Section 1221.10  Definitions


Terms used in this Part shall have the meanings set forth in the Seizure and Forfeiture Reporting Act and in this Section.


"Act" means the Seizure and Forfeiture Reporting Act.


"Department" means the Illinois State Police.


"Participating Agency" means a unit of local government, including but not limited to law enforcement agencies, a drug task force, or a Metropolitan Enforcement Group (MEG), that participated in or received funds from the forfeiture or seizure process.


Section 1221.20  Scope


This Part is applicable to seized or forfeited property as set forth in Section 5 of the Act. 


Section 1221.30  Purpose


The purpose of this Part is to provide notice of the requirements and procedures for Illinois law enforcement agencies to report seizures, forfeitures, disbursements and expenditures to the Department pursuant to the Act. 


Section 1221.40  Duties


a)         Department.


1)         The Department shall establish and maintain on its official website at


A)        All necessary forms for initial seizure and annual reporting, which require the journaling of information pertaining to seized assets, awarded assets, and expenditures, as outlined in subsection (a)(2) below; and


B)        A public database that includes annual aggregate data for each participating agency that:


i)          reports seizures of property under Section 10(a) of the Act;


ii)         receives distributions of forfeiture proceeds subject to reporting under the Act; or


iii)        reports expenditures under Section 10(b) of the Act.  (Section 10(c) of the Act)


2)         This aggregate data reported on the Department's website shall include, for each participating agency:


A)        The total number of asset seizures reported by each participating agency during the calendar year;


B)        The monetary value of all currency or its equivalent seized by the participating agency during the calendar year;


C)        The number of conveyances seized by the participating agency during the calendar year, and the aggregate estimated value;


D)        The aggregate estimated value of all other property seized by the participating agency during the calendar year;


E)        The monetary value of distributions by the Department of State Police of forfeited currency or auction proceeds from forfeited property to the participating agency during the calendar year; and


F)         The total amount of the participating agency's expenditures of forfeiture proceeds during the calendar year, categorized as provided under Section 10(b) of the Act.  (Section 10(c) of the Act)


b)         Law Enforcement. Each participating agency that seizes property subject to reporting under the Act shall report to the Department utilizing the forms referenced in subsection (a) consistent with the rules established in this Part.


Section 1220.110  Authority


This Part is promulgated pursuant to the Intergovernmental Drug Laws Enforcement Act [30 ILCS 715], which charges the Illinois Department of State Police to establish reasonable rules. Additionally, the Department is charged with coordinating the operations of all MEG Units, conducting those investigations the Director deems necessary to carry out the Department's designated duties under that Act, including the establishment of forms for reporting by each MEG Unit to the Department.


(Source:  Amended at 42 Ill. Reg. 19207, effective October 10, 2018)


Section 1220.120  Definitions


"Act" – The Intergovernmental Drug Laws Enforcement Act [30 ILCS 715].


"Board" – A policy board composed of an elected official, or his/her designee, and the chief law enforcement officer, or his/her designee, from each participating unit of local government to oversee the operations of the MEG and make such reports to the Department as the Department may require.


"Confidential Source" – Any individual, other than law enforcement personnel, who is or whose purpose is to supply intelligence information or services to the MEG Unit, whether paid or not.


"Coordinator" – That person designated to coordinate MEG activities for the Department of State Police.


"Department" or "DSP" – The Illinois Department of State Police.


"Director" – The Director of the Illinois Department of State Police.


"Fiscal Officer" – A designated appropriate elected official of a participating unit of local government to act as the financial officer of the particular MEG and person responsible for receiving and expending funds for the operation of the MEG.


"MEG Director" – That person appointed by a governing board responsible for supervising the day-to-day operations of a particular unit.


"Metropolitan Enforcement Group" or "MEG" – A combination of units of government established through an intergovernmental agreement to enforce the drug laws of this State.


"Monitor" – That person in the Department designated to monitor the MEG Units.


"Shall" – A term used to indicate a mandatory statement.


"Should" – A term used in the interpretation of a standard reflecting the commonly acceptable method, yet allowing for the use of effective alternatives when the standard can be shown to be inappropriate.


(Source:  Amended at 42 Ill. Reg. 19207, effective October 10, 2018)


Section 1220.130  Public Policy


a)         Purpose

To the end that the health, safety and welfare of the People of the State of Illinois should be protected from those who would violate the laws regulating the production, sale, prescribing, manufacturing, administering, transporting, having in possession, dispensing, delivering, distribution or use of a controlled substance, as defined in the Illinois Controlled Substances Act [720 ILCS 570], and cannabis, as defined in the Cannabis Control Act [720 ILCS 550], the Department of State Police establishes rules for the purpose of coordinating the operation of all MEG Units and for reporting those activities annually to the Governor and the General Assembly.


b)         Adherence to Professional Standards

All MEG personnel and operations shall be conducted in such a way as to bring credit, and not discredit, upon the MEG Unit, the department the individual represents, and the Department of State Police.


c)         Discrimination Prohibited

No person operating under this Part shall discriminate against any individual on the basis of race, color, religion, sex or national origin in any manner prohibited by the laws of the United States or the State of Illinois.


d)         Interference with Department Staff Prohibited

No person shall hinder, interfere, obstruct or intervene with any inspection or investigation conducted by the Department pursuant to the Act.


e)         Notification to the Department

The MEG Director will notify the DSP Director, or his/her designee (Coordinator), and the authority of local jurisdiction by telephone immediately, with follow up in writing within 24 hours after any instance of:


1)         The discharge of weapons in any situation (except in cases of required training);


2)         Complaints of misconduct against the Unit or any individual in the Unit;


3)         Serious injuries sustained by agents or defendants due to an arrest situation.


f)         Rights

Each MEG Director and agent shall, in all cases of action by agents of his/her Unit, insure that each person confronted or arrested by a member of his/her Unit receives those privileges afforded by the laws and Constitutions of the United States and the State of Illinois.


g)         Information

The Director may request and will receive all information written or oral that he/she deems necessary to evaluate the MEG Units.


h)         Standards of Conduct

The MEG Director and his/her agents shall adhere to the Department's established standards of conduct as provided.


