The Department of Nuclear Safety was created in 1980 by Executive Order Number 3 and by enabling legislation. The primary mission of the Department is to protect the public health and safety of the citizens of Illinois from the potential hazards of radiation. Effective July 1, 2003, Executive Order Number 12 (2003) transferred all powers, duties, rights and responsibilities vested in the Illinois Department of Nuclear Safety to the Illinois Emergency Management Agency.

The Department of Nuclear Safety (Department) did not incorporate statutorily required information into their applications for permits to allow individuals to transport low-level radioactive waste.

The Illinois Low-Level Waste Management Act (420 ILCS 20/9(c)) states that each application for a permit shall contain:

A random sample of twenty-five applications was reviewed. The applications used by the Department contained none of the required elements.

According to Department personnel, it would be impossible for the applicants to know the required information at the time that the application is being completed. (Finding 1, pages 11-12)

We recommended the Agency obtain the required information in a timely manner, or seek a legislative remedy to the statutory requirement.

Agency officials accepted our recommendation and indicated that they would seek legislative remedy.

The Department did not timely submit accurate financial reporting information to the Office of the State Comptroller.

We noted the following errors in the Department’s accounting information submitted to the Office of the State Comptroller:

We also noted that a supervisory review of the accounting reports was not performed prior to their submission to the Office of the State Comptroller. Agencies are required to prepare accounting reports in accordance with generally accepted accounting principles (GAAP) and submit them to the Illinois Office of the State Comptroller (IOC) on GAAP forms provided by IOC.

Portions of the Department’s fiscal year 2003 GAAP reporting package were submitted to the Office of the State Comptroller late. In addition, the Comptroller’s Office sent comments to the Department on September 18, 2003, October 8, 2003 and October 15, 2003 regarding the GAAP reporting package forms that required a response from the Department. The Department did not respond to the Comptroller comments until October 30, 2003.

According to Department personnel, the untimely and inaccurate submission of the financial reporting information was due to overloaded personnel relating to the merger between the Illinois Emergency Management Agency and the Department, as well as confusion between the Office of the State Comptroller and the Department. (Finding 2, pages 13-16)

We recommended the Department of Nuclear Safety communicate the importance of accurate and timely submission of financial reporting information to the appropriate personnel and that senior fiscal management perform a supervisory review of the GAAP reporting package to ensure accurate and timely submission of all required information.

Department officials concurred, in part, with this finding and stated they would take extra effort to ensure correct data is included in the accounting packages submitted to the Office of the Comptroller. Further, they would ensure that the information is timely submitted. Department officials, however, did not concur that certain amounts were in error, or that a supervisory review of the accounting information was not performed. Department officials also indicated they did not concur that the information submitted to the Office of the State Comptroller was late or responses to the IOC inquires were not timely.

In an Auditors’ Comment we noted that we stand behind the facts as stated in the finding. Also, we believe that an effective supervisory review entails someone other than the original preparer performing the review. We welcomed the Department’s response that they would take extra effort toward accurate and timely submissions of accounting report packages to the State Comptroller.

The Department did not seek repayment from an employee who received a single lump sum payment of $48,299 of accrued vacation and sick leave upon retirement.

One of twenty employees tested received a single lump sum payment of accrued vacation and sick leave as a result of the individual’s early retirement. However, the individual then returned to work with the Department two days after his early retirement and did not repay the amount previously received as a lump sum payment.

According to the State Finance Act (30 ILCS 105/14a(c)), if an "employee returns to employment in any capacity with the same agency or department within 30 days of the termination of his or her previous State employment, the employee must, as a condition of his or her new State employment, repay the lump sum amount within 30 days after his or her new State employment commences".

According to Department personnel, repayment on the part of the employee was not required in this instance. The individual’s salary is now paid from an appropriation for State officers by the Office of the State Comptroller. As such, the Department claims the person is a State officer, not an employee, and, therefore, not subject to the repayment provision. The Office of the State Comptroller has indicated that it agrees with this interpretation but would defer to the Attorney General’s Office should the matter be referred to that office. (Finding 3, pages 17-20)

We recommended the Department of Nuclear Safety obtain an opinion from the Attorney General if it believes the lump sum payment was exempt from the Act.

