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FINDINGS, CONCLUSIONS, AND
RECOMMENDATIONS
INADEQUATE CONTROLS OVER CAMPING REVENUES AND PERMITS
The
Department of Agriculture (Department) did not maintain adequate controls
over camping revenue and permits at the Illinois State Fair (Fair) to ensure
all revenues for camping were received.
The Department rents campsites at the fairgrounds
during the time of the fair. Total
camping revenue for the 2004 and 2005 Fairs was $84,780 and $76,810,
respectively. During our sample
testing of 30 camping permits during the 2004 Fair, we noted that the
Department did not receive the proper amount of camping revenue from 6
campers (20%) resulting in overcharges to campers of $50. During our sample testing of 32 camping
permits during the 2005 Fair, we noted that the Department did not receive
the proper amount of camping revenue from 13 campers (41%) resulting in a
loss to the Fair of $175.
During our
sample testing of 30 camping permits during the 2004 Fair, we noted that the
Department did not properly complete 11 camping permits (37%) resulting in an
identifiable loss of $75. During our
sample testing of 32 camping permits during the 2005 Fair, we noted that the
Department did not properly complete 7 of the camping permits (22%). The problems noted with the permits
included missing information, inconsistent dates, and miscalculations of the
number of days camped. We also noted
7 permits were not properly displayed on the camper during the 2005
Fair. The amount of lost revenue from
the improperly displayed permits in 2005 could not be identified.
The Department entered into a special agreement
with a vendor during the 2004 Fair that allowed the vendor 10 complimentary
camping spaces. We noted that the
vendor had a total of 16 camping spaces.
However, the Department did not charge the vendor for the 6 additional
camping spaces, resulting in a loss to the Fair of $1,800 in camping
revenues. (Finding 1, pages 8-9)
We
recommended the Department improve control procedures over camping revenue
and receipts. Further the Department
should improve controls over the completion and monitoring of camping
permits.
Department
officials agreed with the finding and stated it will review its procedures
for camping revenue and receipts and make changes as necessary.
PROOF OF INSURANCE
NOT OBTAINED
The
Department did not obtain proof of insurance from Illinois State Fair
vendors, as required by terms of their contract for the 2005 Fair.
The Department entered into contractual agreements
with vendors to provide services at the Fair. During the 2005 Fair, the Department did not obtain proof of
insurance from 10 of 30 contracts sampled (33%) as required by the terms of
their contracts. (Finding 2, page 10)
We
recommended the Department implement procedures to ensure the Department does
not sign contracts until proof of insurance is obtained from the vendor.
Department
officials agreed with our recommendation and stated that they will ensure
that all vendors provide proof of insurance at check-in and that no one is
allowed to set up at the Fair without having provided the proof of
insurance.
INADEQUATE CONTROLS OVER GATES AND
PARKING ADMISSION
The
Department did not have adequate control over gate/parking admissions at the
Illinois State Fair (Fair).
The
Department sells parking space at the Fair each year. Total gate admissions for the 2004 and
2005 fairs was $943,612 and $958,353, respectively.
During
the gate observations in 2004 Fair, the following exceptions were noted:
·
One gate was unmanned for over 30
minutes.
·
Unsold tickets were left unattended.
·
A volunteer at one gate was observed
taking cash from two different groups of pedestrians for the purchase of a
ticket, however, they were not tearing off a ticket and placing it in the
appropriate collection box.
·
Four gates were understaffed causing
the volunteer to sell and take tickets.
·
During detail testing of the entire
gate admissions process, it appeared that the contractor did not have
adequate controls over ticket sales and gate admissions. It appeared the contractor underestimated
the staffing requirement needed to provide adequate supervision, adequate
staff at the gates, and still perform the required cash and ticket
reconciliations and reporting of those daily amounts in a timely manner.
·
The contractor did not make up any
shortages of gate and parking revenues as required by the contract. The contractor deposited $3,608 less than
what should have been deposited in admission revenue based on unsold
tickets.
During
the gate observations in 2005 Fair, the following exceptions were noted:
·
Non-paid credentials were not
collected.
·
One gate was undermanned causing the
volunteer to sell and take tickets from pedestrians.
·
Parking permits for vehicles were
checked but passengers were not checked if they have valid admission tickets.
·
We
noted parked vehicles with no parking passes (employee or purchased pass)
displayed in their cars. (Finding
4, pages 12-14)
We
recommended the Department enhance its controls over gate and parking
admissions.
Department
officials agreed with our recommendation and indicated that controls were
substantially improved in 2005, and that it will review procedures with the
gate/parking contractor to ensure that gate and parking admissions are
handled with maximum accuracy.
NO SUPPORTING DOCUMENTS FOR ALL-ACCESS PASSES
The
Department did not have supporting documents for recipients of the All-Access
Pass issued during the 2005 State Fair.
During
the 2005 Fair, 147 All-Access Passes were distributed to various individuals
at the discretion of the Fair Manager and the Fair did not keep supporting
documentation to indicate individuals issued passes and the purpose for
issuing the passes. Additionally, per
review of the All-Access Passes, we noted that no documentation was presented
detailing any limitations, if any, on the use of these passes and whether
these limitations had been communicated to the recipients. (Finding 8, page 18)
We
recommended Fair personnel document the issuance of non-paid All-Access
Passes and clearly communicate the use/limitation of such passes in writing
to the recipient.
Department
officials agreed with our recommendation and stated that beginning with the
2006 Fair, there will not be any All-Access Passes distributed.
INADEQUATE SEGREGATION OF DUTIES OVER NON-FAIR SPACE RENTAL
The
Department did not have adequate segregation of duties in its Non-Fair Space
Rental Division.
During
the 2005 Fair examination, we noted that one person in the Non-Fair Space
Rental Division is responsible for entering revenue accounting information
into Fair Management System (FMS) for Non-Fair rentals, and processing and
depositing cash receipts. Non-fair
space rentals totaled $1,015,211 in fiscal year 2005.
Good
internal control procedures require that responsibilities for maintaining
accounting records be segregated from responsibilities with access to cash or
other assets. (Finding 9, page 19)
We
recommended Fair personnel allocate the resources necessary to segregate
duties over the fiscal operations of the Non-Fair Space Rental.
Department
officials agreed with our recommendation and stated it will review current
procedures and establish new procedures to ensure there is an adequate
separation of duties.
OTHER FINDINGS
The remaining findings
are reportedly being given attention by the Department. We will review the Department’s progress
toward implementing our recommendations in our next audit.
Ms. Laura Lanterman, Chief Fiscal
Officer, provided the responses to our findings and recommendations.
FINANCIAL RESULTS OF THE FAIR
Fair expenditures
exceed revenues by $3,313,804 and $3,792,340 for the years ended September
30, 2005 and 2004, respectively.
(page 24)
ACCOUNTANTS’ REPORT
The auditors’ have applied certain limited procedures to the
accompanying supplementary information of the Illinois State Fair, except for
information marked “not examined”.
_______________________________________
WILLIAM
G. HOLLAND, Auditor General
WGH:JAF:pp
SPECIAL ASSISTANT AUDITORS
McGladrey & Pullen LLP were our special assistant
auditors for this examination.
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