REPORT DIGEST

DEPARTMENT OF INNOVATION AND TECHNOLOGY

COMPLIANCE EXAMINATION
FOR THE TWO YEARS ENDED JUNE 30, 2024

Release Date:  July 17, 2025

FINDINGS THIS AUDIT: 20

CATEGORY:  NEW -- REPEAT – TOTAL
Category 1:  0 -- 4 -- 4
Category 2:  2 -- 14 -- 16
Category 3:  0 -- 0 -- 0
TOTAL:  2 -- 18 -- 0

FINDINGS LAST AUDIT: 26

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, 400 West
Monroe, Suite 306, Springfield, IL
62704-9849
(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

INTRODUCTION

This digest covers the Department of
Innovation and Technology’s (Department)
State Compliance Examination for the two
years ended June 30, 2024. A digest covering
the Department’s Financial Audit as of and
for the year ended June 30, 2024, was
previously released on April 29, 2025. In
total, this report contains 20 findings, 1
of which was reported in the Financial
Audit.

SYNOPSIS

• (24-02) The Department failed to maintain
adequate controls over its property and
related records.
• (24-04) The Department failed to implement
adequate controls in place to control,
track, and monitor end-user software use.
• (24-09) The Department had not implemented
adequate security and controls over the
midrange environment.

FINDINGS, CONCLUSIONS, AND RECOMMENDATIONS

FAILURE TO MAINTAIN CONTROLS OVER PROPERTY

The Department of Innovation and Technology
(Department) failed to maintain adequate
controls over its property and related
records.

Agency Report of State Property

During our testing of the Agency Report of
State Property (Form C-15) filed with the
Office of Comptroller, we noted:

• The Department was not able to provide
evidence of review for 16 of 16 (100%)
quarterly C-15 Reports required to be filed
during Fiscal Years 2023 and 2024. As such,
we were not able to determine whether these
reports were reviewed prior to submission.

• The Department did not consistently
classify equipment subject to theft.
Equipment totaling $10,769,323 and
$5,015,478 were not classified as subject to
theft and not reported in the C-15 Reports
in Fiscal Years 2023 and 2024, respectively.
These items were within the scope of the
Department’s high-theft property definition
under Section 2.1b of the Department’s
Property Control Procedures.

• For the Fiscal Year 2023 C-15 Reports:

–  For the Technology Management Revolving
Fund (Fund 0304) C-15 Reports, the following
discrepancies were noted:
* Equipment, totaling $308,766,167 at June
30, 2023, did not agree with the
Department’s property listing. The
discrepancy totaled $2,636,655.
* Construction in Progress (CIP), totaling
$18,377,327 at June 30, 2023, did not agree
with the Department’s property listing. The
discrepancy totaled $315,253.
* Property additions did not agree with the
detailed list of additions provided by the
Department.  The discrepancies totaled
$10,038,290.
* Property deletions did not agree with the
detailed list of deletions provided by the
Department. The discrepancies totaled
$29,027,667.
* Net transfers did not agree with the
detailed list of net transfers provided by
the Department. The discrepancies totaled
$6,130,938.


For the Technology Management Revolving Fund
(Fund 0304) C-15 Reports, the following For
the Governmental Funds (Funds 0001, 0141,
and 0544) C-15 Reports, the following
discrepancies were noted:

* CIP, totaling $94,406,420 at June 30,
2023, did not agree with the Department’s
property listing. The discrepancy totaled
$828,378.
* Property additions did not agree with the
detailed list of additions provided by the
Department. The discrepancies totaled
$46,949,205.
* Property deletions did not agree with the
detailed list of deletions provided by the
Department. The discrepancies totaled
$11,539.
* Net transfers did not agree with the
detailed list of net transfers provided by
the Department. The discrepancies totaled
$24,189,883.

• For the Fiscal Year 2024 C-15 Reports:
For the Technology Management Revolving Fund
(Fund 0304) C-15 Reports, the following For
the Technology Management Revolving Fund
(Fund 0304) C-15 Reports, the following
discrepancies were noted:
* Equipment, totaling $319,259,213 at June
30, 2024, did not agree with the
Department’s property listing. The
discrepancy totaled $2,249,629.
* Property additions did not agree with the
detailed list of additions provided by the
Department.  The discrepancies totaled
$1,704,257.
* Property deletions did not agree with the
detailed list of deletions provided by the
Department. The discrepancies totaled
$31,630.
* Net transfers did not agree with the
detailed list of net transfers provided by
the Department. The discrepancies totaled
$1,433,597.

For the Technology Management Revolving Fund
(Fund 0304) C-15 Reports, the following For
the Governmental Funds (Funds 0001, 0141,
and 0544) C-15 Reports, the net transfers
did not agree with the detailed list of net
transfers provided by the Department. The
discrepancies totaled $828,804.

Annual Certification of Inventory

During our testing of the Annual Inventory
Certification Reconciliation filed with
DCMS, we noted:

• The Department’s C-15 Report did not agree
with the amounts reported in the Annual
Inventory Certification. The discrepancies
totaled $201,067,803 and $83,883,677 for
Fiscal Years 2023 and 2024, respectively.

• 2,213 and 88 property items reported to
DCMS during Fiscal Years 2023 and 2024,
respectively, did not have costs.

• The total value of inventory reported in
the Annual Inventory Certificate did not
agree with the supporting details of the
inventory provided by the Department. The
discrepancies totaled amounting to
$193,685,779 and $1,332,976 during Fiscal
Year 2023 and Fiscal Year 2024,
respectively.

Population Completeness

We requested the Department to provide the
population of its property in order to
determine if property had been properly
recorded.  In response to the request, the
Department provided a population; however,
given the noted exceptions above we were
unable to conclude the Department’s
population records were sufficiently precise
and detailed under the Professional
Standards promulgated by the American
Institute of Certified Public Accountants
(AT-C § 205.36).

