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2018ANNUAL REPORT

STATE OF ILLINOISOFFICE OF THE AUDITOR GENERAL

Frank J. Mautino, Auditor General

March 1, 2019

The Honorable Members of the General AssemblyThe Legislative Audit CommissionThe Honorable JB Pritzker, GovernorCitizens of Illinois

Ladies and Gentlemen:

Enclosed is the Annual Report of the Auditor General’s Office, submitted in compliancewith Section 3-15 of the Illinois State Auditing Act.

The mission of the Auditor General’s Office has been, and will continue to be, to present objective, balanced and independent audits. I believe this Annual Report reflects theOffice’s success in fulfilling that goal during calendar year 2018.

I would like to thank the members of the General Assembly, members and staff of theLegislative Audit Commission, and the staff of the Auditor General’s Office, through whoseefforts the reported accomplishments were made possible.

Yours truly,

FRANK J. MAUTINO Auditor General

SPRINGFIELD OFFICE:

ILES PARK PLAZA

740 EAST ASH • 62703-3154

PHONE: 217-782-6046

FAX: 217-785-8222 • TTY: 888-261-2887

INTERNET ADDRESS: [email protected]

RECYCLED PAPER: SOYBEAN INKS

CHICAGO OFFICE:

MICHAEL A. BILANDIC BLDG. • SUITE S-900

160 NORTH LASALLE • 60601-3103

PHONE: 312-814-4000

FAX: 312-814-4006

OFFICE OF THE AUDITOR GENERAL

FRANK J. MAUTINO

Overview . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4

Public Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5

Organizational Chart . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6

Compliance Examination Program . . . . . . . . . . . . . . . . . . . . . . . . . . 7 Accountability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8 Federal Auditing/Statewide Single Audit Update . . . . . . . . . . . . . . 16

Performance Audit Program . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17 Performance Audits Completed in 2018 . . . . . . . . . . . . . . . . . . . . 18 Performance Audits in Progress . . . . . . . . . . . . . . . . . . . . . . . . . 21

Information Systems Audit Program . . . . . . . . . . . . . . . . . . . . . . . . 25 ISA Findings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26

OAG Fraud Hotline . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28

Other Office Responsibilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29

Continuing Professional Education and Training Requirements . . . . . . . . 30

Claims Due the State and Methods of Collection . . . . . . . . . . . . . . . . . 31

Summary of Appropriations and Expenditures . . . . . . . . . . . . . . . . . . 31

Financial Audits and Compliance Examinations Completed . . . . . . . . . . 33

Regional Office of Education and Intermediate Service Center Financial Audits Completed in 2018 . . . . . . . . . . . . . . . . . . . . . . . . 36

Performance Audits 1980-2018 . . . . . . . . . . . . . . . . . . . . . . . . . . . 37

TABLE OF CONTENTS

Frank J. Mautino became Auditor General of the State of Illinois on January 1, 2016.Prior to his appointment as Auditor General,

Mr. Mautino was a member of the Illinois House of Representatives, and served as a co-chairman of the Legislative Audit Commission.

As a constitutional officer, the Auditor Generalaudits public funds of the State and reports findingsand recommendations to the General Assembly and to the Governor. The establishment of theAuditor General under the Legislature is important.It ensures that the Legislature, which grants fundsand sets program goals, will ultimately review program expenditures and results. Thus, agencies are accountable to the people through their electedrepresentatives.

The Auditor General’s Office performs several types of audits to review State agencies. Financialaudits and Compliance examinations are mandatedby law. They disclose the obligation, expenditure,receipt, and use of public funds. They also provideagencies with specific recommendations to helpensure compliance with State and Federal statutes,rules and regulations.

Performance audits are conducted at the request oflegislators to assist them in overseeing State government. Programs, functions, and activities arereviewed according to the direction of the audit resolution or law directing the audit. The General

Assembly may then use the audit recommendations todevelop legislation for the improvement of government.

Information Systems audits are performed on the State’s computer networks. They determine whether appropriate controls and recovery procedures existto manage and protect the State’s financial and confidential information.

Copies of all audits are made available to membersof the Legislature, the Governor, the media, and the public. Findings include areas such as accountsreceivable, computer security, contracts, expenditurecontrol, leases, misappropriation of funds, personneland payroll, property control, purchasing, reimburse-ments, telecommunications, and travel.

Audit reports are reviewed by the Legislative AuditCommission in a public hearing attended by agencyofficials. Testimony is taken from the agency regarding the audit findings and the plans the agency has for corrective action. In some cases, the Commission may decide to sponsor legislation to correct troublesome fiscal problems brought tolight by an audit. All outstanding recommendationsare reviewed during the next regularly scheduledaudit of an agency or, if the Commission requests, aspecial interim audit may be conducted.

OVERVIEW

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An audit and its supporting workpapers,unless confidential by, or pursuant to, law orregulation, are public documents once the

report has been officially released to the Legislature,the public, and the press. These documents areavailable for review in our Springfield and Chicagooffices.

The following information is also available byrequest:

• Late Filing Affidavits

• Emergency Purchase Statements

Information about the Auditor General is availableon the Internet. This information includes reportsummaries and full report texts.

OUR INTERNET WEB SITE ADDRESS IS:www.auditor.illinois.gov

OUR E-MAIL ADDRESS IS:[email protected]

PUBLIC INFORMATION

PUBLIC INFORMATION IS AVAILABLE BY WRITING:

FOIA OfficerOffice of the Auditor General

Iles Park Plaza740 E. Ash St.

Springfield, IL 62703-3154

Springfield ..............Telephone: (217) 782-6046...............................................Fax: (217) 785-8222

Chicago ..................Telephone: (312) 814-4000...............................................Fax: (312) 814-4006

TTY: (888) 261-2887

OUR FRAUD HOTLINE IS:

Toll-Free: (855) 217-1895

Visit our web site at www.auditor.illinois.gov for full details or for an on-line reporting form.

TTY: (888) 261-2887

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ORGANIZATIONAL CHART

As of December 31, 2018, there were 87 employees. Eighty-two werelocated in the Springfield Office and five in the Chicago Office. v

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DEPUTYAUDITOR GENERAL

LEGAL COUNSELFISCAL OFFICER

PERFORMANCEAUDITS

INFORMATIONSYSTEMS AUDITS

FINANCIAL/COMPLIANCEAUDITS

CHIEF OFSTAFF EXECUTIVE

SECRETARY TOAUDITOR GENERAL

AUDITOR GENERAL

INSPECTORGENERAL

THE COMPLIANCE EXAMINATION PROGRAM

The Auditor General is required by the Illinois StateAuditing Act to conduct, as is appropriate to theagency’s operations, a financial audit and/or

compliance examination of every State agency at leastonce every two years. These audits and examinationsinform the public, the Legislature, and State officersabout the obligation, expenditure, receipt, and use ofpublic funds, and provide State agencies with specificrecommendations to help ensure compliance with Stateand Federal statutes, rules, and regulations.

The Compliance Audit Division conducted engagementsat 83 different agencies during the FY 2017 audit cycle.These engagements encompassed compliance examinations, financial audits, and/or federal audits. Staff auditors conducted 30 of these audits. The remainder were performed by public accounting firmsunder the general direction and management of theAuditor General’s audit managers.

The Illinois Constitution of 1970 revised and expandedthe traditional financial audits conducted of State agencies to focus on compliance with legislative intentand proper performance of governmental operations, aswell as financial accountability.

The compliance program has a positive impact on the operations of State government because agenciesimplement many of the recommendations made in these reports. Compliance reports are also reviewed by the Legislative Audit Commission, where legislatorsquestion agency directors about audit findings and the corrective action they plan to take. Legislators and their staffs also use compliance reports during appropriation hearings in the spring legislative session.To maximize the usefulness of audit information, theOffice attempts to deliver audits as early as possible inthe legislative session. v

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ACCOUNTABILITY

A number of reports issued since our last annualreport had findings that were critically importantfrom an accountability standpoint. A brief summaryof some of these findings follows:

PROBLEMS WITH THE DECOMMISSIONING OF THE ILLINOISHEALTH INFORMATION EXCHANGE The Illinois Health Information ExchangeAuthority’s (Authority) purpose was to promote andfacilitate the widespread adoption of electronic medical records and participation in the IllinoisHealth Information Exchange (ILHIE) amonghealthcare providers. According to Authority officials, the ILHIE was decommissioned by June 30, 2016.

The Authority, the Office of the Governor, and theDepartment of Healthcare and Family Services(Department) entered into an interagency agreementon September 23, 2016. This interagency agreementincluded the following terms:• Section 2.03 noted all of the Authority’s remainingstaff “shall ultimately report to, and be under themanagement control of the Department’s ChiefOperating Officer/Chief of Staff.”

• Section 3.02 required the Authority to designatethe Department as its fiscal agent for the purposesof distributing moneys from the HealthInformation Exchange Fund and may, at theDepartment’s discretion, deposit future moneysreceived into the Health Information ExchangeFund.

• Section 3.03 required the Authority to designatethe signature authority of its Executive Director“in its entirety” to the Department’s Director.

In practicality, this interagency agreement ended theAuthority’s existence as an independent, standaloneentity and reorganized the functions of the Authorityinto the Department. We noted this change wouldcontravene the provisions of the Illinois Health

Information Exchange and Technology Act (20 ILCS 3860/10), which created the Authority as “an instrumentality and an administrative agencyof the State.”

The Constitution (Article V, Section 11) allows theGovernor to reassign functions among or reorganizeexecutive agencies directly responsible to theGovernor. If the reassignment or reorganization contravenes a statute, the Executive Order must bedelivered to the General Assembly. After theGovernor complies with the delivery provisions ofthe Constitution, the General Assembly has 60 calendar days after the delivery of the ExecutiveOrder to have one house, by a record vote, disapprove of the reassignment or reorganization to prohibit the reassignment or reorganization from occurring.

Some of the other significant problems we notedwere as follows:• It does not appear that the Authority has an adequate plan for its future operations.

• The Authority failed to adopt a comprehensivedecommissioning plan for ILHIE which completely addressed the destruction of personallyidentifiable information and health data of individuals within the ILHIE.

• The Authority did not ensure data on the ILHIEwas properly destroyed.

• The Authority failed to comply with the StateRecords Act, resulting in an improper destructionof the State’s records.

We recommended the Department, on behalf of the Authority, develop and operate ILHIE, or seeklegislative remedy; take action to ensure all of theILHIE’s data is adequately protected from disclosureand secured until it can be verified as destroyed; and take action to ensure all of the Authority’sremaining records are retained and only destroyed in accordance with the provisions of the State Records Act.

Department officials accepted the recommendations.

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ACCOUNTABILITY (CONT.)

LATE PAYMENT OF STATUTORILY MANDATED TRANSFERSThe Office of the Comptroller did not make all statutorily mandated transfers between State fundswithin established timeframes, as required.

The Office of the Comptroller processed transfersfrom 31 to 479 days after the mandated transfer date.The late transfers outstanding as of and paid afterJune 30, 2017, totaled $2.14 billion. Failure to makeinter-fund transfers within applicable timeframesrepresents noncompliance with State law and mightresult in delayed use of appropriated funds.

Comptroller officials stated the late payment oftransfers occurred because of cash managementdecisions and prioritization due to the lack of available cash in the State Treasury. Further, somestatutory provisions relating to transfers contain language such as “as soon as possible.”

