REPORT DIGEST

 

DEPARTMENT OF CENTRAL MANAGEMENT SERVICES

 

FINANCIAL AUDIT

AND COMPLIANCE EXAMINATION

For the Year Ended:

June 30, 2007

 

Summary of Findings:

Total This Year                    28

Total Last Year                    18

Repeated From Last Year    14

 

 

Release Date:

May 27, 2008

 

 

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

                    740 E. Ash Street

Springfield, IL 62703

(217) 782-6046 or TTY (217) 888-2887

 

This Report Digest and the Full Report are also available on

the worldwide web at

http://www.auditor.illinois.gov

 

 

SYNOPSIS

 

  • The Department generated excess fund balances for certain internal service fund activities and failed to make adequate adjustments as required by OMB Circular A-87.

 

  • CMS recognized costs for federal reporting purposes different than reported in the Department’s financial statements, and unallowable costs were reported for federal purposes.

 

  • CMS did not document the distribution of salaries or wages for employees working on multiple activities as required by federal regulations.

 

  • CMS failed to comply with the Illinois Administrative Code rules governing advance billing for internal service funds.

 

  • The Department made payments for Workers’ Compensation Act claims from funds appropriated to the Department of Healthcare and Family Services for health care coverage.

 

  • CMS’ expenditure control system was inadequate to ensure that bond funds were utilized for appropriate purposes.

 

  • The Department did not provide adequate documentation to support charges billed for information technology, facilities management and graphic designers (consolidated services).

 

 

 

 

 

 

 

{Expenditures and Activity Measures are summarized on the next page.}


STATE OF ILLINOIS

DEPARTMENT OF CENTRAL MANAGEMENT SERVICES

FINANCIAL AUDIT AND COMPLIANCE EXAMINATION

For The Year Ended June 30, 2007

 

STATEMENT OF ACTIVITIES INFORMATION –

GOVERNMENTAL ACTIVITIES

(expressed in thousands)

 

Fiscal Year 2007

 

Fiscal Year

2006

PROGRAM REVENUES

Charges for Services............................................................

 

EXPENSES

General Government............................................................

Interest................................................................................

NET (EXPENSE) REVENUES........................................

 

Total General Revenues and transfers...................................

CHANGE IN NET ASSETS............................................

 

Beginning Net Assets, July 1................................................

ENDING NET ASSETS, JUNE 30..................................

 

$576,496

 

 

$693,426

96

$693,522

 

       $121,345

$4,319

 

$154,007

$158,326

 

$434,444

 

 

$530,890

    247    

$531,137

 

$243,767

$147,074

 

$6,933

$154,007 

STATEMENT OF NET ASSETS INFORMATION

GOVERNMENTAL ACTIVITIES

(expressed in thousands)

 

Fiscal Year 2007

 

Fiscal Year

2006

Cash equity with State Treasurer.........................................

$65,723

$72,706

Cash and cash equivalents..................................................

$4,107

$5,605

Investments.......................................................................

$0

$1,918

Capital Assets, net..............................................................

$295,393

$284,188

Other Assets......................................................................

$137,391

$93,992

Total Assets....................................................................

$502,614

$458,409

Accounts Payable..............................................................

$53,169

$37,539

Long Term Obligations.......................................................

$261,638

$247,037

Other Liabilities..................................................................

$29,481

$19,826

Total Liabilities...............................................................

$344,288

$304,402

Net Assets, invested in capital assets, net of debt.................

$249,652

$236,316

Net Assets, restricted.........................................................

$3,675

$3,441

Net Assets, unrestricted......................................................

$(95,001)

$(85,750)

Total Net Assets.............................................................

$158,326

$154,007

SELECTED ACTIVITY MEASURES (unaudited)

FY07

FY06

Average Number of Employees ............................................

Number of Business Enterprise Program applications received

Number of Network Data Circuits managed...........................

Number of flexible spending account participants....................

Number of equipment items transferred out of surplus...........

Percent of Workers’ Compensation claims paid within 90 days

Total gallons of gasohol sold..................................................

Number of facilities participating in I-cycle...........................

1,682

809

8,048

10,602

1,826

78.64%

957,389

252

1,729

1,248

7,900

7,705

2,616

31.28%

1,030,376

251

EXECUTIVE DIRECTOR

 

 

During the Audit Period: Paul Campbell (through March 9, 2007)

                                      Maureen O’Donnel (effective March 10, 2007)

Currently:                        Maureen O’Donnel

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Excess fund balances have not been adequately adjusted as required

 

 

 

 

 

 

 

 

 

Liabilities of $24.111 million due to the federal government

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Department officials disagree

 

 

 

 

 

 

 

 

 

 

 

Auditor’s Comment

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

IT billings reported differently

 

 

 

 

 

 

 

 

 

 

Department unable to document matching revenues with related expenses

 

 

 


Inconsistencies in Financial Reporting

 

 

 

 

 

 

 

 

 

 

Excess fund balances need to be determined annually

 

 

 

 

 

Expenditures not reasonable or necessary

 

 

 

 

 

 

 

 

 

The Department officials partially concur

 

 

 

 

 

 

 

 

 

Auditor’s Comment

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Payroll costs for employees paid from one internal service fund were allocated to another internal service fund without adequate supporting documentation

 

 

 

 

 

 

$2.852 million in payroll costs for 85 employees were misallocated among internal service funds

 

 

 

 

 

 

 

 

 

 

The Department disagrees

 

 

 

 

 

 

 

 

 

Auditor’s Comment

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

CMS accepted $2.825 million from DOR for which they had not rendered billings

 

 

CMS recorded $2.825 million as FY08 revenue while DOR reported it as FY07 expenditures

 

 

 

 

 

CMS also received $925,522 from DCFS in excess of billings rendered

 

 

 

 

 

 

 

 

 

Overstatement of revenues

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

The Department disagrees

 

 

 

 

 

 

 

 

 

 

 

Auditor’s comment

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

CMS expended nearly $20 million that was appropriated to another agency

 

 

 

 

 

 

 

 

Invalid interagency agreement

 

 

 

 

 

 

 

 

 

 

 

 

The Department disagrees

 

 

 

 

 

 

 

Auditor’s Comment

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

The IOC denied $1,353,546 in vouchers to be paid from the Capital Development Fund

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

The Department disagrees

 

 

 

 

 

 

 

 

 

 

 

 

 

Auditor’s Comment

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Inadequate supporting documentation provided to user agencies

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

The Department disagrees