REPORT DIGEST

 

HISTORIC PRESERVATION AGENCY

 

COMPLIANCE EXAMINATION

For the Two Years Ended:

June 30, 2004

 

Summary of Findings:

Total this audit†††††††               11

Total last audit†††††††††††††             2

Repeated from last audit†††††††††† 1

 

Release Date:

May 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 payment for an efficiency initiative billing from an improper line item appropriation.

 

®      All donations received at historic sites were not deposited into the State Treasury.

 

®      A formal written policy regarding overtime was not in place to cover merit compensation employees.

 

®      A formal process for developing policies and procedures did not exist which resulted in inconsistent processes among divisions of the Agency.

 

®      The Agency was not in compliance with several areas of the Illinois Historic Preservation Act including:

 

-         The Advisory Council membership was incomplete.

 

-         The Illinois Register of Historic Places was not adequately maintained.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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

 


HISTORIC PRESERVATION AGENCY

COMPLIANCE EXAMINATION

For The Two Years Ended June 30, 2004

EXPENDITURE STATISTICS

FY 2004

FY 2003

FY 2002

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

 

$16,425,169

$17,900,067

$18,511,092

†††† OPERATIONS TOTAL.................................

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

$15,577,699

94.9%

$15,516,516

86.7%

$16,415,895

88.7%

†††††††† Personal Services...................................

††††††††††† % of Operations Expenditures...........

††††††††††† Average No. of Employees...............

$8,554,290

54.9%

194

$8,732,821

56.3%

211

$9,863,464

60.1%

248

†††††††† Other Payroll Costs (FICA,

†††††††† Retirement, Insurance)...................................

††††††††††† % of Operations Expenditures...........

 

$1,647,970

10.6%

 

$1,934,427

12.5%

 

$2,157,354

13.1%

†††††††† Contractual Services..............................

††††††††††† % of Operations Expenditures...........

$1,675,661

10.8%

$1,653,027

10.7%

$1,949,824

11.9%

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

††††††††††† % of Operations Expenditures...........

 

$3,699,778

23.7%

$3,196,241

20.5%

$2,445,253

14.9%

†††† AWARDS AND GRANTS TOTAL................

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

$320,267

1.9%

$1,217,067

6.8%

$695,501

3.8%

PERMANENT IMPROVEMENTS TOTAL...

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

$210,236

1.3%

$675,421

3.8%

$1,132,919

6.1%

NON-APPROPRIATED EXPENDITURES...

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

$316,967

1.9%

$491,063

2.7%

$266,777

1.4%

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

$220,940,072

$134,177,863

$121,452,566

 

SELECTED ACTIVITY MEASURES

FY 2004

FY 2003

FY 2002

Visitors to Sites:

 

 

 

!All State-owned Historical Sites...........................

2,608,966

2,676,550

2,640,037

!Lincolnís New Salem..........................................

457,310

566,266

575,067

!Cahokia Mounds.................................................

328,490

370,414

399,622

!Lincoln's Tomb....................................................

310,665

313,183

301,187

!Old State Capitol/Lincoln Herndon........................

146,719

163,126

181,807

!IL Vietnam Veterans Memorial............................

227,837

234,888

176,205

!Galena Complex..................................................

248,685

181,864

167,445

 

AGENCY DIRECTOR(S)

†††† During Audit Period:Maynard Crossland

†††† Currently:Robert Coomer (eff. 9-1-04)


 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 


Agency did not receive guidance or documentation with the billing from CMS

 

 

 

 

 

 

 

 

Efficiency initiative payment totaled $19,327

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 


Donations given to volunteer groups of a historic site

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 


Overtime records not properly maintained

 

 

 

 

 

 

 

 

No formal policy regarding overtime

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

No comprehensive policies and procedures manual

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 


Advisory Council membership incomplete

 

 

 

 

 

 

 

 


Illinois Register of Historic Places not adequately maintained

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 


 

FINDINGS, CONCLUSIONS AND

RECOMMENDATIONS

 

PAYMENT MADE FOR EFFICIENCY INITIATIVE BILLING FROM IMPROPER LINE ITEM APPROPRIATION

 

††††† The Agency made payment for an efficiency initiative billing from an improper line item appropriation without adequate documentation to support where the Agency could anticipate savings to occur.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 billing from CMS detailing from which line item appropriations savings were anticipated to occur.According to Agency staff, while a memo from CMS and the Governor's Office of Management and Budget received in advance of the May 14, 2004 billing indicated 16 vacant positions - it did not identify what 16 positions the Agency was being billed for.The Agency reported only being able to identify eight vacant positions, did not investigate the additional eight, and made the payment to CMS.

