Illinois Office of the Treasurer Nonfiscal Officer Responsibilities

REPORT DIGEST

OFFICE OF THE STATE TREASURER

NONFISCAL OFFICER RESPONSIBILITIES

FINANCIAL AND COMPLIANCE AUDIT

For the Two Years Ended:
June 30, 1999

Summary of Findings:

Total this audit 1
Total last audit 1
Repeated from last audit 0

Release Date:
April 20, 2000

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
Attn: Records Manager
Iles Park Plaza
740 E. Ash Street
Springfield, IL 62703

(217)782-6046 or TDD (217) 524-4646

This Report Digest is also available on
the worldwide web at
http://www.state.il.us/auditor

SYNOPSIS

The Office of the State Treasurer’s Internal Audit division was not fully in compliance with the Fiscal Control and Internal Auditing Act. Audits of certain major systems were not completed during a 2 year cycle.

{Expenditures and Activity Measures are summarized on the reverse page

OFFICE OF THE STATE TREASURER - NONFISCAL OFFICER RESPONSIBILITIES
FINANCIAL AND COMPLIANCE AUDIT
For The Two Years Ended June 30, 1999

EXPENDITURE INFORMATION AND STATISTICS	FY 1999	FY 1998	FY 1997
Total Expenditures (All Funds) APPROPRIATED EXPENDITURES % of Total Expenditures General Revenue Fund - 001 Personal Services Employee Retirement - Contributions Paid by Employer State Contribution to State Employees' Retirement System State Contribution to Social Security Contractual Services Travel Commodities Printing Equipment Electronic Data Processing Telecommunications Operation of Auto Equipment SAMS Conversion Costs Refunds of Estate Tax & Accrued Interest thereon Refunds of Accrued Interest on Protested Taxes Total Expenditures - General Revenue Fund General Obligation Bond Fund - 101 Payment of Principal Payment of Interest Payments to Refund General Obligation Bonds Total Expenditures - General Obligation Bond Fund Bank Service Trust Fund - 373 Total Payments for Banking Services Matured Bond and Coupon Fund - 625 Total Payments of Matured Bonds and Interest Estate Tax Collections Distributive Fund - 815 Total Payments to Counties	$1,014,245,306 $901,664,075 89% $ 4,225,233 165,577 402,775 316,707 795,215 113,768 32,067 12,629 32,073 590,443 148,787 8,794 398,435 4,175,861 964,295 $12,382,659 $422,975,040 267,771,278 173,178,627 $863,924,945 $4,552,496 $197,608 $20,606,367	$934,835,788 $840,201,665 90% $ 3,923,171 151,728 255,322 294,353 778,744 117,137 28,509 15,500 40,929 580,626 142,847 7,039 296,734 4,399,977 110,877 $ 11,143,493 $427,305,031 258,844,719 123,256,504 $809,406,254 $4,815,558 $131,124 $14,705,236	$849,014,805 $785,775,004 93% $3,769,032 142,561 187,193 283,197 713,688 83,537 26,096 22,140 34,056 553,785 127,926 7,812 0 3,400,423 298,379 $9,649,825 $419,062,527 255,578,066 84,803,153 $759,443,746 $4,865,122 $72,587 $11,743,724
UNAPPROPRIATED EXPENDITURES % of Total Expenditures IPTIP Administrative Trust Fund - 195 Protest Fund - 401 Metropolitan Pier and Exposition Fund - 337 Cost of Property and Equipment	$112,581,231 11% $1,392,856 $31,520,535 $79,667,840 $2,532,441	$94,634,123 10% $1,248,327 $1,016,411 $92,369,385 $2,403,035	$63,239,801 7% $1,205,998 $3,942,793 $58,091,010 $2,795,799
SELECTED ACTIVITY MEASURERS(unaudited)	FY 1999	FY 1998	FY 1997
Overall Average Yield on Investments Overall Average Investments Number of Warrants Issued Number of Active IPTIP Accounts Estate Tax Collections Estate Tax Distributions	5.05% $6,268,822,280 10,570,290 4,979 $346,977,725 $20,606,367	5.59% $5,457,815,997 10,695,989 4,659 $250,434,181 $14,705,236	5.40% $4,679,071,103 13,412,801 4,350 $199,423,183 $11,079,458
STATE TREASURER During Audit Period: Honorable Judy Baar Topinka Currently: Honorable Judy Baar Topinka

The Internal Audit division was not fully in compliance with the Fiscal Control and Internal Auditing Act

FINDINGS, CONCLUSIONS, AND RECOMMENDATIONS

NEED TO PERFORM INTERNAL AUDITS ON ALL MAJOR SYSTEMS

The Treasurer’s Internal Audit division has an established two-year audit plan to ensure all major areas are audited biennially as required by statute. However, during fiscal year 1999, the following scheduled audits were not completed: The Illinois Funds Division, Accounting Division, MIS Division, and Petty Cash (Springfield).

The Fiscal Control and Internal Auditing Act requires a program of internal auditing in which all major systems of internal accounting are to be reviewed at least once every two years. Officials in the Treasurer’s Office stated part of the problem for not completing the current two-year audit cycle rests with the transition of chief internal auditors during fiscal year 1999. In addition, it was noted staffing was also a problem in that, other than the chief internal auditor, the division had one part-time employee and one intern. (Finding 1, page 10)

We recommended the Treasurer’s Office fully comply with the Fiscal Control and Internal Auditing Act. The Treasurer accepted the recommendation and indicated a two-year audit plan has been approved and it is anticipated that all required audits will be completed within the audit plan timeframe.

Ms. Barbara Ringler, Chief Internal Auditor provided the response to our recommendation.

AUDITORS' OPINION

Our auditors state the Treasurer's financial statements for the nonshared State Treasury and locally-held funds are fairly stated for the two years ended June 30, 1999.

____________________________________

WILLIAM G. HOLLAND, Auditor General

WGH:RPU:pp

SPECIAL ASSISTANT AUDITORS

The firm of Kerber, Eck & Braeckel LLP were our special assistant auditors for this audit.