Illinois Department of Public Health 2001 Audit

REPORT DIGEST

DEPARTMENT OF PUBLIC HEALTH

FINANCIAL AND COMPLIANCE AUDIT

For the Two Years Ended:
June 30, 2001

Summary of Findings:

Total this audit 7
Total last audit 9
Repeated from last audit 5

Release Date:
March 12, 2002

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
Attn: Records Manager
Iles Park Plaza
740 E. Ash Street
Springfield, IL 62703

(217)782-6046 or TDD (217) 524-4646

This Report Digest is also available on
the worldwide web at
http://www.state.il.us/auditor

SYNOPSIS

The Department’s internal audit program did not meet statutory requirements of the Fiscal Control and Internal Auditing Act.

The Department did not provide hospitals with information on infant cardiopulmonary resuscitation (CPR) for distribution to new mothers.

The Department did not comply with the regulation and inspection requirements of the Hospital Licensing Act.

The Department did not properly report amounts on the "Agency Fee Imposition Report Form".

{Expenditures and Activity Measures are summarized on the reverse page.}

DEPARTMENT OF PUBLIC HEALTH
FINANCIAL AND COMPLIANCE AUDIT
For The Two Years Ended June 30, 2001

EXPENDITURE STATISTICS	FY 2001	FY 2000	FY 1999
Total Expenditures (All Funds)	$229,384,149	$186,217,119	$169,607,665
OPERATIONS TOTAL % of Total Expenditures	$171,976,078 75%	$147,431,062 79%	$132,293,149 78%
Personal Services % of Operations Expenditures Average No. of Employees	$50,762,583 30% 1,319	$47,448,087 32% 1,285	$44,169,431 33% 1,258
Other Payroll Costs (FICA, Retirement) % of Operations Expenditures	$12,363,440 7%	$11,143,107 8%	$10,260,489 8%
Contractual Services % of Operations Expenditures Lump Sum % of Operations Expenditures	$9,208,344 5% $92,388,932 54%	$9,024,599 6% $72,993,277 49%	$8,047,466 6% $63,090,200 48%
All Other Operations Items % of Operations Expenditures	$7,252,779 4%	$6,821,992 5%	$6,725,563 5%
GRANTS TOTAL % of Total Expenditures	$57,408,071 25%	$38,786,057 21%	$37,314,516 22%
Cost of Property and Equipment	$28,177,000	$25,964,000	$25,705,000

SELECTED ACTIVITY MEASURES (unaudited)	FY 2001	FY 2000
Children Screened for Blood Lead Poisoning	244,442	242,040
% of Children Tested with Blood Lead Levels Exceeding 10 mcg/dl	9.4%	10.07%
Newborns Screening Tests Performed	1,470,604	1,466,052
Vision and Hearing Screenings Performed	2,466,100	2,539,919

AGENCY DIRECTOR

During Audit Period: John R. Lumpkin, M.D.
Currently: John R. Lumpkin, M.D.

All major systems were not reviewed in a two year period and a new computer data processing system was not reviewed prior to installation

Information on infant CPR not provided to new mothers

The Department did not prescribe regulations, perform inspections, or report as required by the Hospital Licensing Act

Amounts reported to the Comptroller were overstated by $101,090 in FY00 and understated by $46,486 in FY01

FINDINGS, CONCLUSIONS, AND RECOMMENDATIONS

INTERNAL AUDIT REQUIREMENTS

The Department's internal audit program did not meet statutory requirements of the Fiscal Control and Internal Auditing Act (30 ILCS 10/1001 et seq.). During our audit we noted the following:

Two major system audits, revenues/receivables and printing, were not performed at least once within a two year period.

The design of a major new electronic data processing system was not reviewed prior to its installation.

Department officials stated the two audits were not performed due a lack of sufficient staff in the Division of Audits, and the Division was not properly notified by the Information Technology Division when the system reached the phases of development where Internal Audit needed to be involved. (Finding 1, pages 12-13) This finding has been repeated since 1987.

We recommended the Department allocate adequate resources to the Division of Internal Audit to ensure audits of major systems are performed as required and ensure there is adequate communication between divisions to ensure new systems are reviewed prior to their installation.

Department officials concurred with our recommendation and stated it will devote available resources to ensure audits of major systems are performed as required, and will review new information technology application systems as needed to ensure the systems provide adequate audit trails and accountability. (For previous Department responses see digest footnote number 1.)

CPR INSTRUCTIONS FOR MOTHERS OF NEWBORNS

The Department did not prepare and provide hospitals with materials to be distributed to new mothers on performance of infant cardiopulmonary resuscitation (CPR) as required by the Hospital Licensing Act (Act).

Department officials stated they have not prepared and provided these instructional materials to hospitals as no funding has been appropriated for this purpose.

We recommended the Department comply with the Hospital Licensing Act or seek a legislative remedy to this statutory requirement. (Finding 4, page 19)

Department officials concurred with our recommendation and stated it will seek legislation: 1) to remove this mandate, or 2) clarify that production of a document is not needed for compliance.

INSPECTIONS OF STATE OWNED AND OPERATED RESIDENTIAL FACILITIES

The Department did not comply with the regulation and inspection requirements required by the Hospital Licensing Act (Act).

The Act requires the Department to perform the following:

Prescribe, by regulation, standards for facilities for the mentally ill and separate standards for facilities for the mentally retarded which shall apply to State residential institutions under the jurisdiction of the Department of Human Services.

Prescribe, by regulation, separate standards for residential facilities under the jurisdiction of the Department of Public Health, Department of Veterans’ Affairs and the Board of Vocational Rehabilitation.

