Illinois Office of the State Treasurer Nonfiscal Officer 2001 Audit

REPORT DIGEST

OFFICE OF THE STATE TREASURER

NONFISCAL OFFICER RESPONSIBILITIES

FINANCIAL AND COMPLIANCE AUDIT

For the Two Years Ended:
June 30, 2001

Summary of Findings:

Total this audit 2
Total last audit 1
Repeated from last audit 0

Release Date:
March 28, 2002

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
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

The Office of the State Treasurer maintained cash balances in excess of the $2,500,000 allowed by the Uniform Disposition of Unclaimed Property Act. Month end cash balances exceeded $2,500,000 in 23 of the 24 months during the audit period.

The Office of the State Treasurer’s Information Technology Disaster Recovery Plan was incomplete and had not been tested recently.

{Expenditures and Activity Measures are summarized on the reverse page

OFFICE OF THE STATE TREASURER - NONFISCAL OFFICER RESPONSIBILITIES
FINANCIAL AND COMPLIANCE AUDIT
For The Two Years Ended June 30, 2001

EXPENDITURE INFORMATION AND STATISTICS		FY 2001	FY 2000	FY 1999
Total Expenditures (All Funds) APPROPRIATED EXPENDITURES % of Total Expenditures General Revenue Fund–001 & State Pension Fund–054* Personal Services Employee Retirement - Contributions Paid by Employer State Contribution to State Employees' Retirement System System State Contribution to Social Security Group Insurance Contractual Services Travel Commodities Printing Equipment Electronic Data Processing Telecommunications Operation of Auto Equipment SAMS Conversion Costs Refunds of Estate Tax & Accrued Interest thereon Refunds of Accrued Interest on Protested Taxes Total Expenditures - General Revenue & State Pension General Obligation Bond Fund – 101 Payment of Principal Payment of Interest Payments to Refund General Obligation Bonds Total Expenditures - General Obligation Bond Fund Bank Service Trust Fund – 373 Total Payments for Banking Services Capital Litigation Trust Fund – 614 Total Payments of Capital Litigation Matured Bond and Coupon Fund – 625 Total Payments of Matured Bonds and Interest Estate Tax Collections Distributive Fund – 815 Total Payments to Counties		$1,125,858,728 $975,412,418 87% $6,962,903 260,010 692,639 536,374 354,950 3,309,647 282,670 116,822 48,020 57,769 2,059,638 252,236 14,792 0 7,499,932 1,605,180 $24,053,582 $453,887,451 336,582,816 119,264,408 $909,734,675 $5,930,228 $12,445,743 $121,806 $23,126,384	$898,049,324 $768,773,955 86% $6,622,854 252,600 643,540 492,381 289,276 3,492,575 280,101 68,425 32,592 158,024 1,813,557 243,320 9,450 0 7,066,589 1,201,604 $22,666,888 $430,464,406 286,679,081 0 $717,143,487 $4,391,865 $5,947,055 $127,665 $18,496,996	$1,014,245,306 $901,664,075 89% $4,225,233 165,577 402,775 316,707 0 795,215 113,768 32,067 12,629 32,073 590,443 148,787 8,794 398,435 4,175,861 964,295 $12,382,659 $422,975,040 267,771,278 173,178,627 $863,924,945 $4,552,496 $0 $197,608 $20,606,367
UNAPPROPRIATED EXPENDITURES % of Total Expenditures IPTIP Administrative Trust Fund - 195 Metropolitan Pier and Exposition Fund – 337 Protest Fund - 401 Unclaimed Property Trust Fund - 482 Municipal Economic Development Fund – 650 College Savings Plan Administration Fund – 668 Cost of Property and Equipment		$150,446,310 13% $2,491,349 $92,997,365 $17,921,863 $36,603,532 $271,430 $160,771 $3,582,902	$129,275,369 14% $1,556,053 $88,726,547 $8,985,458 $29,795,902 $191,640 $62,769 $3,750,090	$112,581,231 11% $1,392,856 $79,667,840 $31,520,535 $0* $0 $0 $2,532,441
SELECTED ACTIVITY MEASURERS (unaudited)		FY 2001	FY 2000	FY 1999
Number of Warrants Issued Number of Warrants Paid Amount of Unclaimed Property Remittances Received Number of Unclaimed Property Claims Paid Amount of Unclaimed Property Claims Paid		12,115,469 11,948,342 $126,635,761 36,823 $36,427,837	11,393,618 10,815,378 $124,938,750 19,498 $29,791,852	10,570,290 10,252,058 $0* 0* $0*
STATE TREASURER
During Audit Period: Honorable Judy Baar Topinka Currently: Honorable Judy Baar Topinka	*The State Treasurer did not incur any expenditures from the State Pension Fund or the Unclaimed Property Trust Fund during FY 99. These two funds were the responsibility of the Department of Financial Institutions and were transferred to the Office of the Treasurer in FY 00.

Month end balances exceeded statutory limit

Incomplete Information Technology Disaster Recovery Plan

FINDINGS, CONCLUSIONS, AND RECOMMENDATIONS

EXCESS CASH BALANCES IN UNCLAIMED PROPERTY TRUST FUND

The Office of the Treasurer maintained cash balances in excess of $2,500,000 allowed by the Uniform Disposition of Unclaimed Property Act in 23 of the 24 months during the audit period. Month end cash balances in the trust fund fluctuated significantly and were as high as $25,300,000 on May 31, 2001. (Finding 1, pages 10-11)

We recommended the Treasurer’s Office comply with the Uniform Disposition of Unclaimed Property Act and retain no more than $2,500,000 in the trust fund or seek legislative remedy to the statutory requirement.

The Office accepted the recommendation and stated it will seek legislative remedy to increase the statutory balance limitation to reflect a balance commensurate with collections and sufficient to facilitate timely claims processing.

INCOMPLETE DISASTER RECOVERY PLAN

The Office of the Treasurer’s Information Technology Disaster Recovery Plan is incomplete, has not been tested since 1998, and has not been fully customized to the Treasurer’s Office.

We noted the Recovery Plan does not address the different levels of disasters, include required restoration times for critical applications, or include recovery of the wide area network.

We recommended the Treasurer’s Office complete the customization of the Disaster Recovery Plan and broaden the plan to include recovery of the wide area network. In addition, we recommended the Plan be reviewed and updated on an ongoing basis and the Office complete a scheduled test in January 2002 and fully document the test results.

The Office accepted the recommendation and stated it will have all disaster recovery documentation updated and testing completed by March 30, 2002.

Ms. Barbara Ringler, Chief Internal Auditor provided the responses to our recommendations.

AUDITORS' OPINION

Our auditors state the Treasurer's financial statements for the nonshared State Treasury and locally-held funds, as of and for the two years ended June 30, 2001, are fairly stated in all material respects.

____________________________________

WILLIAM G. HOLLAND, Auditor General

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SPECIAL ASSISTANT AUDITORS

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