REPORT DIGEST

DEPARTMENT OF CORRECTIONS

DEPARTMENT-WIDE FINANCIAL AUDIT

For the Year Ended:
June 30, 2002

GENERAL OFFICE
COMPLIANCE AUDIT

For the Two Years Ended:
June 30, 2002

Summary of Findings:

Total this audit 17
Total last audit 11
Repeated from last audit 9

Release Date:
April 23, 2003

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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 Department’s Property Control System did not maintain sufficient information to compile the required information to comply with Governmental Accounting Standards.
  • The Department is not using its statutory authority to request reimbursement from inmates to cover the costs of their incarceration.
  • The Department is not reporting the value of State housing benefits as income to employees as required by Internal Revenue Service regulations and is not complying with the requirements of the State Employee Housing Act.
  • The Department did not ensure records were properly maintained and submitted at the Adult Transition Centers.
  • The Department does not have an automated payroll timekeeping system.
  • Auditors identified an individual on the Department of Corrections payroll who was working in a management position for the Department of Agriculture.
  • The Department did not provide written notification of the release or escape of any persons from the Department’s Juvenile Division as required by the Unified Code of Corrections.
  • The Department did not update the addresses of all discharged sex offenders in its Offender Tracking System, and did not forward the required copies of the sex offender registration act notification form to the State Police.
  • Auditors noted one weapon on the Department’s inventory listing that could not be located. In addition, the location of several other weapons was not properly identified on the Department’s weapon inventory listing.

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

DEPARTMENT OF CORRECTIONS - GENERAL OFFICE
FINANCIAL AND COMPLIANCE AUDIT
For The Two Years Ended June 30, 2002

EXPENDITURE STATISTICS

FY 2002

FY 2001

FY 2000

Total Expenditures(All Treasury Held Funds)

$256,910,448

$231,504,392

$213,870,422

OPERATIONS TOTAL

% of Total Expenditures

$212,901,468

82.9%

$196,849,201

85.0%

$186,179,083

87.1%

Personal Services

% of Operations Expenditures

Average No. of Employees

Average Employee Salary

$85,350,022

40.1%

1,716

$49,738

$77,844,543

39.5%

1,648

$47,236

$67,742,208

36.4%

1,503

$45,071

Other Payroll Costs (FICA, Retirement)

% of Operations Expenditures

$19,095,343

9.0%

$17,286,219

8.8%

$14,868,797

8.0%

Contractual Services

% of Operations Expenditures

$59,363,421

27.9%

$57,553,987

29.2%

$57,030,470

30.6%

Claims and Settlements

% of Operations Expenditures

Repairs and Maintenance

% of Operations Expenditures

Electronic Data Processing

% of Operations Expenditures

Telecommunications

% of Operations Expenditures

Commodities

% of Operations Expenditures

$11,337,940

5.3%

$2,984,918

1.4%

$10,225,444

4.8%

$9,382,318

4.4%

$2,439,262

1.1%

$10,097,891

5.1%

$3,512,809

1.8%

$9,531,479

4.8%

$5,678,358

2.9%

$2,604,555

1.3%

$8,061,965

4.3%

$4,189,925

2.3%

$10,273,804

5.5%

$7,240,513

3.9%

$3,060,197

1.6%

All Other Operations Items

% of Operations Expenditures

$12,722,800

6.0%

$12,739,360

6.5%

$13,711,204

7.4%

GRANTS AND PROGRAMS

% of Total Expenditures

$44,008,980

17.1%

$34,655,191

15.0%

$27,691,339

12.9%

Cost of Property and Equipment

$104,949,977

$105,434,648

$94,595,909

SELECTED ACTIVITY MEASURES

FY 2002

FY 2001

FY 2000

ADULT CENTERS

Average Daily Population
Rated Capacity
Population in Excess of Capacity
Average Annual Costs

 

42,473
31,651
10,822
$21,654

 

43,249
30,694
12,555
$20,612

 

42,829
30,894
11,935
$19,543

JUVENILE CENTERS

Average Daily Population
Rated Capacity
Population in Excess of Capacity
Average Annual Costs

 

1,863
1,758
105
$59,202

 

1,961
1,512
449
$50,286

 

2,153
1,512
641
$42,297

ADULT TRANSITION CENTERS

Average Population
Rated Capacity
Population in Excess of Capacity
Average Annual Costs