(Source:  Amended at 42 Ill. Reg. 19207, effective October 10, 2018)


Section 1221.100  Initial Seizure


a)         Each participating agency shall report the following information about property seized or forfeited under State law to the Department:


1)         The name of the participating agency that seized the property;


2)         The date of the seizure;


3)         The type of property seized, including a building, vehicle, boat, cash, negotiable security, or firearm, except reporting is not required for seizures of contraband including alcohol, gambling devices, drug paraphernalia, and controlled substances;


4)         A description of the property seized, and if the property is a conveyance, the description shall include the make, model, year, and vehicle identification number or serial number;


5)         The estimated value of the property; and


6)         The location where the seizure occurred.  (Section 10(a) of the Act)


b)         The Department shall make ISP form 4-064, Notice/Inventory Seized Property form available to participating agencies through its asset forfeiture reporting system on its official website at for reporting the required information.  The form must be filed:


1)         within 28 days after the seizure when it is related to drug and Article 36 cases filed pursuant to Article 36 of the Illinois Criminal Code of 2012 [720 ILCS 5/36-1]; and


2)         within 60 days after the seizure when it is related to money laundering cases.


Section 1221.110  Annual Report


a)         Annual reports are required of all participating agencies that:


1)         seize property subject to reporting under the Act; or


2)         receive proceeds from forfeitures subject to reporting under the Act (Section 10(b) of the Act); or


3)         have forfeited property awarded by the Director to their agency for official use under the Act.


b)         Annual reports shall be filed with the Department no later than 60 days after December 31 of that year, through its asset forfeiture reporting system on its official website at


c)         ISP Form 2-691, Asset Forfeiture Annual Report form, which the Department shall make available on its official website at:


Section 1220.210  Planning and Execution of an Operation


a)         General

The MEG Director or his designee is responsible for overseeing the planning and execution of any operation which may involve forced entry.


b)         Notifications

The MEG Director or his designee must notify the local police agency of venue that there is an anticipated raid and should request its assistance unless unforeseen exigencies do not permit time to do so or the MEG Director believes an unusual consideration makes that procedure unwise.


c)         Duties

The MEG Director or his designee is responsible for providing in detail:


1)         Clear lines of authority, accountability and individual duty assignments;


2)         Thorough familiarization with the premises, persons and circumstances which might be expected or encountered in any enforcement activity;


3)         Coordination with local law enforcement agencies;


4)         Any other reasonable circumstances not enumerated.


d)         Unauthorized Persons Prohibited

Unless specifically approved by the MEG Director, no one other than law enforcement personnel (except confidential sources) shall be present during any surveillance, search, seizure and/or arrest operation.


(Source:  Amended at 5 Ill. Reg. 6450, effective June 3, 1981)


Section 1220.220  Confidential Sources


a)         General

Confidential sources are to be utilized to achieve their full potential value to the Unit.  They shall not be considered for the exclusive use of the agents who developed the individual as a source of information.


b)         Identification of Confidential Sources

For internal record keeping purposes, all confidential sources will be identified, using Department guidelines.  As used in this Section, however, "identification" of confidential sources does not necessarily imply disclosure to entities outside the Department and the relevant MEG Unit.  Disclosure to those entities shall also be governed by the applicable Department guidelines.


c)         Juveniles

No juvenile will be used or receive any money as a confidential source without written approval of his/her parent or guardian and the MEG Director.


d)         Illegal or Improper Activity

In all cases in which the confidential source's activity is suspected of being illegal or improper, the MEG agents shall conduct an investigation and report the results to the appropriate authority.


e)         Reports

MEG Directors shall make available to the Department information summarizing the activity of the confidential source.  Included shall be records of all monies paid and a recommendation for continued or discontinued utilization.


f)         All information in the confidential source file shall remain confidential and may not be disclosed unless prescribed by law.


(Source:  Amended at 42 Ill. Reg. 19207, effective October 10, 2018)


Section 1221.200  Compliance Checks


a)         Pursuant to Section 10(e) of the Act, the Department may check any participating agency's records or materials to ensure compliance with the Act and this part.


b)         Participating agencies shall retain all records regarding seizures and forfeitures under the Act for a period of at least 7 years. 


c)         All participating agencies shall fully and timely cooperate with the Department during any requested compliance check, including making available personnel to interview and making records or property available upon request.


d)         The proceeds from the sale of any asset purchased with asset forfeiture funds shall be spent with the same restrictions and reporting obligations as provided in the Act and this Part.


e)         Participating agencies shall make available to the Department upon request: 


1)         records related to all forfeited funds or property, including but not limited to all financial accounts and evidence storage locations; or


2)         the actual property awarded.


Section 1221.210  Noncompliance


a)         The Department's Asset Forfeiture Section will perform compliance checks on up to 5% of all participating agencies each year.


b)         If the Department's Asset Forfeiture Section deems a participating agency to be non-compliant with subsection (c) based upon a compliance check, the Director may:


1)         Order property that was previously awarded under this Act to be returned to the Director; or


2)         Sanction the non-compliant participating agency with a goal of remedying any non-compliant activity. 


A)        Sanctions may include but are not limited to:


i)          remedial education;


ii)         additional training;


iii)        additional mandatory reporting requirements;


iv)        delay in distribution of forfeited property pending compliance;


v)         extinguishing the participating agency shares of un-distributed or seized but not yet forfeited property;


vi)        suspension from the program; and


vii)       removal from the program. 


