REPORT DIGEST DEPARTMENT OF VETERANS’ AFFAIRS ILLINOIS VETERANS’ HOME AT ANNA COMPLIANCE EXAMINATION For the Two Years Ended: June 30, 2008 Summary of Findings: Total this report 5 Total last report 5 Repeated from last report 1 Release Date: June 25, 2009 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 http://www.auditor.illinois.gov

SYNOPSIS ¨ The Home did not comply with all application and admissions requirements. ¨ A Home employee was inappropriately involved in a resident’s personal finances maintained outside the Home’s funds. ¨ The Home did not exercise adequate control over its locally held funds and related reporting. {Expenditures and Activity Measurers are summarized on the reverse page.}

DEPARTMENT OF VETERANS' AFFAIRS - ILLINOIS VETERANS' HOME AT ANNA

COMPLIANCE EXAMINATION

For The Two Years Ended June 30, 2008

EXPENDITURE STATISTICS	FY 2008	FY 2007		FY 2006
Total Expenditures (All Funds)*...........	$4,408,906	$3,874,981		$3,646,201
OPERATIONS TOTAL........................... % of Total Expenditures..................	$4,335,437 98.3%	$3,802,515 98.1%		$3,592,046 98.5%
Ordinary and Contingent Expenses % of Operations Expenditures Personal Services........................... % of Operations Expenditures...... Average No. of State Employees.	$0 0% $2,575,960 59.4% 65	$0 0% $2,486,121 65.4% 64		$3,587,296 99.9% $0 0.0% 60
Other Payroll Costs (FICA, Retirement)..................................... % of Operations Expenditures......	$624,534 14.4%	$473,203 12.4%		$0 0.0%
Contractual Services........................ % of Operations Expenditures......	$569,505 13.1%	$549,913 14.5%		$0 0.0%
Commodities................................... % of Operations Expenditures......	$297,032 6.9%	$250,567 6.6%		$0 0.0%
Healthcare Shared Services............. % of Operations Expenditures......	$187,870 4.3%	$0 0.0%		$0 0.0%
All Other Operations Items................... % of Operations Expenditures........ NON-APPROPRIATED FUNDS Library Grant Fund (775)…………………. % of Total Expenditures…………………	$80,536 1.9% $4,850 0.1%	$42,711 1.1% $4,978 0.1%		$4,750 0.1% $9,000 0.2%
Locally Held Funds – Benefit Trust Fund... % of Total Expenditures..............	$68,619 1.6%	$67,488 1.8%		$45,155 1.3%
Cost of Property and Equipment...........	$7,185,651	$7,148,718		$7,103,500
SELECTED ACTIVITY MEASURES (NOT EXAMINED)			FY 2008		FY 2007
Average Number of Residents - Skilled Care................................ Average Number of Residents – Domiciliary Care........................			48 10		48 9
Ratio of Employees to Residents..................................................			1.12 to 1		1.12 to 1
Estimated Cost Per Year Per Resident – Skilled Care................... Estimated Cost Per Year Per Resident – Domiciliary Care............			$55,746 $28,700		$49,428 $22,849
HOME ADMINISTRATOR(S)
During Examination Period: Connie Duncan (Through 8/4/06); Patricia Simms, Acting (8/5/06- 5/31/07); Linda Hadley (As of June 1, 2007) Currently: Linda Hadley

* Includes all funds except the IVHA Members’ Trust Fund and the IVHA Clearing Account Fund.

One resident did not meet admission requirements One applicant was approved for admission without proof of military service One veteran was admitted prior to all previously approved veterans on the waiting list A Home employee helped maintain a resident’s personal finances outside of the Home’s fund Checks were made payable to cash or an employee 46% of reports contained errors and inconsistencies

FINDINGS, CONCLUSIONS, AND RECOMMENDATIONS NONCOMPLIANCE WITH APPLICATION AND ADMISSION REQUIREMENTS The Home did not comply with all application and admissions requirements of the Department of Veterans’ Affairs Act (Act). · One of 11 (9%) tested veterans admitted to the Home during the examination period did not meet admission requirements. · One of 25 (4%) applicants tested was approved for admission and placed on the Home’s short-term waiting list without providing proof of military service to the Home. · One of 25 (4%) applicants tested was approved for admission to the Home and given preference over all other eligible and previously approved veterans. · Two of 11 (18%) files tested for veterans admitted during the examination period did not contain evidence the veteran had been notified of the rules of the Home upon admission. (Finding 1, Pages 9-10) We recommended the Home carefully evaluate each application for admission to ensure all admission and eligibility requirements are met and documented in the application file before granting admission into the Home. We also recommended the Home ensure each veteran is notified of the rules of the Home upon admission and this notification is documented in each veteran’s file. Home officials agreed with our finding and stated the recommendations have been implemented. INAPPROPRIATE INVOLVEMENT IN RESIDENT’S PERSONAL FINANCES An individual employee of the Home helped maintain a legally blind resident’s personal checking account held outside the Home Member’s Trust Fund (Fund). The Home had no segregation of duties, independent monthly reconciliations, or authority to assist with residents’ personal finances maintained outside the Fund. (Finding 3, Pages 13-14) We recommended the Home prohibit employee involvement in the residents’ personal finances maintained outside the Member’s Trust Fund. Home officials agreed with our finding and stated the recommendation has been implemented. INADEQUATE CONTROLS OVER LOCALLY HELD FUNDS AND RELATED REPORTING The Home did not exercise adequate control over its locally held funds and related reporting. We noted: · Checks totaling $8,102 were made payable to either Cash or an employee. · The Home could not provide documentation that 9 of 72 (13%) reconciliations were performed timely. · Eleven of 24 (46%) Quarterly Reports of Receipts and Disbursements (C-17) reports contained errors and inconsistencies in the classification of receipts and disbursements. (Finding 4, Pages 15-16) We recommended the Home strengthen controls over local fund transactions and reporting, including obtaining receipts for all expenditures, initialing and dating bank reconciliations; and thoroughly reviewing all C-17 reports and underlying records for accuracy and completeness. Home officials agreed with the finding and responded that the recommendation has been implemented. OTHER FINDINGS The remaining findings are 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 WGH:lkw AUDITORS ASSIGNED This compliance examination was conducted by the Office of the Auditor General’s staff.