REPORT DIGEST

DEPARTMENT OF VETERANS’ AFFAIRS

ILLINOIS VETERANS’ HOME AT ANNA

COMPLIANCE EXAMINATION

For the Two Years Ended:

June 30, 2006

Summary of Findings:

Total this report                        5

Total last report                        0

Repeated from last report         0

Release Date:

April 19, 2007

State of Illinois

Office of the Auditor General

WILLIAM G. HOLLAND

AUDITOR GENERAL

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Springfield, IL 62703

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SYNOPSIS

¨      The Home did not conduct employee performance appraisals timely.

¨      The Home did not maintain time sheets in compliance with the State Officials and Employees Ethics Act.

¨      The Home inappropriately purchased a vehicle for Central Office from its lump sum appropriation.

¨      The Home did not have adequate segregation of duties over receipt processing.

{Expenditures and Activity Measurers are summarized on the reverse page.}

EXPENDITURE STATISTICS

FY 2006

FY 2005

FY 2004

     Total Expenditures (All Funds) (1).....

$3,646,201

$3,602,916

$3,914,423

     OPERATIONS TOTAL (2)....................

         % of Total Expenditures................

$3,637,201

99.8%

$3,594,871

99.8%

$3,914,263

100.0%

         Ordinary and Contingent Expenses

% of Operations Expenditures

Personal Services.........................

           % of Operations Expenditures....

           Average No. of State Employees

$3,587,296

98.6%

$0

0.0%

60

$3,556,556

98.9%

$0

0.0%

58

$1,098,239

28.1%

$39,793

1.0%

16

         Other Payroll Costs (FICA, Retirement)...................................

           % of Operations Expenditures....

$0

0.0%

$0

0.0%

$8,402

0.2%

         Contractual Services......................

           % of Operations Expenditures....

$0

0.0%

$0

0.0%

$2,729,814

69.7%

         Locally Held Funds – Benefit Trust Fund..

           % of Operations Expenditures....

$45,155

1.3%

$33,529

1.0%

$18,045

0.5%

         All Other Operations Items.................

           % of Operations Expenditures......

     NON-APPROPRIATED FUNDS

         Library Grant Fund (775)………………….    

           % of Total Expenditures…………………

$4,750

0.1%

$9,000

0.2%

$4,786

0.1%

$8,045

0.2%

$19,970

0.5%

$160

0.0%

     Cost of Property and Equipment.........

$7,103,500

$6,979,382

$6,827,369

SELECTED ACTIVITY MEASURES (NOT EXAMINED)

FY 2006

FY 2005

Average Number of Residents - Skilled Care................................

Average Number of Residents – Domiciliary Care.......................

49

10

49

11

Estimated Cost Per Year Per Resident – Skilled Care...................

Estimated Cost Per Year Per Resident – Domiciliary Care...........

$23,170

$10,698

$55,006

$22,010

HOME ADMINISTRATOR(S)

During Examination Period:        Connie Duncan 

Currently:                                  Patricia Simms

Evaluations were prepared late

Annual evaluation was not performed

Time sheets did not document time spent on official State business

A vehicle was purchased for the Central Office through the Home’s appropriation

One individual was responsible for custody, record keeping, and reconciliation of receipts

FINDINGS, CONCLUSIONS, AND RECOMMENDATIONS

EMPLOYEE PERFORMANCE APPRAISALS WERE NOT CONDUCTED TIMELY

 The Home did not conduct employee performance appraisals timely. We noted the following:

·     10 of 17 (59%) annual evaluations were prepared 62 to 99 days late.

·     1 of 17 (6%) annual evaluations was not performed at all.  (Finding 1, page 9)

We recommended the Home implement controls to ensure appraisals are performed timely for all employees. Further, responsible employees should obtain necessary training in proper completion of the evaluation forms.  

Home officials agreed with our finding and stated our recommendations have been implemented.

TIME SHEETS NOT MAINTAINED IN COMPLIANCE WITH THE STATE OFFICIALS AND EMPLOYEES ETHICS ACT

The Home did not maintain time sheets in compliance with the State Officials and Employees Ethics Act (Act). We noted employees were required to submit time sheets documenting arrival time at work and the time employees leave work. However, the time sheets did not document the time spent each day on official State business to the nearest quarter hour. (Finding 2, page 11)

The Act requires State employees to periodically submit time sheets documenting the time spent each day on official State business to the nearest quarter hour.

We recommended the Home comply with the State Officials and Employees Ethics Act by requiring employees to periodically submit time sheets recording time spent each day on official State business to the nearest quarter hour.

Home officials agreed with our recommendation.

INAPPROPRIATE PURCHASE OF VEHICLE FROM LUMP SUM APPROPRIATION

The Home inappropriately purchased a vehicle for the Department of Veterans’ Affairs Central Office through the Home’s appropriation. The vehicle should have been purchased out of the Department of Veterans’ Affairs – Central Office appropriation since the vehicle was for the Director of the Department rather than the Administrator of the Home.

Public Act 93-0842 designates the expenditure authority from which the Home is authorized to expend its appropriation. The appropriation bill for the Home states that appropriations are for the ordinary and contingent expenditures for the operation of the Home. (Finding 3, page 12)

We recommended the Home comply with the appropriation authorization by paying for all purchases from the proper appropriation.

Home officials agreed with our recommendation.

INADEQUATE SEGREGATION OF DUTIES FOR RECEIPTS

      The Home did not have an adequate segregation of duties over receipt processing within its locally held clearing account.     

One individual was responsible for most aspects of receipt processing, including the physical receipt of funds, record keeping, and preparing deposit slips.  In addition, an independent person was not available to perform monthly reconciliations of bank statements for approximately four and one-half (38%) months during Fiscal Year 2006.  The Home received a total of $2,029,768 in receipts in Fiscal Year 2006. 

      We recommended the Home adequately segregate the receipt processing duties by designating independent employees and back-up individuals to perform the custody, record keeping and bank reconciliation functions. 

      Home officials agreed with our recommendation and stated they have now segregated duties and will also look at implementing backup training with a third individual.

OTHER FINDING

      The remaining finding is reportedly being given attention by the Home.  We will review the Home’s progress toward implementation of our recommendations in our next compliance examination.   

AUDITORS’ OPINION

We conducted a compliance examination of the Department of Veterans’ Affairs, Illinois Veterans’ Home at Anna as required by the Illinois State Auditing Act.  We have not audited any financial statements of the Home for the purpose of expressing an opinion because the Home does not, nor is it required to, prepare financial statements. 

___________________________________

WILLIAM G. HOLLAND, Auditor General

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AUDITORS ASSIGNED

      This compliance examination was conducted by the Office of the Auditor General’s staff.