REPORT DIGEST

ILLINOIS RURAL BOND BANK

FINANCIAL AND COMPLIANCE AUDIT

For the Year Ended:
June 30, 1997

Summary of Findings:

Release Date:
March 5, 1998

State of Illinois
Office of the Auditor General

WILLIAM G. HOLLAND
AUDITOR GENERAL

Iles Park Plaza
740 E. Ash Street
Springfield, IL 62703
(217) 782-6046

SYNOPSIS

• The Illinois Rural Bond Bank's annual report was not filed within 90 days as required by statute.

• The Illinois Rural Bond Bank had deficiencies in contract document preparation.

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

FY 1997

FY 1996

• Total Expenditures (All Funds)
  
  OPERATIONS TOTAL (General and Special Reserve Funds)
  
  % of Total Expenditures
  
  Personal Services
  % of Operations Expenditures
  Average No. of Employees
  
  Other Payroll Costs (FICA, Retirement)
  % of Operations Expenditures
  
  Professional Services
  % of Operations Expenditures
  
  Financing Costs
  % of Operations Expenditures
  
  Equipment and Office Leases
  % of Operations Expenditures
  
  General and Administrative Expenditures
  % of Operations Expenditures
  
  Depreciation
  % of Operations Expenditures
  
  OPERATIONS TOTAL (Bond Funds)
  % of Total Expenditures
  
  INTEREST EXPENSE (Bond Funds)
  % of Total Expenditures

  Total Revenue (All Funds)

$4,204,136


$735,625

17.5%

$235,413
32.0%
7

$62,862
8.5%

$44,800
6.1%

$292,896
39.8%

$42,821
5.8%

$50,525
6.9%

$6,308
.9%

$0
0%

$3,468,511
82.5%

$3,935,133

$3,490,621


$523,869

15.0%

$235,271
44.9%
5

$56,663
10.8%

$45,450
8.7%

$98,667
18.8%

$42,765
8.2%

$38,951
7.4%

$6,026
1.2%

$14,414
.4%

$2,952,338
84.6%

$3,336,990

FY 1997

FY 1996

• Revenue Bonds Outstanding
• Loans Made During Year
  

$64,690,000
$15,305,000

$50,605,000
$3,960,000

Chairman: Bob Kustra, Lieutenant Governor
Executive Director: Tim G. Bobinsky

The annual report was not filed within 90

Contracts did not contain certain clauses required by State law

FINDINGS, CONCLUSIONS, AND RECOMMENDATIONS

LATE FILING OF THE ILLINOIS RURAL BOND BANK'S ANNUAL REPORT

The Illinois Rural Bond Bank's (Bank) annual report was not filed within 90 days which is in violation of the Rural Bond Bank Act (Act). The Bank's 1996 annual report was due to the Governor and General Assembly by September 30, 1996, but was not filed until March 1997.

We recommended the Bank adhere to the requirements of the Act and file the annual report within the time specified, or seek legislation to change the time requirements to become more suitable. (Finding #1, page 10)

The Bank responded that the audited financial statements are not available for distribution within 90 days of fiscal year end. The Bank's staff will either seek to amend the statute extending the 90 day period or distribute an annual report without audited financial statements within the 90 day period.

CONTRACTS LACKED REQUIRED CLAUSES

The Illinois Rural Bond Bank (Bank) had deficiencies in contract document preparation. These deficiencies were in violation of statute.

During audit testing, it was noted four contracts did not include a drug free workplace clause and three contracts tested did not contain a vendor records retention clause. The Drug Free Workplace Act (30 ILCS 580/3) requires a certification from the contractor that it will provide a drug free workplace. The Illinois Purchasing Act (30 ILCS 505/6i) requires contracts contain a clause that the contractor will maintain, for a minimum of five years after the completion of the contract, adequate books, records, and supporting documents related to the contract.

We recommended the Bank strengthen its controls over contract preparation to ensure contracts comply with State law regarding content. (Finding 4, page 13)

The Bank concurred with the recommendation and stated that subsequent to the audit, staff brought all contracts into compliance and put controls in place to ensure future compliance.

OTHER FINDINGS

The remaining findings are less significant and are being given appropriate attention by the Bank. We will review progress toward implementing our recommendations during our next audit.

Mr. Tim Bobinsky, Executive Director, provided responses to our recommendations.

AUDITORS' OPINION

Our auditors state the Bank's financial statements for the year ended June 30, 1997 are fairly presented.

___________________________________
WILLIAM G. HOLLAND, Auditor General

WGH:BAR:pp

SPECIAL ASSISTANT AUDITORS

Kyle E. McGinnis, CPA was our special assistant auditor for this audit.