REPORT DIGEST

DEPARTMENT OF CENTRAL MANAGEMENT
SERVICES, COMMUNITY COLLEGE HEALTH
INSURANCE SECURITY FUND

FINANCIAL AUDIT
FOR THE YEAR ENDED JUNE 30, 2022

Release Date:  April 6, 2023

FINDINGS THIS AUDIT: 2

CATEGORY:  NEW -- REPEAT -- TOTAL
Category 1:  0 -- 0 -- 0
Category 2:  1 -- 1 -- 2
Category 3:  0 -- 0 -- 0
TOTAL:  1 -- 1 -- 2

FINDINGS LAST AUDIT: 1

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

This digest covers the Department of
Central Management Services
(Department), Community College Health
Insurance Security Fund financial
audit as of and for the year ended
June 30, 2022.

SYNOPSIS

• (22-1) The Department failed to
determine premiums that will allow for
the establishment of an actuarially
sound reserve for the Community
College Health Insurance Program.

• (22-2) The Department did not have
sufficient controls over their change
management procedures.

FINDINGS, CONCLUSIONS, AND
RECOMMENDATIONS

FAILURE TO DETERMINE PREMIUMS THAT
ALLOW FOR ESTABLISHMENT OF ACTUARIAL
SOUND RESERVE

The Department of Central Management
Services (Department) failed to
determine premiums that will allow for
the establishment of an actuarially
sound reserve for the Community
College Health Insurance Program
(Program).

In the Fiscal Year 2018 and 2019
compliance examination, we first
reported the Department had failed to
determine premiums that would allow
for the establishment of an
actuarially sound reserve. During
Fiscal Year 2022 testing, we continued
to identify exceptions, as noted
below:

• The State Employees Group Insurance
Act of 1971 (Act) (5 ILCS 375/6.9(e)
(2)) states the balance of the rate of
insurance, including the entire
premium for any coverage for community
college dependent beneficiaries that
has been elected, shall be paid by
deductions authorized by the community
college benefit recipient. During
testing, we noted the Fund covered
1.932% of the total insurance rate for
benefit recipients. The projected
total additional cost to the Fund was
$42,066.

• The Act (5 ILCS 375/6.9(e)) requires
the Department to determine premiums
that will allow for the establishment
of an actuarially sound reserve for
the Program. As of June 30, 2022, the
Program had a fund deficit of $123.594
million. Additionally, the Program
experienced a loss of $19.458 million
during Fiscal Year 2022. The Program
does not have an actuarially sound
reserve.  (Finding 1, pages 24-25)

We recommended the Department ensure
premium rates meet the requirements
established by the Act. Additionally,
we recommended the Department either
comply with the law by working with
the Governor’s Office of Management
and Budget to obtain the necessary
appropriation to supplement the
Program or seek legislative relief
from the statutory requirement.

The Department agreed with the finding
and stated it will seek legislative
relief as an expected bill is in the
process of being introduced.

INADEQUATE CONTROLS OVER CHANGE
MANAGEMENT

The Department did not have sufficient
controls over their change management
procedures.

Change control is the systematic
approach to managing changes to an IT
environment, applications, or data.
The purpose is to prevent unnecessary
and/or unauthorized changes, ensure
all changes are documented, and
minimize any disruptions due to system
changes.  The Department was unable to
provide a complete and accurate
population of changes for applications
maintained by the Department;
therefore, we were unable to perform
any testing of the internal controls
over changes to the applications and
data.  (Finding 2, pages 26-27)

We recommended the Department
implement controls in order to track
the changes made to their applications
and data.

The Department agreed with the finding
and stated it will work with the
Department of Innovation and
Technology (DoIT) to obtain the
information needed to implement the
controls necessary for tracking
changes made to its applications.

AUDITOR’S OPINION

The auditors stated the financial
statements of the Department of
Central Management Services, Community
College Health Insurance Security Fund
as of and for the year ended June 30,
2022, are fairly stated in all
material respects.

This financial audit 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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