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FINDINGS, CONCLUSIONS, AND RECOMMENDATIONS
FINANCIAL REPORTING DELAYS
The Department's reports of programmatic expenditure information were not prepared
on a timely basis causing financial reporting delays.
The Department utilizes a programmatic accounting system (PAS) to capture information
necessary to prepare Generally Accepted Accounting Principle (GAAP) reporting packages for
the State Comptroller and departmental financial statements. However, the reports
generated from the PAS are generally not available until 45 to 50 days after the end of
the accounting period.
Department personnel attributed the delay in PAS report preparation and submission of
GAAP reporting packages to insufficient personnel resources and the late submission of
programmatic timesheets by Department employees.
An important element of internal control is the timely review, reconciliation and
reporting of accounting data. (Finding 1, pages 12-13)
We recommended the Department review, and revise as necessary, its current system of
gathering programmatic expenditure information to improve the timeliness of its financial
reporting. Also, GAAP reporting packages and financial statements should be prepared in a
timely manner.
Department officials agreed with our recommendation and stated they will evaluate the
current process used to report programmatic cost information and will explore alternatives
to improve the timeliness of this information. In addition, the Department will work to
improve the timely submission of GAAP packages and financial statements.
LACK OF SUPPORTING DOCUMENTATION AND CONTROLS OVER MONITORING UNEMPLOYMENT CLAIMS
The Department did not maintain necessary records to adequately monitor
unemployment benefits paid by the State. The State paid unemployment benefits of
approximately $204,252 to Department employees. We selected 25 unemployment claims for
testing and noted the following:
- 19 of 25 (76%) "Notice of Claim to Chargeable Employer or Other Interested
Party" forms (BIS-032) could not be located by the Department.
- One of the six BIS-032 forms obtained was not reviewed within the required ten-day
review period. The form was reviewed 19 days late.
- One of 25 (4%) persons paid unemployment compensation totaling $279 was not an employee
of the Department.
We also noted there was no supporting documentation indicating the Department reviewed
the FY00 quarterly "Statement of Amount Due for Benefits Paid" (BEN-118R)
reports sent by the Illinois Department of Employment Security (IDES) within the required
20 day period.
IDES rules and the Illinois Unemployment Insurance Act establish the procedures which
the Department must follow regarding unemployment claims. In addition, the Department has
its own Unemployment Compensation policies and procedures. (Finding 2, pages 14-15)
We recommended Department employees comply with Department and IDES rules and the
Unemployment Insurance Act. Also, the Department should maintain appropriate documentation
to support their reviews and decisions on unemployment benefit claims filed and benefits
paid.
Department officials agreed with our recommendation and stated they have transferred
responsibility for the review of unemployment compensation to their Office of Human
Resources who have met with officials from the IDES to familiarize themselves with
unemployment claim requirements. In addition, procedures will be developed and implemented
during FY2001 to ensure appropriate supporting documentation is maintained for the
Department’s review of unemployment compensation claims.
INACCURATE ACCUMULATED LEAVE RECORDS
The Department did not calculate leave records accurately. During our testing, we
noted 19 of 96 (20%) accumulated leave records contained mathematical errors. The errors
resulted in inaccuracies in accumulated leave time.
The Department’s Timekeeping Handbook requires the timekeepers make all entries in
a timely fashion and ensure all accumulated leave calculations are correct. In addition,
good business practice requires the Department maintain a system to accurately calculate
the accumulated leave balance for each employee. (Finding 3, page 16)
We recommended the Department maintain accurate leave records for all employees.
Specifically, the Department should recalculate accumulated leave records to ensure the
original calculation is accurate.
Department officials agreed with our recommendation and stated they will remind all
timekeepers and supervisors of the need to ensure the accuracy of mathematical
calculations on accumulated leave records. In addition, the Department will perform
additional audits and reviews of leave records to verify the accuracy of such
calculations.
INADEQUATE SECURITY CONTROLS
The Department did not have adequate security controls for its computer resources.
During our review, we noted the following weaknesses:
- Comprehensive department-wide information technology and physical security policies and
procedures, including a security awareness program did not exist.
- Physical security was not consistently enforced or monitored.
- Network rooms at various locations were not locked at all times and some computer
network servers were located in unsecure rooms.
- Environmental control and detection devices were not always employed and/or maintained.
- Network security defaults were not consistent and in some instances were not employed.
Adequate physical and logical security over the Department’s resources would
assist the Department in assuring its critical computer resources are adequately secured.
In addition, documented comprehensive department-wide security policies and procedures
would assist the Department in assuring staff responsible for monitoring and enforcing
security are aware of their responsibilities, as well as ensuring that security policies
and procedures are consistent among locations. (Finding 10, pages 23-24)
We recommended the Department establish and distribute to each location comprehensive
information technology security policies and procedures. In addition, the Department
should restrict access to all network servers, update their Internet policies and
procedures to provide controls over Internet access, and review their network security
defaults.
Department officials agreed with our recommendation and stated a Department-wide
evaluation of the security risks of its computer resources and information technology
functions will be performed and formal policies and procedures will be developed. In
addition, on-going security awareness programs for Department employees will be
established as part of these policies and procedures.
OTHER FINDINGS
The remaining findings were less significant and are being given attention by the
Department. We will review progress towards the implementation of our recommendations in
our next compliance audit.
Mr. Brad Hammond, Chief Internal Auditor for the Department, provided the responses.
AUDITORS’ OPINION
Our auditors stated the Department’s financial statements of the
non-shared funds, as of and for the year ended June 30, 2000, are fairly stated in all
material respects.
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WILLIAM G. HOLLAND, Auditor General
WGH:JSC:pp
AUDITORS ASSIGNED
This audit was performed by the staff of the Office of the Auditor General.
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