REPORT DIGEST

STATE EMPLOYEES’ RETIREMENT SYSTEM OF ILLINOIS

COMPLIANCE AUDIT

For the Year Ended:
June 30, 2000

Summary of Findings:

Total this audit 1
Total prior audit 0
Repeated from last audit 0

Release Date:
February 14, 2001

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State of Illinois
Office of the Auditor General

WILLIAM G. HOLLAND

AUDITOR GENERAL

Iles Park Plaza
740 E. Ash Street
Springfield, IL 62703
(217) 782-6046

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

 

  • We noted several areas in which workpaper documentation should be strengthened for internal audits.

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{Financial Information and Activity Measurers summarized on the reverse page.}

STATE EMPLOYEES' RETIREMENT SYSTEM OF ILLINOIS

INFORMATION FROM FINANCIAL AND COMPLIANCE AUDITS

TWO YEARS ENDED JUNE 30, 2000

FINANCIAL OPERATIONS

FY 2000

FY 1999

REVENUES

Contributions:

Participants
Employing State agencies
State pension fund

Net investment income
Net appreciation in fair value of investments
Interest earned on cash balances

Total Revenue

EXPENSES

Benefits:

Retirement annuities
Survivors' annuities
Disability benefits
Lump-sum death benefits

Refunds

Administration
Transfers to reciprocating systems

Total Expenses

 

 

$ 164,792,356
328,152,521
12,720,000

199,499,986
725,684,217
6,079,096

$1,436,928,176

 

 

$405,944,513
42,672,462
29,239,488
12,058,958

15,898,980

6,613,765
32,327

$512,460,493

 

 

$ 159,580,234
307,001,046
8,523,961

202,442,449
700,891,860
4,787,485

$1,383,227,035

 

 

$363,649,705
40,506,748
26,791,871
9,894,097

13,989,387

6,433,951
23,137

$461,288,896

SELECTED ACCOUNT BALANCES

JUNE 30, 2000

JUNE 30, 1999

Cash
Receivables
Investments, at fair value
Property and equipment, net of accumulated depreciation
Liabilities
Net Assets Held in Trust for Benefits
Actuarial Accrued Liability
Unfunded Liability

$97,638,073
$27,920,145
$8,786,654,484
$3,354,788
$4,666,838
$8,910,900,652
$10,912,987,912
$2,002,087,260

$100,578,832
$25,972,613
$7,861,470,281
$3,500,719
$5,089,476
$7,986,432,969
$9,998,204,988
$2,011,772,019

SUPPLEMENTARY INFORMATION

FY 2000

FY 1999

Number of System employees
Number of retirees and beneficiaries currently receiving benefits
Inactive members not yet receiving benefits
Current Members:

Vested
Nonvested
Total Return on Investments

80
42,094

4,032

54,204
26,472
11.8%

80
41,131

3,749


54,366
25,136
12.9%

EXECUTIVE SECRETARY
During Audit Period: Michael L. Mory
Currently: Michael L. Mory
 

 

 

 

 

 

 

 

 

 

 

 

Internal audit workpaper documentation should be strengthened

 

 

 

 

 

 

INTRODUCTION

This digest covers our compliance audit of the System for the year ended June 30, 2000. A financial audit covering the year ending June 30, 2000 is being issued separately.

It should be noted that, pursuant to the Illinois Pension Code, investments of the System are managed by the Illinois State Board of Investment.

FINDING, CONCLUSION, AND RECOMMENDATION

INTERNAL AUDIT WORKPAPER DOCUMENTATION

During our audit, we noted several areas in which workpaper documentation should be strengthened relating to internal audits. Some of the areas identified were:

  • Workpapers did not adequately document the planning of the audits in the following areas: objective(s) and scope, background information, communication and surveys.
  • Work plans/ programs did not include audit objectives, scope or degree of testing required to achieve the audit objectives, sample selection, and identification of technical processes or transactions that should be examined.
  • The audit files did not contain documentation of the determination of how, when, and to whom audit results should be communicated.

The Internal Audit Advisory Board of the State has adopted the Institute of Internal Auditors, IIA, standards to be used when performing internal audits. The IIA standards address workpaper and work plan preparation and should be followed when performing internal audits. (Finding 1, pages 9-10)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

We recommended the System's Internal Auditor document the work performed and sign audit reports in accordance with the standards.

System management indicated it will attempt to strengthen audit documentation where appropriate and cost justified considering the time restraints of having one internal audit position for the entire agency and the diverse operational areas to be reviewed.

Mr. Michael Mory, Executive Secretary, provided the response to our recommendation on January 5, 2001.

_____________________________________

WILLIAM G. HOLLAND, Auditor General

 

WGH:RPU:pp

SPECIAL ASSISTANT AUDITORS

Thomas Havey LLP were our special assistant auditors for this audit