REPORT DIGEST
ILLINOIS DEPARTMENT OF LABOR
COMPLIANCE EXAMINATION
For the Two Years Ended: June 30, 2009
Summary of Findings:
Total this audit: 11
Total last audit: 16
Repeated from last audit: 9
Release Date: June 3, 2010
State of Illinois, Office of the Auditor General
WILLIAM G. HOLLAND, AUDITOR GENERAL
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Office of the Auditor General, Iles Park Plaza, 740 E. Ash Street, Springfield, IL 62703
(217) 782-6046 or TTY (888) 261-2887
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SYNOPSIS
• The
Department did not exercise adequate controls over revenues. Receipts were deposited late, documentation
was not maintained, and reconciliations contained errors.
• The
Department did not exercise adequate control over accounts receivable records
and reporting. Reports contained errors
and documentation was not maintained.
• The
Department did not exercise adequate control over the recording and reporting
of State property. Two different sets of
records were maintained; however, they differed in content.
• The
Department did not exercise adequate control over its Special State Trust Fund
(Fund 251). A ledger of claimants and
corresponding dollar amounts comprising the balance was not maintained.
• The Department improperly used funds appropriated by the General Assembly.
FINDINGS, CONCLUSIONS, AND RECOMMENDATIONS
INADEQUATE CONTROLS OVER REVENUES
The Department did not exercise adequate controls over
revenues. Some of the conditions we
noted follow:
• Twenty-nine
of 60 (48%) receipts tested, totaling $153,782, were deposited between 1 and
104 days late.
• For 9 of 60
(15%) receipts tested, totaling $81,549, Treasurer’s Drafts were submitted to
the Office of the Comptroller between 11 and 144 days late.
• Fifty-six
of 72 (78%) receipt reconciliations for the General Revenue Fund, the Special
State Trust Fund, and the Child Labor Law Enforcement Fund contained errors.
• The
Department did not maintain documentation to support amounts reported on their
Agency Fee Imposition Reports totaling $593,442 and $1,420,262 for Fiscal Years
2008 and 2009, respectively.
We recommended the Department comply with the State Officers
and Employees Money Disposition Act by making timely deposits into the State
Treasury and documenting the date that receipts are received and ensure
collection of revenues and adequate documentation is maintained and readily available
for all transactions. We also
recommended monthly reconciliations are reviewed for accuracy. We recommended the Department maintain
accurate documentation to support amounts reported on their Agency Fee
Imposition Reports and carefully review reports to ensure all fees collected
are reported and to ensure accuracy of the Agency Fee Imposition Report before
submission to the Comptroller. (Finding
1, pages 10-12)
Department officials agreed with our recommendation and
stated they obtained a deposit extension from the Office of the Comptroller and
Office of the Treasurer to address the timeliness of deposits.
INADEQUATE CONTROLS OVER ACCOUNTS RECEIVABLE RECORDS AND
REPORTING
The
Department did not exercise adequate controls over accounts receivable records
and reporting. We noted the following:
• Eleven of
24 (46%) Quarterly Summary of Accounts Receivable (C-97’s) reports contained
errors.
• The
Department could not locate documentation to support transactions reported on 7
of 24 (29%) C-97’s.
• The
Department did not maintain adequate accounts receivable records to facilitate
aging of accounts.
We
recommended the Department review C-97’s before submission to the Office of the
Comptroller. We also recommended the Department maintain detailed records and
supporting documentation of all billings to support balances reported and aging
of accounts. (Finding 2, pages 13-14)
Department
officials agreed with our recommendation and stated they are working on a
corrective action plan.
PROPERTY CONTROL WEAKNESSES
The
Department did not exercise adequate controls over recording and reporting of
State Property. The Department
maintained two sets of property inventory records during the period, including
a computerized property inventory register and a manually prepared monthly
transaction spreadsheet. The results of
our testing indicated the valuation of the computerized property inventory
register was insufficient and the two sets differed in content. Some of the conditions we noted follow:
• Five of 8
(63%) Quarterly Reports of State Property (C-15’s) prepared by the Department
and submitted to the State Comptroller’s Office did not accurately reflect
Department equipment transactions. We
noted differences between the addition, deletion, and ending balance amounts
reported on the C-15’s and the Department’s monthly transaction reports.
