REPORT DIGEST

HISTORIC PRESERVATION AGENCY

FINANCIAL AND COMPLIANCE AUDIT
(In accordance with the Single Audit Act of 1984 and OMB Circular A-128)
For the Two Years Ended:
June 30, 1996

Summary of Findings:

Release Date:
April 30, 1997

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 Agency established a locally held trust fund but did not report it to the Auditor General or the Comptroller.

• The Agency did not maintain adequate controls over property and artifacts purchased with Trust Fund moneys or over artifacts at the Fort De Chartres historical site.

• At four of five historic sites tested, donations were not forwarded to the Agency on a timely basis.

• The Historic Preservation Agency did not file federal grants reports in a timely manner.

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

FY 1996

FY 1995

FY 1994

• Total Expenditures (All Funds)

OPERATIONS TOTAL
% of Total Expenditures

 

Personal Services
% of Operations Expenditures
Average No. of Employees

 

Other Payroll Costs (FICA, Retirement)
% of Operations Expenditures

 

Contractual Services
% of Operations Expenditures

 

Expendable Trust
% of Operations Expenditures

 

All Other Operations Items
% of Operations Expenditures

 

AWARDS, GRANTS & PERMANENT
IMPROVEMENTS TOTAL
% of Total Expenditures

• Cost of Property and Equipment

$13,687,629

$12,735,404
93.0%

$7,515,009
59.0%
211

$1,232,050
9.7%

$1,283,517
10.1%

$139,720
1.1%

$2,565,108
20.1%

$952,225
7.0%

$87,912,695

$13,064,590

$11,770,473
90.1%

$7,034,004
59.8%
208

$1,107,792
9.4%

$1,291,713
11.0%

$0
0%

$2,336,964
19.8%

$1,294,117
9.9%

$82,261,877

$10,908,130

$10,471,808
96.0%

$6,639,053
63.4%
196

$1,037,919
9.9%

$1,104,458
10.6%

$0
0%

$1,690,378
16.1%

$436,322
4.0%

$78,430,256

FY 1996

FY 1995

FY 1994

• All State-owned Historical Sites

• Top Site: Lincoln's New Salem

• 2^nd Site: Cahokia Mounds

• 3^rd Site: Lincoln's Tomb

• Top 1996 Revenue Site ($100,400) U.S. Grant Home

2,547,894

525,792

359,084

270,975

88,096

2,668,692

590,118

412,842

298,834

116,428

2,479,552

578,415

378,014

275,721

105,000

The Agency did not report the new fund for approximately 18 months

Failure to disclose the fund's existence violates statutes and regulations

Assets were not tagged and were not included on the property or artifact listing.

We noted 27 instances where fees and donations were not remitted timely

Reports were filed 29 to 210 days late

FINDINGS, CONCLUSIONS, AND
RECOMMENDATIONS

UNREPORTED AND UNRECORDED FUND

In Fiscal Year 1995 the Agency received a contribution of $1,349,000 and established a locally held trust fund. The Agency did not report the new fund to the Auditor General or the Comptroller, which they are required to do by statute and regulation, until November, 1996, approximately 18 months later. During Fiscal Year 1996, the fund received approximately $105,000 in contributions and interest earnings and disbursed about $140,000.

The Public Use Trust Act (30 ILCS 160/2), under which this fund was established, requires the trustee to provide an annual accounting to the Auditor General, and the Auditor General is required by this statute to audit every trust created under this Act. Further, the State Officers and Employees Money Disposition Act (30 ILCS 230/2a.2) requires any officer or employee who receives money under conditions which do not require payment thereof into the State Treasury to immediately submit a report to the Auditor General.

In addition, the Agency did not notify the Comptroller of the fund, did not include the fund in their fiscal years 1995 and 1996 GAAP reporting packages, and did not file quarterly Reports of Receipts and Disbursements for Locally Held Funds to the Comptroller, as required by Comptroller procedures.

Failure to disclose the fund's existence not only violates statutes and regulations, it reduces the effectiveness of government oversight and creates a potential for misstated financial statements.

We recommended the Agency comply with laws and regulations and establish procedures to identify those laws and regulations governing its activities. (Finding 1, page 7)

Historic Preservation Agency officials indicated they were not initially aware of the requirements to report the fund or include it in their financial statements. The Agency agreed that the reporting on the Trust Fund was not timely but stated that once the problem was discovered, the Agency took immediate action.

INADEQUATE CONTROLS OVER ARTIFACTS AND PROPERTY

The Agency did not maintain adequate control over property and artifacts purchased with Trust Fund moneys or over artifacts at the Fort De Chartres historical site. In four of five Trust Fund purchases tested, assets were not tagged and were not included on the property or artifact listing. (Finding 2, page 9) At the Fort De Chartres site, three of ten artifacts tested could not be traced from the artifact listing to the artifact; five of 15 artifacts could not be traced from the artifact to the listing; and 15 additional items were found which were not tagged or marked in any way. (Finding 3, page 10)

We recommended the Agency supervise, control, inventory and mark property and artifacts as required by State statute and Illinois Administrative Rules. The Historic Preservation Agency concurred with these recommendations but attributed the Fort De Chartres problems to the 1993 flood.

UNTIMELY DEPOSIT OF CASH FROM HISTORIC SITES

At four of five historic sites tested, the sites did not forward donations to the Central Office for deposit in a timely manner. We noted 27 instances where fees and donations were not remitted timely, ranging from 1 to 82 days late. The Historic Preservation Agency Act requires sites to forward balances in local banks to the Central Office for deposit with the State Treasurer on Monday of each week if the amount to be deposited exceeds $500. (Finding 4, page 11)

We recommended the Agency inform personnel at the sites of the statutory requirements for timely remittance. The Agency concurred with this recommendation.

FEDERAL REPORTS WERE NOT FILED TIMELY

The Historic Preservation Agency did not file federal reports in a timely manner as required by federal regulations. The Agency entered into a grant agreement with the National Park Service, which required the Agency to follow National Register Program Guidelines in reporting. However, six of eight quarterly Minority Business Enterprise Reports were filed 29 to 210 days late and the End-Of-Year Reports for 1994 and 1995 were filed two and four months late, respectively. (Finding 17, page 125) This finding has been repeated since 1992.

We recommended the Agency comply with federal regulations and submit all required reports timely. The Agency concurred but believes systems to ensure timely reporting are already in place. (For previous Agency responses, see Digest footnote1.)

OTHER FINDINGS

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

AUDITORS' OPINION

Our auditors state that the Agency's financial statements for the two years ending June 30, 1996 are fairly presented.

___________________________________
WILLIAM G. HOLLAND, Auditor General

WGH:KMC:pp

SPECIAL ASSISTANT AUDITORS

Our special assistant auditors for this audit were Geo. S. Olive & Co. LLC.

DIGEST FOOTNOTES

#1:FEDERAL REPORTS NOT FILED TIMELY - Previous Agency Responses.

1994: "The Agency concurs that MBE reports were not submitted timely to the National Park Service. The Agency also concurs that the federal fiscal year 1993 end-of-year report was not timely filed with the National Park Service." (The response goes on to detail reasons for late filing, namely citing increased grant workloads due to the 1993 flood.)

1992: "The two quarterly MBE reports were not timely filed due to an oversight by Agency staff. A new schedule of required program reports is being developed to avoid this problem in the future." (The response then provides additional information and explanations for why the reports were late.)