REPORT DIGEST

DEPARTMENT OF
FINANCIAL
INSTITUTIONS

FINANCIAL AND COMPLIANCE AUDIT
For the Two Years Ended:
June 30, 1998

Summary of Findings:

Total this audit 2
Total last audit 13
Repeated from last audit 1


Release Date:
March 18, 1999


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 unclaimed property division conducted 460 unclaimed property exams and collected about $22 million in cash, but did not always document all unclaimed property exams and decisions. In one exam file tested, the final negotiated cash settlement was about $10 million less than the examiner's initial estimate.

 

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


ILLINOIS DEPARTMENT OF FINANCIAL INSTITUTIONS
FINANCIAL AND COMPLIANCE AUDIT
For The Two Years Ended June 30, 1998

EXPENDITURE AND CASH RECEIPT STATISTICS

FY 1998

FY 1997

FY 1996

  • Total Expenditures (All Funds)
OPERATIONS TOTAL
% of Total Expenditures
Personal Services
% of Total Expenditures
Average No. of Employees
Other Payroll Costs (FICA, Retirement)
% of Total Expenditures
Contractual Services
% of Total Expenditures
Electronic Data Processing
% of Total Expenditures
Expenses to Process Additional Claims
% of Total Expenditures
All Other Items
% of Total Expenditures
  • Cost of Property and Equipment (Rounded to nearest thousand)
  • Cash Receipts

$12,262,482

$12,262,482
100%
$6,335,053
51.7%
157
$1,872,849
15.3%
$2,309,768
18.8%
$1,032,257
8.4%
$0
0%
$712,555
5.8%

$1,602,000

$128,796,772

$11,986,783

$11,986,783
100%
$6,210,782
51.8%
151
$1,685,944
14.1%
$2,354,420
19.6%
$1,041,486
8.7%
$0
0%
$694,151
5.8%

$1,785,000

$102,756,975

$11,910,019

$11,910,019
100%
$5,741,124
48.2%
153
$1,562,590
13.1%
$2,583,470
21.7%
$732,423
6.2%
$643,841
5.4%
$646,571
5.4%

$1,695,000

$112,061,816

SELECTED ACTIVITY MEASURES (unaudited)

FY 1998

FY 1997

FY 1996

  • CONSUMER CREDIT DIVISION
    Number of licenses
    Number of exams performed
  • CURRENCY EXCHANGE DIVISION
    Number of licenses
    Number of ambulatory licenses
    Number of exams performed
  • CREDIT UNION DIVISION
    Number of state chartered credit unions
    Number of exams performed
  • UNCLAIMED PROPERTY DIVISION
    Number of inquiries processed
    Number of claims paid
    Number of exams performed


5,625
1,112

692
371
762

489
415

55,145
22,882
224


4,968
1,149

700
393
779

501
488

62,281
28,442
235


4,682
1,069

706
414
800

514
528

61,704
20,252
148

AGENCY DIRECTOR
During Audit Period: Frank C. Casillas
Currently: Sarah Vega

 

 

 






Unclaimed property examiners did not adequately document all unclaimed property exams

























In one exam file, the final negotiated and documented cash settlement was about $10 million less than the examiner's initial estimate

FINDINGS, CONCLUSIONS, AND RECOMMENDATIONS

UNCLAIMED PROPERTY EXAMS NOT ADEQUATELY DOCUMENTED
 
Under the Unclaimed Property Act, all financial assets that go unclaimed for five or more years must be remitted to the State of Illinois. The Department is authorized to examine holders of unclaimed property to assure compliance with this law.
 
During the audit period, the Department's unclaimed property division conducted 460 unclaimed property exams and collected about $22 million in cash, but did not always document all unclaimed property exams and decisions.
 
Weaknesses noted by the internal auditor and our audit staff included the following:

In general, the examiner's files for unclaimed property were disorganized and lacked uniformity.

Examiner's files did not always contain a written conclusion regarding unclaimed property; for those files which had a written conclusion, the workpaper detail did not always support it.

The examiner's files were not indexed, contained no cross-references, and did not always indicate what exam procedures were done.

In one exam file we reviewed, the Department examiner's initial estimate of unclaimed property was not supported with written documentation. The Department's files did support the negotiated cash settlement amount, which was about $10 million less than the examiner's initial estimate. Exam files did not document the reason for the substantial difference in amounts. (Finding 98-1, pages 10 and 11)
 
Department officials accepted our recommendations to adequately document key decisions regarding unclaimed property. Effective April 1998, the Department adopted new written procedures for its unclaimed property exams and provided training for the examiners. According to the response, the Department will continue to train the unclaimed property examiners as needed.






OTHER FINDING
 
The remaining finding is considered less significant and has been given appropriate attention by the Department. We will review progress towards the implementation of our recommendations in our next audit.
 
Responses were provided by the Department's chief internal auditor, Ms. Christina Neely, CIA.
 

AUDITORS' OPINION

Our auditors state that the Department's fiscal year 1998 and 1997 financial statements for its nonshared and locally held funds are fairly presented in all material respects.

____________________________________
WILLIAM G. HOLLAND, Auditor General

WGH:JHL:pp
 

SPECIAL ASSISTANT AUDITORS

The accounting firm of Olive LLP served as our special assistant auditors for the engagement.