LACK OF CONTROL OVER PROPERTY The
Department's internal accounting records for
property and equipment were not adequate. The
deficiencies resulted primarily from the
increased work load after the merger of the
various agencies and the termination of computer
software used to accumulate information and
reconcile purchases to appropriation
expenditures.
The Department is now responsible for property
and equipment having a recorded acquisition value
in excess of $631 million. Purchase additions
during the current year were approximately $2
million, and other additions and deductions
totaled $20 million and $763 thousand
respectively. (Finding 1, page 10.)
The Department agreed to complete development
of a new automated report which will accumulate
transaction records and document the needed
reconciliations.
The Department did not have adequate
documentation to support the deletion of
individual items from its property and equipment
inventory.
The Mines and Minerals Division recorded
deletions from its property and equipment
inventory totaling approximately $656,139. Of
this amount, approximately $402,256 of the
deletions were not supported by proper
documentation. Limitations with respect to
manpower and time allotted to the project of
combining the property inventories contributed
significantly to the documentation deficiency.
(Finding 6, page 17.)
The Department concurred with our
recommendations and stated they are reviewing the
deletions and will ensure adequate documentation
is prepared for these adjustments. Department
officials also stated monitoring of deletions has
been centralized in the Property Control Unit
which should prevent the recurrence of similar
instances.
LACK OF CONTROLS IN MONITORING UNEMPLOYMENT
COMPENSATION
The Department's failure to develop adequate
controls over the review of unemployment benefit
claims and payments resulted in instances of
unemployment benefits being paid, by the State,
to employees who were still receiving a paycheck
from the Department and, in one case, to someone
who never worked for the Department.
We were unable to review the timeliness of
filing unemployment benefit claim protests. The
Department had a 10-day period in which to file
protests. The Department had documentation on
only 5 of 25 cases sampled. For the claim forms
that were available we found that: all were
marked with "still employed" by the
Department; none were signed and dated to
indicate if the protest was timely; and, in some
instances the claim forms were not received by
the responsible personnel until after the
"reply due date" on the form. Failure
to protest timely results in payments to
individuals that may not be entitled to benefits.
The Department also has the responsibility to
review quarterly statements of benefits paid,
furnished by the Department of Employment
Security , and protest questionable charges. We
selected 25 cases to test the appropriateness of
the payments. In 24 percent of the cases, benefit
recipients were working at the Department while
they were also receiving unemployment benefits.
The Department failed to protest the charges.
Another benefit recipient had not worked for the
Department. The total amount of questionable
payments was approximately $3,000 for FY 96.
(Finding 2, pages 11 and 12.)
The Department agreed to develop procedures to
strengthen controls over its review of claims and
charges. It also stated it would work with IDES
to investigate and seek reimbursement where
appropriate.
OVERALL COST TO THE STATE IN THE USE OF
INTERMITTENTLY SCHEDULED EMPLOYEES NOT CONSIDERED
The Department's use of intermittently
scheduled employees resulted in additional costs
to the State in the form of unemployment-benefit
payments that are not reflected in the
Department's budget. Intermittent employees are
eligible to receive unemployment benefits when
they are on scheduled layoffs. State moneys used
to pay unemployment benefits to State workers are
appropriated to the Illinois Department of
Employment Security and not the individual
government agencies. During FY 96 the State paid
$226,760 in unemployment benefits to employees
reportedly laid off by the Department of Natural
Resources.
Department officials indicated they had not
conducted a formal cost study of using
intermittently scheduled employees. A common
management tool utilized in the private sector is
to carefully plan for unemployment at the time
employees are hired. Since unemployment benefit
payments are charged back to the State,
unemployment planning could result in significant
savings to the State. (Finding 3, page 13)
While the Department concurred with our
recommendations to conduct a formal cost study
and to evaluate the cost of unemployment benefits
when hiring, they indicated their belief that the
use of intermittently scheduled employees is cost
effective.
FAILURE TO IMPLEMENT RULES FOR BOAT
INSPECTION
The Department did not meet its statutory
mandate to implement rules for safety and
inspection of Illinois boats that either carry
passengers for hire or are offered for rent. This
finding has been repeated since 1988.