We recommended the Comptroller make transferswithin timeframes established by applicable statute.While we realize that lack of available funds in the State Treasury requires prioritization and cashmanagement decisions, we also recommended theComptroller continue in its efforts to make transfersin as timely a manner as possible.

Comptroller officials accepted the recommendationand stated that taking into account the financial condition of State funds facing at times a $16 billionbacklog, they will continue efforts to make therequired transfers to the extent possible given all the competing payments from limited resources in theState Treasury.

FAILURE TO IDENTIFY FINANCIAL STATEMENT REPORTING ERRORSThe Office of the Secretary of State (Office) didnot identify the required adjustments necessary toensure the Office’s audited financial statements were accurately presented in accordance with generallyaccepted accounting principles (GAAP).

The Office’s financial statements were originallysubmitted to the Illinois Office of the Comptrollerwith errors. The government-wide adjustments onthe Reconciliation of Statement of Revenues,Expenditures and Changes in Fund Balance ofGovernmental Funds to Statement of Activities were materially misstated by approximately$340,000,000, primarily due to incorrect pensionadjustments. In addition, the governmental fundsbalance sheet did not balance because total assetsand deferred outflows of resources did not equaltotal liabilities, deferred inflows of resources andfund balances by $6,000 on the Statement of NetPosition and Governmental Funds Balance Sheet.The Office submitted revised financial statementswith the previous issues corrected, however, additional misstatements were noted.

We recommended the Office implement internalcontrol procedures to assess the risk of material misstatements of the Office’s financial statementsand devote adequate resources to identify such misstatements during the financial statement preparation and review process.

Office officials agreed with the recommendation and stated corrective measures will be taken in order to ensure that documentation of Office financial reporting procedures is current and complete, and that appropriate resources are utilizedto ensure a more accurate and timely review ofreports prior to submission.

INADEQUATE PROCESS TO DETERMINECLAIMS LIABILITIESThe Illinois Workers’ Compensation Commission(Commission) Self-Insurers Security Fund (Fund)had an inadequate process to determine the claimsliabilities of the Fund.

Background The Self-Insurers Advisory Board (Board) within the Commission was established by the Workers’Compensation Act (Act) to provide oversight of self-insurers, ensure the employees of insolvent self-insurers continue to receive their benefits due underthe Act and the Workers’ Occupational Diseases Act

(together, the “Acts”) by administering the Fund,and determining the assessments to levy against all private self-insurers to ensure resources are available to continue paying benefits due to employees of insolvent self-insurers.

If a self-insurer becomes insolvent and can no longerpay its workers’ compensation obligations, the Boardassumes the outstanding obligations under the Actsof the insolvent self-insurer and takes action to collect, recover, and enforce all of the various formsof security provided by the insolvent self-insurer.The Board then directs the Commission to depositresources derived from the security into the Fund.

The Fund will continue to pay, in full, the insolventself-insurer’s obligations due under the Acts as longas the insolvent self-insurer’s employees remain disabled. Due to the nature of workers compensationclaims, these costs can extend out over severaldecades and remain subject to a wide variety of factors impacting the actual cost of the obligationdue to the employees, including necessary medicalprocedures, cost inflation, and each employee’s life expectancy.

Review of Accounting Principles GenerallyAccepted in the United States Governmental Accounting Standards BoardStatement (GASBS) No. 34 requires the presentationof proprietary funds, such as the Fund, under theaccrual basis of accounting and the economicresources measurement focus. Further, GASBS No.34 notes transactions occur when something of valuepasses between two or more parties. Additionally,National Council on Governmental AccountingStatement No. 1 states that under the accrual basis of accounting, transactions are generally recordedwhen the transaction occurs, regardless of when cash is received or disbursed.

Additionally, GASBS No. 62 requires estimatedlosses be accrued if both (1) information availableprior to the issuance of the financial statements indicates it is probable a liability has been incurredas of the date of the financial statement, and (2) theamount of the loss can be reasonably estimated. Ifeither or both of these conditions cannot be satisfied,GASBS No. 62 requires the exposure be disclosed inthe notes to the financial statements.

Application of the Accounting Literature to theFund’s Environment As such, the Fund must develop an accountingmethodology to properly account for incurred butnot reported (IBNR) claims liabilities and the associated administrative costs necessary to continueprocessing the amounts due to the employees’ overtime as of the date when it is both (1) probable a liability has been incurred, and (2) the amount canbe reasonably estimated, or disclose the situation inthe Fund’s notes if one or both conditions are notmet. This is necessarily an accounting estimate andimpacts the Board’s determination of assessmentsneeded to ensure the Fund has sufficient resources tocarry out its activities under the Act.

We noted the Commission’s current methodology for its claims liability generally reflects cash basis or modified accrual basis accounting for the Fund’sunpaid medical claims and unpaid administrativeand legal expenses. These liabilities must be reported on the full accrual basis of accounting.

During the audit process, we recommended theCommission adopt a claims reserve analysis to properly estimate the Fund’s net unpaid claims liability. This process would calculate both knownclaims (such as established rates for indemnity payments) and IBNR claims where actuarial techniques are used to calculate the total liability of each individual claim from an insolvent self-insurer’s employees, and recognize that expense inthe period when it becomes probable a liability hasbeen incurred. When these claims are ultimately paidfrom the Fund, the Fund would reduce its alreadyrecorded liability for unpaid claims.

A formula for determining the Fund’s net claims liability from each claim is:

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Add: • Gross Unpaid Indemnity Claims• Gross Unpaid Medical Claims• Gross Unpaid Administrative and Legal Expenses

Less: • Excess Insurance Recoveries• Security Collected from Insolvent Self-Insurers

Recognized Net Unpaid Claims Liability

Material and Pervasive Misstatement After extensive discussions between the auditors and the Commission, the Board and Commissionultimately did not adopt a claims reserve analysisapproach to calculate claims liabilities in accordance with the accrual basis of accounting. The Board and Commission kept its prior claimsmethodology which did not reflect the accrual basisof accounting.

As a result of the Commission not adopting a morerobust process to determine the estimated claims liabilities of the Fund, the auditors expressed anadverse opinion of the Fund financial statements asof and for the year ended June 30, 2016.

We recommended the Commission, in conjunctionwith the Board, take action to ensure its claims liabilities, including the Fund’s unpaid medicalclaims and unpaid administrative and legal expenses,are properly presented in accordance with the accrual basis of accounting.

The Commission agreed with this recommendation.

NONCOMPLIANCE WITH STATUTORILYMANDATED TIME LIMITSThe Department of Human Rights (Department)did not meet the procedural time limits set forthwhen a charge of a civil rights violation has been filed.

In our review of 40 employment cases filed with theDepartment, we noted the following: • In 28 (70%) of the cases tested, a copy of thecharge to the respondent was served 1 to 115 dayslater than the required 10 day period.

• In 25 (63%) of the cases tested, notices to thecomplainant of the complainant’s rights to file acomplaint with the Human Rights Commission orcommence a civil action in the appropriate circuitcourt were served 1 to 115 days later than therequired 10 day period.

• In 34 (85%) of the cases tested, notice to therespondent of the complainant’s right to file with

the Human Rights Commission or commence acivil action in the appropriate circuit court was notserved. The required time period to send the noticeis 10 days.

We recommended the Department timely notify theappropriate parties as mandated by the IllinoisHuman Rights Act.

Department officials accepted the recommendation.

NONCOMPLIANCE WITH THE ILLINOIS LOTTERY LAWThe Department of the Lottery (Department) didnot transfer the required amount to the CapitalProjects Fund (Fund 694), as required by the IllinoisLottery Law (Law), and did not properly disclose thenoncurrent portion of the liabilities associated withnot making the transfer in its financial statements.

During testing, the auditors noted the amount owedto Fund 694 from the State Lottery Fund (Fund 711)has grown to $98.382 million. This amount has beensteadily increasing since June 30, 2015, because theactual annual amount of cash transferred to Fund694 from Fund 711 has been less than required bythe Law. The following is an analysis of the actualtransfers and cash deposits into Fund 694 andamounts due to Fund 694 (in thousands) over thepast three fiscal years:

In analyzing Fund 711’s current assets for the lastthree years, there were sufficient funds availablefrom current assets to pay current liabilities (lessamounts due to Fund 694) with current assets leftover. The following summary analysis shows Fund711’s current assets, current liabilities (excluding theamount due to Fund 694), and cash balances (inthousands) over the past three fiscal years:


Finally, the cash ratio, a comparison of total cash tocurrent liabilities, is one metric to analyze liquidity,or ability to satisfy an entity’s short-term obligationswith cash. The higher the cash ratio, the more capa-ble an entity is to pay its current liabilities. The cashratio is generally a more conservative look at anentity’s ability to cover its liabilities than many otherliquidity ratios because other current assets, includ-ing accounts receivable, are left out of the equationand some current liabilities have not yet beeninvoiced by vendors. A cash ratio of 1.0 or greater isan indicator an entity is better positioned to cover itscurrent liabilities. The following is a summaryanalysis and chart of Fund 711’s increasing cashratio (in thousands) over the past three fiscal years:

The Illinois Lottery Law (Law) (20 ILCS1605/9.1(o)) requires the Department distribute theproceeds of lottery tickets and shares sold in the fol-lowing priority order and manner:1) to pay prizes and retailer bonuses;2) to pay costs related to administering the Lottery(including all amounts due under theManagement Agreement to the Private Manager);

3) to distribute the net revenue from specialty ticketsinto specific State funds, as provided by §21.5, §21.6, § 21.7, § 21.8, and § 21.9 of the Law;

4) to transfer into the Common School Fund (Fund412) an amount equal to the proceeds transferredinto Fund 412 from Fund 711 in Fiscal Year2009, as adjusted for inflation; and,

5) to deposit, on or before the last day of each fiscalyear, any remaining proceeds into Fund 694.

In addition, the auditors noted the Department hadnot properly disclosed its current and noncurrent liabilities associated with the interfund balances due to Fund 694 from Fund 711. Department management corrected this error in the Department’sfinal financial statements.

Department officials stated the insufficient transferswere due to:1) excess transfers from Fund 711 to the Fund 412which occurred up to June 30, 2009; and,

2) the Law’s annual deadline for transferring cashfrom Fund 711 to Fund 694 occurring on the lastday of the State’s fiscal year, which does notallow the Department to perform a close of itsaccounting records to determine the actualamount of net proceeds to transfer into Fund 694.

Further, Department officials indicated the development of a reasonable estimate is complicatedby an unknown liability for prizes won (particularly,if a jackpot was to be won) on June 30 but after the transfer would have to be completed and the fact the Lottery has to maintain sufficient cashreserves to continue normal operations until non-cash assets at June 30 are converted to cash, such as accounts receivable.

In regards to the excess transfers referenced by theDepartment’s management, until June 30, 2009, theDepartment’s predecessor agencies had historicallymade cash transfers into Fund 412 in excess of Fund 711’s accrual basis net income. These excesstransfers were recorded as a due from Fund 412 onFund 711’s financial statements (effectively, anaccount receivable). As of June 30, 2009, thisamount of excess transfers was $69.9 million. AtJune 30, 2012, the Department determined – due tothe statutory changes within Public Act 096-0034

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(effective on July 13, 2009) – the excess contributions would not be collected. As such, the Department recorded an adjustment of $69.842 million to reclassify the due from Fund 412as a transfer. Through the end of fieldwork, theDepartment has not been able to recoup the $69.9 million in excess transfers, which has caused a shortage of cash available to perform current period transfers.

