FINDINGS,
CONCLUSIONS, AND RECOMMENDATIONS
INTERNAL AUDIT
The internal audit unit did not review all of the
Department's major systems of internal control as
required by the Fiscal Control and Internal Auditing Act
(FCIAA). FCIAA (30 ILCS 10/2003) requires the internal
audit program to include audits of major systems of
internal accounting and administrative control and be
conducted on a periodic basis so that all major systems
are reviewed at least once every two years.
Our review of the internal audit work for the two
years ended in 1997 disclosed that 7 of the 11 major
systems of internal control were audited during the audit
period, 2 additional audits were completed, but the
reports had not been released, and 2 audits were not yet
started. This finding has been repeated since 1989. (Finding
2, pages 16-17)
We recommended the Chief Internal Auditor continue to
implement the internal audit plan for FY 97/98 in order
to complete a review of all systems of internal control
as required by the Fiscal Control and Internal Auditing
Act.
The Department responded that an internal audit
program has been implemented which has shown significant
improvement during the fourteen months since the current
Chief Internal Auditor has been in the position. (For the
previous Department responses, see Digest footnote #1.)
OTHER FINDING
The remaining finding is less significant, and the
Department's response indicates it is addressing the
condition. We will review progress toward implementing
the recommendation in our next audit.
AUDITORS' OPINION
The auditors state the Department of Insurance's
financial statements for the two years ended June 30,
1997 are fairly presented.
___________________________________
WILLIAM G. HOLLAND, Auditor General
WGH:BAR:pp
SPECIAL ASSISTANT AUDITORS
Clifton Gunderson L.L.C. were our special assistant
auditors for this audit.
DIGEST FOOTNOTES
#1 INTERNAL AUDIT - Previous
Department Responses
1995: "The Department agrees with
this recommendation. The Department has addressed the
clearing up of this repeated finding by requesting in
fiscal year 1997 an additional experienced staff position
to direct the internal audit function. This new position
will be responsible for the Department's internal audit
operation and should be hired by July 1, 1996."
1993: "The audit plans for the
next two fiscal years include limited audits for all of
the Department's systems of internal accounting control
and internal administrative control. The internal auditor
will continue to devote efforts in improving management's
annual evaluations of the Department's internal controls.
Assistance will be provided by the
electronic data processing section in conducting reviews
of their internal controls. The word processing unit will
be utilized, if required, to assist the internal auditor
in the preparation of audit reports. This will enable the
internal auditor to be more timely in the completion of
audits.
The internal auditor uses the annual
evaluations, prior audits by the Auditor General, and
prior internal audits in conducting all new audits. It is
anticipated that all major and some minor internal
controls will be reviewed for the next evaluation
period."
1991: "The Audit Plan for Fiscal
Year 92 and Fiscal Year 93 includes limited audits for
all of the Department's internal accounting and internal
administrative systems. The audits will be directed to
the major areas of each system initially, and will be
more specific in future years to include minor areas of
each control system.
Emphasis has been placed on the annual
evaluations of the internal fiscal and administrative
controls of the Department conducted by Division
Management to show possible weaknesses, and strong points
in the various areas. The Internal Auditor uses these
reviews, prior audits by the Auditor General, and prior
internal audits in conducting all new audits. It is
anticipated that all major, and some minor internal
controls will be reviewed every two years."
1989: "The Audit Plan for FY 1990
and FY 1991 was revised in November 1989, and approved by
the Director. This plan was revised to ensure that audits
of major systems of internal accounting and
administrative control are conducted on a periodic basis
so that all major systems are reviewed at least once
every 2 years. Review of the design of major new
electronic data processing systems and major
modifications of those systems provide for adequate audit
trails and accountability. Special audits of operations,
procedures, programs, electronic data processing systems
and activities will be performed as directed by the
Director."
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