 

1,632
1,578
54
$21,968

 

1,491
1,578
87
$21,785

 

1,329
1,228
101
$20,773

AGENCY DIRECTOR

During Audit Period: Mr. Donald Snyder
Currently: Mr. Donald Snyder, Acting

 

 

 

 

 

 

 

 

 

 

 

 

The Department did not maintain an audit trail for $1.4 billion of property and equipment

 

 

 

The Property Control System (PCS) was unable to provide an audit trail of accumulated depreciation

 

Documentation to support accumulated depreciation beginning balances could not be provided

 

$23 thousand of law books were not tagged as Department property or recorded in the PCS

 

 

 

 

Department indicated exceptions were the result of inadequacies in the PCS

 

 

 

 

 

 

 

 

 

 


During FY 2002 an average of $3.34 per inmate was reimbursed to the Department for the cost of incarceration

 

 

 

 

 

During FY 2002 Adult Transition Center inmates reimbursed the Department $1,967,649

 

During FY 2002 inmates remitted $243,953 in medical treatment co-payments to the Department

During FY 2002 $95,307 was collected from the saving accounts of four inmates

 

 

 

 

 

 

 

The Department has no procedures to identify assets or income maintained by an inmate outside of their Department trust funds.

 

 

 

 

The Department noted their new intake and receiving facility will improve asset identification

The Unified Code of Corrections was amended to grant the Department authority to gather asset information

 

 

 

 

 

 

 

 

 

 

The Department has not determined a fair market value of the housing benefits provided to 310 Department employees

 

The Department may be in violation of Internal Revenue Regulations

 

 

 

 

The Department indicated housing is provided to fulfill operational needs

 

 

 

 

 

 

 

 

 

 

Records were not properly maintained at adult transition centers

 

 

 

 

 

The Department indicated exceptions were the result of performance deficiencies and lack of training

 

 

 

 

 

 

 

 

 

 

 

 

 

The Department needs to develop an automated payroll timekeeping system

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

The Department was unable to provide documentation that an individual working at Agriculture and paid by the Department of Corrections devoted any time to Correction issues

 

An Intergovernmental Agreement was entered into which allowed the individual to remain on the Department’s payroll while working at Agriculture

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

The Department did not notify the State’s Attorney, Sheriff and other required parties when a juvenile was released from the Department

 

 

 

 

 

 

 

 

 

 

 

 

The Department did not notify the required parties when juveniles escaped from the Department

 

 

 

The Department indicated the required notifications were not performed as a result of a misinterpretation of legal terminology

 

 

 

 

 

 

 

 

 

 

 

Updated addresses for seven discharged sex offenders were not entered into the Offender Tracking System (OTS) and copies of required sex offender registration forms not sent to State Police

The Department does not update OTS for an inmate's indicated address upon discharge since the Department does not verify the given address is correct

 

 

 

 

 

 

 

 

The Department is required to obtain and forward the address and copies of the required form of discharged sex offenders to the State Police

 

 

 

 

 

 

 

 

 

 

 

The Department indicated they were following procedures set forth by the State Police

 

 

 

One weapon was unassigned on PCS and not in the vaults

 

 

 

Sixteen weapons were unassigned on PCS and not in the vaults

 

 

 

 

 

 

 

 

 

 

 

 

 

INTRODUCTION

This report presents our financial audit for the whole Department and compliance audit of the Department’s General Office operations. During the audit period the Department administered 37 correctional centers, which were comprised of 28 adult centers and 9 juvenile centers. In addition, the Department had 12 adult transition centers.

FINDINGS, CONCLUSIONS, AND RECOMMENDATIONS

INADEQUATE CONTROLS OVER PROPERTY AND EQUIPMENT RECORDS

Effective July 1, 2001, the State adopted Governmental Accounting Standards Board (GASB) Statements 34, 37 and 38. As part of the adoption of these new accounting standards, governmental entities are now required to capitalize and depreciate property and equipment. In auditing the Department’s accounting records and reports provided to the Office of the Comptroller we noted the following exceptions:

