REPORT DIGEST

DEPARTMENT OF THE
LOTTERY


FINANCIAL &
COMPLIANCE AUDIT
For the Year Ended:
June 30, 1998



Summary of Findings:

Total this audit 4
Total last audit 6
Repeated from last audit 2



Release Date:
February 24, 1999


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
Attn: Records Manager
Iles Park Plaza
740 E. Ash Street
Springfield, IL 62703
(217) 782-6046 or TDD (217) 524-4646

This Report Digest is also available on
the worldwide web at
http://www.state.il.us/auditor









SYNOPSIS

The Department of the Lottery did not perform employee evaluations on a timely basis for approximately 49% of its employees.
 
The Department has not established any regular program for the destruction of those records which are not necessary to be retained.
 
The Department did not require that the approval signatures on vouchers include the date of approval.
 














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


DEPARTMENT OF THE LOTTERY
COMPLIANCE AUDIT
For The Year Ended June 30, 1998

EXPENDITURE STATISTICS

1998

1997


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
Game Promotion
% of Operations Expenditures
Electronic Data Processing
% of Operations Expenditures
Telecommunications
% of Operations Expenditures
All Other Operations Items
% of Operations Expenditures
COMMISSIONS AND FEES
% of Total Expenditures
PRIZES
% of Total Expenditures

Cost of Property and Equipment


$1,006,692,518

$59,526,895
5.9%
$8,311,878
14.0%
280
$2,606,720
4.4%
$26,338,379
44.2%
$9,314,394
15.6%
$2,696,988
4.5%
$8,912,159
15.0%
$1,346,377
2.3%
$104,822,474
10.4%
$842,343,149
83.7%

$4,822,373


$998,263,590

$63,228,674
6.3%
$8,632,792
13.6%
291
$2,460,391
3.9%
$25,588,390
40.5%
$13,882,625
22.0%
$2,705,678
4.3%
$8,685,092
13.7%
$1,273,706
2.0%
$107,621,385
10.8%
$827,413,531
82.9%

$4,799,468
SELECTED ACTIVITY MEASURES

1998

1997


Ticket Sales
Operating Tranfers To Common School Fund


 


$1,516,610,882
$534,442,172


$1,569,442,916
$582,586,589
AGENCY DIRECTOR(S)
During Audit Period: Lori Montana
Currently: Lori Montana













Evaluations were not performed timely for 49% of employees















There was no regular program for the destruction of records
















Out of 320 vouchers examined, 171 lacked the date of approval signatures

FINDINGS, CONCLUSIONS, AND RECOMMENDATIONS

EMPLOYEE EVALUATIONS NOT COMPLETED TIMELY

The Department has not performed employee evaluations on a timely basis for approximately 49% of its employees. Our review showed that 24% of evaluations were up to one month late; 8% were one to two months late; and 17% were over two months late. Because evaluations are required prior to pay increases, untimely completion results in delays in awarding pay increases and can result in the need for special payrolls. Also, untimely evaluations delay performance assessments and the establishment of employee goals and objectives for the next reporting period. (Finding 98-1, page 13)

We recommended that all evaluations be completed timely. The Department concurred and stated it will continue to emphasize the importance of timely evaluations to management staff. The Lottery response noted that its timeliness was improving.


INEFFICIENT MANAGEMENT OF RECORDS

The Department has not maintained an active, continuing program for the economical and efficient management of records as specified in the State Records Act. With the exception of the Return Ticket Control and a few other records, the Department has not established any regular program for the destruction of those records which are not necessary to be retained. Records were stored in the warehouse portion of the main office in Springfield, and they were not being transferred to the State Archives. Space allocated to records storage was poorly arranged. Some pallets were overloaded, with stacks of boxes leaning in an unstable fashion. This represented a hazard to personnel working in the area as well as a potential fire hazard. The dates on some of the boxes go back to 1978. (Finding 98-3, page 15)

We recommended the Department of the Lottery inventory stored records, submit lists of records not needed to the State Records Commission, and establish a program for the periodic destruction of records no longer needed. The Lottery concurred with this recommendation.


APPROVAL SIGNATURES ON VOUCHERS NOT DATED

The Department did not require that the approval signatures on vouchers include the date of approval. Out of 320 vouchers examined, 171 lacked the date of the approval signatures. Among the signatures not dated were receiving officers, heads of units, and agency head. Without these dates, it was not possible to determine whether, or to what extent, late payment interest was due or whether travel vouchers were being submitted timely. (Finding 98-4, page 16)

We recommended the Department require dates on all voucher signatures. The Lottery concurred with this recommendation.


OTHER FINDING

The remaining finding dealt with maintaining current policies and procedures and was not as significant. We will review progress towards implementation of all recommendations in our next compliance audit.


AUDITORS' OPINION

Our auditors stated the Department of Lottery's financial statements as of June 30, 1998 were presented fairly except for the effects of such adjustments, if any, as might have been determined to be necessary had they been able to examine evidence regarding year 2000 disclosures.

____________________________________
WILLIAM G. HOLLAND, Auditor General

WGH:KMC:pp

SPECIAL ASSISTANT AUDITORS

Our special assistant auditors for this audit were Sleeper, Disbrow, Morrison, Tarro & Lively.