Deferred revenues were not
properly accrued
Beginning fund balances and net assets were restated Multi-million dollar
adjustments needed to be made
$13 million in credits
not recorded in financial statements
Department agrees with
auditors Accounts receivable
adjusted by $87.6 million
High percentage of
invalid receivable accounts (TEST 1)
(TEST 2)
Payments were misapplied
Further testing by the
Department and the Auditors continue to reflect problem (TEST 3 and TEST 4)
Comparison of Business
Income Tax accounts to the accounts receivable database identifies additional
problems (TEST 5) Additional financial
statement adjustments necessary totaling $26.1 million
Department agrees with
auditors
Numerous errors in
financial statements provided to auditors
Problems with financial
information submitted to the Office of the State Comptroller Motor Fuel Tax
liabilities overstated and revenue understated by $9.7 million
Net effect of errors Department agrees with
the auditors
Significant increase in inventory
levels
Significant backlog at
June 30, 2008
Increase in backlog
increases risk with financial statement reporting
BIT Taxpayer Notices
WIT Taxpayer Notices
Taxpayer information not
processed timely
Testing by the
Department and the auditors indicate problems with accounts receivable
Significant time noted
in processing taxpayer correspondence
Information received by
Department prior to June 30, 2008 affecting accounts receivable was not
considered for financial statement reporting
Department agrees with
auditors
Ineffective communication
between Business Processing Division and the Financial Control Bureau
Data entry errors
No edits to detect
taxpayer error No edit checks to
prevent payments made to future years in error
Some payments applied up
to 20 or more years into the future
Material adjustments
made with no supervisory approval
Contract maximum for
GenTax is $49.2 million Partial implementation
in December 2007 Failure to run parallel
systems during implementation
Lack of documentation
Internal control
weaknesses
Problems with
correspondence
Department set bonds at
zero in 1986 Department disagrees with auditors
AUDITOR’S COMMENT |
FINDINGS, CONCLUSIONS, ANDRECOMMENDATIONS PROBLEMS
WITH REVENUE RECOGNITION FOR FINANCIAL REPORTING The Department of
Revenue (Department) does not have sufficient processes and controls in place
to ensure revenue recognition for financial reporting is proper for taxpayer
credit-carry forward payments.
·
During
our audit of Individual Income Tax (IIT) and Business Income Tax (BIT)
returns for taxpayers with credit-carry forward amounts, we noted deferred
revenues were not properly accrued for financial reporting purposes. A credit-carry forward occurs when a
business or individual taxpayer has a tax overpayment which they elect to
apply to a subsequent tax period (as opposed to requesting a refund). The Department’s procedure for income tax
related liabilities was to accrue the lapse period refunds for business and
individual income taxes. This methodology
resulted in revenue recognition during the current financial reporting period
for all overpayments that were not refunded.
When a credit was requested to be carried to the next tax year by a
taxpayer, the taxpayer intended that it be applied to a subsequent reporting
period and used to offset tax liabilities of the subsequent period. Thus, amounts received should have been
accrued and deferred for financial reporting purposes. This situation
resulted in the overstatement of revenue and understatement of deferred
revenue for four governmental funds as well as governmental activities, in
the draft financial statements.
Because the Department had not previously adjusted its financial
statements for the effects of credit-carry forward balances, a prior period
adjustment was also necessary to restate beginning fund balances and net
assets for the impact from previous years.
In the draft
financial statements provided to the auditors, income tax revenues were
understated by approximately $71 million at June 30, 2008 for governmental
funds and governmental activities. Deferred (unearned) revenues were
understated by approximately $433 million for governmental funds and
governmental activities. Also, beginning of the year fund balances/net assets
were overstated by approximately $344 million for governmental funds and
governmental activities. Adjustments
to record these credit-carry forward amounts were recorded in the final
financial statements.
