Uncollected Tolls to Motorists Who Did Not Pay the Required Toll
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STATE OF ILLINOIS OFFICE OF THE AUDITOR GENERAL MANAGEMENT AUDIT ILLINOIS STATE TOLL HIGHWAY AUTHORITY MAY 2003 WILLIAM G. HOLLAND AUDITOR GENERAL SPRINGFIELD OFFICE: CHICAGO OFFICE: ILES PARK PLAZA STATE OF ILLINOIS BUILDING • SUITE S-900 740 EAST ASH • 62703-3154 160 NORTH LASALLE • 60601-3103 PHONE: 217/782-6046 PHONE: 312/814-4000 FAX: 217/785-8222 • TDD: 217/524-4646 FAX: 312/814-4006 OFFICE OF THE AUDITOR GENERAL WILLIAM G. HOLLAND To the Legislative Audit Commission, the Speaker and Minority Leader of the House of Representatives, the President and Minority Leader of the Senate, the members of the General Assembly, and the Governor: This is our report of the Management Audit of the Illinois State Toll Highway Authority. The audit was conducted pursuant to Senate Joint Resolution Number 72, which was adopted June 2, 2002. The audit was conducted in accordance with generally accepted government auditing standards and the audit standards promulgated by the Office of the Auditor General at 74 Ill. Adm. Code 420.310. The audit report is transmitted in conformance with Section 3-14 of the Illinois State Auditing Act. WILLIAM G. HOLLAND Auditor General Springfield, Illinois May 2003 INTERNET ADDRESS: [email protected] RECYCLED PAPER: SOYBEAN INKS SYNOPSIS REPORT DIGEST The Illinois State Toll Highway Authority (Tollway) operates 274 miles of toll roads that are used by 1.2 million vehicles per day. As of December 31, 2002, the Tollway had $781 million in outstanding Management Audit revenue bonds and $355 million in unrestricted cash equivalents and investments. ILLINOIS STATE TOLL HIGHWAY AUTHORITY 1. Reconstruction Capital Plan. The Tollway lacked a comprehensive capital plan to support the need for reconstructing and widening the toll roads. · The Tollway did not review the cost estimate of the $5.5 billion reconstruction plan submitted in March 2002 by its Consulting Engineer, Consoer Townsend Envirodyne Engineers, Inc.(CTE). Released: May 2003 · CTE told us in March 2003 that the $5.5 billion reconstruction cost estimate was the high end cost estimate and that less costly alternatives may exist. This had not been previously disclosed by the Tollway in public discussions of its reconstruction needs. · Some documentation to back up the Tollway’s 15-year, $5.5 billion reconstruction cost estimate was not prepared until after our request in September 2002. · The cost estimation process for the $5.5 billion reconstruction plan appears to be simplified. 2. Planning. The Tollway needs to improve its operational plans and adequately monitor their implementation. 3. Management Information. The Tollway has some computerized information systems that date back to the late 1970s. These systems are not able to process data or prepare reports with the capability of current computer systems. 4. Personnel. The Tollway personnel records contained deficiencies State of Illinois for 15 of the 50 employees sampled, such as missing performance evaluations, missing salary information, and not meeting the position Office of the Auditor General requirements. Some interview files examined also lacked job application forms, interview evaluation forms, and reference checks. · Since 1991, the Tollway has been reimbursing the medical WILLIAM G. HOLLAND insurance premiums for the dependents of retired employees AUDITOR GENERAL who have the “High Option Indemnity” insurance. · Officials at State Employees’ Retirement System and Central Management Services were unaware of any State agency with a To obtain a printed copy of the report similar policy. contact: 5. Money Room. The Tollway needs to enhance security and controls Office of the Auditor General over its toll collection process, including its Money Room. Attn: Records Manager 6. Toll Collection. The Tollway lost $11 million in 2002 mainly due Iles Park Plaza to toll evasion. The toll evasion rate was three percent which was 740 East Ash Street Springfield, IL 62703 higher than most of the 20 toll roads responding to our survey. (217) 782-6046 or 7. Toll Rates. Toll rates were last raised in 1983 and the Tollway has TDD: (217) 524-4646 gone the longest without an increase in tolls of the 20 toll roads responding to our survey. This Report is also available on the worldwide web at: The Tollway generally agreed with the 23 recommendations to http://www.state.il.us/auditor improve the management of the Tollway. In January 2003, a new Executive Director was appointed who began making changes that parallel some of the audit’s findings. We will follow up on the status of recommendations in next year’s financial and compliance audit. MANAGEMENT AUDIT OF ILLINOIS STATE TOLL HIGHWAY AUTHORITY Page ii MANAGEMENT AUDIT OF ILLINOIS STATE