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Employees are
assumed to be working unless otherwise noted
No documentation of business purpose for personally assigning 59 of
62 State vehicles
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FINDINGS, CONCLUSIONS, AND
RECOMMENDATIONS
TIME SHEETS NOT MAINTAINED IN COMPLIANCE WITH THE
STATE OFFICIALS AND EMPLOYEES ETHICS ACT
The Secretary of State
does not maintain time sheets for its employees in compliance with the State
Officials and Employees Ethics Act (Act).
We noted Secretary of
State employees did not maintain time sheets in compliance with the Act. Employees’ time is tracked using a
“negative” timekeeping system whereby the employee is assumed to be working
unless otherwise noted. An original
year-to-date attendance form is maintained for each employee. This form is updated by an attendance
clerk only when an employee takes any type of leave. (Finding 1, page 12)
We recommended the
Secretary of State amend its policies to require employees to maintain time
sheets documenting the time spent each day on official State business to the
nearest quarter hour as required by the Act.
Agency officials
accepted our recommendation and stated that the Office will endeavor to meet
the recommendations of the auditors with respect to the maintenance of time
sheets by employees by establishing internal controls to monitor timekeeping
and attendance.
STATE VEHICLES ASSIGNED TO EMPLOYEES WITHOUT A DOCUMENTED
BUSINESS PURPOSE
Secretary of State
employees have been assigned State vehicles without documentation of a
business need for the vehicles.
As of June 2005, 62 State vehicles were personally assigned to Office
employees (excluding Secretary of State Police). However, the Office did not have documentation on file
providing justification for the business purpose of personally assigning 59
of these vehicles.
The Secretary of State Physical Services Department Support Services
Division/Property Control Unit Vehicle Operators Rules Manual lists four
criteria for the individual assignment of vehicles. However, the Secretary of State did not document whether
employees assigned a vehicle met any of these criteria. (Finding 2, pages 13-14)
We
recommended the Secretary of State require documentation justifying the
business need of assigning a State vehicle to any Office employee. In addition, the Office should review its
assignment of State vehicles no less than annually to ensure that all
employees who have been personally assigned State vehicles continue to have
an adequate business purpose for using that vehicle, and document this
review.
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5 of 10 accidents
reported between 5 and 532 days late
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Agency officials accepted our recommendation and stated that the
Office has completed and approved a Personally Assigned Vehicle Information
Form for each vehicle that has been personally assigned to an employee
(excluding Secretary of State Police).
The form includes a documented business purpose to be completed by the
employee’s supervisor, and approved by the employee, his/her supervisor, and
the Department Director. In addition,
agency officials stated that the Office has currently implemented an annual
review of vehicle assignments.
INADEQUATE PROCEDURES REGARDING STATE VEHICLES
The Secretary of State
did not have adequate procedures over its State vehicles. We noted accidents involving State
vehicles were not reported in a timely manner, receipts supporting gasoline
usage were not maintained, employees were driving motor pool vehicles for
extended periods and not reporting commuting mileage and personally assigned
vehicles were not promptly reported to the Office’s Payroll Department so the
value of the commuting fringe benefit could be added into the employees’
income.
Specific problems noted were as
follows:
¨
During our review of accidents involving State
vehicles, we tested 10 of 35 accidents and noted 5 of the 10 accidents
selected for testing were not reported to the Department of Central
Management Services (DCMS) on a timely basis. The DCMS “Vehicle Guide” states that accident reports are “to
be submitted to (DCMS) Risk Management no later than seven calendar days
following the accident.” We noted the
reports were submitted between 5 and 532 days late.
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Incomplete or no
Automotive Cost Report submitted
Personal use not
included in wages of 6 employees
Payroll notified 28
to 287 days following personal assignment of vehicle
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¨
Secretary of State employees assigned State vehicles
were not properly completing monthly Automotive Cost Reports and not
providing receipts supporting their gasoline usage. We reviewed two Monthly Automotive Cost Reports for a sample of
25 employees assigned State vehicles.
We noted 2 of the 25 employees submitted reports that had missing gas
receipts, 4 employees submitted reports with missing information (miles
driven for the month) and one employee did not submit a report for either
month.
¨
Chicago motor pool vehicles were used by six
Secretary of State employees consecutively from 1 to 5 months without
adjustment of the employees’ wages for the value of the personal use of those
vehicles. As a result, the six employees
had not filed a “Personal Use of State Vehicle” form. Without a properly completed form, the
Secretary of State is unable to compute an appropriate gross income upon
which to base withholding and results in the employees not paying taxes on
the additional benefit they derive from using a State vehicle.
¨
During our review of 25 vehicle assignments, we noted
6 instances (24%) where the Office’s Payroll Department was not notified on a
timely basis of the personal use of the vehicle, and thus not including the
value of the fringe benefit in the employee’s income. The delay in notifying Payroll ranged from
28 to 287 days following the personal assignment of the vehicles to the
employees. (Finding 3, pages 15-18)
We
recommended the Secretary of State strengthen its controls regarding State
vehicles as follows:
¨ Communicate the requirement to file accident reports
in a timely manner to those employees whose jobs involve travel. We also recommended the Vehicle
Coordinator monitor the submission of accident reports to ensure the DCMS
requirements are being followed.