B)        Non-compliant agencies removed from the program may be ordered to:


i)          return all awarded property, any property purchased with forfeited funds, and any forfeited funds held by the participating agency as of the date of the removal from the program; and


ii)         terminate any contracts involving the use of forfeited funds or cease using such funds for future payments under the contract if not terminated.


c)         Non-compliance may include but not be limited to any of the following:


1)         violating the Act or this Part;


2)         disobeying or disregarding an order or directive of the Director regarding the program;


3)         use of forfeited funds or property inconsistent with:


A)        the Act, which allows for funds to be used for:


i)          crime, gang, or abuse prevention or intervention programs;


ii)         compensation or services for crime victims;


iii)        witness protection, informant fees, and controlled purchases of contraband;


iv)        salaries, overtime, and benefits, as permitted by law;


v)         operating expenses, including but not limited to, capital expenditures for vehicles, firearms, equipment, computers, furniture, office supplies, postage, printing, membership fees paid to trade associations, and fees for professional services including auditing, court reporting, expert witnesses, and attorneys;


vi)        travel, meals, entertainment, conferences, training, and continuing education seminars; and


vii)       other expenditures of forfeiture proceeds.


B)        Article 36 of the Criminal Code of 2012 [720 ILCS 5/36-1], the Illinois Streetgang Terrorism Omnibus Prevention Act [740 ILCS 147/1], the Drug Asset Forfeiture Procedure Act [725 ILCS 150/1], the Illinois Food, Drug and Cosmetic Act [410 ILCS 620/3.23], the Narcotics Profit Forfeiture Act [725 ILCS 175U/1], the Cannabis Control Act [720 ILCS 550/1], and the Illinois Controlled Substances Act [720 ILCS 570/100], which allow for funds to be used for:


i)          the enforcement of laws governing cannabis and controlled substances;


ii)         public education in the commuity or schools in the prevention or detection of the abuse of drugs or alcohol; or


iii)        security cameras used for the prevention or detection of violence;


C)        the money laundering [720 ILCS 5/29], the financial institution fraud [720 ILCS 5/17-10.6], the street gang and racketeer influence and corruption [720 ILCS 5/33G-6] provisions of the Illinois Criminal Code of 2012, which allow for funds to be used for the enforcement of these laws;


D)        the Environmental Protection Act [415 ILCS 5/44.1], which allows for funds to be used for the enforcement of the environmental protection laws of this State;


E)        the Herptiles-Herps Act [510 ILCS 68/105-55], the Fish and Aquatic Life Code [515 ILCS 5/1-215], and the Wildlife Code [520 ILCS 5/1.25], which allow for funds to be deposited in the Wildlife Preservation Fund; or


F)         the gambling and related offenses [720 ILCS 5/28-5] provisions of the Illinois Criminal Code of 2012, which allow for funds to be deposited in the general fund of the county wherein such seizure occurred;


4)         failure to timely submit to the annual reporting requirement;


5)         negative audit or compliance check findings; or


6)         failure to cooperate with an audit or compliance check.


d)         Participating agencies may appeal a finding of noncompliance by submitting documentation to the Department's Asset Forfeiture Section for further review by the Director or the Director's designee.


1)         Within 30 days of receiving notice from the Department of non-compliance, the participating agency shall provide written responses to the findings.  The audited entity's response options are:


A)        "Concur" – the participating agency agrees with the finding.


B)        "Do not concur" – the participating agency does not agree with the finding.


2)         The response will also include a corrective action plan and an estimated completion date of the corrective action.


A)        If corrective action is impeded by fiscal or staffing issues outside of participating agency's control, the use of compensating controls should be considered until appropriate resources are allocated.


B)        If a conference is requested, Asset Forfeiture staff will meet with the appropriate management/command to discuss the findings.


C)        Once Asset Forfeiture staff and the participating agency agree on the findings, the participating agency will then provide a written response for each finding.


3)         All written communication shall be sent to:


Illinois State Police

Asset Forfeiture Section

801 South Seventh Street, Suite 700-A

Springfield, Illinois  62703


Section 1220.310  Records


a)         Procedure

Every MEG Unit must maintain the following:


1)         Records that fully disclose the total receipts and expenditures of the MEG Unit.


2)         Records that fully disclose the disposition of all Department funds for the MEG Unit.


3)         Records that fully disclose the amount of money and/or in-kind match provided for the MEG Unit by sources other than the Department.


4)         Any other records requested by the Department to facilitate an effective audit.


b)         Accounts


1)         MEG Units accounts shall be maintained in conformity with the category and subcategory detail shown in the detailed budget submitted.  The MEG Unit may make allotments and account expenditures in further subcategory detail if so desired, and an account will be maintained for each such allotment.


2)         Expenditures shall be recorded in a formal account.  The record of expenditures may be maintained in the agency's regular accounts if the expenditures are clearly identified in those accounts and memorandum records are maintained that separately identify the expenditures.


c)         Recording of Receipts and Expenditures

Accounting procedures must provide for an accurate and timely recording of receipt of funds by source, of expenditures made from the funds, and of unexpended balances.  Controls must be set up to ensure that expenditures charged to MEG activities are for allowable purposes and that documentation is readily available to verify that those charges are accurate.


d)         Intermediate Records

Intermediate or secondary records, such as ledger cards, weekly or monthly cost summaries, cost analysis reports, letters of justification, or technical cost appraisals, are not supporting records and cannot be used in place of the supporting records.  For purposes of audit, expenditures shall be supported by both the supporting records and intermediate records.


e)         Supporting Records (Documentation)

Supporting records are the original or source records and documents that evidence expenditures made and that underlie the accounting transactions.  Daily time records and payroll records evidencing labor costs, invoices for purchases of capital equipment and supplies or services, computations that show the method used in allocating indirect costs, authorizations to perform or discontinue work, change orders to the scope of the work, and similar documents and records serve as supporting records.


