REPORT DIGEST

 

DEPARTMENT OF STATE POLICE

 

COMPLIANCE EXAMINATION

For the Two Years Ended:

June 30, 2004

 

Summary of Findings:

Total this audit                        11

Total last audit                          3

Repeated from last audit           2

 

Release Date:

March 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 Department had made payments for efficiency billings from improper line item appropriations.  

 

¨      The Department had not maintained sufficient controls over the recording and reporting of State Property.

 

¨      The Department had inadequate controls over telephone credit card cancellations and telephone bill reviews.

 

¨      The Department had not maintained adequate documentation to substantiate payments to a contractual employee.

 

¨      The Department had not complied with certain requirements set forth in the School Code.

 

¨      The Department had not performed independent and mandated reviews of the Department’s computer systems.   

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(Expenditure and Activity Measures are summarized on the next page.)


                                                  DEPARTMENT OF STATE POLICE

                                                     COMPLIANCE EXAMINATION

                                               For The Two Years Ended June 30, 2004

 

EXPENDITURE STATISTICS

FY 2004

FY 2003

FY 2002

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

 

$313,861,355

$318,296,123

 

$324,776,883

     OPERATIONS TOTAL.............................

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

$312,371,645

99.5%

$316,002,015

99.3%

$323,045,895

99.5%

         Personal Services..............................

            % of Operations Expenditures......

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

$195,693,505

62.6%

3,299

$200,683,947

63.5%

3,482

$197,546,885

61.2%

3,740

         Other Payroll Costs (FICA,

          Retirement)...............................................

            % of Operations Expenditures......

 

$31,365,534

10.1%

 

$36,273,222

11.5%

 

$35,344,710

10.9%

         Contractual Services..........................

            % of Operations Expenditures......

$17,310,483

5.5%

$15,990,060

5.1%

$17,766,467

5.5%

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

            % of Operations Expenditures......

 

$68,002,123

21.8%

$63,054,786

19.9%

$72,387,833

22.4%

     GRANTS, REFUNDS, IMPROVEMENTS, TOTAL.....................................................

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

 

$1,489,710

.5%

 

$2,294,108

.7%

 

$1,730,988

.5%

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

$241,167,646

$240,079,004

$237,337,375

           

SELECTED ACTIVITY MEASURES

FY 2004

FY 2003

FY 2002

!  Number of Impaired Driving/Zero Tolerance Citations…………………………………………..

 

9,128

 

9,258

 

9,058

!  Number of Speeding Citations...............................

150,828

199,147

191,929

!  Number of Seatbelt Citations.................................

135,773

89,616

87,477

!  Number of Forensic Cases Worked in All Disciplines

 

110,863

 

107,947

 

109,648

!    Number of Crime Scenes Processed.......................

!    Number of Ethics/Integrity Events Conducted.........

4,198

21

4,289

17

4,846

34

 

AGENCY DIRECTOR(S)

     During Audit Period:  Mr. Sam Nolen (7-1-02 through 3-3-03), Mr. Larry Trent (effective 3-24-03)

     Currently:                    Mr. Larry Trent


 

 

 

 

 

 

 

 

 

 

 

 

 

Efficiency initiative payments totaled $4,719,505

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 


Insufficient controls over recording and reporting of State Property

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 


Credit cards not canceled timely and supervisory review of telephone bills not documented

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

$50,004 paid for contractual employee without requiring documentation to support work performed

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 


School Code not complied with

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 


Independent and mandated reviews not performed of computer systems

 

 

 

 

 

 

 

 

 

 

 

 

 

 

FINDINGS, CONCLUSIONS, AND

RECOMMENDATIONS

 

PAYMENTS WERE MADE FOR EFFICIENCY INITIATIVE BILLINGS FROM IMPROPER LINE ITEM APPROPRIATIONS

 

The Department made payments for efficiency initiative billings from improper line item appropriations.  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 Department did not receive guidance or documentation with the billings from CMS detailing from which line item appropriations savings were anticipated to occur.  According to Department staff, they received no documentation or information from CMS detailing the nature and/or type of savings that CMS anticipated.  The only guidance received was the amount of payments that should be taken from General Revenue Funds versus other funds for the September 2003 billings.  The Department used:

 

·     $2,840,400 from its contractual services, travel, commodities, equipment, EDP, telecommunications, operation of automotive equipment, and permanent improvements, lump sum and other purposes line item appropriations to pay for the Procurement Efficiency billing. 

