REPORT DIGEST

OFFICE OF THE TREASURER –
THE ILLINOIS FUNDS

FINANCIAL AUDIT
FOR THE YEAR ENDED JUNE 30, 2020

Release Date:  February 17, 2021

FINDINGS THIS AUDIT: 1

CATEGORY:  NEW -- REPEAT -- TOTAL
Category 1:  1 -- 0 -- 1
Category 2:  0 -- 0 -- 0
Category 3:  0 -- 0 -- 0
TOTAL:  1 -- 0 -- 1

FINDINGS LAST AUDIT: 1

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
FRANK J. MAUTINO, 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

SYNOPSIS
• (20-01) The Office had inadequate
internal controls over the Office’s
Illinois Funds Program financial
statement review process.

FINDINGS, CONCLUSIONS, AND
RECOMMENDATIONS

INADEQUATE INTERNAL CONTROLS RELATED TO
REVIEW OF FINANCIAL STATEMENTS

The Office had inadequate internal
controls over the Office’s Illinois Funds
Program financial statement review
process.

During testing of the Office’s Illinois
Funds Program financial statements,
various errors were identified in the
draft financial statements provided,
specifically:

• In the Notes to the Financial
Statements, Note 2. Deposits and
Investments, the fiscal year 2019 table
summarizing the fair value of investments
held at June 30, 2019 overreported the
carrying amount for Farm Credit Discount
Notes by $358,530,000. The amount was
reported as $398,366,722 but should have
been $39,836,722. As a result, total
deposits and investments reported in Note
2 as of June 30, 2019 were also
overstated by $358,530,000.

• In the Notes to the Financial
Statements, Note 2. Deposits and
Investments, the fiscal year 2020 table
summarizing the Illinois Funds’
investments within the fair value
hierarchy reported carrying value instead
of fair value for all investments. The
total amount reported was understated by
$1,279,211 as the amount reported was
$7,000,331,688 but should have been
$7,001,610,899.

• In the Notes to the Financial
Statements, Note 2. Deposits and
Investments, the Credit Risk Note
incorrectly included information from
fiscal year 2018 as fiscal year 2019
information.

• On the Statement of Fiduciary Net
Position, the fiscal year 2019
unamortized premiums and unaccreted
discounts for Supranational Notes and
Corporate Bonds were switched. The amount
reported for Supranational Notes should
have been $532,523 but was reported as
$601,188 and the amount for Corporate
Bonds should have been $601,188 but was
reported as $532,523.

• On the Statement of Fiduciary Net
Position, Certificates of Deposit did not
include the interest accrued since
purchase date of $65,400.

• In the Notes to the Financial
Statements, Note 5. Related Parties cash
balance disclosures for the Illinois
Funds’ Administrative Fund were not
updated for fiscal year 2020. The prior
year fiscal year report (2019 and 2018)
balances were reported as June 30, 2020
and 2019 balances.

• On the Condensed Statement of Fiduciary
Net Position by Investor Type, Net
Position did not agree to the amount
report for Net Position on the Statement
of Fiduciary Net Position or the amount
reported on the Condensed Statement of
Changes in Fiduciary Net Position by
Investor Type. The amount did not agree
by $1.

• On the Statement of Fiduciary Net
Position, the unamortized premium for
fiscal year 2019 Supranational Notes was
reported as a discount.

• On the Statement of Fiduciary Net
Position, the Money Market Mutual Funds
did not disclose the unamortized premium,
of $470,032. In addition, the Notes to
the Financial Statements, Note 1. Summary
of Significant Accounting Policies, did
not properly disclose the presentation of
Money Market Mutual Funds.

The Office has corrected all errors noted
above.  (Finding 1, pages 49-50)

We recommended the Office improve
controls over the financial reporting
process of the Illinois Funds Program,
specifically:

• Verify accuracy of all information
reported.

• Verify prior fiscal year information
reported within the financial statements,
notes and supplementary information
agrees to the prior fiscal year audit
report.

• Verify all amounts within the financial
statements, notes, and supplementary
information have been updated.

• Verify amounts reported agree between
statements and note schedules.

The Office accepted the recommendation
and stated they will examine review
procedures of both current and prior
financial statement information and
footnotes for improvement.

AUDITOR’S OPINION

The auditors stated the financial
statements of the Office of the
Treasurer, The Illinois Funds as of and
for the year ended June 30, 2020, are
fairly stated in all material respects.

This financial audit was conducted by
Crowe LLP.

JANE CLARK
Division Director

This report is transmitted in accordance
with Section 3-14 of the Illinois State
Auditing Act.

FRANK J. MAUTINO
Auditor General

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