DEPARTMENT OF NATURAL RESOURCES
For the Two Years Ended:
Summary of Findings:
Total this audit 12
State of Illinois
Office of the Auditor General
WILLIAM G. HOLLAND
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Expenditures and Activity Measures are summarized on the next page.}
DEPARTMENT OF NATURAL RESOURCES
For the Two Years Ended June 30, 2002
|Total Expenditures (All Appropriated
Cost of Property and Equipment (in thousands)
|SELECTED ACTIVITY MEASURES (Unaudited)||
|Acreage owned and managed
Site Attendance (In Thousands)
Protected Natural Area Acreage
Hunting Licenses Issued
Fishing Licenses Issued
Students Certified in Safety Education Classes
|During Audit Period: Brent Manning|
Delays and errors in preparation and submission of GAAP reporting packages
Inaccurate records over property and equipment totaling in excess of $973 million
Incomplete commodity inventory records maintained
Department expended approximately $1.2 million and $1.4 million in fiscal years 2002 and 2001, respectively on paper and printing
$50,234 improperly prepaid communication charges
Inefficiencies and errors in calculating employee accumulated leave due to manual timekeeping system
Timekeeper added 40 hours of accrued leave to an employees balance
Department lacked adequate controls over its 1,600 plus State vehicles
FINDINGS, CONCLUSIONS, AND RECOMMENDATIONS
LACK OF TIMELY INFORMATION REPORTED AND INADEQUATE PREPARATION OF GAAP PACKAGES
The Department's preparation and submission of
Generally Accepted Accounting Principles (GAAP) reports were not performed on a timely basis causing financial reporting delays. All GAAP packages required to be submitted to the Office of the State Comptrollers Office by the Department were submitted between 29 and 69 days late.
We also noted the following:
We recommended the Department implement procedures to ensure GAAP financial reports are prepared in an accurate and timely manner and review and revise, as necessary, its current system of gathering programmatic expenditures information to improve the timeliness of its financial reporting, as well as personnel devoted to the task. (Finding 1, pages 12-13)
Department officials agreed with our recommendation and stated they will establish new methodologies to gather information to improve the timeliness and accuracy of their financial reporting. These methodologies will address the concerns identified by the auditors, and the Department will also strive to provide additional personnel in its preparation of its annual GAAP reports.
INACCURATE PROPERTY CONTROL RECORDS
The Department did not maintain accurate records over its property and equipment totaling in excess of $973 million. We selected a sample of 248 equipment items from 14 Department locations. We noted the following:
We recommended the Department remind all employees of its property control procedures to ensure that such procedures are followed. (Finding 2, pages 14-15)
Department officials agreed with our recommendation and stated they will immediately remind all location supervisors of the Agencys property control procedures to ensure that such procedures are followed and will follow-up on the specific instances noted in the finding.
FAILURE TO MAINTAIN ACCURATE COMMODITY INVENTORY RECORDS FOR GAAP REPORTING PURPOSES
The Department did not maintain accurate and complete commodity inventory records for GAAP reporting purposes.
During our review of fiscal year 2001 and 2002 GAAP package submissions, we noted the Department did not record the value of paper or printed publications for sale as inventories and erroneously included postage amounts as commodity inventories rather than as pre-paid postage.
We recommended the Department maintain a record of all paper and printed material for sales as part of its commodity inventories and properly record and classify amounts on GAAP package submissions. (Finding 3, pages 16-17)
Department officials agreed with our recommendation and stated it will implement procedures to ensure that paper and printed publications for sale are included in the Agencys commodities inventory reported in its GAAP submission. Department officials also stated the Department will implement procedures to reconcile the delivery of publications shipped to multiple sites.
IMPROPER FISCAL YEAR EXPENDITURES
The Department improperly prepaid fiscal year 2002 costs totaling $50,234 from fiscal year 2001 appropriations, in violation of the State Finance Act.
The Department paid $60,000 to the Department of Central Management Services for a $9,766 vendor invoice, resulting in an prepayment of $50,234.
We recommended the Department not advance pay expenses. (Finding 4, pages 18-19)
Department officials agreed with our recommendation and stated this was an isolated occurrence resulting from a misinterpretation of the State Finance Act. Department officials also stated no further prepayments have been made.
TIMEKEEPING SYSTEM IS NOT AUTOMATED
The Department-wide timekeeping system is not automated, resulting in inefficiencies and errors in accurately calculating employee accumulated leave. The Department employs over 2000 employees and each division within the Department maintains a manual timekeeping system. We noted the following weaknesses:
We recommended the Department implement an automated timekeeping system to strengthen internal controls and eliminate the multiple timekeeping systems currently used by the Department. (Finding 5, pages 20-21)
Department officials agreed with our recommendation and stated they will evaluate existing timekeeping systems available to the Department at minimal cost. Subject to staffing and funding levels, the Department will work toward implementing an automated system in calendar year 2004. In the meantime, the Department will immediately remind all timekeepers and supervisors of their responsibility to confirm all timesheet calculations prior to signing such documents.
INADEQUATE PROCEDURES REGARDING STATE VEHICLES
The Department did not have adequate controls over its State vehicles. We noted the following:
We recommended the Department strengthen its controls regarding State vehicles in regards to the items noted. (Finding 6, pages 22-26)
Department officials agreed with our recommendation and stated they have initiated a thorough evaluation of its vehicle management process which will be completed in March 2003. As part of the evaluation, the Department will review all assignments to ensure they are in the best interest of the State and ensure documentation of the Directors approval of vehicle assignments is retained. In addition, the Department will develop procedures to require an annual review of vehicle assignments and strengthen its procedures for monitoring employee use of personal vehicles and for documenting odometer readings and maintenance records.
The remaining findings were less significant and are reportedly 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.
We conducted a compliance audit of the Department as required by the Illinois State Auditing Act. We have not audited any financial statements of the Department for the purpose of expressing an opinion because the Department does not, nor is it required to, prepare financial statements
WILLIAM G. HOLLAND, Auditor General
Our special assistant auditors for this audit were Sikich Gardner & Co. LLP.