REPORT DIGEST PROPERTY TAX APPEAL BOARD COMPLIANCE EXAMINATION FOR THE TWO YEARS ENDED JUNE 30, 2018 Release Date: October 9, 2019 FINDINGS THIS AUDIT: 3 CATEGORY: NEW -- REPEAT -- TOTAL Category 1: 0 -- 1 -- 1 Category 2: 2 -- 0 -- 2 Category 3: 0 -- 0 -- 0 TOTAL: 2 -- 1 -- 3 FINDINGS LAST AUDIT: 1 Category 1: Findings that are material weaknesses in internal control and/or a qualification on compliance with State laws and regulations (material noncompliance). Category 2: Findings that are significant deficiencies in internal control and noncompliance with State laws and regulations. Category 3: Findings that have no internal control issues but are in noncompliance with State laws and regulations. State of Illinois, Office of the Auditor General FRANK J. MAUTINO, 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 SYNOPSIS • (18-01) The Board did not allow for the speedy hearing of all appeals. • (18-02) The Board did not have adequate controls over its State property records and related reporting. FINDINGS, CONCLUSIONS, AND RECOMMENDATIONS TIMELINESS OF HEARINGS The Property Tax Appeal Board (Board) did not allow for the speedy hearing of all appeals. During testing, we noted the following: • We tested 44 cases that were closed during the audit period. Thirty-four of the 44 (77%) cases tested took longer than one year to be closed. The Board took between 414 and 2,102 days to process and close the appeals. The chart below has a breakdown of the time taken to process the tested cases. Time Taken to Process Cases Tested < 1 Year: 10 (23%) 1 - 2 Years: 8 (18%) 2 - 3 Years: 16 (36%) > 3 Years: 10 (23%) Note: Six of the 44 (14%) cases tested went to a hearing. All six cases took more than one year to process. One of these cases took more than two years to process; the remaining five cases took more than three years to process. • We tested 40 cases that were pending at the end of the audit period. Twenty-one of 40 (53%) cases tested had been pending for a period greater than one year. As of June 30, 2018, the cases had been open between 376 and 2,283 days. The chart below has a breakdown of the length of time the tested cases had been pending at the end of the audit period. (Finding 1, pages 10-11) This finding has been repeated since 2004 Length of Time Tested Cases Were Pending as of June 30, 2018 < 1 Year: 19 (47%) 1 - 2 Years: 16 (40%) 2 -3 Years: 4 (10%) > 3 Years: 1 (3%) We recommended the Board provide for the speedy hearing of all appeals. Board officials accepted the recommendation and stated they continue to make enhancements to the Board’s Information Technology processing systems to provide for the electronic retrieval of decisions and other appeal information. (For the previous Board response, see Digest Footnote #1.) INADEQUATE CONTROLS OVER EQUIPMENT The Board did not have adequate controls over its State property records and related reporting. Property Reporting The Board failed to report transfers of surplus property to the Department of Central Management Services, totaling $15,471, on the Board’s quarterly Agency Report of State Property (Form C-15) for the second quarter of Fiscal Year 2017 and the second quarter of Fiscal Year 2018. Property Testing • During deletions testing, we noted the Board was unable to provide documentation supporting the date items had been removed from the Board’s property records for seven of seven (100%) items tested. Therefore, we were unable to determine whether the items were timely removed from the Board’s property records. • During property testing, we noted 5 of 40 (13%) list to floor items tested, totaling $8,329, and one of 40 (3%) floor to list items tested, totaling $268, were located in a different location than reported on the Board’s property listing. (Finding 2, pages 12-13) We recommended the Board strengthen its internal controls over recording and reporting of State property by reviewing its inventory items and inventory listing to ensure it is accurate and up-to-date. In addition, the Board should thoroughly review all reports prepared from its records for accuracy and completeness prior to submission. Board officials accepted the recommendation and stated they will work to strengthen the Board’s internal controls for the recording and reporting of State property. OTHER FINDING The remaining finding pertains to inadequate controls over employee performance evaluations. We will review the Board’s progress towards the implementation of our recommendation in our next compliance examination. ACCOUNTANT’S OPINION The accountants conducted a compliance examination of the Board for the two years ended June 30, 2018, as required by the Illinois State Auditing Act. The accountants qualified their report on State compliance for Finding 2018-001. Except for the noncompliance described in this finding, the accountants stated the Board complied, in all material respects, with the requirements described in the report. This compliance examination was conducted by the Office of the Auditor General’s staff. JANE CLARK Division Director This report is transmitted in accordance with Section 3-14 of the Illinois State Auditing Act. FRANK J. MAUTINO Auditor General FJM:APA DIGEST FOOTNOTE #1 – Timeliness of Hearings – Previous Board Response 2016 – The Board accepts this finding. The Board made further enhancements to its Information Technology processing systems by providing the Advanced Status Inquiry (ASI) search program that provides for the electronic retrieval of decisions and other appeal information. In addition, the Board implemented an electronic storage scanning process for all appeals beginning with assessment year 2016. In the future, this will allow for faster notifications, through electronic dissemination of correspondence, and provide a storage platform for on-line filing.