Here are excerpts:
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FINDINGS, CONCLUSIONS AND RECOMMENDATIONS
ACCOUNTING AND FINANCIAL REPORTING PROBLEMS
During initial testing, we found that the amounts recorded in the financial statements of the 940 Fund were not internally linked between the different statements. These errors included:
* The final net position of Fund 940 in its Statement of Net Position and its Statement of Income, Expenses and Changes in Net Position has not been reconciled by
* Fund 940’s operating profit (loss) in its Statement of Cash Flows and its Statement of Income, Expenses and Changes in Net Position did not reconcile by
After performing our tests to identify the causes of these issues, we determined that the Commission had made the following eight accounting errors and three classification errors:
* The Commission has not recorded any deferred outflows of contributions to the State employees pension scheme
* The Commission made a duplicate entry for a refund by SERS of excess contributions for the 2019 financial year, totaling
* The Commission made a double entry for a refund payable of an overpayment of an assessment by a self-insurer, totaling
* The Commission incorrectly recorded the settlement of a prior period refund payable to an excess insurer in the current period, totaling
* The Commission has not identified and recorded all the miscellaneous accounts receivable from the 940 Fund, totaling
* The Commission’s supporting schedule for cash activity and interest allocations in each insolvent self-insurer’s security deposit account, Fund 940 account and excess insurance activity was not Totally correct. Moreover, the Commission did not examine whether the events subsequent to
* The Commission proceeded to a double entry for the collection of a miscellaneous claim, for an amount
* The Commission has not registered the settlement of
* The Commission has incorrectly classified current and non-current liabilities within the 940 Fund. We noted the following:
* The current net liability of other post-employment positions (AEP) was overstated and the non-current net commitment in respect of AAPE was underestimated by
* Current unearned margin deposits were understated, while non-current unearned margin deposits were overstated, by
* Current unpaid claims were understated, while non-current unpaid claims were overstated, by
We have proposed, and the Commission has issued, adjusting entries to correct these errors in the final financial statements of the 940 Fund.
(Conclusion 1, pages 50-52)
We recommended that the Commission continue its efforts to fully understand and appropriately record and report transactions and events affecting the 940 Fund. In addition, we recommended that the Commission ensure that all transactions and all events affecting the 940 Fund are recorded and reported in strict accordance with applicable generally accepted accounting principles. to the 940 Fund. In addition, the Commission should ensure that independent monitoring by a person with sufficient skills, knowledge and experience to identify and correct errors is carried out during the preparation of the annexes, accounting entries and financial statements of the 940 Fund. Finally, the Commission should monitor and review whether events subsequent to the end of the budget year that occur before the date of the auditor’s report provide new audit evidence on the estimates used to prepare draft financial statements for the 940 Fund which should be adjusted before the publication of the final financial statements for the 940 Fund. Commission officials agree Commission officials agree with our recommendation.
The remaining finding relates to census data reconciliations. We will review the Commission’s progress towards implementing our recommendation during our next financial audit.
The auditors have prepared the financial statements of the Fund as of and for the year ended
This financial audit was carried out by Roth&Co.
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The report is posted at www.auditor.illinois.gov/Audit-Reports/Compliance-Agency-List/IWCC/FY21-IWCC-Self-Ins-Fund-940-Fin-Digest.pdf