The Boat Registration and Safety Act,
effective January 1, 1988, requires the
Department to develop rules and regulations to
prescribe methods of inspection to determine the
weight capacity for each boat carrying passengers
for hire or for rent and to satisfy the
Department that each boat is of a suitable
structure and in a condition to warrant the
belief that it may be used in navigation with
safety to life and property. The Act further
indicates that it is the duty of the Department
to see that all such boats comply with the
standards prescribed in the Act and the rules and
regulations of the Department. (625 ILCS 45/7-3
and 7-5)
Failure to develop the mandated rules
prescribing safety inspection procedures or to
enforce such inspection procedures negates the
statutory intent to protect the public safety. In
FY '94 the Department had licensed 159 boat
rental operators and 227 operators to carry
passengers for hire. (Finding 9, page 20)
The Department concurred with our finding and
said rules for the inspection of boats for hire
were submitted to JCAR and formally approved in
December 1996. (For previous agency responses,
see Digest Footnote 1.)
LACK OF COORDINATION OF FEDERAL GRANT
MONITORING
The Department's system for monitoring the
administration of its grants did not include all
grant programs and did not detect certain
instances of noncompliance.
The Department administered 7 major and 26
non-major federal programs which received
$22,524,903 in FY '96. Several of these programs
were administered on a decentralized basis by
various units of the Department without a
coordinated effort to determine that the
Department was in compliance with federal and
State regulations. (Finding 20, page 186)
The Department responded it is continuing its
efforts to fully implement the grant coordination
policy to ensure that general and specific grant
requirements are met for all federal grant
programs. Department officials also stated that
in FY 1997 they implemented revisions to their
programmatic accounting system, which will be
used by all divisions to document costs on
federal programs and will assist their efforts to
monitor and coordinate all federal assistance
programs.
QUESTIONED FEDERAL PROGRAM COSTS
The Department's subgrantee incurred costs and
completed an Upper Mississippi River
Environmental Management Program (EMP) project
after a grant had expired. The project was to be
completed by September 30, 1995. The Department
requested and received a no-cost extension until
November 30, 1995, however, the project continued
until January 31, 1996.
Failure to obtain extensions of grant
agreements can result in the loss of federal
reimbursements. The Department claimed and
received federal reimbursement for $117,730 of
costs incurred after the federally extended grant
term of November 30, 1995.
The Department did not request time extensions
for completing federally funded disaster
assistance projects and performed
disaster-related work after the required due
dates. (Finding 23, page 190)
Project completion deadlines are set from the
date that a major disaster or emergency is
declared. Debris removal and emergency work must
be completed within 6 months and permanent work
must be completed within 18 months (44 CFR
206.204).
The Department had completed $9,450 of
disaster work after the federal deadlines for
completion. Furthermore, approximately $1,335,000
of additional work had not yet been completed,
for which there had been no request for a
deadline extension. The Department's predecessor
agency, Conservation, completed $104,430 of
disaster work after the federal deadlines for
completion during its final fiscal year ended
June 30, 1995. Failure to obtain such extensions
could cause the State to repay federal funds and
could also cause a loss of future federal
revenue. (Finding 31, page 200)
The Department's predecessor agency, the
Department of Mines and Minerals, had not
reported various small adjustments to federal
programs resulting from refunds. Refunds and
reimbursements of $3,862.11 dating back to 1984
were accumulated in the agency's 765 fund cash
balance that had not been appropriately credited
to the federal grant program.
Failure to report these amounts is a violation
of the grant agreement and results in the
unauthorized holding of federal funds by the
Department. (Finding 35, page 204)
The Department concurred with all of these
findings and stated they would work to resolve
the questioned costs cited in the findings.
OTHER FINDINGS
The remaining findings were less significant
and have been given appropriate attention by the
Department. We will review progress towards the
implementation of our recommendations in our next
audit.
Mr. Brent Manning, Director of the Department
of Natural Resources, provided the responses.