·
During
our audit of sales tax, and the related revenue and deferred revenue, we
noted credits totaling $11.8 million from the legacy computer tax system had
not been recorded as a liability at June 30, 2008 in the financial
statements. Although the amount of
credits related to the sales tax types were converted to the new
enterprise-wide computer tax system (GenTax) and were recorded, the
adjustment was understated by approximately $1 million. In total, credits of approximately $13
million related to sales tax (Department–wide total) were not recorded in the
financial statements. These amounts
were deemed immaterial and were not recorded in the final financial
statements. (Finding 1, pgs. 10-13 of the Compliance report) We
recommended the Department strengthen its processes and procedures over
financial reporting of credit-carry forward amounts. The preparation of accounting estimates
requires management to obtain sufficient data, make reasonable assumptions and
continuously examine the appropriateness of amounts recorded. Also, the Department should analyze
historical data used, assess whether the data is comparative and consistent
with data of the current period and consider if it can be relied upon in
formulating a current estimate. Further,
relevant information such as the taxpayer’s estimated income tax liability,
income tax refunds and credits to be applied to future periods should all be
considered in determining earned and unearned revenue. In addition, we recommended Revenue Accounting personnel be
responsible for developing the income tax deferrals and revenues related to
credit-carry forwards and ensure the methodology used to estimate the
unearned revenue be re-examined annually.
Department officials accepted the
recommendation and stated they have changed the way it accounts for credit-carry
forwards on year-end financial statements.
They stated that it is important to note that this change will have no
impact on budgetary cash flows or revenues, which are accounted for on a cash
basis. The change, however, will
better estimate the fiscal year to which a revenue should be credited. INACCURATE
ACCOUNTS RECEIVABLE REPORTING After five
separate audit tests, we noted problems regarding the accuracy of the
accounts receivable calculation at June 30, 2008. As a result of the inaccuracies found,
accounts receivable was adjusted by
$87,556,887 for the financial statements.
During our testing, we originally reviewed two samples of Business Income Tax (BIT) and Withholding Income Tax (WIT) account detail to ensure the accuracy and existence of the Department’s June 30, 2008 accounts receivable information. During the course of our review, we tested 25 of the highest dollar accounts receivable balances and a statistically selected sample of receivable account balances for both BIT and WIT data from the financial reporting accounts receivable data file. The results of this testing are detailed below:
After our initial testing revealed a high percentage of invalid
accounts, the auditors requested a listing of all cash payments received on
the accounts receivable accounts from July 1, 2008 through December 31, 2008. During the Department’s own review of the December 2008
payments received on the receivable balances, the Department noted a high
percentage of the total payments received on various tax accounts were
actually misapplied payments that had been received by the Department prior
to June 30, 2008. These payments were
not applied to the correct accounts for various reasons, including taxpayer
error. This review showed that $1,730,938 or 82% of WIT payments received
and $6,500,727 or 62% of BIT payments noted as received in December 2008 had
been misapplied and should not have been a receivable as of June 30, 2008. The Department then tested the top 100 tax accounts for WIT, BIT, and
IIT and the auditors tested a statistical sample of accounts below the top
100 accounts for each tax type. The
results of this testing are detailed below as either a valid receivable or
invalid receivable:
Additionally, we also compared the Business Income Tax accounts,
which were “excluded and not billed,” to the accounts receivable database,
noting:
·
70 accounts totaling $118.6 million were not included
in the accounts receivable; however, the Department had deducted them from
the gross accounts receivable.
·
22 accounts were included in the accounts receivable
database; however, the amounts the Department excluded did not agree to the
accounts receivable amount, for a difference of $22.4 million.
·
As a result, an adjustment was made to the financial
statements totaling $26.1 million, net of an allowance of $70.7 million. (Finding 2, pgs. 14-17 of the Compliance
report) We recommended the Department evaluate the controls over taxes
receivable and implement the necessary edits and controls to better identify
valid accounts receivables to report in the financial statements. Department officials agreed to the recommendation and stated they have
changed the way it makes estimates of accounts receivable on year-end
financial statements. They stated it is important to note this will have no
impact on budgetary cash flows or revenues. The Department has made
the accounting change (reducing its gross receivables 4.9 percent on the
FY08 financial statement) and will take steps to more expeditiously identify
“invalid” accounts receivable, thereby also improving estimates of accounts
receivable in the future.ACCOUNTING REPORTS
AND DRAFT FINANCIAL STATEMENTS NOT COMPLETE AND ACCURATE The
Department had numerous errors in accounting reports (Generally Accepted Accounting
Principles (GAAP) package forms) and draft financial statements that were
given to the auditors. During our
audit, we noted several errors that were made in compiling the GAAP package
forms. The GAAP package forms are
required accounting reports that are submitted to the Office of the State
Comptroller for State-wide reporting.
These GAAP package forms are also provided to the auditors where they
function as a trial balance for the financial statement audit portion of the
engagement. Based on
our audit of amounts reported in the GAAP package forms and draft financial
statements, we noted the following errors:
·
Nine
cash accounts totaling approximately $17 million were not recorded as of June
30, 2008. The unrecorded cash accounts
ranged from ($80,000) to $13.6 million.
