REPORT DIGEST

 

DEPARTMENT OF NUCLEAR SAFETY

(Final Audit)

 

COMPLIANCE AUDIT

For the Two Years Ended:

June 30, 2003

 

Summary of Findings:

 

Total this audit                       5

Total last audit                       0

Repeated from last audit       0

 

Release Date:

April 5, 2004

 

 

 

 

 

 

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 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 Nuclear Safety (Department) did not incorporate statutorily required information into their applications for permits for the transport of low-level radioactive waste.
  • The Department did not timely submit accurate financial information to the Office of the State Comptroller.
  • The Department did not seek repayment from an employee who received a single lump sum payment of $48,299 for accrued vacation and sick leave upon retirement. The individual returned to work with the Department two days later and did not repay the amount previously received as a lump sum payment.
  • The same person, a former State Officer of the Department who was transferred to a new position not requiring the advice and consent of the Senate on July 1, 2003 at the Illinois Emergency Management Agency, continues to receive retirement annuity payments prohibited by the Pension Code.

 

 

 

 

 

 

 

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

 

                              DEPARTMENT OF NUCLEAR SAFETY

 

                                           COMPLIANCE AUDIT

                               For The Two Years Ended June 30, 2003

 

OPERATING STATISTICS

FY 2003

FY 2002

FY 2001

  • Total Receipts

$24,512,430

$24,605,782

$24,512,430

  • Total Expenditures

$25,848,184

$24,331,376

$24,320,355

OPERATIONS TOTAL

% of Total Expenditures

$23,154,341

89.6%

$23,143,255

95.1%

$22,509,747

92.6%

Personal Services

% of Operations Expenditures

Average No. of Employees

$11,870,765

51.3%

181

$11,355,510

49.1%

214

$10,898,435

48.4%

219

Average Salary per Employee

$65,584

$53,063

$49,765

Other Payroll Costs (FICA, Retirement,

Insurance)

% of Operations Expenditures

$4,158,018

18.0%

$4,005,047

17.3%

$3,636,352

16.2%

Contractual Services

% of Operations Expenditures

$2,303,111

9.9%

$2,295,649

9.9%

$2,494,927

11.1%

All Other Operations Items

% of Operations Expenditures

$4,822,447

20.8%

$5,487,049

23.7%

$5,480,033

24.3%

GRANTS AND REFUNDS TOTAL

% of Total Expenditures

$2,696,843

10.4%

$1,188,121

4.9%

$1,810,608

7.4%

  • Cost of Property and Equipment (thousands)

$22,872

$22,635

$22,500

SELECTED ACTIVITY MEASURES

FY 2003

FY 2002

FY 2001

! Emergency exercises conducted

3

4

4

! Nuclear Power Plant inspections

32

60

60

! Drinking water samples tested

2,281

3,361

4,081

! Radiation producing devices inspected

6,268

6,039

3,837

! Mammography facilities inspected

385

371

395

! Contaminated material shipped from West Chicago (tons)

82,923

146,331

174,835

AGENCY DIRECTOR

During Audit Period: Mr. Thomas W. Orticiger (7/1/01 through 2/15/03); Mr. Gary N. Wright (2/16/03 through 6/30/03)

Currently: Mr. William C. Burke, Director of the Illinois Emergency Management Agency (the Department of Nuclear Safety merged into the Illinois Emergency Management Agency 7/1/03)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

The Department is not in compliance with the Illinois Low-Level Waste Management Act

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Applications used by the Department did not contain the required elements

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Errors were noted in reports submitted to the State Comptroller

 

 

 

Understatement of deferred revenue

 

 

Understatement of receivables

 

 

 

Supervisory review of accounting reports lacking

 

 

 

 

 

 

 

Required accounting reports submitted late

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

A lump sum payment of $48,299 was made to an employee who returned to work with the Department within 2 days after taking retirement

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Department personnel indicate repayment is not required in this instance

 

 

 

 

 

 

 

 

Recommended Department seek an opinion from the Attorney General

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Retirement annuity payments were made that are prohibited by the Pension Code

 

 

 

 

 

 

 

 

 

Executive Order No. 12 abolished the Department and its functions were moved to the Illinois Emergency Management Agency

 

 

 

 

 

Pension Code prohibition

INTRODUCTION

The Department of Nuclear Safety was created in 1980 by Executive Order Number 3 and by enabling legislation. The primary mission of the Department is to protect the public health and safety of the citizens of Illinois from the potential hazards of radiation. Effective July 1, 2003, Executive Order Number 12 (2003) transferred all powers, duties, rights and responsibilities vested in the Illinois Department of Nuclear Safety to the Illinois Emergency Management Agency.