  • The Department did not maintain an audit trail for property and equipment, totaling approximately $1.4 billion, or accumulated depreciation, totaling approximately $779 million, that was reported to the Office of the Comptroller. The Department subsequently was able to recreate financial data to support the amounts reported to the Office of the Comptroller and determined it had understated property and equipment by approximately $28 million and overstated accumulated depreciation by approximately $337 million.
  • During our review of reports and discussions with Department personnel, the Property Control System (PCS) was unable to provide an audit trail of accumulated depreciation reclassifications and other corrections. As a result we were unable to test the additions to accumulated depreciation for July 1, 2001, which was reported to the Office of the Comptroller.
  • The Department was unable to provide detailed documentation to support the beginning balances for accumulated depreciation for reporting in accordance with GASB Statement 34 due to deficiencies noted in the Property Control System.
  • The Department did not tag or record in the PCS $23 thousand of law books it had purchased. In addition, 15 items noted as being unlocated since 1999 were still included on the PCS.

Failure to maintain accurate property and equipment records leads to inaccurate financial reporting and resulted in a qualification of the opinion of the Department’s financial statements for the year ended June 30, 2002.

Department personnel stated the lack of documentation to support the amounts in the financial statements and reported to the Office of the Comptroller were due to inadequacies in the Property Control System. (Finding 1, pages 11-13)

We recommended the Department investigate modifications to its Property Control System or a different system to maintain information consistent with Government Accounting Standards. We also recommended the Department comply with the State Property Control Act to ensure property records are complete and accurate.

Department officials accepted the recommendation and indicated the Property Control System is over 25 years old and was not designed to calculate depreciation and keep depreciation history. A request to purchase a fully compliant property module in conjunction with an accounting system is currently on hold at the Department of Central Management Services. It was also noted that only 5 of the Department’s law library collections have not been valued and added to the property control inventory at the time of this response and the 15 missing items on the property listing were removed as of January 2003.

COSTS OF INCARCERATION NOT BEING COLLECTED FROM INMATES

During fiscal year 2002, the direct cost of incarcerating inmates at Juvenile and Adult facilities totaled almost $1.03 billion. Reimbursements from inmates incarcerated at these institutions, excluding fees collected from Adult Transition Centers (ATC), Electronic Detention (ED) and inmate medical co-payments, totaled only $148,501; an average of $3.34 per inmate per year and .01% of the direct cost of incarceration.

The Department collected reimbursements for the cost of incarceration from five sources during the audit period, four of the sources were "inside" the Department:

  • Inmates working for Correctional Industries at adult institutions reimburse the Department 3% of their monthly wages in excess of $25 per month. During fiscal year 2002 the Department received $53,194 from inmates working for Correctional Industries.
  • Inmates at ATC’s are required to remit 20% of their earnings from private employers as "maintenance fees." These fees totaled $1,967,649 in fiscal year 2002.
  • Inmates on ED are required to remit 20% of their earnings from private employers as "maintenance fees." These fees totaled $37,694 in fiscal year 2002.
  • Inmates are required to contribute $2 per visit as co-payments for medical treatment. These fees totaled $243,953 in fiscal year 2002.
  • During fiscal year 2002, the Department collected a total of $95,307 from four inmates that was in their savings accounts.

The Unified Code of Corrections states: "Convicted persons committed to Department correctional institutions or facilities shall be responsible to reimburse the Department for the expenses incurred by their incarceration at a rate to be determined by the Department."

The Department has procedures to recover costs from inmate assets on deposit in Department held trust funds in excess of $2,000; however, inmates are aware of Department procedures and rarely keep more than $2,000 in their trust funds. Presently, the Department has no formal procedures to identify assets or income maintained by an inmate outside of their Department trust fund. We noted the following:

  • There are no procedures at the time of inmate intake to identify assets, no survey or analysis of assets is performed, no financial analysis is conducted, no credit check is obtained, and there is no identification of potential responsible parties performed.
  • There are no formal procedures for billing inmates or responsible parties.
  • The Department does not always look beyond the inmate’s trust fund for money that can be used as reimbursement.

Department officials stated the new intake and receiving center that is being constructed at Stateville will have "newer technology" that should be able to let them "find out more" about an inmate's accounts. Department officials indicated the new intake and receiving center is expected to be operational in fiscal year 2004.

The Unified Code of Corrections was amended during the audit period to allow the Department to obtain information from all persons committed to the Department regarding assets of those persons. The amendment became effective on January 1, 2003. This finding has been repeated since 1999. (Finding 2, pages 14-15)

We recommended the Department pursue efforts to recover as much money as possible for the cost of incarceration in compliance with the State statute.

