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REPORT DIGEST DEPARTMENT OF MILITARY AFFAIRS COMPLIANCE
EXAMINATION For the Two Years Ended: June 30, 2008 Summary of Findings: Total this audit 4 Total last audit 10 Repeated from last audit 2 Release Date: June 30, 2009
State of Office of the Auditor General WILLIAM G. HOLLAND AUDITOR GENERAL To obtain a copy of the
Report contact: Office of the Auditor
General
(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
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The Department did not maintain sufficient controls over the
accuracy and reporting of its property.
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The Department did not adequately update its property records in
a timely manner. {Expenditures and Activity Measures are summarized on the next page.} |
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ILLINOIS
DEPARTMENT OF MILITARY AFFAIRS COMPLIANCE
EXAMINATION For The Two Years Ended June 30, 2008
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EXPENDITURE STATISTICS |
FY 2008 |
FY 2007 |
FY 2006 |
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Total
Expenditures (All Funds)........................... |
$34,223,797 |
$31,527,410 |
$28,550,894 |
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OPERATIONS
TOTAL.................................... % of TOTAL Expenditures................................ |
$33,093,032 96.7% |
$30,482,900 96.7% |
$27,105,719 94.9% |
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Personal Services, including reimbursable positions....................................................... %
of Operations Total Expenditures.......... Average
No. of Employees....................... |
$12,602,931 38.1% 226 |
$12,594,904 41.3% 241 |
$12,153,813 44.8%
240 |
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Other Payroll Costs (FICA, Retirement).......... %
of Operations Total Expenditures.......... |
$1,332,308 4.0% |
$1,008,408 3.3% |
$887,109 3.3% |
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Contractual Services...................................... %
of Operations Total Expenditures.......... |
$3,125,945 9.4% |
$2,719,797 8.9% |
$1,950,066 7.2% |
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%
of Operations Total Expenditures.......... |
$7,189,757 21.7% |
$7,479,240 24.6% |
$7,606,390 28.1% |
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Facilities Operations and Maintenance........... % of Operations Total Expenditures.......... |
$8,033,594 24.3% |
$5,575,507 18.3% |
$4,305,333 15.9% |
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All Other Items............................................. % of Operations Total Expenditures............. |
$808,497 2.5% |
$1,105,044 3.6% |
$203,008 0.7% |
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CAPITAL
PROJECTS...................................... % of TOTAL Expenditures................................ |
$0 0.0% |
$0 0.0% |
$51,966 0.2% |
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AWARDS AND GRANTS TOTAL............. % of TOTAL Expenditures................................ |
$1,130,765 3.3% |
$1,044,456 3.3% |
$1,277,148 4.5% |
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NON-APPROPRIATED FUNDS Armory Rental Fund (416)............................. % of TOTAL
Expenditures............................... |
$0 0.0% |
$54 0.0% |
$116,061 0.4% |
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Cost of Property and Equipment |
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(See Finding 08-1)……………… |
$208,257,470 |
$175,107,589 |
$167,830,935 |
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CASH RECEIPTS |
FY 2008 |
FY 2007 |
FY 2006 |
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Federal Reimbursements................................................ |
$19,235,362 |
$16,871,037 |
$15,934,811 |
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Rent.................................................................. |
85,752 |
105,638 |
334,059 |
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Other................................................................ |
357,811 |
306,412 |
767,126 |
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Total................................................................. |
$19,678,925 |
$17,283,087 |
$17,035,996 |
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AGENCY DIRECTOR |
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During
Audit Period: Adjutant General William Enyart (September
2007 to Present) Adjutant
General Randal E. Thomas (Through August 2007) Currently: Adjutant General William Enyart |
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Department had multi-million dollar
differences between property records Auditors could not
reconcile expenditure information to property records
Department
did not record permanent structure transactions on the property listing Department did not record equipment additions and deletions on the property listing in a timely manner |
FINDINGS, CONCLUSIONS, AND
RECOMMENDATIONS INADEQUATE
RECONCILIATION AND REPORTING OF
STATE PROPERTY The Department did not maintain
sufficient controls over the accuracy and reporting of its property. We noted the following: • Eight of 8 (100%) Agency Reports of State Property (C-15) tested contained inaccuracies and did not agree to the Central Inventory System (CIS).
