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REPORT DIGEST DEPARTMENT OF PUBLIC HEALTH COMPLIANCE
EXAMINATION For the Two Years Ended: June 30, 2007 Summary of Findings: Release Date: March 25, 2008
State of Illinois Office of the Auditor General WILLIAM G. HOLLAND AUDITOR GENERAL
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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 is also available on the worldwide web at www.auditor.illinois.gov |
SYNOPSIS
¨ The Department did not adequately document its procedures and monitoring of awards and grants. The Department expended $159,321,862 for awards and grants. ¨ The Department did not have adequate support for amounts paid for legal services pursuant to an interagency agreement with the Office of the Governor. ¨ The Department did not follow prescribed accounting procedures for the recognition of revenues and non-cash awards. Revenues were understated by $2,495,000 and expenditures were overstated by $948,000. ¨ The Department did not accurately report capital asset information. Capital assets were overstated by $4,692,000. Further, depreciation was overstated by $5,911,000 ¨ The Department did not reconcile its cash receipts records as required. ¨ The Department did not establish adequate controls for securing its computer resources. {Expenditures
and Activity Measures are summarized on the reverse page.} |
DEPARTMENT OF PUBLIC HEALTH
COMPLIANCE EXAMINATION
For the Two Years Ended June 30, 2007
EXPENDITURE STATISTICS
|
FY 2007 |
FY 2006 |
FY 2005 |
|
Total Expenditures (All Funds)............... |
$333,310,088 |
$297,741,708 |
$296,378,918 |
|
OPERATIONS TOTAL............................ % of Total Expenditures..................... |
$249,238,943 75% |
$222,490,991 75% |
$232,796,622 79% |
|
Personal Services................................ % of Operations Expenditures....... Average No. of Employees........... |
$47,279,854 19% 1,092 |
$45,618,568 21% 1,098 |
$46,024,036 20% 1,118 |
|
Other Payroll Costs (FICA, Retirement) % of Operations Expenditures....... |
$11,480,128 5% |
$9,821,671 4% |
$13,170,241 6% |
|
Contractual Services.......................... % of Operations Expenditures........ Lump Sum..................................... % of Operations Expenditures....... |
$10,607,401 4% $174,480,702 70% |
$10,771,534 5% $151,319,826 68% |
$5,566,810 2% $162,823,781 70% |
|
All Other Operations Items............... % of Operations Expenditures........ |
$5,390,858 2% |
$4,959,392 2% |
$5,211,754 2% |
|
GRANTS TOTAL.............................. % of Total Expenditures................. |
$84,071,145 25% |
$75,250,717 25% |
$63,582,296 21% |
|
Cost of Property and Equipment..... |
$28,131,463 |
$29,957,836 |
$29,708,246 |
|
SELECTED ACTIVITY MEASURES (not examined) |
FY
2007 |
FY
2006 |
FY
2005 |
|
Number
of Licensed LTC Beds........................... |
123,620 |
123,782 |
125,349 |
|
Number
of LTC Facility Annual Inspections.......... |
1,107 |
1,115 |
1,106 |
|
Newborns
Genetic/Metabolic Disorder Screening Performed......................................................... |
181,000 |
182,003 |
179,845 |
|
Vision
and Hearing Screenings Performed............ |
2,100,000 |
1,901,256 |
1,799,125 |
|
Number
of Requests to Women’s Health Helpline. |
5,561 |
2,386 |
1,603 |
|
AGENCY DIRECTOR |
|
During Audit Period: Eric E. Whitaker, M.D., M.P.H. (through 9/30/07), Damon T. Arnold, M.D., M.P.H. (10/1/07 –
current) Currently:
Damon T. Arnold, M.D., M.P.H. |
|
No written
procedures
No documentation of
monitoring activities
Stem cell grantees
were awarded amounts that exceeded the budgets by $862,837 No supporting
documentation for the amount paid for legal services
Inaccurate capital
asset reporting
Capital assets
overstated by $4.692 million
Depreciation
overstated by $5.911 million
Failure to
reconcile on monthly basis Receipt
reconciliations were up to seven months in arrears Inadequate controls
for securing computer resources
Shared
responsibility with DCMS over computer security
Security Weaknesses
|
FINDINGS, CONCLUSIONS, AND
RECOMMENDATIONS
WEAKNESSES IN THE DOCUMENTATION NOTED IN THE AWARDS AND GRANTS
PROGRAMS The Department did not adequately document its procedures and monitoring of its awards and grants programs. The Department expended $159,321,862 or 25.2% of its
$631,051,796 total expenditures for awards and grants. We tested grants from the Division of
Health Protection, Division of Health Promotion and the Center for Minority
Health and noted the following weaknesses: · The Department did not have written procedures established to guide its administration of the awards and grants programs tested. · The Department did not ensure it adequately monitored and reviewed programmatic and financial reports for 47 of 157 (29.9%) grants tested totaling $47,149,085. The Department did not follow up on missing reports, nor did the files contain documentation of any other monitoring activities. Auditors noted one grant where a $14,000 refund was due from the grantee but the Department did not seek collection. · Seven of 12 (58.3%) stem cell research grantees were awarded a total of $7,298,299 which exceeded the grant budgets of $6,435,462 by a total of $862,837. The grant files did not contain documentation indicating the additional funds were approved. (Finding 1, pages 12-14) We recommended the Department develop a comprehensive grant administration program that includes the development and implementation of written procedures over the awarding of all of the Department’s grant awards, reviewing the programmatic and financial reports of grant recipients, and scheduling, conducting, and documenting grantee site visits. In addition, we recommended the Department seek reimbursement of the $14,000 refund due to the Department. Department
officials concurred with the finding and stated a Department wide grants monitoring
protocol will be implemented across all impacted offices. The Department also stated it will seek
recovery of the $14,000 refund. LACK OF DOCUMENTATION FOR INTERAGENCY AGREEMENT The
Department did not have adequate support detailing the methodology for the
allocation to be paid for legal services provided to the State in conjunction
with the State’s video-game lawsuit.
