REPORT DIGEST

OFFICE OF THE COMPTROLLER
FISCAL OFFICER RESPONSIBILITIES

FINANCIAL AND COMPLIANCE AUDIT

For the Year Ended:
June 30, 2001

Summary of Findings:

Total this audit 1
Total last audit 3
Repeated from last audit 0

Release Date:
March 28, 2002

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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
Attn: Records Manager
Iles Park Plaza
740 E. Ash Street
Springfield, IL 62703

(217)782-6046 or TDD (217) 524-4646

This Report Digest is also available on
the worldwide web at
http://www.state.il.us/auditor

  

 

 

 

 

 

 

 

 

 

SYNOPSIS

 

 
  • The Office of the Comptroller did not report payments made during calendar year 2000 to the Internal Revenue Service for approximately 470 medical corporations.

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

 

OFFICE OF THE COMPTROLLER - STATE OF ILLINOIS
FISCAL OFFICER RESPONSIBILITIES
FINANCIAL AND COMPLIANCE AUDIT
FOR THE YEAR ENDED JUNE 30, 2001
FUND BALANCE (Amounts in Thousands)

Fiscal Year 2001
Cash Balance      Budgetary                          Balances*

Fiscal Year 2000
Cash Balance         Budgetary                           Balance*
APPROPRIATED FUNDS
General Funds
Highway Funds
Special State Funds
Bond Financed Funds
Debt Service Funds
Federal Trust Funds
Revolving Funds
State Trust Funds

 

$1,125,673
1,310,499
2,153,067
494,065
436,280
225,357
42,760
179,960

 

$ 300,145
1,188,397
1,727,594
492,858
436,280
15,258
6,904
110,101

 

$1,516,653
1,014,193
2,296,954
568,922
457,857
137,210
59,598
286,237

 

$ 776,595
902,638
1,907,562
566,368
457,857
(36,166)
22,354
208,858
Sub-total

$5,967,661

$4,277,537

$6,337,624

$4,806,066
NON-APPROPRIATED FUNDS
Federal Trust Funds
State Trust Funds

$ 7,891 1,163,894

$ 7,358 1,140,129

$ 14,576
1,082,691

$ 14,367 1,065,264
Sub-total

$1,171,785

$1,147,487

$1,097,267

$1,079,631
GRAND TOTAL - ALL FUNDS

$7,139,446

$5,425,024

$7,434,891

$5,885,697
* Budgetary Balances represent the balances remaining after reduction of Cash Balances at June 30 by expenditures made during the lapse period.
FINANCIAL HIGHLIGHTS (Amounts in Thousands)

YEAR ENDED
JUNE 30, 2001

YEAR ENDED
JUNE 30, 2000
Total Receipts - All Funds

$67,281,732

$62,055,140
Total Expenditures - All Funds

$67,742,406

$61,262,917
Net Change In Budgetary Fund Balance - All Funds

$ (460,674)

$ 792,223
STATE COMPTROLLER
During Audit Period: Honorable Daniel Hynes
Currently: Honorable Daniel Hynes
 

 

 

 

 

 

 

 

 

 

 

Approximately 470 payments were not reported to the IRS on Form 1099-MISC

 

Penalties could be assessed to the State at $50 per occurrence

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

INTRODUCTION

Our 2001 audit of the Comptroller's Fiscal Officer Responsibilities is presented in two parts. The compliance part, with our finding and recommendation, is presented in one document. The financial part, with our opinion on the budgetary financial statements, is presented in the State Comptroller's "Illinois Traditional Budgetary Financial Report." Our opinion on the Statewide general-purpose financial statements prepared in accordance with generally accepted accounting principles is contained in the separately issued Comprehensive Annual Financial Report.

FINDING, CONCLUSION, AND RECOMMENDATION

INCOMPLETE REPORTING OF 1099 TAX INFORMATION

During our testing we noted the Office of the Comptroller did not report payments made during calendar year 2000 to the Internal Revenue Service (IRS) on Form 1099-MISC for approximately 470 medical corporations.

The Office’s system for reporting payments for medical services was not adequate to capture amounts paid to corporations, as required by IRS regulations. Inaccurate reporting to the Internal Revenue Service can result in penalties to the State of Illinois. The penalties are calculated on a per occurrence basis and can be assessed up to $50 per occurrence.

In April 2001, Office operations personnel submitted a programming change-request to institute a computer programming function that would facilitate the inclusion of medical service payments to corporations in the State’s 1099 reporting to the IRS. This programming modification appears to adequately address this problem for the 2001 calendar year. The programming change was made subsequent to our audit period. (Finding 1, page 11)

We recommended the Office continue in its effort to ensure corporations providing medical services are not excluded from 1099-MISC reporting.

The Comptroller’s office concurred with our recommendation and indicated the Office has successfully implemented the necessary system changes required to be in compliance with IRS guidelines for corporations providing medical services for 2001.

Ms. Carol Kraus, Director of Internal Audit, provided the Office response to our finding and recommendation.

AUDITORS’ OPINIONS

Our auditors state the traditional budgetary financial statements present fairly the fund balances and receipts and expenditures as of and for the year ended June 30, 2001, relating to the Fiscal Officer Responsibilities of the Comptroller.

In addition, the Comptroller has issued a separate Comprehensive Annual Financial Report that has additional details on the financial activities of State agencies and funds. Our auditors report the general-purpose financial statements in the Comprehensive Annual Financial Report as of and for the year ended June 30, 2001 are fairly presented in all material respects.

 

 

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WILLIAM G. HOLLAND, Auditor General

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SPECIAL ASSISTANT AUDITORS

The firm of Sleeper, Disbrow, Morrison, Tarro & Lively, LLC were our special assistant auditors.