REPORT DIGEST DEPARTMENT OF HEALTHCARE AND FAMILY SERVICES - LOCAL GOVERNMENT HEALTH INSURANCE RESERVE FUND FINANCIAL AUDIT For the Year Ended: June 30, 2011 Release Date: May 2, 2012 Summary of Findings: Total this audit: 1 Total last audit: 0 Repeated from last audit: 0 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, 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 INTRODUCTION This report covers our financial audit of the Local Government Health Insurance Reserve Fund for the year ended June 30, 2011. SYNOPSIS • The Department’s year-end financial reporting contained weaknesses and inaccuracies. FINDINGS, CONCLUSIONS, AND RECOMMENDATIONS FINANCIAL STATEMENT PREPARATION The Illinois Department of Healthcare and Family Services’ (Department) year-end financial reporting in accordance with generally accepted accounting principles (GAAP) to the Illinois Office of the Comptroller (Comptroller) contained weaknesses and inaccuracies. These problems, if not detected and corrected, could materially misstate the Local Government Health Insurance Reserve Fund’s (Fund) financial statements. During our audit of the June 30, 2011 Fund’s financial statements, we noted weaknesses in the financial accounting for, and reporting of, accounts payable. Specifically, the Department did not correctly calculate accounts payable resulting in an adjustment totaling $1.613 million to reduce accounts payable. (Finding 1, pages 20-21 of the Financial Report) We recommended the Department implement additional internal control procedures to ensure GAAP Reporting Packages are accurately prepared. Department officials concurred with our recommendation and stated that the Department is continually assessing the financial reporting process and implementing procedures to improve upon accuracy. AUDITORS’ OPINION Our auditors state the financial statements of the Local Government Health Insurance Reserve Fund as of June 30, 2011, are fairly presented in all material respects. WILLIAM G. HOLLAND Auditor General WGH:tld:rt AUDITORS ASSIGNED This audit was performed by the Office of the Auditor General’s staff.