Inspect all State owned and operated residential facilities at least once each year to determine whether the standards promulgated are being met.

Make available to each State agency or person requesting it a report detailing the findings of the inspection and conclusions of the Department within 60 days of having performed the inspection.

Submit a report indicating the facilities inspected, summarizing the findings, and recommending such remedies as the Department deems necessary to the Governor and the General Assembly by December 31 of each year.

Department officials stated these regulations establishing the standard for these facilities have not been prescribed, inspections have not been performed, and reports have not been compiled as required because the Department thinks it would be duplicative for them to prescribe regulations and conduct inspections of facilities which are already inspected pursuant to federal law or by another State agency. (Finding 5, page 20)

We recommended the Department comply with the requirements of the Hospital Licensing Act or seek legislative remedy to this statutory requirement.

Department officials concurred with our recommendation and stated it will seek legislation to remove this outdated and unnecessary mandate.

INACCURACY OF AGENCY FEE IMPOSITION REPORT

The Department did not properly report amounts on the "Agency Fee Imposition Report Form" according to the Department’s Fee Receipt System.

We noted the amounts reported to the Comptroller on the Fee Imposition Report did not match amounts reported on the Department’s Fee Receipt System for either fiscal year under audit. The amounts reported on the Fee Imposition Report were overstated by $101,090 in FY00 and understated by $46,486 in FY01 in comparison to the Department’s Fee Receipt System amounts.

Department officials stated two different reports were utilized to compile the information for reporting to the Comptroller and a reconciliation was not performed between the two reports. (Finding 7, page 22)

We recommended the Department establish a reconciliation process to ensure amounts recorded by the Department are accurately reported to external parties.

Department officials concurred with our recommendation and will perform a proper reconciliation.

OTHER FINDINGS

The remaining findings were less significant and Department officials have responded that corrective action is in progress. We will review progress toward implementation of our recommendations during our next audit.

Mr. Darrel Balmer, Chief Internal Auditor, provided the Department's responses to our findings and recommendations.

AUDITORS' OPINION

Our auditors report the financial statements of the Illinois Department of Public Health as of and for the years ended June 30, 2001 and 2000 are fairly presented in all material respects.

____________________________________

WILLIAM G. HOLLAND, Auditor General

WGH:JSC:pp

SPECIAL ASSISTANT AUDITORS

Our special assistant auditors for this audit were FPT&W, Ltd.

DIGEST FOOTNOTES

#1 INTERNAL AUDIT REQUIREMENTS -Previous Department Responses.

1999. "The Department concurs with this finding and recommendation. The Division of Internal Audits has made progress in meeting the goals and objectives established in the two year audit plan. However, due to lack of adequate resources, all of the requirements of the Fiscal Control and Internal Auditing Act have not been met. The Division will continue to strive to meet the statutory mandates and as additional funding is made available further improvements can be expected."

1997: "The Department concurs with this finding and recommendation. The Division of Audits has made progress in meeting the goals and objectives established in the two year audit plan. However, due to lack of adequate resources, all of the requirements of the Fiscal Control and Internal Auditing Act have not been met. The Division will continue to strive to meet the statutory mandates and as additional funding is made available further improvements can be expected."

1995: "The Department concurs with the finding and recommendation. The Division of Audits has made progress in meeting the goals and objectives established in the two year audit plan. However, due to lack of adequate resources, all of the requirements of the Fiscal Control and Internal Auditing Act have not been met. The Division will continue to strive to meet the statutory mandates and as additional funding is made available further improvements can be expected. In regard to the lack of required audit work relative to the EDP systems, the Department has hired an Information Systems Auditor."

"The Department will examine the feasibility of reassigning the program monitoring function within its current organizational pattern."

1993: "The Department concurs with the finding and recommendation. The Division of audits has made progress in meeting the goals and objectives established in the two-year audit plan. However, due to lack of adequate resources, all of the requirements of the Fiscal Control and Internal Auditing Act have not been met. The Division will continue to strive to meet the statutory mandates and as additional funding is made available further improvements can be accomplished."

"The Department will examine the feasibility of reassigning the program monitoring function within its current organizational pattern."

1991: "The Department concurs with the finding and recommendation. The Division's inability to meet all of the requirements of the Fiscal Control and Internal Auditing Act are attributable to the factors mentioned below and key vacancies within the Division during a major portion of the audit period. "

"With the filling of two key positions, the Division of Audits anticipates that additional progress will be achieved in meeting the goals and objectives established in the Division’s two year audit plan."

"While the Department acknowledges that the internal audit function did not fully meet the requirements of the Fiscal Control and Internal Auditing Act, several notable accomplishments were realized during the current audit period. Foremost among these, was the successful, yet time-consuming, implementation of the certification requirement of Article 3 of the Fiscal Control and Internal Auditing Act. The Division of Audits assumed the responsibility for implementing and coordinating this effort." (Response continues outlining areas in which the internal audit functions has improved).

1989: "The Department concurs in the finding and recommendation. The finding correctly states that the emphasis during the audit period has been on developing the foundation for an effective program of internal auditing. The groundwork has now been laid with the development of a two year audit plan and an audit procedures manual. We have also pursued an aggressive program of staff professional development. The division has experienced significant staff variances that have inhibited the quality and quantity of work necessary to meet the statutory requirements of the Internal Auditing Act." (Response continues with an explanation concerning changes that are anticipated to be made in the Internal Audit area).

1987: "The Department concurs in the finding and recommendation. Several changes have occurred within Audit Operations which address some of the concerns and recommendations cited." (Response continues with an explanation concerning changes made in Audit Operations).