For the Year Ended:

June 30, 2003



For the Year Ended:

June 30, 2003


Summary of Findings:


Total this audit                    11

Total last audit                    12

Repeated from last audit       8


Release Date:

April 20, 2004



State of Illinois

Office of the 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 TDD (217) 524-4646


This Report Digest is also available on

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  • Child welfare and foster care files lacked complete and timely prepared documentation.
  • The Department's child abuse investigations did not always fully comply with State law. For instance, the Department:
  • Did not always determine whether reports of child abuse and neglect were "unfounded" or "indicated" within 60 days.
  • Failed to initiate some investigations of child abuse and neglect within 24 hours of receipt.
  • Inadequate oversight for expenditures made for children's personal and physical maintenance resulted in a lack of adequate documentation and questionable expenditures.
  • The Department had not established adequate controls for securing its computer resources.
  • Additional monitoring procedures are needed over residential and group home service providers.
  • The Department did not perform sufficient monitoring of its contractors providing services to children.




                                   FINANCIAL AND COMPLIANCE AUDIT

                                          For The Year Ended June 30, 2003



FY 2003

FY 2002

! Total Expenditures (All Funds)




% of Total Expenditures





Personal Services

% of Operations Expenditures

Average No. of Employees







Other Payroll Costs (FICA,


% of Operations Expenditures







Contractual Services

% of Operations Expenditures





                   All Other Operations Items

                   % of Operations Expenditures






% of Total Expenditures








% of Total Expenditures





! Cost of Property and Equipment (unaudited)




FY 2003

FY 2002

! Hotline Calls



! Children served in --
       • Regular foster care
       • Specialized foster care
       • Relative care
       • Residential placements
       • Independent living













! Finalized adoptions




During Audit Period: Mr. Jess McDonald (through 4-28-03)

Currently: Mr. Bryan Samuels (effective 4-28-03)














Child case files incomplete and not timely prepared

























All child abuse and neglect investigations not timely completed



































All child abuse and neglect reports not investigated timely








































Questionable purchases

























































Weaknesses noted in computer security


















































Additional monitoring procedures needed

























































Insufficient monitoring of contractors providing services to children





























The Department's Child Welfare and Foster Care files lacked required documentation. During our review of 55 case files, we noted: 8 initial case plans were not maintained in the file and 14 initial case plans were not prepared within 45 days; 7 permanency hearing orders were not maintained in the file and 15 permanency hearings were not held timely; 4 administrative case reviews were not prepared timely; 11 temporary or protective custody orders were not maintained in the file; 9 disposition hearing orders were not maintained in the file; and 3 medical and dental consent forms were not maintained in the file. Department procedures and State law (705 ILCS 405/2-10.1, Juvenile Court Act of 1987) prescribe deadlines and documentation requirements for file maintenance. The failure to follow Department procedures and State law or maintain documentation of such is not in the best interest of the children being served. (Finding 1, pages 12-13) This finding was first reported in 1998.

Department officials stated they will continue to stress the importance of timely preparation and retention of documentation in child welfare files. They stated they intend to automate much of the required documentation included in a child/family case file. (For previous agency responses, see Digest Footnote #1.)


Reports of child abuse and neglect were not always determined within 60 days as required by the Abused and Neglected Child Reporting Act. The Act states the Department shall determine, within 60 days, whether a report is "unfounded" or "indicated" and provides that the Department may extend the period up to an additional 30 days for good cause. Department statistics indicate the following noncompliance:


Fiscal     9; Total      9; Reports Not     Percent of Reports

Year      Reports   In Compliance      Not In Compliance

2003         58,956            ; 952                      1.61%

2002         59,080            ; 492                      0.83%

2001         59,003            ; 226                      0.38%

2000         61,787            ; 187                      0.30%

1999         62,054         1,502                      2.42%

1998         65,877         2,125                      3.23%

1997         68,124         1,223                      1.80%

1996         70,743           ; 859                      1.21%

Failure to make a determination of a report within 60 days is a violation of the Act, could delay the implementation of a service plan, and could result in further endangerment of the child. (Finding 2, pages 14-15) This finding was first reported in 1998.

We recommended the Department determine reports of child abuse or neglect within 60 days as mandated by State law.

Department officials stated they will continue in their efforts to achieve 100% compliance in the future. (For previous agency responses, see Digest Footnote #2.)


