Compliance Plan Fiscal Year 2019

30 ILCS 5/2-16

 

Statutory Requirement

Public Act 100-0801 amended the Illinois State Auditing Act to provide the following new section:

 

(30 ILCS 5/2-16 new)

Sec. 2-16.  Contract aspirational goals.  The Auditor General shall establish aspirational goals for contract awards substantially in accordance [with] the Business Enterprise for Minorities, Women, and persons with Disabilities Act, unless otherwise governed by other law.  The Auditor General shall not be subject to the jurisdiction of the Business Enterprise Council established under the Business Enterprise for Minorities, Women, and Persons with Disabilities Act with regard to steps taken to achieve aspirational goals.  The Auditor General shall annually post the Office’s utilization of businesses owned by minorities, women, and persons with disabilities during the preceding fiscal year on the Office’s Internet websites.

 

The purpose of this report is to set contracting goals, a plan for achieving those goals, and the results of our efforts as required by P.A. 100-0801.

 

Policy Statement

The Auditor General’s Office adopts the public policies set forth in the Business Enterprise for Minorities, Women, and Persons with Disabilities Act [30 ILCS 575/1].  Specifically, it is the public policy of the Auditor General’s Office to promote and encourage the continuing economic development of minority-owned (MBE) and women-owned and operated businesses (WBE, WMBE) and that minority-owned and women-owned and operated businesses participate in our procurement process as both prime and subcontractors.  It is also the public policy of the Auditor General’s Office to promote and encourage the continuous economic development of businesses owned by persons with disabilities (PBE).  Further, although no specific aspirational goals are established in the Act, it is the policy of the Auditor General’s Office to promote and encourage the economic development of service disabled veteran owned small businesses (SDVOSB) and veteran owned small businesses (VOSB).

 

Legal Basis

The Business Enterprise for Minorities, Women, and Persons with Disabilities Act [30 ILCS 575/] sets specific dollar value aspirational goals for State contracts/subcontracts with MBE, WBE and PBE businesses.  In 2015 the Department of Central Management Services commissioned a disparity study that concluded “[i]n our judgment, the state has a strong basis in evidence to continue its M/FBE program and to employ narrowly tailored remedies to ameliorate discrimination.”  [State of Illinois Department of Central Management Services Disparity Study 2015, Colette Holt & Associates, page 3]  The Auditor General’s Procurement Rules permit the OAG’s Chief Procurement Officer to “establish goals and other such preferences for contracting or subcontracting with businesses owned and controlled by minorities, women and persons with disabilities.”  [44 ILAC 500.1190]

 

Aspirational Goals

The Auditor General’s Office adopts the aspirational goals set forth in the Business Enterprise for Minorities, Women, and Persons with Disabilities Act [30 ILCS 575/].  Specifically, “not less than 20% of the total dollar amount of State contracts. . .shall be established as an aspirational goal to be awarded to businesses owned by minorities, women, and persons with disabilities. . .contracts representing at least 11% shall be awarded to businesses owned by minorities, contracts representing at least 7% shall be awarded to women-owned businesses, and contracts representing at least 2% shall be awarded to businesses owned by persons with disabilities.”  [30 ILCS 575/4]

 

Aspirational Goals Expressed in FY19 Dollar Amounts

All terms are as defined in the Business Enterprise for Minorities, Women, and Persons with Disabilities Act [30 ILCS 575/].  In classifying contractors and subcontractors, we relied upon certifications from the Department of Central Management Services as shown on its website at https://cms.diversitycompliance.com/

 

Beginning of Year - Projected FY19 Contract Dollar Amounts:

FY19 appropriations total $35,347,611 [P.A. 100-586].  Estimated payroll, fringe and travel costs (which are not subject to contracting) are $8 million.  The appropriation balance of $27.3 million represents the approximate dollar value of contracts subject to the aspirational goals during FY19.  Twenty-percent of $27.3 million results in an overall aspirational goal for FY19 of $5,460,000, broken down by category as follows:

 

11% minority-owned

$3,003,000

7% women-owned

$1,911,000

2% persons with disabilities

$546,000

Total FY19 Goal

$5,460,000

 

Mid-year Update as of 11/8/18:

In assessing our progress toward meeting the end-of-year projected FY19 contract dollar amounts, we focused on audit contracts since audit contracts are, by far, the largest subset of the OAG’s contractual expenditures.  As of November 8, 2018, the OAG has entered into $19,384,469 in audit contracts.  Twenty-percent of $19,384,469 million resulted in a mid-year aspirational goal for FY19 of $3,876,894.  Progress toward achieving our FY19 goals based on actual audit contracts/subcontracts as of 11/8/18 is shown below:

 

% Goal by Category

Goal based on $27.3 million (anticipated spend)

Goal based on $19.4 million (actual spend through 11/8/18)

$ Actual Amount with prime/sub at 11/8/18

% Actual Amount with prime/sub at 11/8/18

11% minority-owned

$3,003,000

$2,132,292

$2,302,939

11.9%

7% women-owned

$1,911,000

$1,356,913

$1,604,868*

8.3%

2% persons with disabilities

$546,000

$387,689

$0

0%

Total 20%

$5,460,000

$3,876,894

$3,907,807

20.2%

*The women-owned firm is also a certified minority-owned firm.  The amounts shown in each category are unduplicated (i.e., not reflected in both categories).

