REPORT DIGEST

 

ENVIRONMENTAL PROTECTION AGENCY

 

FINANCIAL AUDIT

For the year ended June 30, 2004

AND COMPLIANCE EXAMINATION

For the two years ended

June 30, 2004

 

Summary of Findings:

Total this audit                          7

Total last audit                          4

Repeated from last audit           2

 

Release Date:

March 10, 2005

 

 

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 is also available on

the worldwide web at

http://www.state.il.us/auditor

 

 

 

 

 

 

SYNOPSIS

 

 

·        The Agency made payments for efficiency billings from improper line item appropriations.  

 

·        The Agency did not conduct employee performance evaluations in a timely manner. 

 

·        The Agency did not publish the Annual Toxic Chemical Reports by April 1st as required by the Environmental Protection Act.

 

·        The Agency did not publish an annual report on the progress of pollution prevention as required by the Illinois Pollution Prevention Act.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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


ENVIRONMENTAL PROTECTION AGENCY

FINANCIAL AUDIT AND COMPLIANCE EXAMINATION

For The Two Years Ended June 30, 2004

 

EXPENDITURE STATISTICS

FY 2004

FY 2003

FY 2002

!  Total Expenditures (All Funds)........

 

$592,016,400

$507,374,848

$494,350,315

     OPERATIONS TOTAL......................

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

$195,718,343

33.1%

$222,589,192

43.9%

$204,173,675

41.3%

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

            % of Operations Expenditures

            Average No. of Employees....

$59,324,021

30.3%

1,196

$60,407,054

27.1%

1,144

$58,254,556

28.5%

1,258

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

            % of Operations Expenditures

 

$24,744,541

12.6%

 

$20,223,214

9.1%

 

$19,787,767

9.7%

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

            % of Operations Expenditures

$78,841,147

40.3%

$91,600,494

41.2%

$71,082,512

34.8%

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

            % of Operations Expenditures   

$32,808,634

16.8%

$50,358,430

22.6%

$55,048,840

27.0%

 

     GRANTS TOTAL...............................

         % of Total Expenditures  

 

 

$396,298,057

66.9%

 

$284,785,656

56.1%

 

$290,176,640

58.7%

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

$61,707,059

$62,302,343

$62,798,892

SERVICE EFFORTS AND ACCOMPLISHMENTS

 

FY 2004

 

FY 2003

 

FY 2002

CLEAN AIR

  Title V permits issued …………………

  Facilities inspected......................................

  Vehicle emission tests performed.................

 

237

2,149

2,083,930

 

769

2,350

2,091,897

 

882

2,350

2,034,430

CLEAN LAND

  Permits issued ……………………………

  Facilities inspected......................................

  Cleanup programs:

     Federal superfund cleanup (State-lead)....

     State cleanup projects completed.............

  Leaking Underground Storage Tanks:

     Incidents reported...................................

  Household Hazardous Waste Collections ….

 

649

4,727

 

2

6

 

633

39

 

649

4,340

 

1

7

 

581

26

 

741

5,055

 

3

3

 

702

34

CLEAN WATER

  Permits issued............................................

  Facilities inspected......................................

  Financial assistance:

      Wastewater loans issued........................

      Drinking water loans issued.....................

 

10,397

1,438

 

12

37

 

8,942

1,488

 

23

41

 

8,444

1,513

 

16

21

 

AGENCY DIRECTOR(S)

During Audit Period:  Renee Cipriano

Currently:  Renee Cipriano

 

 


 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 


Efficiency initiative payments totaled $2,632,777

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 


Performance evaluations not performed timely

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 


Annual Toxic Chemical Reports due April 1 annually not filed timely

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 


Annual report on pollution prevention not published

 

 

 

 

 

FINDINGS, CONCLUSIONS, AND

RECOMMENDATIONS

 

PAYMENTS WERE MADE FOR EFFICIENCY INITIATIVE BILLINGS FROM IMPROPER LINE ITEM APPROPRIATIONS

 

The Agency made payments for efficiency initiative billings from improper line item appropriations.  Public Act 93-0025, in part, outlines a program for efficiency initiatives to reorganize, restructure, and reengineer the business processes of the State.  The State Finance Act details that the amount designated as savings from efficiency initiatives implemented by the Department of Central Management Services (CMS) shall be paid into the Efficiency Initiatives Revolving Fund.  The Act further requires State agencies to pay these amounts from line item appropriations where cost savings are anticipated to occur. 

 

The Agency did not receive guidance or documentation with the billings from CMS detailing from which line item appropriations savings were anticipated to occur.  According to Agency staff, they received no documentation or information from CMS detailing the nature and/or type of savings that CMS anticipated.  The only guidance received was the amount of payments that should be taken from General Revenue Funds versus other funds for the September 2003 billings. 

 

The Agency made payments for billings not from line item appropriations where the cost savings were anticipated to have occurred but from line items that simply had available monies to make payments.  The Agency used:

 

·        $2,238,000 from its contractual services, travel, commodities, printing, equipment, telecommunications, and lump sum purposes line item appropriations to pay for the Procurement Efficiency billing. 

 

·        $340,137 from its equipment line item appropriation to pay for the Information Technology billing.

