Public Act 93-0630
SB794 Enrolled LRB093 02814 RCE 02830 b
AN ACT concerning State audits.
Be it enacted by the People of the State of Illinois,
represented in the General Assembly:
Section 5. The Illinois State Auditing Act is amended by
changing Sections 1-12, 1-13, 1-14, 1-16, 2-11, 3-2, 3-3, and
3-6 and by adding Section 1-13.5 as follows:
(30 ILCS 5/1-12) (from Ch. 15, par. 301-12)
Sec. 1-12. Post audit or audit. "Post audit" or "audit"
means a post facto examination of books, documents, records,
and other evidence relating to the obligation, receipt,
expenditure or use of public funds of the State, including
governmental operations relating to such obligation, receipt,
expenditure, or use. A post audit is a financial audit, a
compliance audit or other attestation engagement, or a
performance audit a management audit or a program audit, as
those terms are defined in this Article, or some combination
thereof.
(Source: P.A. 78-884.)
(30 ILCS 5/1-13) (from Ch. 15, par. 301-13)
Sec. 1-13. Compliance audit. "Financial audit" or
"Compliance audit" means an attestation engagement that
either examines, reviews, or entails performing agreed-upon
procedures on a subject matter or an assertion about a
subject matter and reporting on the results. The compliance
audit, as appropriate, may address agency management
representations, assertions, and supporting evidence
regarding a post audit which determines:
(a) whether the audited agency has obligated,
expended, received and used public funds of the State in
accordance with the purpose for which such funds have
been appropriated or otherwise authorized by law;
(b) whether the audited agency has obligated,
expended, received and used public funds of the State in
accordance with any limitations, restrictions, conditions
or mandatory directions imposed by law upon such
obligation, expenditure, receipt or use;
(c) in the case of a State agency, whether the
audited agency has generally complied with applicable
laws and regulations, including the State uniform
accounting system, in its financial and fiscal
operations;
(d) in the case of a State agency, whether the
records, books and accounts of the audited agency
accurately reflect its financial and fiscal operations;
(e) in the case of a local or private agency,
whether the records, books and accounts of the audited
agency fairly and accurately reflect its financial and
fiscal operations relating to the obligation, receipt,
expenditures and use of public funds of the State to the
extent such operations must be reviewed to complete post
audit determinations under paragraphs (a) and (b) of this
Section;
(f) in the case of a State agency, whether the
audited agency is maintaining effective internal controls
accounting control over revenues, obligations,
expenditures, assets and liabilities;
(g) whether collections of State revenues and
receipts by the audited agency are in accordance with
applicable laws and regulations and whether the
accounting and record keeping of such revenues and
receipts is fair, accurate and in accordance with law;
(h) in the case of a State agency, whether money or
negotiable securities or similar assets handled by the
audited agency on behalf of the State or held in trust by
the audited agency have been properly and legally
administered, and whether the accounting and record
keeping relating thereto is proper, accurate and in
accordance with law; and
(i) whether financial, program and statistical
reports of the audited agency contain useful data and are
fairly presented.
Compliance audits are to be performed in accordance with
attestation standards issued by the American Institute of
Certified Public Accountants (AICPA), related AICPA
Statements on Standards for Attestation Engagements, and
generally accepted government auditing standards (GAGAS)
current at the time the audit is commenced.
(Source: P.A. 78-884.)
(30 ILCS 5/1-13.5 new)
Sec. 1-13.5. Financial audit. "Financial audit" means a
post audit primarily concerned with providing reasonable
assurance about whether financial statements are presented
fairly in all material respects in conformity with generally
accepted accounting principles (GAAP), or with a
comprehensive basis of accounting other than GAAP. Other
objectives of financial audits, which provide for different
levels of assurance and entail various scopes of work, may
include, as appropriate:
(1) providing special reports for specified
elements, accounts, or items of a financial statement;
(2) reviewing interim financial information;
(3) issuing letters for underwriters and certain
other requesting parties;
(4) reporting on the processing of transactions by
service organizations; and
(5) auditing compliance with regulations relating
to federal award expenditures and other governmental
financial assistance in conjunction with or as a
byproduct of a financial statement audit.
