REPORT DIGEST

CAPITAL DEVELOPMENT BOARD

COMPLIANCE EXAMINATION
FOR THE TWO YEARS ENDED JUNE 30, 2020

Release Date:  June 16, 2021

FINDINGS THIS AUDIT: 9

CATEGORY:  NEW -- REPEAT -- TOTAL
Category 1:  3 -- 0 -- 3
Category 2:  5 -- 1 -- 6
Category 3:  0 -- 0 -- 0
TOTAL:  8 -- 1 -- 9

FINDINGS LAST AUDIT: 6

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

INTRODUCTION

This digest covers the Capital
Development Board’s (CDB) Compliance
Examination for the two years ended June
30, 2020.  A separate digest covering the
CDB’s financial audit as of and for the
year ended June 30, 2020, will be
released under separate cover.  In total,
this report contains 9 findings, 2 of
which were reported in the financial
audit.

SYNOPSIS

• (20-03) The CDB did not provide all
requested documentation to the auditors
in a timely manner.
• (20-09) The CDB did not have adequate
internal controls to demonstrate the
schedules and components (report
components) within the CDB’s Compliance
Examination Report were complete and
accurate.

FINDINGS, CONCLUSIONS, AND
RECOMMENDATIONS

FAILURE TO PROVIDE REQUESTED
DOCUMENTATION IN A TIMELY MANNER

The Capital Development Board (CDB) did
not provide all requested documentation
to the auditors in a timely manner.

As is necessary in a compliance
examination, we made numerous requests of
the CDB during our fieldwork. Two hundred
and fifty-seven (257) specific written
requests for information were made to the
CDB for documentation to perform our
testing. Requests were routed through one
employee designated as the audit liaison,
as requested by the CDB. While the
employee ensured requests were sent
through to the appropriate personnel, and
conducted follow-ups, one request was
never returned to the auditors by various
CDB personnel.  Documents related to 122
(47%) requests were provided after the
date they were requested as noted below:

Days Received After the Due Date of
Request
11 to 30 days; 63 items
31 to 60 days; 28 items
61 to 90 days; 17 items
90 to 120 days; 3 items
Over 120 days; 11 items
Total	122

The request for documentation never
provided by the CDB was one request for
affirmation of cause statements for
potential findings.  (Finding 3, pages
20-21)

We recommended the CDB submit requests to
auditors in a timely manner and ensure
that any requested documents are provided
in their entirety.

CDB accepted our recommendation, and
stated the conversion to a digital work
environment due to the COVID-19 pandemic
resulted in additional time needed to
scan in paper documents.  Additionally
CDB stated its staff was working remotely
using home office equipment and a virtual
connection application which increased
the difficulty of reviewing and
completing all the information and
statements required in a timely manner.
CDB stated it communicated these issues
to the external audit partners. Finally,
CDB stated due to learning to work in a
remote environment, there was an overall
lack of communication between CDB and our
external audit partners.

In an auditor’s comment, we noted that
during fieldwork, periodic status
meetings were requested by the auditor,
however; the request was declined by CDB.
Additionally, auditors were in daily
contact with CDB during the critical
audit testing periods, via email, phone,
and virtual meetings.

FAILURE TO DEMONSTRATE THE COMPLETENESS
AND ACCURACY OF THE REPORT COMPONENTS

The Capital Development Board (CDB) did
not have adequate internal controls to
demonstrate the schedules and components
(report components) within the CDB’s
Compliance Examination Report were
complete and accurate.

Due to changes in independence
requirements effective June 30, 2020, the
Office of the Auditor General (OAG) now
requires auditees, without auditor
assistance, to prepare the report
components comprising the Supplementary
Information for State Compliance Purposes
usually found within the OAG’s compliance
reports. To help facilitate this change,
the OAG published guidance on its website
for auditees to follow in preparing these
report components. While we do not
express an opinion, a conclusion, or
provide any assurance on these report
components, we read them to identify
potential errors based on our knowledge
of the auditee and, where possible,
compare or reconcile the information to
the auditee’s records examined during the
compliance examination. If we identify
any potential errors, we bring the matter
to the attention of the auditee’s
management to, ideally, either correct
the error or demonstrate why the
disclosure is complete and accurate.

