State of Illinois Department of Commerce and Economic Opportunity
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STATE OF ILLINOIS DEPARTMENT OF COMMERCE AND ECONOMIC OPPORTUNITY COMPLIANCE EXAMINATION For the Two Years Ended June 30, 2010 Performed as Special Assistant Auditors For the Auditor General, State of Illinois STATE OF ILLINOIS DEPARTMENT OF COMMERCE AND ECONOMIC OPPORTUNITY COMPLIANCE EXAMINATION For the Two Years Ended June 30, 2010 TABLE OF CONTENTS Page Agency Officials ................................................................................................................. 1 Management Assertion Letter ............................................................................................. 3 Compliance Report Summary .......................................................................................................................... 5 Accountants’ Report Independent Accountants’ Report on State Compliance, on Internal Control Over Compliance, and on Supplementary Information for State Compliance Purposes ..................................................................................................................... 8 Schedule of Findings Current Findings – State Compliance ........................................................................... 12 Prior Findings Not Repeated ......................................................................................... 24 Status of Management, Program, and Performance Audits Management and Program Audit of the Illinois Department of Commerce and Economic Opportunity – Administration of its Economic Development Programs (February 2006) ..................................................................................... 27 Program Audit of Funding Provided by or through the State of Illinois to the Chicago Project for Violence Prevention for the CeaseFire Program (August 2007) ....................................................................................……………. 30 Performance Audit of Payments to the Illinois Hispanic Chamber of Commerce By State Agencies (August 2007)………………………………………………… 32 Management Audit of the $1 Million Grant to the Loop Lab School (July 2009) .... 33 Performance Audit of the Coal Development Fund (February 2009) ....................... 37 Supplementary Information for State Compliance Purposes Summary .......................................................................................................................... 39 Fiscal Schedules and Analysis Schedule of Expenditures of Federal Awards Year Ended June 30, 2010 ...................................................................................... 41 Year Ended June 30, 2009 ...................................................................................... 45 Notes to Schedules of Expenditures of Federal Awards ............................................ 47 Schedule of Appropriations, Expenditures and Lapsed Balances Fiscal Year 2010 ..................................................................................................... 54 Fiscal Year 2009 ..................................................................................................... 56 Comparative Schedule of Net Appropriations, Expenditures and Lapsed Balances . 58 Comparative Schedule of Net Appropriations, Expenditures and Lapsed Balances By Detail Object Code ............................................................................................ 71 Page Fiscal Schedules and Analysis – Continued Comparative Schedule of Net Appropriations, Expenditures and Lapsed Balances By Fund ................................................................................................................... 72 Schedule of Changes in State Property ...................................................................... 73 Comparative Schedule of Cash Receipts ................................................................... 74 Reconciliation Schedule of Cash Receipts to Deposits Remitted to the State Comptroller Year Ended June 30, 2010 ................................................................................... 80 Year Ended June 30, 2009 ................................................................................... 81 Analysis of Significant Variations in Expenditures ................................................... 82 Analysis of Significant Variations in Receipts .......................................................... 88 Analysis of Significant Lapse Period Spending ....................................................... 93 Analysis of Accounts Receivable .............................................................................. 98 Indirect Cost Reimbursements and Administrative Costs (Not examined) ............... 99 Analysis of Operations Agency Functions and Planning Program ................................................................. 