The Department neither accepted or rejected the recommendation set forth in the finding. In its response the Department, in part, stated that it believes the payment was authorized under the State Finance Act (30 ILCS 105/14a(d), which provides for payment of nontransferable accrued vacation, overtime, and qualifying sick leave in a lump sum.

In light of the complicated circumstances presented in the finding, in an Auditor's Comment, we continue to recommend that the agency seek a formal, written opinion from the Attorney General to determine whether it has any obligation to recoup State funds paid out from appropriations.

A former State Officer of the Department, who was transferred to a new position on July 1, 2003 at the Illinois Emergency Management Agency without the advice and consent of the Senate, continues to receive retirement annuity payments prohibited by the Pension Code.

The individual retired from the Department as Manager of the Office of Nuclear Facility Safety on February 14, 2003 and began receiving retirement annuity payments from the State Employees Retirement System (SERS) on April 23, 2003. On February 16, 2003 he was appointed Director of the Department and was confirmed in that position with the advice and consent of the Senate on February 28, 2003. At the time of his appointment as a State Officer, the individual elected not to participate in the SERS in his new position. However, he continued to draw a pension from SERS related to his prior position.

Subsequently, by operation of the Governor’s Executive Order #12, effective July 1, 2003, the Department was abolished and its functions moved to the Illinois Emergency Management Agency (IEMA). Section II (B) of Executive Order #12 provided that "the Director of Nuclear Safety shall be transferred to the Illinois Emergency Management Agency and be made the Assistant Director of the Illinois Emergency Management Agency." The individual’s transfer to his current position as Assistant Director of IEMA was not subject to the advice and consent of the Senate.

The Pension Code (40 ILCS 5/14-111) prohibits an annuitant who re-enters the service of a department and receives compensation on a regular payroll from simultaneously receiving a retirement annuity. However under Section 14-103.05(b)(3) of the Pension Code, the term employee does not include "…any person appointed by the Governor with the advice and consent of the Senate unless that person elects to participate in this system."

The individual stated he believed his transfer to Assistant Director of IEMA did not change his status as excluded from the definition of employee under the Pension Code. Therefore, he believed he was entitled to continue to receive his monthly retirement annuity. (Finding 4, pages 21-24)

We recommended the individual return the retirement annuity payments received since July 1, 2003 to the State Pension system or seek legislative remedy confirming his current position as a State Officer with the advice and consent of the Senate.

Department officials accepted our recommendation to seek legislative remedy confirming this person's current position as a State Officer serving with the advice and consent of the Senate. The Department, however, further responded that it should not be called upon to address a finding that deals with an action alleged to have begun on July 1, 2003. It also believes the finding addresses actions outside the scope of either the Department of Nuclear Safety or its successor agency, the Illinois Emergency Management Agency. Departments and agencies do not have the authority or control over payroll payments to a state officer. Such payments are made by the State Comptroller under the authority of the Civil Administrative Code.

In an Auditors’ Comment we noted that although the substance of this issue relates to the period beginning July 1, 2003, it results from reorganization undertaken pursuant to an Executive Order issued during the current audit period. Further, we believe the issue was too important to defer until the next biennial audit. We disagree with the agency’s contention that neither DNS nor its successor agency has any responsibility to ensure payroll payments to persons working for DNS or its successor are legal and proper. We believe that the fact the Comptroller continued to pay the individual’s salary from the State Officer’s appropriation and the fact that the individual was originally confirmed to a two-year term are not relevant to the issue at the heart of this finding. We stand behind the facts as stated in the finding that the individual, in his current position, as Assistant Director of IEMA had not been confirmed to that position with the advice and consent of the Senate and, therefore the legality of his simultaneous receipt of both payroll and pension payments is questionable. We welcomed the agency’s acceptance of our recommendation to seek a legislative remedy.

The remaining finding is less significant and is reportedly being given attention by the Department. We will review the Department’s progress towards the implementation of our recommendation in our next audit.

Mr. Kevin Noone, Administrative Officer, provided responses to the findings for the Department of Nuclear Safety.

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WILLIAM G. HOLLAND, Auditor General

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Kerber, Eck & Braeckel, LLP were our special assistant auditors for this audit.