• The Department’s SAMS to GAAP Reconciliation – Capital
Assets (SCO-537) reported approximate differences of $6.5 Million and $1.4
Million in FY07 and FY08, respectively, between the C-15’s and the Capital
Assets Summary (SCO-538) submitted to the Office of the State
Comptroller. While the Department was
unable to identify the underlying cause behind the unreconciled differences
and errors, the Department was able to identify the dollar amounts of the
errors by property asset category.
• Auditors were unable to reconcile Department
property and equipment expenditures processed by the Office of the Comptroller
to either the additions reported on the property listing or the quarterly
C-15 reports.
(Finding 1, pages 9–11)
This finding was first reported in 2002. We recommended the
Department establish a corrective action plan to address controls to ensure
an accurate property listing and reporting for the Department. The Department should reconcile its
property reports and records to the C-15’s on a quarterly basis to ensure the
completeness and accuracy of its property records. Further, we recommended that the Department
maintain adequate documentation supporting their property reports.
Department
officials agreed and stated that they will establish a work group to develop
and implement a corrective action plan to address the deficiencies noted. (For the previous Department
response, see Digest Footnote #1)
INADEQUATE
CONTROLS OVER STATE PROPERTY The Department of
Military Affairs (Department) did not adequately update its property records
in a timely manner. We noted the
following: • Fourteen structures that currently exist that were not
included in the Property Listing.
Eight of these structures are trailers that were transferred to the
Department by the Federal Emergency Management Agency. The Department believes that the remainder
of the buildings were built by the federal government at • Three structures, totaling $17,380, that were on the
Property Listing, but could not be located.
The Department believes that these buildings were either demolished or
moved to another location.
•
Twenty of 25 (80%)
equipment additions tested, totaling $136,064, were not recorded on the
Property Listing in a timely manner.
The equipment was added to the Property Listing between 2 and 200 days
late. In addition, 51 drills and saws,
totaling $14,036, were not added to the Property Listing. • Sixteen of 25 (64%) equipment deletions tested, totaling $5,704, were not recorded on the Property Listing in a timely manner. The equipment was deleted from the Property Listing between 5 and 255 days late. The Department entered all property deletions for the two-year examination period during a two and one-half month period in FY08 in order to catch up on past transactions.
During our site visit testing and walk-through,
we noted:
• 4 of 150 (3%)
equipment items tested, totaling $15,811, were obsolete. • 8 of 150 (5%)
equipment items tested, totaling $9,109, were not at the location specified
on the Property Listing. During our testing of capital leases, we noted
1 of 1 (100%) capital lease items tested, totaling $5,206, was not added to
the Property Listing. (Finding 2,
pages 12-13) This
finding was first reported in 2004. We recommended that
the Department comply with the State Property Control Act, the Administrative
Code, and the Statewide Accounting Management System by ensuring that all
property under its jurisdiction is properly recorded, maintained, and
disposed. Department
officials agreed and stated that they will review their current processes for
ways to improve them to ensure compliance with the applicable rules. (For the previous Department
response, see Digest Footnote #2) OTHER FINDINGSThe remaining findings are reportedly being addressed by the Department. We will review the Department’s progress towards the implementation of our recommendations in our next engagement. AUDITOR’S OPINION
We conducted a compliance
examination of the Department as required by the Illinois State Auditing
Act. We have not audited any financial
statements of the Department for the purpose of expressing an opinion because
the Department does not, nor is it required to, prepare financial
statements. _____________________________________ WILLIAM G. HOLLAND, Auditor General WGH:CML AUDITORS ASSIGNED This examination was performed by the staff of the Office of the Auditor General.
DIGEST FOOTNOTES
#1 – INADEQUATE RECONCILIATION AND
REPORTING OF FIXED ASSETS – Previous Agency Response The Department agreed with
this finding. During this audit
period, the person responsible for property accountability and reporting was
vacant. The Department has since filed
the SPO position and this will greatly assist in correcting
deficiencies. The Department will
establish a corrective action plan.
The C-15 will be prepared based upon the appropriate records. The Department will work with the IOC to
resolve any discrepancies noted in the annual reports. #2 – PROPERTY CONTROL WEAKNESSES –
Previous Agency Response The Department agreed with this finding. During this audit period, the person responsible for property accountability and reporting was vacant. The Department has since filed the SPO position and this will greatly assist in correcting deficiencies. The Department will now be able to comply with the State Property Control Act and the Illinois Administrative Code and will ensure that all equipment is recorded in an accurate and timely manner. |