ILLINOIS STATE TOLL HIGHWAY AUTHORITY
For the Year Ended:
Summary of Findings:
Total this audit 9
State of Illinois
WILLIAM G. HOLLAND
To obtain a copy of the
(217)782-6046 or TDD (217) 524-4646
ILLINOIS STATE TOLL HIGHWAY AUTHORITY
FINANCIAL AND COMPLIANCE AUDIT
For The Year Ended December 31, 2000
|FINANCIAL OPERATIONS (GAAP BASIS)||
Depreciation and Amortization
|SIGNIFICANT ACCOUNT BALANCES (GAAP Basis)||
December 31, 2000
December 31, 1999
Accounts Receivable (net)
Property, Plant and Equipment (net)
Revenue Bonds Payable
|During Audit Period: Mr. Thomas Cuculich
Currently: Mr. Thomas Cuculich
There was an average of 715 toll plaza equipment resets a month, approximately 4.87% of all the lanes in the system
Cash deposits did not include receipts for all toll plazas, which resulted in daily variance between actual cash reported and the amounts computed by toll collection equipment
In Calendar Year 2000, the Authority paid over $7.2 million for toll equipment maintenance but did not assess any performance-related damage fees
The total number of toll violators in the system for June 2001 was 2,770
These reports represent the results of our financial and compliance audit for the year ending December 31, 2000.
FINDINGS, CONCLUSIONS, AND RECOMMENDATIONS
FAILURE TO MAINTAIN DATA FOR CASH RECEIPT RECONCILIATION
The Illinois State Toll Highway Authoritys toll collection equipment and software did not maintain data necessary for reconciliation of cash receipts.
During testing, we noted in 7 out of 14 days (50%) selected for testing, equipment at toll plazas was reset 149 times in order to make repairs. Information on the amount of cash receipts and the number of vehicles passing through the plaza lane was lost in all instances. This information is necessary to reconcile cash receipts. There was an average of 715 resets per month for the year ended December 31, 2000. This equates to approximately 4.87% of the 14,670 lanes in the system being reset monthly.
Failure to maintain adequate data results in the breakdown of the control function. We recommended the Authority establish alternative procedures to maintain data so that information will not be lost. (Finding 1, page 12). This finding is repeated from 1999.
Authority officials agreed with the need to maintain the data, but emphasized that no money was lost. They stated they were in the process of a major update to their toll collection equipment and in the interim, have reemphasized to maintenance technicians not to reset the equipment unless absolutely necessary.
INCOMPLETE RECORDING OF CASH COLLECTED AND LACK OF PROCEDURES FOR REPORTING CASH BALANCING DIFFERENCES
The Authority did not always report the total daily cash collected for all plazas and did not have adequate written procedures for resolution of cash balancing variances.
During testing, we noted cash deposits did not include receipts for all toll plazas, which resulted in daily variances between the actual cash reported and the amounts computed by toll collection equipment. Also, according to the Authoritys Internal Audit Department, existing internal control procedures in the money room were not adequate because they were not documented or always followed.
We recommended money room procedures be documented, communicated to employees, and include specific instructions regarding cash reporting and reconciliation issues. (Finding 2, pages 13-14) This finding is repeated from 1999.
Authority officials agreed with our recommendations and stated the money room policy and procedural manual is in draft format and will be finalized immediately. The Authoritys response also stated that every attempt will be made to pull full and partially full vaults and deliver them to the money room for counting when operationally feasible.
INADEQUATE MONITORING OF CONTRACTOR'S PERFORMANCE LEVEL
The Authoritys procedures were not adequate to monitor contractor's performance levels.
During testing, we noted that contracts for the repair of toll equipment included performance standards but the Authority did not have adequate procedures to monitor the contractors actual performance against those standards. The contract establishes precise time limits to repair toll equipment, which vary by type of malfunction. If the contractor does not repair a malfunction in the allotted time, the Authority can assess damage fees. In Calendar Year 2000, the Authority paid $7,236,332 for toll equipment maintenance but did not assess any damage fees because of inadequate monitoring procedures.
According to the Authority, this condition existed due to the inability of its computer system to provide on-line monitoring and reporting of equipment malfunctions. We recommended the Authority make every effort to monitor contractors' performance levels and to assess appropriate penalties. (Finding 3, page 15) This finding is repeated from 1999.
Authority officials agreed with our recommendation. The Authority stated that effective April 2001, the new Maintenance On-Line Management System (MOMS) was implemented and is being used for monitoring purposes.
FAILURE TO BILL TOLL VIOLATORS TIMELY
The Authority did not bill toll violators in a timely manner.
Toll violators were not being billed on a regular basis. Invoices were sent to toll violators for 5 of the 12 months in Calendar Year 2000. During Calendar Year 2000, the actual amount billed for violations was $247,563. The Authority was unable to determine the amount of the billings for months missed because the existing database maintained cumulative records for violators that were difficult to sort by previous months. The Authority collected $270,024 during the year from toll violators. Accounts receivable for toll violators at December 31, 2000 was $1,095,445 with an allowance for doubtful accounts of $972,330. The total number of toll violators in the system for June 2001 was 2,770.
When there is a lag time between the violation occurring and a bill being sent, the likelihood of collecting the full amount billed at a later date decreases. We recommended the Authority produce a billing and send invoices on a monthly basis to toll violators. (Finding 7, page 20).
Authority officials agreed that violators were not billed timely during 2000. The Authority stated that billing information has been compiled for future notification and collection efforts. The Authority also stated that it is currently negotiating with contractors to outsource the violator billing and collection process.
The remaining findings are being given attention by the Authority. We will review the Authoritys progress toward implementation of all our recommendations during our next audit.
Our auditors stated the Illinois State Toll Highway Authoritys financial statements as of December 31, 2000 and 1999 present fairly, in all material respects.
WILLIAM G. HOLLAND, Auditor General
SPECIAL ASSISTANT AUDITORS
Our special assistant auditors for this audit were