Department officials accepted the recommendation and indicated they are working closely with the Attorney General’s Office to establish new procedures for revenue collection techniques to increase recovery. In addition, a new Administrative Directive was published in relation to the statute change. The Department indicated they have been aggressively collecting costs of incarceration from offenders in fiscal year 2003. (For previous Department responses, see Digest footnote #1.)

STATE HOUSING BENEFITS NOT PROPRELY REPORTED AS INCOME

The Department has approximately 281 employees living in State-owned dormitory rooms and 29 employees living in houses located on Department property. The Department charges up to $120 per month for employee houses and $27 per month for guard dormitory rooms and pays all utility costs. The Department could not provide a fair market value for this housing.

Although the practice of renting housing to employees below market value appears proper, the Department failed to report the value of the housing that was not paid for by the employee as income to those employees, as required by Internal Revenue Service regulations. As a result the Department may be in violation of Internal Revenue Regulations.

It was also noted the Department had not developed a policy on housing for State employees as required by the State Employee Housing Act.

Department officials stated housing is provided to many of its guards and wardens to fulfill operational needs of the Department, and they do not feel they should have to report the value as income. This finding has been repeated since 1999. (Finding 3, pages 16-17)

We recommended the Department determine the fair market value of the housing benefits provided and report the excess value of State housing benefits to employees as required by Internal Revenue Service regulations. In addition, we recommended the Department develop policies and procedures on housing for State employees consistent with the State Employee Housing Act.

Department officials accepted our recommendation and responded that the Department is reviewing revisions to the agency’s State housing directive that will be consistent with Internal Revenue Regulations. (For previous Department responses, see Digest footnote #2.)

EXCEPTIONS AT ADULT TRANSITION CENTERS

In addition to 37 correctional centers, the Department operates a work release program for approximately 1,632 inmates who are housed in 12 adult transition centers.

During our audit fieldwork at the transition centers we noted numerous exceptions. Some of the exceptions noted are as follows:

  • Financial information sent to the General Office to compile Department-wide financial statements did not agree to accounting records maintained at the transition centers.
  • Year-end cash balances were misstated.
  • Errors were made relating to the calculation of maintenance fees on residents' paychecks.
  • Deposits of receipts were not made in a timely manner into the Residents’ Benefit Fund, Employees’ Benefit Fund and Residents’ Trust Fund.
  • Resident financial folders did not contain all required documents.

Department personnel stated these exceptions result from a combination of performance deficiencies and lack of training on pertinent Administrative Directives. This finding has been repeated since 1994. (Finding 5, pages 20-22)

We recommended the Department improve controls over accounting functions and resident files at adult transition centers.

Department officials accepted our recommendation and stated four of the adult transition centers with deficiencies have recently been closed. Those centers are Metro, Winnebago, Urbana and Joliet. For the remaining centers, specific guidance in the above areas will be given. Fiscal Services has a field employee dealing with the adult transition center operations on a full-time basis. (For previous Department responses, see Digest footnote #3.)

OUTDATED MANUAL PAYROLL SYSTEM

The Department-wide payroll timekeeping system is not automated. Each of the correctional centers employs several hundred employees, and the related timekeeping system is maintained manually. Facility employees sign in and out, and the sign-in sheets are sent to the timekeeping clerk. Other information, including notification of absence and call-in reports, is also forwarded to the timekeepers. No automation is involved except for the processing of payroll warrants. Officials indicate there are insufficient funds available to develop a Department-wide system to replace the outdated manual system used for over 16,000 employees.

Prudent business practices suggest that controls available through an automated timekeeping system can provide greater efficiency and reduce the potential for costly errors or employee abuse. (Finding 8, page 25) This finding was first reported in 1998.

We recommended the Department implement an automated timekeeping system.

The Department accepted our recommendation and noted a Request for Proposal (RFP) was completed during fiscal year 2002 and submitted to the Department of Central Management Services (DCMS) for a comprehensive accounting system, which includes an automated payroll and timekeeping system. This RFP is on hold due to the budget crisis. In the meantime, the Department is in discussion with DCMS to allow the Department to use the Department of Human Services timekeeping system (For previous Department responses, see Digest footnote #4.)

