REPORT DIGEST

DEPARTMENT OF LABOR

COMPLIANCE EXAMINATION
FOR THE TWO YEARS ENDED JUNE 30, 2025

Release Date:  May 21, 2026

FINDINGS THIS AUDIT: 15

CATEGORY:  NEW -- REPEAT – TOTAL
Category 1:  6 -- 5 -- 11
Category 2:  1 -- 3 -- 4
Category 3:  0 -- 0 -- 0
TOTAL:  7 -- 8 -- 15

FINDINGS LAST AUDIT: 12

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

Because of the significance and
pervasiveness of the findings described
within the report, we (the accountants)
expressed an adverse opinion on the
Department of Labor’s compliance with the
specified requirements which comprise a
State compliance examination.  The
Codification of Statements on Standards for
Attestation Engagements (AT-C § 205.72)
states a practitioner “should express an
adverse opinion when the practitioner,
having obtained sufficient appropriate
evidence, concludes that misstatements,
individually or in the aggregate, are both
material and pervasive to the subject
matter.”

SYNOPSIS

• (25-01) The Department of Labor
(Department) did not have adequate controls
over monthly appropriations, cash balance,
revenues, and obligations reconciliations.

• (25-03) The Department failed to maintain
adequate controls over personal services.

FINDINGS, CONCLUSIONS, AND RECOMMENDATIONS

INADEQUATE CONTROLS OVER MONTHLY
RECONCILIATIONS

The Department of Labor (Department) did
not have adequate controls over monthly
appropriations, cash balance, revenues, and
obligations reconciliations.

During our testing of the Department’s
monthly reconciliation reports to the
Office of the Comptroller’s reports for
Fiscal Year 2024 and 2025, some of the more
significant issues we noted included the
following:

• For 40 of 240 (17%) Appropriations Status
(SB01) reports, the Department did not
review and approve the monthly
reconciliations between its internal
records and SB01 reports in a timely
manner, ranging from 6 to 47 days late.

• For 30 of 240 (13%) SB01 reports, the
Department did not provide documentation
demonstrating the completion of monthly
reconciliations between its internal
records and the SB01 reports within 60 days
of month-end.

• For 90 of 216 (42%) Cash (SB05) reports,
the Department did not complete monthly
reconciliations between its internal
records and SB05 reports in a timely
manner, ranging from 3 to 100 days late.

• The Department was unable to provide an
explanation for the variances identified in
the SB05 reconciliation reports for any of
its non-shared funds.

• For 6 of 24 (25%) Obligation Activity
(SC15) reports, the Department did not
complete monthly reconciliations between
its internal records and SC15 reports in a
timely manner, ranging from 2 to 105 days
late. (Finding 1, pages 9-12)

We recommended the Department implement
adequate internal controls and maintain
documentation demonstrating the
appropriations, cash balance, revenues, and
obligations reconciliations are all
performed and reviewed in a timely manner.

The Department agreed with the finding and
will implement internal controls and
maintain proper documentation.

INADEQAUTE CONTROLS OVER PERSONAL SERVICES

The Department failed to maintain adequate
controls over personal services.

During the examination of personal
services, the Department provided a
population of active, newly hired, and
terminated employees. However, we were
unable to determine the completeness and
accuracy of the listing provided in order
to obtain reasonable assurance on the
reported hire and separation effective
dates of employees in order to thoroughly
test compliance.

Statements on Standards for Attestation
Engagements (AT-C §205.36) require, when
using information produced by the entity,
the practitioner to evaluate whether the
information is sufficiently reliable for
the practitioner’s purposes, including
obtaining evidence about the accuracy and
completeness of the information; and to
evaluate whether the information is
sufficiently precise and detailed for the
practitioner’s purposes.

Despite these limitations, we selected a
sample of employees to review payroll
vouchers, personnel files, performance
evaluations, time sheets, leave requests,
accrued leave balances, overtime cards, and
training certificates.  Some of the more
significant issues we noted included the
following:

• Five of 46 (11%) employees had time
sheets that were not submitted in a timely
manner, with delays ranging from 3 to 17
days, during Fiscal Year (FY) 2024.

• Two of 46 (4%) employees had time sheets
that were not approved in a timely manner,
with delays ranging from 5 to 17 days,
during FY 2025.

• Ten of 60 (17%) employees’ overtime
requests were not approved prior to the
actual overtime being worked.

• One of six (17%) employees subject to a
probationary period during FY 2025 did not
have performance evaluation reports.
(Finding 3, pages 17-23) This finding has
been reported since 2013.

We recommended the Department strengthen
its internal controls over personal
services to ensure compliance with
applicable Federal and State requirements.

The Department concurred and stated
internal controls will be implemented to
ensure compliance with applicable federal
and State requirements.

OTHER FINDINGS

The remaining findings are reportedly being
given attention by the Department.  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, 2025, as
required by the Illinois State Auditing
Act.  Because of the effect of
noncompliance described in Findings
2025-001 through 2025-015, the accountants
stated the Department did not materially
comply with the requirements described in
the report.

This State compliance examination was
conducted by Maharlika PLLC.

COURTNEY DZIERWA
Deputy Auditor General

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

CHRISTOPHER B. MEISTER
Auditor General

CBM:sdw