We recommended the Department study its estimation process for the amount due to Fund 694so the annual transfer can better approximate theamount required to transfer in accordance with theLaw, absent a statutory change in the transfer date.Further, the Department should continue to seek alegislative remedy to allow the Department to “true-up” its annual required transfer after finalizingits accounting records. In addition, the Departmentshould properly report the current and noncurrentportions of the amount due to Fund 694 from Fund711 during its financial reporting process.

Department officials accepted the recommendation.

INADEQUATE CONTROLS OVER FISCALLY MONITORING MANAGED CAREORGANIZATIONS The Department of Healthcare and FamilyServices (Department) failed to implement adequatefiscal-related monitoring controls over ManagedCare Organization (MCO) contracts. In addition, the Department failed to exercise or enforce fiscal-related monitoring controls as provided for in thevarious MCO contracts. Since 2013, the Departmenthas paid the 12 MCOs approximately $22.5 billion.

While testing the contracts the Department enteredinto with the 12 MCOs, we noted the Departmentdid not:• have a review process in place to ensure MCOcapitation payments were accurate. As a result, we noted instances totaling $619,455 for which theDepartment had a net underpayment to the MCOsfor services paid during fiscal year 2017.

• have a review process in place to ensure the

correct percentage of the MCO incentive payments, manually calculated, were withheld inaccordance with the MCO contracts. As a result,we noted instances totaling $10,991,086 for whichthe Department overpaid the MCOs during fiscal year 2017 by failing to withhold at the rateestablished by the contract.

• review or audit self-reported encounter data(valid claims of services rendered by medicalproviders) submitted to the Department by theMCOs as required by the MCO contracts and the federally-approved State Plan.

• receive all healthcare program encounter data. • review or audit the MCOs denial of claims data. • review MCO actual administrative costs or othernon-benefit costs.

• calculate and finalize the MCOs’ annual MedicalLoss Ratio calculations for mandatory enrollmentfor Coverage Years 2013, 2014, and 2015. Thisprovision of the MCO contracts is included todetermine whether the MCOs met established benefit levels for the coverage year and provides a mechanism for the State to recoup payments thatfail to meet the target.

• conduct internal audits over the Managed CareProgram for mandatory enrollment since 2013.

We recommended the Department take immediateaction to exercise and enforce monitoring andaccountability provisions established in the contractswith the MCOs. We also recommended theDepartment establish and implement additionalinternal controls, internal audits, and on-site reviewsto fiscally monitor the MCOs to ensure the State’sMedicaid program is carried out in an effective, efficient, and economical manner.

The Department accepted the recommendation.

INADEQUATE CONTROLS OVER STATEPROPERTYThe Department of Agriculture (Department) didnot exercise adequate controls over State property.

The following are some of the items we noted


during our testing of State property within theDepartment:• We were unable to locate 3 of 60 items totaling$23,254 from the property listing.

• Twenty-four of 60 items could not be traced to theproperty listing.

• We noted 16 of 120 items were not tagged.• The Department was not able to provide adequatesupporting documentation for additions or deletions during Fiscal Year 2016 and 2017. As aresult, we were not able to perform additions anddeletions testing of State property items.

During our testing of the quarterly Agency Report ofState Property (Form C-15), we noted the following:• Adequate supporting documents for the additionsand deletions for Fiscal Years 2016 and 2017 weremissing. As a result, we were not able to verify the accuracy of the amounts reported or reconcileDepartment records with Comptroller’s record for equipment expenditures. In addition, we wereunable to determine whether C-15 errors noted in the prior examination were corrected by theDepartment.

• Three of 8 Form C-15s were not submitted timely.• Five of 8 Form C-15s contained mathematicalerrors in totals and the beginning balances did notagree with ending balances of previous quarter.

We recommended the Department strengthen its procedures over property and equipment to ensureaccurate and timely recordkeeping and accountabili-ty for all State assets. We also recommended theDepartment incorporate internal review procedureswithin its fixed assets reporting function to ensurethe capital asset information is complete and properly recorded and accounted for to permit thepreparation of reliable financial information andreports to the Illinois Office of the Comptroller.

Department officials agreed with the recommenda-tion and stated new procedures resulting from theDepartment’s conversion into the new EnterpriseResource Program, with SAP replacing much of thecurrent software and programs that are used by theDepartment today that are very out of date, shouldclear up much of the confusion surrounding propertyand assets held by the Department.

WEAKNESSES IN INTERNAL CONTROLOVER FINANCIAL REPORTING The Department of Central Management Services(Department) year-end financial reporting in accordance with generally accepted accounting principles (GAAP) to the Illinois Office of the StateComptroller contained errors in the determination of certain year-end account balances.

During the audit of the June 30, 2017 financial statements we noted the following errors for whichthe Department revised their financial statements: • The Department understated accrued liabilities in the Health Insurance Reserve Fund by $11.849million due to the exclusion of certain prescriptiondrug benefit liabilities. This misstatement alsoresulted in an understatement of the amounts due to this fund from the General Revenue Fundand Road Fund.

• The Department understated accrued liabilities inthe Local Government Health Insurance ReserveFund, the Teacher Health Insurance Security Fund, and the Community College HealthInsurance Security Fund by $247 thousand, $2.032 million, and $199 thousand, respectively,due to the exclusion of certain prescription drug benefit liabilities.

• In the prior fiscal year, the Department understatedtheir accrued liabilities and benefit payments inthe Community College Health Insurance SecurityFund due to a mathematical error when calculating

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the accrued liability. The Department restated itsfinancial statements as of July 1, 2016, to correctfor these errors.

• The Department overstated accounts receivable inthe Health Insurance Reserve Fund by $12.423million due to including a deposit in transit inaccounts receivable and cash. It should not havebeen included in accounts receivable. This mis-statement also resulted in an understatement of theamounts due to this fund from the GeneralRevenue Fund and Road Fund.

• The Department overstated accounts receivable inthe Local Government Health Insurance ReserveFund, the Teacher Health Insurance Security Fund,and the Community College Health InsuranceSecurity Fund by $296 thousand, $1.898 million,and $215 thousand, respectively, due to includinga deposit in transit in accounts receivable andcash. It should not have been included in accountsreceivable.

We recommended the Department implement procedures and cross-training measures throughoutthe Department to ensure required financial information is submitted to those responsible forfinancial reporting in a timely, accurate and complete manner. This should include allocating sufficient staff resources and the implementation offormal procedures to ensure adequate and reliablefinancial information is prepared and submitted tothe Office of the State Comptroller. We also recommended these procedures address all elementsof the Department’s financial reporting processincluding, but not limited to, accruals for liabilitiesand receivables, supervisory review of supportingspreadsheets for data accumulation, and the preparation of management estimates.

The Department agreed with the finding and statedthey will strive to implement cross-training measuresand financial reporting procedures to ensure thetimeliness, accuracy, reliability and reasonableness

of data utilized to perform financial reporting.Additionally, the Department stated they willcontinue to work diligently to fill key positions toensure an independent, internal analytical review ofcalculations is documented and completed timely.

INADEQUATE INTERNAL CONTROLS OVER COMMODITIESThe Department of Public Health (Department)did not exercise adequate internal controls over its commodities inventories. The Department reported a commodities inventory balance of $5,574,641 atJune 30, 2017.

During testing, we noted nine of 22 (41%)Department programs or divisions did not report thedollar amount of their commodities inventory in theJune 30 balance.

Due to these conditions, the accountants were unable to conclude the Department’s populationrecords were sufficiently precise and detailed underthe Attestation Standards promulgated by theAmerican Institute of Certified Public Accountants(AT-C § 205.35) to test the Department’s commodities inventories.

We recommended the Department implement procedures to maintain records of its complete commodities inventories to ensure accurate accounting records and reports.

Department officials concurred with the finding andstated the Department will implement procedures tostrengthen internal controls over the reporting ofcommodities inventories. They further stated, in aneffort to accurately report commodities inventories,all programs will be advised of the importance ofensuring that June 30 balances are reported.


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STATEWIDE SINGLE AUDIT UPDATE

The purpose of the Statewide Single Audit is to ful-fill the State mandate in accepting federal funding.It includes all State agencies that are part of the pri-mary government and expend federal awards. Intotal, 44 Illinois State agencies expended federalfinancial assistance in FY 2017.

The Schedule of Expenditures of Federal Awards(SEFA) reflects total expenditures of approximately$27.5 billion for the year ended June 30, 2017.Overall, the State participated in 363 different federal programs; however, 10 of these programs or program clusters accounted for approximately86.9% of the total federal award expenditures.

Overall, 11 State agencies accounted for approximate-ly 98.8% of all federal dollars spent during FY17.

Our audit testing focused primarily on the 30 majorprograms expending about $25.850 billion in federal awards.

Our report contained 72 findings related to programsat 13 State agencies.

FEDERAL AUDITING

FEDERAL AGENCIESPROVIDING FEDERAL FUNDING

For the year ended June 30, 2017U.S. Department MillionsHealth & Human Services $ 12,325.8Education 5,984.0Agriculture 4,156.6Labor 2,197.1Transportation 2,181.7All Others 660.4Total Federal Award Expenditures $ 27,505.6

Source: FY 2017 State of Illinois Single Audit Report

SUMMARY OF FEDERALSPENDING BY STATE AGENCY

For the year ended June 30, 2017Agency MillionsHealthcare and Family Services $ 10,192.7Human Services 4,773.7Student Assistance Commission 4,318.4Board of Education 2,337.1Transportation 2,177.7Employment Security 2,050.0Commerce & Economic Opportunity 412.7Children & Family Services 391.5Public Health 256.3Environmental Protection Agency 166.8Emergency Management Agency 105.8All Others 322.9Total Federal Spending $ 27,505.6

Source: FY 2017 State of Illinois Supplemental Report ofFederal Expenditures by Agency/Program Fund.

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Performance audits are conducted at the requestof legislators to assist them in their oversightfunction. Based on the scope specified in the

resolution or the law requesting the audit, Stateagencies’ programs, functions, and activities arereviewed. The audits determine if the services areprovided as intended by the General Assembly anddirectly impact and improve agency operations.

The General Assembly uses performance audit information to develop legislation, to deal withbudgetary issues, and to direct agencies to improveprograms. Some audits produce immediate changes.For example, our 2016 audit of the State MoneysProvided to the Criminal Justice InformationAuthority for Community Based Violence PreventionPrograms identified several issues related to monitoring grants and recovering unspent grantfunds. Legislation was passed in the Spring of 2018which addressed some issues raised in our audit.Among several issues addressed, a provision wasadded requiring grantees to maintain grant funds in a separate account, which specifically addressedRecommendation Number 15 in our audit.

In other instances, significant changes may not beseen for several years. The length of time it takes tosee changes is due to the process of transforming theaudit findings and recommendations into legislativebills and converting bills into law; additionally, once a law is implemented, the effects may not beapparent for some time.