These amounts were deemed immaterial and were not recorded.
·
The
Department used inaccurate reports to accrue Motor Fuel Tax credits. This resulted in the overstatement of Motor
Fuel Tax Fund liabilities by approximately $9.7 million and corresponding
revenue was understated by $9.7 million.
This error was corrected for the final financial statements.
·
Taxes
receivable and revenue were overstated in the General Fund by approximately
$14.9 million due to an allocation error between taxes recorded in the
General Fund and taxes recorded in Fund 719 - the Municipal
Telecommunications Fund. These amounts were deemed immaterial and were not
recorded.
·
During
our audit of income taxes and the related revenue and deferred revenue, we
noted that a duplicate entry was made in the amount of $2.2 million to record
accounts receivable for amounts “in protest”. Amounts “in protest” are the tax
assessments, penalties and interest where the taxpayer is disputing the
amount. Also, additional amounts for
allocated and unallocated Business Income Tax were not correct and resulted in
an understatement of receivables and revenues totaling approximately $1
million. The net effect of these
errors was an overstatement of $1.2 million for taxes receivable and income
tax revenue (Department-wide). These
amounts were deemed immaterial and were not recorded. (Finding 3, pgs. 18-20 of the Compliance report) We
recommended the following:
·
The
Department should institute new procedures for preparing the GAAP package
forms which includes supervisory review of all supporting schedules and
reports used in the formation of accruals and adjustments, as well as
supervisory review of the completed GAAP packages, prior to submitting them
to the Office of the State Comptroller.
·
All
cash accounts should be reviewed to ensure they are properly recorded in the
GAAP package forms.
·
Reports
used for recording Motor Fuel Tax liabilities should be reviewed to ensure
the reports are complete and accurate.
·
Entries
to adjust allocations between the General Fund and the Telecommunications Tax
Fund should be made to both funds.
·
The
process for determining taxes receivable, tax revenue, and deferred revenue
for the governmental funds should be re-evaluated. The current process is primarily manual and
complex and involves several electronic spreadsheets. As such, it is highly susceptible to
errors. At a minimum, the spreadsheets
used to calculate these amounts should be reviewed by a supervisor and all
amounts should be compared to the underlying documentation used in its
preparation. Department officials agreed with the
recommendation. They will more closely
review financial reports before they are transmitted to the Office of the
State Comptroller and the external auditors. TAXPAYER INFORMATION
NOT CONSIDERED OR PROCESSED TIMELY The
Department did not consider or process taxpayer information received by June
30, 2008. This impacted the financial
reporting process and adjustments to the financial statements were necessary. The Department converted to a new
enterprise-wide computer tax system (GenTax), which went into production
December 2007. As a result, the
Department experienced a significant increase in the backlog of processing
Business Income Tax (BIT) and Withholding Income Tax (WIT) information. At June 30,
2008, the Department had incurred a significant backlog of taxpayer
information relating to BIT accounts and WIT accounts. The Department provided the following
charts to illustrate the inventory levels for the past few years at June 30th
of each year. The increase in
unprocessed taxpayer information prior to fiscal year-end increases the
likelihood the information utilized for financial statement preparation could
be misstated. As indicated, the
backlog was significantly higher at June 30, 2008 than the previous years.  Source: Department of Revenue – Business Processing Division
Source: Department of Revenue – Business
Processing Division During our
detailed testing of accounts receivable we noted several accounts where the
taxpayer had provided the Department additional or corrected information;
however, the information had not been processed by the Department as of June
30, 2008. The Department tested the top 100 tax accounts receivable for WIT,
BIT, and Individual Income Tax (IIT) and the auditors tested a statistical
sample of accounts below the top 100 accounts for each tax type. The auditors reviewed the accounts to determine if the accounts would
be resolved once the information was processed by the Department, resulting
in no cash being received and therefore, an invalid accounts receivable at
June 30, 2008. The results of this testing are detailed below:
Of the accounts receivable identified as invalid due to backlog for the top 100 sample and the statistical
samples identified above, we noted the time to process the accounts was significant. The following chart depicts the number of
days to process the invalid due to
backlog accounts in our samples:
As a result, the reports of taxpayer accounts generated for the
period ending June 30, 2008 to support the accounts receivable for financial
reporting did not accurately reflect information received by the Department
because the Department did not consider the information received prior to
June 30, 2008 that would be material to the financial statements, but was not
processed as of fiscal year-end. (See
Finding 08-2) (Finding 4, pgs. 21-24 of the Compliance report) We recommended the Department take action to ensure taxpayer
information is timely considered or processed to ensure taxpayer’s records and
