REPORT DIGEST

ILLINOIS GAMING BOARD

FINANCIAL AUDIT – STATE GAMING FUND
FOR THE YEAR ENDED JUNE 30, 2017

Release Date:  January 9, 2018

FINDINGS THIS AUDIT:  1

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

FINDINGS LAST AUDIT: 0

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

INTRODUCTION

This digest covers the financial statement
audit of the Illinois Gaming Board (Board),
State Gaming Fund, as of and for the year
ended June 30, 2017.

SYNOPSIS

• (17-1) The Board had weaknesses in its
preparation of financial statements for the
State Gaming Fund and its GAAP Package
reports filed with the Comptroller.

FINDINGS, CONCLUSIONS, AND RECOMMENDATIONS

FINANCIAL STATEMENT PREPARATION WEAKNESSES

The Illinois Gaming Board (Board) had
weaknesses in its preparation of financial
statements for the State Gaming Fund (Fund)
and its corresponding generally accepted
accounting principles (GAAP) Package reports
filed with the Office of the State
Comptroller (Comptroller).

During testing, we noted the following:

• The Board did not adequately monitor
activity of the Department of Human Services
(Department) to ensure the proper accrual of
Lapse Period payables paid from the Fund,
totaling $122 thousand.  While the Department
is responsible for accruing its expenditures
and reporting the accrual entry to the Board
as required by the Statewide Accounting
Management System (SAMS) (Procedure Exhibit
27.50.10-A), the Board is ultimately
responsible for reporting the activities of
the Fund.  As a result, accounts payable and
expenditures for health and social services
were understated by $122 thousand and due to
the Education Assistance Fund and transfers
out were overstated by $122 thousand.  Board
management corrected this error in the Fund’s
final financial statements.

• The Board did not record two contingent
liabilities, totaling $338 thousand, which
were deemed probable for loss by the Office
of the Attorney General (Attorney General) as
of June 30, 2017.  As a result, accounts
payable and expenditures for public
protection and justice were understated by
$338 thousand and due to the Education
Assistance Fund and transfers out were
overstated by $338 thousand.  This amount was
deemed immaterial by Board management and was
not corrected in the Fund’s final financial
statements; however, the auditors determined
this exception represented a significant
deficiency in the Board’s internal control
over financial reporting.

Failure to ensure all transactions are
properly reported could result in a material
misstatement of the Fund’s financial
statements and reduces the overall
reliability of Statewide financial reporting.
(Finding 1, pages 16-17).

We recommended the Board work with the
Department to ensure the proper reporting of
accounts payable during the Lapse Period.  In
addition, we recommended the Board work with
the Attorney General to ensure the proper
reporting of contingent liabilities.

The Board agreed with the finding and will
attempt to work with both the Department of
Human Services as well as the Attorney
General to ensure the proper reporting of
contingent liabilities.

AUDITOR’S OPINION

The auditors stated the financial statements
of the Board’ State Gaming Fund as of and for
the year ended June 30, 2017 are presented
fairly in all material respects.

This financial audit was conducted by BKD
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

FJM:JWF