The National State Auditors Association (NSAA)established the Excellence in Accountability Awards Program in 2003 to recognize outstandingperformance audits and special projects.Performance audits performed by the Office of theAuditor General (OAG) have received five NSAAawards in past years:

• 2014 Neighborhood Recovery Initiative audit(Honorable Mention);

• 2012 Management Audit of the Department ofState Police’s Administration of the FirearmOwner’s Identification Act;

• 2007 Performance Audit of the Mass TransitAgencies of Northeastern Illinois: RTA, CTA,Metra, and Pace;

• 2004 Management and Program Audit of the RendLake Conservancy District; and

• 2003 Management Audit of the Illinois State TollHighway Authority.

Another national organization, the NationalLegislative Program Evaluation Society (NLPES),also has an Impact Award which is given annually toaudits that demonstrate significant dollar savings,program improvements, or impact from a legislativeand public perspective. The OAG has received theNLPES award for many audits as well:• 2016 Program Audit of the College of DuPage;• 2014 Neighborhood Recovery Initiative audit;• 2012 Management Audit of the College Illinois!Prepaid Tuition Program’s AdministrativeOperations;

• 2012 Management Audit of the Department ofState Police’s Administration of the FirearmOwner’s Identification Act;

• 2011 Management Audit of the State’s FinancialReporting System;

• 2010 Program Audit of the Covering ALL KIDSHealth Insurance Program;

• 2009 Management and Program Audit of theIllinois State Police’s Division of ForensicServices;

• 2008 Performance Audit of the Department ofHealthcare and Family Services’ Prompt PaymentAct Compliance and Medicaid Payment Process;

• 2007 Performance Audit of the Mass TransitAgencies of Northeastern Illinois;

• 2006 Management Audit of the Flu VaccineProcurement and the I-SaveRx Program;

• 2004 Management and Program Audit of the RendLake Conservancy District;

• 2003 Management Audit of the Illinois State TollHighway Authority;

• 2002 Management Audit of Agency Use of InternetUser Tracking Technology;

• 2001 State Board of Education and Other StateAgencies Providing Funding to Illinois’ RegionalOffices of Education;

• 2000 Management Audit of Child Support StateDisbursement Unit;

THE PERFORMANCE AUDIT PROGRAM

The Auditor General released three performanceaudits and three reviews in 2018. The performanceaudits released are listed below. Performance auditsreleased in 2018 included 42 recommendations forimprovement.

In addition, the Performance Audit Division had theresponsibility for 35 audits of Regional Offices ofEducation (ROEs) and 3 Intermediate ServiceCenters (ISCs) which covered Fiscal Year 2017. The FY17 ROE audits released in 2018 contained atotal of 42 recommendations for improvement.

PERFORMANCE AUDIT OF MEDICAIDMANAGED CARE ORGANIZATIONSOn May 31, 2017, House Resolution Number 100was adopted which directed the Office of the AuditorGeneral to conduct an audit of Medicaid ManagedCare Organizations (MCOs). The Resolution includ-ed a comparison of State expenditures betweenMCOs and the Medicaid fee-for-service program forfiscal year 2016. The audit found the following:• Auditors determined that the Department ofHealthcare and Family Services (HFS) did notmaintain the complete and accurate informationneeded to adequately monitor $7.11 billion in pay-ments made to and by the 12 MCOs during FY16.

• Specifically, HFS could not provide auditors withthe following information:- all paid claims to Medicaid providers by theMCOs in FY16;

- Medicaid provider claims denied by MCOs inFY16;

- the administrative costs incurred by MCOs inFY16;

- the coordinated care costs incurred by MCOs inFY16; and

- Medical Loss Ratio calculations since calendaryear 2012.

• In FY16, HFS made multiple monthly capitationpayments to MCOs for the same months for thesame individuals totaling $590,237.

The audit recommended HFS should:• Monitor the actual administrative costs incurred byits MCOs to ensure that the administrative costsdo not exceed what is allowed by contract;

• Calculate the Medical Loss Ratios for the previousfour calendar years (2013 through 2016), anddetermine whether the State should be reimbursedby MCOs due to overpayment;

• Require all MCOs to submit all Medicaid providerpayment data for all services, and perform on-sitereviews of the MCOs’ financial data systems andtest the completeness and accuracy of the data

THE PERFORMANCE AUDIT PROGRAM

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• 1999 Management Audit of the Pilsen LittleVillage Community Mental Health Center; and

• 1998 Management Audit of Tuition and FeeWaivers.

PERFORMANCE AUDITS COMPLETED IN 2018

reported to HFS that is used to monitor the pay-ments made to Medicaid providers;

• Provide clear guidance to the MCOs for reportingdenied claims, and ensure that MCOs provide thedenied claims to HFS as required by contract;

• Ensure multiple monthly capitation payments arenot being made for the same Medicaid recipients,immediately identify and remove all duplicativerecipients from its eligibility data, and recoup anyoverpayment of duplicate capitation payments; and

• Ensure that it effectively monitors the newlyawarded MCO contracts to ensure compliancewith all contractual provisions.

This audit report contained six recommendations tothe Department of Healthcare and Family Services.

PERFORMANCE AUDIT OF THE STATE’S LEASING DECISIONOn June 28, 2017, the Illinois General Assemblyadopted House Joint Resolution Number 63 which directed the Auditor General to conduct a performance audit of the State’s decision to enterinto a five-year $2.4 million lease for property at 2410 South Grand Ave. East, Springfield.

The decision to enter into the lease actually involved two different leases – one for a file storagewarehouse and one for an IT (InformationTechnology) and Telecommunications SupportCenter. After the winning vendors were selected butprior to the final award, the Department of CentralManagement Services (CMS) switched the purposesof the leases and the using agencies.

CMS violated a provision of the IllinoisProcurement Code by awarding leases to vendorswho were not qualified respondents for the leasesawarded. For example, the vendor awarded thewarehouse lease was not a qualified respondentunder the Procurement Code as it had submitted aresponse for the IT and Telecommunications SupportCenter and not the warehouse lease. This was nofault of the vendors as the decision to switch leases

was made by CMS. In addition:• Offers were evaluated and awards selected basedon the requirements set forth in the solicitationdocument. These requirements were then changed.

• CMS and the Chief Procurement Office forGeneral Services have characterized the switch ofthe leases as substituting using agencies. However,the switch was not a simple substituting of usingagencies. Not only were the agencies changed, the purposes of the leases were changed, the structural layouts were changed, the tenant’s space requirements were changed, and the pricesoffered were changed.

• Other responders did not get the opportunity tochange their bids to meet the new lease requirements violating the principle of fair and equal treatment.

• By not rebidding, CMS may have excluded potential bidders who were not afforded the opportunity to bid on the new space requirements.

• The State Purchasing Officer responsible forreviewing the leases could not provide adequatedocumentation of review.

Other key findings of the audit included the following:• The information provided by CMS to theProcurement Policy Board for the Department ofHuman Services (DHS) warehouse lease was misleading and incomplete which hampered theBoard’s ability to review the lease. A draft versionof the information sent to the Board containedadditional language explaining the switching ofleases but it was removed in the final version sentto the Board.

• The amount of space requested in the DHS spacerequest was insufficient to meet its file storageneeds. DHS also could not provide documentationdemonstrating any cost savings resulting fromconsolidating files.

• CMS did not conduct an analysis of the cost-benefit of purchasing instead of leasing the property at 2410 South Grand Ave. East.

• DHS has not conducted a comprehensive cost-benefit analysis of digitizing records.

This audit report contained ten recommendations:

PERFORMANCE AUDITS COMPLETED IN 2018 (CONT.)


five recommendations directed to CMS; two recommendations directed to the Chief ProcurementOffice for General Services; one recommendationdirected to both CMS and the Chief ProcurementOffice for General Services; one recommendationdirected to DHS; and one recommendation directedto the Procurement Policy Board.

PERFORMANCE AUDIT OF THE DHS OVERSIGHT OF THE CILA PROGRAMOn March 15, 2017, the Illinois House ofRepresentatives adopted House Resolution Number34 which directed the Auditor General to conduct aperformance audit of the oversight of theCommunity Integrated Living Arrangements (CILA) program at the Department of HumanServices (DHS).

As of May 2017, DHS licensed more than 3,000CILA locations around the State with over one-thirdof all CILAs being located in Cook County. TheseCILAs served approximately 10,000 individuals.• For the period FY12-FY16, DHS:- expended over $2 billion on CILA services with the majority for clients with developmentaldisabilities;

- additionally expended nearly $6.1 million for acontractor to provide transition planning andsupport;

- expended more than $28 million on 17Independent Service Coordinators whose primary role is to assist with finding individualsappropriate living arrangements; and

- transitioned 408 individuals to CILA from State-Operated Developmental Centers.

• We found weaknesses in DHS’ licensing processincluding failures to:- publish accurate survey data;

- complete timely annual reviews; - accurately account for notices of violation in itsdatabase;

- complete all surveys, require plans of correction,and approve all plans of correction; and

- exercise ability to revoke a CILA license.• We found weaknesses in DHS oversight and monitoring of the CILA Program including failures to:- conduct all CILA reviews by the Bureau ofQuality Management;

- monitor CILA residents’ personal funds by DHS;- maintain supporting documentation for community placement interest by individuals atState-Operated Developmental Centers;

- share findings from DHS bureaus/offices withlicensing staff; and

- recover funds from CILA providers not providing services for which they were paid.

• There was a lack of documentation to support thatall required transition visits were conducted forindividuals that transitioned to CILA from State-Operated Developmental Centers.

• DHS utilized a vendor, on a decision from theGovernor’s Office from the previous administration, to assist in closing State-OperatedDevelopmental Centers. We found weaknesses inthe oversight by DHS of the vendor includingquestionable procurement strategies and failure to maintain documentation to support requiredcontractual deliverables. Additionally, DHS paidthe vendor an additional $233,000 for servicesalready required by the contract.

This audit report contained 26 recommendationsdirected to the Department of Human Services.

REGIONAL OFFICES OF EDUCATIONAUDITSIn addition to other duties, the Auditor General hasthe responsibility for annual audits of the financialstatements of the regional superintendent of schoolsof each educational service region in the State.

There were a total of 38 Fiscal Year 2017 audits conducted: 35 of Regional Offices of Education

(ROEs) and 3 of Intermediate Service Centers(ISCs). Our Office arranged for auditing firms toperform these audits under the general direction and management of the Auditor General’s auditmanagers.

The FY17 ROE audits released in 2018 contained atotal of 42 recommendations for improvement. Mostof the recommendations dealt with the ROEs nothaving sufficient internal controls, including controlsover their financial reporting processes. v


PERFORMANCE AUDITS IN PROGRESSDEPARTMENT OF CHILDREN AND FAMILY SERVICES ABUSE AND NEGLECTINVESTIGATIONSHouse Resolution Number 418 directs the AuditorGeneral to conduct a performance audit on theDepartment of Children and Family Services toreview and assess the Department’s protocols forinvestigating reports of child abuse and neglect. Theaudit is to include a review of abuse and neglectinvestigations conducted by the Department ofChildren and Family Services in Fiscal Year 2015,Fiscal Year 2016, and Fiscal Year 2017. The auditresolution contains the following determinations:

• The status of abuse and neglect investigations; • The final determination or findings made by theDepartment for abuse and neglect investigations;

• The time frame within which the Department com-pleted or closed abuse and neglect investigations;

• For sampled cases, recommendations made by theDepartment to families who were the subject of an abuse or neglect investigation, including anyservices provided by the Department to the childor family; and

• Demographic information on abuse and neglectinvestigations, including the age, race, and genderof children who were subjects of the abuse or neglect investigations, and, if available, the zip

code and county where the abuse or neglect wasalleged to have occurred.

