REPORT DIGEST

RUSHVILLE TREATMENT AND DETENTION FACILITY

LIMITED SCOPE COMPLIANCE EXAMINATION

For the Two Years Ended:

June 30, 2007

Summary of Findings:

Total this audit                    7

Total last audit                    6*

Repeated from last audit     2

*Previously reported in the Department of Human Services Financial Audit and Compliance Examination report for the two years ended June 30, 2005.

Release Date:

June 12, 2008

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

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

http://www.auditor.illinois.gov

SYNOPSIS

¨      The Facility did not maintain sufficient controls over the accuracy and reporting of its property records.

¨      The Facility lacked adequate internal controls over the inventory and financial reporting of commodities.

¨      The Facility had inadequate internal controls over the resident commissary operations.

¨      The Facility did not have a policy and rate structure in place for charging services to residents.

{Expenditures and Activity Measures are summarized on the reverse page.}

EXPENDITURE STATISTICS

FY 2007

FY 2006

FY 2005

Total Appropriations

$25,886,400

$21,485,800

$17,488,900

     TOTAL OPERATIONAL EXPENDITURES -

       Sexually Violent Persons Program

         % of Total Expenditures

         Average Number of Employees

$22,009,778

100%

195

$18,838,248

100%

141

$17,446,853

100%

145

          Cost of Property and Equipment

$2,627,289

$11,874,874

$10,427,977

SELECTED ACTIVITY MEASURES               (Not Examined)

FY 2007

FY 2006

FY 2005

     Average Number of Residents

292

248

216

     Ratio of Employees to Residents

0.67/1

0.57/1

0.67/1

     Paid Overtime Hours & Earned Compensatory Hours

25,611

48,186

*

     Value of Paid Overtime Hours & Earned Compensatory Hours

$628,021

$1,282,596

*

     Cost Per Year Per Resident

$74,491

$70,123

$80,575

* The Department had not calculated this statistic for FY 05.

FACILITY DIRECTOR

     During Engagement Period:  Mr. Timothy Budz (7/1/05 – 8/31/05)

                                                     Mr. Thomas Monahan, Acting (9/1/05 – 3/8/07)

                                                     Mr. Brian Thomas, Acting (3/9/07 – 10/15/07)

     Currently:  Mr. Larry Phillips

Property transactions tested were recorded in the wrong fiscal year

Records for some property transactions tested could not be located

Property records were misstated and incomplete

Some assets selected for testing could not be located

Commodities were recorded in the wrong fiscal year

Some requisitions tested were post-approved and were not accounted for

Commissary inventory records were not complete

Questionable resident balances were not timely investigated and addressed

Commissary duties were not segregated

Policies and procedures were not formally documented

Residents were not charged for services as mandated

INTRODUCTION

           The Treatment and Detention Facility (Facility) was established in 1998 pursuant to the Sexually Violent Persons Commitment Act.  During the engagement period, the Facility was relocated from Joliet to Rushville.  This constitutes the first separate examination of the Facility, which was previously examined only as part of the Department of Human Services Central Office engagement.

FINDINGS, CONCLUSIONS AND RECOMMENDATIONS

INADEQUATE INTERNAL CONTROLS OVER PROPERTY RECORDS

The Facility did not maintain sufficient controls over the accuracy and reporting of its property records.  The auditors noted the following:

·        Sixteen of 62 (26%) property items tested were recorded in the wrong fiscal year. 

·        Support could not be located for 29 of 87 (33%) property transactions tested.

·        The cost of 4 of 43 (9%) additions tested differed between invoices and property records by $28,711.

·        A property item costing $5,560 was not recorded on property records.

·        Two of 40 (5%) assets tested did not have a State property tag.  These items totaled $2,238.

·        Two of 40 (5%) assets selected for testing could not be located. (Finding 1, Pages 10-11).

The auditors recommended that the Facility ensure all equipment is tagged and recorded accurately and timely on its property records and sufficient documentation is maintained to support the property records.

Officials accepted the finding and recommendations and stated corrective action has been taken.

INADEQUATE INTERNAL CONTROLS OVER COMMODITIES INVENTORY

The Facility had inadequate internal controls over the commodities inventory and over reporting inventory balances for financial reporting purposes.  Specifically:

·        Four of 12 (33%) items tested were recorded in the wrong fiscal year.

·        Eight of 25 (32%) requisitions tested were not approved prior to filling the order. 

·        The Facility did not track and account for 14 of 25 (56%) requisitions. (Finding 2, Pages 12-13).

The auditors recommended the Facility improve internal controls to timely record additions, timely approve requisitions, and periodically account for requisitions.

Officials agreed with the finding and recommendations.

INADEQUATE INTERNAL CONTROLS OVER RESIDENT COMMISSARY OPERATIONS

The Facility had inadequate internal controls over the resident commissary operations. The following was noted:

·        The Facility did not maintain accurate and complete commissary inventory records.  Therefore, we were unable to verify the approximately $13,000 in FY07 commissary expenditures.

·        The Facility did not have a proper data backup plan for commissary inventory records.  The program crashed in August 2006 and data was still not fully restored as of June 30, 2007.

·        Questionable negative resident commissary account balances were not timely investigated and addressed.

·        Responsibilities were not segregated for maintaining commissary inventory records, conducting physical inventory counts, updating residents’ account balances, and ordering inventory.

·        The Facility lacked formally documented policies and procedures over commissary operations. (Finding 3, Pages 14-15).  This finding was first reported in 2003. 

The auditors recommended the Facility implement a system to track and value its commissary inventory and back up the information on a regular basis.  The auditors further recommended policies and procedures be implemented and inventory counts and residents’ balances be reconciled by an independent person.

      Officials accepted the finding and recommendations and stated a cashless vending inventory system will be implemented to track and record all commissary inventory. (For previous response, see digest footnote #1.)

CHARGES FOR SERVICES POLICY AND RATE STRUCTURE NOT ESTABLISHED

The Facility did not have a policy and rate structure in place for charging services to residents as required by the Sexually Violent Persons Commitment Act (725 ILCS 207/90).  Currently, residents are not required to pay for services even if they have access to assets to do so.  (Finding 6, Page 19). 

The auditors recommended the Facility formally document a policy on charging residents for services and a corresponding rate structure to comply with the Sexually Violent Persons Commitment Act.

Officials accepted the finding and recommendation and stated a rule is being written to implement the Act.

OTHER FINDINGS

The remaining findings concerned document retention, hiring policies, and local funds.  We will review progress toward implementing all recommendations in our next examination.

AUDITORS’ OPINION

The auditors conducted a limited scope compliance examination of the School as required by the Illinois State Auditing Act.  The auditors stated that the Facility complied, in all material respects, with the compliance requirements, except for the noncompliance with requirements for the accounting and recordkeeping for property as reported in Finding 1.

The auditors also performed certain agreed-upon procedures with respect to the accounting records of the School to assist with the financial audit of the entire Department.  Financial statements for the Department will be presented in that report.

          ____________________________________

WILLIAM G. HOLLAND, Auditor General

WGH:LKW:pp

SPECIAL ASSISTANT AUDITORS

Doehring, Winders & Co. LLP were our special assistant auditors for this engagement.  

DIGEST FOOTNOTES

#1 - INADEQUATE INTERNAL CONTROLS OVER RESIDENT COMMISSARY OPERATIONS - Previous Department Response

2005: Agree.  The Department will review the feasibility of implementing the CCS and other procedures to increase accountability over commodity items.  However, additional staff is necessary in the Business Office to implement the CCS.