Even given the population limitations noted
above, we performed testing on a sample of
the property population.

Detailed Testing

Property Additions

• Three of 60 (5%) property additions,
totaling $2,660,815, were recorded 26 to 920
days late.

• Two of 60 (3%) property additions,
totaling $223,677, were not properly
supported. The items cannot be traced to the
supporting invoices provided by the
Department; therefore, we were unable to
determine if the additions were recorded at
their proper values in the Department’s
property control records.

• The Department did not record on its
property listing and did not report on the
Department’s annual inventory report
submitted to DCMS a voucher for the purchase
of equipment totaling $22,550.

Property Deletions

• Twenty of 60 (33%) property deletions
tested, totaling $505,913, were deactivated
and deleted from the property records 1 to
327 days prior to DCMS approval of asset
deletion request.

Physical observation of equipment

During testing, we noted:

List To Floor

• Thirteen of 60 (22%) items tested,
totaling $849,167, were not found at the
location indicated on the Department’s
property listing.

• Five of 60 (8%) items tested, totaling
$57,116, were not reported in the
Department’s Annual Inventory Certification
submitted to DCMS.

Floor to List

• Seven of 60 (12%) items examined were not
recorded in the Department’s property
listing as of June 30, 2024.

• Ten of 60 (17%) items examined, totaling
$49,858, were not reported in the Annual
Inventory Certification submitted to DCMS
during Fiscal Year 2024. We were unable to
determine the associated cost/value for
three of these items due to lack of
supporting records.

• Two of 60 (3%) items examined, totaling
$59,294, were not properly recorded as to
the correct location within the Department.

• Two of 60 (3%) items examined, totaling
$3,979, were reported as being transferred
to surplus, yet the items were still located
at the Department.

Surplus

• Seventeen of 60 (28%) surplus items tested
had not been recycled, issued, or reported
as transferable property to DCMS.

• Twenty-eight of 60 (47%) surplus items
tested were not reported in the Department’s
C-15 Form.

• For one of 60 (2%) surplus items tested,
the Department was unable to provide
supporting documents pertaining to the
asset, therefore, we were not able to test
whether the surplus item was properly
recorded. (Finding 2, pages 13-19).  This
finding has been reported since 2018.

We recommended the Department implement
controls to ensure all property is accounted
for in accordance with the Illinois
Administrative Code and the Statewide
Accounting Management System Manual.  In
addition, we recommended the Department
ensure the reporting to DCMS and the Office
of Comptroller is accurate and reconciled to
the Department’s records.

The Department accepted the finding and
recommendation and stated the Department is
continuing efforts to correct this finding
by introducing new tools to advance the
physical inventory process, improving the
data quality, creating new policies and
procedures to strengthen the controls around
asset management, training staff, and
automating manual processes.

FAILURE TO CONTROL AND MONITOR SOFTWARE
LICENSING

The Department failed to implement adequate
controls in place to control, track, and
monitor end-user software use.

The Department had not developed procedures
for controlling, monitoring, and tracking
the use of software licenses. In addition,
the Department could not provide an
inventory of software licenses purchased and
the number of software licenses that were
actually deployed. As a result, we were
unable to determine if the Department was in
compliance with contractual licensing
agreements. (Finding 4, pages 22-23).  This
finding has been reported since 2018.

We recommended the Department develop and
implement procedures and a tracking
mechanism to control, monitor, and track
software licenses and its utilization.
Furthermore, we recommended the Department,
at least annually, reconcile their software
license inventory to vendor software
inventory to ensure software is deployed in
accordance with the terms of procurement.

The Department accepted the finding and
recommendation and stated the Department is
actively working to develop and implement
formal procedures and create positions to
manage this activity.

INADEQUATE SECURITY AND CONTROL OVER
MIDRANGE ENVIRONMENT

The Department had not implemented adequate
security and controls over the midrange
environment.

During our testing of a sample of 40 of the
Department’s midrange servers, we noted the
following:
• Five (13%) servers were running
unsupported operating systems,
• Three (8%) servers were running outdated
operating systems, and
• Four (10%) servers were operating without
anti-virus software. (Finding 9, pages
32-33). This finding has been reported since
2018.

We recommended the Department upgrade or
update servers to current vendor recommended
patch or service pack levels and ensure all
servers are running antivirus software with
current definition files.

The Department accepted the finding and
recommendation and stated the Department has
addressed the finding to the extent possible
without disrupting the business functions of
legacy applications that are unable to
operate on a supported operating system. The
Department also noted they will implement
controls to monitor systems that require
antivirus software.

OTHER FINDINGS

The remaining findings pertain to
telecommunication billing rates, system
access, Information Technology internal
control environment, risk assessments,
adoption of formal rules, receipt
processing, voucher processing, internal
audit, overtime, I-9 forms, cybersecurity,
monthly reconciliations, vehicles,
performance evaluations, contractual
agreements, employee time reports, and
disaster contingency planning. We will
review the Department’s progress towards the
implementation of our recommendations in our
next State compliance examination.

ACCOUNTANT’S OPINION

The accountants conducted a State compliance
examination of the Department for the two
years ended June 30, 2024, as required by
the Illinois State Auditing Act.  The
accountants qualified their report on State
compliance for Findings 2024-002 through
2024-005.  Except for the noncompliance
described in these findings, the accountants
stated the Department complied, in all
material respects, with the requirements
described in the report.

This State compliance examination was
conducted by Roth & Company LLP.

COURTNEY DZIERWA
Division Director

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

FRANK J. MAUTINO
Auditor General

FJM:QK