 

FINDINGS, CONCLUSIONS AND RECOMMENDATIONS

APPLICATIONS FOR PERMITS TO TRANSPORT LOW-LEVEL RADIOACTIVE WASTE

The Department of Nuclear Safety (Department) did not incorporate statutorily required information into their applications for permits to allow individuals to transport low-level radioactive waste.

The Illinois Low-Level Waste Management Act (420 ILCS 20/9(c)) states that each application for a permit shall contain:

  1. The estimated quantities and types of wastes to be transported to a facility located in Illinois;
  2. The procedures and methods used to monitor and inspect the shipments to ensure that leakage or spills do not occur;
  3. The timetables according to which the wastes are to be shipped;
  4. The qualification and training of personnel handling low-level radioactive waste; and
  5. The use of interim storage and transshipment facilities.

 

A random sample of twenty-five applications was reviewed. The applications used by the Department contained none of the required elements.

According to Department personnel, it would be impossible for the applicants to know the required information at the time that the application is being completed. (Finding 1, pages 11-12)

We recommended the Agency obtain the required information in a timely manner, or seek a legislative remedy to the statutory requirement.

Agency officials accepted our recommendation and indicated that they would seek legislative remedy.

NEED TO IMPROVE TIMELY AND ACCURATE REPORTING OF FINANCIAL INFORMATION

The Department did not timely submit accurate financial reporting information to the Office of the State Comptroller.

We noted the following errors in the Departmentís accounting information submitted to the Office of the State Comptroller:

  • The Department understated deferred revenue in relation to statutory account balance limits in the Nuclear Safety Emergency Preparedness fund by $1,290,000;
     
  • The Department understated deferred revenue for the Foreign Reactor Fuel Shipping Program in the Radiation Protection Fund by $27,000; and
     
  • The Department understated the beginning receivables balance in the Foreign Reactor Fuel Shipping Program in the Radiation Protection Fund by $7,000.

We also noted that a supervisory review of the accounting reports was not performed prior to their submission to the Office of the State Comptroller. Agencies are required to prepare accounting reports in accordance with generally accepted accounting principles (GAAP) and submit them to the Illinois Office of the State Comptroller (IOC) on GAAP forms provided by IOC.

Portions of the Departmentís fiscal year 2003 GAAP reporting package were submitted to the Office of the State Comptroller late. In addition, the Comptrollerís Office sent comments to the Department on September 18, 2003, October 8, 2003 and October 15, 2003 regarding the GAAP reporting package forms that required a response from the Department. The Department did not respond to the Comptroller comments until October 30, 2003.

According to Department personnel, the untimely and inaccurate submission of the financial reporting information was due to overloaded personnel relating to the merger between the Illinois Emergency Management Agency and the Department, as well as confusion between the Office of the State Comptroller and the Department. (Finding 2, pages 13-16)

We recommended the Department of Nuclear Safety communicate the importance of accurate and timely submission of financial reporting information to the appropriate personnel and that senior fiscal management perform a supervisory review of the GAAP reporting package to ensure accurate and timely submission of all required information.

Department officials concurred, in part, with this finding and stated they would take extra effort to ensure correct data is included in the accounting packages submitted to the Office of the Comptroller. Further, they would ensure that the information is timely submitted. Department officials, however, did not concur that certain amounts were in error, or that a supervisory review of the accounting information was not performed. Department officials also indicated they did not concur that the information submitted to the Office of the State Comptroller was late or responses to the IOC inquires were not timely.

In an Auditorsí Comment we noted that we stand behind the facts as stated in the finding. Also, we believe that an effective supervisory review entails someone other than the original preparer performing the review. We welcomed the Departmentís response that they would take extra effort toward accurate and timely submissions of accounting report packages to the State Comptroller.

 

QUESTIONABLE VACATION AND SICK LEAVE PAYOUT

The Department did not seek repayment from an employee who received a single lump sum payment of $48,299 of accrued vacation and sick leave upon retirement.

One of twenty employees tested received a single lump sum payment of accrued vacation and sick leave as a result of the individualís early retirement. However, the individual then returned to work with the Department two days after his early retirement and did not repay the amount previously received as a lump sum payment.

According to the State Finance Act (30 ILCS 105/14a(c)), if an "employee returns to employment in any capacity with the same agency or department within 30 days of the termination of his or her previous State employment, the employee must, as a condition of his or her new State employment, repay the lump sum amount within 30 days after his or her new State employment commences".

According to Department personnel, repayment on the part of the employee was not required in this instance. The individualís salary is now paid from an appropriation for State officers by the Office of the State Comptroller. As such, the Department claims the person is a State officer, not an employee, and, therefore, not subject to the repayment provision. The Office of the State Comptroller has indicated that it agrees with this interpretation but would defer to the Attorney Generalís Office should the matter be referred to that office. (Finding 3, pages 17-20)

We recommended the Department of Nuclear Safety obtain an opinion from the Attorney General if it believes the lump sum payment was exempt from the Act.