 

††††† Based on our review, we question whether the appropriate appropriations, as required by the State Finance Act, were used to pay for the anticipated savings.We found that the Agency delayed making the payment until August 23, 2004 in order to determine both whether funds would be available and where the funds would be available.At the end of FY 04 the Agency determined there were sufficient funds in the Historical Library Division and paid the entire $19,327 from the salary line of that division.(Finding 1, pages 8-9)

 

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

 

††††† Agency officials concurred with our finding and stated they did not pay the invoice without first seeking further explanation, and did delay payment-making it on the last possible day of the fiscal year and using funds that were going to expire.If such a transfer request happens again, the agency stated it would again attempt to receive full justification of the matter prior to making payment.

 

DONATIONS NOT DEPOSITED IN STATE TREASURY

 

††††† One of the Agency's 60 historic sites was not remitting donations collected on-site, to the Agency for deposit in the State Treasury.Rather, the donations were evenly divided between the site's two volunteer groups and used to benefit the historic site.

 

††††† The State Officers and Employees Money Disposition Act (30 ILCS 230/2) requires all state agencies to pay into the State Treasury the gross amount of monies received for or on behalf of the State.In addition, the Historic Preservation Agency Act (20 ILCS 3405/16) allows historic sites to temporarily hold donations in a local bank account.However, these funds must then be forwarded to the Agency for deposit into the State Treasury.In discussing this matter with Agency officials, they indicated this site superintendent was allowed to give the donations to the volunteer groups due to the small amount collected and in order to reduce the time associated with the administration of the donation program.Though complete donation records at the site were not maintained, an Agency employee estimated the donations in question totaled $531 and $326 in fiscal year 2003 and 2004, respectively.(Finding 2, page 10)

 

††††† We recommended the Agency instruct site superintendents to remit all donations to the Agency for deposit into the State Treasury.

 

††††† Agency officials stated they implemented written procedures in November 2004 to ensure proper handling of donations collected at all historic sites.

 

LACK OF WRITTEN OVERTIME POLICY

 

††††† A site superintendent at one of the Agency's 60 historic sites reported a total of 1,327.5 hours of overtime incurred between January 2001 and March 2004 resulting in total payments of $31,702 during this time period.In addition, this site superintendent's overtime records were improperly maintained.The overtime hours worked were reported on a weekly basis, rather than daily, and were not submitted to the Agency on a timely basis.There was no evidence of supervisory approval prior to the overtime being incurred.In addition, an individual description was not provided for each day overtime was incurred.

 

††††† Agency officials stated there was no written policy regarding overtime incurred by merit compensation employees (employees not covered by a collective bargaining unit).The Agency's unwritten overtime policy required employees fill out an Overtime Authorization Form reporting overtime in daily increments with an explanation for each occurrence of overtime.This form should have then been approved and authorized by a supervisor prior to the overtime being worked.Agency officials indicated the lack of monitoring of this site superintendent's overtime was an oversight.(Finding 3, page 11)

 

††††† We recommended the Agency develop and implement a written policy and procedure regarding overtime and adhere to this policy.Also, all overtime should be authorized in advance and subjected to an analytical review to monitor for abuse.

 

††††† Agency officials stated they implemented written procedures in November 2004 to ensure proper use and documentation of overtime.

 

LACK OF POLICIES AND PROCEDURES

 

††††† The Agency did not have a comprehensive set of policies and procedures and there was no formal process for implementing new policies and procedures.As issues arose within the Agency, the Accounting Manager would write policies and procedures to address each issue.These would then be distributed to the necessary parties via e-mail and the Accounting Manager would maintain a hard copy.The majority of these policies and procedures were not approved by management or formally adopted by the Agency.