INDIVIDUAL ON DEPARTMENT OF CORRECTIONS’ PAYROLL BUT WORKING FOR THE DEPARTMENT OF AGRICULTURE

During our testing of personal service expenditures, we identified an individual on the Department of Corrections payroll who was working in a management position for the Department of Agriculture. The Department of Corrections was unable to provide any documentation demonstrating that the individual devoted any time to Correction’s issues during the time period of the audit. The individual’s working time appears to be largely, if not wholly, devoted to management duties at the Department of Agriculture.

Effective May 1, 2001, the Departments of Corrections and Agriculture and the Office of the Governor entered into an Intergovernmental Agreement under which the Department of Agriculture agreed that Corrections would "be able to utilize the services and unique expertise" of its former employee. In exchange, the Intergovernmental Agreement provided for the former Corrections employee to remain on Corrections payroll and for Agriculture to reimburse Corrections for the individual’s salary and benefits. From March 2001 through June 2002, the individual was paid $136,562 by the Department of Corrections. During the audit period, we noted that Agriculture had reimbursed Corrections $102,954 for salary and $27,055 for employer-paid benefits.

Payment of an individual’s salary and benefits from appropriations to an agency for which the individual’s work cannot be documented distorts the appropriation process and appears to be a violation of the State Finance Act. The State Finance Act requires every State payroll voucher to be certified by the Chief Executive Officer of the department or his or her designee. The certification notes for employees that, "substantially all of their working time is directly related to the objectives, functions, goals, and policies of the organizational unit for which the appropriation is made…" (Finding 11, page 28)

We recommended the Department of Corrections develop procedures to track the working time of individuals subject to a Intergovernmental Agreement and only pay costs associated with time spent in the service of the Department.

The Department accepted our recommendation and noted the individual in question was transferred to the Department of Agriculture in December 2002. If Intergovernmental Agreements are used in the future, the Department indicated it will develop a method to track the individual’s working time.

FAILURE TO PROVIDE NOTIFICATION OF RELEASE OR ESCAPE FROM THE DEPARTMENT’S JUVENILE DIVISION

The Department did not provide written notification of the release or escape of persons from the Department’s Juvenile Division as required by the Unified Code of Corrections.

During our testing of individuals released from the Juvenile Division we noted:

  • The Department did not notify the State’s Attorney of the county from which the offender was convicted for 4 out of 20 individuals tested.
  • The Department did not notify the Sheriff of the county from which the offender was convicted for 5 out of 20 individuals tested.
  • The Department did not notify the State’s Attorney of the county into which the individual was to be paroled or released for 8 out of 20 individuals tested.
  • The Department did not notify the Sheriff of the county into which the individual was to be paroled or released for 8 out of 20 individuals tested.
  • The Department did not notify the municipal law enforcement agency where the individual’s arrest occurred, individual had resided or commission of offense took place for 10 out of 20 individuals tested.
  • The Department did not notify the public housing agency where the individual has resided, or will reside upon release for 10 out of 20 individuals tested.

During our testing of the files of escaped juveniles, we noted:

  • In the two juvenile escapes noted during the audit period, the Department did not notify the persons or agencies required.
  • The Department’s Administrative Directives did not include procedures for notification to the persons and agencies required by statute.

The Unified Code of Corrections requires the Department to establish procedures to provide written notification of the release and/or escape of any person from the Juvenile Division to certain individuals. Department personnel indicated the notifications were not sent due to a misinterpretation of legal terminology that changed with the Juvenile Justice Reform Provisions of 1998. (Finding 12, pages 29-30)

We recommended the Department follow the mandated reporting requirements and provide written notification of the release and/or escape of any person from the Juvenile Division to persons and agencies specified by the Unified Code of Corrections.

The Department accepted our recommendation and noted the Juvenile Division has revised the "Notice of Release/Discharge from Juvenile Facilities" form to include juvenile delinquent paroles, juvenile felon mandatory releases, escapes and runaways. The required notification list, pursuant to 730 ILCS 5/3-14-1, has been added at the bottom of the form. The Department’s Juvenile Division shall ensure compliance with the required notifications as mandated in the Statute.