financial statement information reflects accurate information. Further, we recommended that material
account balances be up to date, including the review of all received
information for possible adjustments to accounts. Department officials agreed with the
recommendation and stated they made a business decision which they believe
was compelling to accept a temporary increase in some inventories in order to
bring on line a new tax system. LACK
OF SUPERVISORY APPROVAL FOR LARGE ADJUSTMENTS TO TAXPAYER ACCOUNTS The Department lacked adequate supervisory
approval for large adjustments made to taxpayer accounts. Further, the Department did not have an
adequate procedure in place to monitor and investigate unusual balances in
taxpayer accounts. Material
adjustments and issues were not effectively communicated between the Business
Processing Division and the Financial Control Bureau. During our testing of Withholding Income
Tax (WIT) accounts, we
·
8 of
66 (12%) receivable accounts tested, totaling $4,109,359, were the result of
data entry errors made by the Department in entering taxpayer information. All of these accounts were originally
included in the accounts receivable calculation for the financial
statements. For example, one
taxpayer’s tax liability was entered at $1,109,643 when it should have been
entered as $109,643. No procedures
were in place to monitor unusual account balances or discrepancies between
payments claimed to payments received. Upon auditor inquiry, the
Department stated there were no edits to suspend unusual balances for review
at the time these accounts were entered.
·
3 of
66 (5%) accounts tested had payments that were received by the Department, but
were held in pending due to an error in the tax liability period by the
taxpayer. These pending payments were
not reflected in the taxpayers’ account balances in the new GenTax system since
they were not associated with the right tax liability. Any payment received by the Department that
is not associated with a tax return gets suspended until it is manually
posted or a return is filed. All three
accounts receivable balances were resolved once the payments were manually
posted. For two of these accounts, the taxpayer
erroneously applied the payments to a future quarter of withholding income
tax where a return was not yet posted.
There is not an edit in place to prevent taxpayers from applying
payments to future quarters for withholding income tax. Upon further analysis, the auditors discovered the following payments that were in excess of one tax liability period into the future:
In following up on this exception, the
auditors determined the accounts receivable data contained 58 additional
withholding receivables that were erroneously included, totaling
$291,772.
In addition to the deficiencies noted
above, the Department does not have adequate controls over account
adjustments and changes. In testing
WIT and Business Income Tax (BIT), the auditors noted that high dollar
adjustments were made to various accounts with no review or supervisory
approval noted. Due to taxpayer accounts potentially being a
receivable or liability for the State of
·
9 of 25 (36%) of the top 25 WIT accounts receivable
were adjusted by amounts ranging from $326,623 to $1,741,101 with no evidence
of supervisory review or approval.
·
6 of 25 (24%) of the top 25 BIT accounts receivable
were adjusted by amounts ranging from $2,911,425 to $13,428,965 with no
evidence of supervisory review or approval. (Finding 7, pgs. 30-33 of the Compliance
report) We recommended the
Department evaluate the controls over WIT accounts and implement necessary
edits and controls to identify the processing problems in a timely
manner. Further, the Department should
implement a supervisory authorization and review for material adjustments to
taxpayer accounts. Additionally, we
recommended that all material adjustments be communicated between the
Business Processing Division and the Financial Control Bureau for consideration
in the financial statement reporting process. Department officials agreed with the
recommendation, again noting that the impact is on year-end financial
statements not on budgetary revenues or cash flows. WEAKNESSES
IN THE DEVELOPMENT AND CHANGE MANAGEMENT PROCESS IN IMPLEMENTING THE NEW
COMPUTER TAX SYSTEM The Department did not ensure
that the development process and change management process for its new
enterprise-wide computer tax system (GenTax) was properly controlled and
documented. In addition, the
Department had not utilized its historic practice of following its Project
Control Methodology to promote effective and controlled development of
GenTax. After a competitive
procurement process, the Department entered into a contract with a vendor for
the development of an integrated tax system named GenTax. The contract was signed in October 2006 and
continues through June 2012. The
contract maximum is approximately $49.2 million and through fiscal year 2008,
the Department had paid approximately $13.2 million. In December of 2007, the
Business Income Tax, Withholding Income Tax, and Sales Tax systems went into
production and replaced the applicable legacy systems. For the fiscal year ended June 30, 2008,
GenTax processed over $15 billion of tax collections, as well as other
transactions. Some of the weaknesses noted
during our review follow: · Development Methodology - The vendor supplied its own development methodology; however, our review of the documentation found that it was not generally followed. In particular, required reviews and approvals of deliverables by Department staff were not obtained.
