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INTRODUCTION
Our
audit of the Department of Central Management Services is issued in four
documents: 1) the Financial Audit, 2) the Compliance Examination, 3) CMS
Responses, Auditor General Comments and Auditors' Comments on the Compliance
Examination, and 4) CMS Attachments to CMS Responses to the Compliance
Examination. The Financial Audit
Report contains the Department’s financial statements and opinion on these
statements. The Compliance
Examination document contains the audit findings and recommendations, as well
as the supplementary financial information.
The Department’s responses to the findings, along with the Auditor
General’s Comments and Auditors' Comments, are contained in a third document
titled as such. Finally, attachments
to the Department’s responses, which were provided by CMS to the Office of
the Auditor General, are contained in a fourth document titled as such.
FINDINGS, CONCLUSIONS, AND RECOMMENDATIONS
PAYMENTS
WERE MADE FOR EFFICIENCY INITIATIVE BILLINGS FROM IMPROPER LINE ITEMS; CMS
DID NOT FULFILL ITS STATUTORY RESPONSIBILITY TO DETERMINE COST SAVINGS FOR
EFFICIENCY INITIATIVE BILLINGS TO OTHER STATE AGENCIES
The Department made payments for efficiency initiative billings from
improper line item appropriations.
Further, the Department appears to have transferred responsibility for
determining cost savings for efficiency initiatives to another agency when
the responsibility is granted to the Department by State law.
Public Act 93-0025, in part, outlines a
program for efficiency initiatives to reorganize, restructure and reengineer
the business processes of the State.
The State Finance Act details that the amount designated as savings
from efficiency initiatives implemented by the Department of Central
Management Services shall be paid into the Efficiency Initiatives Revolving
Fund. The Act further requires State
agencies to pay these amounts from line item appropriations where cost
savings are anticipated to occur.
During FY04, the Department paid eight
billings totaling $24,843,842 for savings from efficiency initiatives. We found that the Department made payments
for these billings not from line item appropriations where the cost
savings were anticipated to have occurred, as provided for in the State
Finance Act. Rather, the Department
made payments for the billings generally where it had flexibility in funding
levels.
Further, although Public Act 93-0025
gave the Department the duty to "establish the amount of cost savings to
be realized by State agencies from implementing the efficiency
initiatives," Department officials noted that the Governor's Office of
Management and Budget (GOMB), in fact, established the amounts that were billed
to all State agencies - including the Department - in September 2003. Department staff printed the amounts
received from GOMB onto Department invoices.
These invoices were then returned to GOMB – which then decided which
invoices would be sent to agencies for payment. (Finding Code No. 04-1, page 12)
We recommended that the Department only
make payments for efficiency initiative billings from line item
appropriations where savings would be anticipated to occur. Further, we recommended the Department
seek an explanation from the Governor’s Office of Management and Budget as to
how savings levels were calculated, or otherwise arrived at, and how savings
achieved or anticipated impact the Department’s budget. Finally, we recommended the Department, as
required by State statute, establish the amount of cost savings to be
realized by State agencies from implementing efficiency initiatives or seek
legislative changes to the law to assign that responsibility to the
Governor’s Office of Management and Budget.
The Department disagreed with most of
the finding and recommendation.
LACK
OF DOCUMENTATION IN CONTRACT FILES
We selected nine contracts related to the Department’s major
initiatives awarded in FY04, totaling a maximum award amount of $69 million,
for which we reviewed the procurement and award files at the Department. While the Department’s contract files
contained summary scoring sheets for each procurement tested, 6 of 9
contract files (67 percent) did not have the individual evaluators’ scoring
sheets. Further, some summary sheets
did not identify who the evaluators were and some summary scoring sheets did
not show a breakdown of the scoring by evaluation category. Lacking this detailed information, the
accuracy of the summary sheet, and the integrity of the scoring process,
could not be verified.
Eight of 9 of the contract files we
tested (89 percent) lacked evidence of a decision memorandum to the Director
recommending the award of a contract to a specific vendor. The Illinois Administrative Code requires
written determinations to be filed in the solicitation or contract file to
which it applies. (Finding Code No.
04-2, page 16)
We recommended that the Department develop a recommendation
decision memorandum for director approval prior to allowing vendors to begin
work on State projects. We also
recommended that the Department maintain individual scoring sheets completed
by evaluators to properly support the award of taxpayer monies to contractors.
The Department disagreed with the finding.
USE
OF CONTRACTOR WORK IN DEVELOPING RFP SPECIFICATIONS
The Department used vendors to develop specifications in
Requests for Proposals (RFP) – including some vendors that eventually
received awards for the procurement opportunities. In 67 percent (6 of 9) of the contracts we reviewed, the
winning vendor participated in the development of information for the RFP
and/or was granted a waiver by the Department to propose on the
procurement. Three of the six winning
vendors had information attributed to them in the RFP, as follows:
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