ADDRESS OF SEX OFFENDERS NOT UPDATED AND REQUIRED FORMS NOT SENT TO THE STATE POLICE

During our testing we noted the Department did not update the addresses in the Offender Tracking System (OTS) for 7 of 20 sex offender registration act notification forms (form) completed upon a sex offender’s discharge from the Department. In addition, the Department did not send two copies of the form as required to the State Police for any of the 20 forms tested.

When a sex offender is released from the Department to mandatory supervised release or parole, the address the person gives on the form is verified by the Field Services Division. Upon verification of the address it is entered into the OTS. Department officials indicated in order to maintain the integrity of the data in OTS, the Department only enters the address after it has been verified. Sex offender information is then transmitted electronically from the OTS to the State Police.

In the 7 exceptions noted above, the individuals violated their mandatory supervised release or parole and were recommitted to a correctional center to finish serving the rest of their sentence. Upon completion of their sentence the individuals were discharged from the Department. Upon discharge the Department did not update the OTS with the address where the person was going to be living, because Department employees could not verify the address where the person was going to be living, since they have no responsibility over the inmate after discharge of their sentence. Therefore the address in OTS was where the person had indicated they were going to be living when they had originally been released on parole or on supervised release.

The Sex Offender Registration Act states the Department facility shall obtain the address where the person expects to reside upon his or her discharge, parole or release and shall report the address to the State Police. In addition, the Act notes the Department facility is to have the person sign a sex offender registration act notification form that the duty to register as a sex offender has been explained to them and that they understand. One copy of the form is to be given to the person and two copies of the form are to be forwarded to the State Police.

Department officials indicated they were instructed by the State Police to retain the original sex offender registration act notification form and share with the State Police within 24 hours, electronic data files, including photographs of all sex offenders being released from the Department. (Finding 14, pages 32-33)

We recommend the Department provide the State Police with the address a sex offender gives at their time of discharge from the Department. In addition we also recommended the Department forward all required copies of the sex offender registration act notification form to the State Police as required by the Sex Offender Registration Act, or seek legislative relief from this responsibility if the required information is being provided electronically.

The Department accepted our recommendation and acknowledged the issues raised. The Department indicated they are in full compliance with the procedures established by the State Police to implement the requirements of the Statute. However, as pointed out in the Audit, the language needs to reflect the efficiencies of electronic transmittal of data and documentation. The Department will work with the State Police to address this issue.

MISSING WEAPON AND RECORDS NOT PROPERLY MAINTAINED

During our testing we noted one weapon was listed on the Department’s Property Control System (PCS) as unassigned, however this weapon could not be verified as being in the vaults during the physical review. The Department was unable to provide documentation that identified the movement, assignment or location of the weapon.

In addition, we noted five weapons in the vaults that were listed on the PCS as being assigned to personnel, and sixteen weapons that were listed as unassigned on the PCS and should have been in the vaults, but were not. The Department was able to provide documentation for the discrepancies noted that reflected the movement of the weapons.

The State Property Control Act requires the Department to be accountable for the supervision, control and inventory of all property under its jurisdiction. In addition, the Department’s Administrative Directive’s require a signed receipt any time a weapon or other equipment is removed from the armory or storage area.

Failure to account for all weapons of the Department increases the risk that an unauthorized individual could gain access to a firearm and leave the Department and State exposed to a risk of liability. Department personnel stated that multiple units were responsible for weapons during the audit period. The Department was aware of the missing weapon, which has been investigated. (Finding 17, page 38)

We recommended the Department maintain proper records to identify the location of all weapons. We further recommend the Department adhere to Department Directives requiring a signed receipt when a weapon or other equipment is removed from the armory or storage area.

The Department accepted our recommendation and indicated the issues addressed in the finding were being investigated internally when it was brought to their attention by the auditors. The Department’s investigation determined the management of the weapons was too decentralized. New procedures were developed to correct deficiencies found in the review and specific procedures are now in place to ensure proper control of weapons.

OTHER FINDINGS

The remaining findings are less significant and are reportedly being given attention by the Department. We will review the Department’s progress toward the implementation of our recommendations in our next audit.

Ms. Deanna Marvin, Internal Audit Supervisor of the Department of Corrections, provided the agency’s responses.

