REPORT DIGEST

 

ILLINOIS GRAIN INSURANCE CORPORATION

 

FINANCIAL AUDIT AND COMPLIANCE EXAMINATION

For the Two Years Ended: June 30, 2011

 

Release Date: March 27, 2012

 

Summary of Findings:

Total this audit: 2

Total last audit:  2

Repeated from last audit: 1

 

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 www.auditor.illinois.gov

­­­­­­­­­­­____________________________

 

INTRODUCTION

 

The Illinois Grain Corporation, a component unit of the State of Illinois, was created for the purpose of providing the economic stability of agriculture by establishing funds to pay grain producers and other claimants for losses incurred by the failure of a grain dealer or warehouseman.  Fiscal support to carry out the responsibilities of the Corporation is provided by the Department of Agriculture. 

 

SYNOPSIS

 

• The Corporation has not established the $2,000,000 Grain Insurance Reserve Fund as required by the Grain Code. 

 

• The Corporation’s accounting system had several errors relating to receivables. 

 

FINDINGS, CONCLUSIONS, AND RECOMMENDATIONS

 

GRAIN INSURANCE FUND NOT FUNDED

 

The Illinois Grain Insurance Corporation has not funded the $2,000,000 Grain Insurance Reserve Fund required by the Grain Code. 

 

As of the end of examination fieldwork, the Corporation had not established the $2,000,000 Grain Insurance Reserve Fund.

 

The Corporation’s management indicated the Grain Insurance Reserve Fund was not funded because the funds were not appropriated.  Management also indicated they did not request an appropriation in fiscal years 2010 and 2011 because of budgetary constraints on the General Revenue Fund. (Finding 1, page 11)  This finding has been repeated since 2005.

 

We recommend the Corporation comply with the law by working with the Office of Management and Budget to obtain the necessary appropriation to fund the Grain Insurance Reserve Fund or seek legislative relief from the statutory requirement. 

 

Corporation officials agreed with our recommendation and stated they will request the appropriation in future budget years. (For previous agency response, see Digest Footnote 1)

 

ERRORS NOTED IN ASSESSMENT ACCOUNTING SYSTEM

 

The Illinois Grain Insurance Corporation’s accounting system had several errors relating to assessment receivables that required adjustments.

 

When testing receivables, we noted the subsidiary receivable ledger had 28 accounts netting a balance of $1,525 even though the trial balance indicated a balance of zero.  Account errors ranged from a few cents to over $2,000.

 

The Corporation’s management stated that staff was unaware of the need to adjust the subsidiary receivable as well as the trial balance.

 

We recommended the Corporation provide necessary training and develop procedures to facilitate proper posting and reconciliation of its accounting system.

 

Corporation officials agreed with our recommendation and will review both the system and its procedures for correcting errors in the receivables. 

 

AUDITORS’ OPINION

 

Our auditors state the June 30, 2011 financial statements of the Grain Insurance Corporation are presented fairly in all material respects.

 

 

WILLIAM G. HOLLAND

Auditor General

 

WGH:EVB:rt

 

SPECIAL ASSISTANT AUDITORS

 

Sikich, LLP was our special assistant auditors for this audit and examination.

 

Digest Footnotes

 

  1. GRAIN INSURANCE RESERVE FUND NOT FUNDED

 

2009:     “The Agency agrees with the finding and will attempt to obtain appropriation to fund the Grain Insurance Reserve Fund.”