REPORT DIGEST MID-AMERICA MEDICAL DISTRICT COMMISSION COMPLIANCE EXAMINATION For the Two Years Ended: June 30, 2012 Release Date: August 6, 2013 Summary of Findings: Total this audit: 4 Total last audit: 1 Repeated from last audit: 1 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 and Full Report are also available on the worldwide web at www.auditor.illinois.gov INTRODUCTION The Mid-America Medical District Commission (Commission) was created through the authority of the Mid-America Medical District Act (70 ILCS 930/1 et seq.). The Commission’s mission is to attract and retain a medical district within East St. Louis, academic centers of excellence, viable health care facilities, medical research facilities, emerging high technology enterprises, and other facilities and uses as permitted by the Act. SYNOPSIS • The Commission had inadequate controls in place to determine whether interest calculated on their behalf by the Southwestern Illinois Development Authority (SWIDA) on funds held in trust was accurate. • The Commission did not adhere to their By- Laws. FINDINGS, CONCLUSIONS, AND RECOMMENDATIONS LACK OF INTERNAL CONTROLS OVER INTEREST CALCULATION The Commission did not have adequate controls in place to determine whether the interest calculated on their behalf by SWIDA on the funds held in trust was accurate. The interest calculated on behalf of the Commission was understated by approximately $1,612. Commission management stated SWIDA was the grantee on these funds and they were not advised by the funds grant manager that they were required to establish additional controls. (Finding #1, pages 9-10) We recommended the Commission strengthen controls over its State grant funds by maintaining their own documentation related to any funds held in trust and verify the accuracy of any calculations performed on behalf of the Commission. We also recommended the Commission work to have the additional interest amount still held by SWIDA returned to the Illinois Department of Commerce and Economic Opportunity (DCEO). Commission management agreed with the finding and recommendation and stated they will no longer allow an outside entity to hold funds in trust. They also stated the remaining interest has been remitted to DCEO. NONCOMPLIANCE WITH THE COMMISSION BY-LAWS The Commission did not adhere to their By-Laws. Specifically, the Commission’s Treasurer was not bonded and the Commission’s motions were not signed by required members. Commission management stated the Commission had no funds to carry out the bonding and it was oversight not to have the motions signed by the President and Secretary of the Commission. (Finding #4, page 14) We recommended the Commission comply with all aspects of their By-Laws. Commission management agreed with the finding and recommendation. The Commission will vote to amend the By-Laws to remove the bonding provision and the requirement of signatures on motions has been put into practice for all future meetings. OTHER FINDINGS The remaining findings pertain to noncompliance with the Open Meetings Act and the Commission not being fully seated. We will review the Commission’s progress towards the implementation of our recommendations in our next engagement. AUDITORS’ OPINION We conducted a compliance examination of the Commission as required by the Mid-America Medical District Act in accordance with the Illinois State Auditing Act. We have not audited any financial statements of the Commission for the purpose of expressing an opinion because the Commission does not, nor is it required to, prepare financial statements. WILLIAM G. HOLLAND Auditor General WGH:skm AUDITORS ASSIGNED This examination was performed by staff of the Office of the Auditor General.