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
USE OF UNAUTHORIZED LOCALLY HELD FUND
The Board utilized a locally held fund during Fiscal Year
2005 that was established in a prior fiscal year without specific statutory
authorization. We noted the
following:
o
The
Board utilized a locally held fund throughout FY05 even though the Board did
not obtain proper statutory authorization to establish the locally held fund
as required by the State Officers and Employees Money Disposition Act. In addition, the Illinois Petroleum
Education Marketing Act did not explicitly permit the Board to establish a
locally held fund.
o
At
the end of FY04, excess monies totaling $31,641 remained in the locally held
account. This amount would have been
lapsed in the normal appropriation process, and the Board did not return the
excess funding to the Department of Natural Resources (Department) to be deposited
into the Petroleum Resources Revolving Fund.
o
The
Board submitted eight claims totaling $625,000 to the Department to draw down
on their appropriation for subsequent deposit into the locally held fund in
FY05. In addition, the Board did not
return $29,090 in excess funds remaining in the locally held account to the
Department.
o
The
Board contracted with an accounting firm to perform bookkeeping functions on
behalf of the Board and the partner of the accounting firm had signature
authority over this account.
o
Month
end bank balances exceeded the amount of Federal Deposit Insurance Coverage
(FDIC) by amounts ranging from approximately $4,200 to $106,700 for 6 of 12
months in FY05.
o
The
Board did not prepare nor submit quarterly Reports of Receipts and
Disbursements of Locally Held Funds for any of the four quarters of
FY05. (Finding 1, pages 8-10)
We
recommended the Board close the locally held fund and resume processing all
expenditures through the Petroleum Resources Revolving Fund until a legislative
remedy is sought.
Board officials stated they are doing
everything possible to provide a legislative remedy to the finding and
anticipate that proposed legislation will pass during the current
session.
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:JSC:pp
AUDITORS ASSIGNED
This audit
was performed by the Office of the Auditor General's staff.
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