REPORT DIGEST

OFFICE OF THE TREASURER: NONFISCAL
OFFICER RESPONSIBILITIES

COMPLIANCE EXAMINATION
FOR THE TWO YEARS ENDED JUNE 30, 2021

Release Date:  July 6, 2022

FINDINGS THIS AUDIT:  6

CATEGORY:  NEW -- REPEAT – TOTAL
Category 1:  0 -- 0 -- 0
Category 2:  2 – 4* -- 6
Category 3:  0 -- 0 -- 0
TOTAL:  2 -- 4 -- 6

FINDINGS LAST AUDIT: 5

* Finding 2 was last reported in 2015.
The Independent Accountant’s Report on
State Compliance and on Internal
Control Over Compliance for the two
years ended June 30, 2017 and the two
years ended June 30, 2019, contained a
scope limitation on compliance and
internal control over unclaimed
property. No such scope limitation is
included in the Independent
Accountant’s Report on State
Compliance on Internal Control Over
Compliance for the two years ended
June 30, 2021.


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

• (21-1) The Office of the Treasurer
did not exercise adequate control over
the capitalization and subsequent
depreciation of a newly acquired
building resulting in inaccurate
property reporting.
• (21-2) The Office of the Treasurer
did not exercise adequate control over
unclaimed property (UP) inventory and
reconciliations.

FINDINGS, CONCLUSIONS, AND
RECOMMENDATIONS

LACK OF CONTROLS OVER STATE PROPERTY
REPORTING

The Office of the Treasurer
(Treasurer) did not exercise adequate
control over the capitalization and
subsequent depreciation of a newly
acquired building resulting in
inaccurate property reporting.

During our review of the Form SCO-538
– Capital Asset Summary (SCO-538), we
noted the following deficiencies:

• The Illinois Office of Comptroller
(IOC) version SCO-538, which is the
version including revisions made by
IOC after initial agency submission,
and for testing purposes, considered
the final version of the SCO-538, did
not appropriately reflect the ending
asset balance for buildings as of June
30, 2020 or June 30, 2021. The
Office’s C-15 and underlying support
accurately reported the buildings
value as $1,986,000.68 and
$6,076,112.68 as of June 30, 2020 and
June 30, 2021, respectively. The
SCO-538 incorrectly reported the value
of buildings as $2,090,000 and
$6,362,000 as of June 30, 2020 and
June 30, 2021, respectively.

•The Office depreciated the building
using the straight-line depreciation
method; however, the Office did not
utilize a placed in-service month/
Capital Development Board (CDB)
transfer month as the start date for
depreciation and rather depreciated
the building for one full year. As a
result, the Office overstated
depreciation by approximately
$126,787. (Finding 1, pages 10-11)

We recommended the Office implement
adequate controls over capitalization
and depreciation of capital assets.

The Office accepted the recommendation
and stated they are working with the
IOC to correct the Capital Asset
Summary (SCO-538).

LACK OF CONTROLS OVER UNCLAIMED
PROPERTY

The Office of the Treasurer (Office)
did not exercise adequate control over
unclaimed property (UP) inventory and
reconciliations.

During our examination, we noted the
following deficiencies pertaining to
unclaimed property:

• Two of 60 (3%) tangible items
selected as held in the Office’s
unclaimed property vault as of June
30, 2021 were no longer held by the
Office and had been sold or destroyed
in a prior year.

• Two of two (100%) mutual fund
reconciliations and one of three (33%)
security share reconciliations tested
were not completed in a timely manner
ranging from 112 to 311 days after
month end. The December 2019 and June
2020 mutual fund reconciliations were
completed 240 and 311 days after month
end, respectively. The June 2020 share
reconciliation was completed 112 days
after month end.

• One of three (33%) cash
reconciliations and one of three (33%)
security share reconciliations did not
have an identifiable date of
reconciliation or review to determine
timeliness of completion.

• The Office did not reconcile the
Unclaimed Property Management System
(KAPS) expenditures for unclaimed
property claims disbursements to
Illinois Office of Comptroller
expenditure records in Fund 482,
Unclaimed Property Trust Fund, in a
timely manner. For Fiscal Year 2021,
the Office had not reconciled the
months of February 2021 through June
2021 as of April 30, 2022. (Finding 2,
pages 12-13)  This finding has been
repeated since 2011*. (*See note on
cover page.)

We recommended the Office enhance its
controls over the safeguarding of
unclaimed property to ensure policies
and procedures are followed. Further,
we recommended the Office improve
controls over reconciliation
completion and review.

The Office accepted the recommendation
and stated they will review their
processes to improve controls.

OTHER FINDINGS

The remaining findings pertain to
monthly reconciliations, the Office’s
personnel policies and procedures,
Agency Fee Imposition Reports, and
controls over petty cash.  We will
review the Office’s progress towards
the implementation of our
recommendations in our next State
compliance examination.

ACCOUNTANT’S OPINION

The accountants conducted a State
compliance examination of the Office
of the Treasurer, Nonfiscal Officer
Responsibilities, for the two years
ended June 30, 2021, as required by
the Illinois State Auditing Act.  The
accountants stated the Office
complied, in all material respects,
with the requirements described in the
report.

This State compliance examination was
conducted by Crowe 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:sjs