100 Average Number of Employees ................................................................................. 104 Grant Management Projects (Not examined) ............................................................ 105 Memorandums of Understanding (Not examined) .................................................... 119 Service Efforts and Accomplishments (Not examined) ............................................. 120 AGENCY OFFICIALS DEPARTMENT OF COMMERCE AND ECONOMIC OPPORTUNITY Director Warren Ribley (Effective March 1, 2009) Jack Lavin (Through February 27, 2009) Assistant Director Roxanne Nava Chief of Staff Stephen Konya, III Chief Operating Officer vacant Chief Financial Officer Anita Patel Chief Accountability Officer Scott Harry General Counsel Gail Niemann Acting Chief Information Officer Lisa Logan Chief Internal Auditor Gary Shadid Deputy Director, Office of Legislative Affairs Nicholas Reitz Deputy Director, Office of Policy Development, Planning, and Research vacant Deputy Director, Office of Marketing and Communications Lisa Stott Deputy Director, Budget Office Justin Petrovich Deputy Director, Bureau of Business Development Gabriel Sanders Deputy Director, Office of Employment and Training Therese McMahon Deputy Director, Bureau of Community Development Maureen Palmer Deputy Director, Bureau of Tourism Jan Kostner Deputy Director, State Energy Office Jonathan Feipel Acting Deputy Director, Office of Entrepreneurship, Innovation and Technology Jill Mehrberg Acting Deputy Director, Office of Trade and Investment Mary Roberts Deputy Director, Office of Coal Development and Marketing Bill Hoback Deputy Director, Illinois Film Office Betsy Steinberg Deputy Director, Office of Urban Assistance vacant Deputy Director, Office of Regional Outreach Andre Ashmore Deputy Director, Office of Energy Assistance Larry Dawson Department offices are located at: 607 East Adams 500 East Monroe Springfield, Illinois 62701 Springfield, Illinois 62701 100 West Randolph Street Suite 3-400 Chicago, Illinois 60601 The Department maintains additional office locations at: Local Offices Springfield, Chicago, Marion 1 Regional Offices Central – Springfield (same as local offices) East Central – Champaign North Central – Peoria, Canton, Bloomington Northeast – Aurora, Bourbonnais, Libertyville, Chicago (same as local office) Northern Stateline – Rockford Northwest – Moline, Viola Southeast – Olney Southern – Marion (same as local office) Southwest – Collinsville, Waterloo West Central – Macomb, Galesburg, Quincy Foreign Offices Western Europe – Brussels, Belgium North Asia – Tokyo, Japan Central Europe – Warsaw, Poland Far East – Wanchai, Hong Kong Latin America/Caribbean – Mexico City, Mexico Canada – Toronto, Ontario Africa – Johannesburg, South Africa China – Shanghai, China Middle East – Jerusalem, Israel India – New Delhi, India 2 STATE OF ILLINOIS DEPARTMENT OF COMMERCE AND ECONOMIC OPPORTUNITY COMPLIANCE REPORT SUMMARY The compliance testing performed during this examination was conducted in accordance with Government Auditing Standards and in accordance with the Illinois State Auditing Act. ACCOUNTANTS’ REPORT The Independent Accountants’ Report on State Compliance, on Internal Control Over Compliance and on Supplementary Information for State Compliance Purposes does not contain scope limitations, disclaimers, or other significant non-standard language. SUMMARY OF FINDINGS Number of Current Report Prior Report Findings 6 10 Repeated findings 3 4 Prior recommendations implemented or not repeated 7 10 Details of findings are presented in a separately tabbed report section. SCHEDULE OF FINDINGS FINDINGS (STATE COMPLIANCE) Item No. Page Description Finding Type 10-1 12 Weaknesses in grant administration Material Noncompliance and Material Weakness 10-2 16 Lack of documentation for shared expense Noncompliance methodology and Significant Deficiency 10-3 18 Employee performance evaluations not performed Noncompliance on a timely basis and Significant Deficiency 5 FINDINGS (STATE COMPLIANCE) - Continued Item No. Page Description Finding Type 10-4 20 Failure to follow DCMS Wireless Communication Noncompliance Device Policy and Significant Deficiency 10-5 21 Failure to timely submit report as required by the Noncompliance Environmental Protection Act and Significant Deficiency 10-6 22 Failure to appoint a representative to the Noncompliance Southwestern Illinois Metropolitan and Regional Planning Commission PRIOR FINDINGS NOT REPEATED Item No. Page Description A. 24 Contract provisions violate State statute and circumvent appropriation process B. 24 Failure to document reasonable reimbursement of out-of-country travel C. 25 Failure to enforce planned absence approval procedures D. 25 Failure to enforce employee review of telecommunications/phone