The audit resolution also requires the AuditorGeneral to compile a detailed report that includes afull summary of the number of lawsuits or otherlegal actions filed against the Department, and thenumber of lawsuits the Department settled, withinthe past three fiscal years that concern an abuse orneglect investigation.

MEDICAID LONG-TERM CARE ELIGIBILITYDETERMINATION AUDIT On August 25, 2017, the Governor signed into lawPublic Act 100-380 which amended the Public AidCode. This amendment to the Public Aid Coderequires the Auditor General to report every threeyears to the General Assembly on the performanceand compliance of the Department of Healthcare andFamily Services, the Department of HumanServices, and the Department on Aging in meetingthe requirements placed upon them by Section 11-5.4 of the Public Aid Code and federal requirementsconcerning eligibility determinations for Medicaidlong-term care services and supports.

The audit is to, at a minimum, review, consider, andevaluate the following:

PERFORMANCE AUDITS IN PROGRESS (CONT.)

• Compliance with federal regulations on furnishingservices as related to Medicaid long-term careservices and supports as provided under 42 CFR435.930 (i.e., furnish Medicaid promptly to beneficiaries without any delay caused by theagency’s administrative procedures);

• Compliance with federal regulations on the timelydetermination of eligibility as provided under 42CFR 435.912 (i.e., the determination of eligibilityfor any applicant may not exceed: (i) Ninety daysfor applicants who apply for Medicaid on the basisof disability; and (ii) Forty-five days for all otherapplicants);

• The accuracy and completeness of the reportrequired under paragraph (9) of subsection (e)(i.e., monthly reports posted to the Department ofHuman Services and the Department of Healthcareand Family Services websites on the applicationsand redeterminations pending long-term care eligibility determination and admission and thenumber of appeals of denials in given categories);

• The efficacy and efficiency of the task-basedprocess used for making eligibility determinationsin the centralized offices of the Department ofHuman Services for long-term care services,including the role of the State’s integrated eligibility system, as opposed to the traditionalcaseworker-specific process from which these central offices have converted; and

• Any issues affecting eligibility determinationsrelated to the Department of Human Services’ staffcompleting Medicaid eligibility determinationsinstead of the designated single-state Medicaidagency in Illinois, the Department of Healthcareand Family Services.

AUDIT OF THE MORNEAU SHEPELL CONTRACTHouse Resolution Number 522 directs the AuditorGeneral to conduct a performance audit of the procurement and administration of the contract withMorneau Shepell. The audit is to include the follow-ing determinations:• Whether the scope of the Request for Proposals(RFP) that was issued in November 2015 was adequate to meet the State’s needs and written in amanner to allow adequate competition on thismulti-million dollar initiative;

• Whether the time frame for response to the RFPwas adequate to allow for participation by potential vendors;

• The rationale for not including a business enterprise goal in the solicitation;

• The rationale for awarding the contract toMorneau Shepell rather than re-issuing the RFP inan attempt to obtain adequate competition;

• The cost of the procurement, including amountspaid to the State’s procurement consultant;

• Whether the Department of Central ManagementServices has reviewed the vendor’s compliancewith the Performance Standard Guarantees and, inparticular, the standards applicable to the accuracyof participant transactions; and

• Whether there have been any reductions in thevendor’s administrative fee as a result of any failure to meet performance guarantees.

QUINCY VETERANS’ HOMESenate Resolution Number 1186 directs the AuditorGeneral to conduct a performance audit of theIllinois Department of Veterans’ Affairs’ management of Legionnaires’ disease outbreaks atthe Quincy Veterans’ Home. The audit is to includethe following determinations:• The responses of the Department of Veterans’Affairs to the outbreaks of Legionnaires’ disease in2015, 2016, and 2017, including the recommenda-tions made in the 2015 study by the Centers forDisease Control and the Department’s actions toaddress those recommendations;

• The type, cost, and timing of any infrastructure orother building improvements intended to containthe further spread of Legionnaires’ disease or prevent its reoccurrence;

• The nature of changes made by the Department in operating protocols and staff training thereon,intended to contain the further spread ofLegionnaires’ disease or prevent its reoccurrence;

• The nature and extent of monitoring conducted by the Department to determine whether theimprovements and protocols put in place are effective to ensure the safety of residents and staffat the Quincy Veterans’ Home;

• The amount of State moneys received and theamount of State moneys expended by theDepartment or any other State agency during Statefiscal years 2015, 2016, 2017, and 2018 for infrastructure improvement, monitoring, and othermeasures taken to address the Legionnaires’ disease outbreaks; and

• To the extent information is available, whether the Quincy Veterans’ Home has been the subject of any reviews since 2015 to determine its compliance with applicable laws and regulationswith regard to the care of its residents and, if so,the results of those reviews.

CMS MULTIPLE CHOICE EXAMSHouse Resolution Number 816 directs the AuditorGeneral to conduct a performance audit of theDepartment of Central Management Services to

review and assess the Department’s automated multiple choice exams.

The audit is to include a review of whether thoseautomated multiple choice exams are biased againstminority exam takers, either in their content or intheir results.

FORD HEIGHTS PUBLIC LIBRARY DISTRICTHouse Resolution Number 843 directs the AuditorGeneral to conduct a performance audit of the FordHeights Library District. The audit is to include thefollowing determinations:• Whether the administrative expenses at the FordHeights Public Library District are justified basedon the services provided to the residents of FordHeights;

• Whether the Ford Heights Public Library Districtmaintains documentation supporting its administrative expenses;

• Whether there has been any use of public librarydistrict funds that is not supported by adequate andreasonable documentation; and

• What services are provided by the Ford HeightsPublic Library District and whether service can beimproved.

COVERING ALL KIDS HEALTH INSURANCEPROGRAM (FISCAL YEAR 2017)Public Act 95-985 amended the Covering ALL KIDSHealth Insurance Act [215 ILCS 170/63] and directed the Auditor General to annually audit theALL KIDS program. This will be the ninth annualaudit and will cover FY17. The focus of this auditwill be on “EXPANDED ALL KIDS,” which is theportion of the ALL KIDS program that serves uninsured children not previously covered byKidCare (children whose family income was greaterthan 200% of the federal poverty level or who wereundocumented immigrants).



This FY17 audit will follow up on the Departmentof Healthcare and Family Services’ and theDepartment of Human Services’ actions to addressprior audit findings. There were five audit recommendations made in the FY16 audit report.The FY17 audit report will follow-up on all five recommendations – including the recommendationon the policies covering orthodontic treatment,which could not be followed-up on in FY15 or FY16.

REGIONAL OFFICES OF EDUCATIONSince 2002, the School Code (105 ILCS 5/2-3.17a)has required the Auditor General’s Office to conductannual audits of the financial statements of allaccounts, funds, and other moneys in the care, custody, or control of the regional superintendent ofschools of each educational service region in theState. For Fiscal Year 2018, a total of 38 audits areto be performed. v

Computers are an integral part of State government, processing billions of dollars in financial transactions each year and

helping control the operations of State agencies.Since financial transactions and confidential information are processed using computers, audits ofinformation system activities are necessary to ensurethat computer processing is secure and accurate.

TESTING CONTROLS AND SYSTEMSThe Auditor General’s Office plans to continue toemphasize the review of information system controls at State agencies. In 2018, we reviewed the following agencies:

Chicago State University, Department ofAgriculture, Department of Central ManagementServices, Department of Employment Security,Department of Healthcare and Family Services,Department of Human Services, Department ofInnovation & Technology, Department ofRevenue, Illinois Commerce Commission, IllinoisEmergency Management Agency, Illinois PowerAgency, Illinois State Toll Highway Authority,Illinois Supreme Court, Northeastern IllinoisUniversity, Northern Illinois University, Office ofthe Comptroller, Southern Illinois University,Teachers’ Retirement System, and University ofIllinois.

To enhance the control environment, the AuditorGeneral has emphasized the review of networks andthe security and control of confidential information.These reviews have focused on the necessity ofestablishing consistent and effective security policiesand programs, performing comprehensive riskassessments, and implementing comprehensive security techniques on all computer systems.

THE INFORMATION SYSTEMS AUDIT PROGRAM

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Six agencies – Department of Agriculture,Department of Employment Security,Department of Human Services, Illinois

Emergency Management Agency, NortheasternIllinois University, and Northern IllinoisUniversity – had not adequately developed or testedrecovery plans to provide for continuation of criticalcomputer operations in the event of a disaster. Werecommended that these agencies develop and testdisaster contingency plans.

Four agencies – Department of Agriculture,Department of Public Health, NortheasternIllinois University, and Office of the Secretary ofState – had not completed all requirements todemonstrate full compliance with the Payment CardIndustry Data Security Standards. We recommendedthat these agencies at least annually, assess each program accepting credit card payments, review andvalidate its environment, and ensure agreementswith service providers are current and maintained.

Five agencies – Chicago State University,Governors State University, Human RightsCommission, Illinois Emergency ManagementAgency, and Northeastern Illinois University –had not established adequate controls for securingtheir computer resources. We recommended thatthese agencies evaluate their computer environmentsand ensure adequate security controls and policiesexist to safeguard computer resources.

The Department of Human Services had notensured the adequate security and/or disposal ofconfidential information and transmitted unsecuredconfidential information over the Internet.Confidential and personally identifiable informationcollected and maintained by agencies should be adequately secured at all times. As such, it is anagency’s responsibility to ensure adequate procedures for safeguarding all confidential information have been established, effectively communicated to all personnel, and continually

enforced. We recommended the Department assesstheir procedures for safeguarding, retaining, transmitting, and disposing confidential informationand ensure such information is adequately protected.

Two agencies – Department of Healthcare andFamily Services and Department of HumanServices – failed to implement adequate controlsover the State of Illinois’ Integrated EligibilitySystem (IES). We recommended that these agenciesimplement suitable security controls over the computing environment supporting IES.

Three agencies – Department of Healthcare andFamily Services, Department of Human Services,and Office of the State Treasurer – did not performand document internal control reviews of all externaldata processing related service providers. We recommended that these agencies obtain or performindependent reviews of internal controls associatedwith service providers at least annually.

Nine agencies – Department of Agriculture,Department of Healthcare and Family Services,Department of Human Services, Department ofPublic Health, Department of Revenue, GeneralAssembly Retirement System, Illinois EmergencyManagement Agency, Judges Retirement System,and State Employees’ Retirement System – hadnot implemented an effective change managementprocess to ensure changes to computer applications were properly approved, tested, anddocumented. We recommended that these agenciesdevelop and implement change management standards to ensure adequate oversight of allchanges to computer applications.

The Illinois Historic Preservation Agency failed toimplement the provisions of the Identity ProtectionAct. We recommended the Agency finalize andimplement an identity protection policy as requiredby the Act.

ISA FINDINGS

The information systems audit staff also reviewedand tested the systems and procedures at the State’scentral computer facility operated by theDepartment of Innovation & Technology. TheDepartment provides IT services, general controls,and application controls for approximately 103 user agencies.