f)         Responsibility

Each MEG Unit is required to maintain, or cause to be maintained, all records (including source documentation) relating to programs undertaken as evidence of costs incurred.  It is the responsibility of the MEG Unit to assure that an accounting system is in effect that conforms to generally accepted accounting principles and that fully discloses the amount and disposition of the State funds, the amount and disposition of the matching contributions, and such other records as will facilitate an effective audit.  It is also the responsibility of the MEG Unit to assure that procedures are established and supporting documentation is developed to substantiate allowable costs.


g)         Maintenance of Records

MEG Units are expected to insure that records of each fiscal year are separately maintained and that the information required can be readily located.  The MEG Units are also obliged to protect records adequately against fire or other damage.  When records are stored away from the principal office, a written index of the location of records stored should be on hand and readily accessible.  The records should be maintained in an orderly manner and must be available for audit purposes.


h)         Retention of Records


1)         Financial records of the MEG Unit, including books of original entry, source documents, the general ledger, subsidiary ledgers, personnel and payroll records, cancelled checks, and related documents and records must be retained for a period of 5 years or the period of time required by the Secretary of State's Local Records Commission (see 44 Ill. Adm. Code 4400), whichever is greater.  The retention period starts from the date of the submission of the final expenditure report or ending date of the fiscal year, whichever is later.  The 5-year retention period is qualified as follows:


A)        Records for non-expendable property acquired with project funds shall be retained for 5 years after final disposition of that property.


B)        Records must be retained beyond the 5-year period if an audit is in progress and/or the findings of a completed audit have not been resolved satisfactorily.  If an audit is completed and the findings are resolved prior to the 5-year period, records will still be retained until the end of the 5-year period.


C)        The Department may request transfer of certain records to its custody from local governments when it determines that the records possess long term retention value.


2)         Program records of the MEG Unit must be retained for a period of 5years.  Program records are all records other than financial. 


A)        The retention period starts from the date of the submission of the final expenditure report or ending date of the fiscal year, whichever is later.


B)        However, records must be retained beyond the 5-year period if an audit is in progress and/or the findings of a completed audit have been resolved satisfactorily.  If an audit is completed and the findings are resolved prior to the 5-year period, records will still be retained until the end of that 5-year period.


3)         No record of the MEG Unit may be destroyed or otherwise disposed of unless the State Archivist or the Secretary of State's Local Records Commission has been notified and has given the MEG Unit written approval, as required by the Local Records Act [50 ILCS 205]).


i)          Department's Fiscal Report

A Fiscal Report will be submitted to the Department by the 30th day following the end of each fiscal quarter, reporting State and local expenditures. Obligations will be reported that are unliquidated at the end of the quarter.  All obligations not liquidated by the end of the lapse period will become the responsibility of the local participants. The MEG Unit fiscal year shall commence July 1 and close June 30.


(Source:  Amended at 42 Ill. Reg. 19207, effective October 10, 2018)


Section 1220.320  Matching Contributions




The following subsections set forth local matching contribution requirements.


a)         All MEGs requesting Department funds must be prepared to provide at least 50 percent of the total fiscal year project cost.


b)         Matching cost contributions can be from local or private sources and shall consist of the following:


1)         Cash match from funds appropriated by units of local government, or cash from private and not-for-profit organizations, donations and contributions.


2)         In-kind resources (services, equipment, goods or facilities).


c)         Assets and equipment acquired under Illinois Criminal Justice Information Authority grants may not be provided as match.


(Source:  Amended at 42 Ill. Reg. 19207, effective October 10, 2018)


Section 1220.330  Administrative Policies


a)         General

To be allowable, costs must meet the following general criteria:


1)         Be necessary and reasonable for proper and efficient administration of the program, be allocable to the program under these principles, and, except as specifically provided in this Section, not be a general expense required to carry out the overall responsibilities of local governments.


2)         Be authorized by, or in conformity with, local laws or regulations.


3)         Conform to any limitations or exclusions set forth in this Part or other governing limitations as to types or amounts of cost items.


4)         Be consistent with policies, regulations and procedures that apply to the unit of government of which the MEG is a part.


5)         Be accorded consistent treatment through application of generally accepted accounting principles appropriate to the circumstances.


b)         Conflict of Interest


1)         No official or employee of any MEG Unit shall knowingly participate personally in any matter in which Department funds are used or in which an immediate family member, partner, or any person or organization with whom he/she is negotiating or has any arrangement concerning prospective employment, has a financial interest.


2)         No MEG Unit shall employ a former Department employee for any purpose directly or indirectly connected with the administration, operation or evaluation of a Department funded MEG Unit without prior written approval of the Director.


3)         In the use of Department funds, any official or employee of the unit of local government or a non-government grantee shall avoid any action that might result in, or create the appearance of:


A)        Using his/her official position for private gain.


B)        Giving preferential treatment to any person.


C)        Losing complete independence or impartiality.


D)        Making an official decision outside official channels.


E)        Affecting adversely the confidence of the public in the integrity of the government or the program.


c)         Reporting Irregularities

The MEG Director is responsible for reporting promptly to the Department the nature and circumstances surrounding any financial irregularities discovered.  Failure to report known irregularities can result in suspension or other remedial action.


d)         Program Income


1)         Definition.  Program income represents earnings by the MEG Unit realized from the State-supported activities.  Program income includes, but is not limited to, interest earned, income from service fees, sale of commodities, usage or rental fees, restitution, and seized funds or assets.


2)         Disposition of Program Income.


A)        Interest income earned, restitution, and seized funds and assets shall be retained by the MEG Unit to be utilized in the MEG Program as matching funds.


B)        All other program income requires the approval of the Department prior to its use or disposal.


e)         Minutes of Meetings

The proceedings of all Supervisory, Advisory, Ad Hoc and Executive committees or commissions should be recorded as official minutes and maintained by the MEG Unit.  Copies of the official minutes shall be forwarded to the Department MEG Coordinator.  The minutes should be made available to the general public when mandated by law or Department staff.