• Seven of 25
items tested, totaling $19,815, appeared on the Department’s property inventory
register but could not be located within the Department.
• The
Department did not timely record 8 of 25 (32%) additions, totaling $7,133, on
its property inventory register. The items were recorded 3 to 332 days late.
• The
Department could not provide documentation that it reported a theft of an
equipment item, totaling $3,493, to the State Police.
We
recommended the Department strengthen controls over the recording and reporting
of State property by reviewing their inventory and recordkeeping practices to
ensure compliance with statutory and regulatory requirements. We also recommended the Department ensure all
equipment is accurately and timely recorded on the Departments’ property
records and properly valued. In
addition, we recommended the Department thoroughly review all reports prepared
from internal records for accuracy before submission to the State Comptroller
and the Department of Central Management Services. (Finding 3, pages 15-18) This finding was first reported in 2003.
Department
officials agreed with our recommendation and reported taking corrective action
to address the issues noted. (For the
previous agency response, see Digest Footnote #1)
INADEQUATE CONTROL OVER SPECIAL STATE TRUST FUND
The
Department did not exercise adequate control over its Special State Trust Fund
(Fund 251). We noted the following:
• The
Department did not maintain a ledger of claimants and corresponding dollar
amounts comprising the balance held in the Special State Trust Fund. The State Comptroller’s Office records showed
balances of $575,666 and $1,658,317 as of June 30, 2008 and June 30, 2009
respectively.
• The
Department could not locate documentation of fund reconciliations prepared
during the examination period.
We recommended the Department maintain detailed records for
all Special State Trust fund transactions.
We also recommended the Department retain documentation of all
reconciliations performed. (Finding 4,
pages 19-20)
Department officials agreed with our recommendation and
reported they are working on a corrective action plan.
IMPROPER USE OF APPROPRIATED FUNDS
The
Department improperly used funds appropriated by the General Assembly. We noted the following:
• The
Department received lump sum appropriations of $159,000 in each of Fiscal Year
2008 for costs associated with promoting and enforcing the Equal Pay Act and
the Victims’ Economic Security and Safety Act.
However, we noted the Department expended $1,500 from this appropriation
for license and application fee refunds unrelated to the promotion and
enforcement of the Equal Pay Act and Victims’ Economic Security and Safety
Act.
• The
Department received a telecommunication appropriation of $87,900 for Fiscal
Year 2008. However, the Department
expended $45,766 from this appropriation, which should have been expended from
the contractual services appropriation.
• The
Department received a commodities appropriation of $19,500 for Fiscal Year
2008. However, the Department expended
$2,474 from this appropriation, which should have been expended from the
printing appropriation.
We
recommended the Department limit expenditures from appropriate line items to
the purpose for which they are appropriated.
(Finding 10, pages 31-32)
Department officials agreed with our recommendation and
stated they plan to implement procedural changes to help ensure that
expenditures from appropriated line items are limited to the purpose for which
they were appropriated.
OTHER FINDINGS
The
remaining findings are reportedly being given attention by the Department. We will follow up on our findings during our
next examination of the Department.
ACCOUNTANT'S REPORT
The
auditors qualified their report on State Compliance for findings 09-1, 09-2,
09-3, 09-4, and 09-10. Except for the
noncompliance described in these findings, the auditors state the Department
complied, in all material respects, with the requirements described in the
report.
WILLIAM G. HOLLAND, Auditor General
WGH:CMD:pp
AUDITORS ASSIGNED
The compliance examination was conducted by the Auditor
General’s staff.
DIGEST FOOTNOTES
#1 – PROPERTY CONTROL WEAKNESSES – Previous Agency Response
2007: The Department
of Labor agrees.