We released a Service Organization Control (SOC) Report regarding the Department’s controlenvironment.

The SOC Report contained an adverse opinion as aresult of:• The Department’s Description of System contained inaccuracies and omissions.

• The controls stated in its Description of Systemwere not suitably designed to provide reasonable

assurance that the control objectives would beachieved.

• The controls stated in its Description of Systemwere not operating effectively.

As a result of this adverse opinion, auditors of theseagencies will likely modify the agency-level riskassessments to accommodate the additional risk toagencies and perform additional procedures to properly address these risks.

Agency officials generally concurred with our recommendations concerning these issues.

The Information Systems Audit Division also maintains the computer system environment for the office.

ISA FINDINGS (CONT.)

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OAG FRAUD HOTLINE

The Auditor General’s Office is required bylaw [30 ILCS 5/2-15, added by P.A. 97-261,effective August 5, 2011] to operate a

toll-free fraud hotline for the public to report allegations of fraud in the executive branch of Stategovernment. The hotline went into operation at thebeginning of January 2012.

The toll free number is 1-855-217-1895. The hotlineis available 24 hours a day, 7 days a week. Liveoperators are generally available Monday-Fridayfrom 8:00 a.m. to 4:00 p.m. (CST).

In addition to calling the toll-free number, otheroptions have been established for the public toreport allegations of fraud. The public may also:• Complete the Fraud Reporting Form on-line located on the OAG web-site (www.auditor.illinois.gov);

• E-mail a description of the allegation to:[email protected];

• Contact the Auditor General via telecommunications device for the disabled (TTY)at 1-888-261-2887; or

• Send a written report via the U.S. Postal Service tothe following address:Fraud Hotline, Auditor General’s Office, 740 E. Ash St., Springfield, IL 62703.

Individuals reporting alleged fraud to the hotlinemay remain anonymous. However, if the individualchooses not to be identified, the Office’s ability tofollow up on the allegation may be limited.

More information regarding the reporting of fraud allegations can be found at the Fraud Hotlinesection of the OAG website. Jurisdiction of theFraud Hotline does not include the legislative orjudicial branches of government, nor units of localgovernment. Other resources the public may use toreport fraud if it is outside of the jurisdiction of theOAG can also be found on the website. Even if theAuditor General’s Office does not have jurisdictionover the allegation, our hotline manager will try todirect the caller to another State, federal, or localagency that may be able to help.

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OTHER OFFICE RESPONSIBILITIES

ANNUAL AUDIT ADVISORYEvery year, the Auditor General’s Office distributesan Illinois Audit Advisory to all State agencies forthe purpose of sharing information that may maketheir operations more efficient and effective, andincrease compliance with State law. Copies of thisaudit advisory are available on our website at:www.auditor.illinois.gov.

COMPTROLLER’S ACCOUNTING SYSTEM REVIEWThe Auditor General is required by law to annuallyreview the Comptroller’s Statewide accountingsystem. This review is accomplished through theOffice’s audit of the State Comptroller, and by ensuring that all agency audits are performed inaccordance with the Auditor General’s Audit Guide.

In addition, the Auditor General annually reviewsthe State Comptroller’s pre-audit function. Pre-auditis the primary control over expenditure voucher processing. The State Comptroller pre-audits financial transactions to determine if they are proper and legal.

PEER REVIEWPeer review is an external quality control reviewconducted every three years by audit professionalsfrom across the United States who are selected bythe National State Auditors Association. The peerreview helps to ensure that our procedures meet all required professional standards, comply withGovernment Auditing Standards, and produce reliable products for the agencies we audit.

The September 2017 peer review of the AuditorGeneral’s audit processes resulted in an unmodified(clean) opinion. Additionally, the peer review teamdid not note any deviations from professional standards that would have required a written letter of comments. Our prior peer reviews, conductedfrom 1996 through 2014, likewise resulted inunmodified opinions. Our next peer review is slated for 2020.

STATE ACTUARYPublic Act 97-694, effective June 18, 2012, directedthe Auditor General to “contract with or hire anactuary to serve as the State Actuary.” Among itsduties, the State Actuary is required to “reviewassumptions and valuations prepared by actuariesretained by the boards of trustees of the State-fundedretirement systems” and “issue preliminary reports...concerning proposed certifications of required Statecontributions submitted to the State Actuary by thoseboards.” [30 ILCS 5/2-8.1 (a) and (b)] In addition,Public Act 100-465, effective August 31, 2017,added a similar requirement for the State Actuary toreview the Public School Teachers’ Pension andRetirement Fund of Chicago. [40 ILCS 5/17-127(e)]

Through a competitive proposal process, the AuditorGeneral awarded a contract in August 2012 toCheiron, a full-service actuarial and consulting firm.Cheiron issued its preliminary reports to the publicretirement systems in December 2018. As requiredby statute, the Auditor General submitted a writtenreport to the General Assembly and Governor onDecember 27, 2018, documenting the initial assumptions and valuations prepared by the actuaries retained by the boards of trustees of theState-funded retirement systems, the State Actuary’spreliminary reports, and the responses of each boardto the State Actuary’s recommendations. The reportis available in its entirety on our website atwww.auditor.illinois.gov. v

The U.S. Government Accountability Officeestablished Government Auditing Standards(the Yellow Book) for performing high-

quality audit work with competence, integrity, objectivity, and independence to provide accountability and to help improve governmentoperations and services.

The Yellow Book standard relating to competencespecifies that management must assign auditors toconduct the engagement who collectively possessthe competence needed to address the engagementobjectives and perform their work in accordancewith Generally Accepted Government AuditingStandards (GAGAS).

Auditors who plan, direct, perform engagement procedures for, or report on an engagement conducted in accordance with GAGAS shoulddevelop and maintain their professional competenceby completing at least 80 hours of continuing professional education (CPE) every 2 years. A minimum 24 hours of that CPE should be directlyrelated to the government environment, governmentauditing, or the specific or unique environment inwhich the audited entity operates. The remaining 56CPE hours should be in subject matter that directlyenhances auditors’ professional expertise to conductengagements. Auditors should complete at least 20hours of CPE in each year of the 2-year period.

Auditors hired or assignedto a GAGAS engagementafter the beginning of the 2-year CPE period maycomplete a prorated number of CPE hours. Also, auditors who chargeless than 20 percent of their time annually toengagements conducted in accordance with GAGASbut are not involved in planning, directing, or reporting on the engagement need only comply withthe 24-hour requirement.

The most recently completed 2-year period for CPE requirements as measured by the Office of theAuditor General was January 1, 2017, throughDecember 31, 2018. All auditors, audit directors,and information specialists required to meet the CPEstandards were in compliance for this 2-year period.

Additionally, the Office of the Auditor General is aregistered sponsor with the Illinois Department ofFinancial and Professional Regulation, and complieswith the rules of the Illinois Public Accounting Act.

CONTINUING PROFESSIONAL EDUCATION AND TRAINING REQUIREMENTS

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GRF Operations:Personal Services . . . . . . . . . . . . . . . . . . . . . . . .$5,677,350 . . . . . . . .$5,677,048 . . . . . . . . . . . . .$302Social Security . . . . . . . . . . . . . . . . . . . . . . . . . . .$416,000 . . . . . . . . . .$413,357 . . . . . . . . . . .$2,643Contractual Services . . . . . . . . . . . . . . . . . . . . . . .$605,000 . . . . . . . . . .$601,793 . . . . . . . . . . .$3,207Commodities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .$1,250 . . . . . . . . . . . .$1,170 . . . . . . . . . . . . . .$80Paper and Printing . . . . . . . . . . . . . . . . . . . . . . . . . .$4,400 . . . . . . . . . . . .$4,355 . . . . . . . . . . . . . .$45Equipment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .$6,250 . . . . . . . . . . . .$5,949 . . . . . . . . . . . . .$301EDP . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .$41,000 . . . . . . . . . . .$40,559 . . . . . . . . . . . . .$441Telecommunications . . . . . . . . . . . . . . . . . . . . . . . .$53,250 . . . . . . . . . . .$52,855 . . . . . . . . . . . . .$395Operation of Automotive Equipment . . . . . . . . . . . .$2,500 . . . . . . . . . . . .$1,850 . . . . . . . . . . . . .$650

GRF Operations Total . . . . . . . . . . . . . . . . . . .$6,807,000 . . . . . . . .$6,798,936 . . . . . . . . . . .$8,064

Audit Expense Fund:Audits/Studies/Invest. . . . . . . . . . . . . . . . . . . .$25,398,600 . . . . . . .$22,943,281 . . . . . . . .$2,455,319

As required by law [30 ILCS 205/2 (k)], the Office of the Auditor General isreporting that there were no outstanding claims administered by the Officethat were due and payable to the State as of December 31, 2018. The

accounts receivables generated by our Office primarily represent billings to otherState agencies for reimbursement of audit costs. Reimbursements for federal singleaudits are deposited into the General Revenue Fund. Reimbursements for audits notassociated with federal single audits are deposited or transferred to the AuditExpense Fund. If normal collection methods fail, we request assistance from theOffice of the Attorney General. To date we have never used the services of a private collection agency.

The Office of the Auditor General was funded by appropriations from the General Revenue Fund and AuditExpense Fund for Fiscal Year 2018 (July 1, 2017 to August 31, 2018, including lapse period).

CLAIMS DUE THE STATE AND METHODS OF COLLECTION

SUMMARY OF APPROPRIATIONS AND EXPENDITURES

Appropriation Expended BalanceFY 2018 - FINAL

DATEAGENCY F C S RELEASED

Architect of the Capitol X 05-30-18Arts Council X 06-28-18Arts Council Foundation X X 05-03-18Attorney Registration and Disciplinary Commission (12/31/17) X X 05-30-18Board of Admissions to the Bar (9/30/17) X X 05-03-18Board of Examiners X 11-01-18Board of Higher Education X 07-10-18Capital Development Board X 12-21-17Chicago State University X X X 03-15-18Civil Service Commission X 07-25-18Commission on Government Forecasting and Accountability X 04-19-18Comptroller - Fiscal Officer Responsibilities X X 12-21-17Court of Claims X 12-12-18Criminal Justice Information Authority *DCMS - Deferred Compensation Plan (12/31/17) X 06-28-18Deaf and Hard of Hearing Commission X 08-15-18Department of Agriculture X 03-27-18Department of Central Management Services X 02-22-18Department of Central Management Services X 03-27-18Department of Central Management Services- Community College Health Insurance Security Fund X 02-22-18Department of Central Management Services- Community College Health Insurance Security Fund- Special Report X 06-28-18Department of Central Management Services- Local Government Health Insurance Reserve Fund X 02-22-18Department of Central Management Services- State Employees Group Insurance Program X 08-15-18Department of Central Management Services- Teacher Health Insurance Security Fund X 02-22-18Department of Central Management Services- Teacher Health Insurance Security Fund – Special Report X 06-28-18Department of Central Management Services- University Benefit Schedule X 11-29-17Department of Employment Security X 01-11-18Department of Employment Security X 04-26-18Department of Healthcare and Family Services X 03-20-18Department of Healthcare and Family Services X 07-10-18Department of Human Rights X 01-11-18Department of Human Services X 03-20-18Department of Human Services X 06-14-18Department of Labor *Department of Natural Resources (Capital Asset Account) X 02-08-18

FINANCIAL AUDITS AND COMPLIANCE EXAMINATIONS

FOR THE PERIOD(S) ENDINGJUNE 30, 2017, SEPTEMBER 30, 2017, AND DECEMBER 31, 2017.