TOLL HIGHWAY AUTHORITY REPORT CONCLUSIONS The Illinois State Toll Highway Authority (Tollway) is governed by the Toll Highway Act which states that it is in the public interest to provide for a toll highway system. The Act states that toll roads will become freeways when all revenue bonds have been paid (605 ILCS 10/21). As of December 31, 2002, the Tollway had $781 million in outstanding revenue bonds and $355 million in unrestricted cash equivalents and investments. The Tollway is funded entirely by tolls and other revenues (e.g., concessions, investments) of approximately $390 million in 2001 and did not receive any federal or State tax revenues in 2002. The Illinois State Toll Highway Authority (Tollway) operates 274 miles of toll roads used by 1.2 million vehicles per day. Many segments of the toll roads are 40 years old and, according to the Tollway’s Consulting Engineer, require frequent repairs and would be more cost- effective to reconstruct. In March 2002, the Tollway announced a plan to increase tolls by 88 percent (i.e., increase the base toll rate for cars from 40 cents to 75 cents) to pay for reconstructing the toll roads. Tollway officials said the reconstruction would cost $5.5 billion over 15 years. In accordance with the audit resolution, this management audit focused on reviewing the operations of the Tollway and reports the results primarily for 2002. In January 2003, a new Executive Director was The Tollway appointed who began making changes that parallel some of the audit’s lacked a findings, such as reducing the number of permanent take-home vehicles, comprehensive conducting employee background checks, and establishing a chief of staff. written capital plan to support 1. Reconstruction Capital Plan. The Tollway lacked a comprehensive the need for written capital plan to support the need for reconstructing and reconstructing and widening the toll roads. Many documents exist but they failed to widening the toll merge the financial and engineering components into a single plan. roads. The Tollway needs to prepare a comprehensive plan that combines The plan should projects, detailed cost estimates, timelines, revenues, and expenditures. combine projects, costs, timelines, $ The Tollway also did not review the cost estimate of the $5.5 revenues, and billion reconstruction plan submitted by its Consulting Engineer, expenditures. Consoer Townsend Envirodyne Engineers, Inc. (CTE). Page iii MANAGEMENT AUDIT OF ILLINOIS STATE TOLL HIGHWAY AUTHORITY $ CTE informed us in March 2003 that the $5.5 billion CTE informed us reconstruction cost estimate was the high end cost estimate and in March 2003 that less costly alternatives may exist. This was not previously that the $5.5 disclosed by the Tollway in its public discussions of reconstruction billion needs. reconstruction $ Some of the supporting documentation to back up the Tollway’s cost estimate was 15-year, $5.5 billion reconstruction cost estimate by the Tollway in the high end cost March 2002 was not prepared until after our request in September estimate and that 2002. less costly $ The cost estimation process for the $5.5 billion reconstruction plan alternatives may appears to be simplified. See Appendix E for the Tollway’s exist. Proposed Capital Program. This was not 2. Planning. The Tollway lacked complete information on its existing previously operational plans. The Tollway needs to fully complete the Annual disclosed by the Management Plan used by the Governor’s Office and monitor the Tollway. implementation of its planning documents. 3. Management Information. The Tollway has some computerized information systems that date back to the late 1970s. These systems are not able to process data or prepare reports with the capability of current computer systems. 4. Organization Structure. The Tollway may be able to reorganize certain units performing related work into a single division, such as the various planning units. 5. Personnel. The Tollway’s personnel records contained deficiencies for 15 of the 50 employees in our sample, such as the following: missing performance evaluations, missing salary information, misfiled documentation, and not meeting the position requirements. Some interview files examined also lacked job application forms, interview evaluation forms, and reference checks. $ Since 1991, the Tollway has been reimbursing the medical insurance premiums for the dependents of retired employees who have the “High Option Indemnity” insurance. Officials at both the State Employees’ Retirement System and the Group Insurance Division of the Department of Central Management Services said they were unaware of any other State agency with a similar policy. $ In our survey of Tollway employees, respondents said the Authority needs to improve its internal management, such as supervision, training,