REPORT DIGEST DEPARTMENT OF REVENUE FINANCIAL AUDIT FOR THE YEAR ENDED JUNE 30, 2020 Release Date: June 9, 2021 FINDINGS THIS AUDIT: 2 CATEGORY: NEW -- REPEAT -- TOTAL Category 1: 0 -- 0 -- 0 Category 2: 1 -- 1 -- 2 Category 3: 0 -- 0 -- 0 TOTAL: 1 -- 1 -- 2 FINDINGS LAST AUDIT: 1 Category 1: Findings that are material weaknesses in internal control and/or a qualification on compliance with State laws and regulations (material noncompliance). Category 2: Findings that are significant deficiencies in internal control and noncompliance with State laws and regulations. Category 3: Findings that have no internal control issues but are in noncompliance with State laws and regulations. State of Illinois, Office of the Auditor General FRANK J. MAUTINO, AUDITOR GENERAL To obtain a copy of the 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 are also available on the worldwide web at www.auditor.illinois.gov SYNOPSIS • (20-01) The Department did not have adequate internal controls over access to GenTax. • (20-02) The Department did not have a reconciliation process to provide assurance census data submitted to its pension and other postemployment benefits (OPEB) plans was complete and accurate. FINDINGS, CONCLUSIONS, AND RECOMMENDATIONS INADEQUATE INTERNAL CONTROLS OVER ACCESS TO GENTAX The Department of Revenue (Department) did not have adequate internal controls over documenting newly hired and/or terminated employees and thus could not demonstrate access to the enterprise tax system (GenTax) was limited to only appropriate personnel. During fiscal year 2020, GenTax processed over 12.3 million tax transactions and $47.35 billion in payments from taxpayers for the Department. As part of our audit process, we requested the Department provide the populations of individuals hired and terminated from employment during the audit period. In response to our request, the Department provided the populations; however, they did not provide documentation demonstrating the populations were sufficiently precise and detailed under the Professional Standards promulgated by the American Institute of Certified Public Accountants (AU-C § 330, AU-C § 530). Although the populations provided to the auditors had limitations, we selected a sample of newly hired and terminated employees and performed testing over each individual’s access to GenTax, and noted no exceptions. (Finding 1, pages 67-68) We recommended the Department strengthen controls over the records maintained related to hiring and terminations. The Department agreed with the recommendation and stated the Department will implement a coordinated system between the two areas to ensure inconsistencies are identified in a timely manner, will incorporate the process into written procedures, and will explore ways to further automate the tracking process to eliminate any manual processes. LACK OF CENSUS DATA RECONCILIATIONS The Department did not have a reconciliation process to provide assurance census data submitted to its pension and other postemployment benefits (OPEB) plans was complete and accurate. During testing, we noted the Department had not performed an initial complete reconciliation of its census data recorded by the State Employees’ Retirement System of Illinois (SERS) and the Department of Central Management Services (CMS) to its internal records to establish a base year of complete and accurate census data. (Finding 2, pages 69-70) We recommended the Department work with SERS and CMS to develop an annual reconciliation process of its active members’ census data from its underlying records to a report from each plan of census data submitted to the plan’s actuary. The Department agreed with the recommendation and stated it will work with SERS and CMS to identify reports that can be used to reconcile records of Department current active employees with SERS and Group Insurance program members’ records. Further, the Department stated the reconciliation process will be incorporated into written procedures. We will review the Department’s progress towards the implementation of our recommendations in our next financial audit. AUDITOR’S OPINIONS The auditors stated the financial statements of the Department as of and for the year ended June 30, 2020 are fairly stated in all material respects. This financial audit was conducted by RSM US LLP. JANE CLARK Division Director This report is transmitted in accordance with Section 3-14 of the Illinois State Auditing Act. FRANK J. MAUTINO Auditor General FJM:jv