The
Department, along with four other agencies, entered into an interagency
agreement with the Office of the Governor for an allocable share of the legal
fees incurred effective June 20, 2006.
There was no supporting documentation detailing the methodology used
for determining the percent allocation of 14% which was to be paid by the
Department. The Department then was
instructed to and then paid $10,259 or 2% of the approximate judgment award
of $511,000 in addition to the accrued interest on the attorney’s fee award
which totaled $10,104. (Finding
3, page 17) We recommended
the Department require interagency agreements to include the methodology
supporting the percent allocated and ensure
the amounts allocated for related billings are in accordance with the
agreement. Department officials
concurred with the finding and noted that although a detailed methodology was
not available, the Department paid less than the contracted allowable
amounts. NEED TO IMPROVE FINANCIAL REPORTING The Department did not correctly report financial information on the Grant/Contract Analysis (SCO-563) form to the Office of the State Comptroller. The Department prepares a separate SCO-563 form for five funds. We noted the following errors: ·
The Department
did not calculate (estimate) deferred revenues correctly for federal grants
in two funds. The Department
received an additional $2.495 million in revenues during the first 60 days of
the next fiscal year, resulting in the Department overstating deferred
revenues and understating revenues by $2.495 million. · The Department inaccurately reported a non-cash award on the SCO-563 due to incorrect reports generated by the Department’s immunization inventory database. The Department overstated expenditures by $948,000 and understated receipts by $113,000. (Finding 4, pages 18-19) We recommended the Department comply with the Statewide Accounting Management System and Governmental Accounting Standards Board requirements to ensure accurate financial information is submitted to the Office of the State Comptroller. Further, we recommended the Department review and revise as necessary its current system used to gather and document the financial information that will be reported in the Office of the State Comptroller.
Department officials
concurred with the finding and recommendation and stated they will change the
process
currently used to project the future cash draw downs to ensure accurate
reporting of the deferred revenue.
They also stated they will reconcile reports generated from the
immunization database system to reports that manually calculate the doses of
vaccine to ensure all doses received are accounted for and distributed
accurately. NEED TO IMPROVE REPORTING FOR CAPITAL ASSETS The Department did not accurately
report capital asset information on the Capital Asset Summary (SCO-538) form
to the Office of the State Comptroller. We noted the Department’s ending
capital asset balance and accumulated depreciation at June 30, 2007 did not
agree to the property records maintained by the Department. Total capital assets were overstated by
$4.692 million and total accumulated depreciation was overstated by $5.911 million due to
the Department including commodity
expenditures as capital assets. As a
result, additions and deletions reported on the SCO-538 were also incorrect by
undetermined amounts. (Finding 5,
page 20-21) We recommended the Department report
capital assets accurately and in accordance with the procedures outlined in
the SAMS manual. We also recommended
the Department correct and resubmit the capital asset forms to the Office of
the State Comptroller. Department officials concurred with the
finding and recommendation and stated they were working with the Office of
the State Comptroller to correct the methodology and to correct the FY07
amount. DEPARTMENT RECEIPTS NOT RECONCILED TO STATE COMPTROLLER RECORDS
The Department did not reconcile its cash receipt records to the State Comptroller’s Monthly Revenue Status Report (SB04) as required.
During the engagement period, the Department processed 155,350 receipts totaling $325,818,535. The Department did not reconcile cash receipts to the SB04 each month; rather, the Department normally reconciled the activity of two to three months at one time. At one point in the engagement period, the reconciliations were seven months in arrears. (Finding 8, page 25)
We recommended the Department establish procedures to reconcile its cash receipt records to the SB04 on a monthly basis.
Department officials
concurred with the finding and recommendation and stated significant staff
losses have resulted in the necessity of prioritizing work and the ongoing
priority is meeting the 24/48 hour deposit requirements. They further stated with additional staff
hired which is in progress, the Department will be able to perform the
necessary reconciliations. INADEQUATE COMPUTER SECURITY CONTROLS The Department in conjunction with the
Department of Management Services (DCMS) did not establish adequate controls
for securing its computer resources. The Department had established computer systems throughout the State in order to meet its mission and mandate. The Department processes and maintains critical, confidential and sensitive information on computer systems. Many of the Department’s IT functions were consolidated into DCMS, with a physical move of equipment in April 2007. As a result, the Department and DCMS have a shared responsibility over computer security. Although the Department had developed a security awareness program, it had not been fully implemented. In addition, during our testing of computer security, we noted:
We recommended the Department formally communicate to DCMS its security requirements, and establish and document guidelines that outline both the Department’s and DCMS responsibilities. We also recommended the Department work with DCMS to strengthen its security parameters. In addition, we recommended the Department finalize and implement the security awareness program. Department officials concurred with
the finding and recommendation. OTHER FINDINGS The remaining findings are reportedly
being given attention by the Department.
We will review the Department’s progress toward the implementation of
our recommendations during our next examination. ACCOUNTANTS REPORT We conducted a compliance examination of the Department as required by the Illinois State Auditing Act. The Accountant’s report noted the Department did not comply in all material respects with the requirements regarding laws and regulations, including the State uniform accounting system, in its financial and fiscal operations. ____________________________________ WILLIAM
G. HOLLAND, Auditor General WGH:PH:pp SPECIAL
ASSISTANT AUDITORS
Sikich LLP were our
special assistant auditors for this engagement. |