REPORT DIGEST SOUTHWESTERN ILLINOIS DEVELOPMENT AUTHORITY SPECIAL LIMITED SCOPE COMPLIANCE EXAMINATION FOR THE TWO YEARS ENDED JUNE 30, 2018 Release Date: July 18, 2019 FINDINGS THIS AUDIT: 1 CATEGORY: NEW -- REPEAT -- TOTAL Category 1: 0 -- 0 -- 0 Category 2: 1 -- 0 -- 1 Category 3: 0 -- 0 -- 0 TOTAL: 1 -- 0 -- 1 FINDINGS LAST AUDIT: 0 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 • (18-001) The Authority did not ensure appropriations received from the General Assembly were utilized for the purposes intended. FINDINGS, CONCLUSIONS, AND RECOMMENDATIONS IMPROPER USE OF EXPENDITURE AUTHORITY The Authority did not ensure appropriations received from the General Assembly were utilized for the purposes intended. We noted the Authority erroneously authorized the expenditure of $1,404,292 for the purpose of loan repayment from its appropriation for debt service reserve replenishment. We also noted the Authority erroneously authorized the expenditure of $1,404,125 for the purpose of debt service reserve replenishment from its appropriation for loan repayment. In addition, we noted the Authority authorized its bond trustee to pay additional funds, totaling $219, beyond what was originally owed to the Illinois Finance Authority in the course of its repayment of the loan received during Fiscal Year 2016 (Finding 1, pages 7-8). We recommended the Authority ensure appropriations received from the General Assembly are used for the indicated purposes. Authority officials stated the matter at issue was an unusual one-time transaction initiated by staff of the Governor’s Office due to the two-year budget crisis and that SWIDA had no way of knowing or even surmising that funds should come from a different state account requiring a different code to be used. ACCOUNTANT’S OPINION The accountants conducted a special limited scope compliance examination of the Authority for the two years ended June 30, 2018, as required by the Illinois State Auditing Act. The accountants stated the Authority complied, in all material respects, with the requirements described in the report. This special limited scope compliance examination was conducted by the Office of the Auditor General’s staff. 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:cmd