(Released on or before December 31, 2018)F = Financial Audits C= Compliance Attestation Examinations S = Single Audits

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FINANCIAL AUDITS AND COMPLIANCE EXAMINATIONS (CONT.)

DATEAGENCY F C S RELEASED

Department of Public Health X 08-15-18Department of Revenue X 03-13-18Department of Transportation X 01-31-18Drycleaner Environmental Response Trust Fund Council X 03-13-18DuQuoin State Fair (09/30/17) X 04-26-18Eastern Illinois University X 03-27-18Eastern Illinois University X X 03-29-18Emergency Management Agency X 07-25-18Environmental Protection Agency (Water Revolving Fund) X 02-01-18Executive Ethics Commission X 08-29-18Executive Office of Inspector General X 09-26-18General Assembly – Senate - *Overseen by LAC X 02-27-18General Assembly – House - *Overseen by LAC X 02-27-18General Assembly Retirement System X 02-08-18General Assembly Retirement System X 04-26-18Governor’s Office of Management and Budget X 03-06-18Governors State University X 01-11-18Governors State University X X 03-29-18Guardianship and Advocacy Commission X 10-11-18Health Information Exchange Authority X 08-29-18Historic Preservation Commission X 05-03-18Human Rights Commission X 07-10-18Illinois Commerce Commission X 10-11-18Illinois Conservation Foundation X X 02-01-18Illinois Council on Developmental Disabilities X 12-12-18Illinois Educational Labor Relations Board X 05-30-18Illinois Finance Authority X 12-21-17Illinois Finance Authority X 03-13-18Illinois Gaming Board X 01-09-18Illinois Grain Insurance Corporation X X 03-15-18Illinois Housing Development Authority X 11-08-17Illinois Housing Development Authority X X 02-14-18Illinois Labor Relations Board X 03-13-18Illinois Math and Science Academy X X 01-31-18Illinois Math and Science Academy Fund X X 01-31-18Illinois Power Agency X 02-14-18Illinois State Fair (09/30/17) X 04-26-18Illinois State University X X X 03-20-18Illinois Student Assistance Commission(Including Golden Apple Scholars of Illinois) X 03-01-18Illinois Student Assistance Commission, Prepaid Tuition X 03-01-18Illinois Supreme Court X 02-22-18Independent Tax Tribunal X 12-12-18Judges’ Retirement System X 02-08-18Judges’ Retirement System X 04-26-18Legislative Audit Commission X 05-22-18Legislative Printing Unit X 04-26-18

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FINANCIAL AUDITS AND COMPLIANCE EXAMINATIONS (CONT.)

DATEAGENCY F C S RELEASEDLegislative Reference Bureau X 03-27-18Legislative Research Unit X 07-25-18Literacy Foundation X X 01-31-18Lottery X 01-31-18Lottery X 05-30-18Mid-Illinois Medical District Commission X 06-28-18Metropolitan Pier and Exposition Authority X 11-15-17Northeastern Illinois University X 03-13-18Northeastern Illinois University X X 03-29-18Northern Illinois University X 03-15-18Northern Illinois University X X 03-29-18Office of the Governor X 03-27-18Office of the Lieutenant Governor X 07-25-18Secretary of State X 01-09-18Secretary of State X 03-06-18Southern Illinois University X 03-20-18Southern Illinois University X X 03-29-18State Board of Education X 01-09-18State Board of Elections X 05-03-18State Board of Investment X 01-31-18State Board of Investment X 04-05-18State Employees’ Retirement System X 02-08-18State Employees’ Retirement System X 04-26-18State Employees’ Retirement System – Special Purpose Report X 03-20-18State Universities’ Retirement System X 12-21-17State Universities’ Retirement System X 01-11-18State Universities’ Retirement System – Special Purpose Report X 01-11-18Statewide Financial Audit X 03-22-18Statewide Single Audit - Federal Funds X 05-15-18Supreme Court Historic Preservation Commission X 12-12-17Teachers' Retirement System X 01-09-18Teachers' Retirement System X 04-05-18Teachers' Retirement System – Special Purpose Report X 03-15-18Teachers’ Pension and Retirement System - Chicago X 01-09-18Toll Highway Authority (12/31/17) X X 07-10-18Treasurer – Achieving a Better Life Experience Program (ABLE) X 03-13-18Treasurer – College Savings Plan X 03-20-18Treasurer – Fiscal Officer Responsibilities X X 03-06-18Treasurer – Fiscal Officer Responsibilities - Securities Lending Program X 10-31-17Treasurer - Illinois Funds X 03-15-18Treasurer - Non-Fiscal Officer X 04-19-18Universities Civil Service Commission X 05-22-18University of Illinois X 02-14-18University of Illinois X X 02-22-18Western Illinois University X 03-15-18Western Illinois University X X 03-29-18Workers’ Compensation Commission ** Report not released as of December 31, 2018.

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ROE #01: Adams, Brown, Cass, Morgan, Pike, Scott Counties X 05-03-18ROE #03: Bond, Christian, Effingham, Fayette, Montgomery Counties X 05-22-18ROE #04: Boone, Winnebago Counties *ROE #08: Carroll, Jo Daviess, Stephenson Counties X 04-26-18ROE #09: Champaign, Ford Counties X 04-19-18ROE #11: Clark, Coles, Cumberland, Douglas, Edgar, Moultrie, Shelby Counties X 07-11-18ROE #12: Clay, Crawford, Jasper, Lawrence, Richland Counties X 04-19-18ROE #13: Clinton, Jefferson, Marion, Washington Counties *ROE #16: DeKalb County X 08-15-18ROE #17: Dewitt, Livingston, Logan, McLean Counties X X 03-06-18ROE #19: DuPage County X *ROE #20: Edwards, Gallatin, Hamilton, Hardin, Pope, Saline,

Wabash, Wayne, White Counties X 06-28-18ROE #21: Franklin, Johnson, Massac, Williamson Counties X X 03-27-18ROE #24: Grundy, Kendall Counties X 06-28-18ROE #26: Fulton, Hancock, McDonough, Schuyler Counties X 05-03-18ROE #28: Bureau, Henry, Stark Counties X X 03-15-18ROE #30: Alexander, Jackson, Perry, Pulaski, Union Counties *ROE #31: Kane County X 06-28-18ROE #32: Iroquois, Kankakee Counties X X 07-11-18ROE #33: Henderson, Knox, Mercer, Warren Counties X 05-30-18ROE #34: Lake County *ROE #35: LaSalle, Marshall, Putnam Counties X 05-22-18ROE #39: Macon, Piatt Counties X 06-12-18ROE #40: Calhoun, Greene, Jersey, Macoupin Counties X 05-30-18ROE #41: Madison County X 06-14-18ROE #44: McHenry County X 03-27-18ROE #45: Monroe, Randolph Counties X 05-03-18ROE #47: Lee, Ogle, Whiteside Counties *ROE #48: Peoria County X X 06-12-18ROE #49: Rock Island County X X 10-02-18ROE #50: St. Clair County X X 05-22-18ROE #51: Menard, Sangamon Counties *ROE #53: Mason, Tazewell, Woodford Counties X 05-03-18ROE #54: Vermilion County X 03-15-18ROE #56: Will County X X 11-01-18Intermediate Service Center #01: North Cook X 06-28-18Intermediate Service Center #02: West Cook *Intermediate Service Center #04: South Cook X X 08-15-18

* Report not released as of December 31, 2018.

REGIONAL OFFICE OF EDUCATION ANDINTERMEDIATE SERVICE CENTER FINANCIAL AUDITS

FOR THE PERIOD ENDING JUNE 30, 2017 F = Financial Audits S = Single Audits

DATEAGENCY F S RELEASED

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PERFORMANCE AUDITS, INQUIRIES, & SPECIAL REPORTS

AUDITS IN PROGRESS• Medicaid Long-Term Care Eligibility Determination• Morneau Shepell Contract• Quincy Veterans’ Home• Covering All Kids Health Insurance Program• Department of Children and Family Services Abuseand Neglect Investigations

• Department of Central Management ServicesMultiple Choice Exams

• Ford Heights Public Library District

12/18 Review of Information Submitted by the ChicagoTransit Authority’s Retiree Health Care Trust

12/18 State Actuary’s Report: The ActuarialAssumptions and Valuations of the Five State-Funded Retirement Systems

11/18 Review of Information Submitted by theRetirement Plan for Chicago Transit AuthorityEmployees

07/18 Performance Audit of the Department of HumanServices’ Oversight of the Community IntegratedLiving Arrangements (CILAs) Program

05/18 Performance Audit of the State’s LeasingDecision

01/18 Performance Audit of Medicaid Managed CareOrganizations

12/17 Program Audit of the Covering All Kids HealthInsurance Program



12/17 Program Audit of the Department of HumanServices - Office of the Inspector General


11/17 Health Facilities and Services Review Board andthe Certificate of Need Processes

05/17 State Moneys Provided to the Kenwood OaklandCommunity Organization




09/16 College of DuPage 09/16 Performance Audit of Department of Children

and Family Services’ Placement of Children08/16 Department of Human Services’ Forensic Patient

Transport Procedures 08/16 Program Audit of the Covering All Kids Health

Insurance Program04/16 State Moneys Provided to the Illinois Criminal

Justice Information Authority for CommunityBased Violence Prevention Programs, the After-School Program, and the Chicago Area Project


12/15 Appropriations from the General ProfessionsDedicated Fund for Pharmacy Programs at StateUniversities



12/14 Department of Children and Family Services’Search for Missing Children



11/14 Village of Robbins Use of Municipal EconomicDevelopment Funds

08/14 Management Audit of the State’s Procurement ofInmate Telephone Service Vendors


07/14 Review of the Expedited Long Term CareEligibility Determination and Enrollment System

05/14 Performance Audit of the Center forComprehensive Health Planning and the HealthFacilities and Services Review Board

04/14 Management Audit of the Illinois LawEnforcement Training and Standards Board’s Useof Moneys Appropriated from the DeathCertificate Surcharge Fund

03/14 Review of the Department on Aging’sCommunity Care Program ReformImplementation Report

PERFORMANCE AUDITS, INQUIRIES, & SPECIAL REPORTS (CONT.)

