REPORT DIGEST

Financial, Compliance, and Program Audit of the

VILLAGE OF ROBBINS’

USE OF
MUNICIPAL ECONOMIC DEVELOPMENT FUNDS

Released: June 2000

Logo.gif (1870 bytes)

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 East 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

Public Act 90-813, adopted on January 29, 1999, amended the Public Utilities Act (220 ILCS 5/8-403.1) to require the Auditor General to conduct an annual financial, compliance, and program audit of distributions received by any municipality in Illinois from the Municipal Economic Development Fund. Under the Public Utilities Act, qualified solid waste energy facilities are required to pay into the Fund $0.0006 per kilowatt hour of electricity for which payment was received during the previous month.

Each audit is to be for distributions from the Fund for the immediately preceding year. This is the first audit conducted under this requirement. This audit covers distributions from the Fund during calendar year 1999.

The Village of Robbins was the only entity to receive distributions from the Fund for calendar year 1999. The audit concluded that:

  • Robbins received $137,828 from the Fund for calendar year 1999.
  • As of January 2000, Robbins had not spent any of the $137,828 received. Therefore, there were no expenditures to review for this audit.

The next annual audit pursuant to this requirement will review any expenditures made by Robbins from Fund distributions during calendar year 2000.

We identified some potential weaknesses regarding the State’s collection of monies deposited into the Fund. Subsequent financial and compliance audits by the Auditor General of the State Treasurer, Illinois Commerce Commission (ICC), and Department of Revenue will examine whether the proper amount of Fund payments is being collected from qualified solid waste energy facilities and paid to Robbins in a timely manner.

 

 

REPORT CONCLUSIONS

The Village of Robbins was the only entity to receive distributions from the Municipal Economic Development Fund for calendar year 1999. Robbins received $137,828 from the Fund for calendar year 1999. As of January 2000, Robbins had not expended any of these funds. Therefore, there were no expenditures to review for this audit. The next annual audit pursuant to this requirement will review any expenditures made by Robbins from Municipal Economic Development Fund distributions during calendar year 2000.

We identified some potential weaknesses regarding the State’s collection of monies deposited into the Fund. Subsequent financial and compliance audits by the Auditor General of the State Treasurer, ICC, and Department of Revenue will examine whether the proper amount of Fund payments is being collected from qualified facilities and paid to Robbins in a timely manner.

 

THE 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 outside the State treasury to receive and maintain payments from qualified solid waste energy facilities that sell electricity to electric utilities.

The Public Utilities Act defines a "qualified solid waste energy facility" as a facility that the ICC determines to qualify under the Local Solid Waste Disposal Act (415 ILCS 10) to use methane gas generated from landfills as its primary fuel and to possess characteristics that would enable it to qualify as a cogeneration or small power production facility under federal law. The ICC is responsible for requiring electric utilities to enter into long-term contracts to purchase electricity from qualified solid waste energy facilities. According to information from the ICC, Treasurer, and Department of Revenue, there were 24 qualified solid waste energy facilities operating in Illinois in 1999. (Pages 1-2)

 

EXPENDITURE OF DISTRIBUTIONS FROM
THE MUNICIPAL ECONOMIC DEVELOPMENT FUND

Digest Exhibit 1 shows that the Treasurer distributed $137,828 in calendar year 1999 Municipal Economic Development Fund receipts to Robbins. Robbins did not expend any funds received from the Municipal Economic Development Fund through January 2000.

When Robbins received the first payment of $61,628 in October 1999, it did not set up a separate account as required by the Public Utilities Act (220 ILCS 5/8-403.1). Robbins corrected the error by establishing a separate interest-bearing account on January 26, 2000. The $137,828 deposited into the account included the initial $61,628, plus $76,200 received in January 2000. (Pages 5-6)

Robbins was the only entity to recieve distributions from the Municipal Economic Development Fund.

Robbins received $137,828 from the Fund for calendar year 1999.

As of January 2000, Robbins had not spent any of the funds received

 

 

 

 

 

Digest Exhibit 1
VILLAGE OF ROBBINS’ RECEIPT AND EXPENDITURE OF MUNICIPAL ECONOMIC DEVELOPMENT FUNDS
(For Calendar Year 1999)

Disbursement Received 10/99:
Disbursement Received 01/00:
Total Receipts:
Total Expenditures:
Balance as of January 2000:

$ 61,628
$ 76,200
$137,828
$ 0
$137,828
Note: Figures rounded to nearest dollar.
Source: Village of Robbins

 

 

 

 

 

 

 

 

 

OTHER ISSUES FOR REVIEW DURING FUTURE FINANCIAL AND COMPLIANCE AUDITS OF STATE AGENCIES

Information received from the State Treasurer, ICC, and Department of Revenue indicates that the State may need to improve controls over receipts and disbursements from the Municipal Economic Development Fund. Future financial and compliance audits of these agencies will focus on:

  • Whether all Required Payments are being made into the Fund – We received differing information from the Treasurer, ICC, and the Department of Revenue regarding qualified solid waste energy facilities required to pay into the Municipal Economic Development Fund.
  • Whether Qualified Solid Waste Energy Facilities are Paying into the Fund in a Timely Manner – Qualified solid waste energy facilities have filed late payments with the Treasurer. The Public Utilities Act (220 ILCS 5/8-403.1) states that each facility that sells electricity to an electric utility shall make a payment into the Fund by the 15th of each month based on the number of kilowatts for which payment was received during the previous month. As of March 2000, only 8 of the 24 facilities had paid into the Fund for the last quarter of calendar year 1999.
  • Whether the Treasurer is Making Disbursements to Robbins in a Timely Manner – The Public Utilities Act (220 ILCS 5/8-403.1) states that the State Treasurer must make distributions from the Municipal Economic Development Fund immediately after January 15, April 15, July 15, and October 15 of each year. Because Robbins maintains the Fund receipts in a separate interest-bearing account, any delay by the Treasurer in making quarterly disbursements could result in lost revenue for Robbins. (Pages 6-7)

 

AGENCY RESPONSES

The audit report has no recommendations. However, the Village of Robbins responded in writing to the report. Their response questions whether all funds are being collected by the State on behalf of Robbins. As discussed above, we will follow up on this in subsequent financial and compliance audits of State agencies. Robbins’ entire response is included in Appendix C of the audit report.

 

 

                                                            WILLIAM G. HOLLAND
                                                            Auditor General

WGH/JK

 Future financial and complaince audits of the Treasuer, ICC, and Department of Revenue will assess whether the proper amount of Fund payments is being collected from qualified solid waste energy facilities and paid to Robbins in the timely manner.