 

·     $1,009,650 from its EDP and lump sums and other purposes line item appropriations to pay for the Information Technology billing.

 

·     $686,970 from its operation of automotive equipment line item appropriation to pay for the Vehicle Fleet Management billing.

 

·     $111,205.50 from its contractual services line item appropriation to pay for the Legal Services billing.

 

·     $71,280 from its personal services line item appropriation to pay for the Facilities Management Consolidation billing.

 

The Department paid a total of $4,570,740.50 from the General Revenue Fund and $148,765 from the LEADS Maintenance Fund for the efficiency initiatives.  (Finding 1, pages 9-11)

 

We recommended the Department only make payments for efficiency initiative billings from line item appropriations where savings would be anticipated to occur.  Further, we recommended the Department 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 Department’s budget. 

 

Department officials concurred with our recommendation and stated the Department has requested from CMS information on the method by which efficiency savings were derived and that payments will only be made from those appropriation lines that will incur a savings.

 

PROPERTY CONTROL AND REPORTING WEAKNESSES

 

The Department did not maintain sufficient controls over the recording and reporting of State Property.  We noted the following:

 

·        Three of 25 (12%) equipment vouchers tested totaling $90,551 and five of 25 (20%) additions tested totaling $14,091 were not included on the Department’s inventory within 30 days of acquisition.  In addition, during FY04, Capital Development Board transfers of approximately $6.5 million were not entered on the property listing. 

 

·        Six of 75 (8%) equipment items observed by auditors were not located on the property listing. 

 

·        The Quarterly Reports of State Property (C-15s) were inaccurate.  Permanent improvements of approximately $812,517 and $305,235 during FY03 and FY04, respectively, were incorrectly recorded as transfers on the C-15s.  In addition, adjustments to existing tag numbers were also recorded as transfers instead of additions.  Lastly, the Department’s system for fixed asset reporting does not break down additions, deletions, and transfers between equipment, buildings, capital leases and construction in progress but rather all transactions are recorded in the equipment category.   

 

·        CDB transfers of $11.5 million were improperly classified as reconciling items on the SCO-537 and omitted from the “net transfers” column on the Capital Assets Summary Form (SCO-538).  In addition, the Department was unable to provide auditors with supporting documentation for the additions and deletions columns on the SCO-538.  (Finding 2, pages 12-13)  This finding was first reported in 2002.  The current finding is revised from the previous finding.    

 

We recommended the Department ensure all equipment is accurately and timely recorded on the property records.  In addition, we recommend the Department follow SAMS procedures for completing the Quarterly Report of State Property and the Capital Asset Summary. 

 

Department officials concurred with our recommendation and stated they will develop an action plan and assign responsibility for implementing the recommendation accordingly.  (For the previous Department response, see Digest Footnote #1.)

 

TELEPHONE CREDIT CARD CANCELLATION AND TELEPHONE BILL REVIEW

 

      The Department did not have adequate controls over telephone credit card cancellations and telephone bill reviews.  We noted the following:

 

·        Seven of 25 (28%) terminated individual’s telephone credit cards were cancelled between 4 and 965 days late. 

 

·        Three of 25 (12%) telecommunications vouchers tested did not display documentation of a supervisory review.  (Finding 3, p. 14)  This finding was first reported in 2002.  The current finding is revised from the previous finding.

 

We recommended the Department ensure a supervisory review of telephone bills is performed and documented and telephone credit cards are cancelled timely.  

 

      Department officials concurred with our recommendation and stated due to the volume of the telephone and credit card changes, cancellations do not always occur in a timely manner.  Department officials also stated supervisors who are not routinely documenting their review of telecommunications vouchers will be identified and trained in proper procedures.  (For the previous Department response, see Digest Footnote #2.)

 

INADEQUATE CONTROLS OVER CONTRACTUAL PAYROLL EXPENDITURES

 

      The Department did not maintain adequate documentation to substantiate payments to a contractual employee.  The Department paid $50,004 for a legislative consultant during FY04 to provide legislative services and assist in communicating the Department’s position on various issues being considered by the Legislature.  However, the Department did not formally monitor the employee’s activities or require the contractual employees to submit any documentation of the number of hours worked or invoices or other supporting documentation of activities.  (Finding 4, p. 15)

 

      We recommended the Department require and maintain sufficient documentation to ensure expenditures are reasonable and necessary. 