 

FY19 Action Plan

Quantitative Results:  Based on the above analysis of our audit contracts/subcontracts, the OAG anticipates fulfilling our MBE and WBE end-of-year aspirational goals for FY19 without taking any further specific actions (such as setting goals for businesses owned or operated by minorities or women on specific procurements).  There are not currently any PBE prequalified firms in our audit program.  There are no PBE, SDVOSB or VOSB firms certified by CMS in purchasing codes relevant to our audit program.

 

Qualitative Results:  We are mindful of barriers to contracting/subcontracting with the OAG that may impede participation in our audit program by MBE, WBE, WMBE, PBE, SDVOSB and VOSB businesses.  As a consequence, we will take the following actions during FY19:

 

1.      Determine whether there are CMS-certified MBE, WBE, WMBE, PBE, SDVOSB and VOSB accounting firms that appear to have the experience needed to participate in our program but that are not currently prequalified to do business with the OAG;

2.      Reach out to those firms with information on our prequalification process and identify a liaison with our Office to whom those firms can direct their specific questions about our audit program, procurement opportunities, and prequalification requirements;

3.      Include a statement within any requests for proposals issued by the OAG on or after November 1, 2019 (i) encouraging MBE, WBE, WMBE, PBE, SDVOSB and VOSB certified firms to participate in our program either as primary or subcontractors and (ii) encouraging all other firms to consider subcontracting with certified and prequalified MBE, WBE, WMBE, PBE, SDVOSB and VOSB firms.

 

We will continue to monitor progress toward our aspirational goals and consider, as necessary, setting separate aspirational goals on specific prime contracts and purchase orders with subcontracting possibilities.

 

End of Year - Actual FY19 Contract Dollar Amounts:

Quantitative Results:  Total expenditures in FY19 were $31,375,733.  Of that amount, total expenditures subject to contracting were $23,930,443, after excluding detail objects codes that are not competitively procured, such as personal services and fringe benefits, travel reimbursements, employee reimbursements, postage, and internal service fund charges. 

 

 

% Goal by Category

FY19 Goal based on $23,930,443 in actual expenditures

$ Amount expended in FY19 toward goals (prime & sub)

% Amount expended in FY19 toward goals (prime & sub)

11% minority-owned

$2,632,349

$2,891,901

12.08%

7% women-owned

$1,675,131

$1,914,764*

8%

2% persons with disabilities

$478,609

$0

0%

Total 20%

$4,786,089

$4,806,665

20.08%

*The women-owned firm is also a certified minority-owned firm.  The amounts shown in each category are unduplicated (i.e., not reflected in both categories).

 

Qualitative Results:  The following actions were undertaken during FY19 to enhance our outreach to minority-owned, women-owned and persons with disabilities-owned firms.

 

  1. Accessed CMS’ BEP/VBP Vendor Portal at https://cms.diversitycompliance.com/.

 

  1. Input NIGP (National Institute of Government Purchasing) codes to identify vendors who are certified in codes that may contain skill sets relevant to our audit program: 

 

91804:  Accounting, Auditing, Budget Consulting

94620:  Audit Services

94631:  Certified Public Accountant (CPA) Services

96403:  Accounting, Auditing, Bookkeeping Personnel

 

  1. Developed list of new possible BEP/VBP audit firms (eliminated firms already in our program).

 

  1. Letters were sent 12/4/18 to 21 firms that were identified in CMS’ BEP/VBP portal under the applicable NIGP codes that were not already prequalified with the OAG.  Firms were invited to contact a designated OAG liaison with any questions concerning prequalification and participation in our audit program.  As a result, four possible new BEP firms contacted our office for further information about participating in our audit program.

 

End of Year Summary:  The OAG exceeded the statutory aspirational goals for contracting with minority-owned and women-owned firms.  There are no PBE, SDVOSB or VOSB firms currently certified by CMS in purchasing codes relevant to our audit program.  Although we met our aspirational goals for minority-owned and women-owned contractors in FY19, our program continues to rely heavily upon a few minority-owned and women-owned firms.  During FY20, we will continue our efforts to identify and solicit participation in our audit program by additional minority-owned and women-owned firms.