The Department neither accepted or rejected the recommendation set forth in the finding. In its response the Department, in part, stated that it believes the payment was authorized under the State Finance Act (30 ILCS 105/14a(d), which provides for payment of nontransferable accrued vacation, overtime, and qualifying sick leave in a lump sum.

In light of the complicated circumstances presented in the finding, in an Auditor's Comment, we continue to recommend that the agency seek a formal, written opinion from the Attorney General to determine whether it has any obligation to recoup State funds paid out from appropriations.

 

RETIREMENT ANNUITY PAYMENTS

A former State Officer of the Department, who was transferred to a new position on July 1, 2003 at the Illinois Emergency Management Agency without the advice and consent of the Senate, continues to receive retirement annuity payments prohibited by the Pension Code.

The individual retired from the Department as Manager of the Office of Nuclear Facility Safety on February 14, 2003 and began receiving retirement annuity payments from the State Employees Retirement System (SERS) on April 23, 2003. On February 16, 2003 he was appointed Director of the Department and was confirmed in that position with the advice and consent of the Senate on February 28, 2003. At the time of his appointment as a State Officer, the individual elected not to participate in the SERS in his new position. However, he continued to draw a pension from SERS related to his prior position.

Subsequently, by operation of the Governorís Executive Order #12, effective July 1, 2003, the Department was abolished and its functions moved to the Illinois Emergency Management Agency (IEMA). Section II (B) of Executive Order #12 provided that "the Director of Nuclear Safety shall be transferred to the Illinois Emergency Management Agency and be made the Assistant Director of the Illinois Emergency Management Agency." The individualís transfer to his current position as Assistant Director of IEMA was not subject to the advice and consent of the Senate.

The Pension Code (40 ILCS 5/14-111) prohibits an annuitant who re-enters the service of a department and receives compensation on a regular payroll from simultaneously receiving a retirement annuity. However under Section 14-103.05(b)(3) of the Pension Code, the term employee does not include "Öany person appointed by the Governor with the advice and consent of the Senate unless that person elects to participate in this system."

The individual stated he believed his transfer to Assistant Director of IEMA did not change his status as excluded from the definition of employee under the Pension Code. Therefore, he believed he was entitled to continue to receive his monthly retirement annuity. (Finding 4, pages 21-24)

We recommended the individual return the retirement annuity payments received since July 1, 2003 to the State Pension system or seek legislative remedy confirming his current position as a State Officer with the advice and consent of the Senate.

Department officials accepted our recommendation to seek legislative remedy confirming this person's current position as a State Officer serving with the advice and consent of the Senate. The Department, however, further responded that it should not be called upon to address a finding that deals with an action alleged to have begun on July 1, 2003. It also believes the finding addresses actions outside the scope of either the Department of Nuclear Safety or its successor agency, the Illinois Emergency Management Agency. Departments and agencies do not have the authority or control over payroll payments to a state officer. Such payments are made by the State Comptroller under the authority of the Civil Administrative Code.

In an Auditorsí Comment we noted that although the substance of this issue relates to the period beginning July 1, 2003, it results from reorganization undertaken pursuant to an Executive Order issued during the current audit period. Further, we believe the issue was too important to defer until the next biennial audit. We disagree with the agencyís contention that neither DNS nor its successor agency has any responsibility to ensure payroll payments to persons working for DNS or its successor are legal and proper. We believe that the fact the Comptroller continued to pay the individualís salary from the State Officerís appropriation and the fact that the individual was originally confirmed to a two-year term are not relevant to the issue at the heart of this finding. We stand behind the facts as stated in the finding that the individual, in his current position, as Assistant Director of IEMA had not been confirmed to that position with the advice and consent of the Senate and, therefore the legality of his simultaneous receipt of both payroll and pension payments is questionable. We welcomed the agencyís acceptance of our recommendation to seek a legislative remedy.

 

OTHER FINDING

The remaining finding is less significant and is reportedly being given attention by the Department. We will review the Departmentís progress towards the implementation of our recommendation in our next audit.

Mr. Kevin Noone, Administrative Officer, provided responses to the findings for the Department of Nuclear Safety.

 

AUDITORS' OPINION

We conducted a compliance audit of the Department of Nuclear Safety 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 agency does not, nor is it required to, prepare financial statements.

 

 

____________________________________

WILLIAM G. HOLLAND, Auditor General

WGH:JAF:pp

 

SPECIAL ASSISTANT AUDITORS

Kerber, Eck & Braeckel, LLP were our special assistant auditors for this audit.