REPORT DIGEST SOUTHWESTERN ILLINOIS DEVELOPMENT AUTHORITY SPECIAL LIMITED SCOPE COMPLIANCE EXAMINATION For the Two Years Ended: June 30, 2012 Release Date: August 6, 2013 Summary of Findings: Total this audit: 1 Total last audit: 2 Repeated from last audit: 0 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, 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 INTRODUCTION The Illinois General Assembly made appropriations to the Southwestern Illinois Development Authority (Authority) to replenish draws on the debt service reserve fund backing bonds issued on behalf of Waste Recovery – Illinois, Alton Center Business Park, and Laclede Steel – Illinois. In accordance with the Illinois State Auditing Act (30 ILCS 5/3-1(a)), our special limited scope compliance examination was limited to these State appropriations and related payments and to $250,000 of State funds granted by the Department of Commerce and Economic Opportunity (DCEO) subject to a State appropriation to the Authority for the Mid-America Medical District Commission. SYNOPSIS • The Authority had inadequate controls over the calculation of accrued interest on the DCEO grant. FINDINGS, CONCLUSIONS, AND RECOMMENDATIONS INADEQUATE CONTROLS OVER THE CALCULATION OF ACCRUED INTEREST The Authority did not accurately calculate interest on funds held in trust on behalf of the Mid-America Medical District Commission. The amount of interest was understated by approximately $1,612. The calculation was necessary due to the commingling of funds in the account. As a result, the Authority failed to return the unspent interest to DCEO at the end of the grant period. (Finding 1, Pages 7-8) The Authority stated the unspent accrued interest was not returned to DCEO due to employee oversight. We recommended the Authority work to remit the proper amount of unspent grant funds, including interest earned, to DCEO. We also recommended the Authority discontinue the commingling of grant funds. Authority management agreed with the finding and recommendation. AUDITORS’ OPINION We conducted a special limited scope compliance examination of appropriations made by the General Assembly to the Authority and related expenditures and the grant received from the Illinois Department of Commerce and Economic Opportunity subject to a State appropriation to the Authority for the Mid-America Medical District Commission as authorized by the Illinois State Auditing Act. WILLIAM G. HOLLAND Auditor General WGH:skm:rt AUDITORS ASSIGNED This examination was performed by staff of the Office of the Auditor General.