02/14 Performance Audit of the State Moneys Provided tothe Illinois Violence Prevention Authority for theNeighborhood Recovery Initiative

01/14 Village of Robbins Use of Municipal EconomicDevelopment Funds

12/13 Review of Information Submitted by the Chicago Transit Authority’s Retiree Health Care Trust

12/13 The Covering ALL KIDS Health Insurance Program11/13 Review of Information Submitted by the Retirement

Plan for Chicago Transit Authority Employees 10/13 Management Audit of the Department of Central

Management Services’ Administration of the State’s Space Utilization Program

07/13 Management Audit of the Illinois International Port District

05/13 Management Audit of Illinois Public Universities 05/13 Management Audit of Road Fund Revenue and

Expenditures04/13 Management Audit of Management Positions in the

Executive Branch04/13 Review of the Department of Healthcare and Family

Services’ SMART Act Implementation Report12/12 The Village of Robbins’ Use of Municipal Economic

Development Funds 12/12 Review of Information Submitted by the Chicago

Transit Authority’s Retiree Health Care Trust11/12 Review of Information Submitted by the Retirement

Plan for Chicago Transit Authority Employees 10/12 The Covering ALL KIDS Health Insurance Program05/12 College Illinois! Prepaid Tuition Program05/12 Department of Transportation’s Implementation of

Life-Cycle Cost Analysis04/12 The Workers’ Compensation Program for State

Employees04/12 Illinois State Police’s Administration of the Firearm

Owners Identification Card Act03/12 State’s Procurement of Health Insurance Vendors03/12 The Village of Robbins’ Use of Municipal Economic

Development Funds01/12 Certain Financial and Business Processes of the

University of Illinois Board of Trustees12/11 Review of Information Submitted by the Chicago

Transit Authority’s Retiree Health Care Trust11/11 Review of Information Submitted by the Retirement

Plan for Chicago Transit Authority Employees11/11 Department of Central Management Service’s

Operation of the State’s Vehicle Fleet09/11 Management Audit of the State’s Boards and

Commissions

04/11 Program Audit of the Covering ALL KIDS Health Insurance Program

02/11 State’s Financial Reporting System12/10 Village of Robbins’ Use of Municipal Economic

Development Fund12/10 Annual Review of Information Submitted by the

Chicago Transit Authority’s Retiree Health Care Trust 12/10 Department of Human Services – Office of the

Inspector General12/10 Annual Review of Information Submitted by the

Chicago Transit Authority’s Employee Retirement Plan06/10 Exemptions Granted by the Civil Service Commission 05/10 Covering All Kids Health Insurance Program 01/10 Village of Robbins’ Use of Municipal Economic

Development Fund12/09 Annual Review of Information Submitted by the

Chicago Transit Authority’s Retiree Health Care Trust 12/09 Regional Transportation Authority Follow Up 11/09 Annual Review of Information Submitted by the

Chicago Transit Authority’s Employee Retirement Plan09/09 Medical Assistance Program – Long Term Care

Eligibility Determination07/09 Grant to the Loop Lab School 06/09 Department of Central Management Services’ 2008

Joint Procurements of Bulk Rock Salt05/09 Funding Provided by State Agencies to Heartland

Human Services 03/09 Illinois State Police’s Division of Forensic Services 03/09 Multi-Year Beverage Vending and Pouring Contract02/09 Coal Development Fund 12/08 Annual Review of Information Submitted by the

Chicago Transit Authority’s Employee Retirement Plan and Retiree Health Care Trust

12/08 Department of Human Services Office of the Inspector General

11/08 Village of Robbins’ Use of Municipal Economic Development Funds

07/08 Review of Documents Related to the Proposed Sale of Bonds for the Chicago Transit Authority Retirement Plan and Retiree Health Care Trust

05/08 The Department of Healthcare and Family Services’ Prompt Payment Act Compliance and Medicaid Payment Process

02/08 Pilsen-Little Village Community Mental Health Center, Inc.

10/07 Inventory of State Programs 08/07 Funding Provided by or through the State of Illinois to

the Chicago Project for Violence Prevention for the CeaseFire Program

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08/07 Payments to the Illinois Hispanic Chamber of Commerce by State Agencies

07/07 Village of Robbins’ Use of Municipal Economic Development Funds

04/07 Rend Lake Conserv. District Follow-up Report03/07 Mass Transit Agencies of Northeastern Illinois: RTA,

CTA, Metra, and Pace01/07 Department of Transportation’s Aeronautics

Operations12/06 Department of Human Services’ Office of the

Inspector General09/06 Flu Vaccine Procurement and I-SaveRx Program09/06 Village of Robbins’ Use of Municipal Economic

Development Funds08/06 Department of Financial and Professional Regulation’s

Disciplining of Physicians06/06 Department of Central Management Services’

Business Enterprise Program and Department of Transportation’s Disadvantaged Business Enterprise Program

03/06 Department of Transportation’s Traffic Safety Programs

02/06 Department of Commerce and Economic Opportunity’sAdministration of Its Economic Development Programs

02/06 State Employee Travel - Modes of TransportationBetween Chicago and: Bloomington, Carbondale,Champaign-Urbana, Macomb, and Springfield

07/05 Village of Robbins’ Use of Municipal EconomicDevelopment Funds

05/05 The Illinois School District Liquid Asset Fund Plus12/04 Department of Human Services’ Office of the Inspector

General09/04 Rend Lake Conservancy District09/04 Illinois Aquaculture Development Fund08/04 Village of Robbins’ Use of Municipal Economic

Development Funds02/04 Department of Central Management Services’

Administration of the State’s Space Utilization Program12/03 Regulation of Grain Dealers and the Grain Insurance

Fund11/03 Grade Crossing Protection Fund09/03 Village of Robbins’ Use of Municipal Economic

Development Funds05/03 Illinois State Toll Highway Authority04/03 Teachers Academy for Mathematics and Science01/03 Group Workers Compensation Self-Insured Pools12/02 DHS Office of the Inspector General08/02 Village of Robbins’ Use of Municipal Economic

Development funds08/02 Department of Human Services’ Early Intervention

Program

07/02 Department of Public Aid’s KidCare Program04/02 Department of Human Services Early Intervention

Program Follow-up04/02 States Construction Contracting Methods01/02 Agency Use of Internet User Technology10/01 EPA’s Vehicle Emissions Testing Program09/01 Illinois Health Facilities Planning Board08/01 Board of Education and Other State Agencies Providing

Funding to Regional Offices of Education06/01 Village of Robbins’ Use of Municipal Economic

Development Funds05/01 Tuition & Fee Waivers Follow-up12/00 DHS Office of the Inspector General06/00 Municipal Economic Development Fund Distributions:

Village of Robbins03/00 Department of Public Aid: Child Support State

Disbursement Unit11/99 Illinois Math & Science Academy09/99 Department of Public Aid’s Contracts with Delta Dental08/99 Pilsen-Little Village Community Mental Health Center07/99 Medicaid Home Health Care & Regulation of Home

Health Agencies06/99 State Fire Marshal’s Fire Investigations05/99 Illinois Health & Human Service Providers12/98 DHS: Inspector General09/98 Comptroller’s Offset System06/98 Nursing Home Prescreening05/98 IDOT’s Road Construction Program04/98 Tuition & Fee Waivers05/97 Professional Regulation – Physicians Regulated Under

the Medical Practices Act12/96 DMHDD – Office of the Inspector General06/96 IHSA – Site Selection for Boys Basketball Finals04/96 DMHDD – Reporting of Resident Abuse & Neglect05/95 Summer Unemployment at State Universities02/95 Laws Considered Obsolete01/95 Public Aid’s Child Support Program12/94 Office of the Inspector General06/94 Toll Highway: Helicopters06/94 DMHDD: Abuse & Neglect05/94 Correctional Industries05/94 Central Management Services: Telecommunications03/94 Collection of Money from Circuit Clerks01/94 State Housing Benefits05/93 Public Aid: Property Transfers04/93 Office of the Inspector General04/93 Early Intervention Services System04/93 User Fees


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11/92 DMHDD: Abuse & Neglect07/92 St. Anne’s Lease06/92 State Police I-SEARCH Program05/92 Privatizing Weigh Stations04/92 Henry Horner’s Children’s Care03/92 Governor’s Council on Health & Physical Fitness03/92 Case Management Practices01/92 State Legal Services11/91 State Regulation of Insurer Solvency08/91 Higher Education “Systems of Systems”07/91 Eastern Illinois University Coal Conversion Project06/91 Special Analysis: Build Illinois05/91 Availability of Obstetric Care05/91 Collection of Sales & Taxes Receivable05/91 Property Forfeited Under the Illinois Controlled

Substances Act03/91 Illinois Competitive Access & Reimbursement Equity

Program03/91 Nutritional Services Paid by the Department of Children

& Family Services02/91 Illinois Multi-Year Fixed Contractual Obligations02/91 Administrative Citations: Environmental Protection

Agency10/90 Project Chance Evaluation Contract10/90 Frequent Flyer Programs08/90 Parents Too Soon Program07/90 State University Tuition & Fee Policies & Practices07/90 Debt Collection Practices of Illinois & Other States05/90 DMHDD: Abuse & Neglect04/90 Veterans’ Affairs Field Office Closures03/90 Illinois Competitive Access & Reimbursement Equity

Program01/90 Public Aid’s Delta Dental12/89 Regional Transportation Authority11/89 Illinois Sports Facilities Authority & the Chicago

White Sox11/89 Five State Retirement Systems’ Financial Status10/89 Feasibility of Consolidating State Revenue Bond

Agencies07/89 Commerce & Community Affairs’ Economic

Development Programs05/89 EPA’s Hazardous Waste Mgmt. Program04/89 Selected Auditor Comparability: Jobs & Pay02/89 AIDS Testing: Statutory Requirements & Costs01/89 Public Univ. Instructional Costs01/89 Vehicle Emissions Testing Program10/88 U of I Athletic Association08/88 JTPA07/88 Audit Status of Circuit Courts06/88 Dept. of Revenue - Corporate Income Tax05/88 State Program of Internal Auditing07/87 Computer Acquisition & Use in Higher Education06/87 Chicago Housing Authority

06/87 Cash Management Practices04/87 State Laboratory Services04/87 U of I Hospital & Affiliated Clinics04/87 Chicago’s Use of State Appropriated Funds10/86 State Pensions Assets Investment Performance10/86 CMS – Lottery Building Lease10/86 Property Management Problems – Mental Health

Centers05/86 Illinois Preferential Procurement Programs04/86 State Toxicology Lab04/86 Legislative Printing Unit04/86 Engineering Programs in Illinois – NIU03/86 Claims & Accounts Receivable03/86 Capital Development Board:Construction of the State of

Illinois Center02/86 Illinois Commerce Commission02/86 Advisory Boards & Commissions11/85 Data Security Practices11/85 Hazardous Waste Management09/85 Management & Collection of Claims Receivable03/85 Perinatal Medical Care10/84 State Employee Travel10/84 Feasibility Study: Rock Island Co. Facility09/84 Employment Security Unemployment Insurance08/84 Salaried Non-working Time Benefits08/84 Responsible Relative Requirements05/84 Board of Investment: Five State Retirement Systems10/83 Commerce Comm.: Management Audits of Public

Utilities05/83 Contractual Legal Services04/83 Industrial Commission12/82 Procurement Policies & Procedures07/82 Criminal History Components04/82 Financing of Improvements of Rock Island State Park12/81 Chicago Road Fund12/81 DMHDD: Region 211/81 Procurement of Real Property10/81 Registration & Education: Investigation & Enforcement

Functions01/81 Licensing & Regulation of Bingo01/81 Chicago Bd. of Education12/80 Nursing Home Reimbursement System12/80 DCFS Day Care Activities11/80 Dept. of Personnel Management10/80 Public Aid’s Local Office Management09/80 Licensing of Grain Dealers07/80 Illinois Fair Employment Practices Commission06/80 Secretary of State Vending Services05/80 Coastal Zone Management01/80 Court of Claims01/80 Cook Co. Health & Hospitals

v

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