FINDINGS,
CONCLUSIONS, AND RECOMMENDATIONS
NON-COMPLIANCE WITH FISCAL CONTROL AND INTERNAL
AUDITING ACT
The Illinois Emergency Management Agency has not fully
implemented a program of internal auditing nor maintained
a fully effective internal control system.
The Agency did not establish a program of internal
auditing because, according to the Agency, funding and
head count were not authorized. As a result, internal
control weaknesses continued to be identified. As many as
five of the current report findings might have been
corrected if the Agency had a full scope program of
internal auditing. During the audit period, the Agency
entered into a limited scope contract with a certified
public accounting firm to provide needed internal control
review procedures. (Finding 1, page 26) This finding
has been repeated since 1993.
We recommended the Agency continue to seek
authorization and funding for an internal audit program.
The Agency agreed with this recommendation. (For previous
agency responses, see Digest footnote #1.)
INADEQUATE CONTROL OVER ASSETS
Procedures and records for control of State property
did not meet statutory requirements or provide adequate
internal control over assets.
The Agency's property control system did not include
purchase information by appropriation line item or
reconciliation of those amounts to acquisitions. The
current system relies upon staff processing vouchers to
recognize expenditures which should be capitalized. The
lack of adequate procedures, records, or internal
controls over property constitutes a material weakness
that could result in loss or misuse of the assets,
including property purchased with federal funds. It could
also result in inaccurate reporting of asset values. At
June 30, 1997 there was a difference of over $231,000
between the Agency's reported General Fixed Asset balance
and its inventory records. The reported General Fixed
Asset balance was $2,656,072 at June 30, 1997. (Finding
2, page 28) This finding has been repeated since 1993.
We recommended the Agency improve procedures and
internal controls over fixed assets. The Agency agreed
and stated that additional staff has been assigned
property control responsibilities. (For previous agency
responses, see Digest footnote #2.)
NON-COMPLIANCE WITH EMERGEMCY MANAGEMENT
REQUIREMENTS
The Illinois Emergency Management Agency did not
distribute federal awards in accordance with applicable
State and federal requirements.
The Agency receives federal assistance from the
Federal Emergency Management Agency and is required to
disburse at least two-thirds of the awards to local
emergency management agencies. The Federal Fiscal Year
1995 award was $2,730,531. The final part of that award
was $30,100 which the Agency inadvertently deposited into
the General Revenue Fund. This resulted in $20,068 of
questioned costs because two-thirds was not disbursed to
local agencies. The Federal Fiscal Year 1996 award
amendment was properly disbursed. (Finding 10, page 41).
We recommended compliance with disbursement
requirements for this award and the Agency agreed.
INCOMPLETE REPORTING AND NON-COMPLIANCE WITH THE
HAZARD MITIGATION GRANT PROGRAM
The Illinois Emergency Management Agency did not
report certain matching costs for its Hazard Mitigation
Grant Program to the Federal Emergency Management Agency
(FEMA), and in some instances did not obtain advance
approval before incurring them.
The Agency subgrants Hazard Mitigation funds to local
units of government to enable them to reduce the risk of
future damage, hardship, loss or suffering from
disasters. Because the Agency incurs costs in the
management and monitoring of this program, FEMA funds 75%
of such costs and requires the State to provide the other
25%. FEMA has approved personnel and appraisal costs as
eligible. Federal regulations require the Agency to
maintain records which adequately identify the source and
application of funds provided for activities and to make
accurate, current, and complete disclosure of financial
results and financially assisted activities. The Agency
did not report its matching management costs for this
program, for which they were awarded $280,987 in
connection with disasters occurring between July 1993
through June 1997. The total amount of matching costs
eligible for this award was not determined at the time of
the audit. (Finding 12, page 43)
In addition, through June 30, 1997, the Agency
incurred and disbursed $102,218 of management costs from
Hazard Mitigation Grant Program federal funds before
receiving advance approval from FEMA. Accordingly, the
disbursement of funds in excess of approved amounts
resulted in questioned costs. (Finding 13, page 44).
We recommended the Agency prepare and submit accurate
and complete financial reports, which include both
Federal and State matching program costs, and that
advance approval be requested prior to drawdown and
expenditure of funds. The Agency agreed and stated
financial reports will include state matching costs and a
request will be submitted for the continuation of
management costs through June 30, 1999.
OTHER FINDINGS
The remaining findings were less significant and are
being given appropriate attention by the Agency. We will
review progress toward implementing all recommendations
in our next audit.
AUDITOR'S OPINION
Our auditors state that the financial statements for
the Illinois Emergency Management Agency for the two
years ending June 30, 1997 are fairly presented.
____________________________________
WILLIAM G. HOLLAND, Auditor General
WGH:KMC:pp
SPECIAL ASSISTANT AUDITORS
Our special assistant auditors for this audit were
Sleeper, Disbrow, Morrison, Tarro & Lively.
DIGEST FOOTNOTES
#1 NON-COMPLIANCE WITH FISCAL
CONTROL AND INTERNAL AUDIT ACT - Previous Agency
Responses
1995: We Agree. IEMA will continue to
seek authorization and funding for an internal auditing
program. The Agency will request that this function be
performed by Central Management Services until we are
able to secure the staff needed to perform this function
effectively.
1993: The Agency has contacted the
Department of Central Management Services to establish a
more thorough program of internal control. DCMS has
verbally agreed to assist. Previously, the annual
certification to the Auditor General was used to
determine the status of findings related to previous
external audits.
#2 INADEQUATE CONTROL OVER ASSETS
- Previous Agency Responses
1995: We Agree. The Agency is now
implementing its developed procedure for the accumulation
of property purchased. To improve upon current practices,
IEMA has purchased a bar code system to more effectively
monitor property. Management has provided to staff
responsible for tracking property all requirements for
state and federal reporting. In addition, property
control staff now reconcile expenditure reports to
property reports monthly to ensure that all acquisitions
are included in property records in a timely manner.
1993: The Agency will develop a more
coordinated program of property control that meets
requirements of CUSAS and DCMS property control.
|