Financial audits are to be performed in accordance with
generally accepted auditing standards issued by the American
Institute of Certified Public Accountants (AICPA) for field
work and reporting, generally accepted government auditing
standards (GAGAS), and AICPA Statements on Auditing Standards
(SAS) current at the time the audit is commenced.
(30 ILCS 5/1-14) (from Ch. 15, par. 301-14)
Sec. 1-14. Performance audit. "Performance audit" means
an objective and systematic examination of evidence in order
to provide an independent assessment of the performance and
management of a program against objective criteria.
Performance audits provide information to improve program
operations and facilitate decision-making by parties with
responsibility to oversee or initiate corrective action, and
improve public accountability.
Performance audits include management audits, which are
also called economy and efficiency audits, and program
audits. A program audit addresses the effectiveness of a
program and typically measures the extent to which a program
is achieving its goals and objectives. An economy and
efficiency audit concerns whether an agency is acquiring,
protecting, and using its resources in the most productive
manner to achieve program objectives. Program audits and
economy and efficiency audits may include an assessment of:
(1) the extent to which legislative, regulatory, or
organizational goals and objectives are being achieved;
(2) the relative ability of alternative approaches
to yield better program performance or eliminate factors
that inhibit program effectiveness;
(3) the relative cost and benefits or cost
effectiveness of program performance;
(4) whether a program produced intended results or
produced effects that were not intended by the program's
objectives;
(5) the extent to which programs duplicate,
overlap, or conflict with other related programs;
(6) whether the audited entity is following sound
procurement practices;
(7) the validity and reliability of performance
measures concerning program effectiveness and results or
economy and efficiency; and
(8) the reliability, validity, or relevance of
financial information related to the performance of a
program.
Performance audits may also encompass objectives related
to internal control and compliance with legal or other
requirements. Performance audits are to be performed in
accordance with generally accepted government auditing
standards (GAGAS) current at the time the audit is commenced.
"Management audit", or "efficiency audit" means a post
audit which determines with regard to the purpose, functions,
and duties of the audited agency:
(a) whether the audited agency is managing or utilizing
its resources, including public funds of the State,
personnel, property, equipment and space in an economical and
efficient manner; and
(b) causes of inefficiencies or uneconomical practices,
including inadequacies in management information systems,
internal and administrative procedures, organizational
structure, use of resources, allocation of personnel,
purchasing policies and equipment.
(Source: P.A. 78-884.)
(30 ILCS 5/1-16) (from Ch. 15, par. 301-16)
Sec. 1-16. Special audit. "Special audit" means a
financial audit, a compliance audit, or other attestation
engagement of limited scope.
(Source: P.A. 78-884.)
(30 ILCS 5/2-11) (from Ch. 15, par. 302-11)
Sec. 2-11. Special assistant auditors.
(a) The Auditor General may contract with certified
public accountants licensed and registered public accountants
certified or registered in Illinois, qualified management
consultants, attorneys licensed in Illinois, and other
persons or firms necessary to carry out his duties. For the
purpose of assisting in performance program audits, the
Auditor General may contract with any State agency. The
Auditor General may contract with other governmental agencies
for the conduct of joint audits of a State agency or a
portion thereof.
(b) The Auditor General shall adopt rules establishing
qualifications for nonlicensed persons with whom he may
contract.
(c) The Auditor General may designate any person with
whom he contracts as a special assistant auditor for the
purpose of conducting a post audit or investigation under his
supervision. The Auditor General may delegate his powers and
authority respecting post audits and investigations to
special assistant auditors other than the power of subpoena,
but any delegation of authority to administer oaths or take
depositions must be made in writing and limited to a
particular audit or investigation.
(Source: P.A. 80-533.)
(30 ILCS 5/3-2) (from Ch. 15, par. 303-2)
Sec. 3-2. Mandatory and directed post audits. The
Auditor General shall conduct a financial audit, a compliance
audit, or other attestation engagement, as is appropriate to
the agency's operations under generally accepted government
auditing standards, of each State agency except the Auditor
General or his office at least once during every biennium,
except as is otherwise provided in regulations adopted under
Section 3-8. The general direction and supervision of the
financial audit program may be delegated only to an
individual who is a Certified Public Accountant and a payroll
employee of the Office of the Auditor General. In the conduct
of financial audits, compliance audits, and other attestation
engagements, the Auditor General may inquire into and report
upon matters properly within the scope of a performance
management or program audit, provided that such inquiry shall
be limited to matters arising during the ordinary course of
the financial audit.