· Data
Conversion – Documentation to support the accuracy of converting data from
the legacy system to GenTax was not provided.
·
Parallel
System Tests - A standard systems development practice is to run parallel
(process transactions on the new and old system to verify the accuracy of
results) for a period of time. The
Department did not run GenTax parallel with the legacy system prior to the
cutover to certain GenTax modules on December 7, 2007.
·
User
Testing Documentation – Documentation to adequately support the adequacy and
completion of user testing was not provided.
·
Vendor
Testing – A system test approach was developed by the vendor; however,
documentation to support the completion of the testing was not provided.
·
System
and User Documentation – There was a general lack of documentation in all
phases and areas to support the development, maintenance, and use of the
system.
·
Reliance
on Vendor – The transfer of knowledge from the vendor to the Department had
not been effectively accomplished, even though major portions of the system
had been in production since December 7, 2007. In addition, rather than
using the Department’s established standard, a less rigid change management
process was utilized for GenTax. Although portions of GenTax
were in production, an effective change management process was not
followed. The process to control
changes to GenTax did not meet the requirements outlined the in the
Department’s standard and was not always followed. (Finding 8, pgs. 34-36 of the Compliance report) We
recommended the Department ensure the development of the critically important
GenTax is effectively controlled and documented. In particular, the Department should:
·
Ensure all required steps in the development process
are completed, reviewed, approved, and documented prior to system
implementation.
·
Ensure the accuracy of converting data from the legacy
system to GenTax is monitored, reviewed, approved, and documented.
·
Ensure appropriate system and user testing is
conducted, reviewed, approved, and documented prior to system implementation.
·
Ensure adequate system and user documentation is
available to support the development, maintenance, and use of the system.
·
Accelerate the transfer of knowledge from the vendor
to the Department.
·
Ensure all required steps in an effective change
management process are utilized with GenTax.
·
Ensure all changes are adequately reviewed, tested,
approved, and documented prior to system implementation. Department officials agreed with the
recommendation and with the need for effective development controls and
documentation. DEFICIENCIES
IN THE NEW ENTERPRISE-WIDE COMPUTER TAX SYSTEM The Department of Revenue
(Department) did not have sufficient internal control over the new
enterprise-wide computer tax system (GenTax) functions, which affect the
integrity of processing taxpayer information, financial data, and financial
reporting. During our review, we
identified a myriad of deficiencies in the production modules of GenTax. Some of the deficiencies noted follow:
·
The capability to enter some return types was not
available which led to the creation of backlog returns waiting for entry into
GenTax. Per Department management, a
decision was made to delay the implementation of the capability; however,
documentation to support the decision was not provided to the auditors.
·
Information on several screens was not accurate and
staff was told not to provide the information to the taxpayer.
·
The system did not allow a 10 year carry back period
for net loss deduction, causing some taxpayer accounts to be inaccurate.
·
Allocations for the disbursements of taxes to local
governments were inaccurate.
·
Numerous problems with system generated
correspondence. Some of the problems included:
We
recommended the Department perform a thorough review of the modules of GenTax
currently in production. From a
general perspective, the Department must ensure the system provides the
required functionality, integrity, and accuracy to support taxpayer information,
financial data and reporting. Specifically,
the Department should:
·
Ensure the capability to enter all return types is
implemented.
·
Ensure the accuracy of all screens.
·
Ensure the system allows the 10 year carry back period
for net loss deductions.
·
Ensure the accuracy of local government allocations.
·
Ensure the accuracy of all system generated
correspondence. Department officials agreed and stated they
have implemented the recommendation. NONCOMPLIANCE
WITH RETAILERS’ OCCUPATION TAX ACT The Department
of Revenue (Department) did not comply with the bonding requirements of
Retailers’ Occupation Tax (ROT) accounts as set forth in the Retailers’
Occupation Tax Act (Act) (35 ILCS 120/2a).
