REPORT DIGEST

OFFICE OF THE ATTORNEY GENERAL

STATE COMPLIANCE EXAMINATION
FOR THE TWO YEARS ENDED JUNE 30, 2022

Release Date:  May 25, 2023

FINDINGS THIS AUDIT: 8

CATEGORY:  NEW -- REPEAT -- TOTAL
Category 1:  4 -- 1 -- 5
Category 2:  2 -- 1 -- 3
Category 3:  0 -- 0 -- 0
TOTAL:  6 -- 2 -- 8

FINDINGS LAST AUDIT: 3

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

• (22-2) The Office did not exercise
adequate control over recording and
reporting of its State property and
equipment.
• (22-7) The Office failed to
implement adequate internal controls
over its service providers.

FINDINGS, CONCLUSIONS, AND
RECOMMENDATIONS

INADEQUATE CONTROLS OVER PROPERTY AND
EQUIPMENT

The Office did not exercise adequate
control over recording and reporting
of its State property and equipment.
The auditors noted:

• Auditors were unable to verify the
completeness and accuracy of the
Fiscal Year 2022 asset listing.
Auditors noted adequate controls did
not exist to ensure all transactions
were being tracked appropriately.
• During testing of the Agency Report
of State Property (C-15) forms, the
auditors noted:
– C-15’s for five of eight (63%)
quarters tested were filed one to five
days late.
– The Fiscal Year 2021 Quarter 4 C-15
overstated transfers in by $1,453 and
deletions by $21,399.
– On the Fiscal Year 2021 year end
C-15, Buildings and Building
Improvements were overstated by
$42,798.
• During testing of the Certification
of Inventory and Discrepancy Reports,
the auditors noted:
– Inventory reported differed from the
Office’s records by $845,791 for
Fiscal Year 2021 and by $810,444 for
Fiscal Year 2022.
– The Fiscal Year 2021 discrepancy
listing reported 37 of 58 (64%)
unlocated items, totaling $107,457,
classified as Information Technology
related items that had the potential
to store confidential information on
the operating system and/or
applications loaded on the equipment.
– The Office failed to report
equipment subject to theft with the
Fiscal Year 2021 report.
• Records of equipment expenditures
were unable to be sufficiently
reconciled. Differences of ($20,970)
and $54,089 were noted in Fiscal Years
2021 and 2022, respectively. (Finding
2, pages 12-15).  This finding has
been reported since 2018.

The auditors recommended the Office
correct their inventory records and
strengthen tracking of their equipment
inventory to ensure an accurate and
complete listing. Additionally, the
auditors recommended the Office
implement controls to ensure proper
and timely reporting, recordkeeping
and reconciliations of its State
property records.

The Office accepted the finding and
recommendations and stated staff will
work to strengthen the Office’s
internal controls to increase the
accuracy of property records and
tracking of inventory.

LACK OF ADEQUATE CONTROLS OVER THE
REVIEW OF INTERNAL CONTROLS FOR
SERVICE PROVIDERS

The Office failed to implement
adequate internal controls over its
service providers.

We requested the Office provide the
population of service providers
utilized. In response to our request,
the Office provided a population;
however, during fieldwork, the
auditors identified an additional
service provider. Due to these
conditions, the auditors were unable
to conclude the Office’s populations
were sufficiently precise and detailed
under the Professional Standards
promulgated by the American Institute
of Certified Public Accountants.

Even given the limitations noted
above, the auditors tested a sample of
four services providers and noted the
Office did not:

• Obtain and review System and
Organization Control (SOC) reports for
four (100%) service providers.
• Ensure the contracts for two of four
(50%) service providers documented the
roles and responsibilities of the
service provider and the Office.
• Ensure the contract for three of
four (75%) service providers addressed
the security, integrity, availability,
confidentiality, and privacy controls
over the Office’s applications and
data.
• Enter into a contract or agreement
with one of four (25%) service
providers.
• Formalize the monitoring process
over the activities outsourced to
service providers.
• Document in an intergovernmental
agreement the services provided to the
Office by the State of Illinois,
Department of Innovation and
Technology (DoIT).
• Document an adequate review of the
SOC reports obtained for services
provided by DoIT. (Finding 7, pages
24-25)

The auditors recommended the Office
strengthen its controls in identifying
all service providers. Additionally,
the auditors recommended the Office:

• Obtain and review SOC reports for
all service providers;
• Ensure all service provider
contracts document roles and
responsibilities of the service
provider and the Office, as well as
the security, integrity, availability,
confidentiality, and privacy controls
over the Office’s applications and
data;
• Enter into appropriate agreements
with service providers;
• Formalize monitoring processes over
activities outsourced;
• Enter into an intergovernmental
agreement with DoIT.

The Office accepted the finding and
recommendations and stated they will
implement the recommendations to
increase control and monitoring over
its service providers.

OTHER FINDINGS

The remaining findings pertain to
personal services, accounting record
reconciliations, voucher processing,
maintenance of records and accounting
procedures, cybersecurity, and access
review.  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
for the two years ended June 30, 2022,
as required by the Illinois State
Auditing Act.  The accountants
qualified their report on State
compliance for Findings 2022-002,
2022-004, 2022-005, 2022-007, and
2022-008.  Except for the
noncompliance described in these
findings, the accountants stated the
Office complied, in all material
respects, with the requirements
described in the report.

This State compliance examination was
conducted by Sikich 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

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