REPORT DIGEST

ILLINOIS STATE TOLL HIGHWAY AUTHORITY

FINANCIAL AUDIT
FOR THE YEAR ENDED DECEMBER 31, 2022

Release Date:  July 27, 2023

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: 4

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

INTRODUCTION

This digest covers the Illinois State
Toll Highway Authority’s (Tollway)
Financial Audit as of and for the year
ended December 31, 2022.

SYNOPSIS

• (22-01) The Tollway did not have
adequate internal controls in place to
ensure transactions over
Intergovernmental Agreements were
properly recorded for financial
reporting purposes.

FINDINGS, CONCLUSIONS, AND
RECOMMENDATIONS

INADEQUATE INTERNAL CONTROLS OVER
INTERGOVERNMENTAL AGREEMENTS

The Illinois State Toll Highway
Authority (Tollway) did not have
adequate internal controls in place to
ensure transactions over
Intergovernmental Agreements (IGA) were
properly recorded for financial
reporting purposes.

The Tollway enters into
intergovernmental agreements with other
governments and municipalities for cost
sharing on construction projects that
impact both the Tollway and other
entities’ property. The
intergovernmental agreements itemize
the estimated costs to each party. The
Tollway utilizes percentage of
completion reports to calculate the
estimated amount due from each entity
at a given point in time. The amount
due from the other entity is recorded
as a receivable and as a reduction of
Assets Under Construction (capital
asset – construction in progress). IGA
revenue and expense are recognized for
the same amount. Upon completion of the
project, final actual costs are
determined, and the final receivable is
adjusted to the earned amount. The net
effect is no impact to the Tollway’s
Net Position.

During our testing of Intergovernmental
Receivables, we noted the Tollway
improperly recorded receivable balances
from two entities within an IGA
resulting in an overstatement of
Intergovernmental Receivables of
$4,971,539, an understatement of
Capital Assets of $4,971,539, and an
overstatement of both Revenue and
Expense of $4,971,539. All errors net
to a zero effect on the Statement of
Net Position and the Statement of
Revenue, Expenses and Changes in Net
Position.

After extrapolating the known errors
over the sample population of
$12,829,216, the estimated projected
impact of these errors is an
overstatement of Intergovernmental
Receivables of $8,100,807, an
understatement of Capital Assets –
Construction in Progress of $8,100,807,
and an overstatement of both Revenues
and Expenses under IGA’s of $8,100,807.
The net effect of this error on net
position is $0. Management elected not
to record the proposed adjusting entry
for this error. (Finding 1, pages
77-78)

We recommended the Tollway implement
controls to ensure Intergovernmental
Agreements are reviewed and accurately
accounted for to reduce the risk of
future potential misstatements.

Tollway officials concurred with the
recommendation and stated they have
enhanced their verification procedures
for Intergovernmental agreement
accounting to include additional
verifications of payment terms and
balances with Tollway staff involved in
drafting and administering the
agreements.

AUDITOR’S OPINION

The auditors stated the financial
statements of the Tollway as of and for
the year ended December 31, 2022 is
fairly stated in all material respects.

This financial audit was conducted by
CliftonLarsonAllen 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

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