REPORT DIGEST

 

BIG MUDDY RIVER CORRECTIONAL CENTER

 

LIMITED SCOPE

COMPLIANCE ATTESTATION ENGAGEMENT

For the Two Years Ended:

June 30, 2008

 

Summary of Findings:

Total this audit†††††††††     †††† 4

Total last audit††††††     ††††††† 3

Repeated from last audit     2

 

 

Release Date:

August 6, 2009

 

 

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

Iles Park Plaza

740 E. Ash Street

Springfield, IL 62703

(217) 782-6046 or TTY (888) 261-2887

 

This Report Digest and Full Report is also available on

the worldwide web at

http://www.state.il.us/auditor

 

 

 

 

 

 

 

 

 

 

 

 

SYNOPSIS

 

 

 

®      The Center had inadequate controls over inventory.

 

®      The Center did not maintain accurate property control records.

 

®      The Center did not comply with the Departmentís Administrative Directives for locally held funds.

 

®      A former Center employee still has access to the Accounting Information System.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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


 

 

 

†††††††††††††††††††††††††††††††††††††††††† ILLINOIS DEPARTMENT OF CORRECTIONS

††††††††††††††††††††††††††††††††††††††† BIG MUDDY RIVER CORRECTIONAL CENTER

†††††††††††††††††††††††† LIMITED SCOPE COMPLIANCE ATTESTATION ENGAGEMENT

††††††††††††††††††††††††††††††††††††††††††††††††† For The Two Years Ended June 30, 2008

 

EXPENDITURE STATISTICS

FY 2008

FY 2007

FY 2006

†††† Total Expenditures (All Appropriated Funds)........

$30,046,792

$27,791,423

$27,782,643

†††† Personal Services.......................................................

†††††††† % of Total Expenditures.....................................

†††††††† Average No. of Employees................................

†††††††† Average Salary Per Employee............................

†††† Student, member and inmate Compensation.......................

†††††††† % of Total Expenditures..............................................

$17,666,441

58.8%

298

$59,283

$301,851

1.0%

$16,608,675

59.7%

303

$54,814

$330,782

1.2%

$16,458,332

59.2%

312

$52,751

$326,217

1.2%

†††† Other Payroll Costs (FICA, Retirement).......................

†††††††† % of Total Expenditures.....................................

$4,251,082

14.1%

$3,158,064

11.4%

$2,725,676

9.8%

†††† Contractual Services...................................................

†††††††† % of Total Expenditures.....................................

Commodities..........................................................

% of Total Expenditures....................................

$5,974,595

19.9%

$1,657,828

5.5%

$5,858,717

21.1%

$1,582,325

5.7%

$6,286,338

22.6%

$1,771,743

6.4%

†††† All Other Items...........................................................

†††††††† % of Total Expenditures.....................................

$194,995

0.7%

$252,860

0.9%

$214,337

0.8%

†††† Cost of Property and Equipment.............................

$49,141,191

$47,378,210

$47,415,526

 

 

SELECTED ACTIVITY MEASURES (Not examined)

FY 2008

FY 2007

FY 2006

†††† Average Number of Inmates.......................................

1,844

1,858

1,865

†††† Ratio of Correctional Officers to Inmates.....................

1/7.7

1 /7.6

1/7.5

†††† Cost Per Year Per Inmate...........................................

$16,294

$14,958

$14,883

†††† Rated Inmate Capacity....................................................

952

952

952

†††† Approximate Square Feet Per Inmate...............................

32

32

32

 

 

CENTER WARDEN

†††† During Examination Period: Mr. Roy Bradford (6/1/06-8/17/07), Mr. Jay Merchant (8/18/07-10/15/07), Mr. John Evans (10/16/07 Ė Current)

†††† Currently:Mr. John Evans

 

 



 

 

 

 

 

 

 


Inventory was overstated

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

†††††††††††††

Inaccurate property control records

 

 

 

 

Lack of supporting documentation

 

 

 

 

 

Equipment not tagged

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Failure to comply with Department Directives

 

 

 

 

 

Untimely deposits

 

 

Accounts Payable understated

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Former employee has access to AIS

 

 

 

 


 

FINDINGS, CONCLUSIONS, AND RECOMMENDATIONS

 

NEED TO ENHANCE CONTROLS OVER INVENTORY

 

†††† The review of the Centerís inventory procedures disclosed numerous control weaknesses.We noted the following:

 

        7 of 22 (32%) inventory items tested were valued incorrectly resulting in an inventory overstatement of $5,620 at 6/30/08 and $18,248 at 6/30/07.

