REPORT DIGEST

DEPARTMENT OF CHILDREN AND FAMILY
SERVICES

FINANCIAL AUDIT
FOR THE YEAR ENDED JUNE 30, 2022

Release Date:  June 22, 2023

FINDINGS THIS AUDIT: 3

CATEGORY:  NEW -- REPEAT -- TOTAL
Category 1:  1 -- 2 -- 3
Category 2:  0 -- 0 -- 0
Category 3:  0 -- 0 -- 0
TOTAL:  1 -- 2 -- 3

FINDINGS LAST AUDIT: 5

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

• (22-01) The Department’s year-end
financial statements in accordance with
generally accepted accounting
principles (GAAP) submitted to the
Illinois Office of Comptroller
contained errors.
• (22-03)   The Department failed to
maintain proper segregation of duties
over access to the Department’s daycare
providers’ licensing information, child
care information and billing system.

FINDINGS, CONCLUSIONS, AND
RECOMMENDATIONS

FINANCIAL STATEMENT PREPARATION

The Department of Children and Family
Services’ (Department) year-end
financial statements in accordance with
generally accepted accounting
principles (GAAP) submitted to the
Illinois Office of Comptroller
contained errors.

During the audit of the Department’s
financial statements, we noted the
following:

• Receipts from a private
organization’s grant (totaling
$1,592,000) were deposited in the
Special Revenue Fund - Special Purpose
Fund 0582 (Fund 0582), while
expenditures related to this grant were
paid from and recorded in the General
Revenue Fund 0001 (Fund 0001). The
error resulted in an understatement of
General Revenue Fund revenues and
overstatement of Special Revenue Fund
revenues by $1,592,000. An adjustment
to correct the error was recorded by
Department management.

• Two health and social services
expenditures (totaling $1,084,744)
pertaining to fiscal year 2021 were
recorded as expenses in fiscal year
2022. The error resulted in an
overstatement of beginning net position
and an understatement in current year
expenditures. The error in Fund 0001
was deemed immaterial by the Department
and was not corrected.

• Three fiscal year 2022 expenditures
payable to a State of Illinois
component unit (totaling $894,805) were
recorded as accounts payable and
accrued liabilities. The error in Fund
0001 was deemed immaterial by the
Department and was not corrected.
(Finding 1, pages 55-57)

We recommended the Department implement
internal control procedures to ensure
accurate financial statement
preparation.

The Department agreed with the
recommendation and stated it has
implemented a corrective action plan.
Department management stated that due
to unprecedented vacancies in the
Division of Budget & Finance, review
procedures in place were not able to be
followed to catch the misstatements
identified in the auditor’s review of
our financial statements and that the
Department has added senior management
positions to its approved headcount to
provide duplicity and support to be
better able to manage the ebbs and
flows of staffing levels and add
expertise to ensure the accuracy of
Departmental financial statements.
FAILURE TO MAINTAIN PROPER SEGREATION
OF DUTIES OVER DAYCARE

The Department failed to maintain
proper segregation of duties over
access to the Department’s daycare
providers’ licensing information, child
care information and billing system.

The Department maintains data related
to entities who provide daycare
services to the children in the State’s
care and specific data related to the
children themselves. As a result of
these services, the Department makes
payment to these entities.  During the
audit period, the Department expended
$34,778,402 related to daycare
services.

We conducted testing of the users’
access right to daycare providers’
licensing information, child care
information and billing system to
determine if proper segregation of
duties had been implemented.
Individuals should not have the ability
to establish a daycare provider, a
child-in-care, and to submit and
approve billings and payments.  Our
testing results noted 45 of 2,348 (2%)
users had rights to enter, modify and
delete daycare providers’ information,
child information and billing
information.  As a result, the
Department failed to maintain proper
segregation of duties.

We also reviewed the Department’s user
access review reports to the daycare
providers’ licensing information, child
care information and billing system for
three months, noting three of seven
(43%) monthly reports had not been
reviewed. (Finding 3, pages 61-62)

We recommended the Department implement
proper segregation of duties and ensure
no one individual has the rights to
enter, modify, and delete daycare
providers’ information, child
information and billing information.
Additionally, we recommended the
Department complete the monthly user
access reviews.

The Department agreed with the
auditor’s recommendation and stated it
has begun the process of conducting an
extensive review of its daycare
processes and will make all necessary
changes to ensure appropriate
segregation of duties are in place over
our Daycare system. The Department also
stated it will review its procedures
over access rights review to ensure
they are up to appropriate standards.

OTHER FINDINGS

The remaining finding pertains to
inadequate controls over the
Department’s review for service
providers. We will review the
Department’s progress towards the
implementation of our recommendations
in our next financial audit.

AUDITOR’S OPINION

The auditors stated the financial
statements of the Department as of and
for the year ended June 30, 2022 are
fairly stated in all material respects.

This financial audit was conducted by
Roth & Co. 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

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