REPORT DIGEST
VILLAGE OF ROBBINS’ USE OF MUNICIPAL ECONOMIC
DEVELOPMENT FUND MONIES
FINANCIAL, COMPLIANCE, & PROGRAM AUDIT
For the Year Ended: December 31, 2009
Summary of Findings:
Total this audit: 1
Total last audit: 1
Repeated from last audit: 1
Release Date: December 16, 2010
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
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SYNOPSIS
The Public Utilities Act (220 ILCS 5/8-403.1) requires the
Auditor General to conduct an annual financial, compliance, and program audit
of distributions received by any municipality from the Municipal Economic
Development Fund (MEDF). Qualified solid
waste energy facilities are required to pay into the Fund $0.0006 per kilowatt
hour of electricity the facilities sold to electric utilities.
Each audit is to be for distributions from the Fund for the
immediately preceding year. This is the
eleventh audit conducted under this requirement. This audit covers distributions from the Fund
during calendar year 2009. The Village
of Robbins was the only entity to receive distributions from the Fund. The audit concluded that:
• In 2009, Robbins received $380,568.28 in quarterly
disbursements from the Fund.
• Robbins used these monies for specific disbursements such
as Village payroll, employee insurance expenses, and general Village
expenses. Based on our review of
documentation provided by the Village of Robbins, we concluded that Robbins’
calendar year 2009 expenditures of MEDF receipts appeared to be consistent with
Public Utilities Act requirements.
• Robbins officials have not yet calculated and transferred
the interest earned on a $1.6 million Department of Commerce and Economic
Opportunity grant deposited into the Village’s MEDF fund in April 2007. The Public Utilities Act requires that MEDF
monies be held in a “separate account.”
MUNICIPAL ECONOMIC DEVELOPMENT FUND
The Public Utilities Act was amended in January 1999 to
create the Municipal Economic Development Fund.
The Municipal Economic Development Fund is a trust fund created to
receive and maintain payments from qualified solid waste energy facilities that
sell electricity to electric utilities.
Each qualified facility must make payments of $0.0006 per kilowatt hour
of electricity it produces and sells to the electric utilities. The facilities
make payments to the Department of Revenue, which deposits the payments into
the Fund. The Department may assess
penalties and interest if the facilities do not submit the payments.
Amendments added by Public Act 94-836 require that the
Treasurer compare the monthly amount received to the amount received for the
corresponding month in 2002. If the
amount received in 2002 is greater, the difference is to be transferred from
the General Revenue Fund to the MEDF. A
total of $340,381.73 was transferred in 2009.
The State Treasurer is required to make quarterly
distributions from the Fund to each eligible municipality. Prior to August 2009, an eligible city,
village, or incorporated town had to have within its boundaries an incinerator
that:
(1) uses, or on the effective date of Public Act
90-813 [January 29, 1999], used municipal waste as its primary fuel to generate
electricity;
(2) was determined by the Illinois Commerce
Commission (ICC) to qualify as a qualified solid waste energy facility prior to
the effective date of Public Act 89-448 [March 14, 1996]; and
(3) commenced
operation prior to January 1, 1998.
According to information from the ICC and the Illinois Environmental Protection Agency, Robbins had the only operating incinerator in the State that met these criteria and was entitled to receive disbursements from the Municipal Economic Development Fund.
Public Act 96-449, effective August 14, 2009, changed the
requirements for a municipality that is eligible to receive funds. An eligible municipality now must be located
in Cook County and must have “approved construction of an incinerator within
its boundaries that will burn recovered wood processed for fuel to generate
electricity.” An official at IEPA
confirmed that the plant in Robbins is the only place in Cook County with a
permit to burn clean wood recovered from construction and demolition debris on
a permanent basis. (pages 2–3)
EXPENDITURE OF FUNDS FROM THE MUNICIPAL ECONOMIC DEVELOPMENT
FUND
The Village of Robbins is the only entity to receive
distributions from the Municipal Economic Development Fund. In calendar year 2009, Robbins’ net cash
receipts from the Municipal Economic Development Fund (MEDF) totaled
$380,568.28 and the Village earned $56.12 in interest income on monies
deposited into its MEDF account. Digest
Exhibit 1 shows that Robbins disbursed $380,645.94 in Municipal Economic Development
Fund receipts during calendar year 2009.
Robbins began the year with a cash balance of $78.53 in its bank account
for Municipal Economic Development Funds and ended the year with a balance of
$56.99 in the account.
The Public Utilities Act establishes requirements regarding
the allowable uses of Municipal Economic Development Funds (220 ILCS
5/8-403.1(j)). The Act states that MEDF
distributions may be used only to: promote and enhance industrial, commercial,
residential, service, transportation, and recreational activities and
facilities within its boundaries, thereby enhancing the employment
opportunities, public health and general welfare, and economic development
within the community, including administrative expenditures exclusively to
further these activities.
The Act also lists specific purposes for which the MEDF
distributions cannot be used. Based on
our review of documentation provided by the Village of Robbins, we concluded
that Robbins’ calendar year 2009 expenditures of MEDF receipts appeared to be
consistent with Public Utilities Act requirements. Specific disbursements were made for employee
payroll; employee insurance expenses; purchase and repair of Village vehicles;
and other general Village expenses.
Digest Exhibit 2 summarizes the amount and purpose for Robbins’ cash
disbursements from the Municipal Economic Development Fund receipts during
calendar year 2009.
In April 2007, Robbins officials deposited $1.6 million in
grant funds it received from the Department of Commerce and Economic
Opportunity into its MEDF account, resulting in a commingling of the funds for
approximately one month. The Public Utilities
Act requires that MEDF monies be held in a “separate account.” When the grant monies were removed from the
Village’s MEDF account, Village officials did not properly allocate and
transfer the amount of interest earned on the grant monies out of the MEDF
account. As of August 2010, Village
officials still had not calculated the interest earned on the grant funds and
transferred it to the proper account.
We recommended that Village officials calculate the amount
of interest earned by the grant funds and transfer that amount to the proper
fund. Village officials responded that the grant was deposited into the MEDF
account in error and that the interest earned will be calculated and
transferred to the correct account.
We audited the Village of Robbins Statements of Cash
Receipts from the Municipal Economic Development Fund and Cash Disbursements
from those Cash Receipts for the year ended December 31, 2009. We concluded that the financial statements
were fairly presented in all material respects.
Appendix B to the full report contains the Independent Auditor’s
Reports. (pages 4-7)
AGENCY RESPONSE
The Village of Robbins concurred with the conclusions in the
audit. The full text of the Village’s
response is included as Appendix C of the report.
WILLIAM G. HOLLAND
Auditor General
WGH:BH
This audit was conducted by the staff of the Office of the Auditor General.