REPORT DIGEST METRO EAST POLICE DISTRICT COMMISSION Compliance Examination For the Two Years Ended December 31, 2014 Release Date: September 30, 2015 FINDINGS THIS AUDIT: 2 CATEGORY: NEW -- REPEAT -- TOTAL Category 1: 2 -- * -- 2 Category 2: 0 -- * -- 0 Category 3: 0 -- * -- 0 TOTAL: 2 -- * -- 2 FINDINGS LAST AUDIT: * ** Effective January 1, 2013, the Metro East Police District Commission was established by the Metro East Police District Act. As such, comparative data for periods prior to January 1, 2013, is not available. 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 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 and Full Report are also available on the worldwide web at www.auditor.illinois.gov INTRODUCTION The Metro East Police District Commission (Commission) began on January 1, 2013, when the General Assembly created the Metro East Police District (District) as a special district and unit of local government. The District is located within St. Clair County and includes the City of East St. Louis, the Village of Washington Park, the Village of Alorton, and the Village of Brooklyn. The Commission was created to advance the cause of public safety and law enforcement for the residents of the District. SYNOPSIS • (14-1) The Commission did not assume administrative functions for external law enforcement grants and assistance within the District. • (14-2) The Commission lacked adequate control over its finances. FINDINGS, CONCLUSIONS, AND RECOMMENDATIONS FAILURE TO ASSUME GRANT ADMINISTRATION FUNCTIONS The Metro East Police District Commission (Commission) did not assume administrative functions for external law enforcement grants and assistance within the Metro East Police District (District). During testing, the auditors noted the Commission did not assume the authority to apply for and accept financial grants or contributions of services from the four police departments located within the District. Further, the Commission has not designed or developed the processes and procedures necessary for receiving and administering grants, such as grant writing and implementing budgetary and accounting systems. (Finding 1, pages 11-12) We recommended the Commission seek sufficient resources to assume the authority to apply for and accept financial grants or contributions of services on behalf of the four police departments located within the District, or seek a legislative remedy. Commission officials concurred with our recommendation. NEED TO IMPROVE INTERNAL CONTROLS OVER THE COMMISSION’S FINANCES The Commission lacked adequate control over its finances. During testing, some of the more significant internal control deficiencies noted by the auditors included the following: • The Commission does not maintain books and records of its financial activity. For example, the Commission does not have a cash disbursement journal, cash receipts journal, or a complete check register for its account held at a bank (distribution account). • Four of seven (57%) disbursements tested, totaling $2,280, did not have the date the invoice was received by the Commission. • Seven of seven (100%) disbursements tested, totaling $22,028, were not paid within the timeframes required by the Local Government Prompt Payment Act. As such, the Commission did not pay $512 in accrued interest due to its vendors. • The Commission did not perform bank reconciliations of its distribution account during Calendar Year 2013 or Calendar Year 2014. As such, the Commission did not identify a wire transfer fee of $10 that should have been reversed from its account. This amount had not been reversed as of the conclusion of fieldwork. • The Commission has not developed an allowance for doubtful accounts for reporting its net outstanding accounts receivable. (Finding 2, pages 13-16) We recommended the Commission establish and maintain books and records for its financial activity, timely pay vendor invoices in accordance with the provisions of the Local Government Prompt Payment Act, and develop a fair and reasonable allowance for doubtful accounts. Commission officials concurred with our recommendation. ACCOUNTANT’S OPINION The accountants conducted a compliance examination of the Commission for the two years ended December 31, 2014, as required by the Illinois State Auditing Act and the Metro East Police District Act. The accountant’s report does not contain any scope limitations or disclaimers, but does contain a qualified opinion on compliance and material weaknesses over internal control. WILLIAM G. HOLLAND Auditor General WGH:djn AUDITORS ASSIGNED This examination was performed by the Office of the Auditor General’s staff.