The Department did not initiate an investigation of some child abuse and neglect cases within 24 hours of receipt of the reports as required by the Abused and Neglected Child Reporting Act. Department statistics indicate the following noncompliance:

Fiscal      #9; Total      #9; Reports Not   Percent of Reports

Year      Reports    In Compliance   Not In Compliance

2003         59,397             ; 220                 0.37%

2002         59,241             ; 517                 0.87%

2001         60,054             ; 141                 0.23%

2000         61,787             ; 219                 0.35%

1999         62,618             ; 250                 0.40%

1998         65,862             ; 461                 0.70%

1997         67,657             ; 426                 0.63%

1996         70,739             ; 347                 0.49%

Failure to respond to a report of abuse or neglect within 24 hours is a violation of the Act and could result in further endangerment of the child. (Finding 3, pages 16-17) This finding was first reported in 1998.

We recommended the Department initiate investigations of all child abuse and neglect reports within 24 hours of receiving the report as mandated by State law.

Department officials responded they will continue efforts to try to achieve 100% compliance in the future. (For previous agency responses, see Digest Footnote #3.)


The Department did not have adequate oversight for expenditures made for children's personal and physical maintenance. This has resulted in several problems ranging from a lack of adequate documentation for expenditures to questionable expenditures due to case status and service code discrepancies.

During fiscal year 2003, the Department expended $2.8 million from an appropriation for personal and physical maintenance for children. Department officials stated the majority of the initial and replacement clothing for children is paid from this appropriation. Additionally, expenditures include camp and educational fees, cultural enrichment, travel, graduation expenses, and tutoring. These payments are in addition to regular monthly payments to caregivers for the child's room, board, clothing and allowance.

We selected 40 vouchers paid from the children's personal and physical maintenance appropriation to test for appropriateness and adequacy of support. Lack of oversight contributed to exceptions in 21 of the 40 vouchers tested and resulted in questioned expenditures of $4,031. Some vouchers had multiple exceptions. The exceptions are summarized as follows:

  • Sixteen vouchers did not have the purchaser's signature or did not match the authorized signer's signature on the receipt.
  • Four vouchers were for purchases not made by the foster parent of the child.
  • One voucher contained a birth date that did not match the birth date of the child in the Department's system.
  • Two vouchers had receipts that did not state the sizes/descriptions for the items purchased.
  • One voucher contained charges for sales tax when sales tax should not have been paid.
  • Three vouchers did not have receipts attached.

Oversight for these expenditures is detailed in Department Procedures/Rules and two types of purchase authorizations. The procedures detail the eligible goods/services that can be purchased. The authorizations detail what was purchased and contain sections for the seller and purchaser to certify that the goods/services were delivered. We found a lack of review at both regional and Springfield central offices. Also, inconsistent processing methods contributed to questionable expenditures. (Finding 4, pages 18-19)

We recommended Department management implement consistent review procedures at regional offices that process expenditures for the personal and physical maintenance of children so that taxpayer funds are adequately protected.

Department officials responded they will be reviewing internal policies and procedures concerning these payments and, where necessary, will delay or deny payment. Policies and processing instructions will be revised as necessary and staff will be trained.


The Department had not established adequate controls for securing its computer resources. The Department relied on computer systems to meet its mission of providing "services to children and families to protect and advocate on behalf of children and youth who are, or who are at risk of, being abused, neglected or removed from their families." The Department collected, maintained, and stored a significant amount of confidential information.

During our review, we noted the Department addressed several weaknesses identified in the prior audit, but had not addressed the following:

  • A comprehensive information technology policy had not been finalized or implemented.
  • An excess number of IDs and passwords were generically assigned and shared.
  • An excessive number of users had security administration authority.

During our review, we also determined that physical security was not consistently enforced or monitored, and lax security controls were allowed in various locations.

Security is essential to the confidentiality, integrity, and availability of information resources. A lack of security policies, user awareness and lax security parameters increases the risk of unauthorized access to computerized information. (Finding 9, pages 26-27)

We recommended the Department implement more stringent security parameters on its computer systems. The Department should develop a security awareness program and ensure physical security controls are enforced and monitored at each location.

Department officials agreed that security controls and confidentiality are essential to ensure compliance with laws and rules that govern how the data maintained is used. They stated the combination of electronic keypads and locks provide adequate control over building access and will issue periodic reminders to all personnel about permitting others into buildings.



The Department had not performed effective monitoring of its residential and group home service providers. The Department contracts with approximately 100 institutions to provide residential, group home, emergency shelter services, and other services. The total paid to these providers during fiscal year 2003 was in excess of $235 million. Many of the institutions have multiple contracts covering the same annual period with each contract covering a separate service.

Some of the problems noted relating to these contracts include:

  • Service provided before the contract was signed and approved;
  • No on-site monitoring for several providers;
  • No specific measurable criteria within the contracts; and
  • Insufficient fiscal monitoring of contract payments.

