REPORT DIGEST

 

DEPARTMENT OF MILITARY AFFAIRS

 

COMPLIANCE EXAMINATION

For the Two Years Ended:

June 30, 2008

 

Summary of Findings:

 

Total this audit                      4

Total last audit                    10

Repeated from last audit       2

 

 

Release Date:

June 30, 2009

 

 

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

http://www.auditor.illinois.gov

 

 

 

 

 

 

SYNOPSIS

 

 

¨      The Department did not maintain sufficient controls over the accuracy and reporting of its property.

 

¨      The Department did not adequately update its property records in a timely manner.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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

 

 

 

ILLINOIS DEPARTMENT OF MILITARY AFFAIRS

COMPLIANCE EXAMINATION

For The Two Years Ended June 30, 2008

 

EXPENDITURE STATISTICS

FY 2008

FY 2007

FY 2006

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

$34,223,797

$31,527,410

$28,550,894

 

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

    % of TOTAL Expenditures................................

 

$33,093,032

96.7%

 

$30,482,900

96.7%

 

$27,105,719

94.9%

     Personal Services, including reimbursable

     positions.......................................................

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

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

 

$12,602,931

38.1%

226

 

$12,594,904

41.3%

241

 

$12,153,813 44.8%

240

     Other Payroll Costs (FICA, Retirement)..........

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

$1,332,308

4.0%

$1,008,408

3.3%

$887,109

3.3%

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

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

$3,125,945

9.4%

$2,719,797

8.9%

$1,950,066 7.2%

     Lincoln’s Challenge.......................................

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

$7,189,757

21.7%

$7,479,240

24.6%

$7,606,390 28.1%

     Facilities Operations and Maintenance...........

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

$8,033,594

24.3%

$5,575,507

18.3%

$4,305,333 15.9%

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

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

 

$808,497

2.5%

$1,105,044

3.6%

$203,008

0.7%

    CAPITAL PROJECTS......................................

    % of TOTAL Expenditures................................

$0

0.0%

$0

0.0%

$51,966  

0.2%

 

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

    % of TOTAL Expenditures................................

$1,130,765

3.3%

$1,044,456

3.3%

$1,277,148 4.5%

 

     NON-APPROPRIATED FUNDS

     Armory Rental Fund (416).............................

     % of TOTAL Expenditures...............................

 

 

$0

0.0%

 

$54

0.0%

         $116,061  

   0.4%

Cost of Property and Equipment 

 

 

 

     (See Finding 08-1)………………

$208,257,470

$175,107,589

$167,830,935

CASH RECEIPTS

FY 2008

FY 2007

FY 2006

Federal Reimbursements................................................

$19,235,362

$16,871,037

$15,934,811

Rent..................................................................

85,752

105,638

334,059

Other................................................................

357,811

306,412

767,126

     Total.................................................................

$19,678,925

$17,283,087

$17,035,996

 

AGENCY DIRECTOR

 

 

 

During Audit Period:  Adjutant General William Enyart (September 2007 to Present)

                                  Adjutant General Randal E. Thomas (Through August 2007)

Currently:  Adjutant General William Enyart


 

 



 

 

 

 

 

 

 

 

 

 

 


Department had multi-million dollar differences between property records

 

 

 

 

 


Auditors could not reconcile expenditure information to property records

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Department did not record permanent structure transactions on the property listing

 

 

 

 

 

 

 

 

 

 

 


Department did not record equipment additions and deletions on the property listing in a timely manner

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

FINDINGS, CONCLUSIONS, AND RECOMMENDATIONS

 

INADEQUATE RECONCILIATION AND       REPORTING OF STATE PROPERTY

 

           The Department did not maintain sufficient controls over the accuracy and reporting of its property.  We noted the following:

 

•   Eight of 8 (100%) Agency Reports of State Property (C-15) tested contained inaccuracies and did not agree to the Central Inventory System (CIS).

 

•   The Department’s SAMS to GAAP Reconciliation – Capital Assets (SCO-537) reported approximate differences of $6.5 Million and $1.4 Million in FY07 and FY08, respectively, between the C-15’s and the Capital Assets Summary (SCO-538) submitted to the Office of the State Comptroller.  While the Department was unable to identify the underlying cause behind the unreconciled differences and errors, the Department was able to identify the dollar amounts of the errors by property asset category.