 

·        $54,640 from its operation of auto and lump sum purposes line item appropriations to pay for the Vehicle Fleet Management billing.  (Finding 1, pages 11-13)

 

We recommended the Agency only make payments for efficiency initiative billings from line item appropriations where savings would be anticipated to occur.  Further, we recommended the Agency seek an explanation from the Department of Central Management Services as to how savings levels were calculated, or otherwise determined, and how savings achieved or anticipated impact the Agency’s budget. 

 

      Agency officials accepted our recommendation and stated the Agency made payments for efficiency initiative billings from FY04 appropriations based on appropriations used in prior fiscal years.  The Efficiency Fund payments were spread across all programs and funding sources that had these types of costs in prior years and therefore, line item appropriations as well as operational lump sum appropriations were used to pay the Efficiency Fund invoices. 

 

 

EMPLOYEE PERFORMANCE EVALUATIONS NOT PERFORMED ON A TIMELY BASIS

 

      The Agency did not conduct employee performance evaluations in a timely manner for 5 out of 53 (9%) employees tested during the examination period.  The time elapsed from the employee’s previous performance reviews ranged from 21 to 40 months.  (Finding 2, page 14)  This finding was first reported in 1994.

 

      We recommended the Agency comply with internal procedures, Administrative Code rules and prudent business practices by performing annual evaluations for all employees in a timely manner.

 

      Agency officials accepted our recommendation and stated the Agency has attempted to improve the timeliness of performance evaluations.  The Office of Human Resources will increase its efforts to track performance evaluation due dates and to ensure that the appropriate manager or supervisor is aware of the need to complete reviews in a timely manner.  (For the previous Agency responses, see Digest footnote #1.)

 

           

NON-COMPLIANCE WITH ANNUAL TOXIC CHEMICAL REPORTING REQUIREMENTS

 

      The Agency published the Fifteenth Annual Toxic Chemical Report 86 days late, and the Sixteenth Annual Toxic Chemical Report due on April 1, 2004 has not been published as of December 9, 2004, the date of our report.  The Environmental Protection Act requires the reports to be filed annually by April 1.  (Finding 3, page 15)  This finding was first reported in 2002. 

 

      We recommended the Agency publish the annual toxic chemical report by April 1st of each year as required by the Environmental Protection Act or seek legislative remedy to extend the deadline for reporting.

 

      Agency officials accepted our recommendation and stated the Agency has published the Sixteenth Annual Toxic Chemical Report.  However, the Agency will seek a legislative change to either extend the report deadline to a date that more closely coincides with the time the information is available, or they may seek to eliminate the requirement because of duplication of information published by USEPA.  (For the previous Agency responses, see Digest footnote #2.)

     

 

NON-COMPLIANCE WITH POLLUTION PREVENTION REPORTING REQUIREMENTS

 

      The Agency did not publish an annual report on the progress of pollution prevention as required by the Illinois Pollution Prevention Act (Act).  The Act states the Agency shall on an annual basis utilize the source reduction and recycling information required to be reported for toxic or hazardous materials and assess and report the progress of pollution prevention and make a comparison for all facilities in Illinois.  (Finding 6, page 18)

 

      We recommended the Agency comply with statutory requirements to publish an annual report on the progress of pollution prevention or seek legislative remedy. 

 

      Agency officials accepted our recommendation and stated they have not published an annual Pollution Prevention report due to the difficulty in analyzing and comparing the data.  The Agency will seek a legislative change to eliminate this reporting requirement.

 

 

OTHER FINDINGS

 

      The remaining findings are less significant and are reportedly being given attention by the Agency.  We will review progress towards the implementation of our recommendations during the Agency’s next examination.

 

      The Director provided the responses to our findings and recommendations.

 

 

AUDITORS’ OPINION

 

      Our special assistant auditors stated that the Water Revolving Fund of the Illinois Environmental Protection Agency as of and for the year ended June 30, 2004 is fairly stated in all material respects.

 

 

     

 

____________________________________

WILLIAM G. HOLLAND, Auditor General

 

WGH:JSC:pp

 

SPECIAL ASSISTANT AUDITORS

 

      Our special assistant auditors for this audit were PTW & Co.

 

 

 

 

 

DIGEST FOOTNOTES

 

 

#1 – EMPLOYEE PERFORMANCE EVALUATIONS NOT PERFORMED ON A TIMELY BASIS – Previous Agency Response

 

2002:  Accepted.  Evaluations have been performed for the employees identified in the audit and, since they are covered by collective bargaining agreements that separate performance reviews and step increases, they were not financially penalized by the late reviews. 

 

            IEPA’s Office of Human Resources is now using a specially developed computer database to monitor and enforce the personnel policy requiring annual performance evaluation for all employees.  This database provides a series of notices that are sent to supervisors and managers identifying upcoming and past due performance evaluations.  

 

#2 –    NON-COMPLIANCE WITH ANNUAL TOXIC CHEMICAL REPORTING REQUIREMENTS – Previous Department Response

 

2002:  Accepted.  We will make the necessary adjustments to publish the toxic chemical report by April 1st.  Given the improved accessibility of this federally required data from the USEPA, we are evaluating the continued necessity of issuing a separate State report.  If we conclude that a separate State report duplicates the information available from the USEPA, we will request that the legislative requirement be eliminated.