REPORT DIGEST OFFICE OF THE COMPTROLLER - FISCAL OFFICER RESPONSIBILITIES FINANCIAL AUDIT AND COMPLIANCE EXAMINATION FOR THE YEAR ENDED JUNE 30, 2017 Release Date: December 21, 2017 FINDINGS THIS AUDIT: 1 CATEGORY: NEW -- REPEAT -- TOTAL Category 1: 0 -- 1 -- 1 Category 2: 0 -- 0 -- 0 Category 3: 0 -- 0 -- 0 TOTAL: 0 -- 1 -- 1 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 SYNOPSIS • (17-1) The State of Illinois, Office of the Comptroller did not make all statutorily mandated transfers between State funds within established timeframes, as required. FINDINGS, CONCLUSIONS, AND RECOMMENDATIONS LATE PAYMENT OF STATUTORILY MANDATED TRANSFERS The Office of the Comptroller did not make all statutorily mandated transfers between State funds within established timeframes, as required. The Office of the Comptroller processed transfers from 31 to 479 days after the mandated transfer date. The late transfers outstanding as of and paid after June 30, 2017 totaled $2.14 billion. Failure to make inter-fund transfers within applicable timeframes is in noncompliance with State law and might result in delayed use of appropriated funds. Comptroller officials stated the late payment of transfers occurred because of cash management decisions and prioritization due to the lack of available cash in the State Treasury. Further, some statutory provisions relating to transfers contain language such as “as soon as possible.” (Finding 1, pages 9-10) This finding was first reported in 2009. We recommended the Comptroller make transfers within timeframes established by applicable statute. While we realize that lack of available funds in the State Treasury requires prioritization and cash management decisions, we also recommended the Comptroller continue in its efforts to make transfers in as timely a manner as possible. Comptroller officials accepted the recommendation and stated taking into account the financial condition of State funds facing at times a $16 billion backlog, they will continue efforts to make the required transfers to the extent possible given all the competing payments from limited resources in the State Treasury. (For previous response, see Digest Footnote #1.) AUDITOR’S OPINION The auditors stated the fund balances at June 30, 2017, and the revenues and expenditures for the year then ended relating to the State of Illinois, Office of the Comptroller - Fiscal Officer Responsibilities’ Traditional Budgetary Financial Report, are fairly presented in all material respects. The auditors noted the financial statements have been prepared on a comprehensive basis of accounting other than accounting principles generally accepted in the United States of America. The budgetary basis deficit of the General Revenue Fund decreased by $4.441 billion during the fiscal year ended June 30, 2017. At June 30, 2016, the budgetary basis fund balance of the General Funds was a deficit of $7.984 billion. ACCOUNTANT’S OPINION The accountants conducted a compliance examination of the Comptroller's Fiscal Officer Responsibilities for the year ended June 30, 2017 as required by the Illinois State Auditing Act. The auditors qualified their report on State compliance for Finding 2017-001. Except for the noncompliance described in this finding, the accountants stated the Comptroller complied, in all material respects, with the requirements described in the report. This financial audit and compliance examination was conducted by CliftonLarsonAllen 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 FJM:PH DIGEST FOOTNOTES #1 - LATE PAYMENT OF STATUTORILY MANDATED TRANSFERS 2016: The Office accepts the recommendation. Taking into account the financial condition of State funds, the Office will continue in its efforts to make transfers in the timeliest manner possible.