The 274-page audit by Illinois Auditor General William Holland found issues at 18 state agencies, as well as the governor’s office and the state comptroller’s office. Some problems apply to multiple agencies, and many of the problems have gone uncorrected for years.
Many of the audit findings center on how the state tracks the expenditure of federal grant money. Holland says the state’s current system prevents reports from being filed completely, accurately and on time.
The state’s “highly-decentralized” reporting process is partly to blame, along with overly complex forms and staff with varying levels of training on accounting principles, Holland notes.
“…[T]hese agency personnel may lack the qualifications, time, support and training necessary to timely and accurately report year end accounting information to assist the comptroller in his preparation of statewide financial statements…,” Holland says, adding that statements often have to be corrected. Errors can cause delays and reductions in funding for federally-supported programs like Medicaid, homeland security, highway planning and more.
Holland notes that his office has repeatedly pointed out the problem, to no avail.
“The state has not solved these problems or made substantive changes to the system to effectively remediate these financial reporting weaknesses,” Holland says in the audit report.
He says some state agency heads rely on the audits done by his office as part of their internal quality control, even though his office “has repeatedly informed state agency officials that the post audit function is not and should not be an internal control mechanism for any operational activity related to financial reporting.”
While the governor’s office acknowledged that the state needs a centralized computer accounting system in discussions with Holland’s office, Holland notes that an even more basic failure worsened the situation. He says the state can’t afford a new computer system because it can’t obtain federal grants – a condition caused by the state’s failure to update the job descriptions of state employees who prepare the reports and grant applications so that all applicants have the correct skills for the job.
The audit also identifies numerous issues with case management by various state agencies, including the Department of Healthcare and Family Services, Department of Human Services, Department of Children and Family Services and the Department of Employment Security.
One example includes the Temporary Aid for Needy Families (TANF) program, which is administered by Human Services but is distributed by several other state agencies. Holland notes that Human Services did not review the costs reported by other agencies, while some agencies billed the federal government for costs that are not allowed under federal regulations.
Holland says his office has identified – for eight straight years – several instances in which unallowable costs were charged to the federal government by state agencies. That “is indicative that adequate internal control does not exist…and adequate monitoring of the other state agencies has not been performed,” Holland notes.
While TANF recipients are supposed to be reviewed regularly to determine eligibility, the growing caseload has resulted in a marked increase in unreviewed cases.
In July 2010, when the state had 28,844 TANF recipients, 939 cases were overdue for review. As of June 2011, when there were 33,029 TANF recipients, 1,501 cases were overdue for review. The Illinois Comprehensive Health Insurance Program (CHIP) has a backlog of 30,636 cases, while 47,729 Medicaid cases are backlogged.
Human Services officials told Holland’s staff the backlogs are due to an increase of 57,280 cases combined between TANF, CHIP and Medicaid, while the department lost 56 staff during the 2010 fiscal year.
Contact Patrick Yeagle at firstname.lastname@example.org.