Illinois Arts Council. Compliance Examination for the Two Years Ended June 30, 2011

              Office of the Auditor General, Iles Park Plaza, 740 E. Ash St., Springfield, IL 62703 • Tel: 217-782-6046 or TTY 888-261-2887
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ILLINOIS ARTS COUNCIL
COMPLIANCE EXAMINATION
For the Two Years Ended: June 30, 2011
Summary of Findings:
Total this examination:
Total last examination:
Repeated from last examination:
2
3
1
Release Date: March 6, 2012
SYNOPSIS
• The Illinois Arts Council did not adopt formal Agency rules.
• The Illinois Arts Council did not reconcile its cash receipts to cash receipts reported by the Comptroller.
{Expenditures and Activity Measures are summarized on the reverse page.}
\ii
EXPENDITURE STATISTICS
Total Expenditures...............................................
10,318,698$
9,186,473$
16,753,633$
OPERATIONS TOTAL.........................................
2,329,108$
1,486,173$
2,113,700$
% of Total Expenditures.....................................
22.6%
16.2%
12.6%
Personal Services.............................................
-
1,225,327
1,366,234
Other Payroll Costs (FICA, Retirement).........
-
89,891
389,376
Other Operating Expenditures.........................
2,329,108
170,955
358,090
AWARDS AND GRANTS....................................
7,989,590$
7,700,300$
14,639,933$
% of Total Expenditures......................................
77.4%
83.8%
87.4%
Total Receipts.......................................................
1,321,045$
1,613,697$
1,568,024$
Average Number of Employees..........................
18
18
21
SELECTED ACTIVITY MEASURES
FY 2011
FY 2010
FY 2009
Federal Grant Receipts........................................
1,173,600$
1,471,100$
1,382,800$
Grant Applications Received (Not Examined)...
1,062
1,545
2,537
During Examination Period: Mr. Terry Scrogum
Currently: Mr. Terry Scrogum
Note: In FY 2011, Personal Services and Other Payroll Costs are included in Other Operating Expenditures.
ILLINOIS ARTS COUNCIL
COMPLIANCE EXAMINATION
For the Two Years Ended June 30, 2011
EXECUTIVE DIRECTOR
FY 2009
FY 2010
FY 2011iii
Failure to draft or adopt formal agency rules
Council Officials stated they will continue to seek the guidance of the Office of the Governor
Cash receipts were not reconciled to State Comptroller’s records
FINDINGS, CONCLUSIONS, AND RECOMMENDATIONS
FAILURE TO ADOPT FORMAL RULES FOR AGENCY AND GRANT PROCEDURES
The Illinois Arts Council did not draft or adopt formal agency rules, including rules relating to grant procedures. Grant expenditures were $8,768,533 and $7,535,334 for fiscal years 2011 and 2010, respectively.
The Illinois Administrative Procedure Act (5 ILCS 100/5 et seq.) states that each agency shall maintain and file organizational rules, including a current description of the agency’s organization, current procedures for information requests, and a current description of the agency’s rulemaking procedures. (Finding 1, page 9) This finding was first reported in 2007.
We recommended the Agency draft organizational rules and grant procedures, then contact the Joint Committee on Administrative Rules (JCAR) for assistance with the formal adoption process.
Agency Officials stated they did not currently have the staff or legal support to engage in this process and due to the financial crisis of the State, did not foresee funds being appropriated for this. The Agency will, however, continue to seek guidance from the Office of the Governor on this finding. (For previous Council response, see Digest Footnote #1)
FAILURE TO RECONCILE CASH RECEIPTS TO THE STATE COMPTROLLER’S RECORDS
The Illinois Arts Council did not reconcile its cash receipts received to cash receipts reported by the State Comptroller. Cash receipts were $1,321,045 and $1,613,697 for Fiscal Year 2011 and Fiscal Year 2010, respectively.
The Statewide Accounting Management System Procedure (SAMS) 25.40.20 requires State Agencies to reconcile receipt account balances maintained by the Agency with Statewide receipt account records maintained by the Comptroller’s Office. The reconciliation is required to be performed monthly and the Comptroller’s Office notified of any irreconcilable differences so that corrective actions may be taken. (Finding 2, page 10)
We recommended the Agency perform formal monthly cash receipt reconciliations as required by The Statewide Accounting Management System (SAMS).iv
Council agrees with auditors
Agency Officials stated they will perform formal monthly cash receipt reconciliations to fully comply with SAMS procedures.
AUDITORS’ OPINION
We conducted a compliance examination of the Illinois Arts Council as required by the Illinois State Auditing Act. The Commission has no funds that require an audit leading to an opinion on financial statements.
___________________________________
WILLIAM G. HOLLAND
Auditor General
WGH:JGR:rt
AUDITORS ASSIGNED
Our special assistant auditors on this engagement were McGreal & Company, PC.
DIGEST FOOTNOTES
#1 – FAILURE TO ADOPT FORMAL RULES FOR AGENCY AND GRANT PROCEDURES
2009: Illinois Arts Council officials partially agreed with our finding, citing shortage of staff and legal support to engage in the process to comply. The Agency will continue to seek the guidance of the Office of the Governor on this finding.