(Source:  Amended at 42 Ill. Reg. 19207, effective October 10, 2018)


Section 1220.340  Audits


a)         Annual Audit

The Department shall have an audit of the MEG units conducted by a certified public accounting firm selected pursuant to this Section.  The audits shall be submitted to the Department by December 31 for the fiscal period having ended June 30 of the previous year.


b)         Selection of Auditor


1)         The Department shall select the auditing firm from those who have submitted bids.  Prior to selecting the auditing firm, the Director shall refer the bids to a committee comprised of members of the Department representing the Office of Internal Auditing; the Division of Administration, Bureau of Fiscal Management; the Division of Criminal Investigation; and such other members as the Director determines are appropriate based upon their experience and qualification.


2)         The Committee shall consider the following criteria in order of rank of importance in recommending an auditing firm to the Director.


A)        Time Frame for Completion


i)          All field work will begin September 1, and must be completed within 60 days.


ii)         A draft report must be prepared and filed with the Director within 35 days of the completion of subsection (b)(2)(A)(i).


iii)        A final report shall be filed with the Director no later than December 31.


iv)        In no event may the time for completion of the requirements of this subsection (b)(2)(A) exceed 120 days.


B)        Reputation and Experience of the Firm


i)          The firm shall provide the Department with evidence of its license and good standing with the Department of Financial and Professional Regulation.


ii)         The firm shall provide the Department with evidence that its personnel assigned to the audit are familiar with, and experienced in, conducting governmental audits involving grant programs.


iii)        The firm shall identify preliminary areas of problems and difficulties and a description of potential methods to solve those problems.


C)        Cost

The cost of the audit shall be limited to professional services and administrative costs which shall be reimbursed as follows:


i)          75 percent upon completion of the draft report; and


ii)         25 percent upon acceptance of the final report by the Department.


c)         Audit Scope

Each audit shall consist of a financial and compliance component of the MEG operations.  Each audit shall consist of two components with coverage of at least those items listed in this subsection (c).  The scope of review shall be broad enough to include expenditures and activities of MEG units with unique operations.  The time frame of the examination shall be the Department's Fiscal Year including an additional 90 days in which expenses for obligations incurred during the fiscal year shall be paid.


1)         Financial Examination

The examination shall include, on a test basis, a review of the receipts and expenditures of State and local funds, including any necessary supporting documentation.  The requirements of Subpart C should be considered in conducting this financial review, and the review shall render an opinion on the financial statements, which are to be presented on the accrual basis.


2)         Compliance Review

The compliance review shall consist of an examination of documentation to determine if there has been adherence to State and local regulations concerning the allowability of receipts and expenditures, such as the prohibition of payment for unauthorized travel.  A paragraph attesting to that compliance, or non-compliance, shall be included in the report. The audit shall consider:


A)        Development of necessary plans and concepts for the MEG operations (see Sections 1220.210, 1220.220, 1220.320 and 1220.350);


B)        Management policies, procedures and controls to promote efficient and effective operations, and assure that accurate records have been generated from the MEG operations (see Sections 1220.310, 1220.320, 1220.330, 1220.350, 1220.360, 1220.370 and 1220.390);


C)        The expenditure of State and matching funds to ensure that they are properly recorded and controlled, are expended for the purposes agreed upon, and have been properly reported (see Sections 1220.310, 1220.320, 1220.350, 1220.360 and 1220.390);


D)        Non-financial resources, such as custody, utilization and control over property, equipment and supplies (see Section 1220.380).


(Source:  Amended at 42 Ill. Reg. 19207, effective October 10, 2018)


Section 1220.350  Budget


a)         Personnel


1)         Written personnel policies are required and will include work hours to be maintained by employees, vacation and sick leave allowances, payment of accrued vacation at the end of employment, and overtime.  The policies should also set forth employee benefits and information related to pay increases, promotions, and all other pertinent personnel policies and regulations.


2)         Amounts charged for personnel services must be based on payrolls documented and approved in accordance with the generally accepted practice of the local agency.  Payrolls must be supported by time and attendance records for individual employees.  These records must demonstrate the days and hours worked on the MEG Unit.


3)         Dual compensation is prohibited (i.e., the individual may not receive increased compensation from a second source for the same unit of work done at the same time).


4)         The salaries and job titles of individuals must be outlined in an approved budget.


5)         Appropriated State money cannot be used to pay the salaries of local and county sworn agents, with the exception of the Unit Director, unless prior approval from the Department is obtained.  Determination will be made in accordance with existing resources or other relevant data.


b)         Equipment

Equipment must be outlined in the approved budget and be necessary.


c)         Consultants (Professional Services)

The requirement of professional services with respect to arrangements with individuals, other government units and non-government organizations or consultants needs prior approval by the Department.


d)         Other Contractual

Other contractual costs may include the costs of utilities, equipment, rentals, evaluation and facilities.  These are considered as "other contractual" in that they generally are incurred as a result of an agreement, letter of intent, contract or lease.


e)         Travel


1)         Travel costs are allowable for expenses for transportation, lodging, subsistence and related items incurred by employees who are on official business incident to a MEG program.  These costs may be charged on an actual basis, on a per diem or mileage basis in lieu of actual costs incurred, or on a combination of the two, provided the method used is applied to an entire trip, and results in charges consistent with those normally allowed in like circumstances in non-State sponsored activities.  The difference in cost between first-class air accommodations and less-than-first-class air accommodations is not allowable except when less-than-first-class air accommodations are not reasonably available.  Meals may not be claimed if travel is within the city of the employee's assigned MEG headquarters.


2)         Foreign Travel.  Foreign travel is defined as any travel outside of Canada and the United States and its territories and possessions.  Foreign travel costs are allowed only when the travel has received specific prior approval from the Department or MEG Policy Board.