In any year the Auditor General shall conduct any special
audits as may be necessary to form an opinion on the
financial statements report of this State, as prepared by the
Comptroller, and to certify that this presentation is in
accordance with generally accepted accounting principles for
government.
Simultaneously with the biennial compliance financial
audit of the Department of Human Services, the Auditor
General shall conduct a program audit of each facility under
the jurisdiction of that Department that is described in
Section 4 of the Mental Health and Developmental Disabilities
Administrative Act. The program audit shall include an
examination of the records of each facility concerning
reports of suspected abuse or neglect of any patient or
resident of the facility. The Auditor General shall report
the findings of the program audit to the Governor and the
General Assembly, including findings concerning patterns or
trends relating to abuse or neglect of facility patients and
residents. However, for any year for which the Inspector
General submits a report to the Governor and General Assembly
as required under Section 6.7 of the Abused and Neglected
Long Term Care Facility Residents Reporting Act, the Auditor
General need not conduct the program audit otherwise required
under this paragraph.
The Auditor General shall conduct a performance
management or program audit of a State agency when so
directed by the Commission, or by either house of the General
Assembly, in a resolution identifying the subject, parties
and scope. Such a directing resolution may:
(a) require the Auditor General to examine and
report upon specific management efficiencies or cost
effectiveness proposals specified therein;
(b) in the case of a program audit, set forth
specific program objectives, responsibilities or duties
or may specify the program performance standards or
program evaluation standards to be the basis of the
program audit;
(c) be directed at particular procedures or
functions established by statute, by administrative
regulation or by precedent; and
(d) require the Auditor General to examine and
report upon specific proposals relating to state programs
specified in the resolution.
The Commission may by resolution clarify, further direct,
or limit the scope of any audit directed by a resolution of
the House or Senate, provided that any such action by the
Commission must be consistent with the terms of the directing
resolution.
(Source: P.A. 89-427, eff. 12-7-95; 89-507, eff. 7-1-97.)
(30 ILCS 5/3-3) (from Ch. 15, par. 303-3)
Sec. 3-3. Discretionary audits.
The Auditor General may initiate and conduct a special
audit whenever he determines it to be in the public interest.
The Auditor General may initiate and conduct an economy
and efficiency audit of a State agency or program whenever
the findings of a post audit indicate that such an efficiency
audit is advisable or in the public interest, if he has given
the Commission at least 30 days' prior notice of his
intention to conduct the efficiency audit and the Commission
has not disapproved of that audit.
The Auditor General may, at any time, make informal
inquiries of any agency concerning its obligation, receipt,
expenditure or use of State funds, but such an inquiry may
not be in the nature of an investigation or post audit.
(Source: P.A. 78-884.)
(30 ILCS 5/3-6) (from Ch. 15, par. 303-6)
Sec. 3-6. Audit Standards. The Auditor General may
adopt regulations establishing post audit standards
consistent with Sections 1-13, 1-13.5, and 1-14 and 1-15 of
this Act and in accordance with generally accepted government
governmental auditing standards. The regulations may specify
separate or particular standards applicable only to audits of
federal grants, aid or trust funds administered by State
agencies in order to comply with applicable federal
regulations. Post audit standards established under this
paragraph shall govern all post audits conducted by the
Auditor General.
The Auditor General may adopt regulations making such
standards applicable to financial audits, compliance audits,
and other attestation engagements conducted by State
agencies of local governmental agencies or private agencies
which are grantees or recipients of public funds of the State
or of federal funds not constituting public funds of the
State through projects administered by that State agency.
Notwithstanding any other statute to the contrary, those
regulations shall govern the audits to which they are
expressly applicable.
The Auditor General may make regulations providing for
the ordinary use of compliance audits conducted by State
agencies or by certified public accountants as part of
financial audits, if such compliance audits comply with the
standards and regulations applicable under this Act.
(Source: P.A. 82-368.)
(30 ILCS 5/1-15 rep.)
Section 10. The Illinois State Auditing Act is amended
by repealing Section 1-15.
Section 99. Effective date. This Act takes effect upon
becoming law.