Department of Revenue. Compliance Examination for the year ended June 30, 2009

              REPORT DIGEST
DEPARTMENT OF
REVENUE
FINANCIAL AUDIT
AND
COMPLIANCE
EXAMINATION
For the Year Ended:
June 30, 2009
Summary of Findings:
Total this audit 21
Total last audit 18
Repeated from last audit 11
Release Date:
May 13, 2010
State of Illinois
Office of the Auditor General
WILLIAM G. HOLLAND
AUDITOR GENERAL
To obtain a copy of the Report contact:
Office of the Auditor General
Iles Park Plaza
740 E. Ash Street
Springfield, IL 62703
(217) 782-6046 or TTY (888) 261-2887
This Report Digest and Full Report
are also available on
the worldwide web at
http://www.auditor.illinois.gov
INTRODUCTION
This report digest covers both the Financial Audit and State
Compliance Examination of the Department of Revenue (Department)
for the year ended June 30, 2009. The Financial Audit and State
Compliance Examination present a total of 21 findings, with some of
the more significant issues summarized in this report digest.
SYNOPSIS
 During our financial audit, we noted that the Department
overstated its liability to local governments for Personal
Property Replacement Tax collections by $84,000,000 that
were received and deposited, but not earned as of year-end.
Specifically, the Department did not consider approved, but
unpaid, Personal Property Replacement Tax refunds in
calculating a liability to local governments for financial
reporting.
 The Department’s failure to pay Personal Property
Replacement Tax refunds created a statutory excess.
Specifically, the Department did not pay all Personal Property
Replacement Tax Refunds prior to determining year-end
“excess” deposits within the Income Tax Refund Fund.
 The Department’s accounts receivable balances calculated at
June 30, 2009 were not accurate.
 The Department failed to exercise adequate control controls
over recording, reporting, and distributing income tax refunds
to taxpayers. Specifically, the Department issued improper
refunds to taxpayers and understated its refund liability at June
30, 2009.
 The Department lacked sufficient evidence supporting that
modifications to the GenTax system were properly approved,
thoroughly tested, and consistently documented prior to
implementation.
 The Department did not allocate Cigarette Tax collections
pursuant to statute, leading to multi-million dollar deposit
errors in the General Revenue, Common School, and Long-
Term Care Provider Funds.
 The Department lacked sufficient appropriation to pay State’s
Attorneys and Public Defenders in accordance with the
Counties Code.
{Expenditures and Activity Measures are summarized on the next page.}