REPORT DIGEST

DEPARTMENT OF LABOR

COMPLIANCE AUDIT

For the Two Years Ended:
June 30, 1999

Summary of Findings:

Total this audit 3
Total last audit 3
Repeated from last audit 0

Release Date:
February 24, 2000
Logo.gif (1870 bytes)

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
Attn: Records Manager
Iles Park Plaza
740 E. Ash Street
Springfield, IL 62703

(217)782-6046 or TDD (217) 524-4646

This Report Digest is also available on
the worldwide web at
http://www.state.il.us/auditor

  

 

 

 

 

SYNOPSIS
  • The Department’s internal controls over receipts and disbursements are not sufficient to properly safeguard assets against loss.

 

 

 

 

 

 

 

 

 

 

 

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

 

 

 

 

DEPARTMENT OF LABOR
COMPLIANCE AUDIT
For The Two Years Ended June 30, 1999
EXPENDITURE STATISTICS

FY 1999

FY 1998

FY 1997

Total Expenditures (All Funds)

$5,731,704

$5,440,138

$5,185,592

OPERATIONS TOTAL

% of Total Expenditures

$4,946,150

86%

$4,653,034

86%

$4,414,741

85%

Personal Services
% of Operations Expenditures
Average No. of Employees

$3,089,886
63%
96

$2,929,105
63%
93

$2,879,480
65%
93
Other Payroll Costs (FICA, Retirement)
% of Operations Expenditures

 

$644,069
13%

$522,932
11%

$468,653
11%

Contractual Services
% of Operations Expenditures

$304,501
6%

$269,219
6%

$265,647
6%

All Other Operations Items
% of Operations Expenditures

$907,694
8%

$931,778
20%

$800,961
18%

GRANTS TOTAL

% of Total Expenditures

$785,554

14%

$787,104

14%

$770,851

15%

Cost of Property and Equipment

$598,686

$706,917

$680,669
SELECTED ACTIVITY MEASURES

FY 1999

FY 1998

FY 1997

Child Labor Violations

10,503

7,221

10,295

Carnival Rides Inspected

1,807

1,722

1,673

Wage Claims Filed

8,596

8,759

8,429

Wage Claims Processed

15,656

16,230

14,593

Minimum Wage Violations

9,373

10,224

7,948
AGENCY DIRECTOR(S)
During Audit Period: Shinae Chun (7/1/97 to 3/1/99) Robert M. Healey (3/1/99 to current)
Currently: Robert M. Healey
 

 

 

Internal controls over receipts and expenditures are not sufficient to properly safeguard assets against loss

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

FINDINGS, CONCLUSIONS, AND RECOMMENDATIONS

INADEQUATE SEGREGATION OF DUTIES

Internal controls over receipts and expenditures were not sufficient to properly safeguard assets against loss. The following exceptions were noted during our testing:
  • Receipts:
  • The Department did not generate a log of incoming checks,
  • The same individual opens the incoming mail and enters the receipt into the fiscal tracking system (Springfield only),
  • Actual checks are routed through departments to complete the verification process.
  • Expenditures:
  • The fiscal officer prepares and approves all journal entries and reconciles the general ledger to the Comptroller reports,
  • The fiscal officer approves vouchers for payment, maintains fund ledgers, and reconciles detail records to the Comptroller reports for the Special State Trust Fund and Child Labor Enforcement Fund,
  • The fiscal officer is the property control officer involved in taking physical inventories, processing vouchers and reporting property transactions.

Good internal control procedures would require receipting of checks, physical controls over actual checks, and limited access to information in the fiscal tracking system. Good business practices would require the Department to maintain adequate segregation of duties to help insure the safeguarding of assets, prevent improper expenditures, and ensure the accuracy of accounting data.

We noted no instances of assets that were lost due to the lack of internal control procedures, however the potential exists. The average annual receipts deposited for all funds are $1,736,782 in each fiscal year, which does not include payments the Agency receives and forwards to claimants. A lack of proper control procedures increases the likelihood that a loss from errors or irregularities could occur and would not be found in the normal course of employees carrying out their assigned duties. (Finding 1, pages 10 & 11)

Department officials concurred with our finding and recommendation and stated affirmative steps had already been implemented to segregate and properly document the processing of incoming checks. They also stated that a new property control officer had been appointed.

OTHER FINDINGS

The remaining two findings were less significant and have been given appropriate attention by Department management. We will review progress toward the implementation of our recommendations in our next audit. The Agency Fiscal Officer, Mr. Mike Bartolomucci, provided department responses.

 

 

 

____________________________________

WILLIAM G. HOLLAND, Auditor General

WGH:TEE:pp

SPECIAL ASSISTANT AUDITORS

West & Company, L.L.C. were our Special Assistant Auditors.