A)        Foreign travel costs for Department employees are allowed only when each specific foreign trip has received specific prior approval by the Department.


B)        Foreign travel costs for non-Department MEG employees are allowed only when each separate foreign trip has received specific prior approval by the relevant MEG Policy Board.


3)         Expenses between the employee's residence and headquarters are not allowable charges.


4)         Travel costs must be supported by travel vouchers that contain dates, places, and purposes of travel.  Motel or hotel bills and train or airplane ticket receipts must support these charges.  State and Department travel regulations must be complied with.


f)         Commodities

Commodities include supplies and materials.  The cost of materials and supplies necessary to carry out MEG operations is allowable.  Purchases made specifically for the MEG program should be charged to that program at their actual prices after deducting all cash discounts, trade discounts, rebates, and allowances received by the MEG Unit.  Withdrawals from general stores or stockrooms should be charged at cost under any recognized method of pricing consistently applied.  Incoming transportation charges are a proper part of material costs.  All purchases of commodities must be supported by purchase orders, invoices or cancelled checks with vouchers supporting the amounts.


g)         Other Allowable Costs


1)         Conferences, lunches or dinners, reimbursement for which are limited by the Department of Central Management Services' Travel Regulations, to the extent that the funds are State appropriated.


2)         Confidential expenditures.  Confidential expenditures are payments to informants, purchases of materials as evidence (narcotics), or other uses as may be required by law enforcement personnel working in an undercover capacity as provided in Section 1220.390.


h)         Unallowable Costs


1)         Bad Debts.  Any losses arising from uncollectible accounts and other claims and related costs.


2)         Contingencies.  Contributions to a contingency reserve or any similar provision for unforeseen events.


3)         Contributions and Donations.


4)         Entertainment.  Costs of amusements, social activities, and incidental costs relating to those activities, such as meals, beverages, lodging, rentals, transportation, and gratuities.


5)         Fines and Penalties.  Costs resulting from violations of, or failure to comply with, federal, State, and local laws and regulations.


6)         Interest and Other Financial Costs.  Interest on borrowings (however represented), bond discounts, cost of financing and refinancing operations, and related legal and professional fees.


7)         Inappropriate Expenditures.  Expenditures not related to the program purpose or unreasonable as to cost benefits derived.


8)         Purchase of Unit Owned Equipment.  Program funds may not be used to provide reimbursement for the purchase price of equipment already owned by the Unit unless specifically approved by the Department based upon economic need of the Unit and availability of resources of the Unit.


9)         Pre-Award Costs.  Award costs incurred after the funding period termination or prior to award.


10)         Indirect Costs.  The Department shall not allow reimbursement of Department funds for the indirect costs of preparing an application in the awarding of any funding.  The intent of this policy is to concentrate the use of State funds on crime control activities.


i)          Costs Requiring Prior Department Approval, When Department Funds Will Be Expended.  If the MEG Unit has a Fiduciary Agreement, those rules will be followed for procurement.  Otherwise, subsection (i) shall be followed.  In the event of conflict between a MEG Unit's Fiduciary Agreement and subsection (i), subsection (i) shall control.


1)         Office space or other space rental when rent is in excess of $7.00 per square foot.


2)         Remodeling or alterations to real property in excess of $1,500.


3)         Purchases with a cost greater than the small purchase threshold as determined by the Chief Procurement Officer for General Services (CPO-GS).


4)         Management studies to improve Unit effectiveness and efficiency.


5)         Pre-agreement costs or costs incurred prior to the beginning of a new fiscal period.


6)         Indirect Cost Plans.


7)         Foreign Travel.  Defined as travel outside of the United States or its possessions and Canada.


8)         Sole Source Purchases greater than the small purchase threshold as determined by the CPO-GS. 


9)         Fixed fee contracts in excess of $1,500.


10)        Consultant fees.


11)        Salaries paid by State appropriated money for sworn agents, with the exception of the Unit Director.


(Source:  Amended at 42 Ill. Reg. 19207, effective October 10, 2018)


Section 1220.360  Fund Disbursements


a)         Cash Advances

The MEG Unit shall be reimbursed for expenses incurred upon submission of the Fiscal Report.  The Department recognizes that, in some instances, the Unit may not possess sufficient local financial resources to support the Unit on a reimbursable basis and that individual units may require cash advances for anticipated operational costs.  Consequently, the MEG Unit may request a cash advance to cover projected costs for a subsequent fiscal quarter. These requests must be in writing and should include the purpose of the proposed expenditure and the reasons necessitating the advance.


b)         Sanctions


1)         Those MEG Units not submitting Fiscal Reports will be sent a late notice via e-mail to the MEG contact and will have 30 days to respond.  If no response is received to the first late notice, a second late notice will be sent via e-mail and will state that, unless a Fiscal Report is received within 15 days, disbursement of funds will be suspended and a request to return any unspent funds will be sent.


2)         Should no response be received to the second late notice, a registered letter will be sent to the MEG Director and the responsible authorized official notifying them of the suspension.  In order to activate the suspended funds and to keep any unspent funds, a written response will be required of the policy board to include explanation of deficient reporting, corrective action to be taken, and a current Fiscal Report.


3)         If the action required to activate a suspension is not taken within 45 days, then appropriate measures will be taken to terminate funding and recover any unspent funds.


(Source:  Amended at 42 Ill. Reg. 19207, effective October 10, 2018)


Section 1220.370  Accounting Standards


a)         Financial Responsibility


1)         Accounting records should provide the information needed to separately identify the receipts and expenditures of State and other matching funds.


2)         Entries in accounting records should refer to subsidiary records and/or documentation that supports the entry and that can be readily located.


3)         The accounting system should provide accurate and current financial information.


4)         The accounting system should have an adequate system of internal controls to safeguard the funds and assets covered, check the accuracy and reliability of accounting information, and promote operational efficiency.


b)         Internal Control


1)         While it is recognized that many MEG Units have limited staffs, sound internal control requires a certain minimum separation of financial duties.  Therefore, no one individual may control all of the following activities:


A)        Authorization to initiate expenses, purchase orders, etc.


