REPORT DIGEST

EAST ST. LOUIS
FINANCIAL ADVISORY
AUTHORITY

FINANCIAL AND COMPLIANCE AUDIT
For the Year Ended:
June 30, 1998

Summary of Findings:

Total this audit 2

Total last audit 2

Repeated from last audit 0

Release Date:
March 18, 1999

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
Attn: Records Manager
Iles Park Plaza
740 E. Ash Street
Springfield, IL 62703
(217) 782-6046 or TDD (217) 524-4646

This Report Digest is also available on
the worldwide web at
http://www.state.il.us/auditor

SYNOPSIS

The Authority did not have adequate segregation of duties in the areas of equipment and cash receipts.

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

EAST ST. LOUIS FINANCIAL ADVISORY AUTHORITY
FINANCIAL AND COMPLIANCE AUDIT
For the Year Ended June 30, 1998

EXPENDITURE STATISTICS

FY 1998

FY 1997

Total Expenditures

Locally Held Funds Total
% of Total Expenditures

Appropriated Funds Total
% of Total Expenditures

Expenditures from the Lump Sum Appropriations:
Personal Services
Contractual Services
Travel
Commodities
Printing
Equipment
Electronic Data Processing
Telecommunications
Total Expenditures

Cost of Property and Equipment

$281,585

$14,905
5%

$266,680
95%

$154,981
95,003
7,018
3,895
153
0
182
5,448
$266,680

$98,491

$349,075

$91,890
26%

$257,185
74%

$109,551
109,276
3,054
9,193
61
15,801
4,903
5,346
$257,185

$96,696

SELECTED ACTIVITY MEASURES	FY 1998	FY 1997
Total Loan Repayments Loan Repayments - Principal Loan Repayments - Interest City Loan Still Outstanding	$368,014 $236,810 131,204 $2,037,625	$184,007 $113,220 70,787 $2,274,435

SUPPLEMENTARY INFORMATION	FY 1998	FY 1997
Number of Authority Employees	5	4

EXECUTIVE DIRECTOR

During Audit Period: Mr. R. Bruce Patterson
Currently: Mr. W. Kenneth Gearhart

Duties were not adequately segregated in the areas of equipment and cash receipts

FINDINGS, CONCLUSIONS, AND RECOMMENDATIONS; INADEQUATE SEGREGATION OF DUTIES
: The Authority did not have adequate segregation of duties in the areas of equipment and cash receipts. One employee was responsible for recording equipment expenditures and maintaining property records. During five months of the audit period, the employee was also responsible for recording cash receipts and performing monthly reconciliations. This increases the risk that errors or irregularities could occur and not be found in the normal course of operations.; We recommended the Authority properly segregate duties in order to maintain an effective internal control over the record keeping and accounting duties concerned with asset custody and physical control over assets. (Finding 1, page 12)
: The Authority agreed with our recommendation and states it has implemented procedures which will segregate responsibilities to enhance internal control structure.

OTHER FINDING

The other finding noted in our report is less significant and the Authority has responded that corrective action is in process. We will review the Authority's progress towards the implementation of our recommendations in our next audit.

Mr. W. Kenneth Gearhart, Director, provided responses to our findings and recommendations.

AUDITORS' OPINION

Our auditors state the financial statements of the East St. Louis Financial Advisory Authority as of and for the year ended June 30, 1998 are fairly presented in all material respects.

____________________________________
WILLIAM G. HOLLAND, Auditor General

WGH:GR:pp

AUDITORS ASSIGNED

Martin & Shadid were our special assistant auditors for this audit.