REPORT DIGEST ILLINOIS GRAIN INSURANCE CORPORATION FINANCIAL AUDIT AND COMPLIANCE EXAMINATION FOR THE TWO YEARS ENDED JUNE 30, 2019 Release Date: February 19, 2020 FINDINGS THIS AUDIT: 2 CATEGORY: NEW -- REPEAT -- TOTAL Category 1: 0 -- 0 -- 0 Category 2: 1 -- 1 -- 2 Category 3: 0 -- 0 -- 0 TOTAL: 1 -- 1 -- 2 FINDINGS LAST AUDIT: 4 Category 1: Findings that are material weaknesses in internal control and/or a qualification on compliance with State laws and regulations (material noncompliance). Category 2: Findings that are significant deficiencies in internal control and noncompliance with State laws and regulations. Category 3: Findings that have no internal control issues but are in noncompliance with State laws and regulations. State of Illinois, Office of the Auditor General FRANK J. MAUTINO, 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 SYNOPSIS • (19-01) The Corporation did not fund the $2,000,000 Grain Insurance Reserve Fund as required by the Grain Code. • (19-02) The Corporation improperly authorized the use of temporary storage space as required by the Grain Code. FINDINGS, CONCLUSIONS, AND RECOMMENDATIONS GRAIN INSURANCE RESERVE FUND NOT FUNDED The Illinois Grain Insurance Corporation (Corporation) did not fund the $2,000,000 Grain Insurance Reserve Fund as required by the Grain Code (Code). On April 5, 2005, the Corporation remitted the $4,000,000 balance due the General Revenue Fund that was borrowed prior to June 30, 2003. The Corporation has not yet established the $2,000,000 Grain Insurance Reserve Fund as required by the Grain Code after repayment of funds owed the General Revenue Fund. (Finding 1, page 11). This finding has been repeated since 2005. We recommended 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 stated while Section, 25-20(h) of the Illinois Grain Code expressly requires the State to make unpaid claimants whole even if the General Assembly does not appropriate the money, the Corporation recognizes the requirement of a Reserve Fund in the Grain Code and the Corporation will work with the Office of Management and Budget to attempt to obtain the necessary appropriation to fund the Grain Insurance Reserve Fund. IMPROPER AUTHORIZATION OF TEMPORARY STORAGE SPACE The Illinois Grain Insurance Corporation (Corporation) improperly authorized the use of temporary storage space as required by the Grain Code. During our testing of temporary storage space authorizations, we noted 4 of 37 (11%) temporary storage space authorizations with expiration dates past May 15th, ranging from 12 to 21 days past the required expiration date. In addition, we noted 1 of 37 (3%) temporary storage space authorizations was approved on November 27, 2018, with an incorrect expiration date of May 15, 2018. (Finding 2, page 12). We recommended the Corporation strengthen its controls to ensure proper authorization of temporary storage space as required by the statute. Corporation officials stated the Corporation will use its best efforts to ensure proper authorization of temporary storage space. AUDITOR’S OPINION The auditors stated the financial statements of the Corporation as of and for the years ended June 30, 2018, and June 30, 2019, are fairly stated in all material respects. ACCOUNTANT’S OPINION The accountants conducted a compliance examination of the Agency for the two years ended June 30, 2019, as required by the Illinois State Auditing Act. The accountants stated the Corporation complied, in all material respects, with the requirements described in the report. This financial audit / compliance examination was conducted by Adelfia LLC. JANE CLARK Division Director This report is transmitted in accordance with Section 3-14 of the Illinois State Auditing Act. FRANK J. MAUTINO Auditor General FJM:MIR