B)        Approving vouchers for payment.


C)        Signing checks.


D)        Recording transactions in books of account.


E)        Responsibility for physical custody of vouchers, payroll records, cancelled checks, and books of account.


2)         All MEG Units are required by this subsection (b)(2) to establish a pre-voucher review in order to assure proper payment of funds.  The person who signs the checks must assure himself/herself by review of the accompanying voucher, time sheet, or any other reasonable means that payment is correct.  The person who initials and/or approves a voucher for payment may not be the sole signer of the check paying for those goods nor may he/she be delegated the entire pre-voucher review responsibility.  Financial officers have the responsibility and authority to disallow payment of expenditures made contrary to the requirements of this subsection (b)(2).


3)         Financial activities should be separated into the following functions and each should be performed by a different individual:


A)        Initiating expense and approving payment.


B)        Disbursing funds or signing checks.


C)        Recording transactions into books of account.


4)         All MEG Units are required to have an annual audit performed by a Certified Public Accountant.


c)         Contractual Responsibility

The MEG Unit is the responsible authority, without recourse to the Department, regarding the settlement and satisfaction of all contractual and administrative issues arising out of procurements entered into in support of the MEG Unit.  Matters concerning violation of law are to be referred to such local, State or federal authority as may have proper jurisdiction.


d)         Procurement Requirements

The requirements outlined in this subsection (d) represent minimum State standards for the procurement of goods and services with Department funds; MEG Units may use their own applicable local rules and regulations if those standards meet or exceed the following:


1)         The MEG Unit shall develop or maintain a code of conduct, in addition to the Department rules of conduct, which shall govern the performance of its officers, employees, or agents in contracting with or expending Department funds. To the extent permissible by State or local law, rules or regulations, these standards shall provide for penalties, sanctions or disciplinary actions to be applied for violations of these standards.  Officers, employees or agents of the MEG Unit shall neither solicit nor accept gratuities, favors or anything of monetary value from contractors or potential contractors.


2)         All procurement transactions, regardless of whether negotiated or advertised and without regard to dollar value, shall be conducted in a manner so as to provide maximum and free competition.  The MEG Director should be alert to organizational conflicts of interest or non-competitive practices among contractors that may restrict or eliminate competition or otherwise restrain trade.


3)         Proposed procurements shall be reviewed by MEG officials to avoid purchasing unnecessary or duplicative items.  When appropriate, a lease vs. purchase analysis shall be conducted by the Unit to determine the most economical and practical procurement.  A lease vs. purchase analysis is required for any acquisition of automatic data processing equipment.  The analysis must be provided to the Department prior to procurement.


4)         All procurements in excess of $20,000 shall contain suitable provisions for termination by the MEG Unit, including the manner by which termination will be effected and the basis for settlement.  The provisions shall include conditions under which the contract can be terminated for default, as well as conditions under which the contract can be terminated because of circumstances beyond the MEG Unit's or the contractor's control.


5)         All procurements in excess of $20,000 shall include provisions for compliance with federal Executive Order No. 11246 entitled "Equal Employment Opportunity" as amended by Executive Order No. 11375, as supplemented by U.S. Department of Labor regulations (41 CFR 60).  Each contractor shall be required to have an affirmative action plan that declares that it does not discriminate on the basis of race, color, religion, creed, national origin, sex or age and that specifies target goals and target dates to assure implementation of that plan.  The MEG Unit shall establish procedures to assure compliance with this requirement by contractors and to assure that suspected or reported violations are promptly investigated.  The MEG Unit shall require the contractor to insert this provision in all subcontracts and subgrants in excess of $20,000.


6)         Procurement records for purchases in amounts in excess of the small purchase threshold determined by the CPO-GS shall include, as a minimum, the following information:


A)        Justification for use of negotiation in lieu of public advertising (if applicable) and the basis for the cost of price negotiation.


B)        A copy of the advertisement and related document upon which the contract was awarded.


C)        A copy of the purchase agreement and any modifications to that agreement.


7)         Contracts shall be made only with responsible contractors who possess the ability to perform successfully under the terms and conditions of the proposed agreement.  Consideration shall be given to such matters as contractor integrity, record of past performance, financial and technical resources and accessibility to other necessary resources.


8)         Contracts shall contain provisions or conditions that will allow for administrative, contractual or other remedies in instances in which contractors violate or breach contract terms.  The provisions of the contract shall provide for such sanctions and penalties as may be appropriate.


9)         A cost plus percentage of the cost purchase agreement shall not be used.


10)         The MEG Unit shall recognize minority and small business concerns when contracting with Department funds.


e)         Invitations for Bids

Formal advertising with adequate purchase descriptions, sealed bids and public bid openings shall be the required method of procurement unless otherwise authorized.  When advertised bids are received, the contract award must be made to the lowest responsive, responsible bidder, considering price and factors affecting price.  (The factors may be discounts, transportation costs, or taxes.)  Invitations for bids shall clearly set forth all requirements the bidder shall fulfill in order for his/her bid to be evaluated by the MEG Director.  A fixed price purchase must result from the award after bid selection.


f)         Negotiated Procurements

Procurements may be negotiated if it is impractical or unfeasible to use formal advertising.  The MEG Unit shall attempt, however, to secure the maximum competition possible in all negotiated procurements.  Generally, procurements may be negotiated if:


1)         Public exigency/emergency will not permit the delay incident to formal advertising.


2)         The material or service to be procured is available from one person or one firm.


3)         The aggregate amount of the procurement does not exceed the small purchases threshold as determined by the CPO-GS.


4)         The contract is for personal, professional or artistic services, or for any service to be rendered by a university, college or other non-profit educational institution.