¨
Enforce the requirement that employees file properly
completed Monthly Automotive Cost Reports with all required documentation in
a timely manner.
¨
Monitor the Chicago motor pool activity to ensure
that motor pool vehicles are not treated as personally assigned vehicles
without following the appropriate procedures.
¨ Implement controls to ensure the Payroll Department
is immediately notified of all personally assigned vehicles.
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Multiple employees
access the same cash drawers
47% of FY04 postage
expenditures were on hand at June 30, 2004
74% of FY05 postage
expenditures were on hand at June 30, 2005
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Agency
officials accepted our recommendation and stated that the Secretary of State
has established the Automotive Administration and Maintenance Department to
coordinate, monitor and enforce policies and procedures pertaining to the use
of Secretary of State Vehicles. In
December 2005, the Illinois Secretary of State’s Motor Vehicle Policy Manual
went into effect, which details all of the rules pertaining to Secretary of
State vehicle usage. In addition,
agency officials stated that every Secretary of State Employee is now required
to complete and submit to the Automotive Administration and Maintenance
Department a form signed by the employee’s Department Director indicating the
date(s) that he or she will be claiming “personal use” of a State
vehicle. This form must be completed
and submitted before the employee is allowed to take possession of the
vehicle.
INADEQUATE
CONTROL OF CASH AT DRIVERS LICENSE FACILITIES
The Secretary of State
permits multiple employees to have access to the same cash drawers at the
Drivers License Facilities (facilities).
During our fieldwork, we visited 4 of the Office’s 138
facilities. We determined that
multiple employees at these facilities could access the same cash drawers.
Secretary of State personnel indicated the excessive access to the
cash drawers is a byproduct of the emphasis placed on prompt service and
minimal customer wait time. By
permitting employees to access more than one cash drawer, the Office is
reducing the wait time that could occur when employees leave their terminals
for any reason, thus permitting another employee to continue processing at
the terminal without switching out the cash drawers and restarting the
terminal. (Finding 4, pages 19-20)
We recommended the Secretary of State ensure that each employee
utilizes an individual cash drawer and not be permitted to access the drawer
of another employee. At the end of
the employee’s shift, the contents of the drawer should be reconciled by the
employee and the facility manager, or designee, to ensure its contents are complete.
Officials accepted our recommendation
and stated that the Secretary of State Driver Services Department formed a
Field Services Committee to draft cash accountability procedures. As a result of this committee, the Cash
Accountability procedures were implemented in 2004. Incorporated within these procedures are cash flow controls,
managerial oversight procedures and report forms for auditing purposes.
YEAR END CARRYOVER OF POSTAGE
During our review of postage usage, we
noted that Secretary of State is requesting postage for their meters and
postage warrants at the end of the fiscal year in excess of reasonable
expected usage for the beginning of the next fiscal year.
At June 30, 2004, the
Office had $4,886,000 of postage on hand, consisting of $3,118,000 of postage
in meters and $1,768,000 of uncashed postage warrants. Postage on hand was 47% of fiscal year
2004 postage expenditures, which totaled $10,350,640. The postage warrants on hand at June 30,
2004, were not expended until the latter part of the lapse period or after
the lapse period. The lag time
between the date the warrants were issued and the date they were paid ranged
from 69 to 148 days.
At June 30, 2005, the Office had $6,307,000 of postage on hand,
consisting of $5,956,000 of postage in meters and $351,000 of uncashed
postage warrants. Postage on hand was
74% of fiscal year 2005 postage expenditures, which totaled $8,467,110. (Finding 5, page 21)
We recommended the Secretary of State
analyze postage needs for the beginning of the next fiscal year to determine
a reasonable carryover balance and to match postage expenditures with the
proper fiscal year.
Agency officials accepted our
recommendation and stated that the Secretary of State has adopted policies
and procedures to enable an annual analysis of postage expenditures. In addition, the Office has already ended
the practice of holding uncashed postage warrants and will continue to
improve on our other postage processes.
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OTHER FINDINGS
The remaining findings are reportedly
being given attention by the Office of the Secretary of State. We will review progress toward
implementing all recommendations in our next compliance engagement.
Agency responses to the findings were
provided by Mr.
Al DiSilvestro, Chief
Auditor for the Office of the Secretary of State.
AUDITORS' OPINION
Our auditors stated the financial
statements of the Office of the Secretary of State as of June 30, 2005, and
for the year then ended are fairly presented in all material respects.
___________________________________
WILLIAM
G. HOLLAND, Auditor General
WGH:GSR
SPECIAL ASSISTANT AUDITORS
Sikich, LLP were our special assistant auditors for this
audit.
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