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)