The Act requires every applicant for a certificate of registration
for any person in the business of selling tangible personal property at
retail in this State, at the time of filing such application, to furnish
either:
·
a bond from a surety company authorized to do business
in the State of
·
an irrevocable bank letter of credit or a bond signed
by two personal sureties who have filed with the Department sworn statements
disclosing net assets equal to at least three times the amount of the bond to
be required of such applicant, or
·
a bond secured by an assignment of a bank account or
certificate of deposit, stocks or bonds, conditioned upon the applicant
paying to the State of Illinois all moneys becoming due under this Act and
under any other State tax law or municipal or county tax ordinance or
resolution under which the certificate of registration that is issued to the
applicant under this Act will permit the applicant to engage in business
without registering separately under such other law, ordinance or resolution.
The Act requires the Department to fix the amount of such security in
each case, taking into consideration the amount of money expected to become
due from the applicant under this Act and under any other State tax law or
municipal or county tax ordinance or resolution under which the certificate
of registration that is issued to the applicant under this Act will permit
the applicant to engage in business without registering separately under such
other law, ordinance or resolution.
·
The amount of security required by the Department is
such as, in its opinion, will protect the State of Illinois against failure
to pay the amount which may become due from the applicant under this Act and
under any other State tax law or municipal or county tax ordinance or
resolution under which the certificate of registration that is issued to the applicant
under this Act will permit the applicant to engage in business without
registering separately under such other law, ordinance or resolution,
·
The amount of the security required by the Department
does not exceed three times the amount of the applicant’s average monthly tax
liability, or $50,000, whichever amount is lower. The Department provided a memo dated July 25, 1986 in which the
Department eliminated the ROT bonding requirements. The memo was signed and approved by the
Director at that time. The Department
stated instead of seeking a
statutory change in 1986 mandating bonds at zero, the Department exercised
its administrative discretion to set bonds at zero, which the Department
believes is consistent with the bonding authority granted in Section 2a of
the Act. (Finding 18, pgs. 54-58 of the Compliance
report) We recommended the Department follow the requirements for Retailers’
Occupation Tax applications as set forth in 35 ILCS 120/2a or seek a
legislative remedy. Department officials disagreed with the
finding. The Department’s tax counsel have advised that, with respect to
setting the level of surety bonds, the Department is in compliance with the
Retailers’ Occupation Tax Act. Auditor’s
Comment The statute requires every person engaged
in the business of selling tangible personal property at retail to obtain a
certificate of registration from the Department. At the time of filing an application for a
certificate of registration, each person is required to provide some form of
specified security. 35 ILCS
120/2a. Contrary to statute, the
Department does not require any applicants to file any form of security. The statute does accord the Department some
discretion in determining the appropriate amount of the required security,
provided it sets an amount “taking into consideration the amount of money
expected to become due from the applicant” and that the amount set be
sufficient to “protect the State of Illinois against [the applicant’s]
failure to pay” applicable taxes. While the Department
argues that its “zero bond’ policy meets the statutory criteria, we would
note that the statute gives the Department discretion in setting the amount
of the security but not in determining whether security is to be filed at
all. Further, the Department’s
discretion in setting the amount of the security is not unbridled; in fact,
the Department must set an amount based on the estimated amount expected to
be due from the applicant and necessary to protect the State against the
applicant’s failure to pay. The
auditors would note that the Department’s gross receivables for ROT at June
30, 2008 on the Quarterly Summary of Accounts Receivable submitted to the
Office of the Comptroller totaled approximately $311,536,000. Of this amount, approximately $249,079,000
is over 180 days past due and the likelihood of collection by the State is
remote. If a bond or other form of
security were held by the Department in these cases, the State would have
some alternative recourse to pursue the satisfaction of the outstanding
amount due. OTHER
FINDINGS
The remaining findings are reportedly being
given attention by the Department. We
will review the Department’s progress towards implementing our recommendations
during the next audit period. AUDITORS’ OPINION Our auditors stated the financial statements of the
Department of Revenue as of June 30, 2008, and for the year then ended are
fairly presented in all material respects. STATE
COMPLIANCE EXAMINATION – ACCOUNTANT’S REPORT The auditors qualified their report on State Compliance for findings 08-1 through 08-4 and 08-7 through 08-9. Except for the noncompliance described in these findings, the auditors state the Department complied, in all material respects, with the requirements described in the report. ____________________________________ WILLIAM G. HOLLAND, Auditor
General WGH:CL:pp AUDITORS ASSIGNED The
compliance examination was performed by the Auditor General’s staff. McGladrey
& Pullen, LLP were our special assistant auditors
for the financial audit. |
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