NEW FACILITIES OPENED AND FACILITIES CLOSED

In November 2001 the Department opened Lawrence Correctional Center which is a medium security men’s facility and the Illinois Youth Center - Kewanee. During the audit period, or shortly after, two Correctional Centers were closed, as was one Youth Center. Joliet Correctional Center, a maximum security men’s facility was closed February 2002; Sheridan Correctional Center a medium security men’s facility was closed in August 2002. In addition, Illinois Youth Center – Valley View was closed in July 2002. On September 30, 2002 the Department closed the following other facilities: Joliet Adult Transition Center, Metro Adult Transition Center, Urbana Adult Transition Center, Winnebago Adult Transition Center, Green County Boot Camp, Hanna City Work Camp and the Paris Work Camp.

AUDITORS’ OPINION

Our auditors stated the Department’s financial statements as of and for the year ended June 30, 2002 were fairly presented in all material respects.

_____________________________________

WILLIAM G. HOLLAND, Auditor General

WGH:RPU:pp

SPECIAL ASSISTANT AUDITORS

FPT & W Ltd. were our special assistant auditors

DIGEST FOOTNOTES

#1 COSTS OF INCARCERATION NOT BEING COLLECTED FROM INMATES– Previous Department Responses

2000: Recommendation accepted: Senior staff is reviewing 730 ILCS 5/3-7-6 to determine the Department’s specific responsibilities in the overall recovery process. The Department did indicate at last year’s LAC hearing that screening for inmate assets would likely be incorporated into the intake process when the new reception and classification center at Stateville became operational (expected opening is March 2002). The Department continues to notify the Attorney General when it becomes aware of any inmate having substantial assets, whether or not appearing in the inmate’s trust fund account.

1999: Recommendation partially accepted: The Department believes it is complying with the intent of the reimbursement statute by monitoring inmate trust fund balances. In addition, the Department would notify the Attorney General if it became aware of any inmate having substantial assets. The Department does not feel that the legislation was intended to direct the Department to investigate routinely the financial status of admitted inmates.

#2 STATE HOUSING BENEFITS NOT PROPRELY REPORTED AS INCOME– Previous Department Responses

2000: Recommendation accepted: The Department is reviewing revisions to the agency’s State housing directive that will be consistent with Internal Revenue Regulations.

1999: Recommendation accepted: The Department provides housing to certain employees for the convenience of the Department. Housing provided on prison property does not have a fair market value. The directive on the use of State-owned housing is being revised pursuant to Internal Revenue Regulation 1.119-1(b).

#3 EXCEPTIONS AT ADULT TRANSITION CENTERS – Previous Department Responses

2000: Recommendation accepted: Specific training on the proper preparation of C-17 reports and the GAAP package will be given to ATC personnel. Last year’s plan to place adult transition centers under the supervision of nearby correctional centers was subsequently changed. Fiscal Services, however, now has a field employee dealing with ATC contacts and operations on a full-time basis. This coupled with the filling of vacancies should result in improved record keeping at these locations.

1999: Recommendation partially accepted: A comparison of this year’s finding at the community correctional centers with those of prior years will show that substantial improvements have been made. Currently reported deficiencies are isolated to performance weaknesses at one or two centers and do not represent a lack of training. Under the Department’s reorganization, the community correctional centers will be reclassified as adult transition centers and will be satellites of correctional centers. This organizational structure will provide more resources for oversight of the business operations of the centers and will also provide for more effective back-up coverage for vacancies or extended absences.

1998: Recommendations accepted: The Department has established a central business office for the Community Services Division (CSD). The CSD business administrator will implement monitoring and follow-up procedures to ensure better performance and greater accountability by field accounting personnel. In addition, the Department will ensure that financial folders are maintained for each resident and that proper documents are maintained in the residents’ financial folders.

1996: Recommendations accepted: The Department indicated that corrective action had been addressed relating to many of the exceptions identified in the findings.

1994: Recommendations accepted: The Department indicated that corrective action had been addressed relating to many of the exceptions identified in the findings.

#4 PAYROLL TIMEKEEPING SYSTEM NOT AUTOMATED –Previous Department Responses

2000: Recommendation accepted: Department-wide automated timekeeping is a required function of a new accounting and financial reporting system that the Department is trying to acquire.

1999: Recommendation accepted: Funding for the automation of department-wide timekeeping has been included in the fiscal year 2001 budget request.

1998: Recommendation accepted: The Department will continue to pursue an automated timekeeping system as resources become available subsequent to completion of the Year 2000 projects.