FY04 appropriations.
Lastly, the $25,000 CMS bill for statistical services and payroll
charges referenced by the Office in its response is unrelated to efficiency
billings sent by CMS.
INACCURATE
REPORTING OF FIXED ASSETS
The Office did not maintain accurate property control records and
filed inaccurate Quarterly Fixed Asset Reports. In addition, the Office did not follow proper procedures
relating to the transfer of existing property to the Department of Central
Management Services’ (DCMS) Surplus.
We tested 8 (100%) Quarterly Fixed Asset Reports (reports) including
related fixed asset transactions and noted the following exceptions:
·
The Office did
not report 17 property items totaling $16,263 on the Quarterly Fixed Asset
Report during the quarter in which the items were received.
·
The Office
reported 68 property items totaling $63,700 on the Office’s property control
records 245 to 696 days late.
·
The Office
reported 1 item totaling $553 twice on the property control records.
·
The Office filed 2
of 8 (25%) reports 35 to 59 days late.
We also tested 50 property items during an
inventory observation and the following exceptions were noted:
·
The Office traded-in 1 item totaling $23,470;
however, it was not removed from the Office’s property control records.
·
One item, an IBM typewriter, was not included on the
Office’s property control records.
We also noted 33 items totaling $14,944 were
documented as being transferred to DCMS’ Surplus, however the Office did not
have the proper forms that would have been signed by DCMS Surplus indicating
the items were actually transferred. (Finding 2, pages 11-12)
We
recommended the Office comply with SAMS requirements in the preparation of
the Quarterly Fixed Asset Reports which are submitted to the Comptroller. Further, we recommended the Office devote
adequate resources to ensure that property records are maintained and updated
timely.
Office officials accepted our finding and
recommendation and stated they have taken necessary measures to ensure that
property control records and Quarterly Fixed Asset Reports are filed in a
timely fashion.
INADEQUATE CASH RECEIPTS
PROCESSING
The
Office did not have adequate controls over cash receipts.
The Office deposited cash receipts totaling
$55,969, which were directly received by the Office during the examination
period. We noted the following
weaknesses:
·
The Office
deposited a total of $27,582 of cash receipts into the incorrect fund. Receipts totaling $10,287 were deposited
into the Lieutenant Governor’s Grant Fund which should have been deposited
into the Illinois Military Family Relief Fund. In addition, $17,295 was deposited into the Lieutenant
Governor’s Grant Fund while the related expenditure was paid from the General
Revenue Fund.
·
The Office did not maintain a cash receipts
journal.
·
The Office did not perform monthly reconciliations
for cash receipts collected by the Office to the Office of the Comptroller’s
revenue reports.
·
The Office did not deposit cash receipts timely into
the State Treasury. One of 5 (20%)
receipts totaling $1,500 was deposited 102 days after being received by the
Office.
·
The Office submitted 2 of 5 (40%) Receipts Deposit
Transmittals (RDTs) to the Office of the Comptroller 286 to 408 days after
the Office received the treasurer’s draft.
(Finding 3, pages 13-14)
We
recommended the Office strengthen its controls over cash receipts by making
timely deposits into the State Treasury and maintaining a cash receipts
ledger as required by the State Officers and Employees Money Disposition
Act. Further, we recommended the
Office submit RDTs to the Office of the Comptroller in a timely manner,
perform monthly reconciliations of cash receipts and deposit receipts in the
correct fund as required by the State Officers and Employees Money
Disposition Act and SAMS procedures.
Office officials accepted our finding and
recommendation and stated they have taken necessary measures to strengthen
controls over cash receipts by making timely and correct fund deposits.
OTHER FINDING
The remaining finding was less significant and is reportedly
being given attention by the Office.
We will review the Office’s progress toward implementation of our
recommendations in our next compliance examination.
AUDITORS’
OPINION
We conducted a compliance
examination of the Office as required by the Illinois State Auditing
Act. We have not audited any
financial statements of the Office for the purpose of expressing an opinion
because the Office does not, nor is it required to, prepare financial statements.
______________________________________
WILLIAM G. HOLLAND, Auditor General
WGH:TLD:pp
SPECIAL
ASSISTANT AUDITORS
Our special assistant auditors on this examination were
McGreal Johnson & McGrane.
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