INTRODUCTION
The Illinois
Petroleum Resources Board was created July 10, 1998 by the Illinois Petroleum
Education and Marketing Act. Its
mission is to coordinate a program designed to demonstrate to the general
public the importance of the Illinois oil exploration and production
industry; to encourage the wise and efficient use of energy; to promote
environmentally sound production methods and technologies; to develop
existing supplies of State oil resources; and, to support research and
education activities concerning the oil exploration and production
industry. The Board received an
appropriation from the Illinois General Assembly through the Department of
Natural Resources.
FINDINGS, CONCLUSIONS, AND
RECOMMENDATIONS
IMPROPER ESTABLISHMENT OF A LOCALLY HELD FUND
The Board established a locally held fund without specific
statutory authorization. In addition,
the Board did not complete the proper forms to establish a temporary bank
account which should have been approved by the Office of the Governor and the
Office of the Comptroller.
The Department of Natural
Resources (DNR) was appropriated $375,000 during FY04 for the Board’s
operation. In the past, all
expenditures that the Board incurred were processed by DNR. However, the Board and DNR entered into a
contract agreement on January 22, 2004 to provide funding, from appropriated
funds, to the Board to accomplish the powers and duties delegated to it by
the Illinois Petroleum Education Marketing Act (225 ILCS 728/1 et seq.). The contract agreement allowed the Board
to submit claims to DNR for operational expenses of the Board which would be
based upon actual liability incurred and estimates based upon an established
budget. DNR transmitted funds from
the Board’s appropriation authorization and the Board subsequently deposited
those funds into a locally held account.
This locally held account was used by the Board to pay for operating
costs.
During
detail testing, we noted the Board submitted three claims totaling $215,041
to DNR for a draw down on the appropriation for deposit into the locally held
account. The first claim was for
$50,000 to allow the Board to establish the locally held account. The other two claims were based on
budgeted amounts and the amounts were deposited in the locally held
account. The Board spent a total of
$183,400 for FY04 expenditures from the locally held account. The Board received $31,641 in excess
advanced funding. This amount would
have lapsed in the normal appropriation process. The Board had not returned the excess funding to DNR to be
deposited back into the Petroleum Resources Revolving Fund. (Finding 04-1, pages 7 & 8)
We recommended the Petroleum Resources
Board close the locally held fund and continue processing all expenditures
through the Petroleum Resources Revolving Fund held in the State Treasury or
seek appropriate legislative remedy.
Board officials accepted our finding and
recommendation and stated they will address the issue by seeking an
appropriate legislative remedy. A
proposed revised statute is being drafted for legislative submittal and
enactment.
OTHER FINDING
The remaining finding is of less
significance and is reportedly being given attention by the Board. We will review progress toward
implementation of all recommendations in our next compliance examination.
AUDITORS’ OPINION
We conducted a compliance examination of the Petroleum
Resources Board as required by the Illinois State Auditing Act. We have not audited any financial
statements of the Board for the purpose of expressing an opinion because the
Board does not, nor is it required to, prepare financial statements.
___________________________________
WILLIAM
G. HOLLAND, Auditor General
WGH:TLD:pp
AUDITORS ASSIGNED
This audit was performed by the Office of the Auditor
General's staff.
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