 

      Department officials concurred with our recommendation and stated that the contractual employee, although not required to submit any documentation, was monitored and reported to and took direction from the Chief of Governmental Affairs.  In addition, the Department will immediately require the contractual employee to submit weekly written reports summarizing the services performed.

 

NONCOMPLIANCE WITH SCHOOL CODE

 

      The Department did not comply with certain requirements set forth in the School Code.  We noted the following:

 

¨      The Department did not prescribe the manner and frequency of form for school districts to report drug-related incidents occurring in a school or on school property.

 

¨      The Department did not send an annual statistical compilation and related data associated with drug-related incidents in schools to the State Board of Education.  (Finding 6, pages 17-18)

 

We recommended the Department comply with the requirements of the School Code or seek legislative remedy to this statutory requirement.

 

Department officials concurred with our recommendation and stated they will meet with the State Board of Education to develop a mutually workable form, manner, and frequency for reporting drug-related incidents to the Illinois State Police and to determine whether amendments to 105 ILCS 5/10-27.1B are advisable.  The Department will also maintain incidents reported by the school districts for compilation into an annual summary report to the State Board of Education.

 

LACK OF INDEPENDENT REVIEWS OF COMPUTER SYSTEMS

 

      The Department did not perform independent and mandated reviews of the Department’s computer systems.

 

      During the examination period, the Department had significant computer system development activities and classified the following system development projects as major:  Kane County Project, Traffic Stop Study Project, and the FOID Card Processing Project.  Independent reviews of these computer system development projects or major modifications to these computer systems was not performed.  (Finding 9, pages 23-24)

 

      We recommended the Department ensure independent reviews of major new and major modifications to computer systems be performed.  We also recommended the Department ensure the Illinois Office of Internal Audit (IOIA) is informed of all major computer system development changes if they are to perform the reviews. 

 

      Department officials concurred with our recommendation and stated they have met with IOIA to review a process for notifying internal auditors when major computer system development projects are initiated and for notifying IOIA thereafter of significant project milestones.  (For the previous Department response, see Digest Footnote #3.)

 

OTHER FINDINGS

 

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

 

AUDITORS’ OPINION

 

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

 

 

 

____________________________________

WILLIAM G. HOLLAND, Auditor General

 

WGH:JSC:pp

 

AUDITORS ASSIGNED

 

The compliance examination was conducted by the Auditor General’s staff.

 

 

 

DIGEST FOOTNOTES

 

#1 – PROPERTY CONTROL AND REPORTING WEAKNESSES – Previous Department Response

 

2002:  Concur.  The ISP will put together a team to address this finding/recommendation.  An action plan will be developed and responsibility for implementing the recommendation will be assigned accordingly.

 

#2 – TELEPHONE CREDIT CARD CANCELLATION AND TELEPHONE BILL REVIEW – Previous Department Response

 

2002:  Concur.  The ISP will put together a team to address this finding/recommendation.  An action plan will be developed and responsibility for implementing the recommendation will be assigned accordingly. 

 

#3 – INTERNAL AUDIT DEFICIENCIES – Previous Department Response

 

2002:  Concur in part.  I&A concurs with the statement that only three of the six IT audits listed in the FY01 – FY02 audit plans were completed.  One auditor holds the responsibility for conducting all of the IT audits in which the office is involved.  This issue has been resolved by restructuring the I&A’s two-year audit plan. 

 

We concur only in part with the statement indicating our lack of involvement in system development projects and major system enhancements.  We were not involved in all of these projects; however, the I&A was not made aware of some of the projects, and in other situations could not participate due to audit scheduling conflicts.  ISB staff have implemented a procedure to ensure the I&A is notified, and the I&A will expend every effort to participate when possible.

 

The I&A involvement in these types of projects is limited to “type 3” audits as outlined in the COBIT standards which are defined as “…participation as “control advisor” throughout the development and implementation process.”  Therefore, although there are no formal work papers associated with these projects, our IT auditor maintains documents of involvement or attempted involvement in which each one participated.