 

††††† This lack of Agency-wide policies and procedures resulted in the following:

 

-         Divisions within the Agency processed vouchers differently depending on which division had initial responsibility.

-         The procedures regarding commodities varied among divisions as each was responsible for purchasing, maintaining, monitoring and recording their own.

-         The Agency did not comply with its internal bidding policies regarding printing procurements on all jobs exceeding $500.

 

††††† A formal process should exist to ensure policies and procedures are properly developed, implemented and enforced.Agency officials stated they were unaware of the importance of maintaining a comprehensive set of policies and procedures and therefore, a low level of priority was placed on this duty.The lack of policies and procedures manuals detrimentally affects the training of employees, guidance for existing employees, and maintenance of the Agency's internal control.(Finding 4, pages 12-13)

 

††††† We recommended the Agency implement a formal process for developing policies and procedures and prepare a comprehensive policy and procedure manual for Agency-wide distribution.

 

††††† Agency officials responded that their Fiscal Section used 30 ILCS, the SAMS manual, and CMS policies and procedures to maintain good practices without benefit of an internal manual.They also said creation of an internal policy and procedures manual is underway to supplement these established guidelines.

 

NONCOMPLIANCE WITH ILLINOIS HISTORIC PRESERVATION ACT

 

††††† The Agency was not in compliance with several areas of the Illinois Historic Preservation Act.The Act establishes the Illinois Historic Sites Advisory Council which is supposed to be comprised of 15 members appointed by the Director of Historic Sites and Preservation, consisting of at least three archeologists.We noted the Council only had 14 members, two of whom are archeologists.In addition, there are supposed to be two non-voting members, the Director of the Lincoln Presidential Library and the Director of the Illinois State Museum.The Council, however, only had the Director of the Illinois State Museum as a non-voting member.

 

††††† The Act requires the Agency to establish and maintain an Illinois Register of Historic Places, consisting of places that have special historical, architectural, archeological, cultural, or artistic interest or value.The Agency had not added any properties to the Illinois Register since 1989.Instead, property owners are encouraged to apply for a listing in the National Register.The Agency feels that the National Register provides more benefits, such as federal grant funds, to the property owners and an Illinois Register would merely function as a duplicate.(Finding 8, pages 18-19)This finding was first reported in 2002.

 

††††† Agency officials concurred with our finding and stated they will seek to bring membership up to full strength or will seek legislative adjustment.They also will initiate the necessary legislation to repeal the Illinois Register of Historic Places.(For the previous agency response, see Digest Footnote #1.)

 

OTHER FINDINGS

 

††††† The remaining findings are less significant and are reportedly being given attention by the Agency.We will review the Agency's progress toward implementation of our recommendations in our next compliance examination.

 

††††† Mr. Robert Coomer, Director, provided the Agency's responses.

 

AUDITORSí OPINION

 

††††† We conducted a compliance examination of the Historic Preservation Agency as required by the Illinois State Auditing Act.We have not audited any financial statements of the Agency for the purpose of expressing an opinion because the Agency does not, nor is it required to, prepare financial statements.

 

 

 

 

 

____________________________________

WILLIAM G. HOLLAND, Auditor General

WGH:KMA:pp

 

 

SPECIAL ASSISTANT AUDITORS

 

††††† Our special assistant auditors were Martin & Shadid, CPAs, P.C.

 

DIGEST FOOTNOTES

 

#1:NONCOMPLIANCE WITH ILLINOIS HISTORIC PRESERVATION ACT - Previous Agency Response

 

2002:IHSAC Appointments

 

The Agency concurs in the finding as it relates to IHSAC appointments and the circumstances explaining the failure to have a fully filled Council are contained in the finding discussion.The Agency is willing to seek legislation to reduce the number of required archaeologists from three to two, as this will still meet the requirements of the National Register Program.In addition, the Agency plans to fill the other positions (non-voting) in the near future.These actions will assure that the Council has a full complement of members.

 

Illinois Register of Historic Places

 

The Agency concurs and will initiate the necessary legislation to repeal the Illinois Register of Historic Places.