 

     Auditors were unable to reconcile Department property and equipment expenditures processed by the Office of the Comptroller to either the additions reported on the property listing or the quarterly C-15 reports. (Finding 1, pages 9–11)  This finding was first reported in 2002.

 

     We recommended the Department establish a corrective action plan to address controls to ensure an accurate property listing and reporting for the Department.  The Department should reconcile its property reports and records to the C-15’s on a quarterly basis to ensure the completeness and accuracy of its property records.  Further, we recommended that the Department maintain adequate documentation supporting their property reports.

 

     Department officials agreed and stated that they will establish a work group to develop and implement a corrective action plan to address the deficiencies noted.  (For the previous Department response, see Digest Footnote #1)

 

 

INADEQUATE CONTROLS OVER STATE PROPERTY

 

The Department of Military Affairs (Department) did not adequately update its property records in a timely manner.  We noted the following:

 

•  Fourteen structures that currently exist that were not included in the Property Listing.  Eight of these structures are trailers that were transferred to the Department by the Federal Emergency Management Agency.  The Department believes that the remainder of the buildings were built by the federal government at Camp Lincoln and transferred to the Department.

 

•  Three structures, totaling $17,380, that were on the Property Listing, but could not be located.  The Department believes that these buildings were either demolished or moved to another location.

 

 Twenty of 25 (80%) equipment additions tested, totaling $136,064, were not recorded on the Property Listing in a timely manner.  The equipment was added to the Property Listing between 2 and 200 days late.  In addition, 51 drills and saws, totaling $14,036, were not added to the Property Listing.

 

•   Sixteen of 25 (64%) equipment deletions tested, totaling $5,704, were not recorded on the Property Listing in a timely manner.  The equipment was deleted from the Property Listing between 5 and 255 days late.  The Department entered all property deletions for the two-year examination period during a two and one-half month period in FY08 in order to catch up on past transactions.

 

During our site visit testing and walk-through, we noted:

•  4 of 150 (3%) equipment items tested, totaling $15,811, were obsolete.

•  8 of 150 (5%) equipment items tested, totaling $9,109, were not at the location specified on the Property Listing.

 

During our testing of capital leases, we noted 1 of 1 (100%) capital lease items tested, totaling $5,206, was not added to the Property Listing.  (Finding 2, pages 12-13)  This finding was first reported in 2004.

 

We recommended that the Department comply with the State Property Control Act, the Administrative Code, and the Statewide Accounting Management System by ensuring that all property under its jurisdiction is properly recorded, maintained, and disposed.

 

Department officials agreed and stated that they will review their current processes for ways to improve them to ensure compliance with the applicable rules.  (For the previous Department response, see Digest Footnote #2)

 

OTHER FINDINGS

 

The remaining findings are reportedly being addressed by the Department.  We will review the Department’s progress towards the implementation of our recommendations in our next engagement.

 

AUDITOR’S 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:CML

 

AUDITORS ASSIGNED

 

      This examination was performed by the staff of the Office of the Auditor General.

 

 

 

 

 

DIGEST FOOTNOTES

 

#1 – INADEQUATE RECONCILIATION AND REPORTING OF FIXED ASSETS – Previous Agency Response

 

The Department agreed with this finding.  During this audit period, the person responsible for property accountability and reporting was vacant.  The Department has since filed the SPO position and this will greatly assist in correcting deficiencies.  The Department will establish a corrective action plan.  The C-15 will be prepared based upon the appropriate records.  The Department will work with the IOC to resolve any discrepancies noted in the annual reports.

 

 

#2 – PROPERTY CONTROL WEAKNESSES – Previous Agency Response

 

The Department agreed with this finding.  During this audit period, the person responsible for property accountability and reporting was vacant.  The Department has since filed the SPO position and this will greatly assist in correcting deficiencies.  The Department will now be able to comply with the State Property Control Act and the Illinois Administrative Code and will ensure that all equipment is recorded in an accurate and timely manner.