5)         No acceptable bids have been received after formal advertising.


6)         The procurement involves use of State or local existing contracts that were originally entered into on a competitive basis.


7)         The purchases are for:


A)        highly perishable materials or medical supplies;


B)        material or service for which the prices are established by law;


C)        technical items or equipment requiring standardization and interchangeability of parts with existing equipment;


D)        experimental, developmental or research work;


E)        supplies purchased for authorized resale; and


F)         technical or specialized supplies requiring substantial initial investment for manufacture.


8)         Formal advertising may expose the MEG Unit and hinder the MEG agents and the MEG Unit in carrying out drug law enforcement.


g)         Special Considerations


1)         All procurements in excess of the small procurement threshold determined by the CPO-GS that are entered into without competition must receive prior Department approval.  The MEG Unit shall provide a complete justification indicating the reasons that preclude formal competition and a copy of the proposed purchase agreement.


2)         Equipment required for MEG operations should be purchased only after determination by responsible officials that no other equipment owned by the Unit is available for the effort.


3)         Funds should not be used to provide reimbursement for the purchase price of equipment already owned by the Unit.  This does not apply to equipment owned by a State or local government central purchasing department and held in stock available for issuance and sale to the MEG Unit or other government offices.


4)         The MEG Unit shall include provisions, as appropriate, to preclude late delivery of equipment by contractors.  These provisions may include penalty clauses and contract bonds.  If it becomes evident that the contractor will be delinquent in fulfilling projected delivery schedules, the MEG Unit shall notify the Department immediately.


h)         Construction Programs

Any MEG project that involves the erection, acquisition, expansion or repair of new or existing buildings or other physical facilities is a construction program and requires prior approval by the Department.


(Source:  Amended at 42 Ill. Reg. 19207, effective October 10, 2018)


Section 1220.380  Use of Property


a)         Definitions


1)         Excess Property.  Excess property means property, under the control of any agency, that is no longer required for the Unit's needs.


2)         Expendable Personal Property.  Expendable personal property refers to all tangible personal property other than non-expendable property.


3)         Non-expendable Personal Property.  Non-expendable personal property means tangible personal property having a useful life of more than one year and an acquisition cost of $100 or more per unit.  The MEG Unit may use its own definition of non-expendable personal property provided that definition would at least include all tangible personal property as defined in subsection (a)(4).


4)         Personal Property.  Personal property means property of any kind except real property.  It may be tangible (i.e., having physical existence) or intangible (i.e., having no physical existence), such as patents, inventions and copyrights.


5)         Real Property.  Real property means land, land improvements, structures and appurtenances thereto, excluding movable machinery and equipment.


b)         Real Property

Real property acquisition requires prior approval by the Department.


c)         State-Owned Non-expendable Personal Property

Unless statutory authority to transfer State property has been granted to the MEG Unit, title to Department/MEG owned property shall be reported to the Department for further agency use or, if appropriate, for reporting to Central Management Services for other State agency use.  Appropriate disposition instructions will be issued to the MEG Unit after completion of agency review.


d)         Property Control


1)         Property records shall be maintained accurately and provide for: 


A)        a description of the property;


B)        manufacturer's serial number or other identification numbers;


C)        acquisition date and cost;


D)        source of the property;


E)        location, use and condition of the property; and


F)         ultimate disposition data, including sales price or the method used to determine current fair market value if the MEG Unit reimburses the donator for its share.


2)         A physical inventory of property shall be taken and the results reconciled with the property records at least once every 2 years to verify the existence, current use, and continued need for the property.


3)         A control system shall be in effect to insure adequate safeguards to prevent loss, damage or theft of the property.  Any loss, damage or theft of non-expendable property shall be investigated and fully documented.


4)         Adequate maintenance procedures shall be implemented to keep the property in good condition.


(Source:  Amended at 42 Ill. Reg. 19207, effective October 10, 2018)


Section 1220.390  Confidential Expenditures


a)         The confidential expenditures budget is subject to prior approval by the Department, if Department funds are expended.  The confidential expenditures budget would be used for payment to informants, purchase of materials as evidence (such as narcotics), or other uses as may be required by law enforcement personnel working in an undercover capacity.  Such an approval will be based on a finding that it is necessary and reasonable for proper and efficient administration of the MEG Unit.


b)         The funds authorized will be controlled by a bonded cashier.


c)         Authorization for Information


1)         The MEG Director to which the fund is assigned must authorize all advances of funds up to $1,000 to agents or officers for the purchase of information.  Advances and payments in excess of $1,000 must be approved by the chairman of the Board.  The authorization must specify the information to be received, the amount of expenditures, and assumed name of informer.


2)         There must be maintained by the MEG Unit confidential files of the true names, assumed names, and signatures of all sources to whom payments of confidential expenditures have been made.  To the extent practicable, pictures and/or fingerprints of the informer should also be maintained.


3)         The cashier shall receive from the agent or officer authorized to make a confidential payment a receipt for cash advanced for those purposes.


4)         The agent or officer shall receive from the confidential source payee a receipt.


5)         The signed receipt from the confidential source payee, with a memorandum detailing the information received, will be forwarded to the agent or officer in charge.  The agent or officer in charge shall compare the signature on the receipt with the confidential file of assumed name signatures.  A certification of payment to the cashier will serve as support for the expenditure from the fund.  The certification will be witnessed by the agent or officer in charge on the basis of the report and confidential source payee's receipt.


6)         Each agent or officer in charge shall maintain records showing status and reconciliation of the fund and itemizing each payment, name used by informer payee, information received, and use to which information was put.  This report shall be part of the files.


7)         In each instance in which Department funds are used for confidential expenditures, it shall be understood that all of the records listed in subsection (c)(6), except the true names of the informers, are subject to the record and audit provisions of 34 USC 10101.


(Source:  Amended at 42 Ill. Reg. 19207, effective October 10, 2018)