 

        The inventory software, The Inventory Management System (TIMS), is not assigning the cost of freight to the unit cost of inventory items.

 

        The Center does not use any type of tagging system during inventory counts to prevent double counting.

 

A lack of proper inventory price reporting, costing and procedures increases the possibility that inventory balances could be misstated and distort the financial position of the Center. (Finding 1, pages 10-11)

 

We recommended the Center comply with the Departmentís Administrative Directives and institute procedures to strengthen controls over inventory, counting procedures and proper pricing.

 

Center officials accepted the recommendation and stated that the facility will make every effort to ensure compliance with Departmental policies on inventory.

 

 

NEED TO IMPROVE PROPERTY REPORTING

 

†††† The Center did not maintain accurate property control records.

 

The following exceptions were noted during testing of the Centerís property control records and the Agency Report of State Property (C-15):

 

        5 of 30 (17%) transfers tested, totaling $2,834, lacked supporting documentation to verify their value and to document that the equipment was properly transferred to the correct facility.

 

        10 of 20 (50%) equipment items, totaling $8,541, that were physically inspected had no tag number.

 

        New computer equipment is not being tagged or checked in as received.

 

        There is an unidentified person who has access rights to the Property Control System (PCS).This person has rights to add, change, and delete information within the system.

 

†††† Failure to maintain accurate and secure property control records increases the potential for fraud and possible loss or theft of State property.Inaccurate State property reporting also reduces the reliability of Statewide financial reporting of State property information.(Finding 2, pages 12-13)

 

We recommended the Center strengthen controls over State property reporting, and comply with the State Property Control Act, applicable SAMS procedures, and the Illinois Administrative Code to ensure accurate reporting of State property information.Also, the Center should strengthen its controls over property control and reinforce the importance of properly notifying Property Control management of additions and transfers into the Center.Further, the Center should investigate the unidentified person who has access rights to the PCS and delete the access code, if appropriate, in a timely manner.

 

Center officials accepted the recommendation and stated that the facility will make every effort to ensure compliance with property control procedures and policies.

 

NEED TO IMPROVE INTERNAL CONTROLS OVER LOCALLY HELD FUNDS

 

The Center did not comply with the Departmentís Administrative Directives for locally held funds.

 

 

We noted the following exceptions during our examination of the Centerís locally held funds:

 

        2 of 24 (8%) receipts tested, totaling $111,413, were not deposited timely.The receipts were deposited two days late.

 

        2 of 33 (6%) locally held fund vouchers tested for proper inclusion in accounts payable were omitted from year-end GAAP reporting packages.Accounts payable understatements for fiscal year 2007 and 2008 were $209 and $203, respectively.

 

        The Centerís current Warden has been signing checks for disbursements but is not on the authorized check signer cards held by the Centerís banking institution.

 

Failure to adhere to the Departmentís Administrative Directive concerning the timeliness of deposits and authorized check signers increases the susceptibility of assets to mishandling or misappropriation.Failure to properly classify and report balances or establish year-end cutoff procedures could result in the distortion of agency financial reporting records.(Finding 3, pages 14-15)

 

We recommended the Center comply with the Departmentís Administrative Directives and ensure that monies received are deposited in a timely manner.The Center should strengthen year-end cutoff procedures and exercise diligence in the preparation of year-end GAAP reports to ensure reporting accuracy.In addition, the Center should strengthen its control regarding authorized check signers.

 

Center officials accepted the recommendation and stated that the facility will make every effort to ensure timeliness and compliance.

 

COMPUTER ACCESS CONTROLS LACKING

 

A former Center employee still has access to the Accounting Information System (AIS).

 

A former employee of the Business Office, who retired in October 2004, still had user access to the AIS as of the end of fieldwork.

 

Failure to terminate computer user access after employees leave employment increases the susceptibility of assets to mishandling or misappropriation.(Finding 4, page 16)

 

We recommended the Center make a request to the Department to remove access to the AIS system and follow up on a timely basis.

 

Center officials accepted our recommendation and stated that the facility will make every effort to ensure timeliness in revoking computer access.

 

AUDITORS' OPINION

 

††††† We conducted a limited scope compliance attestation engagement of the Center as required by the Illinois State Auditing Act.We also performed certain procedures with respect to the accounting records of the Center to assist our audit of the entire Department.Financial statements for the entire Department will be presented in the Central Office report.

 

 

 

_____________________________________

WILLIAM G. HOLLAND, Auditor General

 

WGH:AKS:pp

 

SPECIAL ASSISTANT AUDITORS

 

††††† Our Special Assistant Auditors were Schorb & Schmersahl, LLC.