During the course of this examination, we
noted the CDB’s internal controls were
inadequate to both (1) prepare the report
components and (2) demonstrate the report
components the CDB management prepared
were complete and accurate. Specifically,
we noted the following:

• The Fiscal Year 2019 Schedule of
Appropriations, Expenditures, and Lapsed
Balances was unable to be properly
completed by the CDB management due to
its inability to provide the auditors
with satisfactory supporting
documentation for a difference noted.
Consequently, the related Comparative
Schedule of Net Appropriations,
Expenditures, and Lapsed Balances and
Comparative Schedule of Net Expenditures
by Major Activity were also not properly
completed.

• The Analysis of Significant Variations
in Expenditures and Analysis of
Significant Variations in Lapse Period
Spending were initially provided based
upon inaccurately prepared schedules, and
not subsequently corrected. As a result,
the schedules were not included within
the CDB’s Compliance Examination Report.

• The CDB’s Comparative Schedule of Cash
Receipts and Deposits into the State
Treasury was unable to be properly
completed by the CDB management from
their own records due to its inability to
properly reconcile its cash receipts to
deposits remitted to the Treasury, or
provide the auditors with satisfactory
explanations for differences noted. See
also Finding No. 2020-007. The Analysis
of Significant Variations in Receipts was
provided based upon the inaccurately
prepared schedule, thus not included
within the CDB’s Compliance Examination
Report.

• The Analysis of Operations (Functions
and Planning) prepared by the CDB
appeared to omit disclosures, including
(1) management’s analysis of the meaning
of certain key financial, program, and
statistical elements, including the
prioritized goals and priorities that
were to have been reviewed and analyzed
during each fiscal year and reported to
the Office of Comptroller for preparation
of the Public Accountability Report as
required by the Civil Administrative Code
of Illinois (State Budget Law) (15 ILCS
20/50-25), and (2) significant
operational challenges that existed at
the end of the examination period,
including backlogs, and management’s plan
to address the problem.

As a result of these deficiencies, these
report components were excluded from the
CDB’s Compliance Examination Report.
(Finding 9, pages 30-32)

We recommended the CDB implement controls
to ensure report components are complete
and accurately prepared in future
compliance examinations.

CDB accepted our recommendation and
stated it made every effort to prepare
the required report components according
to the guidance provided by the Auditor
Generals’ office.  CDB stated it was
notified on August 5, 2020 that CDB would
be responsible for preparing these report
components without the assistance from
the OAG or Special Assistant Auditors.

In an auditor’s comment, we noted the
auditors made every attempt to provide
guidance regarding report component
preparation while still maintaining
independence as required by the Generally
Accepted Governmental Auditing Standards
effective June 30, 2020. CDB’s
responsibilities regarding the report
components were communicated during the
entrance conference on May 7, 2020.

OTHER FINDINGS

The remaining findings pertain to
financial reporting weaknesses,
inadequate controls over census data, and
weaknesses in filing required reports,
employee evaluations, travel,
reconciliations, and cybersecurity
programs and practices.  We will review
the CDB’s progress towards the
implementation of our recommendations in
our next compliance examination.

ACCOUNTANT’S OPINION

The accountants conducted a compliance
examination of the Capital Development
Board for the two years ended June 30,
2020, as required by the Illinois State
Auditing Act.  The accountants qualified
their report on State compliance for
Finding 2020-001, Finding 2020-002, and
Finding 2020-009.  Except for the
noncompliance described in these
findings, the accountants stated the
Capital Development Board complied, in
all material respects, with the
requirements described in the report.

This 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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