As currently described in the service provider contracts, residential providers are to be monitored predominately through annual licensure reviews, the submission of annual independent certified audits and interagency financial reports, reviews of behavioral management plans, monthly reviews of treatment plans, and following up on incidents reported at the institutions. Although these are the activities that are supposed to take place, certain of them are either not being performed or are not sufficient to provide for effective monitoring.

Department officials indicated that the causes for the lack of regular on-site monitoring were limited resources to maintain the program, track information, report on monitoring activities and a lack of specific identifiable measurable criteria within the service provider contracts. The Department also indicated that services were provided prior to the approval of contracts due to ongoing placement at these particular facilities. There were instances where the Department requested detailed accounting records from service providers and the Department has not received them. The Department's inability to perform effective monitoring does not provide reasonable assurance that the program is achieving the desired results and that funds are being spent appropriately. (Finding 10, pages 28-29)

Department officials agreed that there is a need for additional monitoring of residential and group home service providers. They stated they are currently in the process of establishing a residential monitoring unit with a target implementation date of July 2004.


The Department does not perform sufficient monitoring of its contractors providing services to children. While the Department has taken some actions, other areas still need to be addressed.

During a previous audit, we selected three providers that had contracts with the Department and performed onsite audit procedures in the areas of expenditures, payroll/personnel, and inventory. The results of this testing indicated that the Department's monitoring activities were not reasonably designed to detect instances of non-compliance with laws and regulations by purchase of service providers. In the last audit we recommended that the Department:

  • continue its investigation into provider activities and, if necessary, refer its findings to the Attorney General;
  • make a determination of the appropriate staffing level for the field audits of provider organizations; and
  • develop more rigorous self-reporting requirements for providers.

The Department agreed with our conclusions and accepted the recommendation.

To follow-up on our initial recommendation, the Department did perform audits of the three providers during 2001-2002. Questioned expenditures for two of the providers were resolved in the last audit. However, at the third provider, the Department has yet to resolve identified expenditures of over $373,000 in disallowed costs. Additional investigation by the Department of this provider was completed and the disallowed cost figure developed. A Department official indicated that while new legal counsel within the Department wants to pursue this action with the Attorney General, the action was not taken during the audit period.

The Department did consider the resources allocated to provider oversight functions in the Office of Field Audits at the end of FY 03. However, no action was taken during the audit period to increase the headcount to the proposed level. The Office of Field Audits conducts onsite fiscal audits of provider agencies. The Department reported that there were six field auditors assigned to this office during the first half of FY 03. Two staff retired leaving the headcount at four from January through June 2003. In addition to field audits, this staff is responsible for desk reviews of provider annual audit reports. Documentation submitted by the Department shows that, during FY 03, the Office of Field Audits worked on only 5 audits. Additionally, during the audit period, documentation shows that 158 desk reviews (including 9 in progress) were processed. According to a Department official, the Office of Field Audits was unable to complete approximately 60 desk reviews. Based on current Department reporting requirements, there are about 235 providers that are required to submit an annual audit to the Department. The Department reported that additional headcount has been approved for FY 04.

In response to the previous findings, the Department stated it would "consider" implementing additional requirements on provider reporting. However, the Department has not implemented additional requirements on provider reporting, nor were any documents provided during this audit illustrating any ideas for additional self-reporting requirements for providers.

Given the size of the field audit staff and number of providers conducting business for the Department, additional self-reporting requirements could provide additional fiscal monitoring. (Finding 11, pages 30-31)

We recommended the Department complete the decision-making process and refer its findings, if appropriate to the Attorney General to seek recovery for the State of the disallowed provider costs. Further, the Department should devote sufficient resources to the field audit function that allows for sufficient monitoring of provider organizations. Lastly, the Department should develop more rigorous self-reporting requirements for providers.

Department officials concurred and stated information identified in the investigation of the provider has been referred to the Office of the Attorney General. Additionally, they have evaluated staffing levels and, as resources permit, plan to add positions in the field audits unit. They are also evaluating reporting criteria and requirements for these residential subrecipient service providers.


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

Mr. Bryan Samuels, Director, provided the Department’s responses.


Our auditors stated the Department's June 30, 2003 financial statements are fairly presented in all material respects.




WILLIAM G. HOLLAND, Auditor General



Our special assistant auditors on this audit were McGladrey & Pullen, LLP.



#1: CHILD WELFARE FILES – Previous Agency Responses

The Department agreed with the auditors’ recommendations with regard to case file documentation and timeliness in its 2002, 2000 and 1999 responses. In its 1998 response, the Department disagreed with the auditors’ findings.


In its prior responses in 2002, 2000, 1999 and 1998, the Department generally agreed with the auditors’ findings and recommendations and agreed to implement corrective actions.

Complete Department responses to prior findings are available upon request from the Auditor General’s Office.